思科 (CSCO) 2017 Q1 法說會逐字稿

Welcome to Cisco Systems' first quarter and FY17 financial results conference call.

歡迎參加思科系統公司第一季及 2017 財年財務業績電話會議。

At the request of Cisco Systems, today's call is being recorded. If you have any objections, you may disconnect.

應思科系統公司的要求，今天的通話正在錄音。如果有異議可以斷開連接。

Now, I would like to introduce Marilyn Mora, Head of Investor Relations. Ma'am, you may begin.

現在，我想介紹投資者關係主管瑪麗蓮莫拉 (Marilyn Mora)。女士，您可以開始了。

Thanks, Sam. Welcome, everyone, to Cisco's first-quarter FY17 quarterly conference call. This is Marilyn Mora, Head of Investor Relations, and I'm joined by Chuck Robbins, our CEO, and Kelly Kramer, our CFO.

謝謝，山姆。歡迎大家參加思科 2017 財年第一季電話會議。我是投資者關係主管瑪麗蓮莫拉 (Marilyn Mora)，與我一起出席的還有我們的執行長查克羅賓斯 (Chuck Robbins) 和財務長凱利克萊默 (Kelly Kramer)。

By now you should have seen our earnings press release. A corresponding Webcast with slides, including supplemental information, will be available on our website in the Investor Relations section following the call.

現在您應該已經看到我們的收益新聞稿了。電話會議結束後，我們將在網站的「投資者關係」部分提供相應的網路廣播和幻燈片，其中包括補充資訊。

Income statements, full GAAP to non-GAAP reconciliation information, balance sheets, cash flow statements, and other financial information can also be found on a financial information section of our Investor Relations website. As is customary in Q1, we have made certain reclassifications to our prior-period amounts to conform to the current period's presentation. The reclassified amounts have been posted on our website. Click on the Financial Reporting section of the website to access these documents.

您也可以在我們的投資人關係網站的財務資訊部分找到損益表、完整的 GAAP 與非 GAAP 調節資訊、資產負債表、現金流量表和其他財務資訊。按照第一季的慣例，我們對前期金額進行了某些重新分類，以符合本期的呈現方式。重新分類的金額已發佈在我們的網站上。點擊網站的財務報告部分即可存取這些文件。

Throughout this conference call, we will be referencing both GAAP and non-GAAP financial results, and we will discuss product results in terms of revenue, and geographic and customer results in terms of product orders, unless stated otherwise. All comparison throughout this call will be made on a year-over-year basis unless stated other wise.

在整個電話會議過程中，我們將參考 GAAP 和非 GAAP 財務結果，並且我們將從收入方面討論產品結果，從產品訂單方面討論地理和客戶結果，除非另有說明。除非另有說明，本次電話會議中的所有比較都將以同比進行。

The matters we will be discussing include forward-looking statements, including the guidance we will be providing for the second quarter of FY17. They are subject to the risks and uncertainties that we discuss in detail in our documents filed with the SEC, specifically the most recent annual report on form 10-K, which identifies important risk factors that could cause actual results to differ materially from those contained in the forward-looking statements.

我們將要討論的事項包括前瞻性陳述，包括我們將為 2017 財年第二季提供的指導。它們受到我們在提交給美國證券交易委員會的文件中詳細討論的風險和不確定性的影響，特別是最新的 10-K 表格年度報告，其中確定了可能導致實際結果與前瞻性陳述中的結果存在重大差異的重要風險因素。

With respect to guidance, please also see the slides and press release that accompany this call for further details. As a reminder, Cisco will not comment on its financial guidance during the quarter unless it is done through an explicit public disclosure.

關於指導，請參閱本次電話會議附帶的幻燈片和新聞稿以了解更多詳細資訊。提醒一下，除非透過明確的公開揭露，否則思科不會對本季的財務指引發表評論。

As a reminder in Q2 FY16, on November 20, 2015, we completed the sale of the Customer Premises Equipment portion of our SP Video Connected Devises business and accordingly had no revenue or expense from that business in Q1 FY17. As such, all of the revenue, non-GAAP and product orders information we will be discussing is normalized to exclude the SP Video CPE business from our historical results.

需要提醒的是，2016 財年第二季度，我們於 2015 年 11 月 20 日完成了 SP 視訊互聯設備業務的客戶端設備部分的出售，因此 2017 財年第一季該業務沒有收入或支出。因此，我們將討論的所有收入、非 GAAP 和產品訂單資訊都經過標準化，以將 SP Video CPE 業務排除在我們的歷史結果之外。

We have provided historical financial information for the SP Video CPE business in the slides that accompany this call and on our website to help to understand these impacts. As a reminder, the guidance we provided during our Q4 earnings call and today's call has been normalized in the same way.

我們在本次電話會議附帶的幻燈片和我們的網站上提供了 SP Video CPE 業務的歷史財務信息，以幫助理解這些影響。提醒一下，我們在第四季度收益電話會議和今天的電話會議上提供的指導已經以相同的方式標準化。

With that, I'll go ahead and turn it over to you, Chuck.

有了這個，我就可以把它交給你了，查克。

Thank you, Marilyn.

謝謝你，瑪麗蓮。

We delivered a strong Q1 in an environment that continues to be challenging. We executed very well in the quarter, with revenue growing 1% and non-GAAP earnings per share growing 3%, along with continued strength in non-GAAP gross and operating margins. This quarter total product orders declined 2%, largely due to Service Provider orders declining 12%, which was worse than our expectations heading into the quarter.

在持續充滿挑戰的環境中，我們取得了強勁的第一季業績。本季我們的業績表現非常出色，營收成長了 1%，非公認會計準則每股收益成長了 3%，同時非公認會計準則毛利率和營業利潤率也持續保持強勁。本季總產品訂單下降 2%，主要是由於服務提供者訂單下降 12%，比我們本季的預期要差。

We continued to show great product in how we are aligning our business model to the way our customers want to consume Cisco technology. There are many strong indicators that we are driving this change, including the 48% growth in our product deferred revenue related to our recurring software and subscriptions. At the same time, we are delivering more innovation with simple, intelligent automated solutions with industry-leading security across our portfolio.

我們不斷展示出色的產品，使我們的業務模式與客戶希望使用思科技術的方式保持一致。有許多強有力的指標表明我們正在推動這項變革，包括與我們的經常性軟體和訂閱相關的產品遞延收入成長 48%。同時，我們正在透過簡單、聰明的自動化解決方案以及整個產品組合中業界領先的安全性提供更多創新。

Let me review a few areas of our business where our innovation is driving momentum. First, security. Our security revenue grew 11%, marking the fourth consecutive quarter of double-digit growth. We're driving more subscription-based recurring business, resulting in deferred revenue growth of 39%.

讓我回顧一下我們業務中幾個透過創新推動發展勢頭的領域。第一，安全。我們的安全收入成長了 11%，這是連續第四個季度實現兩位數成長。我們正在推動更多基於訂閱的經常性業務，從而實現 39% 的遞延收入成長。

Our competitive position in security is growing stronger, as our integrated architecture approach and best-of-breed portfolio resonates with our customers. In fact, we're the only company with security product revenue exceeding a $2 billion annualized run rate with double-digit growth. I'm incredibly pleased with how the team has transformed this business from where we were just a few years ago, establishing Cisco as the market leader in the most critical priority area for our customers.

隨著我們的整合架構方法和最佳產品組合引起客戶的共鳴，我們在安全領域的競爭地位日益增強。事實上，我們是唯一一家安全產品收入年化運作率超過 20 億美元且實現兩位數成長的公司。我對團隊如何將這項業務從幾年前的狀況轉變而來感到非常高興，這使得思科成為客戶最關鍵優先領域的市場領導者。

This past quarter, we again drove rapid adoption of our advanced threat solutions, with AMP revenue growing over 70% and now deployed at over 22,000 customers globally. We also see ongoing traction with our next-generation firewall revenue growing over 35%, as we added 5,300 customers in Q1 bringing our total next-gen firewall customer base to approximately 62,000.

上個季度，我們再次推動了高階威脅解決方案的快速採用，AMP 收入成長了 70% 以上，目前已在全球超過 22,000 個客戶中部署。我們也看到下一代防火牆收入持續成長超過 35%，因為我們在第一季增加了 5,300 名客戶，使我們的下一代防火牆客戶群總數達到約 62,000 名。

Going forward, we are driving innovation, as we extend our security architecture from the network to the endpoint to the cloud. Over two weeks ago at our partner summit, we launched our enhanced AMP for Endpoints, a SaaS-based cloud managed security solution combining prevention, detection and response capabilities delivering simplified and effective endpoint security through our threat-centric architecture.

展望未來，我們將推動創新，將我們的安全架構從網路擴展到端點，再擴展到雲端。兩週前，在我們的合作夥伴高峰會上，我們推出了增強型 AMP for Endpoints，這是一種基於 SaaS 的雲端託管安全解決方案，結合了預防、偵測和回應功能，透過以威脅為中心的架構提供簡化和有效的端點安全。

Second, our next-generation data center, our goal is to build the best private and hybrid cloud solutions for our customers. We are investing heavily in our data center portfolio to extend our market leadership. To do this, we are delivering software, hardware and systems at all levels of the data center stack and across delivery models. Our customers' widespread adoption of Cisco's ACI family of data center networking products continued in Q1, with revenue growth of 33% to an annualized revenue run rate now of $3 billion.

第二，我們的下一代資料中心，我們的目標是為客戶打造最好的私有雲和混合雲解決方案。我們正在大力投資我們的資料中心組合，以擴大我們的市場領導地位。為了實現這一目標，我們在資料中心堆疊的各個層面和交付模型中提供軟體、硬體和系統。我們的客戶在第一季繼續廣泛採用思科 ACI 系列資料中心網路產品，營收成長了 33%，年化營收運行率目前達到 30 億美元。

The automation of data center networks that ACI delivers is the first step in enabling our customers to move work loads in and out of public cloud environments, while maintaining enterprise security and policy. We are building on the foundation of ACI by extending our capabilities with analytics through tetration, agnostic cloud management with cloud center from our CliQr acquisition and our hyper converge offering, HyperFlex.

ACI 提供的資料中心網路自動化是使我們的客戶能夠將工作負載移入和移出公有雲環境同時維護企業安全和策略的第一步。我們在 ACI 的基礎上，透過四重分析擴展我們的分析能力，透過收購 CliQr 實現不可知雲端管理，並透過我們的超融合產品 HyperFlex 實現雲端中心管理。

This will give our customers flexibility, agility and savings by delivering the benefits of both private and public clouds. We have a unique set of capabilities to lead in this market and address our customers needs for delivering business applications quickly, cost effectively and at scale.

這將為我們的客戶提供私有雲和公有雲的優勢，為他們帶來靈活性、敏捷性和節省成本。我們擁有一套獨特的能力來引領這個市場並滿足客戶快速、經濟高效和大規模交付業務應用程式的需求。

In collaboration, we are adding new capabilities to our collaboration and IOT offerings through organic investments, acquisitions and partnerships. As a global market leader, Cisco's collaboration business has a solid foundation to drive our road map of products and services that will increasingly be delivered from the cloud such as Spark, our end-to-end business collaboration suite. Over the last few months, we've added two significant partners to our collaboration ecosystem. We announced a global strategic alliance with Salesforce to natively integrate Cisco's cloud collaboration platform with Salesforce's Lightning platform. This will deliver expanded reach and relevance as part of our cloud strategy.

在合作中，我們透過有機投資、收購和合作為我們的合作和物聯網產品增添新功能。身為全球市場領導者，思科的協作業務擁有堅實的基礎，可以推動我們的產品和服務路線圖，這些產品和服務將越來越多地透過雲端交付，例如我們的端到端業務協作套件 Spark。在過去的幾個月裡，我們在我們的協作生態系統中增加了兩個重要的合作夥伴。我們宣布與 Salesforce 建立全球策略聯盟，將思科的雲端協作平台與 Salesforce 的 Lightning 平台進行原生整合。作為我們雲端策略的一部分，這將擴大覆蓋範圍和相關性。

We also formed an alliance with IBM to further enhance the collaboration experience for our customers by combining our collaboration and analytics technologies. We are integrating our Cisco Spark and WebEx offerings with IBM's cloud collaboration solutions, along with cognitive computing capabilities enabled by the IBM Watson platform. While the dynamics in service provider and emerging markets continue to present headwinds to overall growth, I'm pleased with our success in accelerating our momentum in our key investment areas and our commitment to operational discipline.

我們也與 IBM 結盟，透過結合我們的協作和分析技術，進一步增強客戶的協作體驗。我們正在將 Cisco Spark 和 WebEx 產品與 IBM 的雲端協作解決方案以及 IBM Watson 平台支援的認知運算功能結合。儘管服務提供者和新興市場的動態繼續對整體成長造成阻力，但我對我們在加速關鍵投資領域的發展勢頭和對營運紀律的承諾方面取得的成功感到高興。

Now let me hand it over to Kelly to walk through our Q1 results and outlook in more detail.

現在，讓我將話題交給凱利，讓他更詳細地介紹我們的第一季業績和展望。

Thanks, Chuck.

謝謝，查克。

We executed well on our financial strategy of driving profitable growth, managing our portfolio and strategic investments and delivering shareholder value. On driving profitable growth, total revenue grew 1%, while our non-GAAP EPS was up 3%. We expanded our profitability year over year, with increases in both non-GAAP gross margin and non-GAAP operating margins.

我們出色地執行了推動獲利成長、管理投資組合和策略投資以及實現股東價值的財務策略。在推動獲利成長方面，總收入成長了 1%，而非 GAAP 每股盈餘成長了 3%。我們的獲利能力逐年提高，非公認會計準則毛利率和非公認會計準則營業利潤率均有所提高。

Let me provide some details on revenue. Total product revenue was down 1%. We saw switching decline 7%, driven by weakness in campus, partially offset by continued strong momentum in ACI, which was up 33%, as Chuck mentioned. In campus, we still see a pause in enterprise spend, largely driven by uncertainty in the macro environment.

讓我提供一些有關收入的詳細資訊。總產品收入下降了1%。我們看到轉換率下降了 7%，這是由於校園業務疲軟所致，但正如查克提到的，ACI 繼續保持強勁勢頭（上漲了 33%）部分抵消了這一下降。在校園方面，我們仍然看到企業支出暫停，這主要是由於宏觀環境的不確定性。

Routing grew 6%, driven by growth in both SPCORE and Edge. Collaboration was down 3%, although we did have solid order growth. The revenue decrease was driven by telepresence and unified communications endpoints, partially offset by strong growth of 10% in conferencing as we see more customers each quarter committing to WebEx. We saw good momentum again in the transition to subscriptions and SaaS offers with deferred revenue up 14%.

路由成長了 6%，這得益於 SPCORE 和 Edge 的成長。儘管我們的訂單量確實穩定成長，但合作量卻下降了 3%。營收下降是由於網真和統一通訊終端所致，但由於我們看到每季都有更多客戶選擇 WebEx，會議業務 10% 的強勁成長部分抵消了下降。我們在訂閱和 SaaS 服務的轉型中再次看到了良好的勢頭，遞延收入成長了 14%。

Data center declined 3%, impacted by the market shift we've seen from Blade to Rack. While not significant in terms of revenue at this point, we did see our new hyper converged offering, HyperFlex, as solid early uptake by our customers. Wireless declined 2%, lead by a decline in controllers and soft e-rate funding, partially offset by strong growth in Meraki with our cloud managed product line.

資料中心下降了 3%，受到市場從刀鋒式伺服器轉變為機架式伺服器的影響。雖然目前的收入並不可觀，但我們確實看到我們的新超融合產品 HyperFlex 得到了客戶的積極早期採用。無線業務下降了 2%，主要原因是控制器和軟電子利率融資的下降，但 Meraki 和我們的雲端管理產品線的強勁成長部分抵消了這一影響。

Security grew 11%, with deferred revenue growth of 39% as we transition to more software and recurring revenue. We had strong performance in our advanced threat security, up 100% as well as web security solutions, which was up 60%. Services grew 7% with our ongoing focus on renewals and attach rates. Overall, we're making progress each quarter on our goal of driving more recurring revenue. Total deferred revenue grew 12%, with product up 19% and services up 8%. The portion of our product deferred revenue related to our recurring software and subscription businesses grew 48% to $3.8 billion.

隨著我們轉向更多軟體和經常性收入，安全收入成長了 11%，遞延收入成長了 39%。我們的高階威脅安全表現強勁，成長了 100%，網路安全解決方案也成長了 60%。由於我們持續關注續約和附加率，服務成長了 7%。總體而言，我們每季都在實現增加經常性收入的目標方面取得進展。總遞延收入成長 12%，其中產品成長 19%，服務成長 8%。與我們的經常性軟體和訂閱業務相關的產品遞延收入部分成長了 48%，達到 38 億美元。

From an orders perspective, total product orders declined 2%, with book-to-bill below one. Looking at our geographies, which is the primary way we run our business, Americas was down 4%, EMEA grew 1%, and APJC grew 4%. Total emerging markets declined 2%, with the BRICs plus Mexico up 2%. In terms of customer segments, enterprise grew 5%, commercial grew 1%, public sector was flat, and service provider declined 12%.

從訂單角度來看，產品訂單總量下降了2%，訂單出貨比低於1。從我們的地理位置來看，這是我們經營業務的主要方式，美洲下降了 4%，歐洲、中東和非洲地區成長了 1%，亞太及日本地區成長了 4%。新興市場整體下跌 2%，其中金磚四國加上墨西哥上漲 2%。從客戶細分來看，企業成長5%，商業成長1%，公共部門持平，服務提供者下降12%。

We are driving consistent profitability. From a non-GAAP perspective, total gross margin was 65.2%, growing 0.3 points, with product gross margin of 64.8%, up 0.3 points and service gross margin flat at 66.2%. We increased our non-GAAP operating margin to 31.6%, improving 0.2 points. We remain disciplined and focused on increasing operational efficiencies and productivity. In terms of our bottom line, we delivered non-GAAP EPS of $0.61, up 3%. GAAP EPS was $0.46.

我們正在努力實現持續盈利。從非美國通用會計準則 (Non-GAAP) 來看，總毛利率為 65.2%，成長 0.3 個百分點，其中產品毛利率為 64.8%，成長 0.3 個百分點，服務毛利率持平於 66.2%。我們的非公認會計準則營業利潤率提高至 31.6%，提高了 0.2 個百分點。我們保持紀律並專注於提高營運效率和生產力。就我們的底線而言，我們的非 GAAP 每股收益為 0.61 美元，成長 3%。GAAP EPS 為 0.46 美元。

Moving to our portfolio and strategic investments, we completed three acquisitions in Q1, increasing our investments in key priority and growth areas including CloudLock, which specializes in cloud access security broker technology, which is part of our security business, ContainerX that develops enterprise-class container management technology and Worklife, which develops meeting software that is complimentary to our collaboration business.

談到我們的投資組合和策略投資，我們在第一季完成了三項收購，增加了對關鍵優先和成長領域的投資，包括專門從事雲端存取安全代理技術的 CloudLock（這是我們安全業務的一部分）、開發企業級容器管理技術的 ContainerX 和開發與我們的協作業務互補的會議軟體的 Worklife。

Moving on to shareholder value, in Q1 we delivered operating cash flow of $2.7 billion. Total cash, cash equivalents and investments at the end of Q1 were $71 billion, with $10.4 billion available in the US. We returned $2.3 billion to shareholders during the quarter. That included $1 billion of share repurchases and $1.3 billion for our quarterly dividend. To summarize, we executed well in Q1 delivering, strong profitable growth. We also made solid progress on our transition to more software and subscription based models. We're committed to making the key strategic moves and disciplined investments to drive long-term financial performance and deliver shareholder value.

談到股東價值，第一季我們實現了 27 億美元的經營現金流。第一季末的現金、現金等價物和投資總額為 710 億美元，其中美國有 104 億美元。本季我們向股東返還了 23 億美元。其中包括 10 億美元的股票回購和 13 億美元的季度股利。總而言之，我們在第一季表現良好，實現了強勁的獲利成長。我們在向更多基於軟體和訂閱的模式轉型方面也取得了堅實的進展。我們致力於採取關鍵的策略舉措和嚴格的投資，以推動長期財務表現並實現股東價值。

Now let me reiterate the guidance we provided in the press release for the second quarter of FY17. This guidance includes the type of forward-looking information that Marilyn referred to earlier. The guidance for the second quarter of FY17 is as follows. We expect revenue to decline in the range of minus-2% to minus-4% year over year, normalize to exclude the SP Video CPE business from Q2 FY16.

現在，讓我重申我們在 2017 財年第二季新聞稿中提供的指導。本指南包含瑪麗蓮之前提到的前瞻性資訊類型。2017財年第二季的指引如下。我們預計營收將年減 2% 至 4%，正常化不包括 2016 財年第二季的 SP 視訊 CPE 業務。

We anticipate non-GAAP gross margin rate to be in the range of 63% to 64% and the non-GAAP operating margin rate is expected to be in the range of 29% to 30%. The non-GAAP tax provision rate is expected to be 22%. Non-GAAP earnings per share is expected to be in the range of $0.55 to $0.57.

我們預計非公認會計準則毛利率將在 63% 至 64% 之間，非公認會計準則營業利潤率預計將在 29% 至 30% 之間。非公認會計準則稅務準備率預計為22%。非公認會計準則每股收益預計在 0.55 美元至 0.57 美元之間。

I'll now turn it back over to Chuck to summarize the call.

現在我將把電話轉回給查克來總結這通通話。

Thanks, Kelly. I'm very pleased with the success of the investments we've made in priority growth areas such as security, collaboration and our ACI platform. These areas are key building blocks, along with our strong franchise and switching and routing, that place Cisco in a unique position with our customers as they become increasingly digital.

謝謝，凱利。我對我們在安全、協作和 ACI 平台等優先成長領域所做的投資所取得的成功感到非常高興。這些領域是我們強大的特許經營權以及交換和路由的關鍵組成部分，使思科在客戶日益數位化的過程中處於獨特的地位。

As you've seen with our Meraki platform, we've achieved rapid adoption of cloud managed networking, with enterprise security and policy delivered as a service. Over the next several years, we will bring this automation, management and security at scale to the balance of our switching and routing portfolio as we continue to offer new consumption models aligned to our customers' needs. While this is no small task, it's an incredible opportunity for Cisco as we bring this successful model to the largest part of our business.

正如您在我們的 Meraki 平台上看到的，我們已經實現了雲端管理網路的快速採用，並將企業安全和策略作為服務提供。在接下來的幾年裡，我們將把這種自動化、管理和安全性大規模地納入我們的交換和路由產品組合的平衡中，同時我們將繼續提供符合客戶需求的新消費模式。雖然這不是一項小任務，但對思科來說，這是一個難得的機會，因為我們可以將這個成功模式推廣到我們業務的最大部分。

As we make these investments we also remain firmly committed to operational discipline and driving long-term value for our customers and shareholders and I'm very optimistic about our future.

在進行這些投資的同時，我們也堅定地致力於營運紀律並為我們的客戶和股東創造長期價值，我對我們的未來非常樂觀。

Marilyn, now I'll turn it back to you for questions.

瑪麗蓮，現在我把問題交還給你。

Thanks, Chuck. Sam, let's go ahead and open the line for questions. While Sam is doing that, I would like to remind the audience we ask you to please ask one question.

謝謝，查克。山姆，我們開始回答問題吧。當 Sam 這樣做的時候，我想提醒觀眾，我們請您問一個問題。

Thank you. Our first question is from Ittai Kidron with Oppenheimer.

謝謝。我們的第一個問題來自奧本海默的 Ittai Kidron。

Chuck, I want to talk a little bit about the product mix between the divisions. The switching results are very disappointing. Clearly the wireless is now declining. Data center, and I have been asking you about data center for three quarters in a row and it's still not delivering and you've had changes in the leadership over there as well, which suggests still not where it needs to be. I guess I'm trying to gauge how much of the challenges that you are seeing here right now, in your opinion, are macro driven versus perhaps portfolio driven, because it seemed like a lot of competitors in some of these areas are actually doing very well in switching, for example, and (inaudible) and wireless, HP, even in the data centers doing well, (inaudible) clearly doing well.

查克，我想談談各部門之間的產品組合。轉換結果非常令人失望。顯然，無線網路正在衰落。資料中心，我已經連續三個季度向您詢問有關資料中心的問題，但它仍然沒有交付，而且那裡的領導層也發生了變化，這表明它仍然沒有達到需要的水平。我想我正在嘗試判斷您現在看到的挑戰有多少是由宏觀驅動還是投資組合驅動的，因為看起來這些領域的許多競爭對手實際上在交換方面做得很好，例如（聽不清楚）和無線，惠普甚至在資料中心方面也做得很好，（聽不清楚）顯然做得很好。

These are key major areas for you and we're seeing revenue decline. Help us understand kind of a little bit of what's going on under the surface here and what is it that makes you feel comfortable that there's no big problem. On the flip side, is there anything on the portfolio side that you think could turn the tide here?

這些都是你們關注的關鍵領域，而我們的收入卻在下降。請幫助我們稍微了解這裡到底發生了什麼事情，以及是什麼讓您感到放心，認為沒有什麼大問題。另一方面，您認為投資組合方面有什麼可以扭轉局勢嗎？

Hey, Ittai, thanks for the question. Let me hit a few of those areas. Let me first just acknowledge that there are always areas we can execute more effectively. We are working right now, the teams have been working over the last year on innovation in many of the areas you mentioned and again, I'm optimistic about the pipeline of innovation we have right now.

嘿，Ittai，謝謝你的提問。讓我來談談其中的幾個領域。首先我要承認，總有一些領域我們可以執行得更有效。我們現在正在努力，團隊在過去一年中一直致力於您提到的許多領域的創新，而且我對我們目前的創新管道感到樂觀。

I think when you look at the switching portfolio for us, back in January, when we saw the real market declines at that time and we called out the first pause we saw in the enterprise campus refresh, it's just basically maintained. It stayed the same way throughout the year. I'm pretty comfortable with our position there and as we continue to work on bringing automation and security and cloud-based management to the rest of the portfolio, I think that, that will help our customers see the opportunity to refresh.

我認為，當您回顧我們的轉換組合時，早在一月份，當我們看到當時真正的市場下滑時，我們就喊出了企業園區更新中看到的第一次停頓，它基本上保持了下來。全年情況都保持不變。我對我們在那裡的地位非常滿意，隨著我們繼續努力將自動化、安全性和基於雲端的管理引入其餘產品組合中，我認為這將幫助我們的客戶看到更新的機會。

For me, it's really about as we look at the key driver of refresh over the longer term in the campus, I think that it's going to be really around automation, which can substantially reduce the operating expenses for our customers, as well as security into the network and analytics out of the network. In a couple other areas you mentioned, I think in UCS there's been a fundamental shift in the data center to, again, we've talked about the rack technology and in hyper converge we have some early success with HyperFlex and we have some new capabilities that will be coming out after the first of the calendar year that I think will help us in that space.

對我來說，這實際上關乎我們看待校園長期更新的關鍵驅動力，我認為這將真正圍繞自動化，這可以大幅降低客戶的營運費用，以及網路內的安全性和網路外的分析能力。在您提到的其他幾個領域中，我認為在 UCS 中，資料中心發生了根本性的轉變，我們再次討論了機架技術，在超融合方面，我們在 HyperFlex 方面取得了一些早期成功，並且我們有一些新功能將在日曆年的第一天之後推出，我認為這將對我們在該領域有所幫助。

On the wireless front, there are really, I think there are two key drivers there. First of all is the market is transitioning to a controller-less architecture, so in large part, our access points were actually positive but the controller side of that business was down, Meraki was positive, and then also we are a pretty substantial recipient to the e-rate business, so as that has moved out much more slowly than expected, I think that, that has also impacted that business. Hopefully that gives you some color around those areas.

在無線方面，我認為確實有兩個關鍵驅動因素。首先，市場正在向無控制器架構轉型，因此，在很大程度上，我們的接入點實際上是積極的，但該業務的控制器方面卻在下滑，而 Meraki 是積極的，而且我們也是電子費率業務相當大的接受者，因此，由於該業務的發展速度比預期的要慢得多，我認為這也對該業務產生了影響。希望這能給你一些關於這些區域的資訊。

Thanks, Chuck.

謝謝，查克。

Our next question is from Vijay Bhagavath with Deutsche Bank.

我們的下一個問題來自德意志銀行的 Vijay Bhagavath。

Are you there?

你在嗎？

Oh, yes, I'm here. I'm sorry, I was talking to myself on mute. Yes, so once again, a replay. Hi, Chuck, Kelly. In some sense, the January quarter guide is a snapshot in time and it lags what CEOs, CIOs could be thinking latest in terms of their spending intentions for the New Year. My question for both of you is in your latest cause for business leaders, post elections in particular, has CEO/CIO sentiment here in the US in particular improved in your view? Where do you think would be focus areas of spending in the context of your portfolio? Kelly, internally in the Company, where would you invest the most in terms of the product roadmap? Thanks.

噢，是的，我在這裡。對不起，我剛才在靜音自言自語。是的，再重播一次。嗨，查克，凱利。從某種意義上說，一月份季度指南只是時間的一個快照，它落後於執行長和資訊長對新年支出意圖的最新想法。我想問你們兩位的問題是，在你們最近為商業領袖提出的議題中，特別是在選舉之後，你們認為美國的 CEO/CIO 情緒是否有所改善？您認為在您的投資組合中，支出的重點領域是什麼？凱利，在公司內部，就產品路線圖而言，您會在哪些方面投入最多？謝謝。

Thanks, Vijay. I think if you just look at our guidance, let me be clear. It's predominantly the SP weakness and the overall CapEx challenges that we've seen in SP. That business is large account driven. You can assume that we have done an account by account by account analysis in that space and understand what's going on there. Right now I think there are a unique set of characteristics, particularly in the SP space. You have the overarching macro uncertainty in the economy, which I think has lead to the SP CapEx weakness that's been reported all year by the analysts, as well as you have political and regulatory environments that are somewhat uncertain, both in the US and around the world.

謝謝，維傑。我想如果你只看我們的指導，我就能清楚明白。我們在 SP 中看到的主要是 SP 的弱點和整體資本支出挑戰。該業務由大客戶驅動。您可以假設我們已經在該領域逐一帳戶地進行了分析，並了解那裡發生的情況。現在我認為有一組獨特的特徵，特別是在 SP 領域。經濟中存在整體宏觀不確定性，我認為這導致了分析師全年報告的 SP 資本支出疲軟，美國和世界各地的政治和監管環境也存在一定不確定性。

Some of those could turn more favorable. Some of those could remain negative. We're just not going to model any improvement there and that's the real reason for the guide, just to be clear on that. Post election, I think that most CEOs that I talk to, we are pragmatic about the result and now we are all focused on the policy issues that matter to each of our companies. We're -- I think that President-elect Trump appears to be very business oriented and is very focused on driving the US economy and any time the US economy improves, that's certainly good for us. Kelly, any comments?

其中一些可能會變得更加有利。其中一些可能仍是負面的。我們只是不會在那裡模擬任何改進，這就是指南的真正原因，只是為了明確這一點。選舉結束後，我認為與我交談過的大多數執行長都對結果持務實態度，現在我們都專注於對每家公司都重要的政策議題。我們——我認為當選總統川普似乎非常注重商業，非常注重推動美國經濟，任何時候美國經濟好轉，對我們來說肯定是好事。凱利，有什麼評論嗎？

No, I agree. To address where we're investing the most, because no matter what the economy we're going to be investing for the future. I'd say it's in the same areas we have been. We are continuing to invest heavily in security. We think there's a lot of room to run there. I think we're benefiting and you're seeing us benefit from having not only a best-of-breed portfolio but an integrated solution that ultimately we do think once CIOs start spending again we'll see also drive some of the campus, hopefully.

不，我同意。解決我們投資最多的地方，因為無論經濟如何，我們都會為未來投資。我想說它和我們去過的地區是一樣的。我們將繼續在安全方面投入大量資金。我們認為那裡有很大的發展空間。我認為我們正在受益，而且您也看到我們受益匪淺，因為我們不僅擁有一流的產品組合，而且還擁有整合的解決方案，我們最終認為，一旦 CIO 再次開始支出，我們也希望看到它推動一些校園的發展。

For sure security, data centers a focus for us and Chuck mentioned some of the innovation we have with the data center but also with the analytics around that. Then even in the core we're investing. Chuck talked about how we're driving automation and things along those lines. We're putting heavily our investment there as we drive innovation that you'll see today as well as going forward the next few quarters.

為了確保安全，資料中心是我們的重點，Chuck 提到了我們在資料中心以及圍繞資料中心的分析方面的一些創新。我們甚至還在核心領域進行投資。查克談到了我們如何推動自動化以及相關領域的發展。我們在那裡投入了大量資金，以推動您今天以及未來幾季將看到的創新。

Great, thanks, Kelly.

太好了，謝謝，凱利。

Next question is from Pierre Ferragu from Bernstein.

下一個問題來自伯恩斯坦的皮耶費拉古 (Pierre Ferragu)。

Hi, Chuck, Kelly and Marilyn. Thanks for taking the question. I just wanted to dig a bit into your deferred product revenues this quarter that have increased I think by a bit more than $1 billion year on year and actually $700 million or so, almost $700 million sequentially. It's a very impressive performance. The question I have is how do I take that into account when I look at your overall product performance that you had (inaudible) revenues slightly down in the quarter, but I would assume that a lot of that is related to the transition towards your subscription business. Do you have an estimate as how much this transition has impacted your number this quarter? Then of course I have the same question for next quarter. Your guide is very conservative. How much of this transition is actually impacting your guide for Q2 as well? Thank you.

嗨，查克、凱莉和瑪麗蓮。感謝您回答這個問題。我只是想深入了解本季的遞延產品收入，我認為該收入同比增長了 10 億美元多一點，實際上增加了 7 億美元左右，環比增加了近 7 億美元。這是一次非常令人印象深刻的表演。我的問題是，當我查看您的整體產品表現時，我該如何考慮到這一點，即您本季度的收入（聽不清楚）略有下降，但我認為這在很大程度上與向訂閱業務的轉型有關。您是否估計過這種轉變對本季的數字有多大影響？那我當然對下個季度也有同樣的疑問。你的導遊非常保守。這種轉變實際上對您對第二季度的指導有多大影響？謝謝。

Thanks, Pierre. I appreciate the question. Yes, we are very happy with the progress we are making on it and you can see it on the balance sheet, to your point. We are up sequentially as well as over $1 billion, $1.2 billion year over year. I'd say it's a couple points for sure impact on our growth and it's a combination of -- its largely been historically collaboration and security and Meraki, but we are continuing to add on our core platform with our Cisco ONE suite, like I mentioned last quarter, which that is now being recognized ratable where a year ago, we would have recognized that as a perpetual license sale. For example, just using Cisco ONE as an example in this quarter, it would have been a point and a half just on that if we had recognized it perpetually like we had a year ago.

謝謝，皮埃爾。我很感謝你提出這個問題。是的，我們對所取得的進展感到非常高興，您可以在資產負債表上看到這一點，正如您所說。我們的銷售額連續成長，並且比去年同期成長了 10 億美元至 12 億美元。我想說這肯定會對我們的成長產生幾個影響，而且它是多種因素的結合——歷史上主要是協作、安全和 Meraki，但我們正在繼續在我們的核心平台上添加 Cisco ONE 套件，就像我上個季度提到的那樣，現在它已被確認為可評估的，而一年前，我們會將其確認為永久銷售許可證。例如，僅以本季的 Cisco ONE 為例，如果我們像一年前一樣永遠認識到這一點，那麼光是這一點就會有 1.5 個百分點。

It's for sure about at least two points and clearly that continues to grow and accelerate, so you can assume we're assuming that in my guidance. My guidance for the next quarter is as Chuck mentioned, right? We definitely saw the same thing we saw last quarter with the slowdown in SP, but it actually accelerated. I wouldn't call my guidance conservative. I'd say it's absolutely what we see right now based on all of the factors we take into account.

可以肯定的是，至少有兩點，而且顯然還在繼續成長和加速，所以你可以假設我們在我的指導中也假設了這一點。我對下一季度的指導正如查克所提到的那樣，對嗎？我們確實看到了與上個季度相同的情況，即 SP 的成長放緩，但實際上它有所加速。我不會稱我的指導為保守的。我想說，根據我們考慮的所有因素，這絕對是我們現在所看到的。

Thank you. Next question is from Simona Jankowski with Goldman Sachs.

謝謝。下一個問題來自高盛的 Simona Jankowski。

Hi, thank you very much. I just wanted to confirm, Chuck, that the reason for the guidance being a little weaker is entirely to do with the softness you described in Service Provider orders. Just to dig into that and understand that a little better, it looked like your routing business was I think you said up 7% in the prepared remarks, although I see it as up 17% in the numbers posted online. Regardless, it looks like routing was quite strong. What other products within that Service Provider vertical accounted for the weakness. When we look at the CapEx trends, they definitely have been weak year to date, but they are implied to improve quite a bit into year end, so just curious if you aren't seeing that.

你好，非常感謝。查克，我只是想確認一下，指導略弱的原因完全與你在服務提供者訂單中描述的疲軟有關。為了深入研究並更好地理解這一點，看起來您的路由業務似乎增長了 7%，我想您在準備好的評論中說過，但我認為在線發布的數字顯示它增長了 17%。無論如何，路由看起來相當強大。該服務提供者垂直領域內還有哪些產品導致了這項弱點。當我們觀察資本支出趨勢時，我們發現今年迄今為止的趨勢確實很弱，但暗示年底將出現大幅改善，所以如果您沒有看到這一點，我很好奇。

Thanks, Simona. I'll let Kelly keep me honest on this, but I think our routing revenue that we reported in Q1 was 6% positive, so if that's incorrect we need to fix that. On the guide, what I believe is that the predominant reason for the guide down is this Service Provider space. It's 25% of our business, roughly, and it was down 12% in new orders. You guys know the content of our revenue that is from current quarter bookings so the forecast this past quarter and the performance was negative 12% and we're just not modeling, right now, any improvement. You've written some great stuff around the SP CapEx environment, so I think you know it as well as anyone.

謝謝，西蒙娜。我會讓凱利就此問題保持誠實，但我認為我們在第一季報告的路由收入為 6% 正，所以如果這是不正確的，我們需要糾正它。在指南中，我認為指南失敗的主要原因是這個服務提供者空間。這大約占我們業務的25%，新訂單下降了12%。你們知道我們的收入來自本季的預訂，所以上個季度的預測和業績為-12％，而我們目前還沒有模擬任何改進。您已經圍繞 SP CapEx 環境寫了一些很棒的文章，所以我認為您和其他人一樣了解它。

While there is some forward-looking optimism, many of those cases there's money being spent on density and mobile networks in areas that we may not be a direct recipient as well as we also know there's a lot of variability in how the actuals actually play out vis-a-vis the forecast. We're just making sure that we really see that. I think there's also consternation around the world relative to what's going to happen in the political environment and just a little bit of a wait and see and I think that's going to have an impact. Could be positive, could be tough based on the SP CapEx, but most of the guide challenge that we have is related to SP.

雖然存在一些前瞻性的樂觀情緒，但在許多情況下，我們在密度和行動網路上花費的資金可能不是我們直接受益的地區，而且我們也知道實際情況與預測相比存在很大的差異。我們只是確保我們確實看到了這一點。我認為世界各地對於政治環境的走向也感到驚恐，只需稍加觀望，我認為這就會產生影響。根據 SP CapEx，這可能是積極的，也可能是艱難的，但我們面臨的大多數指導挑戰都與 SP 有關。

Kelly, anything to add?

凱利，還有什麼要補充的嗎？

I think you summarized it well. Just to add to your question, Simona, I'm not going to go into the grungy detail of what else is in there besides SP core and routing, but obviously our enterprise routing business is in there, mobile packet core, those kind of areas that we saw that are included in the revenue. To Chuck's point, the routing business is certainly got a lot of big deals driven and the pressure we see from the orders, you can expect to see coming in the future, as Chuck mentioned.

我認為你總結得很好。西蒙娜，我只是想補充一下你的問題，除了 SP 核心和路由之外，我不會詳細討論其中還有什麼，但顯然我們的企業路由業務、行動分組核心都包含在內，這些領域都包含在收入中。正如查克所說，路由業務肯定受到許多大交易的推動，而且正如查克提到的那樣，我們可以預見未來訂單的壓力也會隨之而來。

One other comment or two. When I talk about customers that we saw just fundamentally freeze CapEx, some of those did it for their own earnings requirements. Some of it did it -- we have examples that occurred based on currency challenges, FX issues. We saw some that were connected to consolidation that's going on in the industry, so we saw different flavors but we did see a fair number of customers around the world that just put the brakes on.

還有一兩則評論。當我談到我們看到的客戶從根本上凍結資本支出時，其中一些人這樣做是為了滿足自己的獲利要求。有些情況確實如此──我們有基於貨幣挑戰、外匯問題而發生的例子。我們看到一些與行業正在進行的整合有關的舉措，因此我們看到了不同的情況，但我們確實看到世界各地有相當多的客戶停止了行動。

Thanks, Chuck. Next question please?

謝謝，查克。請問下一個問題？

Thank you. Next question is from James Faucette with Morgan Stanley.

謝謝。下一個問題來自摩根士丹利的 James Faucette。

Thank you very much. I wanted to ask just around the security business. Obviously, as been pointed out, is that it's developing pretty well, but I'm wondering two things. First, the pace of acquisitions, and specifically what looked to be tuck-in acquisitions, seemed to have slowed a little bit this quarter versus what it had been running. I'm just wondering if you're feeling like you've got the portfolio and the technology where you need it or should we expect to see acquisitions continue to run pretty high and that perhaps those reaccelerate. My second question is on security. I think, Kelly, you kind of alluded to this, but at what point do we start to see incremental benefit on some of the other businesses from security footprint? It seems like a lot of the value of security could be tied to new hardware and switching and networking, et cetera. Should we expect to see some incremental pull through or benefit to the more traditional hardware businesses and if so, when should we expect that? Thanks.

非常感謝。我只是想問一下安全業務。顯然，正如有人指出的那樣，它發展得相當好，但我對兩件事感到困惑。首先，與之前相比，本季的收購速度（特別是看似補充性的收購）似乎有所放緩。我只是想知道您是否感覺自己已經擁有了所需的投資組合和技術，或者我們是否應該預期收購將繼續保持相當高的水平，並且可能再次加速。我的第二個問題是關於安全問題。凱利，我想您似乎提到了這一點，但是什麼時候我們才能開始看到安全足跡為其他一些企業帶來增量利益呢？看起來安全的價值很大程度上與新硬體、交換和網路等相關。我們是否應該期待看到一些漸進式的拉動或對更傳統的硬體業務的益處？如果是這樣，我們該在什麼時候期待呢？謝謝。

James, thanks. This is Chuck. As it relates to the first part of your question on the acquisition capabilities, I think what you'll find with this team is that there's a ton of internal innovation occurring. We, again, at the partner summit launched AMP for Endpoints, which is to bring the endpoints into the consolidated architecture. You can assume that we are actively continuing to scan the landscape relative to acquisitions that fit within the architecture, that bring new capabilities.

詹姆斯，謝謝。這是查克。至於您問題的第一部分關於收購能力的問題，我認為您會發現這個團隊正在進行大量的內部創新。我們再次在合作夥伴高峰會上推出了 AMP for Endpoints，旨在將端點納入整合架構。您可以假設我們正在積極地繼續掃描與適合架構並帶來新功能的收購相關的前景。

I think when I took the role I would probably suggest that there was a little bit of a pent-up demand around companies that teams wanted to move on and we moved relatively quickly in the first year or so. I wouldn't assume that, that suggests that there's no more activity that we will see there. I think we will.

我想，當我擔任這個職位時，我可能會認為公司周圍有一些被壓抑的需求，團隊希望繼續前進，而我們在第一年左右的行動相對較快。我不會認為那意味著我們不會在那裡看到更多的活動。我想我們會的。

As it relates to the core networking platforms and at what point we'll see security pulling through, I think we have had some examples over the last few years where we've seen particularly security portfolios integrated into routing platforms as the teams have done that we have seen as we sell those as licenses that run on top of routers. Assuming the routers have the right horsepower, they're fine. If they don't, then they'll drive a refresh. There's some capabilities the teams are work on that actually provide security at the packet level inside the network. Our intent over the next several quarters is to bring that technology to market and give our customers greater visibility and give them yet another source of contributing to the threat landscape out of the network itself. We'll have to wait and see how successful we are, but that's our plan.

因為它與核心網路平台有關，以及我們將在什麼時候看到安全性的提升，我認為我們在過去幾年中已經有一些例子，我們已經看到特別是安全產品組合集成到路由平台中，正如團隊所做的那樣，我們已經看到我們將它們作為在路由器上運行的許可證出售。假設路由器有合適的馬力，那就沒問題了。如果他們不這樣做，那麼他們就會推動革新。團隊正在研究的一些功能實際上可以在網路內部的資料包層級提供安全性。我們在接下來的幾個季度中的目標是將這項技術推向市場，為我們的客戶提供更高的知名度，並為他們提供另一個從網路本身為威脅情況做出貢獻的來源。我們將拭目以待，看看我們能取得多大成功，但這就是我們的計劃。

Next question is from James Suva with Citigroup Global Markets.

下一個問題來自花旗環球金融的詹姆斯蘇瓦。

Great, thanks very much. Chuck and Kelly, when you mentioned putting the brakes on for some of the demand, can you clarify a little bit? Was that mostly due to the uncertainty around the election or just more uncertainty global demand and now that the election is over, there's a political uncertainty about how the tax and policy changes, what happens, cause those brakes to last in your opinion? How long or when do the brakes come off? Thanks.

太好了，非常感謝。查克和凱利，當你們提到抑制部分需求時，能否稍微澄清一下？這主要是因為選舉的不確定性，還是全球需求的不確定性增加？現在選舉已經結束，稅收和政策如何變化存在政治不確定性，您認為會發生什麼，導致這些煞車持續下去？煞車多久會鬆開或什麼時候鬆開？謝謝。

Well, Jim, thanks. I think there's not one answer to that question, honestly. As I said earlier, there's some customers that are looking at consolidation that lead them to take a pause. There's some that are focused on density of their mobile networks as opposed to their core routing platforms or the edge routing platforms. There's some that outside the United States who faced incredible currency headwinds and decided to stop their CapEx spend until they had better clarity around the currency situation. Then there's some providers around the world, not necessarily in the US even, that are dealing with political dynamics and potential regulatory issues that just aren't clear.

好吧，吉姆，謝謝。說實話，我認為這個問題沒有唯一的答案。正如我之前所說，有些客戶正在考慮整合，這導致他們暫停了這項計劃。有些人專注於行動網路的密度，而不是核心路由平台或邊緣路由平台。美國以外的一些國家面臨巨大的貨幣逆風，他們決定停止資本支出，直到貨幣狀況更加明朗。然後，世界上的一些供應商（甚至不一定是美國的供應商）正在處理尚未明確的政治動態和潛在監管問題。

I think it's a little bit of all of that and my assessment of when those issues are resolved is dependent upon the issues themselves and we're going to have to wait and see how they play out. I have not heard a lot, say, US-based service providers who have paused directly related to the election, but I do believe that the regulatory environment in the US is obviously in flux now around the telecom environment and that could have implications for the service providers and some of them may wait and see how that plays out.

我認為所有這些都有一點關係，我對這些問題何時得到解決的評估取決於問題本身，我們將不得不拭目以待，看看它們如何發展。我沒有聽說很多美國服務提供者因為選舉而暫停服務，但我確實認為，美國電信環境的監管環境顯然正在發生變化，這可能會對服務提供者產生影響，他們中的一些人可能會拭目以待。

Thank you next question is from Jess Lubert with Wells Fargo Securities.

謝謝。下一個問題來自富國證券的 Jess Lubert。

Hi, guys. Thanks for taking my question. I was hoping you could update us on what the saw in the cloud vertical last quarter. You saw weakness there so I was curious if that bounced back, what products you're seeing success with, with this customer set and where you are in your process to drive share with these operators. Thanks.

嗨，大家好。感謝您回答我的問題。我希望您能向我們通報上個季度在雲端垂直領域看到的情況。您看到了那裡的弱點，所以我很好奇它是否會反彈，您看到哪些產品取得了成功，對於這個客戶群，以及您在推動與這些運營商共享的過程中處於什麼位置。謝謝。

What we talked about the last couple quarters is just the top 10 that we have and they were roughly flat this quarter, but I'll tell you we had some performances that were incredibly strong within that, at an account level, and some that were pausing for various reasons. I think that each account is different and I think over the last couple of years what we've been talking about is a deep engagement at the individual customer level. Where we've done that, we had begun to see success. You can assume we are having discussions with each of them individually. We also are, I think, uniquely positioned where in many cases these companies are markets of one and we have the ability to assign dedicated engineering teams to line up our offerings against their specific requirements and those are the discussions we're having right now.

我們談論的過去幾個季度只是我們擁有的前 10 名，而本季度它們大致持平，但我要告訴你，我們在帳戶層面有一些表現非常強勁，而有些則由於各種原因而暫停。我認為每個帳戶都是不同的，我認為過去幾年我們一直在談論的是個人客戶層面的深度參與。當我們這樣做的時候，我們已經開始看到成功。您可以假設我們正在與他們每個人進行單獨討論。我認為，我們還具有獨特的優勢，在許多情況下，這些公司都是一個市場，我們有能力指派專門的工程團隊根據他們的具體要求提供我們的產品，這就是我們現在正在進行的討論。

Thanks, Jess, for the question.

謝謝傑西提出這個問題。

Thank you. Our next question is from Paul Silverstein with Cowen & Company.

謝謝。我們的下一個問題來自 Cowen & Company 的 Paul Silverstein。

Thanks. Kelly, a clarification and then a question. The question is what's the pricing environment look like? Has there been any change? I was hoping, I don't know if you gave the number earlier, but if not, what was software as a percentage of total revenue? Can you remind us, I think it was 29% last quarter but if you could remind us what it was and what it was this quarter?

謝謝。凱利，先澄清一下，然後提問。問題是定價環境是什麼樣的？有沒有變化？我希望，我不知道您是否之前給出了這個數字，但如果沒有，那麼軟體佔總收入的百分比是多少？您能提醒我們一下嗎，我認為上個季度是 29%，但您能提醒我們這個季度是多少嗎？

Sure. I'll answer that one. The recurring revenue number I think is what you're talking about, which is a combination of our product recurring revenue from the software and SaaS business plus recurring revenue from services. This quarter that was 29% and we continue to make progress of product, that has grown to be 9%, up from 6% of our product revenue in Q1 2016, so we continue to make progress there. That's up to 29% versus it was 28% in Q4 and 25.5% in Q1, so making the progress there.

當然。我來回答這個問題。我認為您所說的經常性收入數字是我們來自軟體和 SaaS 業務的產品經常性收入加上來自服務的經常性收入的總和。本季這一比例為 29%，我們繼續在產品方面取得進展，這一比例已從 2016 年第一季的 6% 增長到 9%，因此我們將繼續在這方面取得進展。與第四季度的 28% 和第一季的 25.5% 相比，這一數字上升至 29%，因此取得了進展。

On the pricing question, Paul, we're definitely in the same ranges that we normally have been. It's actually year over year slightly better than we were last quarter can, which is largely driven by the mix of what we saw. I'd say that it's in normal ranges, but how we're driving that internally is, of course, we're very disciplined around pricing like we've talked about but we empower our sales leaders and country leaders to -- we measure them on three things. We measure them on revenue growth, we measure them on operating margin growth and we measure them on driving market share. They are empowered to make tradeoffs between those and if they need to give more price to win the franchises they want to win, they will do that. The good news is they are again continuing to be very disciplined making those tradeoffs and the pricing is staying in the normal ranges.

關於定價問題，保羅，我們的定價範圍肯定與通常的水平相同。實際上，與去年同期相比，我們的業績比上一季略有好轉，這主要是由我們所見的綜合因素所推動的。我想說的是，這是在正常範圍內，但我們在內部推動這一點的方式當然是，就像我們談到的那樣，我們對定價非常嚴格，但我們授權我們的銷售主管和國家主管——我們根據三件事來衡量他們。我們根據收入成長、營業利潤率成長和市場佔有率成長來衡量它們。他們有權在這些因素之間做出權衡，如果他們需要付出更多代價來贏得他們想要的特許經營權，他們就會這樣做。好消息是，他們再次繼續非常自律地做出這些權衡，並且價格保持在正常範圍內。

Our next question is from Steve Milunovich with UBS.

我們的下一個問題來自瑞銀的史蒂夫·米盧諾維奇。

Thank you very much. Chuck, we just wrapped up our tech conference and we had a panel on folks who helped companies move to the cloud. The general consensus was that private cloud implementations generally are not working in many companies that begin on a private cloud path, end up going down a public cloud path. Obviously there's still a lot of legacy and so forth, but if in fact private cloud is not going to do very well, you and others are very focused on that business and the risk is that on-prem pie is declining. Are you seeing something different and do you believe the on-prem business will grow for Cisco?

非常感謝。查克，我們剛結束了技術會議，並組織了一場關於幫助公司遷移到雲端的人員的小組討論。普遍的共識是，私有雲實施通常並不奏效，許多公司都是從私有雲路徑開始，最後走上了公有雲路徑。顯然，仍然存在許多遺留問題等等，但如果事實上私有雲不會做得很好，你和其他人就會非常關注這項業務，而風險在於內部部署份額正在下降。您是否看到了一些不同的東西？您是否相信思科的內部部署業務將會成長？

Thanks, Steve. I think that over the next year to two years that a lot of the complexity in building out private infrastructure and private clouds for our customers will be alleviated. The entire industry is going to focus on, much like we talked about, even in the networking systems of how we bring automation and operational relief to our customers and give them the ability to automate policy and security and manage all of these devises from their private cloud or from the cloud. I think that, that level of simplicity and those capabilities will improve.

謝謝，史蒂夫。我認為在未來一到兩年內，為我們的客戶建立私有基礎架構和私有雲的複雜性將會大大降低。正如我們所討論的，整個行業都將關注如何為客戶帶來自動化和營運緩解，並使他們能夠自動化策略和安全，並從私有雲或雲端管理所有這些設備。我認為，這種簡單程度和能力將會提高。

I think what we see is best represented by our ACI portfolio. When you look at our customers who are building out modern data center infrastructure, I think those are representative of the customers who believe that they are going to have a hybrid environment. That piece of business grew 33% and is up to $3 billion run rate. I think your observations are probably valid, particularly if you look at a lot of the open stack, early open stack implementations. I do think that customers are going to want to have that capability and I think we as an industry will continue to work on simplifying how that operational capability shows up within our customer base.

我認為我們的 ACI 投資組合最能代表我們所看到的情況。當您看到正在建立現代資料中心基礎設施的客戶時，我認為他們代表了那些相信他們將擁有混合環境的客戶。該業務成長了 33%，營業額達到 30 億美元。我認為您的觀察可能是正確的，特別是如果您查看了很多開放堆疊、早期的開放堆疊實作。我確實認為客戶會希望擁有這種能力，而且我認為我們作為一個行業將繼續致力於簡化這種營運能力在我們的客戶群中的表現方式。

Thank you. Next question is from Mark Moskowitz with Barclays.

謝謝。下一個問題來自巴克萊銀行的馬克‧莫斯科維茲。

Yes, thanks, good afternoon. Chuck and Kelly, I want to get a sense here if there's been any change tactically related to how the teams are incentivized around margin, just given the Company continues to outpace the guidance on the gross margin line. Is there something going on there tactically or is this all just because of mix due to the broader macro weaknesses? Thank you.

是的，謝謝，下午好。查克和凱利，我想了解一下，鑑於公司繼續超越毛利率預期，在激勵團隊實現利潤方面是否有任何戰術上的變化。從戰術上來說，這是否發生了一些事情，或者這只是由於更廣泛的宏觀弱點造成的混合？謝謝。

Sure. I think this has been a multi-year thing that we have been driving. I'd say that we incent, like I mentioned, the leadership at the higher levels, at a margin level and then they have also controls at certain discount levels, so they can also manage that within their region. It is definitely part of the focus. We have tools that are set up that when a sales person puts a deal in, it's easy to see how that deal falls in from a margin perspective to help them make good deals, if you will, so the incentives haven't changed at all this year. I think that it's just the sales teams are incredibly disciplined around it.

當然。我認為這是我們多年來一直在推動的事情。我想說，就像我提到的那樣，我們會在利潤水平上激勵更高層次的領導層，然後他們也會在一定的折扣水平上進行控制，這樣他們也可以在自己的區域內進行管理。這絕對是焦點的一部分。我們設置了一些工具，當銷售人員達成交易時，可以輕鬆地從利潤角度了解該交易的進展情況，以幫助他們達成良好的交易，所以今年的激勵措施根本沒有改變。我認為銷售團隊在這方面非常自律。

I'd say the whole Company understands the tradeoff of that. We are all focused on making the tradeoff so we can optimize and drive as much growth as we possibly can and go after every point of market share that we can but they also understand the power of the margins and that helps drive it. I'd say only the other thing to think about is with the acquisitions that we have been doing that have been largely software related, whether it's in security or cloud, those SaaS businesses certainly have very high margins that just help add to the mix. Again, as we continue to do that, you'll continue to see a positive bias on our margins.

我想說整個公司都明白其中的優缺點。我們都專注於做出權衡，以便我們能夠優化並推動盡可能多的成長，並盡可能地追求每個市場份額，但他們也了解利潤的力量，這有助於推動它。我想說，唯一需要考慮的另一件事是，我們一直在進行的收購主要與軟體相關，無論是在安全領域還是在雲端運算領域，這些 SaaS 業務肯定具有非常高的利潤率，這有助於增加我們的組合。再次，隨著我們繼續這樣做，您將繼續看到我們的利潤率呈現正面趨勢。

Just one comment, Mark. Kelly and I have worked with the teams and from a leadership team perspective, we have three measurements that they are held accountable for, revenue, margins and market share. That's how we just try to keep people focused on a healthy balance.

馬克，我只想說一句。凱利和我曾與這些團隊合作過，從領導團隊的角度來看，我們有三個衡量標準需要他們負責，即收入、利潤率和市場份額。這就是我們試圖讓人們專注於健康平衡的方法。

This is not just -- this is at all levels of the organization. Our Head of Sales and our Head of Partner Sales, you know they are all part of this pricing council that we have that we try to be very agile of when we make pricing, either new product pricing or changes to product pricing, to take advantage of where any elasticity is.

這不僅僅是——這涉及組織的各個層面。我們的銷售主管和合作夥伴銷售主管都是我們定價委員會的成員，無論是新產品定價還是產品定價變更，我們都力求保持靈活的定價方式，充分利用任何彈性。

Next question is from Tal Liani with Banc of America Securities.

下一個問題來自美國銀行證券公司的 Tal Liani。

Hi guys. I had some macro questions and I want to ask it in the context of switching. There's a very big gap between the next quarter guidance year-over-year growth rate and your long term growth rate. The question that I have is, what part of the difference is macro, so if the macro slightly improves can you get there?

嗨，大家好。我有一些宏觀問題，我想在切換的背景下提出它。下一季的年成長率指引值與長期成長率之間存在很大差距。我的問題是，差異的哪一部分是宏觀的，所以如果宏觀稍微改善，你能達到目的嗎？

Yes.

是的。

Or is there anything that you can do on the product side that will get you closer? I want to ask it in the context of switching given that you had a major overhaul or major upgrade to your switching in the last two years, but we haven't seen the growth rates improving that dramatically. What can you do and what is macro?

或者在產品方面您可以做些什麼來讓您更接近目標？我想在轉換的背景下問這個問題，因為你們在過去兩年對轉換進行了重大改革或重大升級，但我們還沒有看到成長率有如此顯著的提高。你能做什麼以及什麼是宏？

I think that's a great question. I'd say -- let's just talk about switching. I'd say for campus switching, which is 2/3, roughly, of our entire switching business, which is our biggest business unit, I'd say most of that is macro, right? It is the one area, and I think we've talked about before. It's the one area that people can put off doing a refresh if there is any macro concerns. That's what we typically see any time you see any economic pause or macro event. I do truly feel that if the optimism we've seen this week in the stock market continues giving that feeling of optimism in the economy, I would expect that to raise all boats in our campus switching side.

我認為這是一個很好的問題。我想說——我們只討論轉換吧。我想說的是，校園交換大約占我們整個交換業務的 2/3，這是我們最大的業務部門，我想說其中大部分是宏觀的，對嗎？這是一個領域，我想我們之前已經討論過。如果存在任何宏觀方面的擔憂，這是人們可以推遲更新的一個領域。每當經濟停頓或宏觀事件發生時，我們通常都會看到這種情況。我確實覺得，如果我們本週在股市上看到的樂觀情緒能夠繼續給經濟帶來樂觀的感覺，我預計這將使我們校園轉換方面的所有船隻都受益。

I'd say on the data center, you understand the dynamic there, right? To your point, we launched a fantastic product a couple years ago but we had to manage through the transition of a very sizeable legacy business data center portfolio declining as that accelerated and so we managed through that. Again, that business has continued to grow as we go through that intersection and cross through now as the legacy piece we've worked largely through. I'd say that's why I say it's largely macro, especially on the campus side.

我想說，在資料中心，您了解那裡的動態，對嗎？正如您所說，幾年前我們推出了一款出色的產品，但我們必須應對規模龐大的傳統商業資料中心組合的轉型，因為這種轉型正在加速，所以我們設法度過了這一階段。再次，隨著我們走過那個十字路口並跨越現在，這項業務繼續成長，因為我們已經在很大程度上解決了遺留問題。我想說這就是為什麼我說它主要是宏觀的，特別是在校園方面。

Thank you. Our next question is from Jeff Kvaal with Nomura.

謝謝。我們的下一個問題來自野村證券的 Jeff Kvaal。

Thank you very much. Can you hear me okay?

非常感謝。你聽見我說話嗎？

Yes, we can, Jeff.

是的，我們可以，傑夫。

Wonderful, thanks. I wanted to swift gears and talk about the balance sheet, if I could. Obviously, you and many other companies in tech space have been advocating for repatriation for a decade, a very long time. Could you help us understand or remind us where you would like to take that money, should you bring it back to the US? The second part of that question is there's some sentiment that investment, or I'm sorry, interest rates will start heading north again. Do you take that into account when considering your dividend policy? Thank you.

太好了，謝謝。如果可以的話，我想快速討論一下資產負債表。顯然，您和科技領域的許多其他公司已經倡導遣返十年了，很長一段時間了。您能否幫助我們理解或提醒我們您想把這筆錢帶到哪裡，是否應該把它帶回美國？問題的第二部分是，有人認為投資，或對不起，利率將再次開始上升。在考慮股利政策時您是否考慮到了這一點？謝謝。

Jeff, so great question. I love balance sheet questions, actually. Yes, I mean again, we have talked about tax reform for a very long time. I can say that what's encouraging is with the incoming administration is this is one of their top priorities that they said they would prioritize in their first hundred days, so we're encouraged that something will happen. Now, it's very early and we don't really know the details besides what his platform was during his campaign, so we're going to watch it very closely and look forward to as the details flush out there.

傑夫，這個問題問得真好。事實上，我喜歡資產負債表問題。是的，我的意思是，我們已經討論稅制改革很久了。我可以說，令人鼓舞的是，對於新政府來說，這是他們上任一百天內優先考慮的首要任務之一，因此我們很高興看到一些事情會發生。現在，一切都還為時過早，除了他在競選期間的政綱之外，我們真的不知道更多細節，所以我們將密切關注並期待細節的公佈。

Just high level, as you could imagine, we have many, many scenarios of what we would do when repatriation comes, which is a combination of obviously we would ring fence in our debt and then we would have a blend of actions we can certainly take with our dividend as well as our share buyback, as well as leading flexibility for us to be able to do M&A and strategic investments. It'd be a combination of all those things. Obviously we listen very closely to our shareholders and how we want to do that and we recognize it will certainly give us a lot more flexibility.

從高層次來看，正如您所想像的，當資金匯回時，我們有很多、很多的應對方案，顯然，我們會對債務進行圈定，然後我們會採取一系列的行動，包括股息和股票回購，以及為我們進行併購和戰略投資提供更大的靈活性。這將是所有這些事物的結合。顯然，我們非常認真地聽取股東的意見以及我們希望如何做到這一點，我們認識到這肯定會為我們帶來更多的靈活性。

Thanks.

謝謝。

I'm sorry, I apologize. On the interest rates, would it affect our dividend policy? Again, we've been committed to growing our dividend with our earnings and again driving that to a great yield as our EPS grows. Interest rates go up, they go down. We're committed to growing it as our earnings grow.

對不起，我道歉。關於利率，它會影響我們的股利政策嗎？再次強調，我們一直致力於透過獲利來增加股息，並隨著每股盈餘的成長而再次推動股息獲得豐厚的收益。利率有升有降。我們致力於隨著收益的成長而擴大它。

I believe that is our last question. I'll now turn it over to Chuck to wrap it up.

我相信這是我們的最後一個問題。現在我將把它交給查克來總結一下。

Thanks Marilyn. In summary, once again, we delivered a strong quarter in an environment that obviously continues to be challenging. I'm very pleased with the success that we've seen in security, collab, ACI, our deferred product revenue from software and subscription and we remain focused on executing against the things that we control. To that extent, I think the teams have done a very good job. We're obviously focused now on continuing to execute in those areas as well as, as I talked about earlier, bringing automation management and security at scale to the balance of our switching and routing portfolio and aligning with our customers' desires and how they consume our technology.

謝謝瑪麗蓮。總而言之，在顯然持續充滿挑戰的環境中，我們再次取得了強勁的季度業績。我對我們在安全、協作、ACI、軟體和訂閱的遞延產品收入方面取得的成功感到非常高興，我們仍然專注於執行我們所控制的事情。從這個程度上來說，我認為各支球隊已經做得非常好了。我們現在顯然專注於繼續在這些領域執行，正如我之前提到的，將自動化管理和安全性大規模地融入我們的交換和路由產品組合的平衡中，並與客戶的需求以及他們如何使用我們的技術保持一致。

Finally, we'll obviously remain very committed to operational discipline and long-term value for our customers and our shareholders. We thank you all for spending time with us today. Marilyn, I'll kick it back to you.

最後，我們顯然將繼續致力於為客戶和股東提供營運紀律和長期價值。我們感謝大家今天抽出時間與我們在一起。瑪麗蓮，我會把它踢回去給你。

Thanks, Chuck. Cisco's next quarterly call, which will reflect our FY17 second-quarter results, will be on Wednesday, February 15, 2017, at 1.30 PM Pacific Time, 4.30 PM Eastern Time. I would like to remind the audience in light of regulation FD, Cisco's policy is not to comment on its financial guidance during the quarter unless it is done through an explicit public disclosure.

謝謝，查克。思科的下一次季度電話會議將於 2017 年 2 月 15 日星期三太平洋時間下午 1:30、東部時間下午 4:30 舉行，屆時將公佈我們 2017 財年第二季的業績。我想提醒觀眾，根據公平揭露條例，思科的政策是不對其本季的財務指導發表評論，除非透過明確的公開揭露進行評論。

We now plan to close the call. If you have any further questions, please feel free to contact the Cisco Investor Relations team. We thank you very much for joining the call today. Thank you.

我們現在計劃結束通話。如果您有任何其他問題，請隨時聯絡思科投資者關係團隊。非常感謝您今天參加電話會議。謝謝。

Thank you for participating on today's conference call. If you would like to listen to the call in its entirety, you may call 1-866-439-3743. For participants dial from outside the US, please dial 1-203-369-1047. This concludes today's call. You may disconnect at this time.

感謝您參加今天的電話會議。如果您想完整收聽電話會議，請撥打 1-866-439-3743。對於從美國境外撥打電話的參與者，請撥打 1-203-369-1047。今天的電話會議到此結束。您現在可以斷開連線。