Cisco CEO Chuck Robbins Talks Earnings

Summary

Podcast Summary: Bloomberg Talks — Cisco CEO Chuck Robbins Talks Earnings

Podcast: Bloomberg Talks
Host: Bloomberg
Guest: Chuck Robbins, CEO of Cisco
Date: November 13, 2025

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Episode Overview

This episode features Cisco CEO Chuck Robbins discussing Cisco’s strong quarterly performance, their evolving business model, new customer relationships—especially among hyperscalers and in sovereign cloud markets—security strategy, the impact of AI, product innovation, and future outlooks. The discussion highlights how Cisco is positioning itself as a pivotal technology provider amid the global shift toward AI and cloud infrastructure.

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Key Discussion Points and Insights

1. Record Quarter & Reflections on Cisco’s Legacy

Timestamp: 01:09 – 01:54

• Cisco’s Strong Performance:
  Chuck Robbins opens by expressing pride in Cisco’s record-breaking quarter, pointing to what may be "the best year" in company history.
• Legacy Comparison:
  When asked to reflect on the company's significance since the 2000 tech boom, Robbins says the support from hyperscalers is a powerful endorsement of Cisco’s current innovation.

“We had a record quarter and set ourselves up for what's likely going to be the best year we've ever had.”
— Chuck Robbins [01:16]

• Customer Perception:
  He notes that modern hyperscalers, some of the world’s most advanced clients, "do the deepest analysis of the technology before they make decisions."
  Their growing spend with Cisco signals trust in the firm’s offerings.

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2. Expansion into New Customer Segments

Timestamp: 01:54 – 02:32

• Robbins details Cisco's growing business with major U.S. hyperscalers and highlights new sovereign cloud deals in the Middle East (G42 in the Emirates, Humane and Saudi).
• Cisco sees emerging opportunities among sovereign players in Europe, Southeast Asia, and India.
• The $1.3 billion disclosed relates specifically to the company’s top five hyperscaler customers.

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3. Embracing the Circular Economy and Managing Risk

Timestamp: 02:32 – 03:38

• Pipeline Growth:
  Over $2 billion in pipeline for NEO cloud, sovereign cloud, and enterprise sectors over the coming three quarters.
• Ecosystem & Innovation:
  Cisco’s strength lies in a robust partner ecosystem and technical expertise, positioning them to help build out AI workloads confidently and securely.

“Our bread and butter over the years has been in the enterprise… we have full stack solutions, we have security, we have all the things that they're looking for to actually build out AI workloads and deal with AI with confidence.”
— Chuck Robbins [03:17]

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4. Security: Progress and Challenges

Timestamp: 03:38 – 04:55

• Security Portfolio:
  Robbins acknowledges that while Cisco is "not pleased with where we are yet" in security, significant progress has been made.
• Growth Metrics:
  • Next generation firewalls: "mid teens growth in orders"
  • Splunk ARR: double-digit growth
  • New/refreshed security products: continuous growth
• Accounting Impact:
  Revenue recognition differed as customers shifted from on-premise to cloud-delivered Splunk; cloud revenue is realized over the contract term, complicating quarterly results.
• Offsetting Strength:
  Networking business performing strongly and offsets security revenue volatility.

“We've made a lot of progress. It's a major decision for customers to make big platform decisions in security… But the issue we had in the quarter was really, it's an accounting issue around how cloud delivered Splunk versus On Prem delivered Splunk.”
— Chuck Robbins [03:54, 04:19]

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5. Evolution Through Innovation & M&A

Timestamp: 04:55 – 06:12

• Product Strategy:
  Robbins highlights strategic increases in software offerings like security and calls the Splunk acquisition "a great one."
• In-House Silicon:
  A pivotal 2016 investment in Cisco’s silicon strategy is credited as the “absolute reason” for today’s success with hyperscalers.
• Future Focus:
  Cisco remains open to both internal innovation and relevant M&A, especially in security and AI.

“Our silicon strategy… is absolutely the reason that we're having success today in the hyperscaler space. If we did not have our silicon… we wouldn't be participating at all.”
— Chuck Robbins [05:36]

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6. On the AI Market: Bubble or Future?

Timestamp: 06:12 – 07:27

• AI Investment:
  Robbins pushes back against the idea of an AI bubble. Major spenders have solid financials and view AI as an "existential issue" rather than a “nice to have,” underscored by heavy, rapid investment from big tech.
• Room to Grow:
  Notes that AI’s true potential is ahead of us—physical AI, synthetic training, robotics, and broad enterprise adoption have yet to mature.

“They view it as existential, which you see with the level of spending that they're putting into it. So it's, it's a lot and it's moving fast… there's a huge opportunity ahead for all of us, I believe.”
— Chuck Robbins [06:39, 07:19]

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7. Financial Projections: Conservative Outlook?

Timestamp: 07:27 – 07:57

• Challenged on whether financial projections are "conservative," Robbins stands by Cisco’s numbers, citing dynamic markets but "very confident in the numbers."

“We're 90 days into the year… We have three more quarters to play out. Lots of things can change. The world's very dynamic, but we're very confident in the numbers that we put up yesterday.”
— Chuck Robbins [07:47]

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Notable Quotes & Memorable Moments

• “The hyperscalers… do the deepest analysis of the technology before they make decisions. And I think that their decisions to continue spending more with us speaks volumes about the innovation and the technology that our teams are building right now.” — Chuck Robbins [01:23]
• “I'm proud of what the teams have built and we saw our next generation firewalls, we saw mid teens growth in orders there. We saw double digit ARR growth in Splunk.” — Chuck Robbins [04:01]
• “The difference between now and 2000 is that these are massive companies with strong financial performance and they believe in this 100%.” — Chuck Robbins [07:03]

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Timestamps for Key Segments

• 01:09 — Chuck Robbins on Cisco’s record quarter and reflecting on 2000
• 01:54 — New customers: hyperscalers, sovereign deals, geographic expansion
• 02:32 — Pipeline, circular economy, and investment risk
• 03:38 — Security portfolio progress and accounting nuances
• 04:55 — Cisco’s product mix evolution, software, silicon strategy, M&A
• 06:12 — AI investment: bubble vs. fundamental shift
• 07:27 — Financial projections and market confidence

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Conclusion

Chuck Robbins positions Cisco as a leader successfully navigating industry transformation, fueled by a shift to AI, sovereign cloud markets, and a focus on security and proprietary silicon. While candid about challenges in security revenue recognition and market dynamism, Robbins emphasizes robust growth, adaptability, and “huge opportunity ahead” for Cisco as technology needs continue to surge across sectors.

Transcript

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[Chuck Robbins]

Bloomberg.

[Bloomberg Host]

Audio Studios Podcasts, Radio News. Ed, you're looking at the company that's adding the most in points. Upside.

[Bloomberg Interviewer]

Yeah. One of the big movers to the upside is Cisco shares. Currently up around 4%. They'd open much higher than that. The key bit is they're trading at their highest level since the year 2000, after the company raised its outlook and showed progress on capturing more of the global spend. Let's get the details with Cisco CEO Chuck Robbins. Chuck, in the year 2000, Cisco was one of the original Four Horsemen of technology. Based on the numbers you gave and what you said on the call, do you feel like customers, the new ones and investors understand Cisco's place in this new era.

[Chuck Robbins]

But first of all, thanks for having me. And you know, I'm super proud of what the teams have accomplished. We had a record quarter and set ourselves up for what's likely going to be the best year we've ever had. So it was, it was just a great performance. And as I've been asked a lot over the last 24 hours to reflect back on 2000 and it's, it's kind of an interesting comparison, but I think that, look, the hyperscalers are some of the most advanced customers customers in the world. They do the deepest analysis of the technology before they make decisions. And I think that their decisions to continue spending more with us speaks volumes about the innovation and the technology that our teams are building right now. So I'm really proud of them and I think it'll just extend into the enterprise over time.

[Bloomberg Interviewer]

Chuck, who are some of those new customers that you've been able to sign in the area context?

[Chuck Robbins]

Well, we're just talking about the, the major hyperscalers primarily in the United States, but we've also announced these sovereign deals in Middle east with G42 in the Emirates as well as Humane and Saudi. There's a lot of work going on in the Neo cloud space. We're seeing sovereign players start popping up now in parts of Europe as well as Southeast Asia and India. So it's a, it's a broad swath of customers, but the 1.3 billion that we talked about is strictly the top hyperscalers that, that we're doing business with. So you're talking about five companies and.

[Bloomberg Host]

They'Re good for the money as you can tell from the cash flow that they have. Chuck, that $200 million that you are expanding into Sover and you are expanding into enterprise and NEO clouds. How do you bake in some of the risks that the market just cannot get enough of? Talking about this circular economy.

[Chuck Robbins]

Well, so we, we did talk about the fact that we have over $2 billion now in our pipeline through the end of the fiscal year. So over the next three quarters in NEO cloud, sovereign cloud and enterprise and we just, we see that continue to accelerate. We took $200 million in orders in Q1 and it's, it's just, it's a natural way. The technology technologies have been evolving over the last decade or more. They start in the hyperscalers, they move through the telco space, in this, in this case the NEO clouds and the sovereign players and then into the enterprise and it's happening exactly that way. And you know, our bread and butter over the years has been in the enterprise and we have lots of technical knowledge, we have a partner ecosystem, we have full stack solutions, we have security, we have all the things that they're looking for to actually build out AI workloads and deal with AI with confidence performance.

[Bloomberg Host]

Let's just go to that security. A little bit of a fly in the ointment, let's say. I know you've talked clearly about perhaps how the booking of revenue can be misinterpreted, but how are you going to sell that more holistically? How do you think the security part of the offering can really start firing on all cylinders?

[Chuck Robbins]

Well, I started by saying clearly we're not pleased with where we are yet. But I will say over the last two to three years we've made a lot of progress. It's a major decision for customers to make big platform decisions in security. We've had a lot of great wins. I'm proud of what the teams have built and we saw our next generation firewalls, we saw mid teens growth in orders there. We saw double digit ARR growth in Splunk. We saw our new and refreshed products on the security side continue to show growth. And the issue we had in the quarter was really, it's an accounting issue around how cloud delivered Splunk versus On Prem delivered Splunk. The cloud stuff is ratable and realized revenues realized over the life of the term and the on prem stuff gets recognized immediately. And we just had a major shift in how our customers consume it, which is great for us in the long term that they're buying more cloud based solutions, but it creates a little bit of a challenge on revenue during the quarter. The good news is the networking businesses is doing incredibly well and can cover that for us.

[Bloomberg Interviewer]

Chuck, it is fair to say, at a minimum, that the Cisco of today isn't the same as the Cisco of 2000. What you've done is kind of been open about the product lineup and you've used M and A to change the footprint of the company. What's your latest thinking on that? The products that you offer and what you need to do, either organically or inorganically to offer what the world of.

[Chuck Robbins]

I want, I think the big things that we did, we obviously introduced a lot more software into our portfolio in areas that are strategic, like security. And the Splunk acquisition has been a great one. I think the other thing that's worth calling out is this, this investment that we started in 2016, to be clear on our silicon strategy, that is absolutely the reason that we're having success today in the hyperscaler space. If we did not have our silicon and develop and design our own silicon, we wouldn't be participating at all. It's just, it's black and white. And so as we look. As we look at both internal innovation as well as organic or inorganic opportunities, we're very focused on security, we're very focused on AI. We've made some tech and talent deals. Anything that can help us accelerate our solutions in those areas, we're open to look at.

[Bloomberg Interviewer]

Chuck, I do not apologize for this. Next question. Are we or are we not in an AI bubble?

[Chuck Robbins]

Oh, it's just, it's so funny. Look, the customers that are buying the predominant amount of this technology have incredible balance sheets, have incredible cash flow, have incredible profitability. Caroline said it. They actually pay their bills and, and so. And they view it as an existential issue for them. That's. That's a really key element. They don't view this as something that's nice to have. They don't view it as something that is okay. If we, if we, if we're successful, great. If we're not, great. They view it as existential, which you see with the level of spending that they're putting into it. So it's, it's a lot and it's moving fast. And. But the difference between now and 2000 is that these are massive companies with strong financial performance and they believe in this 100%. So I don't think it's going to change. We haven't gotten into physical AI. We have. We're just getting into synthetic training. Yeah, we haven't gotten into robotics. We haven't gotten into the enterprise in a big way yet. And so there's a, there's a huge opportunity ahead for all of us, I believe.

[Bloomberg Host]

Chuck, Bloomberg Intelligence Analysis says your projections are conservative. Briefly, are they conservative?

[Chuck Robbins]

Well, I think you said that last quarter, so you proved to be correct 90 days ago. But look, I think based on what we know today, we're 90 days into the year. We're taking what we, what we have in our backlog, what we see in the forecast. But again, we got, we have three more quarters to play out. Lots of things can change. The world's very dynamic, but we're, we're very confident in the numbers that we put up yesterday.

[Bloomberg Host]

Cisco CEO Chuck Robbins, always a joy to catch up with.

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