August 14, 2025 • 9 mins
Cisco CEO Chuck Robbins discusses the company’s earnings and its plans for artificial intelligence infrastructure. Robbins joins Caroline Hyde and Ed Ludlow on “Bloomberg Tech.”
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:07):
Delighted to say that we're joined now by Cisco, CEI,
Chuck Robins, and actually, Chuck, I'm going to ask you
something that I felt like the analyst community didn't really
get to, and that is that there is this big
products refresh happening near term overcoming years. And I feel
like you've been trying to talk about Cisco as a
platform offering for a while and if we look at
(00:28):
that fiscal twenty six outlook is that baked into that
where Cisco is a platform offering and you folded security
into it. That's kind of what I think people want
to know.
Speaker 3 (00:38):
Yes, well, first of all, thanks for having me and
I do. I want to thank the team and all
of the Cisco folks for just a great year. We
obviously had good order growth in Q four, we had
the great performance in the AI infrastructure orders. We actually
reported that we had taken down a approximately a billion
dollars revenue from those orders, which was something and that
(01:00):
everybody wanted to talk about. We talked through how we
fill the progress kicking in on security, and then to
your point, this product refresh cycle that we are beginning
will happen over years, and honestly, we just turned on orderability.
Large customers take a lot of time to evaluate put
these things in labs before they put it in their
(01:21):
critical infrastructure. But the points you make about the platform
is really important because as we get into agentic AI,
with the low latency costant communication that's going to occur,
we're going to have to do security in the network.
Speaker 4 (01:37):
There is no other alternative.
Speaker 3 (01:39):
You cannot introduce latency by sending it to a security appliance,
and we are the only company that has both networking
and security technology to fuse it together to create that
platform effect that you're describing.
Speaker 2 (01:51):
AI is a double edged sword. Chuck, it's margin dilutive.
How do you think about that?
Speaker 3 (02:00):
Well, I think we have always had a portfolio of
products that had various margin profiles. I mean, we had
a point in our history where the telco and the
service provider world was as much as thirty five thirty
six percent of our business, and that was a different
margin profile than the enterprise. And so we just manage
it the same way we have all all along, So
I'm not too worried about that.
Speaker 1 (02:20):
Meanwhile, Chuck, that massive opportunity ahead that you articulate with
AI infrastructure. They're bringing in of two billion of orders,
the billion dollars of revenue already. Is it the platform
offering that helps you push out and fend against some
of the other competitors that want in on that. Of
course HPE is trying to get in.
Speaker 4 (02:36):
You've got broad Com. Is that how you set yourself apart? Well?
Speaker 3 (02:40):
I think the key to remember with this is that
it's networking systems and it's optics. That's primarily what we're
selling for AI infrastructure, And there's really only three companies
on the planet that can deliver the networking silicon that
these customers require, and we're one of them. And so
you know, they're looking for low power requirements, they're looking
for meeting their dates, they're looking for speed bandwidth deployments,
(03:02):
you know, and we're hitting that right now with them.
Speaker 4 (03:05):
And we've really built great relationships.
Speaker 3 (03:07):
If you if you go back five or six years ago,
I had to try to convince people that we were
rebuilding relationships here. And even if you go back fifty twelve,
fourteen months ago when we gave them the target of
one billion dollars in orders, I think there were a
lot of skeptics, and the team actually delivered really well
and we have great relationships with these customers.
Speaker 1 (03:23):
Now we are joined by Chuck Robins, Cisco CEO, and
you know, you beat your things that previously others were
cynical of, but the market moves with you. Many wanted
even more in terms of your full year revenue guidance.
Some are even going as far as to say that
maybe you're suggesting a little bit of a cautious it
spend for the next fiscal year.
Speaker 4 (03:43):
Do you abide by that, Chuck, No, we don't see that.
Speaker 3 (03:46):
We see we haven't seen any sort of slowdown at all.
The only place we've seen that challenge, as has been reported,
was in US Federal. You know, our order our product
order growth was seven percent. If you take out US Federal,
we grew ten percent. And if you think about security,
same thing. If we take out a US Federal we
grew double digits and security on orders. And I also
(04:08):
talked about the fact that if we look at the
fiscal year that we just entered, our US Federal team
is actually forecasting a return to growth, so hopefully that
won't be a headwind in the next year. So we
haven't seen anything meaningful, but we're also cognizant that we
were operating in a pretty complex and dynamic environment.
Speaker 2 (04:26):
Chuck, We love to talk about the big projects on
Bloomberg Tech, the big data center projects. Are there any
specific examples of projects you're involved in that do you
think are really needle moving for Cisco?
Speaker 3 (04:38):
Well, all the cloud providers are needle moving, and over
time the neo cloud segment as well as the sovereign
clouds we think are going to will be a big
part of our business. Also, we're just getting started in those.
If I hit on a few of those. The sovereign
AI data centers that we talked about in UAE as
well as in Saudi are the early ones. We're having
(04:59):
discussions and their Asian countries in Africa, in Europe, you
have this push for on PRIM sovereign applications, So from
geopolitical perspective and a risk perspective, they want more control
over the tech stack that they have in their countries.
So that's more of a sovereign play, and we're one
of the unique companies who can actually deliver say Splunk
(05:19):
on PRIM or they're asking for WebEx on PRIM, which
we can do so, and then the neo clouds we
could talk about as well, but that's another emerging opportunity
for US.
Speaker 2 (05:30):
I don't think many appreciate the scale of Cisco.
Speaker 4 (05:34):
Sometimes.
Speaker 2 (05:35):
You've got a lot of credit, by the way, on
this program, at least about how you've communicated tariff's impact.
But you're basically one of the biggest and leading network
chip producers globally, and this is an administration that wants
more US manufacturing. So you have the volume of gear,
you design your own chips, TSMC makes them for you.
The economics kind of works in your favor. Have you
(05:55):
made some commitment to do what this administration is trying
to do, which is that process that you've mastered, but
just bring it to the States in some form.
Speaker 3 (06:06):
Well, I think that much like you in Nvidia, AMDUS others,
there are a lot of companies that actually rely on
TSMC the for the fabrication of the silicon, and they've
obviously made commitments on their side to actually build out
capacity in the United States, and so we're happy to
see that happening. The thing that people don't really realize
(06:28):
is that we've maintained a US manufacturing footprint all along,
and so we have a footprint in the US today
that we can look at expanding. But I think it's
just important for us right now to wait and see
exactly where all this stuff lands. If you go back
to twenty eighteen when the China tariffs hit, our teams
have made moves and mitigated roughly eighty percent or so
(06:52):
of those, and so we just continue to look at
these things as they come out, figure out what the
best plan of action is, and then we act.
Speaker 1 (07:00):
When you think about planning ahead and business continuity, Chuck,
when you see what's happened with AMD and video and
the deal they've cut to access China, when you think
about exporting more broadly, you thinking that might come your
way of pay to play in the future.
Speaker 4 (07:15):
I have no idea.
Speaker 3 (07:16):
We wake up every day and we try to figure
out what's transpired and what's happening in the world, and
how do we react to it. I've talked about over
time that the current crop of CEOs in the United
States have basically been operating in times of uncertainty or
crisis or certainly very dynamic environments, and so we're all
(07:37):
used to just dealing with whatever changes are.
Speaker 4 (07:39):
Coming our way.
Speaker 3 (07:41):
You know, there's the old saying that you can deal
with the world as it is or how you'd like
it to be, and just we just wake up and
we deal with what comes at us and try to
plan accordingly, try to do scenario planning, but then deal
with it as it is.
Speaker 1 (07:57):
And when you're controlling your own destiny. You've been doing
a bit of M and A and you mentioned the
Sprung coffering and how that helps you access the Lexi
view up for example. Anymore M and A on the
rise of particularly when it comes to AI.
Speaker 3 (08:08):
We're always looking Our strategy hasn't changed. Obviously, valuations are
quite frothy in that space. But if there's something that
helps us advance our strategy more effectively, then we're always
willing to take a look at it. I would say
that M and A is not the strategy. We have
our product strategy and our solution strategy for our customers,
(08:30):
and if there's an acquisition that helps us accelerate that,
then that's what we're really interested in. And you think
about places like AI, infrastructure or security or observability.
Speaker 4 (08:39):
In those kind of areas, they're always interesting to us.
Speaker 2 (08:42):
Chuck, how's the relationship with Nvidia evolving since it was
all announced.
Speaker 4 (08:47):
It's great.
Speaker 3 (08:49):
Our team and their team's execs had dinner last night,
and we're working on architectures for neocloud, architectures for the enterprise.
We're working on go to market joint go to market together.
So I'd say it just continues to get stronger. And
we're really on the front end now of a lot
of the technology integrations that we've been working on, and
(09:09):
we're on the front end of the real enterprise wave
of this AI. If you think about it, it started in
the back end networks of the cloud providers.
Speaker 4 (09:18):
It's movement.
Speaker 3 (09:18):
It's obviously going to have an impact on the front
end networks. It's going to have an impact on the
enterprise and even the telco business that we saw this quarter.
We had telco and cable our orders were up greater
than twenty percent, and a lot of that was attributed
to their preparation for AI.
Speaker 1 (09:35):
Chuck Robins, Cisco CEO, been fantastic to speak with you today.
Speaker 4 (09:39):
Thank you very much, and be
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:07):
Delighted to say that we're joined now by Cisco, CEI,
Chuck Robins, and actually, Chuck, I'm going to ask you
something that I felt like the analyst community didn't really
get to, and that is that there is this big
products refresh happening near term overcoming years. And I feel
like you've been trying to talk about Cisco as a
platform offering for a while and if we look at
(00:28):
that fiscal twenty six outlook is that baked into that
where Cisco is a platform offering and you folded security
into it. That's kind of what I think people want
to know.
Speaker 3 (00:38):
Yes, well, first of all, thanks for having me and
I do. I want to thank the team and all
of the Cisco folks for just a great year. We
obviously had good order growth in Q four, we had
the great performance in the AI infrastructure orders. We actually
reported that we had taken down a approximately a billion
dollars revenue from those orders, which was something and that
(01:00):
everybody wanted to talk about. We talked through how we
fill the progress kicking in on security, and then to
your point, this product refresh cycle that we are beginning
will happen over years, and honestly, we just turned on orderability.
Large customers take a lot of time to evaluate put
these things in labs before they put it in their
(01:21):
critical infrastructure. But the points you make about the platform
is really important because as we get into agentic AI,
with the low latency costant communication that's going to occur,
we're going to have to do security in the network.
Speaker 4 (01:37):
There is no other alternative.
Speaker 3 (01:39):
You cannot introduce latency by sending it to a security appliance,
and we are the only company that has both networking
and security technology to fuse it together to create that
platform effect that you're describing.
Speaker 2 (01:51):
AI is a double edged sword. Chuck, it's margin dilutive.
How do you think about that?
Speaker 3 (02:00):
Well, I think we have always had a portfolio of
products that had various margin profiles. I mean, we had
a point in our history where the telco and the
service provider world was as much as thirty five thirty
six percent of our business, and that was a different
margin profile than the enterprise. And so we just manage
it the same way we have all all along, So
I'm not too worried about that.
Speaker 1 (02:20):
Meanwhile, Chuck, that massive opportunity ahead that you articulate with
AI infrastructure. They're bringing in of two billion of orders,
the billion dollars of revenue already. Is it the platform
offering that helps you push out and fend against some
of the other competitors that want in on that. Of
course HPE is trying to get in.
Speaker 4 (02:36):
You've got broad Com. Is that how you set yourself apart? Well?
Speaker 3 (02:40):
I think the key to remember with this is that
it's networking systems and it's optics. That's primarily what we're
selling for AI infrastructure, And there's really only three companies
on the planet that can deliver the networking silicon that
these customers require, and we're one of them. And so
you know, they're looking for low power requirements, they're looking
for meeting their dates, they're looking for speed bandwidth deployments,
(03:02):
you know, and we're hitting that right now with them.
Speaker 4 (03:05):
And we've really built great relationships.
Speaker 3 (03:07):
If you if you go back five or six years ago,
I had to try to convince people that we were
rebuilding relationships here. And even if you go back fifty twelve,
fourteen months ago when we gave them the target of
one billion dollars in orders, I think there were a
lot of skeptics, and the team actually delivered really well
and we have great relationships with these customers.
Speaker 1 (03:23):
Now we are joined by Chuck Robins, Cisco CEO, and
you know, you beat your things that previously others were
cynical of, but the market moves with you. Many wanted
even more in terms of your full year revenue guidance.
Some are even going as far as to say that
maybe you're suggesting a little bit of a cautious it
spend for the next fiscal year.
Speaker 4 (03:43):
Do you abide by that, Chuck, No, we don't see that.
Speaker 3 (03:46):
We see we haven't seen any sort of slowdown at all.
The only place we've seen that challenge, as has been reported,
was in US Federal. You know, our order our product
order growth was seven percent. If you take out US Federal,
we grew ten percent. And if you think about security,
same thing. If we take out a US Federal we
grew double digits and security on orders. And I also
(04:08):
talked about the fact that if we look at the
fiscal year that we just entered, our US Federal team
is actually forecasting a return to growth, so hopefully that
won't be a headwind in the next year. So we
haven't seen anything meaningful, but we're also cognizant that we
were operating in a pretty complex and dynamic environment.
Speaker 2 (04:26):
Chuck, We love to talk about the big projects on
Bloomberg Tech, the big data center projects. Are there any
specific examples of projects you're involved in that do you
think are really needle moving for Cisco?
Speaker 3 (04:38):
Well, all the cloud providers are needle moving, and over
time the neo cloud segment as well as the sovereign
clouds we think are going to will be a big
part of our business. Also, we're just getting started in those.
If I hit on a few of those. The sovereign
AI data centers that we talked about in UAE as
well as in Saudi are the early ones. We're having
(04:59):
discussions and their Asian countries in Africa, in Europe, you
have this push for on PRIM sovereign applications, So from
geopolitical perspective and a risk perspective, they want more control
over the tech stack that they have in their countries.
So that's more of a sovereign play, and we're one
of the unique companies who can actually deliver say Splunk
(05:19):
on PRIM or they're asking for WebEx on PRIM, which
we can do so, and then the neo clouds we
could talk about as well, but that's another emerging opportunity
for US.
Speaker 2 (05:30):
I don't think many appreciate the scale of Cisco.
Speaker 4 (05:34):
Sometimes.
Speaker 2 (05:35):
You've got a lot of credit, by the way, on
this program, at least about how you've communicated tariff's impact.
But you're basically one of the biggest and leading network
chip producers globally, and this is an administration that wants
more US manufacturing. So you have the volume of gear,
you design your own chips, TSMC makes them for you.
The economics kind of works in your favor. Have you
(05:55):
made some commitment to do what this administration is trying
to do, which is that process that you've mastered, but
just bring it to the States in some form.
Speaker 3 (06:06):
Well, I think that much like you in Nvidia, AMDUS others,
there are a lot of companies that actually rely on
TSMC the for the fabrication of the silicon, and they've
obviously made commitments on their side to actually build out
capacity in the United States, and so we're happy to
see that happening. The thing that people don't really realize
(06:28):
is that we've maintained a US manufacturing footprint all along,
and so we have a footprint in the US today
that we can look at expanding. But I think it's
just important for us right now to wait and see
exactly where all this stuff lands. If you go back
to twenty eighteen when the China tariffs hit, our teams
have made moves and mitigated roughly eighty percent or so
(06:52):
of those, and so we just continue to look at
these things as they come out, figure out what the
best plan of action is, and then we act.
Speaker 1 (07:00):
When you think about planning ahead and business continuity, Chuck,
when you see what's happened with AMD and video and
the deal they've cut to access China, when you think
about exporting more broadly, you thinking that might come your
way of pay to play in the future.
Speaker 4 (07:15):
I have no idea.
Speaker 3 (07:16):
We wake up every day and we try to figure
out what's transpired and what's happening in the world, and
how do we react to it. I've talked about over
time that the current crop of CEOs in the United
States have basically been operating in times of uncertainty or
crisis or certainly very dynamic environments, and so we're all
(07:37):
used to just dealing with whatever changes are.
Speaker 4 (07:39):
Coming our way.
Speaker 3 (07:41):
You know, there's the old saying that you can deal
with the world as it is or how you'd like
it to be, and just we just wake up and
we deal with what comes at us and try to
plan accordingly, try to do scenario planning, but then deal
with it as it is.
Speaker 1 (07:57):
And when you're controlling your own destiny. You've been doing
a bit of M and A and you mentioned the
Sprung coffering and how that helps you access the Lexi
view up for example. Anymore M and A on the
rise of particularly when it comes to AI.
Speaker 3 (08:08):
We're always looking Our strategy hasn't changed. Obviously, valuations are
quite frothy in that space. But if there's something that
helps us advance our strategy more effectively, then we're always
willing to take a look at it. I would say
that M and A is not the strategy. We have
our product strategy and our solution strategy for our customers,
(08:30):
and if there's an acquisition that helps us accelerate that,
then that's what we're really interested in. And you think
about places like AI, infrastructure or security or observability.
Speaker 4 (08:39):
In those kind of areas, they're always interesting to us.
Speaker 2 (08:42):
Chuck, how's the relationship with Nvidia evolving since it was
all announced.
Speaker 4 (08:47):
It's great.
Speaker 3 (08:49):
Our team and their team's execs had dinner last night,
and we're working on architectures for neocloud, architectures for the enterprise.
We're working on go to market joint go to market together.
So I'd say it just continues to get stronger. And
we're really on the front end now of a lot
of the technology integrations that we've been working on, and
(09:09):
we're on the front end of the real enterprise wave
of this AI. If you think about it, it started in
the back end networks of the cloud providers.
Speaker 4 (09:18):
It's movement.
Speaker 3 (09:18):
It's obviously going to have an impact on the front
end networks. It's going to have an impact on the
enterprise and even the telco business that we saw this quarter.
We had telco and cable our orders were up greater
than twenty percent, and a lot of that was attributed
to their preparation for AI.
Speaker 1 (09:35):
Chuck Robins, Cisco CEO, been fantastic to speak with you today.
Speaker 4 (09:39):
Thank you very much, and be
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