Page 25 - SAMENA Trends - August 2020

REGIONAL & MEMBERS UPDATES SAMENA TRENDS

Cisco Implements Restructuring Plan

Cisco saw its stock drop by as much cost structure," Cisco CEO Chuck Robbins items, Cisco earned 80 cents per share in
as 6% in afterhours trading Wednesday said on the fourth quarter earnings call, the quarter, beating estimates of 74 cents.
night following its Q4 earnings report. On according to a Seeking Alpha transcript. "I Cisco's product revenue in the fourth
Thursday, Cisco's stock slid by more than think this pandemic is basically just giving quarter decreased by 13% to $8.83 billion.
11%, which put it on track for the worst day us the air cover to accelerate the transition Infrastructure revenue was impacted by
since February 2011. During its earnings of R&D expense into cloud security, cloud the coronavirus pandemic with declines
report, Cisco, which has long been a collab, away from the on-prem aspects across switching, routing, data center
bellwether vendor for the telecom sector, of the portfolio. Clearly, we've got a lot of and wireless. On the other hand, Cisco's
laid out a restructuring plan that includes technology that we're working on today Catalyst 9K switch portfolio was up by
a voluntary early retirement program and to help our customers over the next three, double digits in Q4 a some customers took
layoffs. "Cisco earnings were disappointing four, five years in this multi-cloud world advantage of their employees working from
on several levels, primarily on the news of that they're going to live in, and you'll home to refresh their aging infrastructures.
a large restructuring and elimination of see more of that come out over the next Cisco's application revenue decreased by
jobs as well as the forecast for a revenue couple of years." Investors were spooked 9% to $1.36 billion while sales of security
decline, which shows the company is not by Cisco's guidance going forward. Cisco products increased by 10% to $814 million.
meeting its growth forecasts," said Scott executives said current-quarter revenue "Other Products," which brought in $35
Raynovich, founder and chief analyst of could drop between 9% and 11% from last million, declined by 17%. Cisco's public
Futuriom, in an email Wednesday afternoon year, implying a range of between $11.71 sector was down 1%, while enterprise
to FierceTelecom. "The share price looks billion and $11.97 billion, while analysts was down 7%. Commercial was down
like it will fall on Thursday based on the had expected $12.25 billion. Cisco also 23%, and service provider, which has
fact that investors were too optimistic forecast adjusted earnings of 69 cents struggled over the past several quarters,
that cloud infrastructure expansion could to 71 cents per share, below estimates of was down 5%. While Cisco is in the midst
support Cisco’s business. The fact is that 76 cents per share, according to Refinitiv of its restructuring plan and transitioning
Cisco has never been a major player in the IBES data. For the fourth quarter ended its R&D into cloud security and cloud
cloud, and this quarter may be proving out July 25, Cisco's revenue fell about 9% to collaboration, Robbins said Cisco has a
that point." Cisco, which has about 75,000 $12.15 billion, but it beat estimates of list of M&A targets that it's monitoring.
employees, didn't say how many employees $12.08 billion, as more people working Robbins announced that CFO Kelly Kramer,
would be laid off of going forward, but it has from home increased the demand for its who has been with Cisco for eight years,
been laying off employees over the past web security and Webex teleconferencing will be stepping down, but will stay on until
few quarters as it transitions to generating applications and services. Excluding her successor is found.
more of its revenues from software rather
than hardware. In the fourth quarter,
Cisco reached its goal of generating half
its revenue from software and services,
but Robbins didn't say if there was a new
goal going forward. The restructuring
plan started in the current quarter and is
expected to recognize a related one-time
charge of about $900 million. "Over the next
few quarters, we will be taking out over $1
billion on an annualized basis to reduce our

Cisco Completes Acquisition of ThousandEyes

Cisco announced it completed as if it was their own, quickly surface applications and services over the internet.
the acquisition of ThousandEyes. actionable insights, and collaborate and This combination enables customers to
ThousandEyes’ internet and cloud solve problems with service providers. pinpoint deficiencies and improve network
intelligence platform expands visibility Cisco’s strength in network and application and application performance across
and insights into the digital delivery of performance, combined with visibility into enterprise and cloud networks. Cisco will
applications and services over the internet the internet enabled by ThousandEyes, incorporate ThousandEyes capabilities
and the cloud. ThousandEyes enables now allows customers to have an end- across Cisco’s core Enterprise Networking
organizations to visualize any network to-end view into the digital delivery of and Cloud, and AppDynamics portfolios.

25 AUGUST 2020