Okay, why don't we get underway? Good morning, everybody, and welcome to Barclays' 22nd Annual Global Technology Conference. It's a real pleasure to be here with you all this morning, and it is my distinct privilege to be interviewing Chuck Robbins, the Chairman and CEO of Cisco. Chuck, welcome. It's great to have you with us. Thank you. It's great to be here. Thank you very much. And I know you all know Chuck and are probably very familiar with his résumé, but I might just spend a moment just to run through it because there are some points in the résumé that are going to sort of be relevant to the conversation. So Chuck was born in Grayson, Georgia. He achieved a Bachelor of Mathematics at the University of North Carolina at Chapel Hill. He started his career as an application developer at the North Carolina National Bank, which is now part of what is Bank of America. He did a number of roles: Wellfleet Communications, Ascend Communications, before he joined Cisco in 1997. He then did a number of very senior roles inside of Cisco, which culminated in 2015 when Cisco announced that the CEO and Chairman, John Chambers, would be stepping down and that Chuck would be his successor. Chuck was then elected to Chairman of the Board in 2017 and has really been sort of understood to be transformative in terms of the software, the services, cyber, and innovative technologies. He wears a number of different hats outside of his being the CEO of Cisco. He's also the Chairman of the Business Roundtable. He's the Chair of the IB Governor Steering Committee for the World Economic Forum. He sits on the board of BlackRock, and he's also on the board of trustees for the Ford Foundation, and he's also a very avid North Carolina Tar Heels fan as well. Belichick. We got Belichick. So. Biggest news I got. So we're going to dive right in because we don't have a great deal of time here this morning. Chuck, as I mentioned, one of the roles that you're currently in is that you are chairing the Business Roundtable. Obviously, 2024, a very politically charged year. Can you talk to us a little bit about how you navigated 2024, especially with some of the more challenging issues that would have been impacting the Business Roundtable, like immigration and others? First of all, it's great to be here. Thanks to all of you for being here. I think that, look, our intent, particularly from the Business Roundtable perspective, was to execute on nonpartisan growth policies for the United States. That's what we attempted to do. I think we pulled it off. We had either the candidate or representatives of each candidate show up. We had both vice presidential candidates come to the roundtable, so we stayed very balanced. Then on both the Cisco side and the BRT side, because I always have to speak from two different lenses here, I think that we worked hard to be prepared for the important issues that are going to have to be dealt with in 2025. We looked at it from either side. Obviously, with the outcome that we now have, with a Republican Congress and a Republican White House, albeit with a narrow margin in the House, we think that things like tax will be easier than it was going to be. It won't be easy, but it'll be easier than it would have been. I think issues like immigration, the border, legal immigration, all those things, I think, are things that the incoming administration is going to attempt to move very quickly on. Yeah, yeah. One topic in particular that I'd love to get your perspective on is tariffs and what the technology industry should be doing to prepare for the likelihood of increasing tariffs. Yeah, if everyone that was discussed is implemented, I'm not sure what you do other than math. Look, I think every company has been dealing, if you look at supply chain over the years, we've had a very complex supply chain in 14, 15 different countries, and the way we were constantly evolving our supply chain based on things like tax policy, tariffs to some extent, risk factors, market access, and resilience, and then obviously in the pandemic, resilience took on, I'd say from the pandemic to today, resilience took on a couple of new angles, one being things like single country risk. We used to think about geographic resilience by having like East Coast and West Coast of a certain country. Then if you had a natural disaster, you could move over here, but now we know countries can shut down. We never would have dreamed that before. And I'd say the other one now is geopolitical risk, some of which is represented in the geopolitical-driven tariffs versus economically-driven tariffs. And so I think the thing that everybody just has to do is you got to start figuring out, everybody's been moving based on what we knew already. And now I think it's probably an area where we've done a ton of analysis, and now we're just in wait and see mode, and we'll respond based on what happens. Yeah, yeah. One of the things that I think Darin would probably really appreciate hearing from you is just sort of how you're thinking about the outlook, the macroeconomic outlook for 2025, and maybe just how you're seeing your customer base prepare for 2025. Yeah, I think if I just look at it from Cisco's customer base perspective, I think that, look, we have, I talked to some of you already this morning. We have a suite of CEOs today that have never experienced what might be considered normal. So nobody's sitting around waiting for things to get back to normal, to resume spending or things of that nature. And I think that we just get up, you deal with what you deal with, you deal with what you face. You're looking for the next, you wake up every morning wondering what you're going to see when you wake up in the news. So I think that creates a certain set of behaviors. And then I think the AI boom has created an environment where, for our customers, there is a tremendous concern that if they slow down or if they're not leading, that their competitors are going to do something very transformative, which is going to put them in a very difficult position. So there's just this continued energy to modernize, to build their AI strategy, to understand what the applications are going to be, to make sure they're ready, how we're going to deal with security. And then you've got all the cybersecurity issues that are going on around the world and a belief that state activity will likely even increase from where it is, which is pretty hard to believe. So I think that leads to what should be a pretty solid IT spending environment. I think a lot of the reports that we see from different analysts, banks, investment banks, et cetera, would say that that's what they believe as well. Yeah, absolutely. Cisco is enjoying a terrific year. The stock's trading at the 52-week high. The total return to shareholders is in excess of 20%. How do you think about the next three years and what are going to be the sort of drivers of growth that are going to enable you to continue to grow on top of the great success you're currently experiencing? First of all, I recognize that we're having a good year. The last four years have been very difficult from getting into the pandemic to getting out of the supply chain and the inventory glut that we saw in our customer base was fairly painful. We feel good that that's behind us. We've talked a lot about demand signals being back to normal now. If you look at areas where we see growth, obviously the move in AI in both the hyperscalers and the emerging enterprise applications is an area that we are incredibly well positioned for. Our last quarter, our service provider and cloud orders were up 22%, largely driven by AI infrastructure. Then the enterprise is beginning to move. We think AI is one. I think the cybersecurity stuff that we talked about relative to all the threats and the need by our customers to be able to dynamically correlate multiple events to be able to see what's going on in their infrastructure is a big driver. I think there's replatforming of applications that's happening in enterprises that is leading to strengthened data center. We've got this. I'd say in the last six or nine months, we've seen companies take a little more aggressive approach on return to office and being a little more prescriptive about their folks coming back into the office, which I think is driving technology refresh and collaboration technologies, and so there's a lot of positives right now. Yeah, then you've got other areas like an increasing recognition that end-of-life and end-of-sale technology sitting in critical infrastructure, service providers, government institutions is not something that we can deal with going forward because that's the leverage that some of the cyber actors are taking advantage of now to get into this infrastructure. So I think you're going to see increasing pressure to make sure that, which should be positive for us as well. Yeah. One thing I might get you to sort of dive into a little bit more is the software component of your business and just how you think about the role that it's going to play in that growth and how it sort of sits alongside the sort of more traditional hardware piece of the business. Yeah, it's, look, at the end of the day, if you can help a customer achieve their objective or solve their problem with a software solution, you can do it faster, you can get them to the outcome quicker, and you can deliver innovation more rapidly on a constant basis. However, we all know that the entire internet and all the AI infrastructure and everything that's going on also requires incredibly high-performance hardware, so we hit 57% of our revenue coming from recurring sources last quarter, which is a far cry from where we were 10 years ago, but as I remind my team, that means 43% of our business is still not, and so we got to continue to focus on building the hardware. And one of the big advantages that we have, that we haven't talked about enough, that we're going to begin to really talk about more is our silicon that we've designed. The key to our success in the infrastructure side of the hyperscalers is fundamentally our silicon. And so we've invested a lot more over the last six months into that space, added more people. We're running concurrent development now. And so that's a big piece. And then the software side of it, which has led us to currently we exited last quarter with $40 billion in RPO, which takes a lot of pressure off the order cycle. We can absorb a little more variation in product orders than we could 10 years ago, which I think is a positive benefit of shifting. Customers appreciate software-based solutions, and then our shareholders will appreciate at least a little more predictability and stability. Yeah. One question that I'm sure you're getting all the time right now is how are you responding to sort of the demand for AI-driven solutions for your clients? Can you maybe talk to us a little bit about what your vision is for how AI plays a role in your organization and just sort of where are you in that journey? Yeah, I think if you think about, you've got the hyperscalers on one end that are building out all of their infrastructure, and we play a meaningful role in Ethernet connectivity underneath GPUs as well as optics, and then you have the enterprise applications where enterprises are looking to build out and secure AI applications, and they're looking for sort of, they really want converged infrastructure with storage, GPUs, compute network, et cetera, easy to deploy with a common orchestration layer so that they can just move these applications out and not have to spend so much time integrating all this underlying infrastructure, so we've built solutions that we're bringing to market to help them do that, they need security in order to do it, so we've announced we've got a lot of enterprise security in this space. We have another big event coming in January with a suite of security announcements around AI, and then connecting all that together because at the end of the day, the enterprises have their own data sets. They're going to train their own proprietary data sets. They're going to need to combine that with access to the foundational model insights that they can build. And the combination of those two is what's really going to give them the capability to do something unique and meaningful, and so we play across all of that as well as we're just obviously building AI into all of our products for our customers to consume also. Yeah, yeah. An institution of the scale of Cisco, how do you keep innovation alive? How do you sponsor innovation inside the organization to continue to differentiate your offering to your key competitors? It's fundamentally people at the end of the day. You got to have the right people who have high energy, that want to win, that just have a passion for building great technology. And I think that we've evolved a lot of our leadership, and I think we have a great team right now that wakes up every day and loves to do it. Yeah, yeah. Maybe talk a little bit about that because when you sort of read about Cisco and you sort of look what's in the press, a lot of it talks about this sort of wonderful culture that you've developed and how happy your people are and how well you do in. Kumbaya. Yeah. How How does that work? Yeah, you know we want to create a great culture where people love to work there, but we also want people to win, right? I had to tell people early on when we talk about being a family. I'm like, well, last I checked in my family, I'm also accountable. And so you have to have that, but you have to have accountability, and you have to have people who are just really driven to win in addition to creating an environment. Our culture doesn't do well with brash. I would use certain phrase, but I'm going to keep it clean, difficult people. And sometimes hard-charging innovators feel that way to some extent. You have to really understand the difference of when they're being aggressive because they want to win versus they're just not good people. Two different things. Yeah, yeah. One of the things that we're seeing is the emergence of these new specialist AI clouds, like the sort of the CoreWeave. How is that changing the opportunity for you over time? And how do you think about that in terms of is it a threat? Is it a direction you're going? How do you think about that? It's more opportunity for us. I mean, the more customers that want to build out infrastructure, I mean, in this particular case, it's just more access to GPU services that you can in the case of CoreWeave, but you look at other companies like Scale or Cohere or Mistral or all of those. The ability to partner and understand what the unique thing that you can do together is something that we have really been working hard on, so we announced a $1 billion fund, which is whatever. I mean, a lot of people have $1 billion funds, some have bigger funds, but what we did differently is when we went in and built these partnerships, we made them 360-degree commercial partnerships. It wasn't just an investment. It was an investment with an outcome that we believed we could achieve by having tighter relationships. So as an example, with Scale, we made a $160 million investment, but we also wanted to make sure we had the attention of their resources on a particular thing that we thought we could build together. So they made those commitments on the front end to us as we were making the investment. And then they're going to be a big part of this January announcement that we're going to make. So that's how we've been thinking about it. And we learned a ton just by being close to them. Yeah. One thing that I wanted to cover with you is just the Splunk acquisition, and I wonder if you could sort of talk to us a little bit about your vision around that acquisition and how it played into that growth strategy that we talked about at the beginning of the conversation? Look, our customers are running incredibly complex technology infrastructure that spans both private data center. I mean, their private infrastructure, remote users, cloud, home, office. I mean, they're running virtual enterprises on top of the internet. So there's so many dynamics happening in their infrastructure every day. Splunk had done a great job of building this SIEM platform where they were taking in logs and events and things and helping customers correlate what they saw happening. And what we believed is that if we could take all the insights that our customers could gain from their network infrastructure, everything that Cisco builds, and if we could expose that to what Splunk already has in their SIEM and then apply AI on top of that, we felt like we could give the customers greater insights as to what's happening in their technology infrastructure at any given moment than anybody else. And that's where we're headed. So if you think about a customer who has an application issue that is causing a problem with a customer, they need to know quickly, is it the application? Is it the infrastructure? Is it a cyber attack? What is it? And I think we can bring all the insights together to help them actually derive what's going on. The other thing I would say is that a lot of the cyber attacks that we're seeing today and in the future are no longer brute force attacks that you see something really strange happening in your infrastructure and you know it's not normal, so you know there's an attack going on. What we see happening now is stealing credentials, leveraging vulnerabilities that haven't been patched, taking advantage of poor password hygiene, things of that nature. And then they're getting into the infrastructure and then they're moving laterally through the infrastructure. And so my view is when an event looks just like anybody else logging into your infrastructure, it's very difficult to identify that as a cyber event. But if I bring all this data together and I see that event correlated with three other things that are interesting and happening at the same time, that might tell me I got a problem. And so being able to correlate that in real time, I think it's going to be key to defending against these new types of attacks. Yeah. With your Business Roundtable hat on, how do you think about with the change of administration, the coordination between public sector and private enterprise around cyber as a broad topic? Do you see that there's going to be even greater integration or how do you think about that? The current administration had been embarking on a much tighter public-private partnership around cyber and around these attacks. So it had begun to happen. I've had some conversations with some of the incoming administration, particularly those who are going to be responsible for this particular area, and they believe we need to even accelerate that in order to actually do this right. So I think you're going to see more and more of it. And I think that's what's required, honestly. Yeah. How do you think about where you take Cisco from here around the broad topic of security, observability? Like where to from here? Yeah, I think that, look, those two areas are going to continue to get closer and closer together, and they're going to blur over time, much like the example I was just giving you of you're leveraging observability capabilities to get at a cybersecurity issue. And so that's why the Splunk thing was so valuable for us. And one of the first things I did is reverse integrated our application performance management platform into the Splunk team and the observability assets that Cisco had so that they could rationalize it and really go to market one platform. So I think that it's going to be critical for our customers going forward, especially with AI and understanding what's really going on when something's not working the way you thought it should. How do you get at the bottom of that very quickly? I mean, this is what it's going to be all about. Yeah, yeah. The integration process with Splunk, synergies, how are you feeling now that you're sort of a number of months post the announcement? Like how is that shaping up? It's actually gone better than we even modeled. So they're running ahead of the model that we had when we made the decision to acquire them. And they're running slightly ahead on almost every metric, I think. We've moved faster on the Splunk integration, so we've gotten the OpEx, some OpEx synergies sooner than we expected. Their margin profile is very strong. Their revenue slightly ahead. And we have a plan now. We announced a couple of days ago that we integrated their engineering team into our core product organization at Cisco, and we have a plan on the sales integration that's going to occur in the coming couple of quarters. So we feel pretty good. Just looking ahead again to 2025, you saw obviously the Trump Administration 1.0. We're seeing 2.0 rollout. Just how do you compare kind of the 1.0 and its preparation versus what you're seeing this time around? Yeah. I think first of all, I mean, President-elect Trump has been there, so he knows what he's getting into, I think, a little more this year, this time. He's clearly moving faster on the cabinet picks. I think he's moving on people that he knows. And so I think you'll probably see a greater level of stability in the cabinet in this administration than you perhaps saw when he had a mix of people he didn't know and people he didn't know in the first time around. I think they're moving quickly right now. They're working day and night today, every day. And you should expect on post-inauguration that I joked yesterday that pens are going to be flying. They're going to be signing everything they could possibly sign to get things moving. So I think they're going to move a lot faster than they have in the past. And I think he just has the knowledge. He's got the team. And there's a lot of pressing issues. Yeah. What's your big prediction for 2025? It doesn't have to be about specifically the Cisco, sort of more broadly in the technology space. As you look ahead, what's your big prediction? I think there's two things. I think the emergence of the AI application in the enterprise is going to begin in 2025. I think we're going to start to see the real powerful ones. And then I think you're going to start seeing that move towards agents, towards the latter part of the year in the AI front. And I think the cyber, if we're talking just technology, I think the cyber landscape is actually going to continue to escalate, which is pretty hard to believe from here. Yeah. Very good. I appreciate it. Are you comfortable to take a couple of questions from the floor? I know we have microphones at the back of the room. We've got about sort of four, five minutes left, so I could probably take a couple of questions. Is there anybody in the room that has a question for Chuck? We've got one down the front there. Who's this troublemaker? That's your troublemaker. That's him. Hey, Chuck. It's Tim Long here. Yep. You touched on this a little bit, but can you talk a little bit more specifically about the enterprise and market? I think last quarter was pretty solid. We're starting to see signs across the sector that we're due for recovery after you said some challenging years for networking and other pockets as well, and how does macro improvements or any new technologies that Cisco have play into your ability to capitalize on a better enterprise backdrop? Thank you. Yeah. So when you think about the enterprise, I would say we have the very specific definitions of enterprise and then public sector and things of that nature. But I think if you're talking about it in general, you could include federal and things like that. And just to put it in perspective, US federal was a little weak last quarter for us. We ended our quarter with the October month in, which others didn't necessarily experience. And we think so we saw a little pressure there. But globally, public sector was great. And just to put it in perspective, US federal is less than 10% of our business. So I think we can manage that kind of issue. I think enterprise without Splunk was up like 17% on orders last quarter. So we saw that recovery that you're talking about. And I think in general, given everything that's happened over the last five, seven years, there is a fundamental belief in the enterprise that I can never let my technology infrastructure get to the place it was, particularly like when we entered into the pandemic or when I'm getting attacked for these cyber attacks. And I have to be on the leading edge of AI applications. I don't know what that looks like, but I have to be there. And I think those are the things that are actually driving what should be pretty steady spending. And the other thing is one of the big drivers of sort of the campus refresh is when Cisco brings out a new set of campus products. And we do that every seven or eight years. So you can kind of do the math on that as well. Very good. Chuck, I'm mindful that we only have like a couple of minutes left, and I had one question that I did want to ask you, which is we've had the benefit of having a number of private companies here with us through the conference over the two days, a number of emerging technology leaders that are here with us at the conference. As somebody who's had the terrific career that you've had, what advice would you give? Like what do you wish you knew when you embarked on your technology career? What do I wish I knew? I think the requirement to be plugged in on geopolitical issues, societal issues, macro issues, all those things is much greater today than it ever was. I tell our new salespeople, when I was selling, it was all about features. It was like it was a pure tech sale, which was great. I just had to outsell the other person on the technology features that we had. And today, it's so much more complex. Like if we're talking to you, we need to understand the regulatory pressures you're under, the compliance issues you have, the potential implications of tariffs, all the whole legislative roadmap and what that might mean to you and your industry or the other customer. And I think as leaders, like I look at an example of Scale AI with Alexandr Wang, who's like 26 or 27 years old. I had him at a BRT dinner on Tuesday night with other CEOs, and he had spent the entire day on the Hill, and he understands the importance of doing that, and I think that's the biggest difference, is you can't get heads down and just run your company anymore, it'd be great if you could, but I just don't think in this world you can. Terrific. I think that's a great point for us to wrap it up. Chuck Robbins, thank you so much for doing this with us. I hope you all enjoyed it as much as I have. Thanks very much, and enjoy the rest of the day. Thank you. Thank you.