思科 (CSCO) 2017 Q3 法說會逐字稿

Welcome to Cisco Systems' Third Quarter and Fiscal Year 2017 Financial Results Conference Call.

歡迎參加思科系統 2017 年第三季及財政年度財務業績電話會議。

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

應思科系統公司的要求，今天的會議正在錄製。如果有異議可以斷開連接。

Now I'd like to introduce Ms. Marilyn Mora, Head of Investor Relations. You may begin.

現在我想介紹投資者關係主管瑪麗蓮莫拉女士。你可以開始了。

Thanks, Shaun. Welcome, everyone, to Cisco's Third Quarter Fiscal 2017 Quarterly Earnings 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，肖恩。歡迎大家參加思科 2017 財年第三季財報電話會議。我是投資者關係主管瑪麗蓮·莫拉 (Marilyn Mora)，與我一起發言的還有我們的首席執行官查克·羅賓斯 (Chuck Robbins)；以及我們的首席財務官凱利·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 made 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 in the Financial Information section of our Investor Relations website.

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也可以在我們的投資者關係網站的財務資訊部分找到。

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 comparisons throughout this call will be made on a year-over-year basis, unless stated otherwise.

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 today include forward-looking statements, including the guidance we will be providing for the fourth quarter of fiscal 2017. 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.

我們今天將討論的事項包括前瞻性陳述，包括我們將為 2017 財年第四季提供的指導。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 和 10-Q 表格報告，這些報告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。

With that, I will now turn it over to Chuck.

現在，我將把麥克風交給查克。

Thank you, Marilyn, and good afternoon, everyone.

謝謝你，瑪麗蓮，大家午安。

Our results this quarter demonstrated that we are delivering against our strategic priorities and realizing the benefits of our investments to transform our business and drive long-term shareholder value.

本季度的業績表明，我們正在實現我們的策略重點，並實現了投資效益，從而轉變了我們的業務並推動了長期股東價值。

We delivered a solid quarter, with total revenue of $11.9 billion and non-GAAP earnings per share of $0.60. We had strong margins yet again and great operating cash flow, up 10%. We are managing the business well through a multiyear transformation of the company while remaining focused on delivering customers unparalleled value through highly secure, software-defined automated and intelligent infrastructure.

我們本季取得了穩健的成績，總收入達到 119 億美元，非公認會計準則每股收益為 0.60 美元。我們的利潤率再次很高，經營現金流也大幅成長了 10%。我們透過多年的公司轉型管理好業務，同時仍專注於透過高度安全、軟體定義的自動化和智慧基礎設施為客戶提供無與倫比的價值。

We are on a journey, which as we consistently stated, will take a number of years, but we are pleased with the progress we're making. As our customers add billions of new connections in the years ahead, the network will become more critical than ever. They will be looking for intelligent networks that deliver automation, security and analytics that help them derive meaningful business value from these connections. These will be delivered through a combination of new platforms as well as software and subscription-based services, which we've been focused on accelerating over the last 18 months.

我們正在進行一段旅程，正如我們一直所說的那樣，這將需要數年時間，但我們對所取得的進展感到滿意。隨著我們的客戶在未來幾年增加數十億個新連接，網路將變得比以往任何時候都更加重要。他們將尋求能夠提供自動化、安全性和分析功能的智慧網絡，以幫助他們從這些連接中獲得有意義的商業價值。這些將透過新平台以及軟體和基於訂閱的服務的組合來實現，過去 18 個月我們一直致力於加速這一進程。

My vision for this company is to be the most relevant and most important partner for our customers as they enable their digital businesses, and we will deliver on that vision. I look forward to discussing this in a lot more detail at our Investor Day on June 28.

我對公司的願景是成為客戶在實現數位化業務過程中最相關、最重要的合作夥伴，我們將實現這一願景。我期待在 6 月 28 日的投資者日上更詳細地討論這個問題。

We continue to innovate across our networking portfolio with analytics being a key element of this innovation. This quarter, we completed the acquisition of AppDynamics, enabling us to provide customers with unprecedented visibility across networking, data center, security and applications. As I talk to our customers and partners, I'm getting great feedback about the value of the insights AppDynamics provides to help them make informed business decisions. We are in the early stages of scaling out the AppDynamics solutions through the Cisco Salesforce and partner ecosystem, and I'm excited about the future of this space.

我們不斷創新我們的網路產品組合，而分析是這項創新的關鍵要素。本季度，我們完成了對 AppDynamics 的收購，使我們能夠為客戶提供跨網路、資料中心、安全性和應用程式的前所未有的可視性。當我與我們的客戶和合作夥伴交談時，我得到了很好的回饋，他們稱讚 AppDynamics 提供的見解非常有價值，可以幫助他們做出明智的商業決策。我們正處於透過 Cisco Salesforce 和合作夥伴生態系統擴展 AppDynamics 解決方案的早期階段，我對這個領域的未來感到興奮。

We were also pleased to announce our intent to acquire some new additions to our software and analytics portfolio. Software-defined WAN is a critical market transition and addresses the evolving customer demands and branch routing as a foundational block of executing in cloud networking.

我們也很高興地宣布，我們打算為我們的軟體和分析產品組合增添一些新產品。軟體定義的廣域網路是一個關鍵的市場轉型，它滿足不斷變化的客戶需求和分支路由，作為雲端網路執行的基礎模組。

Viptela, combined with Cisco's IWAN technology, will provide an industry-leading cloud-first SD WAN platform that addresses the Edge networking needs of our most demanding customers.

Viptela 與思科的 IWAN 技術結合，將提供業界領先的雲端優先 SD WAN 平台，滿足我們最嚴苛的客戶的邊緣網路需求。

MindMeld provides an AI platform to build intelligent and humanlike conversational interfaces for any application or device and will complement our already strong collaboration portfolio. These acquisitions support our goal of offering customers extraordinary value through a combination of organic and inorganic innovation, and they are aligned to our strategy of investing to drive longer-term growth and helping us transition to more recurring software and subscription revenue.

MindMeld 提供了一個人工智慧平台，可以為任何應用程式或裝置建立智慧且人性化的對話介面，並將補充我們已經強大的協作產品組合。這些收購支持了我們透過有機和無機創新相結合為客戶提供非凡價值的目標，並且符合我們的投資策略，以推動長期成長並幫助我們過渡到更多經常性軟體和訂閱收入。

We will continue to deploy our capital resources to give us first-mover advantage as we extend our technology portfolio.

我們將繼續部署資本資源，以便在擴展技術組合的同時獲得先發優勢。

In addition to our inorganic growth, we are seeing strong organic growth of our next-generation products and solutions in both networking and security.

除了無機成長之外，我們還看到網路和安全領域的下一代產品和解決方案的強勁有機成長。

Now let me share some business highlights, starting with our security business, which has never been more relevant, as we've seen in recent days.

現在，讓我分享一些業務亮點，首先是我們的安保業務，正如我們最近幾天所看到的，該業務從未像現在這樣重要。

Last week's WannaCry ransomware attack was another example of the devastating impact cybercrime can inflict on individuals, companies and countries around the world. Since Friday's attack, our Talos cyber threat intelligence team has been working around-the-clock to dissect the WannaCry ransomware, understand its attack patterns and keep our customers protected. It's important that the tech industry and customers work together to defend against these attacks from cyber criminals. We will continue to do everything we can to help our customers anticipate, prevent and protect themselves from any future attack by harnessing the intelligence of the network and the power of our security portfolio.

上週的 WannaCry 勒索軟體攻擊是網路犯罪對全球個人、公司和國家造成毀滅性影響的又一例證。自從週五發生攻擊以來，我們的 Talos 網路威脅情報團隊一直在日以繼夜地分析 WannaCry 勒索軟體，了解其攻擊模式並保護我們的客戶。重要的是，科技業和客戶要共同努力，抵禦網路犯罪分子的攻擊。我們將繼續竭盡全力，利用網路智慧和我們安全產品組合的強大功能，幫助我們的客戶預測、預防和保護自己免受未來的任何攻擊。

Our security business delivered another solid quarter with 9% revenue growth and 39% deferred revenue growth, reflecting our combination of best-of-breed solutions, together with the industry's broadest security portfolio and a highly effective end-to-end security architecture.

我們的安全業務又一個季度表現穩健，收入增長 9%，遞延收入增長 39%，這反映了我們一流的解決方案、業界最廣泛的安全產品組合以及高效的端到端安全架構的結合。

We continue to lead in network security. Our next-generation firewall portfolio grew 49% with 6,000 new customers in the quarter, bringing our total customer base to over 73,000.

我們在網路安全方面繼續保持領先地位。我們的新一代防火牆產品組合在本季成長了 49%，新增了 6,000 個客戶，使我們的總客戶群超過 73,000 個。

We expanded our portfolio with the announcement of our Firepower 2100 Series, which offers both performance and protection for mission-critical applications.

我們發布了 Firepower 2100 系列，擴大了我們的產品組合，該系列為關鍵任務應用程式提供效能和保護。

Our Advanced threat portfolio continues to deliver strong revenue growth of over 30%, and we added 6,600 new customers, bringing the total number of AMP customers to over 35,000.

我們的高級威脅產品組合繼續實現超過 30% 的強勁收入成長，並且增加了 6,600 個新客戶，使 AMP 客戶總數超過 35,000 個。

Now let's turn to collaboration. In January, we introduced Cisco's Spark Board, the first all-in-one cloud-based collaboration and meeting room solution. We've seen good early traction with this SaaS-based service, with nearly 700 customers adopting this solution in the quarter. This is a great example of the transition I mentioned earlier focused on moving from standalone systems to best-of-breed products, combined with software subscriptions.

現在讓我們來談談合作。今年一月，我們推出了思科 Spark Board，這是第一款基於雲端的一體化協作和會議室解決方案。我們已經看到這項基於 SaaS 的服務早期取得了良好的發展勢頭，本季度已有近 700 家客戶採用了該解決方案。這是我之前提到的轉變的一個很好的例子，重點是從獨立系統轉向最佳產品，並結合軟體訂閱。

Our intended acquisition of MindMeld will help us simplify and enhance the collaboration experience even further through the power of artificial intelligence and machine learning. As chat and voice quickly become the interfaces of choice, MindMeld's AI technology will enable Cisco to deliver unique experiences throughout its portfolio. This acquisition will power new conversational interfaces for Cisco's collaboration products, revolutionizing how users will interact with our technology while increasing ease-of-use and enabling new capabilities. For example, users will be able to interact with Cisco Spark via Natural Language Commands, providing an experience that is highly customized to the user and their work.

我們計劃收購 MindMeld，這將幫助我們透過人工智慧和機器學習的力量進一步簡化和增強協作體驗。隨著聊天和語音迅速成為首選介面，MindMeld 的人工智慧技術將使思科能夠在其整個產品組合中提供獨特的體驗。此次收購將為思科的協作產品提供新的對話介面，徹底改變使用者與我們的技術互動的方式，同時提高易用性並實現新功能。例如，使用者將能夠透過自然語言命令與 Cisco Spark 進行交互，從而提供高度針對使用者及其工作客製化的體驗。

In our data center switching business, we now have a combined install base of over 20,000 customers, who are using our portfolio to help them build, run and manage their private and hybrid cloud environments.

在我們的資料中心交換業務中，我們現在擁有超過 20,000 個客戶的組合安裝群，他們正在使用我們的產品組合來幫助他們建立、運行和管理他們的私有雲和混合雲環境。

Our ACI portfolio grew 42%, as customers moved to 100-gig and look to automate the network and increase network performance, visibility and security. We added almost 1,200 new Nexus 9K customers in the quarter, bringing the total installed base to 12,000.

隨著客戶轉向 100 千兆並尋求網路自動化以及提高網路效能、可見度和安全性，我們的 ACI 產品組合成長了 42%。本季我們增加了近 1,200 名新的 Nexus 9K 客戶，使總安裝量達到 12,000。

Our APIC adoption continues to increase rapidly with over 380 new ACI customers in Q3, bringing our total to nearly 3,500.

我們的 APIC 採用率持續快速成長，第三季新增 380 多家 ACI 客戶，使我們的總數達到近 3,500 家。

Before I turn it over to Kelly, let me reiterate a few key points. I'm pleased with the progress we're making. As I've consistently stated, this transition will take time, but we are remaking this company to succeed in a dramatically changing marketplace. We are laser-focused on delivering innovation as well as aggressively managing the business to optimize profitability, cash flows and value for our shareholders.

在將發言權交給凱利之前，請允許我重申幾個要點。我對我們所取得的進展感到滿意。正如我一直所說，這一轉變需要時間，但我們正在重塑這家公司，以在急劇變化的市場中取得成功。我們專注於實現創新以及積極管理業務，以優化獲利能力、現金流量和股東價值。

Kelly?

凱莉？

Thanks, Chuck. I'll start with a summary of our financial results for the quarter followed by the Q4 outlook.

謝謝，查克。我將首先總結本季的財務業績，然後展望第四季。

Q3 was a solid quarter with financial results consistent with our expectations. We executed well, driving solid profitability, strong cash flow, and we continued to deliver on our strategic growth priorities.

第三季表現穩健，財務表現符合我們的預期。我們執行得很好，實現了穩健的獲利、強勁的現金流，並繼續實現我們的策略成長重點。

Total revenue was $11.9 billion, down 1%. Non-GAAP EPS was $0.60, up 5%, and operating cash flow grew 10% to $3.4 billion. We generated 31% of our total revenue from recurring offers, up from 29% a year ago. We continue to be extremely focused on driving margins and profitability, increasing our non-GAAP operating margin to 32.3%, up 2.3 points.

總收入為119億美元，下降1%。非公認會計準則每股收益為 0.60 美元，成長 5%，經營現金流成長 10% 至 34 億美元。我們從定期優惠中獲得了 31% 的總收入，高於一年前的 29%。我們持續高度重視提高利潤率和獲利能力，將非公認會計準則營業利潤率提高至 32.3%，上升 2.3 個百分點。

Before I go through Q3 in more detail, I want to remind you that Q3 last year included an extra week, it resulted in higher revenue in that quarter of $265 million, $200 million of which was in Services and $65 million from our SaaS businesses like WebEx and some from product distributions. We also had higher non-GAAP cost of sales and operating expenses of $150 million. This netted to $115 million of higher non-GAAP operating income last year.

在我更詳細地介紹第三季之前，我想提醒大家，去年第三季多了一個星期，導致該季度的收入增加了 2.65 億美元，其中 2 億美元來自服務，6500 萬美元來自我們的 SaaS 業務，例如 WebEx，還有一些來自產品分銷。我們的非公認會計準則銷售成本和營運費用也增加了 1.5 億美元。這使得去年的非公認會計準則營業收入增加了 1.15 億美元。

So onto this quarter. Total product revenue was flat year-over-year. I'll walk through each of the product areas.

進入本季。總產品收入與去年同期持平。我將介紹每個產品領域。

Switching grew 2%, with solid growth in data center switching, driven by ongoing strength in the ACI portfolio, which was up 42%. We also saw a slight positive growth in our campus business.

交換業務成長了 2%，其中資料中心交換業務穩健成長，這得益於 ACI 產品組合的持續強勁成長（成長了 42%）。我們的校園業務也出現了輕微的正成長。

Routing was down 2%, driven primarily by weakness in mobile packet core. Collaboration was down 4%, but adjusting for the extra week last year, it was down 2%. The drivers are primarily a decline in Unified Communications' endpoints, partially offset by continued growth in WebEx. Deferred revenue grew 10%.

路由業務下降了 2%，主要原因是行動分組核心業務疲軟。協作率下降了 4%，但根據去年額外一周的時間進行調整後，協作率下降了 2%。其主要驅動因素是統一通訊終端的下滑，但被 WebEx 的持續成長部分抵銷。遞延收入成長了10%。

Data center declined 5% with the continued market shift from blade to rack. However, we are seeing solid traction with our hyperconverged offering, HyperFlex.

隨著市場繼續從刀片式伺服器轉變為機架式伺服器轉變，資料中心市佔率下降了 5%。然而，我們的超融合產品 HyperFlex 正在獲得強勁的發展。

This quarter, we also further extended our innovations in UCS with new converged solutions for IBM versus stack and with our strategic alliance with Docker to deliver containerized applications.

本季度，我們還透過針對 IBM 堆疊的全新融合解決方案以及與 Docker 的策略聯盟來交付容器化應用程序，進一步擴展了我們在 UCS 領域的創新。

Wireless grew 13% with strong Meraki performance as well as the ramp of our 11 AC Wave 2 portfolio. We continue to innovate with the launch in the quarter of new wireless networking solutions, including a new Wave 2 access point and a wireless controller.

由於 Meraki 的強勁表​​現以及我們 11 AC Wave 2 產品組合的提升，無線業務成長了 13%。我們持續創新，在本季推出新的無線網路解決方案，包括新的 Wave 2 存取點和無線控制器。

Security was up 9% with strong performance in unified threat management, with growth of approximately 50% as well as growth of over 30% in both advanced threat and web security. Deferred revenue grew 39%, demonstrating the value of our solutions and ongoing delivery of innovation.

安全性成長了 9%，統一威脅管理表現強勁，成長了約 50%，高階威脅和網路安全均成長了 30% 以上。遞延收入成長了 39%，證明了我們的解決方案的價值和持續的創新。

Services was down 2%. Normalized for the extra week, it grew 4%. We're continuing to focus on renewals and attach rates.

服務業下降了2%。經過一週的正常化，成長了 4%。我們將繼續關注續約和附加率。

We drove good growth in deferred revenue, which was 13% in total, with product up 26% and services up 7%. Deferred products revenue from our recurring software and subscription businesses was up 57% to $4.4 billion, which includes the acquisition of AppDynamics during the Quarter. Excluding AppDynamics, the increase was 51%.

我們推動了遞延收入的良好成長，總計成長了 13%，其中產品成長了 26%，服務成長了 7%。我們的經常性軟體和訂閱業務的遞延產品收入成長 57%，達到 44 億美元，其中包括本季收購 AppDynamics。不包括 AppDynamics，增幅為 51%。

In terms of orders, total product orders declined 4%.

訂單方面，總產品訂單下降4%。

Looking at our geographies, which is a primary way we run the business, Americas was down 4%, EMEA was down 6% and APJC grew 2%.

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、中東和非洲地區下降了 6%，而 APJC 則成長了 2%。

Total emerging markets declined 12%, with the BRICS plus Mexico down 10%.

新興市場整體下跌 12%，其中金磚國家加墨西哥下跌 10%。

In our customer segments, Enterprise declined 2%, Commercial grew 1%, Public Sector was down 4%, and Service Provider declined 10%.

在我們的客戶領域中，企業下降了 2%，商業成長了 1%，公共部門下降了 4%，服務提供者下降了 10%。

From a non-GAAP profitability perspective, total gross margin was 64.4%, down by 0.8 points. In Q3 '16, the extra week resulted in a 0.5 point benefit in that quarter. So adjusting for that, total gross margin decreased 0.3 points.

從非公認會計準則獲利能力角度來看，總毛利率為64.4%，下降0.8個百分點。在 2016 年第三季度，額外一週的收益為該季度帶來了 0.5 個百分點的收益。因此，經過調整後，總毛利率下降了 0.3 個百分點。

In Q3 '17, our Product gross margin was 63.2%, down 1.3 points, and Service gross margin was 67.8%, growing 0.7 points. We increased our operating margin by 2.3 points to 32.3% from a year ago.

2017年第三季度，我們的產品毛利率為63.2%，下降1.3個百分點，服務毛利率為67.8%，成長0.7個百分點。我們的營業利潤率比去年同期提高了 2.3 個百分點，達到 32.3%。

In terms of the bottom line, we grew non-GAAP EPS 5% to $0.60, while GAAP EPS was $0.50.

就底線而言，我們的非 GAAP EPS 成長 5% 至 0.60 美元，而 GAAP EPS 為 0.50 美元。

We ended Q3 with total cash, cash equivalents and investments of $68.0 billion, with $2.9 billion available in the U.S. From a capital allocation perspective, we returned approximately $2 billion to our shareholders during the quarter that included $0.5 billion of share repurchases and $1.5 billion for our quarterly dividend, reflecting the 12% increase we announced last quarter.

截至第三季度，我們的現金、現金等價物和投資總額為 680 億美元，其中 29 億美元在美國可用。從資本配置角度來看，我們在本季度向股東返還了約 20 億美元，其中包括 5 億美元的股票回購和 15 億美元的季度股息，反映了我們上個季度宣布的 12% 的增長。

To summarize, Q3 was a solid quarter, and we executed well. We're focused on driving operational efficiencies and profitability, enabling us to make the strategic investments to drive long-term shareholder value.

總而言之，第三季表現穩健，我們的表現也很好。我們專注於提高營運效率和獲利能力，使我們能夠進行策略性投資以推動長期股東價值。

Let me reiterate our guidance for the fourth quarter. This guidance includes the type of forward-looking information that Marilyn referred to earlier. We expect revenue in the range of minus 4% to minus 6% year-over-year. We anticipate the non-GAAP gross margin rate to be in the range of 63% to 64%. The non-GAAP operating margin rate is expected to be in the range of 29.5% to 30.5%, and the non-GAAP tax provision rate is expected to be 22%. Non-GAAP earnings per share is expected to range from $0.60 to $0.62.

讓我重申一下我們對第四季的指導。本指南包含瑪麗蓮之前提到的前瞻性資訊類型。我們預計收入年減將在-4%至-6%之間。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在29.5%至30.5%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 0.60 美元至 0.62 美元之間。

I'll now turn it back to Chuck for some closing comments.

現在我將話題轉回給查克，請他發表一些結束語。

Thanks, Kelly, and thanks again to all of you for joining us today.

謝謝，凱利，再次感謝大家今天的參加。

As I mentioned earlier, we delivered another solid quarter, and we are executing well. We're confident in our strategy for long-term growth and profitability. We believe that the network will become increasingly important in solving our customers' most complex business problems and helping them get secure and stay secure.

正如我之前提到的，我們又完成了一個穩健的季度，並且我們的執行情況良好。我們對我們的長期成長和獲利策略充滿信心。我們相信，網路在解決客戶最複雜的業務問題以及幫助他們獲得並保持安全方面將變得越來越重要。

We also believe that we will continue to see strong momentum in our shift towards more software and subscription revenue. This reflects the success of the investments we are making in this area -- in these areas, together with the flexible consumption and buying models we're offering our customers.

我們也相信，我們將繼續看到向更多軟體和訂閱收入轉變的強勁勢頭。這反映了我們在該領域投資的成功——以及我們為客戶提供的靈活的消費和購買模式。

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

瑪麗蓮，我會把問題交還給你。

Great. Thanks, Chuck. Shaun, let's go ahead and open the line for questions. (Operator Instructions)

偉大的。謝謝，查克。肖恩，我們開始回答問題吧。（操作員指示）

(Operator Instructions)

（操作員指示）

Our first question is coming from the line of Mr. Mark Moskowitz of Barclays Capital.

我們的第一個問題來自巴克萊資本的馬克·莫斯科維茨先生。

I wanted to see if we could understand more of the guidance, Kelly and Chuck. The revenues are little lighter than we had anticipated. Is that a function of macro factors? Or is that a function more of the shift to the subscription model or maybe there's going to be some disturbance here and there. Clearly, the deferred revenue -- product revenue growth is quite nice, but I was just wondering if there's any sort of puts and takes you could walk us through there. I really appreciate it.

我想看看我們是否能夠理解凱利和查克的更多指導。收入比我們預期的少一點。這是宏觀因素的作用嗎？或者這更多的是向訂閱模式轉變的結果，又或者可能會出現一些幹擾。顯然，遞延收入——產品收入成長相當不錯，但我只是想知道您是否可以向我們介紹一下這方面的情況。我真的很感激。

Kelly, why don't you take him through the bridge, and then I'll just make some comments?

凱利，為什麼不帶他過橋，然後我就發表一些評論呢？

Sure. So Mark, when we look at guidance, it's a combination of many factors, right? It starts with our backlog and then orders on them, the funnel. And then yes, definitely, we take into account our transition to more software and subscriptions and how that's impacting it. So when I look at the guidance we just gave, our orders were a little weaker in Q3, which does mean that I'm starting with the lower backlog than anticipated. And then when I'm assuming, when I look at the order strength, we're assuming what we saw in Q3 continues on in Q4. So just to give some color around that. Where we had -- we have been facing headwinds all quarter long with SP and emerging. We saw them get worse this quarter that you saw in the numbers there. I'm expecting that to continue. And then we saw some new kind of macro issues in the areas like Public Sector and the U.S. Fed space and things like that. So I'm assuming that orders in line that we saw in Q3 is going to continue on in Q4. And then finally, we are seeing an impact because you're seeing it go to the balance sheet of this transition that we are just accelerating through to the tune of 1.5 to 2 points. So the combination of those 3 things are driving the guidance into that minus-4 to minus-6 range.

當然。所以馬克，當我們看指導時，它是多種因素的結合，對嗎？它從我們的積壓工作開始，然後是訂單，即漏斗。是的，我們肯定會考慮向更多軟體和訂閱的過渡以及這對它的影響。因此，當我查看我們剛剛給出的指導時，我們發現第三季的訂單量略有減弱，這意味著我的積壓訂單量低於預期。然後，當我假設，當我查看訂單強度時，我們假設我們在第三季度看到的情況將在第四季度繼續延續。只是為了給它添加一些色彩。我們在整個季度中都面臨著 SP 和新興市場的逆風。正如您在數字中看到的那樣，我們看到本季的情況變得更糟。我期望這種情況能夠持續下去。然後我們在公共部門和聯準會等領域看到了一些新的宏觀問題。因此，我假設我們在第三季看到的訂單將會在第四季繼續保持。最後，我們看到了影響，因為你看到它進入了這一轉變的資產負債表，而我們正在加速這一轉變，速度達到了 1.5 到 2 個百分點。因此，這三件事的結合將指導價推入了-4 到-6 的範圍。

Yes, just -- Mark, a couple of comments on what Kelly just described. I mean, the Public Sector business, particularly in the United States, the federal business is, frankly, it's about 1 point of that guide. It's a pretty significant stall right now with the lack of budget visibility. And when you think about the strategy that we're deploying, the 57% growth in the software and subscription business, if you just go back 8 quarters ago, we had $2 billion on our balance sheet relative to software and subscription. And the first 2 or 3 quarters, we were convincing the teams that, that was the shift we were going to make. And now we have more than doubled that to $4.4 billion, and the growth there is accelerating. So we are very pleased with that transition. And at the same time we deal with all of these challenges, we're also, -- we remain very committed to earnings. We remain very committed to our capital return strategy.

是的，只是——馬克，對凱利剛才描述的內容發表幾點評論。我的意思是，公共部門業務，特別是在美國，聯邦業務，坦白說，這是該指南的 1 點。由於缺乏預算透明度，目前這是一個相當嚴重的停滯。當您考慮我們正在部署的策略時，軟體和訂閱業務成長了 57%，如果您回顧 8 個季度前，我們的資產負債表上與軟體和訂閱相關的金額為 20 億美元。在前兩三節，我們不斷向各隊證明，這就是我們要做出的改變。現在，我們的投資金額已增加一倍多，達到 44 億美元，而且成長速度還在加快。因此，我們對這一轉變感到非常高興。在應對所有這些挑戰的同時，我們仍然非常致力於獲利。我們仍然堅定地致力於我們的資本回報策略。

The next question is coming from the line of Ittai Kidron from Oppenheimer.

下一個問題來自奧本海默的伊泰·基德隆 (Ittai Kidron)。

Chuck, I'm going to take a U-turn this time, actually not ask you about the data center business but rather focus a little bit more on the gross margins. Some of the commentary in your press release talked about some pricing pressures. If you could give us a little bit more color on the guidance and your gross margin assumption into the guidance, how much of that is mix-related and how much of that is pricing? And if -- any color you could give on the pricing, how much is competitive versus, I don't know, product shifts or something like that, that'll be great.

查克，這次我要來個大轉彎，實際上不是問你有關資料中心業務的問題，而是更多地關注毛利率。你們新聞稿中的一些評論談到了一些定價壓力。如果您可以給我們更多關於指導和指導中的毛利率假設的詳細信息，其中有多少與組合相關，有多少與定價相關？如果您能提供一些關於定價的詳細信息，包括競爭力和產品轉變等，那就太好了。

Thanks, Ittai. So Kelly, let's have the same strategy. You want to go through the math on this and then...

謝謝，伊泰。所以凱利，讓我們採取同樣的策略吧。你想對此進行數學計算然後...

So Ittai, when we look at the drivers of our growth margin, price in Q3 actually has been in the same range that it was pretty much last year as well as last quarter in terms of the price index that we're seeing. So that's in the same range. Again, it's high, but it's in the range. It's not increasing. I would say in terms of the guidance for Q4, we're assuming that. We are also making sure the teams are being very aggressive where they need to be aggressive in areas and then against competitors where we need to be. But overall, the pricing hasn't changed dramatically besides the normal erosion that we see in churned business lines. I'd say, in terms of mix, that hasn't dramatically changed as well, with switching being positive this quarter, that helped a lot. And again, well, the mix isn't changing. There's mix changes with [MBEs] in the guidance going forward but it's nothing dramatic. So I'd say we feel good about being able to continue driving the margins that we have. The only other piece I'll comment on, because we mentioned it before, we are still seeing some cost pressure from the increase in DRAM pricing that was got baked in both our Q3 as well as into Q4. But we've been doing a lot of work, and our supply chain team has done working with our suppliers to make sure we can secure our forward supply at prices that we can plan on. So I think we've pretty much got that boxed in for the guidance.

因此，Ittai，當我們查看成長利潤的驅動因素時，從我們看到的價格指數來看，第三季的價格實際上與去年以及上一季處於同一範圍內。所以這屬於同一範圍。再次強調，這個數字很高，但仍在範圍內。它沒有增加。我想說，就第四季的指導而言，我們假設如此。我們也確保各隊在需要進攻的領域中表現得非常積極，並在需要進攻的領域對抗競爭對手。但總體而言，除了我們在業務線變動中看到的正常侵蝕之外，定價並沒有發生巨大變化。我想說，就組合而言，情況也沒有太大的變化，本季的轉換情況是正面的，這有很大幫助。再說一遍，混合情況沒有改變。未來的指導中 [MBE] 會有混合變化，但並不劇烈。因此我想說，我們很高興能夠繼續提高現有的利潤率。我要評論的唯一另一點是，因為我們之前提到過，我們仍然看到 DRAM 價格上漲帶來的一些成本壓力，這種壓力在第三季和第四季都得到了體現。但我們做了很多工作，我們的供應鏈團隊一直與供應商合作，以確保我們能夠以可規劃的價格確保遠期供應。所以我認為我們已經基本確定了指導方針。

Next question is coming from James Faucette of Morgan Stanley.

下一個問題來自摩根士丹利的詹姆斯·福塞特。

Just a couple of quick follow-up questions to some of the comments that have already been made. Can you talk a little bit about the orders and you mentioned that fed was weak. But when you look at the other areas of weakness, can you talk about, like, what's driving those, et cetera? And I guess, more long term, it continues to be a good deferred revenue growth, and you mentioned the security. What are the priorities that your customers are showing in the security space generally? And what are you able to address now versus where are the things that they're asking for that you think you need to improve on?

我只想針對已經提出的一些評論提出幾個簡單的後續問題。您能否稍微談一下訂單情況，您提到聯準會很弱。但是當您看到其他薄弱環節時，您能否談談導致這些薄弱環節的原因是什麼等等？我想，從長遠來看，它將繼續實現良好的遞延收入成長，正如您所提到的安全性。您的客戶在安全領域通常優先考慮哪些方面？現在您能夠解決什麼問題，而您認為他們的要求中哪些方面需要改進？

Great. Thanks, James. And so we have some order color and then securities. So let me take the order stuff, and then, Kelly, chime in as you'd like. So if we just go around -- sort of go around the globe, let me just highlight what we saw. And I'm just going to tell you what drove the weakness in these areas so you can assume the other pieces of the business were pretty much as expected. In the Americas, it was primarily the U.S. federal -- I mean, there's so much uncertainty around budgets. The U.S. federal business was a significant driver. Mexico, there has been a lot of uncertainty in Mexico, and that was actually down 49% for us year-over-year. So it was -- there's a great deal of uncertainty around the investment landscape there. And then the third element would have been the Service Provider business in the Americas. So those were the things that really drove the orders in the U.S. In Europe, the U.K., the currency issue in the U.K. is real and was very impactful in that business. And then we continue to see pressure in the Middle East relative to oil prices. We also -- obviously, there's been a lot of uncertainty around the geopolitical dynamics, some of which have been clarified recently, obviously. And we did see some strength in some countries there, but the U.K. is a big country for us. And the Middle East, obviously, with the uncertainty around oil prices, continues to be a little bit of a pressure as well. In APJC, we saw Japan and Australia were reasonable. India was solid again. And China, we had tough comps from the SP Video business from a year ago that we talked about. So that's really what we saw from an orders perspective. I think if you look at customer segments, just to give you some color, Enterprise, the challenge was largely driven by Europe. Commercial, the lightness there was driven by Europe. Public Sector, as I said, was U.S. Federal, and SP was fairly consistent. So Kelly, any other comments on that?

偉大的。謝謝，詹姆斯。因此我們有一些訂單顏色和證券。那麼，讓我來處理訂單，然後，凱利，按照你希望的方式插話。因此，如果我們只是環遊世界——環遊世界，讓我重點介紹一下我們所看到的。我只是想告訴你是什麼導致了這些領域的疲軟，這樣你就可以假設業務的其他部分基本上符合預期。在美洲，主要是美國聯邦政府——我的意思是，預算方面存在著許多不確定性。美國聯邦業務是一個重要的推動力。墨西哥，墨西哥存在著許多不確定性，這實際上比去年同期下降了 49%。所以那裡的投資前景存在著很大的不確定性。第三個要素是美洲的服務提供者業務。所以這些才是真正推動美國訂單的因素。在歐洲，英國的貨幣問題是真實存在的，並且對該業務影響很大。然後我們繼續看到中東地區油價面臨的壓力。我們也——顯然，地緣政治動態存在著許多不確定性，其中一些顯然最近已經被澄清。我們確實看到了一些國家的實力，但英國對我們來說是一個大國。顯然，由於油價的不確定性，中東也持續帶來一些壓力。在 APJC 中，我們看到日本和澳洲表現合理。印度再次表現強勁。就中國而言，我們一年前談到的 SP 視訊業務表現不佳。這就是我們從訂單角度看到的情況。我認為，如果你看一下客戶群，只是為了給你一些顏色，企業面臨的挑戰主要是由歐洲推動的。商業方面，那裡的輕鬆是由歐洲推動的。正如我所說，公共部門是美國聯邦，並且 SP 相當一致。那麼凱利，對此還有其他評論嗎？

Yes.

是的。

Just quickly on the securities, since you snuck that one in, too, James. The -- what our customers -- what we see happening in security right now is that as our customers prepare for the next few years and literally adding billions of new connections, we obviously believe that the network is going to become even more relevant than it ever has been. And our customers are going to need -- to deal with that scale, they're going to need significant automation. They're going to need greater insights coming out of their technology infrastructure like the network through analytics. They're going to need security embedded at the network layer because you're going to have to begin to secure the infrastructure the minute these packets hit the wire. So what they're looking for is -- they are looking for an end-to-end architecture now for dealing with security. They're looking for an open architecture that actually allows them to buy the best-of-breed technology, which we have across many elements of what they're trying to do. But they are looking for an architecture, and they're looking for -- to leverage as much of that from the cloud, and which correspondingly turns into the subscription business, as you pointed out. So that's what we see happening there. There's obviously lots of other areas within that architecture that we don't play today where we could, and we continue to assess all of those opportunities.

關於證券，我只想簡單說一下，因為你也偷偷地把這個放進去了，詹姆斯。我們的客戶——我們現在看到的安全問題是，隨著我們的客戶為未來幾年做好準備，並實際上增加數十億個新連接，我們顯然相信網路將變得比以往任何時候都更加重要。而我們的客戶將需要—為了應對這種規模，他們將需要高度自動化。他們需要透過分析從網路等技術基礎設施中獲取更深入的見解。他們需要在網路層嵌入安全性，因為在這些資料包到達網路時，您必須開始保護基礎架構。所以他們正在尋找的是——他們正在尋找端到端的架構來處理安全性問題。他們正在尋找開放式架構，實際上可以讓他們購買到最佳技術，而我們在他們嘗試做的許多方面都擁有這種技術。但他們正在尋找一種架構，他們正在尋找——利用雲端的盡可能多的資源，並相應地轉變為訂閱業務，正如您所指出的。這就是我們看到的在那裡發生的情況。顯然，該架構中還有很多其他領域我們目前還無法觸及，我們將繼續評估所有這些機會。

The next question is coming from Vijay Bhagavath of Deutsche Bank. The next question on queue, coming from Simon (sic) [Simona] Jankowski of Goldman Sachs.

下一個問題來自德意志銀行的 Vijay Bhagavath。下一個問題來自高盛的西蒙（原文如此）[西蒙娜]·揚科夫斯基。

It's Simona Jankowski. Just a couple of follow-ups. First, if you can clarify in terms of the weakness you saw incrementally in the Service Provider and emerging market theaters. How much of that was related to competition or pricing pressure such as from Huawei versus some of the macro factors you discussed? And then just a quick follow-up on how did your cloud business do this quarter.

她是西蒙娜·揚科夫斯基。僅需幾個後續行動。首先，您是否可以澄清一下您在服務提供者和新興市場領域逐漸看到的弱點。其中有多少與華為等公司的競爭或定價壓力有關，以及您討論過的一些宏觀因素？然後簡單問一下本季您的雲端業務表現如何。

So let me comment on the first one, and then, Kelly, maybe you can talk about the cloud business and how we -- I'll talk about both of them but then how we measure that specifically. So the weakness in emerging and SP, I would say, in emerging, I would say it's less. We clearly -- we've been -- we've had competition from several vendors. And clearly, Huawei is a very strong competitor. I don't feel like it has increased significantly in the emerging countries. It's been pretty consistent there, and our teams know how to compete, and we continue to evolve our strategy and bring different tools to help them compete. So I don't -- I wouldn't say that had much to do with it. I think on our overarching cloud business, Simona, we look at that in many, many different ways. So we look at, obviously, our private cloud business, which is made up of the UCS business as well as our data center switching portfolio, which we talked about earlier. Both of those, the UCS business was down 5, as you saw. And then the -- obviously, our next-generation switching portfolio continues to do well, the ACI elements up 42%. And if you're asking about the MSDC guys, which are the web scale cloud guys, it's the same as we were last quarter. These -- we have -- we're engaging with them on an individual basis. We look at the big ones as, frankly, markets of one. We have made great progress with a few of them. Others we're in the early stages, and we have codevelopment opportunities. But I would tell you, we're in very deep discussions with most all of them, and we're looking at very strategic partnerships that scale beyond even just selling infrastructure to them in many cases. So I'm not sure where you're going with cloud. Hopefully one of those answers cover what you're looking for.

因此，讓我對第一個問題發表評論，然後，凱利，也許您可以談論雲端業務以及我們如何 - 我將談論它們兩者，但隨後我們將具體衡量它們。因此，我想說，新興市場和 SP 的弱點在新興市場中較小。顯然，我們一直面臨多家供應商的競爭。顯然，華為是一個非常強大的競爭對手。我並不覺得新興國家的成長速度有顯著提高。我們一直保持著相當一致的狀態，我們的團隊知道如何競爭，我們也在不斷發展我們的策略，並帶來不同的工具來幫助他們競爭。所以我不認為——我不認為這與此有很大關係。西蒙娜，我認為，對於我們的整體雲端業務，我們會從很多不同的角度來看待它。因此，我們顯然會專注於我們的私有雲業務，它由 UCS 業務以及我們之前討論過的資料中心交換產品組合組成。如您所見，這兩項 UCS 業務均下降了 5%。然後——顯然，我們的下一代交換產品組合繼續表現良好，ACI 元素上漲了 42%。如果你問的是 MSDC 人員，也就是網路規模雲端人員，他們的情況和上個季度一樣。這些 — — 我們已經 — — 我們正在與他們進行個人接觸。坦白說，我們將大公司視為一個市場。我們在其中一些問題上已經取得了很大進展。其他方面我們還處於早期階段，我們有共同開發的機會。但我想告訴你，我們正在與大多數公司進行非常深入的討論，我們正在尋求建立非常策略性的合作夥伴關係，這種合作夥伴關係在許多情況下甚至不僅限於向他們出售基礎設施。所以我不確定你要用雲端做什麼。希望其中一個答案能夠涵蓋您所尋找的內容。

Next question on queue is coming from Jess Lubert of Wells Fargo. Your next on queue is coming from Kulbinder Garcha of Credit Suisse Securities.

下一個問題來自富國銀行的 Jess Lubert。下一位發言者是瑞士信貸證券公司的庫爾賓德‧加查 (Kulbinder Garcha)。

For Chuck maybe. On the revenue side, I take your points on the macro economy and the weakness in emerging markets.

對查克來說也許如此。在收入方面，我接受您關於宏觀經濟和新興市場疲軟的觀點。

Kulbinder, could you just speak up just a hair, buddy?

庫爾賓德，你能稍微說點什麼嗎，老兄？

Sorry (foreign language) My question is on revenue growth, I think the drivers of the weak guidance you're talking about. I guess, the broader question is how important is getting this company back to growth? It looks like last year, you did grow. This year, you're probably not going to grow very much, i.e. especially organically. So is there something more transformative have to happen on the M&A front? Do you think this is temporary in nature? I know you're having this headwind of this business transformation, but just the importance of revenue growth to Cisco as a company, if you could comment on that for the long-term.

抱歉（外語）我的問題是關於收入成長，我認為您所談論的指導強度較弱的驅動因素。我想，更廣泛的問題是讓這家公司恢復成長有多重要？看起來去年你確實長大了。今年你可能不會長太多，即：尤其是有機的。那麼，併購方面是否需要發生更具變革性的事情？您認為這本質上是暫時的嗎？我知道你們正面臨業務轉型的阻力，但營收成長對思科公司來說非常重要，請從長期角度評論一下。

Yes, Kulbinder, I think that -- when we look to the future right now and you really think about the number of new connections that are going to be added, that our customers will be adding over the coming years and the need for automation, the need for analytics and security, what we have done, and it'll be done -- our solutions that we'll bringing in the space with a combination, to your point, of inorganic capabilities, as we have shown our ability to do, as well as some organic innovation. I've talked to several of you over the last few quarters about the fact that we went in and reallocated a fair amount of our R&D expense last year and over last 18 months. And many of those solutions are targeting these next-generation networks that our customers are going to need to build out to support this new infrastructure. And with a high degree of automation across the network, with a high degree of analytics, with distributed compute capabilities for processing the data at the Edge as well as the security piece. So we have future innovation that will come in that space. We'll also use a combination of inorganic options where we need it. And we believe that as we get into the next generation of the networks that the customers need to build out, that we will be very successful with our capabilities.

是的，庫爾賓德，我認為——當我們展望未來，認真思考未來幾年將要添加的新連接數量、我們的客戶將添加的新連接數量以及對自動化、分析和安全的需求時，我們已經做了什麼，以及將要做什麼——我們將在這個領域推出的解決方案結合了無機能力（正如您所說），正如我們已經展示的那樣，以及一些有機創新。在過去的幾個季度中，我與你們中的幾個人談過這樣一個事實：去年和過去 18 個月，我們重新分配了相當一部分研發費用。許多解決方案都針對下一代網絡，我們的客戶需要建立這些網路來支援這種新的基礎設施。並且具有整個網路的高度自動化、高度的分析能力以及用於處理邊緣資料和安全部分的分散式運算能力。因此，我們在該領域有未來的創新。我們還將在需要的地方使用無機選項的組合。我們相信，當我們進入客戶需要建立的下一代網路時，我們的能力將非常成功。

The next question is from Jess Lubert of Wells Fargo, you may now begin.

下一個問題來自富國銀行的 Jess Lubert，現在您可以開始。

I was hoping you could provide a little more detail regarding the order weakness you're flagging in the North American service provider vertical. Last quarter, if I remember correctly, you suggested orders there were improving a little bit. So I just want to understand the change. To what degree it's a technology issue versus a macro issue, the duration, you think, that's likely to be weak for and if there's if any areas within the vertical that are better or worse, that would be helpful.

我希望您能提供更多有關您在北美服務提供者垂直領域標記的訂單疲軟的詳細資訊。如果我沒記錯的話，上個季度您曾表示那裡的訂單有所改善。所以我只是想了解這種改變。您認為，這在多大程度上是一個技術問題，還是一個宏觀問題，持續時間有多長，以及垂直領域中是否存在更好或更壞的領域，這將會有所幫助。

Let me just give you a couple of comments, and then Kelly can give us any specifics. As I said 2 quarters back, I think, when we had the negative 10% growth or 12% or whatever it was, 12%, I think.

請容許我給您提幾點意見，然後凱利可以給我們具體細節。正如我兩個季度前所說的那樣，我認為，當時我們的成長率為負 10% 或 12%，或不管是多少，我想是 12%。

Yes, (inaudible).

是的，（聽不清楚）。

This -- Our entire SP business around the world is driven by very large customers. And so when some number of them have an off quarter, it can affect the business. And I think the Americas would be probably an example of that this quarter as well. And the Mexico business that I discussed is heavily influenced by service providers. And so that's a bit of what we've seen. We had some customers in the U.S. that were performed very well this quarter for us and others that did not. Kelly, any comment on the numbers?

這——我們全球的整個 SP 業務都是由非常大的客戶推動的。因此，當其中一些公司出現業績下滑時，就會對業務產生影響。我認為本季美洲可能也是這樣一個例子。我所討論的墨西哥業務深受服務提供者的影響。這就是我們所看到的一些情況。我們在美國有一些客戶，本季的表現非常好，但其他客戶則表現不佳。凱利，對這些數字有什麼評論嗎？

Yes. No, I'd say, I think you hit on it. I think with the Americas being down so much, it was a combination of Mexico. Again, these are big customers, and that was down. Chuck already mentioned Mexico was down 49%. It was a huge chunk of that was in the SP. And then in the U.S., the service providers, that was modestly down, not dramatic at all. Again, and that is, again, we had a lot of customers that were up and a lot that were down, so balanced overall.

是的。不，我想說，我認為你已經猜到了。我認為美洲經濟下滑如此之多是墨西哥經濟下滑的結果。再說一遍，這些都是大客戶，而且價格下降了。查克已經提到墨西哥下降了 49%。其中很大一部分是在 SP 中。然後在美國，服務提供者的利潤略有下降，但並不劇烈。再說一次，也就是說，我們有很多客戶增加，也有很多客戶減少，所以總體上是平衡的。

The next question is coming from Pierre Ferragu of Sanford C. Bernstein Company.

下一個問題來自桑福德·伯恩斯坦公司的皮埃爾·費拉古。

I was wondering, Kelly and Chuck, if how much we should read in the weak guide you gave us against at least expectations we had on The Street. Is there a change we should expect in your seasonality pattern as you're going to watch more subscription services like natural, like trends of the first quarter that we've seen in the past? Is that something that we should see or we should expect to see changing over time?

凱利和查克，我想知道，相對於我們對華爾街的預期，我們應該在你們給我們的薄弱指南中讀到多少內容。當您關注更多像自然訂閱服務這樣的我們過去看到的第一季趨勢時，我們是否應該預期您的季節性模式會發生變化？這是我們應該看到的，還是我們應該期待看到的隨著時間而改變的？

Yes, I'll make a comment and let Kelly answer the seasonality portion of it. But clearly, the transition to the software and subscription business obviously impacts how to think about guidance going forward. And when you -- when we see particularly large quarters with high growth like we saw this quarter, I think it will have an impact. I'm not sure exactly how we look at what it means seasonally. Kelly?

是的，我會發表評論，讓凱利回答其中的季節性部分。但顯然，向軟體和訂閱業務的轉型顯然會影響如何思考未來的指導。當我們看到像本季這樣的高成長季度時，我認為它會產生影響。我不確定我們究竟如何看待它的季節意義。凱莉？

Yes, I mean, I do think that the models that we've looked at, tried and true over the years, where we could look at normal sequential from Q3 and Q4, I think those models are changing because we are accelerating what is -- we're putting more on the balance sheet than what is amortizing off. While we are part of our revenue guide takes into account the growth of what's coming from our recurring offers, we're still adding so much more because we're adding more and more offers every day. So I do think it is changing a bit. I think we'll talk about this a bit more when we get to our Analyst conference in June as well. But we'll give you clarity of how we can continue to model that. We certainly saw the big chunk of our business that's driven by the core orders in the book and ship, because we still have a lot of our business that we haven't transitioned yet, but as we drive more and more of that, I do think it's going to have to change how we've modeled in the past as an analyst, right? And we'll give you the clarity to help that.

是的，我的意思是，我確實認為，我們研究過的模型多年來一直被證明是真實的，我們可以從第三季度和第四季度看到正常的連續情況，我認為這些模型正在發生變化，因為我們正在加速——我們在資產負債表上投入的資金比攤銷的資金更多。雖然我們的收入指南已經將來自定期優惠的收入成長考慮在內，但我們仍在增加更多內容，因為我們每天都在增加越來越多的優惠。所以我確實認為它正在發生一些變化。我想我們在六月的分析師會議上也會進一步討論這個問題。但我們會向您清楚地說明如何繼續進行建模。我們當然看到我們的業務很大一部分是由預訂和發貨中的核心訂單推動的，因為我們還有很多業務尚未轉型，但隨著我們推動的業務越來越多，我確實認為它必須改變我們過去作為分析師的建模方式，對嗎？我們將為您提供清晰的指導來幫助您實現這一點。

Next question is coming from the line of Steve Milunovich of UBS Securities.

下一個問題來自瑞銀證券的史蒂夫·米盧諾維奇。

Kelly, can you give us any guidance by product segment for next quarter? For example, Services, I assume, will be up again. So in terms of kind of the deceleration of the downside, where will we see that? Will Switching likely be down, Routing be down more kind of in terms of things getting a bit worse? Where do you think we'll see that?

凱利，您能否為我們提供下個季度按產品細分方面的指導？例如，我認為服務將會再次啟動。那麼，就下行趨勢的減速而言，我們將在哪裡看到它？就情況變得更糟而言，交換可能會癱瘓嗎？路由可能會癱瘓嗎？您認為我們會在哪裡看到它？

Yes, I mean, again, Steve, that we -- because so much of our core business is still very much related to the orders that we have yet to book, our backlog accounts were less than 1/3. And so much of our quarter comes from the order yet to come. We don't give guidance by business unit. But directionally, I think you're thinking about it the right way, right? I mean, I think last quarter, we tried to guide, when we were talking about Routing. We knew we had strong orders a quarter ago in Routing, which is why it wasn't as bad as it had been in the quarter before this quarter on revenue. So again, it takes into account all of that. I do think, as you know, our Switching business is very fluid, so I don't think you should assume that, that is going to continue to be -- that goes up and down, so I don't think you should draw a trend having that being positive this quarter. So I think it's very fluid within business units.

是的，史蒂夫，我的意思是，由於我們的核心業務很大一部分仍然與尚未預訂的訂單密切相關，因此我們的積壓帳戶不到 1/3。我們季度的大部分收入來自於尚未到來的訂單。我們不提供按業務部門劃分的指導。但從方向上看，我認為你的想法是正確的，對嗎？我的意思是，我認為上個季度，當我們談論路由時，我們試圖提供指導。我們知道，一個季度前我們在路由方面的訂單量很大，這就是為什麼本季的收入不像上一季那麼糟糕。所以再次強調，它考慮到了所有這些因素。我確實認為，正如你所知，我們的交換業務非常不穩定，所以我認為你不應該假設它會持續下去 - 它會上下波動，所以我不認為你應該在本季度畫出積極的趨勢。所以我認為它在業務部門內非常不穩定。

Our next question is coming from Rod Hall of JPMorgan.

我們的下一個問題來自摩根大通的羅德·霍爾。

I just wanted to see if you could comment a little bit on the 31% recurring revenue. Maybe help us understand how much of that is SMARTnet and maintenance-type services and how much is, let's call it, next-gen recurring revenue. And so that -- and I also would like it, if you could comment, I know the carrier situation in the U.S. is pretty weak, and we've seen that across other companies as well. But could you comment on specific projects like the Metro Optical buildout? Is that still a bright spot? Do you still see that project moving ahead as expected?

我只是想看看您是否可以對 31% 的經常性收入發表一些評論。也許可以幫助我們了解其中有多少是 SMARTnet 和維護型服務，有多少是，我們稱之為下一代經常性收入。所以——如果您能評論一下，我也希望如此，我知道美國的運營商狀況相當糟糕，我們也在其他公司看到了這種情況。但是您能對 Metro Optical 建設等具體項目發表評論嗎？這還是一個亮點嗎？您是否仍認為該專案將如預期進展？

Sure. I'll hit the first one. So yes, if I break out the 31%, so the way to think about it, Rod, is basically, 90% of my services revenue is recurring, okay? So of the 31%, 75% of that dollar amount, so the $3.6 billion -- over $3.6 billion, 75% of that comes from the Services business. On the product side, 10% of my product revenue is now coming from recurring, so that's over $900 million. So 25% of that over $3.6 billion. And so again, I think that Services has continued to be in that 90% range. And again, what we're really trying to drive is more and more of those offers on the product side.

當然。我會打第一個。是的，如果我突破 31%，那麼羅德，思考的方式基本上是，我的 90% 服務收入是經常性的，好嗎？因此，在這 31%、75% 的金額中，也就是 36 億美元——超過 36 億美元，其中 75% 來自服務業務。在產品方面，我的產品收入的 10% 現在來自經常性收入，所以這個數字超過 9 億美元。其中 25% 超過 36 億美元。因此，我認為服務業將繼續保持在 90% 的範圍內。再說一次，我們真正想要推動的是在產品方面提供越來越多的此類優惠。

Yes, and Rod, this is Chuck. Like 6 quarters ago, the product number, I think, was 6%, so we have made progress, and we'll continue to, as we see the amount of business that we're putting on the balance sheet is accelerating. On your second question, we absolutely continue to see the projects like Metro Optical moving forward. We've actually continued to do well in some of the next-generation areas that we're working with many of the U.S. service providers. So we see that going well, and we do believe that as they make some of these transitions, we are going to be right in the middle of them with them.

是的，羅德，這是查克。就像 6 個季度前一樣，我認為產品數量是 6%，所以我們取得了進展，我們將繼續取得進展，因為我們看到資產負債表上的業務量正在加速成長。關於您的第二個問題，我們絕對會繼續看到 Metro Optical 等專案的持續推進。事實上，我們在與許多美國服務提供者合作的一些下一代領域中繼續表現良好。所以我們看到一切進展順利，我們也確實相信，當他們進行一些轉變時，我們將與他們並肩作戰。

The next question is coming from Vijay Bhagavath of Deutsche Bank.

下一個問題來自德意志銀行的 Vijay Bhagavath。

I mean, Chuck, I'm just a research analyst. I've noticed you're using AI machine learning quite a bit more recently. So like to get your idea, Chuck, and also, Kelly, if you could, in terms of which might be the product areas within Cisco where you're apply AI machine learning to the max initially, where you see kind of low-hanging fruit, immediate kind of business outcomes from AI machine learning. Would it be in which parts of the portfolio?

我的意思是，查克，我只是個研究分析師。我注意到您最近正在大量使用人工智慧機器學習。所以我想聽聽查克和凱利的想法，如果可以的話，你們可能在思科內部哪些產品領域最初將人工智慧機器學習應用到最大程度，在這些領域中，你們看到了唾手可得的成果，即人工智慧機器學習帶來的直接業務成果。它會位於投資組合的哪些部分？

Thanks, Vijay. Yes, it's -- your point is actually quite accurate that we look at how we use it -- both of those as tools across our entire portfolio. And I would tell you that there are initiatives underway and there are active solutions already in the marketplace that have elements of that. In our security portfolio, there are absolutely elements of the that, that are in our collaboration portfolio already. We see lots of opportunities when you start talking about automation and analytics and things like network assurance, capabilities or in service provider, self-healing networks. So we see the opportunity across everything we do, and we have initiatives both already working with customers as well as a lot of work going on inside the business units to leverage AI machine learning and other technologies going forward.

謝謝，維傑。是的，您的觀點實際上非常準確，我們研究如何使用它們——將它們作為我們整個投資組合的工具。我想告訴你們，目前已經有了一些舉措正在進行，市場上也已經出現了包含這些元素的積極解決方案。在我們的安全組合中，絕對存在這樣的元素，這些元素已經存在於我們的合作組合中。當您開始談論自動化和分析以及網路保證、功能或服務提供者、自癒網路等事物時，我們會看到很多機會。因此，我們在所做的每一件事中都看到了機遇，並且我們已經與客戶開展了合作，並且在業務部門內部也開展了大量工作，以利用人工智慧、機器學習和其他技術向前發展。

The next question is from Paul Silverstein of Cowen and Company.

下一個問題來自 Cowen and Company 的 Paul Silverstein。

I'm hoping for a clarification on certain issues. One, going back to the earlier question on pricing. Kelly, did I hear you say that pricing was relatively stable? And can you give us some granularity in terms of what you're seeing in Europe Switching and Routing in terms of pricing? And just very quickly, 2 quarters ago, you quantified the impact of the shift to recurring revenue model. I think you'd cited 100- to 200-plus basis point adverse impact. Can you give us quantification of that impact this quarter?

我希望對某些問題進行澄清。首先，回到之前關於定價的問題。凱利，我是否聽到您說過價格相對穩定？您能否就歐洲交換和路由的定價向我們詳細介紹一下？就在兩個季度前，您就量化了轉向經常性收入模式的影響。我認為您提到了 100 到 200 多個基點的不利影響。您能否量化本季的影響？

Sure. So on the pricing, yes, just to give you the clarification of the pricing, and I'll pull up actually between Europe here, so just give me a second. But so to clarify, so we do have normal price erosion every period for, mostly, in our switching and routing portfolio, those are the ones that are most sensitive to it. It's been in the same consistent percentage in terms of price reduction year-over-year that it has been both last quarter, a year ago and so in the last -- we had one favorable quarter where we had some favorability for some rebates, but overall, it's been in the same range. But it hasn't gotten worse. I'll pull up about -- I'll try to pull up here as I'm answering the second question, any difference between Europe and the Americas. But I think it's fairly consistent across the regions. The second clarification was on -- what was it, Marilyn? The...

當然。關於定價，是的，只是為了讓你澄清定價，我實際上會在歐洲之間進行討論，所以請給我一點時間。但需要澄清的是，我們每個時期的價格都會出現正常下降，主要是在我們的交換和路由產品組合中，這些產品對此最為敏感。就價格下降幅度而言，與去年上個季度和去年相比，價格下降幅度一直保持相同的百分比——我們有一個有利的季度，對一些回扣有一定的偏好，但總體而言，價格下降幅度一直在同一範圍內。但情況並沒有變得更糟。我會停下來——我會嘗試在這裡停下來，因為我正在回答第二個問題，歐洲和美洲之間有什麼區別。但我認為各地區的情況相當一致。第二個澄清是──瑪麗蓮，那是什麼？這...

On the impact of the recurring business.

關於經常性業務的影響。

Yes. Yes, so I have been saying it's in the 1 to 2 range. It is definitely pushing closer to the 2% range at this point. I mean, I think, it's clearly driven. We share with you the balance and that's accelerating, and I certainly look at the short-term portion of that and try to quarterize that together with it. But it's definitely -- it's pointing to the 2% more than the 1%. And Paul, I'll get back to you on that -- if there's any difference between Americas and Europe on that.

是的。是的，所以我一直說它在 1 到 2 的範圍內。目前，它肯定正在接近 2% 的範圍。我的意思是，我認為，它顯然是有驅動力的。我們與您分享餘額，餘額正在加速，我當然會關注其中的短期部分，並嘗試將其與季度部分一起進行。但它肯定指向的是 2%，而不是 1%。保羅，如果美洲和歐洲在這方面有任何差異，我會回覆你。

Next question is from Tal Liani of Bank of America.

下一個問題來自美國銀行的 Tal Liani。

If my numbers are correct, your recurring revenues grew 6% year-over-year, and it was 14% the previous quarters. And I'm trying to see what could cause reacceleration. The question I have is whether you focus the recurring part mostly on new types of businesses, such as security and others, or you can find ways to go back to Switching and Routing and change either pricing scheme or add features or do something such that recurring revenues outside of maintenance, of course, recurring revenues grow, and you can add software features on top will do that. The question is whether the customers will accept it or is this is going to be a traditional business model forever?

如果我的數字正確的話，你們的經常性收入同比增長了 6%，而前幾個季度則增長了 14%。我正在嘗試找出導致重新加速的原因。我的問題是，您是否將經常性收入主要集中在新型業務上，例如安全等，或者您是否可以找到方法回到交換和路由，並改變定價方案或添加功能，或者做一些事情，使維護之外的經常性收入當然會增加，而經常性收入則會增長，您可以在此基礎上添加軟體功能。問題是客戶是否會接受它，或者這將永遠是一種傳統的商業模式？

Yes, Tal, thanks for the question. So even in our current deferred revenue from Software and Subscription, there are elements of our core portfolio that are included in that $4.4 billion that you saw primarily through our Cisco ONE offerings that we put together. Probably 18 months ago, we started that journey and we got those offers and they began to ramp. But we also are looking -- obviously, security is ramping. Collaboration has been the one probably the longest in this model. But we do believe that across the portfolio, with future offers, we have the opportunity to do that, and you'll see that as we deliver on some of the new capabilities. Kelly, any commentary on the...

是的，塔爾，謝謝你的提問。因此，即使在我們目前來自軟體和訂閱的遞延收入中，我們的核心產品組合中的一些元素也包含在您主要透過我們整合的 Cisco ONE 產品看到的 44 億美元收入中。大概 18 個月前，我們開始了這段旅程，我們收到了那些報價，然後他們開始加強。但我們也在關注——顯然，安全措施正在加強。在這個模式中，合作可能是持續時間最長的。但我們確實相信，透過未來的產品組合，我們都有機會做到這一點，而且隨著我們推出一些新功能，您就會看到這一點。凱利，對此有什麼評論嗎？

Yes, on the slowdown, so Tal, we're actually not slowing down. The reason it looks like it's slowing down is for the Services piece, we do have the extra week compare. So if you adjust for that, it's up double digits in total. And if I look at just product, the growth of product, which I said is over $900 million, that's growing 34% year-over-year, and it was 30% last quarter. So that continues to grow faster.

是的，關於放緩，所以塔爾，我們實際上並沒有放慢速度。看起來速度放緩的原因在於，對於服務部分，我們確實有額外的一周時間。因此，如果對此進行調整，總數將上升兩位數。如果我只看產品，產品的成長（我說的是超過 9 億美元）年增 34%，上個季度的成長率為 30%。因此其成長速度將持續加快。

I believe that was our last question. Chuck, maybe I'll turn it to you for over for final words.

我相信這是我們的最後一個問題。查克，也許我應該把它交給你做最後發言。

Yes, so first of all, I want to thank all of you for joining the call today. I wanted to just take a minute and reiterate that I believe that our strategy is working, and I'm really -- I'm optimistic about where we're going to go over the next 3 to 5 years. We set out 18 months ago to transition the business to one of more software and subscription. At the time, 8 quarters ago, it was $2 billion on our balance sheet. Today, we've more than doubled that, up 57% this quarter to $4.4 billion and accelerating. So I believe that is working, and we'll continue to shift more and more of our offers into that space. We also, obviously, wanted to be very clear about the areas that we needed to invest in, and you've seen significant investments in security and collaboration over the years. About 15 months ago, we made obvious reallocations of expenses more towards the core, and you're going to see future innovation in that space as well. Our customers really are going to be adding billions of connections in the future, and they are going to need a next-generation network with security automation and analytics. And so we're transitioning the business model. We're transitioning the network offers that we're going to deliver to our customers as they move into this next generation. And at the same time, we are leveraging our capability to do inorganic as well as organic innovation to make that happen. And in the midst of all this change, we remain very committed to our execution model and ensuring that we're focused on profitability as well as capital returns to our shareholders. So that's a summary of where I think we are right now, and I wanted to thank all of you for spending time with us today. Thanks.

是的，首先，我要感謝大家今天參加電話會議。我想花一點時間重申一下，我相信我們的策略正在發揮作用，而且我真的——我對我們未來 3 到 5 年的發展方向感到樂觀。18 個月前，我們開始將業務轉型為以軟體和訂閱為主的業務。當時，也就是 8 個季度前，我們的資產負債表上有 20 億美元。如今，這一數字已增加一倍以上，本季成長了 57%，達到 44 億美元，並且還在加速成長。所以我相信這是有效的，我們將繼續將越來越多的服務轉移到該領域。顯然，我們也希望非常清楚地了解我們需要投資的領域，並且您已經看到多年來在安全和協作方面進行了大量投資。大約 15 個月前，我們對核心支出進行了明顯的重新分配，您還將看到該領域的未來創新。我們的客戶未來確實會增加數十億個連接，他們將需要具有安全自動化和分析功能的下一代網路。因此我們正在轉變商業模式。隨著客戶進入下一代網絡，我們正在轉變向客戶提供的網路服務。同時，我們正在利用我們的能力進行無機和有機創新來實現這一目標。在所有這些變化中，我們仍然堅定地致力於我們的執行模式，並確保我們專注於獲利能力以及股東的資本回報。這是我認為我們目前所處位置的總結，我想感謝大家今天花時間與我們在一起。謝謝。

Thanks, Chuck, and I'll go ahead and close it up here. Cisco's next quarterly earnings conference call, which will reflect our fiscal 2017 fourth quarter and annual results, will be on Wednesday, August 16, 2017, at 1:30 p.m. Pacific time, 4:30 p.m. Eastern time. Again, I'd like to remind the audience that in light of Regulation FD, Cisco's policy is not to comment on its financial guidance during the quarter unless it's done through an explicit public disclosure. We now plan to close the call. If you have any further questions, feel free to contact the Investor Relations Department here. And we thank you very much for joining today's call.

謝謝，查克，我將繼續並在這裡結束它。思科的下一次季度財報電話會議將於 2017 年 8 月 16 日星期三下午 1:30 舉行，屆時將公佈我們 2017 財年第四季和年度業績。太平洋時間下午 4:30。東部時間。再次，我想提醒觀眾，根據公平披露規則，思科的政策是不對其本季度的財務指導發表評論，除非透過明確的公開披露進行評論。我們現在計劃結束通話。如果您還有其他問題，請隨時聯絡投資者關係部。非常感謝您參加今天的電話會議。

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) 443-8010. For participants dialing from outside the U.S., please dial 1 (203) 369-1121. 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) 443-8010。對於從美國境外撥打電話的參與者，請撥打 1 (203) 369-1121。今天的電話會議到此結束。您現在可以斷開連線。