Cisco Systems, Inc. (NASDAQ:CSCO) Q1 2020 Earnings Conference Call - Final Transcript

Nov 13, 2019 • 04:30 pm ET


Cisco Systems, Inc. (NASDAQ:CSCO) Q1 2020 Earnings Conference Call - Final Transcript


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Welcome to Cisco's First Quarter Fiscal Year 2020 Financial Results Conference Call. [Operator Instructions]

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

Marilyn Mora

Thanks, Michelle. Welcome everyone to Cisco's first quarter of fiscal 2020 quarterly earnings conference call. This is Marilyn Mora, Head of Investor Relations, and I'm joined by Chuck Robbins, our Chairman and CEO; and Kelly Kramer, our CFO.

By now, you should have seen our earnings press release. A corresponding webcast with slides, including supplemental information, will be made available on our website in the Investor Relations section following the call. As is customary in Q1, we have made certain reclassifications to prior period amounts to conform to the current period's presentation. 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. Throughout this conference call we will be referencing both GAAP and non-GAAP financial results and we'll discuss product results in terms of revenue and geographic and customer results in terms of product orders, unless stated otherwise. All comparisons made throughout this call will be made on a year-over-year basis.

The matters we will be discussing today include forward-looking statements, including the guidance we will be providing for the second quarter of fiscal 2020. 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 Form 10-K, which identifies 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. Cisco will not comment on its financial guidance during the quarter, unless it is done through an explicit public disclosure.

In Q2 of fiscal 2019, we completed the sale of our SPVSS business and accordingly had no revenue or expense from that business in Q1 fiscal 2020. As such, all of the revenue, non-GAAP, and product orders information we will be discussing is normalized to exclude the SPVSS business from our historical results. We have provided historical financial information for the SPVSS business in the slides that accompany this call and on our website to help to understand these impacts. The guidance we provided during our Q4 earnings call had been normalized in the same way.

I will now turn it over to Chuck.

Chuck Robbins

Thanks, Marilyn. We delivered a solid quarter against a challenging macro environment. While we're pleased with this performance, we're most focused on the environment as we move forward. We'll discuss this more in a moment. What's happening inside Cisco regardless of the macro is an unrelenting focus on driving innovation, transforming our business, and exceeding our customers' expectations.

In Q1, as you've seen, we had revenue growth of 2% and double-digit non-GAAP earnings per share growth. We also delivered strong non-GAAP gross margins and