CISCO SYSTEMS, INC. — Call Transcript 2026

Sami told me he's missing the sell side, so I asked him to join and ask some questions. No, I'm kidding. I couldn't let Tom and Peter have all the fun, I was like. I'm joking. Thank you very much for joining us. I'm happy, I'm so glad and grateful for Cisco for joining us because they had their own event, and they join us to the third day. Peter Bailey is SVP and GM of Cisco Security, and I'm happy to actually speak with you now because, as you articulated on the last conference call, we are going to see better growth. The purpose of the call is really to understand Cisco Security business, to understand what drove the slow growth before. Yeah. What is driving the acceleration of growth in the future, to understand the portfolio, the target markets, et cetera. I'm going to start with an easy question just because maybe there are some people that don't understand the story. The easy question, just to start the discussion is, what's in your portfolio? Meaning, can you articulate the portfolio and the portfolio strategy? Where are you going? What you're going after? Sure. Yeah. I'm about a year in. Okay have had the chance to really get my arms around the portfolio and make some changes. There's two big chunks of Cisco Security business. It's sort of what we think about as our NetSec, which includes Zero Trust and identity, and there's some network detection and response things there. Then obviously the Splunk business. If I really dig in on the first one and then the second one, we have reorganized our business around three pillars. They are hybrid mesh firewall, if you understand that Gartner terminology, which is basically firewalling as a mesh across physical, virtual, maybe even workload levels. Zero Trust, which is Zero Trust access, and then we had identity as our third pillar, but more and more identities is really a foundational element because we see identity as being critical for how we're going to secure agentic environments going forward because everything needs an identity, whether it's a machine, an agent, a human, what have you. There's some cats and dogs parts of the business, which is more the legacy stuff. Oh. We had some emails, media, things like that. Those first three are areas of tremendous focus of ours, and we're in as R&D in our focus around those three pillars. When we get to performance, we're seeing performance based upon that focus. Of course, you have the Splunk business, and there's really obviously the existing business, but really the opportunity then to dramatically expand what Splunk is doing in terms of being more of a broader data fabric to get signal, not just from SecOps, but also from machine data and telemetry from workloads, because that visibility across all the infrastructure is one, critical if you're going to, again, secure AI, which is traversing everywhere. Two, is also the way we're going to be able to start training AI so you can start beginning to automate the visibility and management of that infrastructure. We did research, I don't know, maybe two years ago, maybe three years ago. We looked into your security portfolio. Back then we estimated, of course we don't have exact data, but based on market share data, we estimated that over 70% or 70% of your revenues came from appliances. No? Where are we today? I'm not looking for the number. I'm looking for how did the portfolio evolve from on-prem appliance- Yeah. To be cloud service and software, et cetera. Yeah. Listen, we are really focused on, and this is going to be kind of an avoidance to your question, but I will answer your question. Yeah. We're hyper-focused on customer outcomes across some certain areas, and that includes the delivery of hardware and software, in some cases, just software. Cisco also needs to be a multi-cloud business. It can't just be on-prem. We have to be thinking about private, but our customers have assets in the cloud as well. As we extend our capabilities beyond just a physical device, it has to be software that is traversing multi-cloud, and so that is a key area of focus of ours. We don't sit around and, I think, about our business in terms of hardware versus software because these are highly integrated solutions. We obviously are seeing more and more uptake on pure software. Zero Trust obviously is a completely a SaaS solution and sitting across network infrastructure. That business is absolutely growing as a consequence of where we're reaching out to. Yeah. Where we're serving customers. I've been talking to Jeetu for, I don't know, so many years about the strategy, and the strategy was always articulated well, but the execution numbers got to negative levels. We got to -4% and -2%. Why did margins get to negative territory in a solid environment? Security is good. How does it change? What drives a change to the growth trajectory? Listen, I think if you go back in time with Cisco, 10 years ago, I think the business was very strong in firewall and these areas, and somewhere in the middle of the last 10 years. Yeah. That changed. Right? In the last three years since Tom Gillis, who I report to, and before that Jeetu, started refocusing the business, we started seeing this narrowing of focus on excellence and execution around the areas I described, and I've probably added a bit more focus to that since I've been here. Listen, I think we've got a very strong portfolio today. Yeah. I don't know if that was true three or four or five years ago. Yeah. We have continued to really focus our execution across those pillars I mentioned. Those three pillars are 86% of our business today on the SBG side. I think that execution, and then the second piece of this obviously is that the more and more we are infusing security into the network architecture, into how we design networks. Yeah. We design the data center, there's obviously a much easier selling motion there for our go-to-market, and you're seeing that play out right now. On the last call, the company noted that you expect security to accelerate. What drives it? What drives acceleration? I think, listen, first of all, the market right now is obviously very, very strong. Yeah. I think, with the advent of agentic, the number of security problems are growing dramatically, and they're very extreme. With all the money going into the ground to support AI infrastructure build-outs, if we can't secure these use cases, it's going to impact the ROI on those investments. There's tremendous pressure. If I go talk to a large customer, the CISO is under tremendous pressure to figure out how to make AI use cases secure for their environment because the board and the CEO is pushing so hard on that. In general, we're seeing an additional ramp-up of security. Our positioning within a securing AI, I think is very strong. That is obviously helping to drive. Yeah. The growth of our business. Got it. Maybe a question to Sami, because I have you here. Sami, I always ask you about the mix, and meaning how is mix impacting legacy versus new. There was also issue that the recurring revenue, the ratable revenues are going up, but it takes time to ramp it. Where are we in the cycle? When do you expect all the good things that happened in the last three years to translate into growth acceleration? To start, Peter is talking about the market is typically strong. What we have in the security business is really the two buckets. We have the Cisco core, we have the Splunk category. The reality is we have still a couple more quarters of difficult compares, mainly hitting these tough comps that really are affecting us on the Splunk side. By the time we get to fiscal 2Q27, these mixed compares become a lot more normalized. You will not be dealing with these very difficult compares side by side. In the Cisco Security Core, though, you're already starting to see some improvements, and that's starting to drive some better performance. Part of that was seen in Q3, and then, like we've discussed in our live call, that we do expect that to continue to Q4. This kind of gets us to a much better position. Kind of exiting FY 2026 and starting FY 2027, the mix and mix compares will start improving. The ratable composition will also increase. You have all these factors that have taken a lot of time, but we're finally getting to a place that we're feeling very comfortable. This really gets us into the first half of FY 2027, where we're going to be feeling much better. Got it. about how things look. If I might add to that, just one more comment is, even a year ago, I think Cisco was not so much in the mix in the security conversations, we are very much in the mix today. Talking to our customers, the CISO and the CIO are much more in the same room these days because security needs to be considered in thinking about these AI roll-outs. Those conversations are very robust for us on the security- Yeah. Side as well, and that's really encouraging. Actually, I wanted to ask you about it. If I asked your competitors, any security company, where is Cisco in the market, they would tell you, "Oh, we're taking share from Cisco. Sure. How or where are we now when it comes to your position? I don't even know how to articulate the question, but I think that you just said it. I want to basically go deeper into it. Where are we today in the completeness of your portfolio and the vision of your portfolio and the execution, your ability to execute when it comes to positioning you back the way you used to be 10 years ago as the leading cybersecurity company? A couple of things. I think when we talk about relevance in positioning, we also have to look at the market we're in right now. Yeah. The next 6-12 months are going to be dominated by Mythos, vulnerability management, vulnerability patching. Yeah. Shielding, it's going to be about securing AI, right? In the context of that, infrastructure is the front lines of the Mythos concerns. Cisco's we've just announced Live Protect. We have some very effective solutions for how to protect infrastructure, and that we're rolling out. Secondarily, we've got technology like Isovalent or eBPF agent capabilities that is very, very effective at shielding and protecting applications. You're going to see us continue to push forward on that. Then relative to AI security, whether it's infrastructure, whether it's a workload, whether it's Zero Trust Access that now has agentic controls where we can authenticate an agent, authorize an agent, monitor its behavior, and be able to enforce policy on an agent, that is a very critical capability that our customers are asking us about. What I would sort of say is the market is changing. The good news is that we've saw some of this change coming, and we've been able to reposition ourselves for this part of the market. Right. I think the market looking backwards of these silos of firewall or EDR or NDR, what have you, there's going to be consolidation here because what really needs to happen is we need much more broader set of sensors that can be everywhere, by the way the network is everywhere. We have visibility everywhere. We need sensors everywhere. We need enforcement everywhere. We need to have the intelligence to be able to understand what's going on in the network to be able to secure AI because it traverses trust boundaries. It traverses a single control, and these silos start to fall apart. We are very well positioned to take advantage of that. Got it. This week you had Cisco Live. What was your key message on cybersecurity at Cisco Live? I think, again, Mythos has been dominating the headlines. Yeah. Again, I think that's going to be something we're operationalizing with our customers over the next 6-12 months. As the concerns which are merited, by the way, around advanced threat actors using these types of models. Yeah. Number one. Live Protect was associated with that. I think that was a really exciting announce for our customers because this means we can actively start defending their infrastructure going forward. Obviously the agentic security things that we're doing. We've really made some significant advances around how we can identify and help secure agentic activity on the network, and we're manifesting that through whether it's traditional firewall capabilities that have the ability to sense Zero Trust access. We also launched an agentic app that sits across all the platform. The third one is platform. Yeah. Cloud Control, which is all of Cisco coming together through a platform experience. Very, very valid for security as well, because in the background, we can start integrating data planes. When you integrate data planes, it's much easier to do analysis across many different use cases. That integration is how we can create really integrated use cases from a customer experience perspective that leads to, frankly, just better outcomes and better user experience. Why are you positioned well for this? Meaning, why you and not someone else? What do you have in your portfolio? It could be the legacy portfolio, could be switches and routers, could be in security portfolio. What do you have in your portfolio that makes you in a better position to benefit from all these changes because of AI? Yeah. I think it's a few different things. First of all, we are leveraging the network, leveraging our position there, leveraging data center infrastructure. One of the demos you might have seen is that we're actually putting little baby firewalls in the Nexus switches, right? The Smart Switches, right? That allows us to start having a much more distributed security presence, right? The key message is security needs to be more distributed. We have visibility everywhere, we have sensors everywhere, and because we own the infrastructure in many cases, we can put that in place. I don't know if anyone else can say that, right? Yeah. We can really take advantage of ownership of the infrastructure. We can still connect that back to if I need to. Again, remember data's going to increase 10x, 100x, depending on who you ask here in the future. Are we going to create a firewall that's got 10x the capacity or 100x? No. We're going to be a lot smarter about how we route traffic. We're going to be sensing traffic. We're going to be identifying a small percentage of it, maybe to route back through a firewall to do deeper inspection. It's going to be much more about distributed security where things are happening at the edge. Right. If you look at the investments we've made, if you look at how we position our portfolio, that is a very big differentiator for us. When you add in firewall, Zero Trust, identity to this picture, you get to see a much broader portfolio that can come together and work together. Got it. Splunk. Take us through the Splunk journey, meaning what's happening in the company. Splunk security, just security. What's happening there? Sami spoke about the transition. Yeah. What is this transition, and how long does it take to go through it, and what's the risk in the transition? Yeah. We're going through a phase, a journey as an industry to automate the SOC. Yeah. Right. Splunk is aggressively investing to do the same work, right. The fact that we have as much data as we have puts us in maybe a better position to train models faster, get agents more proficient faster, reduce false positives in the kind of work that they do. I would say that that is a tremendous focus for that business over the next year to two years to continue to automate that. The second piece is really expanding the set of use cases we can support across things like AI observability, the Galileo acquisition. We need to have visibility everywhere so that we can drive security outcomes on top of that. Being able to incorporate data, plug and play across just the Cisco infrastructure, obviously that's basically done at this point, but across all other sorts of infrastructure so that we can have that broad view and therefore be able to create these security outcomes for customers. Okay. Yeah. It's a little bit of the same playbook we've had historically there, but with a much broader view. Then we're putting automation on top of that. Listen, if we look out five or six years, agents are going to be driving these things, right? We're not going to have as much human-led workflows here. It's going to be agentic by nature, and you're going to then be looking at dashboards that are going to show your NIST compliance and other kind of audit, compliance. That is the vision we see. That's the journey we're on, and we're roaring towards that. Right. Maybe a question for Sami. Sami, we spoke a lot about it in the past. Take us through the numbers again, not from a numbers perspective, but just conceptually, why are we seeing this deceleration and then acceleration? What happens behind the scenes that creates this kind of volatility in growth rates? I think the biggest driver is how customers want to consume Splunk. When Splunk was a standalone company, they were able to manage the business 50% term software, 50% cloud, and they really ran it down the middle because the company had a different mandate than what Cisco altogether has. Since we've given the customers the freedom to really decide how they want to consume the product they've opted more into the ratable scheme. Yeah. I think you've seen that accelerate, right? Especially in FY 2026. At some point, the mixes will become more favorable, and that gets us into the first half of FY 2027. Let's see if I can add any additional elements here. The other thing is, exactly what Peter said. There are a lot of changes happening. I also just want to connect one other thing is Cisco has the switching, we have the telemetry, domain knowledge. We have the security offerings on top of that. We've made all these very proactive investments to get ahead of it. Then an additional thing that I think people are forgetting is we also have our own silicon. Yeah. This just gives us significantly more vertically integrated programmability into the stack. If you think of networks running hotter with agentic flows, hotter just means more demanding networks with lower latency requirements. If you own every element of the stack, you're going to be able to put out some very compelling products. Got it. Yeah. Is AI playing to your strength of having control over the stack, or is AI irrelevant for it, or how is AI playing, or how do you benefit from AI given that you have full control of the stack? There's two things to look at this. From the customer lens, they are assessing various tools, and they're going to have very significant requirements to mobilize and tool AI technologies. Yeah. Cisco can be the main vehicle to allow that to happen. On the flip side, internally, we are using a significant amount of AI tooling to develop our own products and also help us accelerate key parts of the company. Cloud Control as well, and Jeetu's also talked about developing products almost completely using AI software, right? Yeah. AI tools. There are kind of two parts to this, and both parts kind of gets us to this very compelling delivery and matching what we can offer versus what customers actually need right now to adopt these technologies. There's a bit of a two-sided focus here, and then I think silicon and the stack really plays into that. Got it. Peter, the question, last year I spoke about Hypershield, I spoke about XDR, SASE. Sure. Spoke about new products. Sure. Give us an update on your new portfolio, meaning the take rate and what you've seen with Hypershield and SASE and everything else. Yeah. Yeah. Hypershield is part of that hybrid mesh firewall kind of category, right? Yeah. Think about it as our next-generation workload security and distributed security. What I would say is that the Nexus Smart Switch and what we demoed here at Cisco Live represents one of the big outcomes of that effort. Think about are you going to buy a data center switch that is classic switch or one that also has firewall capability built into it using that technology. Yeah. Okay? The second piece of that is when we look at all the vulnerabilities that primarily Linux-based applications have, that is sort of the thing that everyone's focused on right now because of Mythos, being able to use that agent technology to be able to shield those applications, that is also something that we are doing. Hypershield is finally kind of coming into its own. Yeah. The execution there was slower than we had hoped, but it's the right idea for the right moment. It's a distributed strategy for doing enforcement, whether it's policy enforcement or segmentation. That is, as we think about the future, we think that's going to be a ramping aspect of that mesh portfolio. The mesh, it's physical firewalls, it's cloud firewalls. It's things like Hypershield. The thing we've also done is we've created a single policy plane for all of this. A lot of times customers struggle to operationalize all these things because everything requires a policy or a rule, and historically, this has been a rules and policy-based business that is very complex to manage. Through agentic ops and through integration of a single policy plane, we've also dramatically simplified how customers can operationalize this, because at the end of the day, you're going to need thousands of these sensors out there, and this distributed network of sensors, that's really tough to manage as just a human writing policies. A unified policy plane and then being able to start automating the writing of those policies and managing those policies and run that journey too. Who is the customer or what kind of deployments do you address with the Smart Switch? Meaning who needs a switch together with a firewall? As you're building out data centers and you're looking to protect workloads, segment the data center, it is the perfect solution for that. Got it. That is basically enterprise data centers? Yes. That's it. Yes, sir. Okay. What about legacy firewalls? It's a big part of your business. Although you lost some share in the last few years, you're one of the big players in the space. What are the trends with legacy firewalls? Listen- What are the trends also in terms of your portfolio? How did the portfolio evolve? Yeah, sure. We just refreshed the whole line. Yeah. I would say there's nothing legacy out there anymore, but we've literally refreshed the whole line. Yeah. Listen, these are very advanced products that high throughput, doing deep packet inspection. We've built incredible ML models that can do on-the-fly detection of threats and what have you. These are very sophisticated solutions that are designed to operate in line, right. That is still a very core requirement, and I think you saw this last quarter, we actually saw very strong growth in that business. Yeah. I think that's a very viable part of the business going forward. I think it's an and answer or question and answer is that it's not enough, right? That's where we have to start to think about these more distributed means to actually be able to do security more at the edges of the network. Yeah. In the data center, protecting workloads, and those things can all work together. I want to make the point that it is not a siloed product for us. Got it. This is part of this mesh strategy, all these things working together, policy. We can write policy once and enforce it. Yeah Across all these services. Got it. Agentic AI security. Companies start to make acquisitions in general in the space. Companies start to make acquisitions in the space. You made acquisitions in the space. Articulate your position and your vision to secure agentic AI. Yeah, sure. To secure agentic is really first and foremost about identity, believe it or not. Yeah. Right? You need to basically always understand exactly what the agent is, what it should be doing, what it's connecting to, and what have you. Our strategy is to take identity and make it a horizontal across our platform and our infrastructure so that our customers know everything an agent might be connecting to, and not just a simple identity, but actually rich metadata about that identity. You actually understand, okay, this is a workload that's running very sensitive information and we know that sits behind a certain network and what have you, so that once you do introduce agents in, I'll get to the agentic piece in a second, we have great visibility about what's happening on the network. For agents, we have introduced so far, through Zero Trust, also through just our identity stack, the ability to discover, authenticate, authorize, and now start managing the behavior of those agents on the network. Right? That agentic strategy, which by the way, can be enforced by what we see at the workload level, it's enforced by how we authenticate and bring them through identity onto the network, and then the ability to have visibility and firewalls to see agentic traffic, to see MCP calls, to see tool access. We've introduced DefenseClaw on the endpoint that also is looking at what's happening on the endpoint. All of these things, again, working together to be able to see an agentic activity across the network. An agentic app we just introduced that brings signal from all of these products. It cross-cuts everything. Yeah. It's not a siloed product. It cross-cuts firewalls, secure access, Zero Trust access, identity, to present a view of what is happening with agents on the network. Again, I think, one, that's very unique, and two, because we own the network, we also can see things others cannot, and we can bring in all this signal to give that perspective, and that's going to be absolutely required for securing agentic going forward. Yeah. Is this an opportunity that is here and now, or is this an opportunity that is in the future? This is an opportunity right now. Yeah. AI Defense is an example, a product we built for builders to safely build applications. That's a product that's a little over a year old and has a huge pipeline and backlog, and that is a right now conversation. The ability to use Zero Trust access to control and monitor what agents are doing on the network, that's a right now conversation. Every one of our customers, remember what we talked about at the beginning, the CISOs are under incredible pressure to adopt these technologies, but also to secure them. Yeah. This is very much a right now conversation. Got it. You previously noted it used to be Good. A bug is coming to me. A few quarters ago, you spoke about pressure on cybersecurity from federal government, and it's a big part of your segment. Give us an update, if you can, please, on the federal segment or federal part of cybersecurity? Well, I think the thing everyone's seen is the orders coming down from the federal government to update infrastructure. Yeah. Make sure it's quantum ready, and to really get rid of all the LDOS, last day of support type infrastructure. Yeah. Upgrade that. That is sort of probably the headline to the answer to your question. With that, we are bringing everything we have to bear to help support the government in making those changes, as well as having lots of discussions around what else do we need to do, for example, to help protect and kind of MITRE those type scenarios. Right. A lot of discussion with the government, and other vendors too, around how we're collectively going to help solve some of these problems. I think that, again, is going to be a big topic here in the next 6+ months. Right. I forgot to ask you something about AI when we spoke about AI. What you're doing in AI, is it synergistic to what you currently have, or is it just a standalone opportunity that is now growing? If you remember the description, hopefully, it landed, of the agentic app. Yeah. Imagine you've got this view into what are agents doing on the network, what it's connected to, what tools it's using. Maybe it's associated with a user. All of that is signal that's coming from the products and infrastructure that Cisco's deploying. Yeah. Right? Whether it's secure access or Zero Trust Access Platform, whether it's identity, whether it's coming from a firewall, whether it's signal we're getting from a workload where something's interacting with a workload, looking at the process flows, that is all signal we're bringing up to give you the agentic view. The thing I want to sort of reinforce is you need great breadth and depth to secure agents. Yeah. If you're just an identity player, you can't see what happens past a trust boundary. Yeah. Right? You have to have great depth and breadth. Because we are at the network layer all the way up to L7 in the stack, we have incredible ability to operate at all layers in the stack to give this comprehensive picture to our customers about what agents are doing on the network. Okay. Agents are going to go everywhere. They're going to do things we don't want them to do. We have to be able to enforce everywhere, have visibility, and enforce everywhere. That is really the ecosystem that we are building. Right. Maybe last question is not about products and portfolio, it's maybe about your go to market and your ability to deliver, to execute on your strategy. Sure. What do you think about your own strength and weaknesses when it comes to go to market for cybersecurity, not Cisco's in general? Yeah. Yeah. Listen, we have, I think, my personal opinion, the world's best go to market. It's an incredible sales force. Our DNA is the network and infrastructure, right? A smart person running a site security business in Cisco would do whatever they can to attach their train. Yeah. What's happening on the network side of the business. When we're talking about fusing security into the network, that is really a security story that goes with a network sale and infrastructure sale as well. I think that is landing for us. Really how we think about it is once we are in with a customer with some security offerings, that might be outcomes that are tied to the network, as an example, or might be outcomes tied to Splunk, which is broadly deployed. We have this vast portfolio we can upsell and cross-sell that is integrated with, whether it's the network or with Splunk, to help solve these new use cases we're talking about. Yeah. Because security typically is about what's the house on fire thing I need to solve today? What's the new attack surface, right? Everything we talked about today is that new attack surface, and we can tie that back to the infrastructure, leverage the infrastructure and the network to deliver those outcomes. That allows our go to market to actually have a very integrated sale process going from what would be kind of your network sellers into our security sales force. Putting those two pieces together is obviously really important for us. Got it. Peter, thank you so much. Yeah. We ran out of time. Thank you. Great. Thanks. Thanks, great. Thank you. Appreciate it. Okay, great. Hey, this was great. Thanks a lot. Thank you. I'm going to take a picture with both of you. I didn't do it with anyone

Speaker 2: Sami told me he's missing the sell side, so I asked him to join and ask some questions. No, I'm kidding. Sami told me he's missing the sell side, so I asked him to join and ask some questions. sami told me he's missing the sell side so i asked him to join and ask some questions No, I'm kidding. no i'm kidding

Speaker 3: I couldn't let Tom and Peter have all the fun, I was like. I couldn't let Tom and Peter have all the fun, I was like. i couldn't let tom and peter have all the fun i was like

Speaker 2: I'm joking. Thank you very much for joining us. I'm happy, I'm so glad and grateful for Cisco for joining us because they had their own event, and they join us to the third day. Peter Bailey is SVP and GM of Cisco Security, and I'm happy to actually speak with you now because, as you articulated on the last conference call, we are going to see better growth. The purpose of the call is really to understand Cisco Security business, to understand what drove the slow growth before. I'm joking. i'm joking Thank you very much for joining us. thank you very much for joining us I'm happy, I'm so glad and grateful for Cisco for joining us because they had their own event, and they join us to the third day. i'm happy i'm so glad and grateful for cisco for joining us because they had their own event and they join us to the third day Peter Bailey is SVP and GM of Cisco Security, and I'm happy to actually speak with you now because, as you articulated on the last conference call, we are going to see better growth. peter bailey is svp and gm of cisco security and i'm happy to actually speak with you now because as you articulated on the last conference call we are going to see better growth The purpose of the call is really to understand Cisco Security business, to understand what drove the slow growth before. the purpose of the call is really to understand cisco security business to understand what drove the slow growth before

Speaker 1: Yeah. Yeah. yeah

Speaker 2: What is driving the acceleration of growth in the future, to understand the portfolio, the target markets, et cetera. I'm going to start with an easy question just because maybe there are some people that don't understand the story. The easy question, just to start the discussion is, what's in your portfolio? Meaning, can you articulate the portfolio and the portfolio strategy? Where are you going? What you're going after? What is driving the acceleration of growth in the future, to understand the portfolio, the target markets, et cetera. what is driving the acceleration of growth in the future to understand the portfolio the target markets et cetera I'm going to start with an easy question just because maybe there are some people that don't understand the story. i'm going to start with an easy question just because maybe there are some people that don't understand the story The easy question, just to start the discussion is, what's in your portfolio? the easy question just to start the discussion is what's in your portfolio Meaning, can you articulate the portfolio and the portfolio strategy? meaning can you articulate the portfolio and the portfolio strategy Where are you going? where are you going What you're going after? what you're going after

Speaker 1: Sure. Sure. sure

Speaker 2: Yeah. Yeah. yeah

Speaker 1: I'm about a year in. I'm about a year in. i'm about a year in

Speaker 2: Okay Okay okay

Speaker 1: have had the chance to really get my arms around the portfolio and make some changes. There's two big chunks of Cisco Security business. It's sort of what we think about as our NetSec, which includes Zero Trust and identity, and there's some network detection and response things there. Then obviously the Splunk business. If I really dig in on the first one and then the second one, we have reorganized our business around three pillars. They are hybrid mesh firewall, if you understand that Gartner terminology, which is basically firewalling as a mesh across physical, virtual, maybe even workload levels. have had the chance to really get my arms around the portfolio and make some changes. have had the chance to really get my arms around the portfolio and make some changes There's two big chunks of Cisco Security business. there's two big chunks of cisco security business It's sort of what we think about as our NetSec, which includes Zero Trust and identity, and there's some network detection and response things there. it's sort of what we think about as our netsec which includes zero trust and identity and there's some network detection and response things there Then obviously the Splunk business. then obviously the splunk business If I really dig in on the first one and then the second one, we have reorganized our business around three pillars. if i really dig in on the first one and then the second one we have reorganized our business around three pillars They are hybrid mesh firewall, if you understand that Gartner terminology, which is basically firewalling as a mesh across physical, virtual, maybe even workload levels. they are hybrid mesh firewall if you understand that gartner terminology which is basically firewalling as a mesh across physical virtual maybe even workload levels Zero Trust, which is Zero Trust access, and then we had identity as our third pillar, but more and more identities is really a foundational element because we see identity as being critical for how we're going to secure agentic environments going forward because everything needs an identity, whether it's a machine, an agent, a human, what have you. There's some cats and dogs parts of the business, which is more the legacy stuff. Zero Trust, which is Zero Trust access, and then we had identity as our third pillar, but more and more identities is really a foundational element because we see identity as being critical for how we're going to secure agentic environments going forward because everything needs an identity, whether it's a machine, an agent, a human, what have you. zero trust which is zero trust access and then we had identity as our third pillar but more and more identities is really a foundational element because we see identity as being critical for how we're going to secure agentic environments going forward because everything needs an identity whether it's a machine an agent a human what have you There's some cats and dogs parts of the business, which is more the legacy stuff. there's some cats and dogs parts of the business which is more the legacy stuff

Speaker 2: Oh. Oh. oh

Speaker 1: We had some emails, media, things like that. Those first three are areas of tremendous focus of ours, and we're in as R&D in our focus around those three pillars. When we get to performance, we're seeing performance based upon that focus. Of course, you have the Splunk business, and there's really obviously the existing business, but really the opportunity then to dramatically expand what Splunk is doing in terms of being more of a broader data fabric to get signal, not just from SecOps, but also from machine data and telemetry from workloads, because that visibility across all the infrastructure is one, critical if you're going to, again, secure AI, which is traversing everywhere. Two, is also the way we're going to be able to start training AI so you can start beginning to automate the visibility and management of that infrastructure. We had some emails, media, things like that. we had some emails media things like that Those first three are areas of tremendous focus of ours, and we're in as R&D in our focus around those three pillars. those first three are areas of tremendous focus of ours and we're in as r&d in our focus around those three pillars When we get to performance, we're seeing performance based upon that focus. when we get to performance we're seeing performance based upon that focus Of course, you have the Splunk business, and there's really obviously the existing business, but really the opportunity then to dramatically expand what Splunk is doing in terms of being more of a broader data fabric to get signal, not just from SecOps, but also from machine data and telemetry from workloads, because that visibility across all the infrastructure is one, critical if you're going to, again, secure AI, which is traversing everywhere. of course you have the splunk business and there's really obviously the existing business but really the opportunity then to dramatically expand what splunk is doing in terms of being more of a broader data fabric to get signal not just from secops but also from machine data and telemetry from workloads because that visibility across all the infrastructure is one critical if you're going to again secure ai which is traversing everywhere Two, is also the way we're going to be able to start training AI so you can start beginning to automate the visibility and management of that infrastructure. two is also the way we're going to be able to start training ai so you can start beginning to automate the visibility and management of that infrastructure

Speaker 2: We did research, I don't know, maybe two years ago, maybe three years ago. We looked into your security portfolio. Back then we estimated, of course we don't have exact data, but based on market share data, we estimated that over 70% or 70% of your revenues came from appliances. No? We did research, I don't know, maybe two years ago, maybe three years ago. we did research i don't know maybe two years ago maybe three years ago We looked into your security portfolio. we looked into your security portfolio Back then we estimated, of course we don't have exact data, but based on market share data, we estimated that over 70% or 70% of your revenues came from appliances. back then we estimated of course we don't have exact data but based on market share data we estimated that over 70% or 70% of your revenues came from appliances No? no Where are we today? I'm not looking for the number. I'm looking for how did the portfolio evolve from on-prem appliance- Where are we today? where are we today I'm not looking for the number. i'm not looking for the number I'm looking for how did the portfolio evolve from on-prem appliance- i'm looking for how did the portfolio evolve from on-prem appliance-

Speaker 1: Yeah. Yeah. yeah

Speaker 2: To be cloud service and software, et cetera. To be cloud service and software, et cetera. to be cloud service and software et cetera

Speaker 1: Yeah. Listen, we are really focused on, and this is going to be kind of an avoidance to your question, but I will answer your question. Yeah. yeah Listen, we are really focused on, and this is going to be kind of an avoidance to your question, but I will answer your question. listen we are really focused on and this is going to be kind of an avoidance to your question but i will answer your question

Speaker 2: Yeah. Yeah. yeah

Speaker 1: We're hyper-focused on customer outcomes across some certain areas, and that includes the delivery of hardware and software, in some cases, just software. Cisco also needs to be a multi-cloud business. It can't just be on-prem. We have to be thinking about private, but our customers have assets in the cloud as well. As we extend our capabilities beyond just a physical device, it has to be software that is traversing multi-cloud, and so that is a key area of focus of ours. We don't sit around and, I think, about our business in terms of hardware versus software because these are highly integrated solutions. We're hyper-focused on customer outcomes across some certain areas, and that includes the delivery of hardware and software, in some cases, just software. we're hyper-focused on customer outcomes across some certain areas and that includes the delivery of hardware and software in some cases just software Cisco also needs to be a multi-cloud business. cisco also needs to be a multi-cloud business It can't just be on-prem. it can't just be on-prem We have to be thinking about private, but our customers have assets in the cloud as well. we have to be thinking about private but our customers have assets in the cloud as well As we extend our capabilities beyond just a physical device, it has to be software that is traversing multi-cloud, and so that is a key area of focus of ours. as we extend our capabilities beyond just a physical device it has to be software that is traversing multi-cloud and so that is a key area of focus of ours We don't sit around and, I think, about our business in terms of hardware versus software because these are highly integrated solutions. we don't sit around and i think about our business in terms of hardware versus software because these are highly integrated solutions We obviously are seeing more and more uptake on pure software. Zero Trust obviously is a completely a SaaS solution and sitting across network infrastructure. That business is absolutely growing as a consequence of where we're reaching out to. We obviously are seeing more and more uptake on pure software. we obviously are seeing more and more uptake on pure software Zero Trust obviously is a completely a SaaS solution and sitting across network infrastructure. zero trust obviously is a completely a saas solution and sitting across network infrastructure That business is absolutely growing as a consequence of where we're reaching out to. that business is absolutely growing as a consequence of where we're reaching out to

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Where we're serving customers. Where we're serving customers. where we're serving customers

Speaker 2: I've been talking to Jeetu for, I don't know, so many years about the strategy, and the strategy was always articulated well, but the execution numbers got to negative levels. We got to -4% and -2%. Why did margins get to negative territory in a solid environment? Security is good. How does it change? What drives a change to the growth trajectory? I've been talking to Jeetu for, I don't know, so many years about the strategy, and the strategy was always articulated well, but the execution numbers got to negative levels. i've been talking to jeetu for i don't know so many years about the strategy and the strategy was always articulated well but the execution numbers got to negative levels We got to -4% and -2%. we got to -4% and -2% Why did margins get to negative territory in a solid environment? why did margins get to negative territory in a solid environment Security is good. security is good How does it change? how does it change What drives a change to the growth trajectory? what drives a change to the growth trajectory

Speaker 1: Listen, I think if you go back in time with Cisco, 10 years ago, I think the business was very strong in firewall and these areas, and somewhere in the middle of the last 10 years. Listen, I think if you go back in time with Cisco, 10 years ago, I think the business was very strong in firewall and these areas, and somewhere in the middle of the last 10 years. listen i think if you go back in time with cisco 10 years ago i think the business was very strong in firewall and these areas and somewhere in the middle of the last 10 years

Speaker 2: Yeah. Yeah. yeah

Speaker 1: That changed. Right? In the last three years since Tom Gillis, who I report to, and before that Jeetu, started refocusing the business, we started seeing this narrowing of focus on excellence and execution around the areas I described, and I've probably added a bit more focus to that since I've been here. Listen, I think we've got a very strong portfolio today. That changed. that changed Right? right In the last three years since Tom Gillis, who I report to, and before that Jeetu, started refocusing the business, we started seeing this narrowing of focus on excellence and execution around the areas I described, and I've probably added a bit more focus to that since I've been here. in the last three years since tom gillis who i report to and before that jeetu started refocusing the business we started seeing this narrowing of focus on excellence and execution around the areas i described and i've probably added a bit more focus to that since i've been here Listen, I think we've got a very strong portfolio today. listen i think we've got a very strong portfolio today

Speaker 2: Yeah. Yeah. yeah

Speaker 1: I don't know if that was true three or four or five years ago. I don't know if that was true three or four or five years ago. i don't know if that was true three or four or five years ago

Speaker 2: Yeah. Yeah. yeah

Speaker 1: We have continued to really focus our execution across those pillars I mentioned. Those three pillars are 86% of our business today on the SBG side. I think that execution, and then the second piece of this obviously is that the more and more we are infusing security into the network architecture, into how we design networks. We have continued to really focus our execution across those pillars I mentioned. we have continued to really focus our execution across those pillars i mentioned Those three pillars are 86% of our business today on the SBG side. those three pillars are 86% of our business today on the sbg side I think that execution, and then the second piece of this obviously is that the more and more we are infusing security into the network architecture, into how we design networks. i think that execution and then the second piece of this obviously is that the more and more we are infusing security into the network architecture into how we design networks

Speaker 2: Yeah. Yeah. yeah

Speaker 1: We design the data center, there's obviously a much easier selling motion there for our go-to-market, and you're seeing that play out right now. We design the data center, there's obviously a much easier selling motion there for our go- to- market, and you're seeing that play out right now. we design the data center there's obviously a much easier selling motion there for our go- to- market and you're seeing that play out right now

Speaker 2: On the last call, the company noted that you expect security to accelerate. What drives it? What drives acceleration? On the last call, the company noted that you expect security to accelerate. on the last call the company noted that you expect security to accelerate What drives it? what drives it What drives acceleration? what drives acceleration

Speaker 1: I think, listen, first of all, the market right now is obviously very, very strong. I think, listen, first of all, the market right now is obviously very, very strong. i think listen first of all the market right now is obviously very very strong

Speaker 2: Yeah. Yeah. yeah

Speaker 1: I think, with the advent of agentic, the number of security problems are growing dramatically, and they're very extreme. With all the money going into the ground to support AI infrastructure build-outs, if we can't secure these use cases, it's going to impact the ROI on those investments. There's tremendous pressure. If I go talk to a large customer, the CISO is under tremendous pressure to figure out how to make AI use cases secure for their environment because the board and the CEO is pushing so hard on that. In general, we're seeing an additional ramp-up of security. Our positioning within a securing AI, I think is very strong. That is obviously helping to drive. I think, with the advent of agentic, the number of security problems are growing dramatically, and they're very extreme. i think with the advent of agentic the number of security problems are growing dramatically and they're very extreme With all the money going into the ground to support AI infrastructure build-outs, if we can't secure these use cases, it's going to impact the ROI on those investments. with all the money going into the ground to support ai infrastructure build-outs if we can't secure these use cases it's going to impact the roi on those investments There's tremendous pressure. there's tremendous pressure If I go talk to a large customer, the CISO is under tremendous pressure to figure out how to make AI use cases secure for their environment because the board and the CEO is pushing so hard on that. if i go talk to a large customer the ciso is under tremendous pressure to figure out how to make ai use cases secure for their environment because the board and the ceo is pushing so hard on that In general, we're seeing an additional ramp-up of security. in general we're seeing an additional ramp-up of security Our positioning within a securing AI, I think is very strong. our positioning within a securing ai i think is very strong That is obviously helping to drive. that is obviously helping to drive

Speaker 2: Yeah. Yeah. yeah

Speaker 1: The growth of our business. The growth of our business. the growth of our business

Speaker 2: Got it. Maybe a question to Sami, because I have you here. Sami, I always ask you about the mix, and meaning how is mix impacting legacy versus new. There was also issue that the recurring revenue, the ratable revenues are going up, but it takes time to ramp it. Where are we in the cycle? When do you expect all the good things that happened in the last three years to translate into growth acceleration? Got it. got it Maybe a question to Sami, because I have you here. maybe a question to sami because i have you here Sami, I always ask you about the mix, and meaning how is mix impacting legacy versus new. sami i always ask you about the mix and meaning how is mix impacting legacy versus new There was also issue that the recurring revenue, the ratable revenues are going up, but it takes time to ramp it. there was also issue that the recurring revenue the ratable revenues are going up but it takes time to ramp it Where are we in the cycle? where are we in the cycle When do you expect all the good things that happened in the last three years to translate into growth acceleration? when do you expect all the good things that happened in the last three years to translate into growth acceleration

Speaker 3: To start, Peter is talking about the market is typically strong. What we have in the security business is really the two buckets. We have the Cisco core, we have the Splunk category. The reality is we have still a couple more quarters of difficult compares, mainly hitting these tough comps that really are affecting us on the Splunk side. By the time we get to fiscal 2Q27, these mixed compares become a lot more normalized. You will not be dealing with these very difficult compares side by side. In the Cisco Security Core, though, you're already starting to see some improvements, and that's starting to drive some better performance. Part of that was seen in Q3, and then, like we've discussed in our live call, that we do expect that to continue to Q4. To start, Peter is talking about the market is typically strong. to start peter is talking about the market is typically strong What we have in the security business is really the two buckets. what we have in the security business is really the two buckets We have the Cisco core, we have the Splunk category. we have the cisco core we have the splunk category The reality is we have still a couple more quarters of difficult compares, mainly hitting these tough comps that really are affecting us on the Splunk side. the reality is we have still a couple more quarters of difficult compares mainly hitting these tough comps that really are affecting us on the splunk side By the time we get to fiscal 2Q27, these mixed compares become a lot more normalized. by the time we get to fiscal 2q27 these mixed compares become a lot more normalized You will not be dealing with these very difficult compares side by side. you will not be dealing with these very difficult compares side by side In the Cisco Security Core, though, you're already starting to see some improvements, and that's starting to drive some better performance. in the cisco security core though you're already starting to see some improvements and that's starting to drive some better performance Part of that was seen in Q3, and then, like we've discussed in our live call, that we do expect that to continue to Q4. part of that was seen in q3 and then like we've discussed in our live call that we do expect that to continue to q4 This kind of gets us to a much better position. Kind of exiting FY 2026 and starting FY 2027, the mix and mix compares will start improving. The ratable composition will also increase. You have all these factors that have taken a lot of time, but we're finally getting to a place that we're feeling very comfortable. This really gets us into the first half of FY 2027, where we're going to be feeling much better. This kind of gets us to a much better position. this kind of gets us to a much better position Kind of exiting FY 2026 and starting FY 2027, the mix and mix compares will start improving. kind of exiting fy 2026 and starting fy 2027 the mix and mix compares will start improving The ratable composition will also increase. the ratable composition will also increase You have all these factors that have taken a lot of time, but we're finally getting to a place that we're feeling very comfortable. you have all these factors that have taken a lot of time but we're finally getting to a place that we're feeling very comfortable This really gets us into the first half of FY 2027, where we're going to be feeling much better. this really gets us into the first half of fy 2027 where we're going to be feeling much better

Speaker 2: Got it. Got it. got it

Speaker 3: about how things look. about how things look. about how things look

Speaker 1: If I might add to that, just one more comment is, even a year ago, I think Cisco was not so much in the mix in the security conversations, we are very much in the mix today. Talking to our customers, the CISO and the CIO are much more in the same room these days because security needs to be considered in thinking about these AI roll-outs. Those conversations are very robust for us on the security- If I might add to that, just one more comment is, even a year ago, I think Cisco was not so much in the mix in the security conversations, we are very much in the mix today. if i might add to that just one more comment is even a year ago i think cisco was not so much in the mix in the security conversations we are very much in the mix today Talking to our customers, the CISO and the CIO are much more in the same room these days because security needs to be considered in thinking about these AI roll-outs. talking to our customers the ciso and the cio are much more in the same room these days because security needs to be considered in thinking about these ai roll-outs Those conversations are very robust for us on the security- those conversations are very robust for us on the security-

Speaker 3: Yeah. Yeah. yeah

Speaker 1: Side as well, and that's really encouraging. Side as well, and that's really encouraging. side as well and that's really encouraging

Speaker 2: Actually, I wanted to ask you about it. If I asked your competitors, any security company, where is Cisco in the market, they would tell you, "Oh, we're taking share from Cisco. Actually, I wanted to ask you about it. actually i wanted to ask you about it If I asked your competitors, any security company, where is Cisco in the market, they would tell you, "Oh, we're taking share from Cisco. if i asked your competitors any security company where is cisco in the market they would tell you "oh we're taking share from cisco

Speaker 1: Sure. Sure. sure

Speaker 2: How or where are we now when it comes to your position? I don't even know how to articulate the question, but I think that you just said it. I want to basically go deeper into it. Where are we today in the completeness of your portfolio and the vision of your portfolio and the execution, your ability to execute when it comes to positioning you back the way you used to be 10 years ago as the leading cybersecurity company? How or where are we now when it comes to your position? how or where are we now when it comes to your position I don't even know how to articulate the question, but I think that you just said it. i don't even know how to articulate the question but i think that you just said it I want to basically go deeper into it. i want to basically go deeper into it Where are we today in the completeness of your portfolio and the vision of your portfolio and the execution, your ability to execute when it comes to positioning you back the way you used to be 10 years ago as the leading cybersecurity company? where are we today in the completeness of your portfolio and the vision of your portfolio and the execution your ability to execute when it comes to positioning you back the way you used to be 10 years ago as the leading cybersecurity company

Speaker 1: A couple of things. I think when we talk about relevance in positioning, we also have to look at the market we're in right now. A couple of things. a couple of things I think when we talk about relevance in positioning, we also have to look at the market we're in right now. i think when we talk about relevance in positioning we also have to look at the market we're in right now

Speaker 2: Yeah. Yeah. yeah

Speaker 1: The next 6-12 months are going to be dominated by Mythos, vulnerability management, vulnerability patching. The next 6- 12 months are going to be dominated by Mythos, vulnerability management, vulnerability patching. the next 6- 12 months are going to be dominated by mythos vulnerability management vulnerability patching

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Shielding, it's going to be about securing AI, right? In the context of that, infrastructure is the front lines of the Mythos concerns. Cisco's we've just announced Live Protect. We have some very effective solutions for how to protect infrastructure, and that we're rolling out. Secondarily, we've got technology like Isovalent or eBPF agent capabilities that is very, very effective at shielding and protecting applications. You're going to see us continue to push forward on that. Then relative to AI security, whether it's infrastructure, whether it's a workload, whether it's Zero Trust Access that now has agentic controls where we can authenticate an agent, authorize an agent, monitor its behavior, and be able to enforce policy on an agent, that is a very critical capability that our customers are asking us about. Shielding, it's going to be about securing AI, right? shielding it's going to be about securing ai right In the context of that, infrastructure is the front lines of the Mythos concerns. in the context of that infrastructure is the front lines of the mythos concerns Cisco's we've just announced Live Protect. cisco's we've just announced live protect We have some very effective solutions for how to protect infrastructure, and that we're rolling out. we have some very effective solutions for how to protect infrastructure and that we're rolling out Secondarily, we've got technology like Isovalent or eBPF agent capabilities that is very, very effective at shielding and protecting applications. secondarily we've got technology like isovalent or ebpf agent capabilities that is very very effective at shielding and protecting applications You're going to see us continue to push forward on that. you're going to see us continue to push forward on that Then relative to AI security, whether it's infrastructure, whether it's a workload, whether it's Zero Trust Access that now has agentic controls where we can authenticate an agent, authorize an agent, monitor its behavior, and be able to enforce policy on an agent, that is a very critical capability that our customers are asking us about. then relative to ai security whether it's infrastructure whether it's a workload whether it's zero trust access that now has agentic controls where we can authenticate an agent authorize an agent monitor its behavior and be able to enforce policy on an agent that is a very critical capability that our customers are asking us about What I would sort of say is the market is changing. The good news is that we've saw some of this change coming, and we've been able to reposition ourselves for this part of the market. What I would sort of say is the market is changing. what i would sort of say is the market is changing The good news is that we've saw some of this change coming, and we've been able to reposition ourselves for this part of the market. the good news is that we've saw some of this change coming and we've been able to reposition ourselves for this part of the market

Speaker 2: Right. Right. right

Speaker 1: I think the market looking backwards of these silos of firewall or EDR or NDR, what have you, there's going to be consolidation here because what really needs to happen is we need much more broader set of sensors that can be everywhere, by the way the network is everywhere. We have visibility everywhere. We need sensors everywhere. We need enforcement everywhere. We need to have the intelligence to be able to understand what's going on in the network to be able to secure AI because it traverses trust boundaries. It traverses a single control, and these silos start to fall apart. We are very well positioned to take advantage of that. I think the market looking backwards of these silos of firewall or EDR or NDR, what have you, there's going to be consolidation here because what really needs to happen is we need much more broader set of sensors that can be everywhere, by the way the network is everywhere. i think the market looking backwards of these silos of firewall or edr or ndr what have you there's going to be consolidation here because what really needs to happen is we need much more broader set of sensors that can be everywhere by the way the network is everywhere We have visibility everywhere. we have visibility everywhere We need sensors everywhere. we need sensors everywhere We need enforcement everywhere. we need enforcement everywhere We need to have the intelligence to be able to understand what's going on in the network to be able to secure AI because it traverses trust boundaries. we need to have the intelligence to be able to understand what's going on in the network to be able to secure ai because it traverses trust boundaries It traverses a single control, and these silos start to fall apart. it traverses a single control and these silos start to fall apart We are very well positioned to take advantage of that. we are very well positioned to take advantage of that

Speaker 2: Got it. This week you had Cisco Live. What was your key message on cybersecurity at Cisco Live? Got it. got it This week you had Cisco Live. this week you had cisco live What was your key message on cybersecurity at Cisco Live? what was your key message on cybersecurity at cisco live

Speaker 1: I think, again, Mythos has been dominating the headlines. I think, again, Mythos has been dominating the headlines. i think again mythos has been dominating the headlines

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Again, I think that's going to be something we're operationalizing with our customers over the next 6-12 months. As the concerns which are merited, by the way, around advanced threat actors using these types of models. Again, I think that's going to be something we're operationalizing with our customers over the next 6- 12 months. again i think that's going to be something we're operationalizing with our customers over the next 6- 12 months As the concerns which are merited, by the way, around advanced threat actors using these types of models. as the concerns which are merited by the way around advanced threat actors using these types of models

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Number one. Live Protect was associated with that. I think that was a really exciting announce for our customers because this means we can actively start defending their infrastructure going forward. Obviously the agentic security things that we're doing. We've really made some significant advances around how we can identify and help secure agentic activity on the network, and we're manifesting that through whether it's traditional firewall capabilities that have the ability to sense Zero Trust access. We also launched an agentic app that sits across all the platform. The third one is platform. Number one. number one Live Protect was associated with that. live protect was associated with that I think that was a really exciting announce for our customers because this means we can actively start defending their infrastructure going forward. i think that was a really exciting announce for our customers because this means we can actively start defending their infrastructure going forward Obviously the agentic security things that we're doing. obviously the agentic security things that we're doing We've really made some significant advances around how we can identify and help secure agentic activity on the network, and we're manifesting that through whether it's traditional firewall capabilities that have the ability to sense Zero Trust access. we've really made some significant advances around how we can identify and help secure agentic activity on the network and we're manifesting that through whether it's traditional firewall capabilities that have the ability to sense zero trust access We also launched an agentic app that sits across all the platform. we also launched an agentic app that sits across all the platform The third one is platform. the third one is platform

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Cloud Control, which is all of Cisco coming together through a platform experience. Very, very valid for security as well, because in the background, we can start integrating data planes. When you integrate data planes, it's much easier to do analysis across many different use cases. That integration is how we can create really integrated use cases from a customer experience perspective that leads to, frankly, just better outcomes and better user experience. Cloud Control, which is all of Cisco coming together through a platform experience. cloud control which is all of cisco coming together through a platform experience Very, very valid for security as well, because in the background, we can start integrating data planes. very very valid for security as well because in the background we can start integrating data planes When you integrate data planes, it's much easier to do analysis across many different use cases. when you integrate data planes it's much easier to do analysis across many different use cases That integration is how we can create really integrated use cases from a customer experience perspective that leads to, frankly, just better outcomes and better user experience. that integration is how we can create really integrated use cases from a customer experience perspective that leads to frankly just better outcomes and better user experience

Speaker 2: Why are you positioned well for this? Meaning, why you and not someone else? What do you have in your portfolio? It could be the legacy portfolio, could be switches and routers, could be in security portfolio. What do you have in your portfolio that makes you in a better position to benefit from all these changes because of AI? Why are you positioned well for this? why are you positioned well for this Meaning, why you and not someone else? meaning why you and not someone else What do you have in your portfolio? what do you have in your portfolio It could be the legacy portfolio, could be switches and routers, could be in security portfolio. it could be the legacy portfolio could be switches and routers could be in security portfolio What do you have in your portfolio that makes you in a better position to benefit from all these changes because of AI? what do you have in your portfolio that makes you in a better position to benefit from all these changes because of ai

Speaker 1: Yeah. I think it's a few different things. First of all, we are leveraging the network, leveraging our position there, leveraging data center infrastructure. One of the demos you might have seen is that we're actually putting little baby firewalls in the Nexus switches, right? The Smart Switches, right? That allows us to start having a much more distributed security presence, right? The key message is security needs to be more distributed. We have visibility everywhere, we have sensors everywhere, and because we own the infrastructure in many cases, we can put that in place. Yeah. yeah I think it's a few different things. i think it's a few different things First of all, we are leveraging the network, leveraging our position there, leveraging data center infrastructure. first of all we are leveraging the network leveraging our position there leveraging data center infrastructure One of the demos you might have seen is that we're actually putting little baby firewalls in the Nexus switches, right? one of the demos you might have seen is that we're actually putting little baby firewalls in the nexus switches right The Smart Switches, right? the smart switches right That allows us to start having a much more distributed security presence, right? that allows us to start having a much more distributed security presence right The key message is security needs to be more distributed. the key message is security needs to be more distributed We have visibility everywhere, we have sensors everywhere, and because we own the infrastructure in many cases, we can put that in place. we have visibility everywhere we have sensors everywhere and because we own the infrastructure in many cases we can put that in place I don't know if anyone else can say that, right? I don't know if anyone else can say that, right? i don't know if anyone else can say that right

Speaker 2: Yeah. Yeah. yeah

Speaker 1: We can really take advantage of ownership of the infrastructure. We can still connect that back to if I need to. Again, remember data's going to increase 10x, 100x, depending on who you ask here in the future. Are we going to create a firewall that's got 10x the capacity or 100x? No. We're going to be a lot smarter about how we route traffic. We can really take advantage of ownership of the infrastructure. we can really take advantage of ownership of the infrastructure We can still connect that back to if I need to. we can still connect that back to if i need to Again, remember data's going to increase 10x, 100x, depending on who you ask here in the future. again remember data's going to increase 10x 100x depending on who you ask here in the future Are we going to create a firewall that's got 10x the capacity or 100x ? are we going to create a firewall that's got 10x the capacity or 100x No. no We're going to be a lot smarter about how we route traffic. we're going to be a lot smarter about how we route traffic We're going to be sensing traffic. We're going to be identifying a small percentage of it, maybe to route back through a firewall to do deeper inspection. It's going to be much more about distributed security where things are happening at the edge. We're going to be sensing traffic. we're going to be sensing traffic We're going to be identifying a small percentage of it, maybe to route back through a firewall to do deeper inspection. we're going to be identifying a small percentage of it maybe to route back through a firewall to do deeper inspection It's going to be much more about distributed security where things are happening at the edge. it's going to be much more about distributed security where things are happening at the edge

Speaker 2: Right. Right. right

Speaker 1: If you look at the investments we've made, if you look at how we position our portfolio, that is a very big differentiator for us. When you add in firewall, Zero Trust, identity to this picture, you get to see a much broader portfolio that can come together and work together. If you look at the investments we've made, if you look at how we position our portfolio, that is a very big differentiator for us. if you look at the investments we've made if you look at how we position our portfolio that is a very big differentiator for us When you add in firewall, Zero Trust, identity to this picture, you get to see a much broader portfolio that can come together and work together. when you add in firewall zero trust identity to this picture you get to see a much broader portfolio that can come together and work together

Speaker 2: Got it. Splunk. Take us through the Splunk journey, meaning what's happening in the company. Splunk security, just security. What's happening there? Sami spoke about the transition. Got it. got it Splunk. splunk Take us through the Splunk journey, meaning what's happening in the company. take us through the splunk journey meaning what's happening in the company Splunk security, just security. splunk security just security What's happening there? what's happening there Sami spoke about the transition. sami spoke about the transition

Speaker 1: Yeah. Yeah. yeah

Speaker 2: What is this transition, and how long does it take to go through it, and what's the risk in the transition? What is this transition, and how long does it take to go through it, and what's the risk in the transition? what is this transition and how long does it take to go through it and what's the risk in the transition

Speaker 1: Yeah. We're going through a phase, a journey as an industry to automate the SOC. Yeah. yeah We're going through a phase, a journey as an industry to automate the SOC. we're going through a phase a journey as an industry to automate the soc

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Right. Splunk is aggressively investing to do the same work, right. The fact that we have as much data as we have puts us in maybe a better position to train models faster, get agents more proficient faster, reduce false positives in the kind of work that they do. I would say that that is a tremendous focus for that business over the next year to two years to continue to automate that. Right. right Splunk is aggressively investing to do the same work, right. splunk is aggressively investing to do the same work right The fact that we have as much data as we have puts us in maybe a better position to train models faster, get agents more proficient faster, reduce false positives in the kind of work that they do. the fact that we have as much data as we have puts us in maybe a better position to train models faster get agents more proficient faster reduce false positives in the kind of work that they do I would say that that is a tremendous focus for that business over the next year to two years to continue to automate that. i would say that that is a tremendous focus for that business over the next year to two years to continue to automate that The second piece is really expanding the set of use cases we can support across things like AI observability, the Galileo acquisition. We need to have visibility everywhere so that we can drive security outcomes on top of that. Being able to incorporate data, plug and play across just the Cisco infrastructure, obviously that's basically done at this point, but across all other sorts of infrastructure so that we can have that broad view and therefore be able to create these security outcomes for customers. The second piece is really expanding the set of use cases we can support across things like AI observability, the Galileo acquisition. the second piece is really expanding the set of use cases we can support across things like ai observability the galileo acquisition We need to have visibility everywhere so that we can drive security outcomes on top of that. we need to have visibility everywhere so that we can drive security outcomes on top of that Being able to incorporate data, plug and play across just the Cisco infrastructure, obviously that's basically done at this point, but across all other sorts of infrastructure so that we can have that broad view and therefore be able to create these security outcomes for customers. being able to incorporate data plug and play across just the cisco infrastructure obviously that's basically done at this point but across all other sorts of infrastructure so that we can have that broad view and therefore be able to create these security outcomes for customers

Speaker 2: Okay. Yeah. Okay. okay yeah Yeah. okay yeah

Speaker 1: It's a little bit of the same playbook we've had historically there, but with a much broader view. Then we're putting automation on top of that. Listen, if we look out five or six years, agents are going to be driving these things, right? We're not going to have as much human-led workflows here. It's going to be agentic by nature, and you're going to then be looking at dashboards that are going to show your NIST compliance and other kind of audit, compliance. That is the vision we see. That's the journey we're on, and we're roaring towards that. It's a little bit of the same playbook we've had historically there, but with a much broader view. it's a little bit of the same playbook we've had historically there but with a much broader view Then we're putting automation on top of that. then we're putting automation on top of that Listen, if we look out five or six years, agents are going to be driving these things, right? listen if we look out five or six years agents are going to be driving these things right We're not going to have as much human-led workflows here. we're not going to have as much human-led workflows here It's going to be agentic by nature, and you're going to then be looking at dashboards that are going to show your NIST compliance and other kind of audit, compliance. it's going to be agentic by nature and you're going to then be looking at dashboards that are going to show your nist compliance and other kind of audit compliance That is the vision we see. that is the vision we see That's the journey we're on, and we're roaring towards that. that's the journey we're on and we're roaring towards that

Speaker 2: Right. Maybe a question for Sami. Sami, we spoke a lot about it in the past. Take us through the numbers again, not from a numbers perspective, but just conceptually, why are we seeing this deceleration and then acceleration? What happens behind the scenes that creates this kind of volatility in growth rates? Right. right Maybe a question for Sami. maybe a question for sami Sami, we spoke a lot about it in the past. sami we spoke a lot about it in the past Take us through the numbers again, not from a numbers perspective, but just conceptually, why are we seeing this deceleration and then acceleration? take us through the numbers again not from a numbers perspective but just conceptually why are we seeing this deceleration and then acceleration What happens behind the scenes that creates this kind of volatility in growth rates? what happens behind the scenes that creates this kind of volatility in growth rates

Speaker 3: I think the biggest driver is how customers want to consume Splunk. When Splunk was a standalone company, they were able to manage the business 50% term software, 50% cloud, and they really ran it down the middle because the company had a different mandate than what Cisco altogether has. Since we've given the customers the freedom to really decide how they want to consume the product they've opted more into the ratable scheme. I think the biggest driver is how customers want to consume Splunk. i think the biggest driver is how customers want to consume splunk When Splunk was a standalone company, they were able to manage the business 50% term software, 50% cloud, and they really ran it down the middle because the company had a different mandate than what Cisco altogether has. when splunk was a standalone company they were able to manage the business 50% term software 50% cloud and they really ran it down the middle because the company had a different mandate than what cisco altogether has Since we've given the customers the freedom to really decide how they want to consume the product they've opted more into the ratable scheme. since we've given the customers the freedom to really decide how they want to consume the product they've opted more into the ratable scheme

Speaker 2: Yeah. Yeah. yeah

Speaker 3: I think you've seen that accelerate, right? Especially in FY 2026. At some point, the mixes will become more favorable, and that gets us into the first half of FY 2027. Let's see if I can add any additional elements here. The other thing is, exactly what Peter said. There are a lot of changes happening. I also just want to connect one other thing is Cisco has the switching, we have the telemetry, domain knowledge. We have the security offerings on top of that. We've made all these very proactive investments to get ahead of it. Then an additional thing that I think people are forgetting is we also have our own silicon. I think you've seen that accelerate, right? i think you've seen that accelerate right Especially in FY 2026. especially in fy 2026 At some point, the mixes will become more favorable, and that gets us into the first half of FY 2027. at some point the mixes will become more favorable and that gets us into the first half of fy 2027 Let's see if I can add any additional elements here. let's see if i can add any additional elements here The other thing is, exactly what Peter said. the other thing is exactly what peter said There are a lot of changes happening. there are a lot of changes happening I also just want to connect one other thing is Cisco has the switching, we have the telemetry, domain knowledge. i also just want to connect one other thing is cisco has the switching we have the telemetry domain knowledge We have the security offerings on top of that. we have the security offerings on top of that We've made all these very proactive investments to get ahead of it. we've made all these very proactive investments to get ahead of it Then an additional thing that I think people are forgetting is we also have our own silicon. then an additional thing that i think people are forgetting is we also have our own silicon

Speaker 2: Yeah. Yeah. yeah

Speaker 3: This just gives us significantly more vertically integrated programmability into the stack. If you think of networks running hotter with agentic flows, hotter just means more demanding networks with lower latency requirements. If you own every element of the stack, you're going to be able to put out some very compelling products. This just gives us significantly more vertically integrated programmability into the stack. this just gives us significantly more vertically integrated programmability into the stack If you think of networks running hotter with agentic flows, hotter just means more demanding networks with lower latency requirements. if you think of networks running hotter with agentic flows hotter just means more demanding networks with lower latency requirements If you own every element of the stack, you're going to be able to put out some very compelling products. if you own every element of the stack you're going to be able to put out some very compelling products

Speaker 2: Got it. Yeah. Is AI playing to your strength of having control over the stack, or is AI irrelevant for it, or how is AI playing, or how do you benefit from AI given that you have full control of the stack? Got it. got it Yeah. yeah Is AI playing to your strength of having control over the stack, or is AI irrelevant for it, or how is AI playing, or how do you benefit from AI given that you have full control of the stack? is ai playing to your strength of having control over the stack or is ai irrelevant for it or how is ai playing or how do you benefit from ai given that you have full control of the stack

Speaker 3: There's two things to look at this. From the customer lens, they are assessing various tools, and they're going to have very significant requirements to mobilize and tool AI technologies. There's two things to look at this. there's two things to look at this From the customer lens, they are assessing various tools, and they're going to have very significant requirements to mobilize and tool AI technologies. from the customer lens they are assessing various tools and they're going to have very significant requirements to mobilize and tool ai technologies

Speaker 2: Yeah. Yeah. yeah

Speaker 3: Cisco can be the main vehicle to allow that to happen. On the flip side, internally, we are using a significant amount of AI tooling to develop our own products and also help us accelerate key parts of the company. Cloud Control as well, and Jeetu's also talked about developing products almost completely using AI software, right? Cisco can be the main vehicle to allow that to happen. cisco can be the main vehicle to allow that to happen On the flip side, internally, we are using a significant amount of AI tooling to develop our own products and also help us accelerate key parts of the company. on the flip side internally we are using a significant amount of ai tooling to develop our own products and also help us accelerate key parts of the company Cloud Control as well, and Jeetu's also talked about developing products almost completely using AI software, right? cloud control as well and jeetu's also talked about developing products almost completely using ai software right

Speaker 2: Yeah. Yeah. yeah

Speaker 3: AI tools. There are kind of two parts to this, and both parts kind of gets us to this very compelling delivery and matching what we can offer versus what customers actually need right now to adopt these technologies. There's a bit of a two-sided focus here, and then I think silicon and the stack really plays into that. AI tools. ai tools There are kind of two parts to this, and both parts kind of gets us to this very compelling delivery and matching what we can offer versus what customers actually need right now to adopt these technologies. there are kind of two parts to this and both parts kind of gets us to this very compelling delivery and matching what we can offer versus what customers actually need right now to adopt these technologies There's a bit of a two-sided focus here, and then I think silicon and the stack really plays into that. there's a bit of a two-sided focus here and then i think silicon and the stack really plays into that

Speaker 2: Got it. Peter, the question, last year I spoke about Hypershield, I spoke about XDR, SASE. Got it. got it Peter, the question, last year I spoke about Hypershield, I spoke about XDR, SASE. peter the question last year i spoke about hypershield i spoke about xdr sase

Speaker 1: Sure. Sure. sure

Speaker 2: Spoke about new products. Spoke about new products. spoke about new products

Speaker 1: Sure. Sure. sure

Speaker 2: Give us an update on your new portfolio, meaning the take rate and what you've seen with Hypershield and SASE and everything else. Yeah. Give us an update on your new portfolio, meaning the take rate and what you've seen with Hypershield and SASE and everything else. give us an update on your new portfolio meaning the take rate and what you've seen with hypershield and sase and everything else Yeah. yeah

Speaker 1: Yeah. Hypershield is part of that hybrid mesh firewall kind of category, right? Yeah. yeah Hypershield is part of that hybrid mesh firewall kind of category, right? hypershield is part of that hybrid mesh firewall kind of category right

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Think about it as our next-generation workload security and distributed security. What I would say is that the Nexus Smart Switch and what we demoed here at Cisco Live represents one of the big outcomes of that effort. Think about it as our next-generation workload security and distributed security. think about it as our next-generation workload security and distributed security What I would say is that the Nexus Smart Switch and what we demoed here at Cisco Live represents one of the big outcomes of that effort. what i would say is that the nexus smart switch and what we demoed here at cisco live represents one of the big outcomes of that effort Think about are you going to buy a data center switch that is classic switch or one that also has firewall capability built into it using that technology. Think about are you going to buy a data center switch that is classic switch or one that also has firewall capability built into it using that technology. think about are you going to buy a data center switch that is classic switch or one that also has firewall capability built into it using that technology

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Okay? The second piece of that is when we look at all the vulnerabilities that primarily Linux-based applications have, that is sort of the thing that everyone's focused on right now because of Mythos, being able to use that agent technology to be able to shield those applications, that is also something that we are doing. Hypershield is finally kind of coming into its own. Okay? okay The second piece of that is when we look at all the vulnerabilities that primarily Linux-based applications have, that is sort of the thing that everyone's focused on right now because of Mythos, being able to use that agent technology to be able to shield those applications, that is also something that we are doing. the second piece of that is when we look at all the vulnerabilities that primarily linux-based applications have that is sort of the thing that everyone's focused on right now because of mythos being able to use that agent technology to be able to shield those applications that is also something that we are doing Hypershield is finally kind of coming into its own. hypershield is finally kind of coming into its own

Speaker 2: Yeah. Yeah. yeah

Speaker 1: The execution there was slower than we had hoped, but it's the right idea for the right moment. It's a distributed strategy for doing enforcement, whether it's policy enforcement or segmentation. That is, as we think about the future, we think that's going to be a ramping aspect of that mesh portfolio. The mesh, it's physical firewalls, it's cloud firewalls. It's things like Hypershield. The thing we've also done is we've created a single policy plane for all of this. A lot of times customers struggle to operationalize all these things because everything requires a policy or a rule, and historically, this has been a rules and policy-based business that is very complex to manage. The execution there was slower than we had hoped, but it's the right idea for the right moment. the execution there was slower than we had hoped but it's the right idea for the right moment It's a distributed strategy for doing enforcement, whether it's policy enforcement or segmentation. it's a distributed strategy for doing enforcement whether it's policy enforcement or segmentation That is, as we think about the future, we think that's going to be a ramping aspect of that mesh portfolio. that is as we think about the future we think that's going to be a ramping aspect of that mesh portfolio The mesh, it's physical firewalls, it's cloud firewalls. the mesh it's physical firewalls it's cloud firewalls It's things like Hypershield. it's things like hypershield The thing we've also done is we've created a single policy plane for all of this. the thing we've also done is we've created a single policy plane for all of this A lot of times customers struggle to operationalize all these things because everything requires a policy or a rule, and historically, this has been a rules and policy-based business that is very complex to manage. a lot of times customers struggle to operationalize all these things because everything requires a policy or a rule and historically this has been a rules and policy-based business that is very complex to manage Through agentic ops and through integration of a single policy plane, we've also dramatically simplified how customers can operationalize this, because at the end of the day, you're going to need thousands of these sensors out there, and this distributed network of sensors, that's really tough to manage as just a human writing policies. A unified policy plane and then being able to start automating the writing of those policies and managing those policies and run that journey too. Through agentic ops and through integration of a single policy plane, we've also dramatically simplified how customers can operationalize this, because at the end of the day, you're going to need thousands of these sensors out there, and this distributed network of sensors, that's really tough to manage as just a human writing policies. through agentic ops and through integration of a single policy plane we've also dramatically simplified how customers can operationalize this because at the end of the day you're going to need thousands of these sensors out there and this distributed network of sensors that's really tough to manage as just a human writing policies A unified policy plane and then being able to start automating the writing of those policies and managing those policies and run that journey too. a unified policy plane and then being able to start automating the writing of those policies and managing those policies and run that journey too

Speaker 2: Who is the customer or what kind of deployments do you address with the Smart Switch? Meaning who needs a switch together with a firewall? Who is the customer or what kind of deployments do you address with the Smart Switch? who is the customer or what kind of deployments do you address with the smart switch Meaning who needs a switch together with a firewall? meaning who needs a switch together with a firewall

Speaker 1: As you're building out data centers and you're looking to protect workloads, segment the data center, it is the perfect solution for that. As you're building out data centers and you're looking to protect workloads, segment the data center, it is the perfect solution for that. as you're building out data centers and you're looking to protect workloads segment the data center it is the perfect solution for that

Speaker 2: Got it. That is basically enterprise data centers? Got it. got it That is basically enterprise data centers? that is basically enterprise data centers

Speaker 1: Yes. Yes. yes

Speaker 2: That's it. That's it. that's it

Speaker 1: Yes, sir. Yes, sir. yes sir

Speaker 2: Okay. What about legacy firewalls? It's a big part of your business. Although you lost some share in the last few years, you're one of the big players in the space. What are the trends with legacy firewalls? Okay. okay What about legacy firewalls? what about legacy firewalls It's a big part of your business. it's a big part of your business Although you lost some share in the last few years, you're one of the big players in the space. although you lost some share in the last few years you're one of the big players in the space What are the trends with legacy firewalls? what are the trends with legacy firewalls

Speaker 1: Listen- Listen- listen-

Speaker 2: What are the trends also in terms of your portfolio? How did the portfolio evolve? What are the trends also in terms of your portfolio? what are the trends also in terms of your portfolio How did the portfolio evolve? how did the portfolio evolve

Speaker 1: Yeah, sure. We just refreshed the whole line. Yeah, sure. yeah sure We just refreshed the whole line. we just refreshed the whole line

Speaker 2: Yeah. Yeah. yeah

Speaker 1: I would say there's nothing legacy out there anymore, but we've literally refreshed the whole line. I would say there's nothing legacy out there anymore, but we've literally refreshed the whole line. i would say there's nothing legacy out there anymore but we've literally refreshed the whole line

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Listen, these are very advanced products that high throughput, doing deep packet inspection. We've built incredible ML models that can do on-the-fly detection of threats and what have you. These are very sophisticated solutions that are designed to operate in line, right. Listen, these are very advanced products that high throughput, doing deep packet inspection. listen these are very advanced products that high throughput doing deep packet inspection We've built incredible ML models that can do on-the-fly detection of threats and what have you. we've built incredible ml models that can do on-the-fly detection of threats and what have you These are very sophisticated solutions that are designed to operate in line, right. these are very sophisticated solutions that are designed to operate in line right That is still a very core requirement, and I think you saw this last quarter, we actually saw very strong growth in that business. That is still a very core requirement, and I think you saw this last quarter, we actually saw very strong growth in that business. that is still a very core requirement and i think you saw this last quarter we actually saw very strong growth in that business

Speaker 2: Yeah. Yeah. yeah

Speaker 1: I think that's a very viable part of the business going forward. I think it's an and answer or question and answer is that it's not enough, right? That's where we have to start to think about these more distributed means to actually be able to do security more at the edges of the network. I think that's a very viable part of the business going forward. i think that's a very viable part of the business going forward I think it's an and answer or question and answer is that it's not enough, right? i think it's an and answer or question and answer is that it's not enough right That's where we have to start to think about these more distributed means to actually be able to do security more at the edges of the network. that's where we have to start to think about these more distributed means to actually be able to do security more at the edges of the network

Speaker 2: Yeah. Yeah. yeah

Speaker 1: In the data center, protecting workloads, and those things can all work together. I want to make the point that it is not a siloed product for us. In the data center, protecting workloads, and those things can all work together. in the data center protecting workloads and those things can all work together I want to make the point that it is not a siloed product for us. i want to make the point that it is not a siloed product for us

Speaker 2: Got it. Got it. got it

Speaker 1: This is part of this mesh strategy, all these things working together, policy. We can write policy once and enforce it. This is part of this mesh strategy, all these things working together, policy. this is part of this mesh strategy all these things working together policy We can write policy once and enforce it. we can write policy once and enforce it

Speaker 2: Yeah Yeah yeah

Speaker 1: Across all these services. Across all these services. across all these services

Speaker 2: Got it. Agentic AI security. Companies start to make acquisitions in general in the space. Companies start to make acquisitions in the space. You made acquisitions in the space. Articulate your position and your vision to secure agentic AI. Got it. got it Agentic AI security. agentic ai security Companies start to make acquisitions in general in the space. companies start to make acquisitions in general in the space Companies start to make acquisitions in the space. companies start to make acquisitions in the space You made acquisitions in the space. you made acquisitions in the space Articulate your position and your vision to secure agentic AI. articulate your position and your vision to secure agentic ai

Speaker 1: Yeah, sure. To secure agentic is really first and foremost about identity, believe it or not. Yeah, sure. yeah sure To secure agentic is really first and foremost about identity, believe it or not. to secure agentic is really first and foremost about identity believe it or not

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Right? You need to basically always understand exactly what the agent is, what it should be doing, what it's connecting to, and what have you. Our strategy is to take identity and make it a horizontal across our platform and our infrastructure so that our customers know everything an agent might be connecting to, and not just a simple identity, but actually rich metadata about that identity. You actually understand, okay, this is a workload that's running very sensitive information and we know that sits behind a certain network and what have you, so that once you do introduce agents in, I'll get to the agentic piece in a second, we have great visibility about what's happening on the network. Right? right You need to basically always understand exactly what the agent is, what it should be doing, what it's connecting to, and what have you. you need to basically always understand exactly what the agent is what it should be doing what it's connecting to and what have you Our strategy is to take identity and make it a horizontal across our platform and our infrastructure so that our customers know everything an agent might be connecting to, and not just a simple identity, but actually rich metadata about that identity. our strategy is to take identity and make it a horizontal across our platform and our infrastructure so that our customers know everything an agent might be connecting to and not just a simple identity but actually rich metadata about that identity You actually understand, okay, this is a workload that's running very sensitive information and we know that sits behind a certain network and what have you, so that once you do introduce agents in, I'll get to the agentic piece in a second, we have great visibility about what's happening on the network. you actually understand okay this is a workload that's running very sensitive information and we know that sits behind a certain network and what have you so that once you do introduce agents in i'll get to the agentic piece in a second we have great visibility about what's happening on the network For agents, we have introduced so far, through Zero Trust, also through just our identity stack, the ability to discover, authenticate, authorize, and now start managing the behavior of those agents on the network. Right? That agentic strategy, which by the way, can be enforced by what we see at the workload level, it's enforced by how we authenticate and bring them through identity onto the network, and then the ability to have visibility and firewalls to see agentic traffic, to see MCP calls, to see tool access. We've introduced DefenseClaw on the endpoint that also is looking at what's happening on the endpoint. All of these things, again, working together to be able to see an agentic activity across the network. An agentic app we just introduced that brings signal from all of these products. It cross-cuts everything. For agents, we have introduced so far, through Zero Trust, also through just our identity stack, the ability to discover, authenticate, authorize, and now start managing the behavior of those agents on the network. for agents we have introduced so far through zero trust also through just our identity stack the ability to discover authenticate authorize and now start managing the behavior of those agents on the network Right? right That agentic strategy, which by the way, can be enforced by what we see at the workload level, it's enforced by how we authenticate and bring them through identity onto the network, and then the ability to have visibility and firewalls to see agentic traffic, to see MCP calls, to see tool access. that agentic strategy which by the way can be enforced by what we see at the workload level it's enforced by how we authenticate and bring them through identity onto the network and then the ability to have visibility and firewalls to see agentic traffic to see mcp calls to see tool access We've introduced DefenseClaw on the endpoint that also is looking at what's happening on the endpoint. we've introduced defenseclaw on the endpoint that also is looking at what's happening on the endpoint All of these things, again, working together to be able to see an agentic activity across the network. all of these things again working together to be able to see an agentic activity across the network An agentic app we just introduced that brings signal from all of these products. an agentic app we just introduced that brings signal from all of these products It cross-cuts everything. it cross-cuts everything

Speaker 2: Yeah. Yeah. yeah

Speaker 1: It's not a siloed product. It cross-cuts firewalls, secure access, Zero Trust access, identity, to present a view of what is happening with agents on the network. Again, I think, one, that's very unique, and two, because we own the network, we also can see things others cannot, and we can bring in all this signal to give that perspective, and that's going to be absolutely required for securing agentic going forward. It's not a siloed product. it's not a siloed product It cross-cuts firewalls, secure access, Zero Trust access, identity, to present a view of what is happening with agents on the network. it cross-cuts firewalls secure access zero trust access identity to present a view of what is happening with agents on the network Again, I think, one, that's very unique, and two, because we own the network, we also can see things others cannot, and we can bring in all this signal to give that perspective, and that's going to be absolutely required for securing agentic going forward. again i think one that's very unique and two because we own the network we also can see things others cannot and we can bring in all this signal to give that perspective and that's going to be absolutely required for securing agentic going forward

Speaker 2: Yeah. Is this an opportunity that is here and now, or is this an opportunity that is in the future? Yeah. yeah Is this an opportunity that is here and now, or is this an opportunity that is in the future? is this an opportunity that is here and now or is this an opportunity that is in the future

Speaker 1: This is an opportunity right now. This is an opportunity right now. this is an opportunity right now

Speaker 2: Yeah. Yeah. yeah

Speaker 1: AI Defense is an example, a product we built for builders to safely build applications. That's a product that's a little over a year old and has a huge pipeline and backlog, and that is a right now conversation. The ability to use Zero Trust access to control and monitor what agents are doing on the network, that's a right now conversation. Every one of our customers, remember what we talked about at the beginning, the CISOs are under incredible pressure to adopt these technologies, but also to secure them. AI Defense is an example, a product we built for builders to safely build applications. ai defense is an example a product we built for builders to safely build applications That's a product that's a little over a year old and has a huge pipeline and backlog, and that is a right now conversation. that's a product that's a little over a year old and has a huge pipeline and backlog and that is a right now conversation The ability to use Zero Trust access to control and monitor what agents are doing on the network, that's a right now conversation. the ability to use zero trust access to control and monitor what agents are doing on the network that's a right now conversation Every one of our customers, remember what we talked about at the beginning, the CISOs are under incredible pressure to adopt these technologies, but also to secure them. every one of our customers remember what we talked about at the beginning the cisos are under incredible pressure to adopt these technologies but also to secure them

Speaker 2: Yeah. Yeah. yeah

Speaker 1: This is very much a right now conversation. This is very much a right now conversation. this is very much a right now conversation

Speaker 2: Got it. You previously noted it used to be Good. A bug is coming to me. A few quarters ago, you spoke about pressure on cybersecurity from federal government, and it's a big part of your segment. Give us an update, if you can, please, on the federal segment or federal part of cybersecurity? Got it. got it You previously noted it used to be Good. you previously noted it used to be good A bug is coming to me. a bug is coming to me A few quarters ago, you spoke about pressure on cybersecurity from federal government, and it's a big part of your segment. a few quarters ago you spoke about pressure on cybersecurity from federal government and it's a big part of your segment Give us an update, if you can, please, on the federal segment or federal part of cybersecurity? give us an update if you can please on the federal segment or federal part of cybersecurity

Speaker 1: Well, I think the thing everyone's seen is the orders coming down from the federal government to update infrastructure. Well, I think the thing everyone's seen is the orders coming down from the federal government to update infrastructure. well i think the thing everyone's seen is the orders coming down from the federal government to update infrastructure

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Make sure it's quantum ready, and to really get rid of all the LDOS, last day of support type infrastructure. Make sure it's quantum ready, and to really get rid of all the LDOS, last day of support type infrastructure. make sure it's quantum ready and to really get rid of all the ldos last day of support type infrastructure

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Upgrade that. That is sort of probably the headline to the answer to your question. With that, we are bringing everything we have to bear to help support the government in making those changes, as well as having lots of discussions around what else do we need to do, for example, to help protect and kind of MITRE those type scenarios. Upgrade that. upgrade that That is sort of probably the headline to the answer to your question. that is sort of probably the headline to the answer to your question With that, we are bringing everything we have to bear to help support the government in making those changes, as well as having lots of discussions around what else do we need to do, for example, to help protect and kind of MITRE those type scenarios. with that we are bringing everything we have to bear to help support the government in making those changes as well as having lots of discussions around what else do we need to do for example to help protect and kind of mitre those type scenarios

Speaker 2: Right. Right. right

Speaker 1: A lot of discussion with the government, and other vendors too, around how we're collectively going to help solve some of these problems. I think that, again, is going to be a big topic here in the next 6+ months. A lot of discussion with the government, and other vendors too, around how we're collectively going to help solve some of these problems. a lot of discussion with the government and other vendors too around how we're collectively going to help solve some of these problems I think that, again, is going to be a big topic here in the next 6+ months. i think that again is going to be a big topic here in the next 6+ months

Speaker 2: Right. I forgot to ask you something about AI when we spoke about AI. What you're doing in AI, is it synergistic to what you currently have, or is it just a standalone opportunity that is now growing? Right. right I forgot to ask you something about AI when we spoke about AI. i forgot to ask you something about ai when we spoke about ai What you're doing in AI, is it synergistic to what you currently have, or is it just a standalone opportunity that is now growing? what you're doing in ai is it synergistic to what you currently have or is it just a standalone opportunity that is now growing

Speaker 1: If you remember the description, hopefully, it landed, of the agentic app. If you remember the description, hopefully, it landed, of the agentic app. if you remember the description hopefully it landed of the agentic app

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Imagine you've got this view into what are agents doing on the network, what it's connected to, what tools it's using. Maybe it's associated with a user. All of that is signal that's coming from the products and infrastructure that Cisco's deploying. Imagine you've got this view into what are agents doing on the network, what it's connected to, what tools it's using. imagine you've got this view into what are agents doing on the network what it's connected to what tools it's using Maybe it's associated with a user. maybe it's associated with a user All of that is signal that's coming from the products and infrastructure that Cisco's deploying. all of that is signal that's coming from the products and infrastructure that cisco's deploying

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Right? Whether it's secure access or Zero Trust Access Platform, whether it's identity, whether it's coming from a firewall, whether it's signal we're getting from a workload where something's interacting with a workload, looking at the process flows, that is all signal we're bringing up to give you the agentic view. The thing I want to sort of reinforce is you need great breadth and depth to secure agents. Right? right Whether it's secure access or Zero Trust Access Platform, whether it's identity, whether it's coming from a firewall, whether it's signal we're getting from a workload where something's interacting with a workload, looking at the process flows, that is all signal we're bringing up to give you the agentic view. whether it's secure access or zero trust access platform whether it's identity whether it's coming from a firewall whether it's signal we're getting from a workload where something's interacting with a workload looking at the process flows that is all signal we're bringing up to give you the agentic view The thing I want to sort of reinforce is you need great breadth and depth to secure agents. the thing i want to sort of reinforce is you need great breadth and depth to secure agents

Speaker 2: Yeah. Yeah. yeah

Speaker 1: If you're just an identity player, you can't see what happens past a trust boundary. If you're just an identity player, you can't see what happens past a trust boundary. if you're just an identity player you can't see what happens past a trust boundary

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Right? You have to have great depth and breadth. Because we are at the network layer all the way up to L7 in the stack, we have incredible ability to operate at all layers in the stack to give this comprehensive picture to our customers about what agents are doing on the network. Right? right You have to have great depth and breadth. you have to have great depth and breadth Because we are at the network layer all the way up to L7 in the stack, we have incredible ability to operate at all layers in the stack to give this comprehensive picture to our customers about what agents are doing on the network. because we are at the network layer all the way up to l7 in the stack we have incredible ability to operate at all layers in the stack to give this comprehensive picture to our customers about what agents are doing on the network

Speaker 2: Okay. Okay. okay

Speaker 1: Agents are going to go everywhere. They're going to do things we don't want them to do. We have to be able to enforce everywhere, have visibility, and enforce everywhere. That is really the ecosystem that we are building. Agents are going to go everywhere. agents are going to go everywhere They're going to do things we don't want them to do. they're going to do things we don't want them to do We have to be able to enforce everywhere, have visibility, and enforce everywhere. we have to be able to enforce everywhere have visibility and enforce everywhere That is really the ecosystem that we are building. that is really the ecosystem that we are building

Speaker 2: Right. Maybe last question is not about products and portfolio, it's maybe about your go to market and your ability to deliver, to execute on your strategy. Right. right Maybe last question is not about products and portfolio, it's maybe about your go to market and your ability to deliver, to execute on your strategy. maybe last question is not about products and portfolio it's maybe about your go to market and your ability to deliver to execute on your strategy

Speaker 1: Sure. Sure. sure

Speaker 2: What do you think about your own strength and weaknesses when it comes to go to market for cybersecurity, not Cisco's in general? What do you think about your own strength and weaknesses when it comes to go to market for cybersecurity, not Cisco's in general? what do you think about your own strength and weaknesses when it comes to go to market for cybersecurity not cisco's in general

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Listen, we have, I think, my personal opinion, the world's best go to market. It's an incredible sales force. Our DNA is the network and infrastructure, right? A smart person running a site security business in Cisco would do whatever they can to attach their train. Listen, we have, I think, my personal opinion, the world's best go to market. listen we have i think my personal opinion the world's best go to market It's an incredible sales force. it's an incredible sales force Our DNA is the network and infrastructure, right? our dna is the network and infrastructure right A smart person running a site security business in Cisco would do whatever they can to attach their train. a smart person running a site security business in cisco would do whatever they can to attach their train

Speaker 2: Yeah. Yeah. yeah

Speaker 1: What's happening on the network side of the business. When we're talking about fusing security into the network, that is really a security story that goes with a network sale and infrastructure sale as well. I think that is landing for us. Really how we think about it is once we are in with a customer with some security offerings, that might be outcomes that are tied to the network, as an example, or might be outcomes tied to Splunk, which is broadly deployed. We have this vast portfolio we can upsell and cross-sell that is integrated with, whether it's the network or with Splunk, to help solve these new use cases we're talking about. What's happening on the network side of the business. what's happening on the network side of the business When we're talking about fusing security into the network, that is really a security story that goes with a network sale and infrastructure sale as well. when we're talking about fusing security into the network that is really a security story that goes with a network sale and infrastructure sale as well I think that is landing for us. i think that is landing for us Really how we think about it is once we are in with a customer with some security offerings, that might be outcomes that are tied to the network, as an example, or might be outcomes tied to Splunk, which is broadly deployed. really how we think about it is once we are in with a customer with some security offerings that might be outcomes that are tied to the network as an example or might be outcomes tied to splunk which is broadly deployed We have this vast portfolio we can upsell and cross-sell that is integrated with, whether it's the network or with Splunk, to help solve these new use cases we're talking about. we have this vast portfolio we can upsell and cross-sell that is integrated with whether it's the network or with splunk to help solve these new use cases we're talking about

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Because security typically is about what's the house on fire thing I need to solve today? What's the new attack surface, right? Everything we talked about today is that new attack surface, and we can tie that back to the infrastructure, leverage the infrastructure and the network to deliver those outcomes. That allows our go to market to actually have a very integrated sale process going from what would be kind of your network sellers into our security sales force. Putting those two pieces together is obviously really important for us. Because security typically is about what's the house on fire thing I need to solve today? because security typically is about what's the house on fire thing i need to solve today What's the new attack surface, right? what's the new attack surface right Everything we talked about today is that new attack surface, and we can tie that back to the infrastructure, leverage the infrastructure and the network to deliver those outcomes. everything we talked about today is that new attack surface and we can tie that back to the infrastructure leverage the infrastructure and the network to deliver those outcomes That allows our go to market to actually have a very integrated sale process going from what would be kind of your network sellers into our security sales force. that allows our go to market to actually have a very integrated sale process going from what would be kind of your network sellers into our security sales force Putting those two pieces together is obviously really important for us. putting those two pieces together is obviously really important for us

Speaker 2: Got it. Peter, thank you so much. Got it. got it Peter, thank you so much. peter thank you so much

Speaker 1: Yeah. Yeah. yeah

Speaker 2: We ran out of time. Thank you. We ran out of time. we ran out of time Thank you. thank you

Speaker 1: Great. Thanks. Great. great Thanks. thanks

Speaker 2: Thanks, great. Thanks, great. thanks great

Speaker 1: Thank you. Appreciate it. Okay, great. Thank you. thank you Appreciate it. appreciate it Okay, great. okay great

Speaker 2: Hey, this was great. Hey, this was great. hey this was great

Speaker 1: Thanks a lot. Thank you. Thanks a lot. thanks a lot Thank you. thank you

Speaker 2: I'm going to take a picture with both of you. I didn't do it with anyone I'm going to take a picture with both of you. i'm going to take a picture with both of you I didn't do it with anyone i didn't do it with anyone