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

Nov 13, 2019 • 04:30 pm ET

Previous

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

Share
Close

Loading Event

Loading Transcript

Q & A
Operator
Operator

Thank you. Ittai Kidron from Oppenheimer. You may go ahead.

Analyst
Ittai Kidron

Thanks guys. Chuck, maybe you can kind of walk us through a little bit kind of how the quarter evolved as far as the demand pattern. You've talked about weakness became, first of all, more broad-based, but also started into the enterprise and commercial. Anymore color you can give us there, either from a product or regional standpoint? And with regards to your working assumptions into the -- into the next quarter, into the January quarter, is it your assumption that the intensity of the softness you're seeing right now will just stay as is or getting worse? Help us think about the framework you have in mind when you give the guidance.

Executive
Chuck Robbins

Okay. Thanks, Ittai. So what we -- if you recall on the last earnings call, I did say that we began to see some early signs of some macro impact towards the end of Q4. And then we just basically saw that continue throughout the quarter and as obviously, the entire quarter was worse than we had expected when we began. And it was fairly broad-based. It was -- Kelly just read the regional numbers off from an orders' perspective. So you saw a negative 3%, negative 3%, negative 5% from Americas, EMEA, and Asia.

I'd say across the technology areas, it was pretty broad based. In the segments that we saw, public sector continued to be strong, but the rest were -- and enterprise, commercial did weaken. Service provider and emerging markets which were stressed last quarter were about the same. We had shown the ability to offset that with strength in commercial and enterprise and public sector. And when those weakened obviously this quarter that impacted our ability to offset them. And while I won't let my team make this excuse, it also had to happen in a quarter where we did have incredibly tough compares, so this is the worst quarter that could have occurred for us. But that's really what we saw. As far as what we've modeled going forward, we've effectively assumed that it will stay as is. I don't think -- we haven't modeled any material further deterioration or improvement I think in what we put forward today. Kelly --

Executive
Kelly A. Kramer

That's right.

Analyst
Ittai Kidron

Good luck.

Executive
Marilyn Mora

Thanks, Ittai. Next question, please.

Operator
Operator

Thank you. Samik Chatterjee from JP Morgan. You may go ahead.

Analyst
Samik Chatterjee

Hi, thanks for taking my question. Chuck, thanks for the detail on the last question. I just wanted to get a sense of what you're hearing from your customers in terms of are you hearing that if some of the trade aspects of -- that are depressing the macro get resolved, do you expect some of them to come back in terms of spending, what are you hearing from your customers. And if you can give us an update on the order trends in China as well, that would be helpful.

Executive
Chuck Robbins

Samik, thanks for the question. So from the customers, it feels