Cisco Systems, Inc.

Welcome to Cisco's Second Quarter Fiscal Year 2019 Financial Results Conference Call. At the request of Cisco, today's conference is being recorded. If you have any objections, you may disconnect. Now I would like to introduce Marilyn Mora, Head of Investor Relations. Ma'am, you may begin.

Thanks, Michelle. Welcome everyone to Cisco's Second Quarter Fiscal 2019 Quarterly Earnings Conference Call. This is Marilyn Mora, Head of Investor Relations, and I'm joined by Chuck Robbins, our Chairman and CEO, and Kelly Kramer, our CFO. By now, you should have seen our earnings press release. A corresponding webcast with slides, including supplemental information, will be made available on our website in the Investor Relations section following the call. Income Statements, Full Gap to Non-Gap Reconciliation Information, Balance Sheets, Cash Flow Statements, and other financial information can also be found in the financial information section of our investor relations website. Throughout this conference call, we will be referencing both GAAP and non-GAAP financial results, and we'll discuss product results in terms of revenue, and geographic and customer results in terms of product orders, unless stated otherwise. All comparisons made throughout this call will be made on a year-over-year basis, unless stated otherwise. The matters we will be discussing today include forward-looking statements, including the guidance we will be providing for the third quarter of fiscal 2019. They are subject to the risks and uncertainties that we discuss in detail in our documents filed with the SEC, specifically the most recent reports on Forms 10-K and 10-Q, which identify important risk factors that could cause actual results to differ materially from those contained in the forward-looking statements. With respect to guidance, please also see the slides and press release that accompany this call for further details. As a reminder, FISCA will not comment on its financial guidance during the quarter unless it is done through an explicit public disclosure. As a reminder, in Q2 on October 28th, we completed the sale of our SPVSS business and accordingly had no revenue or expense from that business in Q2 fiscal 2019. As such, all of the revenue, non-GAAP, and product orders information we will be discussing is normalized to exclude the SPVSS business from our historical results. We have provided historical financial information for the SPVSS business in the slides that accompany this call and on our website to help understand these impacts. As a reminder, the guidance we provided during our Q1 earnings call and today's call has been normalized in the same way. I will now turn the call over to Chuck.

Thank you, Marilyn, and good afternoon, everyone. This quarter, we again demonstrated that we have built a resilient growth engine that is firing on multiple cylinders. Our strategy of expanding our portfolio while investing in our core markets is delivering unprecedented innovation for our customers and sustainable value for our shareholders. We delivered revenue growth across all geographies and businesses, strong margins, double-digit non-gap earnings per share growth, and continued solid cash generation. We're building the technologies that enhance our customers' new digital capabilities and experiences like never before. With a continued expansion to the cloud, the increasing connectivity of users and devices, and the need to secure their enterprises, our customers are facing the most complex and dynamic IT environment we've ever seen. Cisco's intent-based networking architecture helps them navigate this complexity by enabling them to simplify, automate, and securely transform their infrastructure. We are redefining every networking domain for our customers, from the campus to the wide area network to the data center to the cloud, delivering the agility, operational efficiency, and most importantly, the security our customers require to accelerate their digital transformations. Only Cisco can build and deliver a multi-domain intent-based architecture that sits at the intersection of users, devices, applications, and data that can securely connect any user on any device on any network to any application. Simply put, the Cisco of today is at the center of our customer strategies and no longer viewed just as an enabler of those strategies. Now let's review some of the highlights in our key strategic growth areas. Starting with infrastructure platforms, Over the last 18 months, we've been reinventing networking from the ground up to connect every domain of the extended enterprise. And it's clear that the investments we've made in our core business are paying off. We are executing well with continued growth in our infrastructure portfolio and strong customer uptake of our Catalyst 9000 family of switches and our SD-WAN offerings. We are now extending our industry-leading security and intent-based networking capabilities to new IoT edge platforms. connecting devices throughout the enterprise with unprecedented scale, unparalleled flexibility and control. Going forward, you will see us continue to extend our intent-based networking innovations across the portfolio with subscription-based offers that will enable our customers to adopt a consistent architecture across every domain. In the data center, we are enabling digital enterprises to securely access their applications and their data everywhere, from private to public cloud environments, as well as the edge. Two weeks ago, we announced a new architecture that extends the data center to wherever the data exists and across all applications running anywhere. We introduced several new innovations to extend our multi-cloud leadership with ACI Anywhere, HyperFlex Anywhere, and Cloud Center capabilities. We are also well-positioned to take advantage of 100-gig and 400-gig upgrade cycles across enterprise data centers, service provider, and web skill networks. With global Internet traffic expected to increase threefold over the next five years, our customers are facing an exponential demand for capacity. To address their need for speed and performance, we continue to innovate to drive the industry's transition to next-generation high-speed networks of 400 gig and beyond. Our acquisition of Luxtera will further augment our existing capability around silicon and optics, enabling our customers to build the fastest and most efficient networks. Now moving to our security business. We generated strong double-digit growth, reflecting the increasing demand for our market-leading solutions and the trust our customers place in us. The attack surface is only increasing, and our comprehensive approach of integrating security into the intent-based architecture from the network to the cloud to the endpoint has been successful as our installed base continues to grow. With our industry-leading threat intelligence, we are redefining how security is delivered with our multi-domain architecture. For example, as a leader in both SD-WAN and security, Cisco provides the most robust SD-WAN platform integrated with cloud security. This helps to simplify and secure our customers' deployment, operation, and management of their environments. Increasingly, we are helping to secure our customers' distributed enterprises with remote access and cloud-based security solutions. A great example of this is Duo Security's cloud-delivered Zero Trust platform, which significantly expands our footprint in the identity and access market, bringing together user, device and application visibility, and trust. We are seeing strong traction with Duo and good progress in scaling their capabilities while strengthening our cloud-based subscription portfolio. Turning to applications and collaboration, enterprise communications continue to evolve as we move to a digital cloud-based world. We are defining the future of work with next-generation collaboration platforms that have flexible, intuitive, and intelligent on-premise and cloud-based solutions. This comprehensive approach to collaboration is a key reason why customers are adopting our market-leading portfolio, resulting in another quarter of exceptional growth. Cisco provides a full suite of collaboration solutions for calling, meeting, team collaboration, and care with flexible subscription offerings designed to easily integrate into customer workflows. With the deep integration of Broadsoft with our core capabilities, we are now the market leader for cloud-based calling and care solutions with compelling solutions for SMBs as well as enterprises globally. AppDynamics is the largest APM vendor providing real-time analytics and insights across applications, infrastructure, and the network, driving solid momentum with our customers. We have been investing in several new capabilities, delivering the broadest application visibility and monitoring platform in the world. Our real-time analytics and monitoring offerings are mission critical for our customers as they face a growing, complex application environment. To simplify and automate their IT operations, we recently launched AIOps, leveraging AI, machine learning, and automation to enable improved customer experiences and greater business performance. In summary, we are very pleased with our strong quarter and first half performance. Our teams are executing incredibly well, aggressively transitioning to a software model, and accelerating our pace of innovation, and I'm proud of the work they are doing. Our multi-domain intent-based architecture is helping to simplify, automate, and secure the complex IT environments our customers are facing, and I believe we are well-positioned to play an even more strategic role with them as they embrace multi-cloud, edge computing, and digital transformation. The innovation our teams have been driving has now given us the strongest portfolio that we've had in a very long time, and I couldn't be more confident about our future. Kelly, I'll now turn it over to you.