Cisco Systems, Inc. Presents at Global Technology, Internet, Media and Telecommunications Conference, Nov-18-2020 10:15 AM - SEHK:4333

SEHK:4333

Marty Palka, representing Investor Relations for Cisco Systems, made the following statements during the conference:

1. Disclosure Statement:

   • This fireside chat webcast is educational in nature with no new financial information being disclosed.
   • There will be forward-looking statements made during the presentation.
   • Actual results may differ materially from those forward-looking statements and are subject to the risks and uncertainties found in Cisco’s SEC 10-Q and 10-K documents.

2. Acacia Acquisition Update:

   • Cisco still expects the Acacia acquisition to close.
   • They are working with Chinese regulatory authorities.
   • There is confidence that the acquisition will close at some point, but no further details were provided.

3. Response to Question About Acacia Acquisition:

   • Reiterated that Cisco still believes the acquisition will be successful in the near term.

   • No new information was added beyond the existing statement regarding the acquisition.

   • There was no focus on other potential scenarios or alternative strategies at the time of the conference.

** Key Points Mentioned by Scott Harrell**

1. Commercial Segment Resilience:

   • Commercial bookings were down 8% year-over-year in Q1, an improvement from the 23% decline in Q4.
   • Recovery varies by vertical, with some sectors performing better than others.
   • Customers are prioritizing IT projects during the pandemic, focusing on transforming remote work and preparing for a safe return to offices.

2. Work-from-Home Adoption:

   • The pandemic has accelerated the adoption of hybrid work models, with more openness to part-time remote work.
   • Cisco is investing in cloud-based security, collaboration tools, and network infrastructure to support this transition.
   • The acquisition of ThousandEyes enhances network visibility and management, crucial for remote work and SD-WAN deployments.

3. ThousandEyes Acquisition:

   • ThousandEyes helps monitor and troubleshoot remote worker issues, providing visibility into home networks and broader Internet connectivity.
   • It resonates well with SD-WAN customers, offering insights into Internet performance and enhancing application delivery.
   • Synergy with AppDynamics provides comprehensive visibility into application performance, benefiting both IT and line-of-business users.

4. Subscription-Based Strategy:

   • Early phases of subscription renewals are positive, with a focus on maximizing opportunities in 2021 and beyond.
   • Renewals offer access to new software innovations, automation, and security features, essential for business agility and resilience.
   • Security capabilities, including network segmentation and protection against availability-based attacks, are key drivers for renewals.

5. Data Center and 400-Gig Adoption:

   • Hyperscalers and enterprises are installing infrastructure for future growth, with 400-gig capabilities becoming essential.
   • Cisco is well-positioned with 400-gig capable DC switches and a technology roadmap that includes silicon and optics innovations.
   • Market adoption is expected to scale by the end of 2021, driven by increased traffic and new workloads.

6. WiFi 6 Deployment:

   • Rapid adoption of WiFi 6, driven by the availability of compatible devices and the need for higher bandwidth.
   • Companies are using the pandemic to deploy new WiFi infrastructure, preparing for a return to the office with enhanced capabilities.
   • WiFi 6 upgrades often lead to subsequent upgrades in access switches and core network infrastructure, creating a ripple effect of network modernization.

7. 5G and WiFi Coexistence:

   • 5G will complement WiFi, particularly in industrial settings where specific device requirements necessitate ultra-fast and clean spectrum.

   • Cisco is investing in solutions to manage both 5G and WiFi, ensuring seamless connectivity and user experience.

   • Additional spectrum for WiFi 6E will further enhance WiFi's capabilities, addressing many use cases traditionally served by cellular networks.