Cisco Systems Inc CSCO
Q1 2013 Earnings Call Transcript

Transcript Call Date 11/13/2012

Operator: Welcome to Cisco Systems' First Quarter and Fiscal Year 2013 Financial Results Conference Call. At the request of Cisco Systems, today's call is being recorded. If you have any objections, you may disconnect.

Now I'll like to introduce Melissa Selcher, Senior Director, Analyst and Investor Relations. Ma'am, you may begin.

Melissa Selcher - IR: Thanks, Kim. Good afternoon, everyone, and welcome to our 91th quarterly conference call. This is Melissa Selcher and I am joined by John Chambers, our Chairman and Chief Executive Officer; Frank Calderoni, Executive Vice President and Chief Financial Officer; Rob Lloyd, President of Development and Sales; and Gary Moore, President and Chief Operating Officer.

I would like to remind you that we have corresponding webcast with slides on our website in the Investor Relations section. Income statements, full GAAP to non-GAAP reconciliation information, balance sheets, and cash flow statements and other financial information can also be found on the Investor Relations website. Click on the Financial Reporting section of the website to access these documents.

Throughout this conference call, we will be referencing both GAAP and non-GAAP financial results. The matters we will be discussing today include forward-looking statements and as such are subject to the risks and uncertainties that we discuss in detail in our documents filed with the SEC, specifically the most recent Annual Report on Form 10-K and any applicable amendments, which identify important risk factors that could cause actual results to differ materially from those contained in the forward-looking statements. Unauthorized recording of this conference call is not permitted.

All comparisons throughout this call will be on a year-over-year basis unless stated otherwise. I will now turn it over to John for his commentary on the quarter.

John T. Chambers - Chairman and CEO: Thank you, Mel. As we open this call, I want to recognize the devastation in the Eastern Seaboard of the United States in the wake of Hurricane Sandy. Knowing many on this call consider the impacted area home, we want to share our sincere condolences for all that has been lost.

We remain committed to doing all we can to support and enable our employees, partners and customers and the local government agencies and support organizations who will work to rebuild and move forward.

Now moving on to a discussion of our year-over-year performance in Q1 FY'13. We delivered another strong quarter of record revenue with growth of 6% and record non-GAAP earnings per share of $0.48 with growth of 12% from an earnings per share perspective.

As we continue to manage through a challenging macroeconomic environment,, we continue to see the benefits of our focus on operational excellence with only 1% increase in non-GAAP operating expenses, Gary nice job there, and strong non-GAAP gross margins of 62.7%; Rob, the teams are doing well sales and engineering; yielding 11% increase in net income and record non-GAAP operating income.

In a world of many clouds mobility, bring-your-own-device and the Internet literally connecting everything, the network has never played a more central role, connecting people, process, data and things anywhere, anytime across any device. In this cloud of mobile world, the challenges of scale, agility, security, and resilience can only be addressed by an intelligent network and Cisco is uniquely positioned to help our customers meet the business requirements and drive this new growth.

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