4f287ac75ec271a4028891bae381c550896e32d8fa70434192e0e63d9b1bf90d

Remaining Performance Obligations for Product (USD millions)

Remaining Performance Obligations for Services (USD millions)

Total Remaining Performance Obligations (USD millions)

Short-term RPO (USD millions)

Long-term RPO (USD millions)

Inventory Purchase Commitments with Contract Manufacturers and Suppliers (Less than 1 year) (USD millions)

Inventory Purchase Commitments with Contract Manufacturers and Suppliers (1 to 3 years) (USD millions)

Inventory Purchase Commitments with Contract Manufacturers and Suppliers (3 to 5 years) (USD millions)

Total Inventory Purchase Commitments with Contract Manufacturers and Suppliers (USD millions)

52b987f67c3f5d20a5a02917b762c129834d4c0846f1705478cd5436bc191710

| Metric [USD Million] | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Americas             | **8,252**  **[0000858877-24-000030_csco-20241026.htm:45]**  | **8,100**  **[CSCO_3398827_5]**  | **7,372**  **[0000858877-24-000007_csco-20240427.htm:38]**  | **7,510**  **[0000858877-24-000003_csco-20240127.htm:47]**  | **9,022**  **[0000858877-23-000031_csco-20231028.htm:36]**  | **9,075**  **[0001193125-23-214316_d511414dex991.htm:4]**  | **8,634**  **[0000858877-23-000013_csco-20230429.htm:49]**  | **7,825**  **[0000858877-23-000005_csco-20230128.htm:47]**  |
| EMEA                 | **3,588**  **[0000858877-24-000030_csco-20241026.htm:45]**  | **3,700**  **[CSCO_3398827_5]**  | **3,458**  **[0000858877-24-000007_csco-20240427.htm:38]**  | **3,484**  **[0000858877-24-000003_csco-20240127.htm:47]**  | **3,664**  **[0000858877-23-000031_csco-20231028.htm:36]**  | **3,926**  **[0001193125-23-214316_d511414dex991.htm:4]**  | **3,806**  **[0000858877-23-000013_csco-20230429.htm:49]**  | **3,728**  **[0000858877-23-000005_csco-20230128.htm:47]**  |
| APJC                 | **2,001**  **[0000858877-24-000030_csco-20241026.htm:45]**  | **1,800**  **[CSCO_3398827_5]**  | **1,873**  **[0000858877-24-000007_csco-20240427.htm:38]**  | **1,798**  **[0000858877-24-000003_csco-20240127.htm:47]**  | **1,982**  **[0000858877-23-000031_csco-20231028.htm:36]**  | **2,203**  **[0001193125-23-214316_d511414dex991.htm:4]**  | **2,131**  **[0000858877-23-000013_csco-20230429.htm:49]**  | **2,039**  **[0000858877-23-000005_csco-20230128.htm:47]**  |

37fddc520851ac6c1be1356ddebe68f48668912a187195d8aedde8158b442e5e

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

6cfbce2403f478951a10910e60b2e049f6ad400b0fc9f2979351cb705bd6ada2

ea14202fa40fc4cf7eabc3397063cd807dd73593aff40b31e5fda15e0346286b

| Metric [Unit: USD Million] | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 |
|----------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Networking**             | **6,753**  **[0000858877-24-000030_csco-20241026.htm:33]**  | **6,804**  **[0001193125-24-200636_d878533dex991.htm:6]**  | **6,522**  **[0000858877-24-000007_csco-20240427.htm:53]**  | **7,081**  **[0000858877-24-000003_csco-20240127.htm:49]**  | **8,822**  **[0000858877-23-000031_csco-20231028.htm:36]** **[0000858877-23-000031_csco-20231028.htm:49]**  | N/A | **7,550**  **[0000858877-23-000013_csco-20230429.htm:50]** **[0000858877-23-000013_csco-20230429.htm:51]**  | N/A |
| **Security**               | **2,017**  **[0000858877-24-000030_csco-20241026.htm:33]**  | **1,787**  **[0001193125-24-200636_d878533dex991.htm:6]**  | **1,304**  **[0000858877-24-000007_csco-20240427.htm:53]**  | **973**  **[0000858877-24-000003_csco-20240127.htm:49]**  | **1,010**  **[0000858877-23-000031_csco-20231028.htm:36]** **[0000858877-23-000031_csco-20231028.htm:49]**  | N/A | **958**  **[0000858877-23-000013_csco-20230429.htm:51]**  | N/A |
| **Collaboration**          | **1,085**  **[0000858877-24-000030_csco-20241026.htm:33]**  | **1,019**  **[0001193125-24-200636_d878533dex991.htm:6]**  | **987**  **[0000858877-24-000007_csco-20240427.htm:53]**  | **989**  **[0000858877-24-000003_csco-20240127.htm:49]**  | **1,117**  **[0000858877-23-000031_csco-20231028.htm:36]** **[0000858877-23-000031_csco-20231028.htm:49]**  | N/A | **985**  **[0000858877-23-000013_csco-20230429.htm:51]**  | N/A |
| **Observability**          | **258**  **[0000858877-24-000030_csco-20241026.htm:33]**  | **248**  **[0001193125-24-200636_d878533dex991.htm:6]**  | **211**  **[0000858877-24-000007_csco-20240427.htm:53]**  | **188**  **[0000858877-24-000003_csco-20240127.htm:49]**  | **190**  **[0000858877-23-000031_csco-20231028.htm:36]** **[0000858877-23-000031_csco-20231028.htm:49]**  | N/A | **204**  **[0000858877-23-000013_csco-20230429.htm:51]**  | N/A |
| **Total Product Revenue**  | **10,114**  **[0000858877-24-000030_csco-20241026.htm:33]**  | **9,858**  **[0001193125-24-200636_d878533dex991.htm:6]**  | **9,024**  **[0000858877-24-000007_csco-20240427.htm:53]**  | **9,232**  **[0000858877-24-000003_csco-20240127.htm:49]**  | **11,139**  **[0000858877-23-000031_csco-20231028.htm:36]** **[0000858877-23-000031_csco-20231028.htm:49]**  | **11,700**  **[CSCO_3386186_3]**  | **11,092**  **[0000858877-23-000013_csco-20230429.htm:50]** **[0000858877-23-000013_csco-20230429.htm:51]**  | **10,200**  **[0001193125-23-040212_d417697dex991.htm:1]** **[0000858877-23-000005_csco-20230128.htm:47]** **[CSCO_3228258_3]**  |
| **Services Revenue**       | **3,727**  **[0000858877-24-000030_csco-20241026.htm:33]**  | **3,784**  **[0001193125-24-200636_d878533dex991.htm:6]**  | **3,678**  **[0000858877-24-000007_csco-20240427.htm:51]**  | **3,559**  **[0000858877-24-000003_csco-20240127.htm:47]**  | **3,529**  **[0000858877-23-000031_csco-20231028.htm:36]** **[0000858877-23-000031_csco-20231028.htm:49]**  | **3,600**  **[CSCO_3386186_3]**  | N/A | **3,400**  **[0001193125-23-040212_d417697dex991.htm:1]** **[0000858877-23-000005_csco-20230128.htm:47]** **[CSCO_3228258_3]**  |
| **Total Revenue**          | **13,841**  **[0000858877-24-000030_csco-20241026.htm:33]**  | **13,642**  **[0001193125-24-200636_d878533dex991.htm:6]**  | **12,702**  **[0000858877-24-000007_csco-20240427.htm:51]**  | **12,791**  **[0000858877-24-000003_csco-20240127.htm:47]**  | **14,668**  **[0000858877-23-000031_csco-20231028.htm:36]** **[0000858877-23-000031_csco-20231028.htm:49]**  | **15,200**  **[0001193125-23-214316_d511414dex991.htm:1]**  | N/A | **13,600**  **[0001193125-23-040212_d417697dex991.htm:1]** **[0000858877-23-000005_csco-20230128.htm:47]** **[CSCO_3228258_3]**  |

f363c4fcf591a965eb4e3606ea7fa8dd6cafa15443590c2d0cd11c6ba77d05b6

Cisco Systems, Inc. designs and sells a broad range of technologies that power the Internet, integrating product portfolios across networking, security, collaboration, applications, and the cloud to create secure, intelligent platforms for digital businesses **[0000858877-24-000007_csco-20240427.htm:41]** **[0000858877-24-000017_csco-20240727.htm:55]**. The company operates globally, primarily managed through three geographic segments: the Americas, EMEA, and APJC **[0000858877-24-000007_csco-20240427.htm:38]** **[0000858877-24-000030_csco-20241026.htm:33]**. Cisco's business activities focus on providing comprehensive solutions that integrate networking and security with advanced technologies like AI to support digital transformation for their customers **[0000858877-24-000017_csco-20240727.htm:55]** **[0000858877-24-000030_csco-20241026.htm:35]**.

1. **Networking** - Offers routers, switches, and other infrastructure essential for building and managing networks.
2. **Security** - Provides cybersecurity solutions, enhanced by the acquisition of Splunk, to protect digital environments.
3. **Observability** - Delivers tools and services for monitoring and analyzing IT infrastructure and applications, bolstered by Splunk's capabilities.
4. **Collaboration** - Develops communication and collaboration tools to enhance productivity and connectivity.
5. **Services** - Offers a range of support and consulting services to optimize the use of Cisco's products and solutions.

d81c9d2eae6005223ff3f3515cdc726696926f8ef7e95261347ad01deac7d36b

1. Given that networking revenue declined by 23% this quarter compared to the same period last year, and acknowledging the previous backlog shipments' impact, what specific strategies are you implementing to drive sequential growth in your networking segment for the rest of fiscal 2025?  **[CSCO_3408408_16]** 

2. With customers preparing for AI but only 13% of organizations reporting that their infrastructure is ready, how confident are you that the expected increase in front-end capacity demand will occur in the near term, and what factors could potentially delay this anticipated growth?  **[CSCO_3408408_3]** 

3. Security orders, excluding the U.S. Federal impact, grew in the mid- to high teens driven by new products like XDR and Secure Access, but given that Hypershield is not yet a major contributor to orders, how sustainable is this growth rate without significant adoption of your newer offerings?  **[CSCO_3408408_14]** 

4. As you continue integrating Splunk, can you elaborate on the challenges you may face in realizing the expected synergies, and how this integration will drive sustained growth in your security business amidst fierce competition?  **[CSCO_3408408_9]** 

5. Considering the recent fluctuations in product orders due to inventory digestion and normalizing demand, what specific factors give you confidence in achieving your long-term target of 4% to 6% growth, and are there any near-term headwinds that could jeopardize this goal?  **[CSCO_3408408_15]** 

99eade1124db8369f2ca0e6ee347c6af3658d84b12115feb32f5f6d10a47d375

### Q1 2025 Earnings Call
- **Issued Period:** Q1 2025
- **Guided Period:** Q2 2025 and FY 2025

#### Guidance for Q2 2025:
- **Revenue:** $13.75 billion to $13.95 billion
- **Non-GAAP Gross Margins:** 68% to 69%
- **Non-GAAP Operating Margin:** 33.5% to 34.5%
- **Non-GAAP Earnings Per Share (EPS):** $0.89 to $0.91
- **Non-GAAP Effective Tax Rate:** Approximately 19%

#### Guidance for FY 2025:
- **Revenue:** $55.3 billion to $56.3 billion
- **Non-GAAP Earnings Per Share (EPS):** $3.60 to $3.66
- **Non-GAAP Effective Tax Rate:** Approximately 19%  **[CSCO_3408408_6]** .

### Q4 2024 Earnings Call
- **Issued Period:** Q4 2024
- **Guided Period:** Q1 2025 and FY 2025

#### Guidance for Q1 2025:
- **Revenue:** $13.65 billion to $13.85 billion
- **Non-GAAP Gross Margin:** 67% to 68%
- **Non-GAAP Operating Margin:** 32% to 33%
- **Non-GAAP Earnings Per Share (EPS):** $0.86 to $0.88
- **Non-GAAP Effective Tax Rate:** Approximately 19%

#### Guidance for FY 2025:
- **Revenue:** $55 billion to $56.2 billion
- **Non-GAAP Earnings Per Share (EPS):** $3.52 to $3.58
- **Non-GAAP Effective Tax Rate:** Approximately 19%  **[CSCO_3398827_7]** .

### Q3 2024 Earnings Call
- **Issued Period:** Q3 2024
- **Guided Period:** Q4 2024 and FY 2025

#### Guidance for Q4 2024:
- **Revenue:** $13.4 billion to $13.6 billion
- **Non-GAAP Gross Margin:** 66.5% to 67.5%
- **Non-GAAP Operating Margin:** 31.5% to 32.5%
- **Non-GAAP Earnings Per Share (EPS):** $0.84 to $0.86
- **Revenue from Splunk:** $950 million to $1 billion
- **Non-GAAP EPS Impact from Splunk:** Negative $0.03 due to interest impact
- **Non-GAAP Effective Tax Rate:** Approximately 18%

#### Guidance for FY 2025:
- **Revenue Growth:** Low to mid-single-digit range
- **Interest Impact from Splunk Acquisition:** Headwind of approximately $350 million per quarter
- **Operating Margins:** Expected to be in line with Q4 2024 guidance  **[CSCO_3389288_6]** .

### Q2 2024 Earnings Call
- **Issued Period:** Q2 2024
- **Guided Period:** Q3 2024 and FY 2024

#### Guidance for Q3 2024:
- **Revenue:** $12.1 billion to $12.3 billion
- **Non-GAAP Gross Margin:** 66% to 67%
- **Non-GAAP Operating Margin:** 33.5% to 34.5%
- **Non-GAAP Earnings Per Share (EPS):** $0.84 to $0.86

#### Guidance for FY 2024:
- **Revenue:** $51.5 billion to $52.5 billion
- **Non-GAAP Earnings Per Share (EPS):** $3.68 to $3.74
- **Non-GAAP Effective Tax Rate:** 19%  **[CSCO_3386184_5]** .

472a6ea027ab6b43e656fcb48896b42a2c14700354d172c4e9c724583b965235

- Amazon Web Services LLC
- Arista Networks, Inc.
- Broadcom Inc.
- Ciena Corporation
- CrowdStrike Holdings, Inc.
- Datadog Inc.
- Dell Technologies Inc.
- Dynatrace Inc.
- Fortinet, Inc.
- Hewlett-Packard Enterprise Company
- Huawei Technologies Co., Ltd.
- Juniper Networks, Inc.
- Microsoft Corporation
- New Relic, Inc.
- Nokia Corporation
- Nvidia Corporation
- Palo Alto Networks, Inc.
- RingCentral, Inc.
- Zoom Video Communications, Inc.
- Zscaler, Inc.  **[0000858877-24-000017_csco-20240727.htm:10]** 

b2fbea5c2e29c81afbaa1b2088b138767f838ce1ea8249bc7733d257321e6bcb

Americas

- United States

EMEA

APJC

Total Revenue

a022b3c0dc05a93e21528a033ecf26bdc50a24f220c9027fd588a72b65217f02

bf6b9711116e28b9274c15d7548f718a7010c0bf05732a1e422f17b4ae86e22c

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

| Name                  | Position                                      | Start Date | Short Bio                                                                                                                                                                                                                                                                                                                                 |
|-----------------------|-----------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Charles H. Robbins    | Chair and Chief Executive Officer             | July 2015  | Charles H. Robbins has served as CEO since July 2015, as a member of the Board since May 2015, and as Chair of the Board since December 2017. He joined Cisco in December 1997 and has held various managerial positions, leading Cisco's global sales and partner teams. Robbins is also a board member of BlackRock, Inc. since 2017  **[0000858877-24-000017_csco-20240727.htm:17]** **[0001104659-24-109859_tm2414474d2_def14a.htm:21]** . |
| R. Scott Herren       | Executive Vice President and Chief Financial Officer | December 2020 | R. Scott Herren joined Cisco in December 2020. Before Cisco, he was the CFO of Autodesk, Inc. from November 2014 and held leadership roles at Citrix Systems, Inc. He has over 15 years of experience in senior strategy and financial positions at FedEx Corporation and IBM. Herren is a board member of Rubrik, Inc. since 2021  **[0000858877-24-000017_csco-20240727.htm:17]** **[0000858877-23-000023_csco-20230729.htm:20]** .      |
| Gary Steele           | President, Go-to-Market                       | May 2024   | Gary Steele joined Cisco in March 2024 as EVP and GM, Splunk, after Cisco's acquisition of Splunk. He was promoted to his current role in May 2024. Previously, he was the President and CEO of Splunk and CEO of Proofpoint, Inc. Steele has held roles at Sun Microsystems, Inc. and Hewlett-Packard Company. He is a board member of Upwork Inc. since 2018  **[0000858877-24-000017_csco-20240727.htm:17]** . |
| Deborah L. Stahlkopf  | Executive Vice President and Chief Legal Officer | August 2021 | Deborah L. Stahlkopf joined Cisco in August 2021. She spent 14 years at Microsoft, holding roles such as Corporate Vice President, General Counsel, and Corporate Secretary. Before Microsoft, she practiced law at Perkins Coie LLP and Cooley Godward LLP. Stahlkopf is a board member of NextEra Energy, Inc. since 2023  **[0000858877-24-000017_csco-20240727.htm:17]** **[0000858877-24-000017_csco-20240727.htm:18]** **[0000858877-23-000023_csco-20230729.htm:21]** .                |
| Thimaya Subaiya       | Executive Vice President of Operations        | March 2024 | Thimaya Subaiya joined Cisco in July 2018 and was promoted to EVP of Operations in March 2024. He previously served as SVP, Chief Transformation Officer, and SVP and GM, Customer Experience. Before Cisco, he spent eight years at Salesforce, Inc., and held leadership roles at Oracle Corporation  **[0000858877-24-000017_csco-20240727.htm:18]** .                                    |

cc44f227a2f0b0183f1fd98f97202aaba46d8e965d98dd05539d9587a6c3ad04

| Program Details          | Program 1       |
|--------------------------|-----------------|
| Approval Date            | September 2001  **[0000858877-24-000030_csco-20241026.htm:30]**  |
| End Date/Duration        | No termination date  **[0000858877-24-000030_csco-20241026.htm:30]**  |
| Total additional amount  | N/A             |
| Remaining authorization amount | $3.2 billion  **[0000858877-24-000030_csco-20241026.htm:30]** **[0000858877-24-000030_csco-20241026.htm:90]**  |
| Details                  | Ongoing program with no specified additional amounts recently authorized  **[0000858877-24-000030_csco-20241026.htm:30]**  |

3965eac52aa153e545e5c7304e9f8737d36483daabc400e02a9e88d65a46048b

1. **AI-Driven Customer Demand**  
   **Q:** How is AI influencing customer demand and infrastructure upgrades?  
   **A:** Customers are upgrading their infrastructure in preparation for AI, sometimes reallocating AI budgets to modernize their networks.  **[CSCO_3398827_8]**  Enterprises are updating data center and core network infrastructures to be ready for smaller training models or inference workloads.  **[CSCO_3398827_19]**  This has led to balanced demand across the portfolio, with double-digit growth in security and collaboration, and high single-digit growth in enterprise switching and routing.  **[CSCO_3398827_8]** 

2. **Workforce Reduction and Guidance**  
   **Q:** What's the impact of the 7% workforce reduction on fiscal 2025 guidance?  
   **A:** The layoffs are fully embedded in the fiscal 2025 guidance.  **[CSCO_3398827_8]**  The action is about reallocating resources—not cost savings—to pivot hundreds of millions of dollars into AI, cloud, and cybersecurity.  **[CSCO_3398827_8]** **[CSCO_3398827_10]**  It's more about finding efficiencies and investing in fast-growing areas than pursuing cost reductions.  **[CSCO_3398827_14]** 

3. **$1 Billion AI Orders**  
   **Q:** Can you elaborate on the $1 billion AI orders and expectations for FY 2025?  
   **A:** They have crossed **$1 billion** in AI orders to date in the webscale space and are on track for another **$1 billion** in fiscal 2025.  **[CSCO_3398827_12]**  The orders are primarily back-end infrastructure, including Ethernet and optics, competing against traditional players.  **[CSCO_3398827_20]**  One of the largest customers is releasing orders from design wins, indicating execution is proceeding as planned.  **[CSCO_3398827_12]** 

4. **Splunk Performance and Integration**  
   **Q:** How is Splunk performing, and what's its impact on guidance?  
   **A:** Splunk is progressing in line with expectations, with Annual Recurring Revenue (ARR) growing in **double digits**.  **[CSCO_3398827_12]**  Integration is leading to cross-sell opportunities, with over **ten deals** closed involving both sales forces.  **[CSCO_3398827_12]**  The impact of Splunk is fully built into the fiscal 2025 guidance, though specifying revenue allocations between Cisco and Splunk will become harder due to product integrations.  **[CSCO_3398827_12]** 

5. **Fiscal 2025 Revenue Outlook**  
   **Q:** Why is revenue growth guidance only around 3% despite improving demand?  
   **A:** There's a tough comparison due to significant backlog shipments in Q1 of fiscal 2024, around **$4 billion**, which won't repeat.  **[CSCO_3398827_14]**  This creates a headwind impacting growth rates for both Q1 and the full year.  **[CSCO_3398827_14]** **[CSCO_3398827_20]**  Excluding backlog and Splunk, core business growth is in the same range as the long-term growth rate.  **[CSCO_3398827_14]** 

6. **Cloud Order Growth and Hyperscalers**  
   **Q:** What's driving cloud order growth, and how are hyperscalers contributing?  
   **A:** Cloud orders grew by **2%**, a combination of service provider and cloud.  **[CSCO_3398827_17]**  Hyperscalers saw significant double-digit growth in the second half and Q4, indicating that the prior digestion period is over.  **[CSCO_3398827_17]**  They expect normal buying behavior from hyperscalers in coming quarters.  **[CSCO_3398827_17]** 

7. **Platform Deals and Cross-Portfolio Sales**  
   **Q:** How are platform deals influencing sales and customer engagement?  
   **A:** Large enterprise and public sector customers are engaging in platform deals to refresh infrastructure in preparation for AI workloads.  **[CSCO_3398827_16]**  Security is a significant area of expansion within these deals.  **[CSCO_3398827_17]**  The number of **$1 million** transactions in wireless alone was up **20%** year-over-year.  **[CSCO_3398827_8]** 

8. **Pricing Environment and Margins**  
   **Q:** How is pricing impacting revenue and margins?  
   **A:** Pricing has returned to normal patterns, with expected impacts similar to historical ranges of **0.5% to 1.5%** per quarter.  **[CSCO_3398827_22]**  The prior period had headwinds due to pricing adjustments, but the environment has stabilized.  **[CSCO_3398827_22]** 

9. **Organizational Integration**  
   **Q:** What are the motivations behind integrating networking, security, and collaboration?  
   **A:** To deliver a platform strategy and leverage cross-integration as a competitive differentiation, especially in rapidly moving AI markets.  **[CSCO_3398827_13]**  A single leader overseeing these areas enhances innovation and execution.  **[CSCO_3398827_13]** 

10. **Sales Efforts and Compensation**  
    **Q:** Are there changes to sales efforts or compensation structures?  
    **A:** There is a focus on cross-sell incentives for Splunk within the Cisco sales force and encouraging security sellers.  **[CSCO_3398827_18]**  Emphasis is on simplicity, increasing frontline quota-carrying reps, and doubling down on core networking and infrastructure.  **[CSCO_3398827_18]** 

6ec641c55c6d7a467ed7dd3f5b138bc2faa39fb55c788c0056920a2fd014a225

**Quarterly guidance for Q2 2025:**
- **Revenue**: $13.75 billion to $13.95 billion  **[CSCO_3408408_6]**  (no prior guidance)
- **Non-GAAP Gross Margins**: 68% to 69%  **[CSCO_3408408_6]**  (no prior guidance)
- **Non-GAAP Operating Margin**: 33.5% to 34.5%  **[CSCO_3408408_6]**  (no prior guidance)
- **Non-GAAP EPS**: $0.89 to $0.91  **[CSCO_3408408_6]**  (no prior guidance)
- **Non-GAAP Effective Tax Rate**: ~19%  **[CSCO_3408408_6]**  (no prior guidance)

**Annual guidance for FY 2025:**
- **Revenue**: $55.3 billion to $56.3 billion  **[CSCO_3408408_6]**  (raised from $55 billion to $56.2 billion  **[CSCO_3398827_7]** )
- **Non-GAAP EPS**: $3.60 to $3.66  **[CSCO_3408408_6]**  (raised from $3.52 to $3.58  **[CSCO_3398827_7]** )
- **Non-GAAP Effective Tax Rate**: ~19%  **[CSCO_3408408_6]**  (no change from prior guidance  **[CSCO_3398827_7]** )

c90cf655568211cd41ab1ca916ca97daa450f086c3f823753b290fc13d86d2dc

| Name                          | Start Date | End Date | Reason for Change |
|-------------------------------|------------|----------|-------------------|
| PricewaterhouseCoopers LLP   | 1988  **[0000858877-24-000017_csco-20240727.htm:94]**    | Present  | Current auditor   |

6f8219f23d613bee0f9ae0ca9ccf4b4986ea01dca5ccc75aea05c0fc55b45e22

8aa101adc2ad4063c58748927b180b36a99770ff0a0513d36e8d000841e9554b

- Total Revenue: $13,841 million (**-6% YoY**)  **[0000858877-24-000030_csco-20241026.htm:33]** **[0000858877-23-000031_csco-20231028.htm:36]**   
- Networking: $6,753 million (**-23% YoY**)  **[0000858877-24-000030_csco-20241026.htm:33]** **[0000858877-23-000031_csco-20231028.htm:36]**   
- Security: $2,017 million (**+100% YoY**)  **[0000858877-24-000030_csco-20241026.htm:33]** **[0000858877-23-000031_csco-20231028.htm:36]**   
- Observability: $258 million (+36% YoY)  **[0000858877-24-000030_csco-20241026.htm:33]** **[0000858877-23-000031_csco-20231028.htm:36]**   
- Product Revenue: $10,114 million (**-9% YoY**)  **[0000858877-24-000030_csco-20241026.htm:33]** **[0000858877-23-000031_csco-20231028.htm:36]**   
- Services: $3,727 million (+6% YoY)  **[0000858877-24-000030_csco-20241026.htm:33]** **[0000858877-23-000031_csco-20231028.htm:36]**   
- Americas: $8,252 million (**-8% YoY**)  **[0000858877-24-000030_csco-20241026.htm:33]** **[0000858877-23-000031_csco-20231028.htm:36]**   
- Operating Income (EBIT): $2,358 million (**-45% YoY**)  **[0000858877-24-000030_csco-20241026.htm:3]** **[0000858877-23-000031_csco-20231028.htm:2]**   
- Net Income: $2,711 million (**-25% YoY**)  **[0000858877-24-000030_csco-20241026.htm:3]** **[0000858877-23-000031_csco-20231028.htm:2]**   
- EPS (Diluted): $0.68 (**-24% YoY**)  **[0000858877-24-000030_csco-20241026.htm:3]** **[0000858877-23-000031_csco-20231028.htm:2]**   

982cf5cfdebd2332fd2c371d743380a91ecaa508e00060954296a5a1d639714a

28c67b1282468b01f5948f4f6d066c1f15feb575fcef5d5f06f84391a9cfcae8

| Year | Amount Due (in millions) | Debt Type                  | Interest Rate | % of Total Debt                                                                 |
|----------|------------------------------|---------------------------------|-------------------|------------------------------------------------------------------------------------|
| 2025     | $493 **[0000858877-24-000030_csco-20241026.htm:21]**                 | Current portion of senior notes | 6.17%  **[0000858877-24-000030_csco-20241026.htm:22]** **[0000858877-24-000030_csco-20241026.htm:21]**   | 1.5% = (493 / 31,987) * 100 **[0000858877-24-000030_csco-20241026.htm:37]** **[0000858877-24-000030_csco-20241026.htm:21]**                                       |
| 2025     | $11,870 **[0000858877-24-000030_csco-20241026.htm:21]**              | Commercial paper                | 5.19%  **[0000858877-24-000030_csco-20241026.htm:22]** **[0000858877-24-000030_csco-20241026.htm:21]**   | 37.1% = (11,870 / 31,987) * 100 **[0000858877-24-000030_csco-20241026.htm:37]** **[0000858877-24-000030_csco-20241026.htm:21]**                                   |
| 2025     | $1 **[0000858877-24-000030_csco-20241026.htm:21]**                   | Current portion of other debt   | 1.13%  **[0000858877-24-000030_csco-20241026.htm:22]** **[0000858877-24-000030_csco-20241026.htm:21]**   | 0.0% = (1 / 31,987) * 100 **[0000858877-24-000030_csco-20241026.htm:37]** **[0000858877-24-000030_csco-20241026.htm:21]**                                         |
| 2025     | $500 **[0000858877-24-000030_csco-20241026.htm:22]**                 | Fixed-rate senior notes         | 3.50% **[0000858877-24-000030_csco-20241026.htm:22]**     | 1.6% = (500 / 31,987) * 100 **[0000858877-24-000030_csco-20241026.htm:37]** **[0000858877-24-000030_csco-20241026.htm:22]**                                       |
| 2026     | $1,751 **[0000858877-24-000030_csco-20241026.htm:22]**               | Fixed-rate senior notes         | 4.90%, 2.95%, 2.50% **[0000858877-24-000030_csco-20241026.htm:22]** | 5.5% = (1,751 / 31,987) * 100 **[0000858877-24-000030_csco-20241026.htm:37]** **[0000858877-24-000030_csco-20241026.htm:22]**                                     |
| 2027     | $3,502 **[0000858877-24-000030_csco-20241026.htm:22]**               | Fixed-rate senior notes         | 4.80% **[0000858877-24-000030_csco-20241026.htm:22]**     | 10.9% = (3,502 / 31,987) * 100 **[0000858877-24-000030_csco-20241026.htm:37]** **[0000858877-24-000030_csco-20241026.htm:22]**                                    |
| 2029     | $2,500 **[0000858877-24-000030_csco-20241026.htm:22]**               | Fixed-rate senior notes         | 4.85% **[0000858877-24-000030_csco-20241026.htm:22]**     | 7.8% = (2,500 / 31,987) * 100 **[0000858877-24-000030_csco-20241026.htm:37]** **[0000858877-24-000030_csco-20241026.htm:22]**                                     |
| 2031     | $12,000 **[0000858877-24-000030_csco-20241026.htm:22]**              | Fixed-rate senior notes         | 4.95% **[0000858877-24-000030_csco-20241026.htm:22]**     | 37.5% = (12,000 / 31,987) * 100 **[0000858877-24-000030_csco-20241026.htm:37]** **[0000858877-24-000030_csco-20241026.htm:22]**                                   |
| 2034     | $0 **[0000858877-24-000030_csco-20241026.htm:22]**                   | Fixed-rate senior notes         | 5.05% **[0000858877-24-000030_csco-20241026.htm:22]**     | 0.0% = (0 / 31,987) * 100 **[0000858877-24-000030_csco-20241026.htm:37]** **[0000858877-24-000030_csco-20241026.htm:22]**                                         |
| 2039     | $0 **[0000858877-24-000030_csco-20241026.htm:22]**                   | Fixed-rate senior notes         | 5.90% **[0000858877-24-000030_csco-20241026.htm:22]**     | 0.0% = (0 / 31,987) * 100 **[0000858877-24-000030_csco-20241026.htm:37]** **[0000858877-24-000030_csco-20241026.htm:22]**                                         |
| 2040     | $0 **[0000858877-24-000030_csco-20241026.htm:22]**                   | Fixed-rate senior notes         | 5.50% **[0000858877-24-000030_csco-20241026.htm:22]**     | 0.0% = (0 / 31,987) * 100 **[0000858877-24-000030_csco-20241026.htm:37]** **[0000858877-24-000030_csco-20241026.htm:22]**                                         |
| 2054     | $0 **[0000858877-24-000030_csco-20241026.htm:22]**                   | Fixed-rate senior notes         | 5.30% **[0000858877-24-000030_csco-20241026.htm:22]**     | 0.0% = (0 / 31,987) * 100 **[0000858877-24-000030_csco-20241026.htm:37]** **[0000858877-24-000030_csco-20241026.htm:22]**                                         |
| 2064     | $0 **[0000858877-24-000030_csco-20241026.htm:22]**                   | Fixed-rate senior notes         | 5.35% **[0000858877-24-000030_csco-20241026.htm:22]**     | 0.0% = (0 / 31,987) * 100 **[0000858877-24-000030_csco-20241026.htm:37]** **[0000858877-24-000030_csco-20241026.htm:22]**                                         |

ce5a02f4c8aa2afe9332c4a449343806b90eda4908a596cac014ce367846639f

97c5ecc6ee6c781328e32664c320f4588505b1fa534d28d560e9d6534aeb6309

- **Increased operating expenses in fiscal 2025 due to integration costs and investments from the Splunk acquisition are expected to pressure margins and may lead to flat or even lower earnings per share compared to fiscal 2024.**  **[CSCO_3389288_19]** **[CSCO_3389288_9]** **[CSCO_3389288_12]**
- **Revenue synergies from the Splunk acquisition may take longer to materialize, with expectations that significant contributions won't occur until the second half of fiscal 2025 or later due to long sales cycles of 6 to 9 months.**  **[CSCO_3389288_9]** **[CSCO_3389288_12]**
- **Intensifying competition in the security and SIEM market, with competitors consolidating and potential pricing pressures, could impact Cisco's growth in this area, as security revenue excluding Splunk grew only 3% year-over-year.**  **[CSCO_3389288_16]** **[CSCO_3389288_9]**

49662d51352438a695716ec77798b645ffb0ab7fdd4597e71bcdeb7a9cbeaf07

- **Cisco expects demand normalization starting in FY'25**, as inventory digestion is progressing as planned, with positive signs in key markets like the Americas and Europe.  **[CSCO_3389288_14]** ,  **[CSCO_3389288_7]**
- **Cisco anticipates $1 billion in AI-related orders in fiscal 2025**, driven largely by web-scale infrastructure wins, including having 3 out of 4 major web-scale players using their AI Ethernet fabric, with enterprise pipeline also beginning to materialize.  **[CSCO_3389288_7]** ,  **[CSCO_3389288_9]**
- **Increasing demand for Cisco's security products**, with high single-digit growth in orders and the ramp-up of new innovative products, is expected to drive significant improvement in FY'25 and beyond, further enhanced by the integration of Splunk.  **[CSCO_3389288_9]**

92a07134433012c9a0f773ab7b2d9a3a99861931f2acd73ce30cbafec04b9456

- **Strong growth in software and recurring revenue streams:** Cisco is experiencing growth in software subscriptions, particularly in Security, Collaboration, and Observability, with software subscription renewal rates responding positively. New security innovations like XDR and Secure Access are gaining traction, with over **230 customers** on the XDR platform since its launch. This shift towards software and recurring revenue enhances Cisco's long-term growth prospects.  **[CSCO_3386184_16]** ,  **[CSCO_3386184_10]**
- **Strategic partnership with NVIDIA in AI infrastructure:** Cisco's partnership with NVIDIA positions it as a key player in the AI infrastructure market. The combined solutions will utilize **Cisco Ethernet technology** alongside NVIDIA GPUs, sold through Cisco's extensive channel network. This collaboration opens new avenues for growth in the AI and enterprise markets.  **[CSCO_3386184_14]** ,  **[CSCO_3386184_6]** ,  **[CSCO_3386184_17]**
- **Gaining market share in key markets:** Cisco has gained market share in its four largest markets, including campus switching, wireless, and service provider routing, indicating a strong competitive position. Despite market challenges, Cisco's core businesses are performing well relative to competitors.  **[CSCO_3386184_8]**

d0a9ac948047d8778433312be99fb7f1dfa37791452976bad209cfc29c92bb33

- **Cisco is experiencing strong demand in AI networking**, with AI infrastructure orders from web-scale customers exceeding **$300 million in Q1** and a strong pipeline expected to surpass their target of **$1 billion of AI orders this fiscal year**. This underscores Cisco's significant role in back-end AI networks and positions them well for future growth.  **[CSCO_3408408_18]** ,  **[CSCO_3408408_15]**
- **Cisco's new security products, including Hypershield, XDR, Secure Access, and Multicloud Defense, are driving strong organic growth**, with over **1,000 customers deploying these new technologies**. The first **seven-figure Hypershield deal** with a large financial institution indicates strong market acceptance and potential for further expansion in the security business.  **[CSCO_3408408_14]** ,  **[CSCO_3408408_9]**
- **Data center modernization is a significant tailwind for Cisco**, with strong momentum in data center switching infrastructure. Investments in both security (Hypershield) and AI infrastructure (Hyperfabric) are gaining traction with customers, indicating future growth opportunities and reaffirming confidence in achieving long-term growth targets.  **[CSCO_3408408_16]** ,  **[CSCO_3408408_14]** ,  **[CSCO_3408408_15]**

5ce60612289077224fc4536797db82266e11c3e55eb78084f7b7b33644447082

1. **Lower Revenue Guidance and Macro Impact**  
   **Q:** What's behind the lower revenue guidance and macro impact?  
   **A:** Management cited a **500 basis point** reduction in revenue guidance due to macro uncertainty, with customers extending digestion periods and pushing out orders.  **[CSCO_3386184_6]**  They expect elevated inventory levels to be resolved by fiscal year-end but note that macro factors and service provider weakness may persist.  **[CSCO_3386184_6]** 

2. **AI Opportunities and NVIDIA Partnership**  
   **Q:** How will the NVIDIA partnership impact Cisco's AI strategy?  
   **A:** The NVIDIA partnership focuses on integrating Cisco's **Ethernet technology** with NVIDIA's GPUs in AI clusters.  **[CSCO_3386184_6]**  Management emphasized that the collaboration includes Ethernet networking and servers, enhancing Cisco's position in AI infrastructures.  **[CSCO_3386184_6]** 

3. **Inventory Digestion and Revenue Trajectory**  
   **Q:** When will inventory digestion issues resolve?  
   **A:** Management expects the consumption of elevated inventory levels to be resolved by fiscal year-end, particularly in enterprise and service provider segments.  **[CSCO_3386184_6]** **[CSCO_3386184_13]**  They noted customers are taking longer to implement shipped products, impacting revenue recognition.  **[CSCO_3386184_13]** 

4. **Margin Outlook and Cost Management**  
   **Q:** How are margins affected by supply chain and cost actions?  
   **A:** Gross margins are stabilizing in the **66% to 67%** range, with supply chain constraints largely behind.  **[CSCO_3386184_13]**  Management is implementing cost reductions, including headcount reductions, to maintain profitability amid challenging growth.  **[CSCO_3386184_17]** **[CSCO_3386184_19]** 

5. **Market Share and Long-Term Growth Targets**  
   **Q:** Is Cisco experiencing market share loss affecting growth targets?  
   **A:** Management disputed share loss concerns, stating they gained market share in key markets like campus switching and wireless.  **[CSCO_3386184_8]**  They acknowledged data center switching shows share loss due to reporting differences but remain confident in long-term **5% to 7%** growth targets.  **[CSCO_3386184_8]** 

6. **Impact of HPE-Juniper Deal**  
   **Q:** Does the HPE-Juniper deal create market uncertainty?  
   **A:** Management indicated it's too early to see customer concerns from the HPE-Juniper deal impacting Cisco.  **[CSCO_3386184_12]**  They noted an increase of **50%** in large wireless deals sequentially but saw no direct correlation.  **[CSCO_3386184_12]** 

7. **Order Trajectory and Bookings Outlook**  
   **Q:** When will orders turn positive again?  
   **A:** While not providing specific guidance, management acknowledged that the second half will be more favorable than the first, indicating an improving order trajectory.  **[CSCO_3386184_9]** 

8. **Security Business Performance**  
   **Q:** Why is the security segment growing only 3%?  
   **A:** Management anticipates acceleration in the second half, citing growth in new innovations like XDR and Secure Access, with over **230 customers** on the XDR platform since its August launch.  **[CSCO_3386184_10]** 

9. **Webscale Presence and Growth**  
   **Q:** What is Cisco's presence in webscale opportunities?  
   **A:** Cisco is designed into **21** use cases among webscale players.  **[CSCO_3386184_18]**  While inventory digestion affects current growth, management sees AI as a long-term tailwind for this segment.  **[CSCO_3386184_18]** 

10. **Customer Demand and AI Budgets**  
    **Q:** How are enterprises allocating budgets for AI?  
    **A:** Management observed that customers are in early stages of AI strategy, with some holding back budgets to invest in AI initiatives once plans are finalized.  **[CSCO_3386184_7]** 

1ff79b6d4e0905870dd6608a55211496d30429dad3797d08006668ab9f95d5e9

- **Cisco faces increasing competition from NVIDIA in AI networking**, particularly in the Ethernet back-end network side, which could impact Cisco's market share.  **[CSCO_3408408_18]**
- **Organic security orders grew only low to mid-single digits excluding Splunk**, indicating weakness in Cisco's core security business; moreover, delays in U.S. federal spending, Cisco's largest customer, have negatively impacted security orders.  **[CSCO_3408408_9]**
- **Revenue realization from AI orders is uncertain and dependent on factors outside Cisco's control**, with the majority of AI-related revenue expected in the second half of the year, posing risks to near-term growth.  **[CSCO_3408408_11]**

7ce204ff78ef24b24c67472e290eb030fdabb6038d2718fe9cb4a7c0bcae0696

1. **AI Orders and Revenue Outlook**  
   **Q:** Will AI orders lead to higher revenue this year?  
   **A:** AI orders exceeded **$300 million**, putting us on track to surpass **$1 billion** this year.  **[CSCO_3408408_7]**  Revenue from these orders will mainly contribute in the second half of the year.  **[CSCO_3408408_11]**  This growth is balanced across multiple cloud customers, not just one.  **[CSCO_3408408_19]** 

2. **Gross Margin Improvement and Sustainability**  
   **Q:** What drove strong gross margins and can they be sustained?  
   **A:** Gross margins reached **69.3%**, the highest in 20 years.  **[CSCO_3408408_7]**  This was driven by the addition of Splunk, favorable product mix, and productivity enhancements.  **[CSCO_3408408_7]**  A one-time benefit from duty drawback added about **0.5 to 1 point**.  **[CSCO_3408408_17]**  We expect gross margins to settle into the **68% to 69%** range for the full year.  **[CSCO_3408408_10]** 

3. **Cloud Orders and Growth Drivers**  
   **Q:** What's driving massive growth in cloud orders?  
   **A:** Cloud orders grew over **100%**, with four of the six largest cloud providers each exceeding 100% growth.  **[CSCO_3408408_7]**  Growth is driven by routing, switching, and optical products, including AI infrastructure underpinning GPUs and backend networks.  **[CSCO_3408408_7]** 

4. **Security Growth and Hypershield Adoption**  
   **Q:** What's driving strong security growth and Hypershield adoption?  
   **A:** Security orders grew in the mid to high teens excluding U.S. Federal.  **[CSCO_3408408_9]**  Over **1,000 customers** have deployed new technologies like XDR, Secure Access, and Multicloud Defense.  **[CSCO_3408408_9]** **[CSCO_3408408_14]**  A large financial institution became the first seven-figure Hypershield customer, signaling positive market reception.  **[CSCO_3408408_9]** 

5. **Data Center Modernization and Switch Demand**  
   **Q:** How is data center switching demand evolving with AI?  
   **A:** Customers are modernizing data centers to prepare for AI deployments.  **[CSCO_3408408_11]**  The third consecutive quarter of strong order growth in data center switching reflects this trend.  **[CSCO_3408408_11]**  The majority of build-out is still ahead on the enterprise side.  **[CSCO_3408408_11]** 

6. **Macro Impact and U.S. Federal Delays**  
   **Q:** How are macro factors and federal delays impacting business?  
   **A:** U.S. Federal orders were impacted by continuing resolution pressures and the fiscal responsibility act, causing delays but not lost deals.  **[CSCO_3408408_8]**  Excluding U.S. Federal, product orders were up mid to high teens.  **[CSCO_3408408_8]**  No significant impact was observed from the U.S. elections.  **[CSCO_3408408_8]** 

7. **NVIDIA Partnership and Competitive Positioning**  
   **Q:** How is the NVIDIA partnership progressing and affecting AI plans?  
   **A:** The NVIDIA partnership is still early; solutions like Hyperfabric will ship in early 2025.  **[CSCO_3408408_12]**  We announced AI compute platforms based on NVIDIA GPUs.  **[CSCO_3408408_12]**  Despite competition, our experience in Ethernet and our own silicon provide a competitive edge.  **[CSCO_3408408_18]** 

8. **Splunk Integration and Growth Opportunities**  
   **Q:** How is the Splunk integration progressing?  
   **A:** Splunk integration is progressing well, with hundreds of partners trained and about **1,500** more customers added to the pipeline.  **[CSCO_3408408_12]**  Splunk is tracking ahead of expectations on profitability.  **[CSCO_3408408_12]** **[CSCO_3408408_15]** 

9. **Enterprise Refresh and WiFi 7**  
   **Q:** How significant is the enterprise refresh opportunity with WiFi 7?  
   **A:** Enterprise networking performed strongly, with customers upgrading to prepare for AI.  **[CSCO_3408408_13]**  New WiFi 7 platforms offer hardware portability between on-premises and cloud management.  **[CSCO_3408408_13]** 

10. **OpEx Management and Investment Priorities**  
    **Q:** How is OpEx being managed and which areas are prioritized?  
    **A:** OpEx growth is driven by the addition of Splunk.  **[CSCO_3408408_19]**  Savings from efficiencies are being reinvested into AI and security, the fastest-growing parts of our business.  **[CSCO_3408408_19]** 

91186d57d175e55b1282901c6ada38f125122d1c07c5df2ab01f8d4de9fd740f

- Cisco has lowered its revenue guidance for the full fiscal year by 500 basis points due to macroeconomic uncertainty, customers absorbing high levels of inventory, and ongoing weakness in the service provider market.  **[CSCO_3386184_6]**
- The inventory digestion issue is extending longer than expected, with cloud providers having over 20 weeks of inventory; this is expected to impact sales through the end of fiscal year 2024.  **[CSCO_3386184_13]**
- Revenue levels have returned to fiscal 2019 levels, raising concerns about Cisco's ability to achieve its long-term growth targets of 5% to 7%; there are questions about potential market share loss in core networking, although Cisco disputes this.  **[CSCO_3386184_8]**

1b986f7d492e5f4ccb157dad3acc507d242061005d36d811d4d909dbf390da99

- **Cisco is experiencing strong demand and returning to normal buying patterns**, with product orders growing **14% year-over-year** (*6% excluding Splunk*), indicating that the inventory digestion period is largely behind them. This strong demand is balanced across geographies, customer segments, and product lines.  **[CSCO_3398827_9]** ,  **[CSCO_3398827_8]** ,  **[CSCO_3398827_14]** ,  **[CSCO_3398827_22]**
- **Significant growth in AI-related business**, having crossed **$1 billion in AI orders** with webscale customers and expecting an **additional $1 billion of AI product orders** in fiscal year '25. Enterprises are upgrading their infrastructure in preparation for AI applications, positioning Cisco well to capture this opportunity.  **[CSCO_3398827_17]** ,  **[CSCO_3398827_11]** ,  **[CSCO_3398827_8]**
- **Success with large platform deals and expansion in the security portfolio**, particularly among large enterprise and public sector customers. Cisco is executing **nine-figure deals** that include multiple technology platforms, with the security portfolio being a key area of growth.  **[CSCO_3398827_17]** ,  **[CSCO_3398827_9]** ,  **[CSCO_3398827_16]**

8d2dd9c94e79d112064595a132c3e23b08c53f98c4cf9db125211f2b28d9f6e8

1. **AI Revenue Outlook**  
   **Q:** What is driving the $1B AI orders next year?  
   **A:** The anticipated **$1 billion** in AI orders for fiscal '25 are primarily from back-end infrastructure for web-scale customers, involving systems based on Silicon One and optics. We have identified specific opportunities with high confidence—not just targets but actual deals we expect to win.  **[CSCO_3389288_7]** **[CSCO_3389288_8]** 

2. **Inventory Digestion Impact**  
   **Q:** How is inventory digestion affecting growth expectations?  
   **A:** Customers are on track with inventory digestion, which is positive. As this completes by end of Q4, we expect demand to normalize starting in Q1 fiscal '25 and beyond, supporting **mid-single-digit growth** in our core business next year.  **[CSCO_3389288_7]** **[CSCO_3389288_9]** **[CSCO_3389288_10]** **[CSCO_3389288_13]** 

3. **Splunk Revenue Synergies**  
   **Q:** When will Splunk synergies contribute to growth?  
   **A:** Revenue synergies from the Splunk acquisition are expected to ramp in the second half of fiscal '25. We've identified **5,000 customers** where Cisco is strong and Splunk isn't present. We're incentivizing our sales teams to penetrate these accounts, with sales cycles of **6 to 9 months**.  **[CSCO_3389288_8]** **[CSCO_3389288_9]** **[CSCO_3389288_12]** 

4. **OpEx Investments and Earnings**  
   **Q:** Why will OpEx rise, impacting earnings in '25?  
   **A:** We're investing in integrating Splunk, including product integration, organizational alignment, channel enablement, and sales training. This will increase OpEx in fiscal '25, delaying EPS accretion to fiscal '26. The investment is necessary to achieve the revenue synergies we anticipate.  **[CSCO_3389288_11]** **[CSCO_3389288_12]** **[CSCO_3389288_19]** 

5. **Security Business Outlook**  
   **Q:** What's the growth outlook for security excluding Splunk?  
   **A:** Our security revenue grew **3%** excluding Splunk, but demand was the highest in a couple of years at **high single digits**. New products are ramping, and we expect significant improvement in the second half of '24 and stronger growth in '25.  **[CSCO_3389288_9]** **[CSCO_3389288_11]** 

6. **Gross Margin Expectations**  
   **Q:** How will margins be affected next year?  
   **A:** We expect gross margins in the **66.5% to 67.5%** range for fiscal '25, similar to our Q4 guidance. While Splunk contributes positively to gross margins, some one-time benefits we had this year won't repeat longer term.  **[CSCO_3389288_10]** **[CSCO_3389288_19]** 

7. **Order Trends Normalization**  
   **Q:** When will order trends return to normal?  
   **A:** We anticipate order trends will normalize starting in the second half of fiscal '25, as customers complete inventory digestion and demand stabilizes.  **[CSCO_3389288_13]** **[CSCO_3389288_14]** 

8. **Leverage and Cash Usage**  
   **Q:** How will you use excess cash given increased leverage?  
   **A:** Our cash allocation priorities remain unchanged: support growth, maintain the dividend, and return cash through **$1.25 billion** per quarter in share buybacks. We'll evaluate deleveraging or returning excess cash to shareholders as appropriate.  **[CSCO_3389288_14]** 

9. **Competitive Landscape in Security**  
   **Q:** How does consolidation in security affect your business?  
   **A:** Despite market consolidation, we're well-positioned with a strong market presence. Our innovation, leadership in the SIEM market, and integration with Cisco enhance our offerings. We haven't changed our pricing strategy.  **[CSCO_3389288_16]** 

10. **AI Opportunities with Enterprises**  
    **Q:** What are enterprises doing with AI and how does it affect you?  
    **A:** Enterprise customers are beginning to run pilots for AI infrastructure, but it's still very early. We've had some wins in the enterprise space, but broader adoption will take time.  **[CSCO_3389288_11]** 

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Cisco Systems Inc (CSCO)

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