思科 (CSCO) 2018 Q4 法說會逐字稿

Welcome to Cisco's Fourth Quarter Fiscal Year 2018 Financial Results Conference Call. At the request of Cisco, today's conference is being recorded. If you have any objections, you may disconnect.

歡迎參加思科 2018 財年第四季財務業績電話會議。應思科的要求，今天的會議正在錄製中。如果有異議可以斷開連接。

Now I would like to introduce Marilyn Mora, Head of Investor Relations. Thank you. You may begin.

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

Thanks, Michelle. Welcome, everyone, to Cisco's Fourth Quarter Fiscal 2018 Quarterly Earnings Conference Call. This is Marilyn Mora, Head of Investor Relations, and I'm joined by Chuck Robbins, our Chairman and CEO; and Kelly Kramer, our CFO.

謝謝，米歇爾。歡迎大家參加思科 2018 財年第四季季度財報電話會議。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董事長兼首席執行官查克·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. 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.

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直播和幻燈片，其中包括補充資訊。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 will discuss product results in terms of revenue and geographic and customer results in terms of product orders unless stated otherwise. All comparisons made throughout this call will be 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，並將討論收入方面的產品結果以及產品訂單方面的地理和客戶結果，除非另有說明。除非另有說明，本次電話會議中的所有比較均以同比為基礎。

The matters we will be discussing today include forward-looking statements, including the guidance we will be providing for the first quarter of fiscal 2019. They are subject to the risks and uncertainties that we discuss in detail in our documents filed with the SEC, specifically the most recent reports on Forms 10-K and 10-Q, which identify important risk factors that could cause actual results to differ materially from those contained in the forward-looking statements. With respect to guidance, please also see the slides and press release that accompany this call for further details.

我們今天將討論的事項包括前瞻性陳述，包括我們將為 2019 財年第一季提供的指導。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。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。

As a reminder, Cisco will not comment on its financial guidance during the quarter unless it is done through an explicit public disclosure.

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。

I will now turn it over to Chuck.

現在我將把發言權交給查克。

Thank you, Marilyn, and good afternoon, everyone. We had a very strong finish to a great year. We generated our highest quarterly revenue of $12.8 billion and non-GAAP EPS of $0.70, as growth accelerated for another consecutive quarter.

謝謝你，瑪麗蓮，大家午安。我們為偉大的一年畫上了圓滿的句點。我們創造了最高的季度營收 128 億美元，非公認會計準則每股收益 0.70 美元，連續一個季度實現加速成長。

Our momentum was broad-based across our portfolio, customer segments and geographies. We also continued to generate solid margins, cash flow and returns for our shareholders. Our results demonstrate a combination of strong customer adoption of our latest innovations, the ongoing value customers see in our software and subscription offerings and excellent execution across our customer segments and geographies. Our strategy is working, and we believe that we are well-positioned to capture growth across the portfolio with our pipeline of innovation.

我們的發展動能遍佈於我們的產品組合、客戶群和地區。我們也持續為股東創造穩健的利潤、現金流和回報。我們的結果表明，客戶強烈接受我們的最新創新成果，客戶持續看到我們軟體和訂閱產品的價值，並且在我們的客戶群和地區中擁有出色的執行力。我們的策略正在發揮作用，我們相信，憑藉我們的創新管道，我們有能力實現整個產品組合的成長。

The broad adoption of multi-cloud environments is changing the very nature of how modern IT infrastructures are built and secured, and Cisco is at the center of this transition. The recently announced intent to acquire Duo Security is another example of how we are extending our intent-based networking portfolio for the multi-cloud world. Duo's SaaS-delivered solution will expand our cloud security capabilities to help enable any user on any device to securely connect to any application on any network. Combining Cisco's network, endpoint and cloud security platform with Duo's zero-trust authentication and access solutions, we will be able to further enhance the industry's broadest and most effective security architecture in the market.

多雲環境的廣泛採用正在改變現代 IT 基礎架構的建置和保護方式的本質，而思科正處於這一轉變的中心。最近宣布的收購 Duo Security 的意向是我們為多雲世界擴展基於意圖的網路產品組合的另一個例子。Duo 的 SaaS 交付解決方案將擴展我們的雲端安全功能，幫助任何裝置上的任何使用者安全地連接到任何網路上的任何應用程式。將思科的網路、端點和雲端安全平台與 Duo 的零信任身分驗證和存取解決方案結合，我們將能夠進一步增強業界最廣泛、最有效的安全架構。

Now I'll briefly highlight some of our innovation and the great momentum we're seeing across our key product areas.

現在我將簡要介紹我們的一些創新以及我們在主要產品領域看到的巨大發展勢頭。

Starting with Infrastructure Platforms. We continue to rapidly innovate and transform our technology portfolio to drive even greater customer value. A year ago, we reinvented Enterprise Networking with the launch of our intent-based networking architecture. This quarter, we saw continued strength in Infrastructure Platforms, driven by the Catalyst 9000, as customers look to us to simplify and automate their networks. Over the last year, we introduced additional innovations across our networking portfolio, including new access, WAN and data center offerings. In June, we announced new developer capabilities across our intent-based networking portfolio, spanning all network domains: Campus switching, wireless, WAN, data center and cloud.

從基礎設施平台開始。我們不斷快速創新和轉變我們的技術組合，以創造更大的客戶價值。一年前，我們推出了基於意圖的網路架構，徹底改變了企業網路。本季度，我們看到基礎設施平台在 Catalyst 9000 的推動下持續保持強勁成長，因為客戶希望我們簡化和自動化他們的網路。在過去的一年裡，我們在整個網路產品組合中引入了更多創新，包括新的存取、廣域網路和資料中心產品。6 月，我們宣布了基於意圖的網路產品組合的全新開發人員功能，涵蓋所有網路領域：園區交換、無線、廣域網路、資料中心和雲端。

We're also excited that our developer program, DevNet, surpassed 500,000 registered members. As part of this program, we introduced new offerings to help developers and network engineers innovate throughout our intent-based architecture.

我們也很高興看到我們的開發者計畫 DevNet 的註冊會員數已超過 50 萬名。作為該計劃的一部分，我們推出了新產品，以幫助開發人員和網路工程師在基於意圖的架構中進行創新。

As we all know, the WAN is undergoing an architectural transition to a software-defined WAN to enable IT to rapidly respond to changing business needs in a digital and cloud world. Our customers are driving this transition and looking to Cisco to help them make this shift. Our SD-WAN portfolio leverages our leading networking products, automation and robust security architecture to enable greater flexibility, increased bandwidth and lower costs. This quarter, we saw significant traction with Viptela, as it has now been deployed at over 800 customers, driven by our ability to provide higher capacity at a lower cost. We are pleased with the ongoing integration of Viptela with our core portfolio to drive even more value for our customers.

眾所周知，廣域網路正在經歷向軟體定義廣域網路的架構轉變，以使 IT 能夠快速回應數位和雲端世界中不斷變化的業務需求。我們的客戶正在推動這項轉變，並希望思科能夠幫助他們實現這項轉變。我們的 SD-WAN 產品組合利用我們領先的網路產品、自動化和強大的安全架構來實現更大的靈活性、更大的頻寬和更低的成本。本季度，我們看到 Viptela 取得了顯著的進展，目前已有超過 800 個客戶部署了該服務，這得益於我們能夠以更低的成本提供更高的容量。我們很高興 Viptela 與我們的核心產品組合持續整合，為我們的客戶創造更多價值。

As our customers move to a multi-cloud environment, we see tremendous opportunities to provide value to them by redesigning their IT architecture, delivering security and building, orchestrating and managing applications. In Q4, we saw the production launch of our hybrid cloud solution with Google, the introduction of a multi-cloud solution with NetApp and numerous engagements with customers redesigning their IT architectures. We continue to believe Cisco is very well-positioned to benefit from the increasing adoption of multi-cloud.

隨著我們的客戶轉向多雲環境，我們看到了透過重新設計他們的 IT 架構、提供安全性以及建置、協調和管理應用程式為他們提供價值的巨大機會。在第四季度，我們與 Google 合作推出了混合雲解決方案，與 NetApp 合作推出了多雲解決方案，並與許多客戶合作重新設計了他們的 IT 架構。我們仍然相信思科完全有能力從多雲技術的日益普及中獲益。

Turning to security. Security continues to be our customers' #1 concern and it is a top priority for us. Our strategy is to simplify and increase security efficacy through an architectural approach, with products that work together and share analytics and actionable threat intelligence. This architecture is supported by Talos, one of the largest commercial threat intelligence teams in the world. We identify and protect against new and emerging threats, like the recent VPN filter vulnerability, through our sophisticated infrastructure and unrivaled telemetry of data.

轉向安全。安全仍然是我們客戶最關心的問題，也是我們的首要任務。我們的策略是透過架構方法簡化和提高安全效力，使用協同工作並共享分析和可操作的威脅情報的產品。該架構由全球最大的商業威脅情報團隊之一 Talos 提供支援。我們透過先進的基礎設施和無與倫比的資料遙測技術來識別和防禦新的和正在出現的威脅，例如最近的 VPN 過濾器漏洞。

Cisco is the largest network and enterprise security company, and our approach of bringing security into the intent-based architecture and offering security across the network, endpoint and cloud has proven to be very successful. This quarter, we saw continued strong momentum with revenue again accelerating and growing double digits year-over-year.

思科是最大的網路和企業安全公司，我們將安全性引入基於意圖的架構並在網路、端點和雲端提供安全性的方法已被證明非常成功。本季度，我們持續保持強勁勢頭，營收再次加速成長，較去年同期成長兩位數。

We continue to invest in our product and technology innovation as we are committed to helping our customers on their multi-cloud journey. Our focus is on delivering cloud security solutions that provide ease-of-use, scalability and protect end users. As I mentioned earlier, with our acquisition of Duo Security, we will further enhance how we deliver simple, automated, trusted access anywhere for our customers' environments.

我們將繼續投資我們的產品和技術創新，致力於幫助我們的客戶實現多雲之旅。我們的重點是提供易於使用、可擴展且保護最終用戶的雲端安全解決方案。正如我之前提到的，透過收購 Duo Security，我們將進一步增強為客戶環境提供簡單、自動化、可信賴的隨時隨地存取的能力。

Moving to applications. In May, we announced the launch of WebEx Teams, bringing together meetings, calling and teamwork into an integrated experience as part of the WebEx platform. In Q4, we introduced major new enhancements to the platform, including a new user design for WebEx Meetings and a new solution with Google, combining their contact center AI service with the WebEx platform. With more than 3 million customer service agents globally using Cisco's contact center software, our integration with Google will help to automate responses in our call centers by leveraging data and intelligence from AI.

轉向應用程式。今年 5 月，我們宣布推出 WebEx Teams，作為 WebEx 平台的一部分，將會議、通話和團隊合作整合為一種綜合體驗。在第四季度，我們對該平台進行了重大改進，包括針對 WebEx Meetings 的新用戶設計和與 Google 合作的新解決方案，將他們的聯絡中心 AI 服務與 WebEx 平台相結合。全球有超過 300 萬名客戶服務代理使用思科的聯絡中心軟體，我們與 Google 的整合將利用來自人工智慧的數據和情報，幫助我們實現呼叫中心回應的自動化。

We also achieved another robust quarter of growth with AppDynamics, underscoring the importance and value of our unique end-to-end visibility and analytics from the end user to the network to the application.

我們還透過 AppDynamics 實現了另一個強勁的成長季度，強調了我們獨特的從最終用戶到網路再到應用程式的端到端可視性和分析的重要性和價值。

To wrap up, 2018 was a great year. We returned to growth, invested in our core franchises, delivered new innovative platforms and continued to shift our business to more software and subscriptions. Our record results demonstrate the strength of our business as well as the strategic focus and execution that we have delivered over the past 12 months. I want to thank our teams around the globe for delivering these results.

總而言之，2018 年是偉大的一年。我們恢復了成長，投資了我們的核心特許經營權，提供了新的創新平台，並繼續將我們的業務轉向更多的軟體和訂閱。我們創紀錄的業績證明了我們業務的實力以及過去 12 個月我們實現的策略重點和執行力。我要感謝我們遍佈全球的團隊所取得的這些成果。

We are looking forward to fiscal year '19 with a clear focus on growth, execution and innovation. We see incredible opportunities across our business and believe we are uniquely positioned to deliver on our vision to be one of the most strategic partners to our customers as they go through their digital transformation.

我們期待 2019 財年明確關注成長、執行和創新。我們看到了整個業務中令人難以置信的機遇，並相信我們擁有獨特的優勢，可以實現我們的願景，成為客戶在數位轉型過程中最具策略性的合作夥伴之一。

Kelly, I'll now turn it over to you.

凱利，現在我將把話題交給你。

Thanks, Chuck. I'll start with a summary of our financial results for the quarter, then cover the full fiscal year and the Q1 outlook.

謝謝，查克。我將先總結本季的財務業績，然後介紹整個財年和第一季的展望。

Q4 was a solid quarter across the business. We executed well with strong orders, revenue growth, margins, EPS and operating cash flow. It was great to see accelerated momentum in product orders, which grew 7%.

第四季是整個業務表現穩健的一個季度。我們的業績表現良好，訂單量強勁，營收成長，利潤率、每股盈餘和經營現金流均有成長。很高興看到產品訂單成長動能加快，成長了 7%。

Total revenue was $12.8 billion, up 6%. Our non-GAAP operating margin rate was 30.9%. Non-GAAP net income was $3.3 billion, up 8%. And non-GAAP EPS was $0.70, up 15%.

總收入為128億美元，成長6%。我們的非公認會計準則營業利益率為 30.9%。非公認會計準則淨收入為 33 億美元，成長 8%。非公認會計準則每股收益為 0.70 美元，成長 15%。

Let me provide some more detail on our Q4 revenue. Total product revenue was up 7%, with broad strength across the portfolio. Infrastructure Platforms grew 7%, with growth in all businesses except for routing, which was down slightly. Switching had another great quarter with strong growth in campus, driven by the ramp of the Cat 9K and growth in data center driven by the Nexus 9K. We saw good growth in wireless with strength in Meraki and our Wave 2 offerings. Data center had very strong double-digit growth driven by servers and HyperFlex. Routing declined slightly driven by weakness in SP routing. Applications was up 10% in total with growth across all the businesses. We saw very solid growth in Unified Communications, TelePresence, conferencing and AppDynamics. Security was up 12%, with strong performance in network security, unified threat, policy and access and web security. Service revenue was up 3%, driven by growth in advanced services as well as Software and Solution Support.

讓我提供有關我們第四季收入的更多細節。總產品營收成長 7%，整個產品組合表現強勁。基礎設施平台成長了 7%，除路由業務略有下降外，所有業務均實現成長。交換業務又度過了一個出色的季度，在 Cat 9K 的成長推動下，校園業務強勁成長，在 Nexus 9K 的推動下，資料中心業務成長。我們看到無線業務取得了良好的成長，其中 Meraki 和 Wave 2 產品表現強勁。在伺服器和 HyperFlex 的推動下，資料中心實現了非常強勁的兩位數成長。由於 SP 路由的疲軟，路由略有下降。應用程式整體成長了 10%，所有業務均實現成長。我們看到統一通訊、網真、會議和 AppDynamics 都實現了非常穩健的成長。安全性提高了 12%，在網路安全、統一威脅、策略和存取以及 Web 安全方面表現強勁。服務收入成長 3%，這得益於高級服務以及軟體和解決方案支援的成長。

We continue to transform our business, delivering more software offerings and driving more subscriptions and recurring revenues. In Q4, recurring revenue was 32% of total revenue, an increase of 1 point from a year ago. Revenue from subscriptions was 56% of our total software revenue, up 5 points year-over-year. We drove good growth in deferred revenue, which was up 6% in total, with product up 15% and services up 1%. Deferred product revenue from our recurring software and subscription offers was $6.1 billion, up 23%. There was also a strong increase in the unbilled deferred, which is not on the balance sheet. The combined total deferred revenue plus unbilled deferred was up 28%.

我們將繼續轉變業務，提供更多的軟體產品，並推動更多的訂閱和經常性收入。第四季度，經常性收入佔總收入的32%，比去年同期增加了1個百分點。訂閱收入占我們軟體總收入的 56%，較去年同期成長 5 個百分點。我們推動了遞延收入的良好成長，整體成長了 6%，其中產品成長了 15%，服務成長了 1%。我們的經常性軟體和訂閱服務的遞延產品收入為 61 億美元，成長 23%。未開立發票遞延款項也大幅增加，這些款項並未列入資產負債表。遞延收入加上未開票遞延收入合計成長了 28%。

When we look at the impact of acquisitions on our Q4 results year-over-year, there was a 90 basis point positive impact on revenue. We saw especially strong momentum in Q4 with total product orders growing 7%.

當我們觀察收購對我們第四季業績年比的影響時，我們發現收購對營收產生了 90 個基點的正面影響。我們看到第四季的勢頭尤為強勁，總產品訂單成長了 7%。

Looking at our geographies. Americas grew 6%, EMEA was up 6% and APJC was up 12%. Total emerging markets was up 12%, with the BRICS plus Mexico up 22%.

看看我們的地理位置。美洲地區成長 6%，歐洲、中東和非洲地區成長 6%，亞太及日本地區成長 12%。新興市場整體上漲 12%，其中金磚國家加墨西哥上漲 22%。

In our customer segments, enterprise was up 11%; commercial was up 9%; public sector was up 1%; and service provider returned to growth, up 6%. Our product backlog at the end of Q4 was $6.6 billion, up 38% year-over-year.

在我們的客戶領域，企業成長了 11%；商業上漲9%；公共部門上漲 1%；和服務供應商恢復成長，成長6%。我們第四季末的產品積壓訂單為 66 億美元，較去年同期成長 38%。

From a non-GAAP gross margin perspective, total Q4 gross margin was 62.9%, down 0.8 points. Product gross margin was 61.5%, down 0.4 points. And service gross margin was 67.1%, down 1.7 points. Product gross margin was down 0.4 points, driven by our APJC region related to some SP-specific deals as well as negative product mix. Product gross margin for the Americas and EMEA were both up year-over-year.

從非公認會計準則毛利率來看，第四季總毛利率為62.9%，下降0.8個百分點。產品毛利率為61.5%，較去年同期下降0.4個百分點。服務毛利率為67.1%，下降1.7個百分點。產品毛利率下降了 0.4 個百分點，原因是我們的 APJC 地區與一些 SP 特定的交易以及負面的產品組合有關。美洲和歐洲、中東和非洲地區的產品毛利率均較去年同期成長。

Overall, pricing continued to have relatively modest erosion, as we have seen over the past couple of quarters, and we continue to be negatively impacted by higher component costs, which we expect to continue in the near term.

總體而言，正如我們在過去幾季所看到的那樣，價格繼續呈現相對溫和的下降趨勢，並且我們繼續受到零件成本上漲的負面影響，我們預計這種影響將在短期內持續下去。

In terms of the bottom line from a GAAP perspective, Q4 net income was $3.8 billion and EPS was $0.81. The GAAP results include an $863 million benefit related to the Tax Cuts and Jobs Act. We've excluded the benefit from our non-GAAP results.

從 GAAP 角度來看，第四季淨收入為 38 億美元，每股收益為 0.81 美元。GAAP 結果包括與減稅和就業法案相關的 8.63 億美元收益。我們已經將該收益從非公認會計準則結果中排除。

We ended Q4 with total cash, cash equivalents and investments of $46.5 billion. Q4 operating cash flow was $4.1 billion, up 2%, with free cash flow of $3.9 billion, also up 2%. From a capital allocation perspective, we returned $7.5 billion to our shareholders during the quarter that was comprised of $6 billion of share repurchases and $1.5 billion for our quarterly dividend.

截至第四季末，我們的現金、現金等價物及投資總額為 465 億美元。第四季營運現金流為 41 億美元，成長 2%，自由現金流為 39 億美元，也成長 2%。從資本配置的角度來看，本季我們向股東返還了 75 億美元，其中包括 60 億美元的股票回購和 15 億美元的季度股息。

I'll now cover the full fiscal year. We delivered solid revenue, margins, net income, EPS and operating cash flows. Revenue was $49.3 billion, up 3%. Our non-GAAP operating margin rate was 31.1%. Non-GAAP net income was $12.7 billion, up 5%. And non-GAAP EPS was $2.60, up 9%.

我現在將介紹整個財政年度。我們實現了穩健的收入、利潤、淨收入、每股盈餘和營運現金流。營收為 493 億美元，成長 3%。我們的非公認會計準則營業利益率為 31.1%。非公認會計準則淨收入為 127 億美元，成長 5%。非公認會計準則每股收益為 2.60 美元，成長 9%。

Our total non-GAAP gross margin was 63.8%, a decrease of 0.5 points, with product gross margin down 0.4 points and service gross margin down 0.9 points. GAAP net income was $110 million, and GAAP EPS was $0.02, which includes the charges related to the Tax Cuts and Jobs Act of $10.4 billion.

我們的非公認會計準則總毛利率為 63.8%，下降 0.5 個百分點，其中產品毛利率下降 0.4 個百分點，服務毛利率下降 0.9 個百分點。GAAP 淨收入為 1.1 億美元，GAAP EPS 為 0.02 美元，其中包括與減稅和就業法案相關的 104 億美元費用。

For the full fiscal year, we delivered operating cash flow of $13.7 billion. We paid approximately $1.4 billion of onetime foreign taxes during the year related to the Tax Cuts and Jobs Act. Operating cash flow increased 8%, normalized for these tax payments.

整個財年，我們的經營現金流達到 137 億美元。我們今年根據《減稅與就業法案》繳納了約 14 億美元的一次性外國稅。經營現金流增加了 8%，因這些稅而正常化。

We returned $23.6 billion to shareholders over the fiscal year, which represented 184% of our free cash flow that was made up of $17.7 billion of share repurchases and $6 billion for our quarterly dividend.

我們在本財年向股東返還了 236 億美元，占我們自由現金流的 184%，其中包括 177 億美元的股票回購和 60 億美元的季度股息。

To summarize, we had a strong Q4 and fiscal year. We executed well with strong top line growth and profitability. We're seeing the returns on the investments we're making in innovation and driving the shift to more software and subscriptions, delivering long-term growth and shareholder value.

總而言之，我們的第四季和全年業績表現強勁。我們表現良好，營收成長和獲利能力強勁。我們看到了在創新方面所做的投資的回報，並推動了向更多軟體和訂閱的轉變，從而實現了長期成長和股東價值。

As a reminder, we are adopting the new revenue recognition standard, ASC 606, as of Q1 fiscal year '19 on a modified retrospective basis. Its primary impact will be to accelerate our revenue recognition for certain software licenses and sales to 2-tier distributors as well as the recognition of a deferred commissions asset that will be amortized over the terms of our sales contracts.

提醒一下，自 2019 財年第一季起，我們將採用新的營收確認標準 ASC 606，並進行追溯修改。其主要影響是加速我們對某些軟體授權和對二級經銷商的銷售的收入確認，以及將在我們的銷售合約期間內攤銷的遞延佣金資產的確認。

Let me reiterate our guidance for the first quarter of fiscal year '19. This guidance includes the type of forward-looking information that Marilyn referred to earlier. We expect revenue growth in the range of 5% to 7% year-over-year. This range includes the impact of ASC 606, which we estimate to be a benefit of about 1%. 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 30% to 31%. And the non-GAAP tax provision rate is expected to be 19%. Non-GAAP earnings per share is expected to range from $0.70 to $0.72. The guidance includes our Service Provider Video Software Solutions business that we recently agreed to sell and excludes the Duo acquisition, since both transactions have not closed. We expect the SPVSS transaction to close in the first half of fiscal '19, subject to customary closing conditions and regulatory approvals.

讓我重申一下我們對 2019 財年第一季的指引。本指南包含瑪麗蓮之前提到的前瞻性資訊類型。我們預計收入成長率將在 5% 至 7% 之間。此範圍包括 A​​SC 606 的影響，我們估計其效益約為 1%。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30%至31%之間。非公認會計準則稅務撥備率預計為19%。非公認會計準則每股收益預計在 0.70 美元至 0.72 美元之間。該指引包括我們最近同意出售的服務供應商視訊軟體解決方案業務，但不包括 Duo 收購，因為這兩項交易都尚未完成。我們預計 SPVSS 交易將於 2019 財年上半年完成，但須滿足慣例成交條件並獲得監管部門的批准。

I'll now turn it back to Marilyn so we can move into the Q&A.

現在我將話題交還給瑪麗蓮，以便我們進入問答環節。

Thanks, Kelly. Michelle, let's go ahead and open the line for questions. (Operator Instructions)

謝謝，凱利。米歇爾，我們開始回答問題吧。（操作員指示）

I'll now turn it over to Michelle.

現在我將把發言權交給米歇爾。

Vijay Bhagavath from Deutsche Bank Securities.

德意志銀行證券公司的 Vijay Bhagavath。

So my question to you, Chuck, and Kelly, please chime in, is it reasonable to assume you'd be extending the software subscription idea and plan across the portfolio? Give us an early glimpse as to how is it going? What are some of the challenges? What are some of the positive surprises? And would the makeup of the software subscription portfolio meaningfully change as you look to extend this model across the portfolio?

所以我想問一下查克和凱利，請問，是否可以合理地假設你們會將軟體訂閱理念和計劃擴展到整個產品組合中？請提前向我們介紹一下進展？有哪些挑戰？有哪些正面的驚喜？當您希望將此模型擴展到整個產品組合時，軟體訂閱產品組合的組成是否會發生重大變化？

Thanks, Vijay. So most of you know that we -- when we began the sell of the Catalyst 9000, that was the first attempt to sell a subscription software offering on top of a core networking product. And that has gone, as we've said on prior calls, reasonably well. I'm very pleased with how the adoption has been from our customers. They understand the value. As I said early on, we put -- we knew when we started that process that we would need to deliver significant innovation that wasn't available in the traditional methodology of buying it in order for our customers to adopt it. And some of those were the Encrypted Traffic Analytics, the overarching analytic -- I mean, the automation capability and then recently, some Assurance. And you'll see us over the next coming quarters, when we bring new products to market in the -- particularly in the enterprise networking space, but across the portfolio, we will apply that same strategy. So I think that we've been pleased. And our job now is to ensure that the operational infrastructure of the company is prepared, and we're working towards being able to ensure that customers are deriving the value from that software as well as obviously putting in the operational capabilities to ensure the renewals, et cetera. So that's what we're focused on. Kelly, any...?

謝謝，維傑。所以大多數人都知道，當我們開始銷售 Catalyst 9000 時，這是第一次嘗試在核心網路產品上銷售訂閱軟體。正如我們在之前的電話會議中所說的那樣，一切進展順利。我對我們的客戶的採用感到非常滿意。他們明白其價值。正如我早些時候所說的那樣，我們知道，當我們開始這個過程時，我們需要提供傳統購買方法所無法提供的重大創新，以便我們的客戶採用它。其中一些是加密流量分析，總體分析——我的意思是自動化能力，以及最近的一些保證。您將在接下來的幾個季度看到我們，我們將在市場中推出新產品 - 特別是在企業網路領域，但在整個產品組合中，我們將應用相同的策略。所以我認為我們很高興。我們現在的工作是確保公司的營運基礎設施準備就緒，我們正在努力確保客戶能夠從該軟體中獲得價值，同時顯然投入營運能力以確保續約等等。這就是我們所關注的重點。凱利，有嗎…？

No, I think you hit it.

不，我認為你擊中了它。

Rod Hall from Goldman Sachs.

高盛的羅德霍爾 (Rod Hall)。

I'm kind of beside myself, don't know where to start. These are so good. But let me -- I guess, let me kick off with a question on the deferred revenue, Kelly. The -- you said that including this off-balance sheet, deferred is up 28%. Is that total deferred or product deferred? Can you just clarify what you meant by that? And also, maybe help us understand what that ASC 606 impact on deferred was because that was, I guess, negative?

我有點不知所措，不知道從哪裡開始。這些太好了。但讓我——我想，讓我先問一個關於遞延收入的問題，凱利。您說包括這個表外項目在內，遞延支出增加了 28%。這是總延期還是產品延期？你能解釋一下你的意思嗎？而且，也許可以幫助我們理解 ASC 606 對延期的影響是什麼，因為我猜那是負面的？

Yes, sure. So on your question on the deferred revenue plus unbilled deferred, so that was up 28%. The big driver we have for that, that is just purely product, okay? So it is -- what we mostly have in our unbilled deferred is from our collaboration, our Applications business. They have a lot of periodic billing that they book month-to-month. That is a very large number. So it is kind of apples-to-apples of business that we have booked that we will recognize in the future. So that's why we look at both. When we do adopt ASC 606 for Q1, that will be one of our disclosures, showing you the combination of deferred plus unbilled, so you have our remaining performance obligations. But it is just product, that 28%. As far as the ASC 606, we adopt that in Q1. So in the results we just went through, of the $6.1 billion of deferred from software and subscriptions, that is related to how we've been accounting for it under the old ASC 605. So when we go in...

是的，當然。因此，關於您關於遞延收入加上未開票遞延收入的問題，該數字上漲了 28%。我們實現這目標的最大動力就是純粹的產品，對嗎？所以，我們的未開票遞延款項主要來自我們的合作，我們的應用程式業務。他們有很多按月記帳的定期帳單。這是一個非常大的數字。因此，這是我們預訂的同類業務，我們將來會認識到這一點。這就是我們關注這兩者的原因。當我們在第一季採用 ASC 606 時，這將成為我們的揭露內容之一，向您展示遞延款項和未開立發票款項的組合，以便您了解我們剩餘的履約義務。但這只是產品，那 28%。就 ASC 606 而言，我們在第一季就採用了它。因此，在我們剛剛討論的結果中，61 億美元的軟體和訂閱遞延收入與我們根據舊 ASC 605 對其進行核算的方式有關。所以當我們進去的時候...

Just to clarify, though, would you write down some -- you'll write some of the deferred down in Q1 as a result of the change or not much or...?

不過，只是為了澄清一下，你會寫下一些——你會在第一季寫下一些由於變化而產生的遞延，還是不會寫下太多，或者......？

Yes. So yes, I can give you some direction. You'll see that in our K. So we will be writing off a portion of that balance. So of the $6 billion, we will be writing off and restating because you basically restate your balance sheet for the new accounting rules. And like we've said over the past year, where we will have that impact is things that were term-based software licenses, things like our ELAs or Cisco ONE, those will now be recognized upfront where they used to be deferred. So the deferred revenue balance will be written down for that, and we'll take -- so we'll take -- we'll lower the balance of the deferred revenue. And then as we go into Q1, we will be recognizing any new business that we bill upfront from that.

是的。是的，我可以給你一些指導。您會在我們的 K 中看到這一點。因此，我們將註銷部分餘額。因此，對於這 60 億美元，我們將予以註銷並重新陳述，因為你基本上是根據新會計規則重新陳述資產負債表。正如我們在過去一年中所說的那樣，我們將對基於期限的軟體許可證（例如我們的 ELA 或 Cisco ONE）產生影響，這些許可證現在將預先​​確認，而以前它們是被推遲的。因此，遞延收入餘額將被減記，我們將採取 - 因此我們將採取 - 我們將降低遞延收入的餘額。然後，當我們進入第一季時，我們將確認任何我們預先計費的新業務。

Ittai Kidron from Oppenheimer.

奧本海默的 Ittai Kidron。

I guess, Chuck, maybe you can help me figure out how you managed to navigate so well in what seems to be such treacherous waters out there between some deceleration in economic activity in Europe; the FX movement recently, which is not favorable to you, although you price in dollars, nonetheless, makes your products a little bit more expensive internationally; poor CapEx matrix out of the large telcos; tariff wars. Globally, you seem to be moving along, sidestepping all of those things. Which of these things really bother you, concern you or you're watchful, you're preparing for? And then second question, maybe you can kind of dig in a little bit on the networking, the Cat 9K, clearly, good progress. Are there any customer matrix or anything you can give us there to help us solidify or get better visibility into the trend there?

我想，查克，也許你可以幫我弄清楚，在歐洲經濟活動放緩、形勢如此危險的情況下，你是怎樣做到如此順利地航行的；最近的外匯走勢對您不利，儘管您以美元定價，但這仍然使您的產品在國際上稍微貴一些；大型電信公司的資本支出矩陣不佳；關稅戰。從全球來看，你們似乎不斷前進，避開所有這些事情。這些事情中哪些真正困擾您、讓您擔心，或讓您保持警覺、做好準備？然後是第二個問題，也許您可以深入了解一下網絡，Cat 9K，顯然進展良好。您能提供任何客戶矩陣或任何東西來幫助我們鞏固或更好地了解那裡的趨勢嗎？

Yes, Ittai. I was feeling pretty good until you asked the first part of your question. I have said publicly, I think we're operating in a -- we have been operating in, what I would call, it's been a very consistent global economic scenario. There's clearly, even in the last few weeks, been things that have arisen. You've got the strengthening of the dollar that you mentioned. You've got some uncertainty in a couple of emerging countries. So those are clearly things that we'll watch. And we're -- we've seen these in the past, and we know how to deal with them. We obviously have the impending tariff situation, which we're watching closely. And on that front, we're in deep discussions in Washington with the administration on trying to get to a favorable outcome. We'd like to see that land in a good place. But overall, all of those are things that we are very actively involved with and we watch on a daily basis. As it relates to the networking business, the Catalyst 9000, as I said previously, has been the fastest-ramping product that we've ever built. So the customer count became less of an indicator pretty quickly, and it flowed through to the infrastructure systems growth that you saw this quarter. So we didn't see it as a metric that was -- we usually use that metric on customer count when we're just trying to give you visibility to the ramp of a new product when it hasn't become real material to the revenue line. And I think that we exceeded that point in time with the 9K pretty quickly. But I will tell you, just so you know, I think -- Kelly, keep me honest on this -- I think we had roughly 9,650-plus customers on the 9K as of the end of the quarter. We had a great Q4, great adoption. And we're very happy with where that product and that architecture is.

是的，伊泰。在你問問題的第一部分之前，我感覺很好。我曾公開表示，我認為我們正處於一種——我們一直處於一種我稱之為非常一致的全球經濟情勢中。顯然，即使在過去的幾周里，也已經發生了一些事情。正如您所提到的，美元正在走強。一些新興國家存在一些不確定性。所以這些顯然是我們要關注的事情。我們過去曾見過這些情況，並且知道如何處理它們。顯然，我們即將面臨關稅形勢，我們正在密切關注。在這方面，我們正在華盛頓與政府進行深入討論，力求有利結果。我們希望看到那片土地處於良好的位置。但總的來說，這些都是我們非常積極參與並且每天關注的事情。就網路業務而言，正如我之前所說，Catalyst 9000 是我們迄今為止生產的成長最快的產品。因此，客戶數量很快就不再是一個指標，而是影響到本季看到的基礎設施系統的成長。因此，我們並不認為這是一個指標——我們通常使用客戶數量作為指標，當我們只是想讓你了解新產品的成長情況時，它還沒有成為收入線的真正重要部分。我認為我們很快就超越了 9K 這一時間點。但我要告訴你，只是為了讓你知道，我認為——凱利，請讓我誠實地說——我認為截至本季度末，我們在 9K 上大約有 9,650 多名客戶。我們的第四季表現非常出色，採用率也很高。我們對產品和架構非常滿意。

Pierre Ferragu from New Street Research.

來自 New Street Research 的 Pierre Ferragu。

I actually wanted to ask you about service provider. So you returned to growth this quarter, which is fantastic. And I think you mentioned as well that your routing business was weak, and most of that weakness was in the service provider vertical as well. So I was curious to understand how you grew revenues, if -- even if routing was negative or maybe I got something wrong? And then, of course, I'm very curious to hear whether this recovering service provider spending might be driven by 5G already.

我實際上想問您有關服務提供者的問題。所以本季你們又恢復了成長，這太棒了。我想您也提到過，您的路由業務很弱，而且大部分弱點也出現在服務提供者垂直領域。所以我很好奇，想知道你們的收入是如何成長的，即使路由是負面的，或者我弄錯了什麼？當然，我非常好奇，服務提供者支出的復甦是否已經受到 5G 的推動。

Let me answer the macro question about the overall situation we see in service provider, and then, Kelly, maybe you can cover the routing and the impact, the first part of the question. So Pierre, the -- in the service provider space, we were obviously pleased. I've said a number of times over the last couple of years that this is a business that is dominated by large customers. And so as we've always said, when we have several of them that are slowing their spending, then it looks bad; when we have several that are spending, it looks pretty good. And that's just the nature of this business. Relative to 5G, I will tell you that -- I think I've said this on prior calls. Starting at Mobile World Congress earlier this year, we really -- we heard these customers in earnest begin and engage in discussions around what network requirements would look like for the infrastructure to support 5G, assuming that they're going to add lots of high-speed connections at the edge, it will require high-performance networks with quality of service and slicing and all those things. So I would say that -- I would not say that this is a material result of the implementation of 5G, to be honest. We expect that is still a year out before many will start and probably see it in earnest into 2020, to be fair. But we're pleased with what our teams have done. It's been a tough market. Our teams have continued to battle. And our engineering team continues to work on next-generation innovation, and we're pleased with the results this quarter. Kelly?

讓我來回答有關服務提供者的整體情況的宏觀問題，然後，凱利，也許您可以談論路由和影響，即問題的第一部分。因此，對於服務提供者領域中的皮埃爾，我們顯然感到高興。過去幾年我曾多次說過，這是一個由大客戶主導的行業。正如我們一直所說的那樣，當其中幾個國家正在放慢支出速度時，情況看起來就很糟糕；當我們有幾個人在花錢時，情況看起來相當不錯。這就是這個行業的本質。關於 5G，我會告訴你——我想我在之前的電話中已經說過了。從今年早些時候的世界行動通訊大會開始，我們真的——我們聽到這些客戶認真地開始並參與與討論支援 5G 的基礎設施的網路要求，假設他們將在邊緣添加大量高速連接，它將需要具有服務品質和切片等功能的高效能網路。所以我想說——老實說，我不會說這是 5G 實施的實質成果。公平地說，我們預計還需要一年的時間，許多人才會開始真正看到這一點，並且可能要到 2020 年才會真正看到這一點。但我們對團隊所做的工作感到滿意。這是一個艱難的市場。我們的團隊繼續戰鬥。我們的工程團隊持續致力於下一代創新，我們對本季的成果感到滿意。凱莉？

Yes, and to the point of -- this why have better revenue, if you remember last quarter, the SP segment was down 4%. And you're seeing that flow through the revenue this quarter when we talked about routing overall. So when I look forward, we don't kind of talk about our guidance in the upfront by business. But some of this, on the order side, might play well as you go into Q1. What I will say, adding on to Chuck's comments is, I do think and as you know very well, our service provider segment is made up of very, very large customers. And in any one quarter, we can get big orders, and that can fluctuate around. So as to the sustainability, I would say we feel good about our position, though I expect this could move around either way as we look forward.

是的，這就是為什麼會有更好的收入，如果你還記得上個季度，SP 部門下降了 4%。當我們談論整體路由時，您會看到本季的收入流。因此，當我展望未來時，我們不會談論前期業務的指導。但進入第一季後，訂單方面的一些表現可能會很好。我想補充的是，查克的評論，我確實認為，而且正如你所知，我們的服務提供者部門由非常非常大的客戶組成。在任何一個季度，我們都可以獲得大訂單，而且訂單量可能會有所波動。至於永續性，我想說我們對自己的地位感到滿意，儘管我預期未來這種地位可能會改變。

Sami Badri from Credit Suisse.

瑞士信貸的薩米·巴德里。

My first question has a lot to do with Europe and the strength you saw in the region in this last quarter. And then is it safe to assume that going into next quarter and your very strong guidance, are you expecting to see the same kind of magnitude of strength in Europe again despite all the moving pieces politically? And then the second question I really have is about the Viptela product launch. Are you addressing customers that are already big users, end customers of the campus product and the Meraki products to kind of up-sell customers into your new Viptela product? Or maybe you can give us just an idea on the sales cycle and the customer base that you're addressing.

我的第一個問題與歐洲以及您在上個季度看到的該地區的實力有很大關係。那麼，是否可以安全地假設，進入下個季度，並且您給出了非常強勁的指導，儘管政治上存在種種變數，您是否預計歐洲將再次呈現同樣程度的強勁勢頭？我的第二個問題是關於 Viptela 產品發布的。您是否針對已經是大用戶、校園產品和 Meraki 產品的最終客戶，以向客戶推銷您的新 Viptela 產品？或者您可以向我們介紹您所針對的銷售週期和客戶群。

If you don't mind, Sami, I'm going to answer the second one, and then I'll give you a little qualitative color on Europe. And then Kelly will answer the specifics on the business expectations. So on the second part of your question relative to Viptela and software-defined WAN, we have 2 offers. We have -- Meraki has an offer -- for those customers who have embraced the Meraki architecture, they have a very effective SD-WAN solution that is actually being well received in their customer base, and they're using it to extend their customer base. So that's been very successful. On the Viptela front, we have been working hard on the integration between the Viptela platform and Cisco's product. And so we're going to have a variety of offerings for our customers. We'll have a version that will have software running on different types of hardware. We'll have a software-only solution. We'll have our integrated ISR solution. And so we're seeing a number of those. This was a quarter where, I would say, we really saw the engagement level increase significantly. We got the offers in the marketplace, the first wave of those. And I said on the Q3 call that our teams were signaling us that Q4 was where we're going to see some of this come to fruition, and we, in fact, did. So we feel good about where we are right now. There's more work to go. We haven't gotten the SD-WAN integration into DNA Center yet. So that will only be, I think, a positive boost when we get that done. The teams are working on that. I think it's coming in one of the upcoming releases. So in general, we're pleased with where we are at this moment in time with Viptela. Europe, our team is doing really well there. Our teams are executing well. I think that they are competing very well because we have some very tough competition there. We have --- the team in Europe is always one of the early teams leading with some of these new technology areas. So they've had a lot of success in this core enterprise networking space as we move to intent-based networking. So we're pleased with what they're doing. We feel the entire global macro environment right now, there are so many dynamics that we're calling it like we see it based on what we know today. And Kelly, you want to comment just on how we see the...?

如果你不介意的話，薩米，我將回答第二個問題，然後我會給你一些關於歐洲的定性資訊。然後凱利將回答有關業務期望的具體問題。因此，關於您問題的第二部分，有關 Viptela 和軟體定義的 WAN，我們有 2 個提議。我們 - Meraki 為那些已經採用 Meraki 架構的客戶提供了一個非常有效的 SD-WAN 解決方案，該解決方案實際上在他們的客戶群中很受歡迎，他們正在利用它來擴展他們的客戶群。所以這是非常成功的。在 Viptela 方面，我們一直在努力實現 Viptela 平台與思科產品的整合。因此我們將為客戶提供各種產品。我們將推出一個可以在不同類型的硬體上運行軟體的版本。我們將有一個純軟體解決方案。我們將擁有整合的 ISR 解決方案。我們看到了許多這樣的情況。我想說，在這個季度，我們確實看到參與度水準顯著提高。我們在市場上獲得了第一批報價。我在第三季電話會議上說過，我們的團隊向我們發出訊號，我們將在第四季看到其中一些成果，事實上我們也確實看到了。因此我們對目前的狀況感到滿意。還有更多工作要做。我們尚未將 SD-WAN 整合到 DNA Center。所以我認為，當我們完成這件事時，這只會帶來正面的推動。各團隊正在為此努力。我認為它將出現在即將發布的版本之一中。總的來說，我們對 Viptela 目前的狀況感到滿意。歐洲，我們的團隊在那裡表現得非常好。我們的團隊表現良好。我認為他們競爭非常激烈，因為我們在那裡面臨著非常激烈的競爭。我們—歐洲的團隊一直是這些新技術領域的早期領先團隊之一。因此，當我們轉向基於意圖的網路時，他們在這個核心企業網路領域取得了巨大的成功。所以我們對他們所做的事情感到滿意。我們現在感覺到整個全球宏觀環境存在著如此多的動態，我們根據今天所了解的情況來稱呼它。凱利，你只是想評論一下我們如何看待…？

Yes, I mean, I think just to add to your point, I think the environment's very strong in Europe despite the political things that are going on. And just as a data point, the U.K. is up double digits for us on product orders this quarter. So again, it is -- I think like Chuck was saying, the overall environment is very favorable as of right now. So we're hoping we see this continued strength.

是的，我的意思是，我想補充你的觀點，儘管發生了一些政治事件，但我認為歐洲的環境非常強大。作為一個數據點，本季英國的產品訂單成長了兩位數。所以，我認為就像查克所說的那樣，目前的整體環境非常有利。因此我們希望看到這種持續的強勁勢頭。

Yes, and a lot of the innovation that we're bringing right now is actually targeted at helping our customers lower the expenses of running this infrastructure. So there's a significant play to be made in -- almost like as customers look at where they are economically, there's reduction of cost by going to this automation platform. There's reduction of cost by moving to SD-WAN. So these are technologies that we are hopeful will continue to be important to our customers regardless.

是的，我們現在帶來的許多創新實際上都是為了幫助我們的客戶降低運行該基礎設施的成本。因此，這是一個重大舉措——就像客戶考慮他們的經濟狀況一樣，透過採用這個自動化平台可以降低成本。轉向 SD-WAN 可以降低成本。因此，我們希望這些技術無論如何對我們的客戶都將繼續發揮重要作用。

Samik Chatterjee, you may go ahead, from JPMorgan.

摩根大通的 Samik Chatterjee，你可以繼續了。

I just had a question on the guide for the first quarter. You clearly have good momentum on the top line, although when I look at the operating margin guidance, it's kind of flat year-over-year. So I was -- just want to check if there's something that's limiting kind of the flow-through of the solid momentum on the top line to the operating margin? Is there something that's limiting the leverage of that to the bottom line? And is that something we should hope for in the future and provides kind of a second leg to the earnings growth?

我剛剛對第一季的指南有一個疑問。儘管當我查看營業利潤率指引時，它與去年同期相比持平，但您的營業收入顯然保持了良好的成長勢頭。所以我只是想檢查一下是否有什麼東西限制了營業收入的強勁成長勢頭流向營業利潤率？是否存在某種因素限制了其對底線的槓桿？這是我們未來應該期待的，並為獲利成長提供第二支柱嗎？

Yes, thanks for the question. No, I don't think you need to read anything different of what's happening on the margin. I mean, if I look at the puts and takes that we have to our margin, I spoke a little bit about we can have -- we have a little margin pressure this quarter in some specific deals in APJC. But otherwise, our margin is driven by the same things, right? Our pricing is very robust. We're being very disciplined. The price that you've seen in the last couple of quarters is in a range that's very, very strong, so that's good. We are still facing component headwinds. And even though it's less of a headwind, it is still higher year-over-year. The prices are up, it's, again, just the slope is less. But that's part of what we see, both in Q4 and the guide. And then everything else, it kind of balances out. So right now, this is kind of what we see. We obviously are going to be driving for as much as we possibly can, but it's really the same dynamics.

是的，謝謝你的提問。不，我認為您不需要閱讀任何與邊緣發生的事情不同的內容。我的意思是，如果我看一下我們的利潤率的看跌期權和看漲期權，我稍微談到了我們可能擁有的——本季度我們在 APJC 的一些特定交易中面臨一點利潤壓力。但除此之外，我們的利潤是由同樣的東西驅動的，對嗎？我們的定價非常合理。我們非常自律。在過去幾個季度中，我們看到的價格處於非常非常強勁的範圍內，所以這是好事。我們仍然面臨零件方面的阻力。儘管逆風不再那麼大，但年比來看還是有所上升。價格上漲了，但坡度又減少了。但這是我們在第四季和指南中看到的部分情況。然後其他一切都平衡了。所以現在，這就是我們所看到的。我們顯然會盡可能地努力駕駛，但動力實際上是一樣的。

Paul Silverstein from Cowen.

來自 Cowen 的 Paul Silverstein。

A clarification question. Kelly, just in response -- your previous response, I trust you expect DRAM, at a minimum, to moderate come next year. And I'm wondering what -- if you have any thoughts on the impact. And the larger question, I recognize this has been asked and answered in various forms. But Chuck and Kelly, my takeaway from your comments is that there's an awful lot of things going right. And my simple question is, how much of this do you attribute to the macro? And I recognize even in that portion, it's not simple in terms of different moving pieces globally. But how much of the strength is macro-related? How much of it is better execution in various areas like campus switching, et cetera?

一個澄清問題。凱利，只是回應一下——根據您之前的回應，我相信您預計 DRAM 至少會在明年出現放緩。我想知道——您對其影響有什麼看法。對於更大的問題，我認識到這個問題已經以各種形式被提出和回答過。但是查克和凱利，從你們的評論中我了解到，有很多事情進展順利。我的簡單問題是，您認為這在多大程度上歸因於宏？我認識到，即使在這個部分，從全球不同的活動部分來看，它也不簡單。但其中有多少力量與宏觀相關？在校園轉換等各領域，它的執行效果有多好？

You want to take the first, the clarification on...

你想先澄清一下…

Yes, sure. So on the component stuff, yes, DRAM is loosening, though, again, as I said, the prices still are up, whether you look quarter-on-quarter or year-over-year. But we are optimistic that both on the demand side, which is also driving some of that pricing, we expect that to get better through '19. And I don't know if you want to hit the other broader...

是的，當然。因此，就組件而言，是的，DRAM 正在放鬆，但是，正如我所說，無論是環比還是同比，價格仍然上漲。但我們樂觀地認為，無論是需求面，還是推動部分定價的方面，我們預計到 2019 年情況都會好轉。我不知道你是否想打另一個更廣泛的...

Paul, it's a virtually impossible question to answer, although I'm pragmatic enough to know that it's a combination of both. I will say that I think that it's -- clearly, the economy has been pretty consistent, and the markets have been positive. So that has certainly helped. And I think correspondingly, this new architecture and the new technology that we brought out first -- about 4 quarters back, actually, right at the end of Q4 from a year earlier, has clearly been adopted at a record pace for us. So I could never possibly give you any sort of split on what that looks like. The best I can do is acknowledge that it's a bit of both. And there are a lot of things going right, right now. But there's also, as we said earlier, and Ittai asked the question, there's a lot of dynamics out there that we're watching very closely. So sorry, I can't give you a better, more specific answer. But I think that's as honest as I can be.

保羅，這是一個幾乎不可能回答的問題，儘管我很務實，知道這是兩者的結合。我想說的是，我認為──顯然，經濟一直相當穩定，市場也一直很正面。這確實有幫助。我認為相應地，我們首次推出的這種新架構和新技術——實際上大約在四個季度前，也就是去年第四季末，顯然已經以創紀錄的速度被我們採用。所以我不可能給你任何關於它是什麼樣子的劃分。我能做的最好的事情就是承認兩者都有一點。目前，很多事情進展順利。但正如我們之前所說，伊泰也提出了一個問題，我們正在密切關注許多動態。很抱歉，我無法給你更好、更具體的答案。但我認為這已經是我能做到的最誠實的了。

James Fish from Piper Jaffray.

Piper Jaffray 的 James Fish。

It's been a while since we got a security metric update. Can you just kind of walk through some of the past metrics you've given or what you're willing to give today? I know in the past, you've given deferred revenue growth as well as penetration of certain products like FireAMP. And then secondly, HyperFlex version 3.0 was released, I believe, recently. Can we get an update as to kind of how we should think about the sizing of that business or any metrics around hyperconverged infrastructure and how it's competing against the Nutanixes of the world?

我們已經有一段時間沒有收到安全指標更新了。您能否簡單介紹一下您過去提供的一些指標或您今天願意提供的一些指標？我知道過去您曾給出遞延收入成長以及 FireAMP 等某些產品的滲透率。其次，我相信 HyperFlex 3.0 版本最近已經發布了。我們能否獲得有關我們應該如何考慮該業務的規模或超融合基礎設施的任何指標以及它如何與世界上的 Nutanix 競爭的最新消息？

Sure. So like I said in the prepared remarks, on the security side, they continue to have -- they're over -- 60% of their business is software. And so obviously, they have a lot of their business going through deferred revenue, and they continue to grow in high double digits. So we feel good about that. They had a very strong Q4. And like I said, from a revenue perspective, it was broad-based this quarter, driving that 12% up on revenue. It was across all of their subsegments. So I'd say it's continuing to grow very quickly. And with this addition of Duo, it really just rounds out the portfolio very well. In terms of HyperFlex, I mean, that's growing very strongly for us. I think this new release has been well-received. And again, we find ourselves in a lot of head-to-head deals and winning against Nutanix, which is obviously a really tough competitor out there. But we feel good about the offer we have. Now it's really fairly small compared to the broader data center business that has all of our servers in there. But we're pleased with how it's ramping and how we're competing.

當然。因此，就像我在準備好的發言中所說的那樣，在安全方面，他們的業務仍然有超過 60% 來自軟體。顯然，他們的許多業務都涉及遞延收入，並且繼續保持兩位數的高成長。因此我們對此感到很高興。他們的第四季表現非常強勁。正如我所說，從收入角度來看，本季營收成長廣泛，推動營收成長 12%。它涵蓋了他們所有的子部分。所以我想說它正在繼續快速成長。隨著 Duo 的加入，我們的產品組合更加完善。就 HyperFlex 而言，我的意思是，它對我們來說成長非常強大。我認為這個新版本受到了好評。我們再次發現自己在許多正面交鋒的交易中都戰勝了 Nutanix，而 Nutanix 顯然是一個非常強大的競爭對手。但我們對我們得到的報價感到滿意。現在，與我們所有的伺服器都位於其中的更廣泛的資料中心業務相比，它確實相當小。但我們對其發展情況和我們的競爭方式感到滿意。

I think that's exactly right.

我認為這是完全正確的。

Simon Leopold from Raymond James.

雷蒙德詹姆斯公司的西蒙利奧波德。

I wanted to see if maybe we could talk a little bit longer-term trending, big picture around the concept of multi-cloud, which you talked about at Cisco Live! and on a number of other occasions. Within the answer, I think what I'm looking for is how does this help the evolution and transformation? And importantly, how does this help Cisco do more business with the web-scale customers?

我想看看我們是否可以談論一下您在 Cisco Live 上談論的多雲概念的長期趨勢和總體情況！以及其他一些場合。在答案中，我想我正在尋找的是這如何幫助進化和轉變？重要的是，這如何幫助思科與網路規模客戶開展更多業務？

Yes, Simon, so it's a really good question. And I think the key message for us that we're trying to get across is that this transition to this multi-cloud world actually is changing the way our customers look at building their IT infrastructure and how they secure it. So if you just think very simply that -- look back over the last 5 to 7 to 10 years, a great majority of the traffic in our enterprise customers' networks was terminating in their private data centers. So networks were architected and security architectures were built to deal with that reality. Now we're moving into a world where there is still some percentage, depending on the customer, of their traffic that is obviously terminating in a private data center. Then they have traffic terminating in SaaS applications, in multiple public cloud providers. They have this whole IoT edge data aggregation issue. So what's happened is the traffic flows, and the way data is moving across their networks and across their infrastructure, is much more complex than it was 5 to 7 years ago, where it was all very predictable, which leads us to, when you think about, ultimately, our customers are going to just need to build a world where you look at the user, you look at the application, you look at their policy and you look at the destination, and then you have technology in the network that actually provides policy routing, quality security in that world. And that's the role that we're playing with our customers because they need to re-architect their networks to accommodate a massively diverse traffic flow scenario that they're going to deal with. So I'll stop with that right now, but that's why it's so important. And you asked what does that do to our partnerships with the web-scale providers. Well, they understand this dynamic that is going on. And so many of the -- you're seeing some early -- some of the early work we're doing with some of the web-scale providers to ensure that we have integrated hybrid cloud solutions so that we can provide security and policy, whether applications are in the private data center or in the public. They're interested in our ability to process data at the edge as customers are building out IoT applications. They're interested in us helping define security architectures that make it simple for our customers to take advantage of their services. So it's emerging as a really attractive partnership because of the reality that everybody sees in the marketplace today. And hopefully, that was clear. If not, we can have some folks talk to you afterwards.

是的，西蒙，這是一個非常好的問題。我認為我們試圖傳達的關鍵訊息是，向多雲世界的轉變實際上正在改變我們的客戶建立 IT 基礎設施和保護 IT 基礎設施的方式。所以如果你只是簡單地想一想——回顧過去 5 到 7 到 10 年，我們企業客戶網路中的絕大多數流量都終止於他們的私人資料中心。因此，網路架構和安全架構的建構都是為了應對這個現實。現在，我們正在進入這樣一個世界：根據客戶的不同，仍有一定比例的流量顯然終止於私人資料中心。然後，他們在多個公有雲供應商的 SaaS 應用程式中終止流量。他們有整個物聯網邊緣資料聚合問題。所以現在發生的情況是，流量以及資料在其網路和基礎設施中移動的方式比 5 到 7 年前複雜得多，那時一切都非常可預測，這導致我們，當您思考時，最終，我們的客戶只需要建立一個世界，在這個世界裡，您可以查看用戶、查看應用程式、查看他們的策略並查看技術目的地，然後您就有了網路中能夠安全性的策略目的地和網路中。這就是我們為客戶扮演的角色，因為他們需要重新建立他們的網絡，以適應他們將要處理的極其多樣化的流量場景。所以我現在就此打住，但這就是它如此重要的原因。您問這對我們與網路規模供應商的合作關係有何影響。嗯，他們了解正在發生的這種動態。我們正在與一些網路規模供應商合作進行許多早期工作，以確保我們整合了混合雲解決方案，以便我們可以提供安全性和策略，無論應用程式是在私人資料中心還是在公共資料中心。當客戶建立物聯網應用程式時，他們對我們在邊緣處理資料的能力很感興趣。他們希望我們能夠協助定義安全架構，讓我們的客戶輕鬆利用他們的服務。因此，根據當今市場中每個人所看到的現實，它正在成為一種真正有吸引力的合作關係。希望這一點已經很清楚了。如果沒有的話，我們可以隨後安排一些人來和你談談。

James Suva from Citigroup Global Markets.

花旗環球金融的詹姆斯蘇瓦。

A quick question, Chuck. Earlier in your remarks, you mentioned with service provider strength coming back that you don't believe it's 5G-related, that's more of a 2020 phenomenon. Can you give us a little bit about a history lesson here of back in 3G or 4G or 2G uptakes, was there a linear into-the-build that happened? Is there a pause before the [positive event] happens? Or is it just more of a steady as she goes, as we kind of look ahead more longer term, strategically to 5G impact to Cisco?

一個簡單的問題，查克。在您先前的評論中，您提到服務提供者實力的恢復，但您不認為這與 5G 有關，而更像是 2020 年的現象。您能否為我們簡單介紹一下 3G、4G 或 2G 發展的歷史，當時的建設過程是否呈線性發展？在 [正面事件] 發生之前是否有停頓？或者，隨著我們更長遠展望 5G 對思科的策略影響，她會採取更穩健的行動嗎？

Yes, Jim, it's a good question. I think if you go back and look at the earlier transitions in this space, they have largely been around delivering, and I don't want to say incrementally better, but a better performance for mobile devices that are connected to the network already. So when you go from 3G to 4G, you get better data performance. You're happier with your apps on your phones, et cetera. This is a step-level difference because we're talking about the latency dynamics of 5G and the belief that this will actually enable them to deliver real-time business applications to small offices or remote branches over 5G networks. That's a completely different dynamic. And so I would tell you that we're -- we don't know yet. But I think if you operate under the assumption that it lives up to its billing, then it is going to create a significant demand on the core networks of the service providers. And so I can't say that there's a huge historical example for us to learn from. But I think what you're going to see is just between now and when they start building these things out, they're going to be working on design. And then we're just going to see them begin to gradually build out. As they open up a certain market, they'll build out bandwidth and backbone capacity. And that's how we're thinking about it. And we'll be able to give you guys updates on upcoming quarters as to how we see this thing emerging. It's not going to happen overnight.

是的，吉姆，這是個好問題。我認為，如果你回顧一下這個領域早期的轉變，它們主要都是圍繞交付進行的，我不想說是逐步改進，而是對於已經連接到網路的行動裝置來說，效能會更好。因此，當您從 3G 升級到 4G 時，您會獲得更好的數據效能。您對手機上的應用程式更加滿意，等等。這是一個階躍級的差異，因為我們正在談論 5G 的延遲動態，並且相信這實際上將使他們能夠透過 5G 網路向小型辦公室或遠端分支機構提供即時業務應用程式。這是一個完全不同的動態。所以我想告訴你，我們還不知道。但我認為，如果你假設它能夠達到預期的效果，那麼它將對服務提供者的核心網路產生巨大的需求。所以我不能說這是一個值得我們學習的歷史案例。但我認為，你將會看到，從現在到他們開始建造這些東西之前，他們都會致力於設計。然後我們就會看到它們開始逐漸發展起來。當他們開拓某個市場時，他們就會擴大頻寬和主幹網路容量。這就是我們的想法。我們將向大家提供未來幾季的最新情況，告訴大家我們對這事態發展的看法。這不會在一夜之間發生。

Tal Liani from Bank of America Securities Merrill Lynch.

美國銀行證券美林的 Tal Liani。

I want to ask about the routing. Just again, it's repeatedly under pressure. And you gave an answer before about Viptela. You're saying that it's going according to the plan. I'm wondering if there's a link between the 2 yet or that the pressure in routing has to do with other things and not to do with SD-WAN. That's the first question, kind of to understand -- or maybe you can provide a different explanation, to understand the pressure on routing and what's the outlook for recovery. Or is it like Nokia and others are saying, that maybe there is a long-term pressure on this market? Second question, just a follow-up on 606. What's the impact on operating margin if you've provided this or you provide this information?

我想問一下路由的問題。只是它再次反覆承受壓力。您之前已經回答過有關 Viptela 的問題。你說一切都按照計劃進行。我想知道這兩者之間是否存在聯繫，或者路由壓力與其他因素有關，而與 SD-WAN 無關。這是第一個問題，有點需要理解——或者也許您可以提供不同的解釋，以了解路由的壓力以及復甦的前景如何。或者像諾基亞和其他公司所說的那樣，這個市場可能面臨長期壓力？第二個問題，只是 606 的後續問題。如果您提供此資訊或提供此訊息，對營業利潤率有何影響？

Okay, Tal, let me make a comment on the first one, and then Kelly can add to it and then she can give the 606 answer as well. I think when you look at our routing business, first of all -- Kelly, half of it, 50%, 60% of it is SP, right? I mean, it's -- so it's significantly impacted by the SP. Some of the players you mentioned, they probably have a much higher percentage of their routing businesses coming from service providers, would be my guess. So that's just sort of couched in the discussion on 5G and everything that we've said so far about SP, I'd say, is the answer on that piece of it. From an enterprise perspective, Tal, I think over the last couple of years, we've just seen a classic architectural stall in the marketplace, as we've talked about historically when there's a big architectural transition. And you said that we believe Viptela was going according to plan. I think the way I would characterize it is we've begun to see customers actually move forward with deployments, but it's early. But we like where we are and we like what we see. So I think that -- I think we'll see the enterprise continue to improve relative to this architectural clarity. And I'll let Kelly answer sort of how you think about the overall routing or the 606 question.

好的，塔爾，讓我對第一個問題發表評論，然後凱利可以補充，然後她也可以給出 606 個答案。我認為，當您查看我們的路由業務時，首先 - 凱利，其中一半，50％，60％是SP，對嗎？我的意思是，它受到 SP 的顯著影響。我猜，您提到的一些參與者，他們的路由業務中很大一部分可能來自服務提供者。所以這只是在有關 5G 的討論中提出的，我想說，我們迄今為止關於 SP 所說的一切都是對這一部分的回答。Tal，從企業的角度來看，我認為在過去的幾年裡，我們看到了市場上典型的架構停滯，就像我們在歷史上討論過的重大架構轉變一樣。您說我們相信維普特拉的事情正在按照計劃進行。我認為，我們已經開始看到客戶真正開始部署，但現在還為時過早。但我們喜歡我們所處的位置，也喜歡我們所看到的。所以我認為——我認為我們會看到企業在架構清晰度方面繼續改進。我會讓凱利回答您對整體路線或 606 問題的看法。

Yes, so on 606, Tal, so just to kind of, again, ground everybody on how we're impacted on 606, so one thing I will say is operationally, nothing has changed, right? We've made no changes to our offers. We've made no changes to our contracts or any changes to our cash conversion cycle. So it is literally just an accounting change. Now what the implications are to us is, like we've said, this is going to accelerate some of our term-based licenses. So we will have to write off some of our deferred revenue. We won't see that revenue, but we will offset that with acceleration of those offers when we book new orders and bill new orders. Net-net, we think it will be a net positive for us of approximately 1%. And so that's the impact on the revenue. It will fall through down through margin. So it's on operating margin, 0.5 point to 70 basis points, roughly, of goodness falling through there. And as we go into the new rev standard as part of our disclosures, we'll be laying out very clearly for everybody, since we have -- we're adopting the modified retrospective approach, we'll lay out very clearly the implications of the new accounting versus what it would have been under the old accounting. So hopefully, that answers your question.

是的，關於 606，塔爾，只是為了再次讓大家了解我們對 606 的影響，所以我要說的一件事是，從操作上來說，什麼都沒有改變，對吧？我們的報價沒有任何變更。我們沒有對合約做出任何改變，也沒有對現金轉換週期做出任何改變。所以這其實只是一種會計變更。現在，對我們來說，這意味著，正如我們所說的，這將加速我們的一些基於期限的許可證。因此我們必須註銷部分遞延收入。我們不會看到這些收入，但當我們預訂新訂單和為新訂單開立發票時，我們會透過加速這些優惠來抵銷這些收入。總體而言，我們認為這將為我們帶來約 1% 的淨收益。這就是對收入的影響。它將通過邊緣向下掉落。因此，就營業利益率而言，其優點大約在 0.5 個百分點到 70 個基點之間。當我們將新的 rev 標準作為揭露的一部分時，我們將為每個人提供非常清晰的說明，因為我們已經採用了修改後的回顧性方法，我們將提供非常清晰的說明新會計與舊會計的影響。希望這能回答你的問題。

George Notter, you may go ahead, from Jefferies LLC.

喬治諾特 (George Notter)，你可以繼續，來自 Jefferies LLC。

I guess, Kelly, I was curious about the revenue headwinds that you're seeing from the subscription transition. You've talked about that in the past. I'm just curious about what that might have looked like in the July quarter. And then what do you think that will look like for the October quarter?

凱利，我想，我很好奇你在訂閱轉型過程中看到的收入阻力。您以前曾談論過這個問題。我只是好奇七月季度的情況會是怎樣。您認為 10 月季度的情況會是如何？

Yes, no, that's a great question, George. So there's good news. There's good news there, I would say. So like we anticipated, as we are so rapidly ramping the Cat 9K and as we are blowing out DNA across not only that, but also our Viptela offerings and across wireless, the revenue headwind was getting more closer to 2.5 to 3 points. Now the good news on this is with the new revenue standard going forward, because it's accelerating some of these offers that we did have previously defer, that headwind will become less of a headwind, okay? So as opposed to the 2.5 to 3 under current accounting standards, that will be much less, closer to like 1.5 point or so, if I had to guess roughly. And again, this will all flush out as we go through it, but it will become less of a headwind because we have such a big portion of things that we will now be recognizing upfront.

是的，不，這是一個很好的問題，喬治。所以有個好消息。我想說，這裡有好消息。因此，正如我們預期的那樣，隨著我們如此迅速地擴大 Cat 9K 的規模，並且我們不僅在此方面大力推廣 DNA，而且還在我們的 Viptela 產品和無線領域大力推廣 DNA，收入逆風越來越接近 2.5 到 3 個百分點。現在的好消息是，隨著新收入標準的推行，因為它正在加速我們之前推遲的一些提議，所以這種逆風將變得不那麼嚴重，好嗎？因此，與目前會計準則下的 2.5 到 3 相比，這個數字會少得多，如果我粗略估計的話，接近 1.5 個百分點左右。再說一次，當我們經歷這一切時，這一切都會迎刃而解，但它不會成為什麼阻力，因為我們現在將提前認識到很大一部分事情。

You said that it was a 1% increase on the other side...

你說的是另一邊增加了1%...

On the revenue, exactly, exactly.

關於收入，確實如此。

So mathematically, it would become a down a point.

所以從數學上來說，它會變成一個下降點。

The good thing about this accounting standard is it does normalize some of the -- some of the natural headwinds we've had on revenue and margins because of it is now going to kind of come back and benefit us.

這個會計準則的好處在於，它確實使我們在收入和利潤方面遇到的一些自然阻力正常化，現在這些阻力將會回來並為我們帶來好處。

All right. I want to -- I think that was the last question, Marilyn? So if I could, just thank everybody for spending time with us today. Thanks for the questions and the dialogue. And Marilyn, I'll turn it back over to you.

好的。我想——我認為這是最後一個問題，瑪麗蓮？所以如果可以的話，我只想感謝大家今天花時間與我們在一起。感謝您的提問和對話。瑪麗蓮，我把它交還給你。

Thanks, Chuck, and thanks, everyone. Cisco's next quarterly earnings conference call, which will reflect our fiscal 2019 first quarter earnings results, will be on Wednesday, November 14, 2018, 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 is done through an explicit public disclosure. We now plan to close the call. If you have any further questions, please feel free to contact Cisco's Investor Relations department, and we thank you very much for joining the call today.

謝謝查克，謝謝大家。思科的下一次季度財報電話會議將於 2018 年 11 月 14 日星期三下午 1:30 舉行，該會議將反映我們 2019 財年第一季的收益結果。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。如果您有任何其他問題，請隨時聯繫思科投資者關係部，非常感謝您今天參加電話會議。

Thank you for participating on today's conference call. If you would like to listen to the call in its entirety, you may call (866) 417-5767. For participants dialing from outside the U.S., please dial (203) 369-0735. 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，可以撥打 (866) 417-5767。對於從美國境外撥打電話的參與者，請撥打 (203) 369-0735。今天的電話會議到此結束。您現在可以斷開連線。