Cisco Systems Inc ($CSCO) Q3 2026 Earnings Call

Welcome to Cisco third quarter and fiscal year 2026 financial results conference call. At the request of Cisco, today's conference is being recorded. If you have any objections, you may disconnect. Now, I would like to introduce Sammy Ba, head of investor relations. Sir, you may begin.

Good afternoon, everyone. This is Sammy Bodri, Cisco's head of investor relations, and I'm joined by Chuck Robbins, our chair and CEO, and Mark Patterson, our CFO. Cisco's earnings press release and supplemental information including GAAP to non-GAAP reconciliations are available on our investor relations website. Today's call is also being live-streamed on YouTube and LinkedIn. Following this call, we will also make the recorded webcast and slides available on our website. Throughout today's call, we'll be referencing both GAAP and non-GAAP financial results. We will discuss product results in terms of revenue and geographic and customer results in terms of product orders unless stated otherwise. All comparisons will be made on a year-over-year basis. Please note that our discussion today will include forward-looking statements including our guidance for the fourth quarter and fiscal year 2026. These statements are subject to risks and uncertainties detailed in our SEC filings, particularly our most recent 10-K and 10-Q reports which identify important risk factors that could cause actual results to differ materially from those contained in our forward-looking statements. With respect to guidance, please also see the slides and press release that accompany this call for further details. Cisco will not comment on its financial guidance during the quarter unless it is done through an explicit public disclosure. Now, I'll turn it over to Chuck.

Thanks, Sammy, and thank you all for joining us today. Q3 was a great quarter for Cisco with our momentum accelerating and revenue and earnings per share both growing double digits and coming in above the high end of our guidance ranges. We delivered record revenue of $15.8 billion in Q3, up 12% year-over-year. Product revenue was up 17% once again driven by robust demand for our AI infrastructure and campus networking solutions. Our record topline performance combined with operating efficiencies and outstanding execution by our teams allowed us to deliver non-GAAP EPS growth of 10%, demonstrating the effectiveness of the initiatives we outlined last quarter to mitigate memory price increases across the market. We believe the trust our customers and partners place in us has never mattered more and our technology is more relevant than ever in the AI era. As a result, we saw record high demand in Q3. Overall, total product orders grew 35% year-over-year. Excluding hyperscaler orders, which grew triple digits, product orders were up 19% year-over-year, demonstrating the continued broad-based demand we see for our technology globally. Enterprise product orders were up 18% year-over-year in Q3 with strength across our entire networking portfolio. Public sector orders were up 27% year-over-year with double-digit growth across all geographies. Product orders from service provider and cloud customers accelerated in Q3, growing 105% year-over-year with five of the top hyperscalers each growing in triple digits. We also saw solid growth from telco customers in Q3 with orders up 9%. Telcos are investing in Cisco technology as they prepare their networks to handle the scale, speed, and complexity of AI. Now, some color on demand from a product perspective. Networking product orders continue to accelerate, growing more than 50% in Q3, driven by triple-digit growth in service provider routing and compute and double-digit growth in data center switching, campus switching, wireless, enterprise routing, and industrial IoT products. This marks the seventh consecutive quarter of double-digit growth for our networking portfolio overall. AI infrastructure orders taken from hyperscalers totaled $1.9 billion in Q3 compared to $600 million in the year prior with strong growth across our Silicon One systems and market-leading Acacia optics. The year-to-date total of $5.3 billion in orders taken from hyperscalers already exceeds our prior expectations of $5 billion for FY26 with a full quarter remaining. Given this strong demand, we now expect to take AI infrastructure orders of approximately $9 billion from hyperscalers in FY26, 4.5 times our FY25 total. We expect to recognize approximately $4 billion in AI infrastructure revenue from hyperscalers in fiscal year 26. Our Acacia business had its strongest quarter to date with more than $1 billion in orders in Q3 and is on track to grow over 200% year-over-year in fiscal year 26. Acacia is leading the coherent pluggable optics market and we see strong momentum across this business. To date, we have shipped over 750,000 400-gig and over 40,000 800-gig coherent pluggable optics, which we believe far exceeds the next largest supplier shipments for both speeds. We had five new design wins with hyperscalers in Q3: two for optics, each with different hyperscalers, and three for systems, including the first two wins for our Silicon One P200 powered system for major scale across use cases and a Silicon One G200 powered system for a scale-out use case. Separately, we took approximately $300 million in AI infrastructure orders from neocloud, sovereign, and enterprise customers in Q3. We have seen triple-digit year-over-year order growth in each quarter of fiscal year 26 with approximately $900 million in orders taken year-to-date, and we have a growing pipeline of approximately $3 billion for our high-performance AI infrastructure portfolio across these customers. Enterprise data center switching orders grew more than 40% year-over-year and have now grown double digits seven of the past nine quarters. We believe the AI infrastructure opportunity in enterprise is continuing to ramp as Nexus switch orders tagged for AI deployments were up almost 50% sequentially in Q3. Within campus networking, we had record orders in Q3, growing more than 25% year-over-year. We are seeing exceptionally strong demand for our next-generation switching, routing, and wireless portfolio, which continues to ramp faster than prior product launches. We reported our highest ever wireless orders this quarter, growing more than 40% year-over-year. Customers are upgrading to modern Wi-Fi, evidenced by strong double-digit sequential growth in orders for Wi-Fi 7, making up half of the wireless mix in Q3. Research conducted recently with around 3,500 technology leaders across global enterprises confirms increased urgency to modernize campus and branch networks. With traffic across these networks expected to increase 3x over the next three years because of AI, 93% of respondents are accelerating their network modernization plans. These findings support our belief that we are still at the start of a multi-year, multi-billion dollar campus refresh opportunity. The strong demand we see for our technology is driven by our ability to deliver AI-native capabilities across our products, including weaving security into the fabric of the network and modernizing the operational stack of campus networks. Many of the world's leading companies are investing in Cisco secure networking solutions for the high-performance connectivity, automated management, and robust security they need to scale their AI initiatives. Our Cisco Unified Edge solution is also gaining traction and we've already booked a single enterprise deal for over 200 units. Unified Edge brings together compute, networking, security, storage, and software to run AI applications at the edge where data is generated and decisions are made. Our industrial IoT portfolio also reported its strongest quarter ever in Q3 and has now grown in double digits for eight consecutive quarters. We expect this demand to continue with the onshoring of manufacturing to the United States and as agentic and physical AI are expected to drive massive increases in network traffic. Now shifting to security. In Q3, our core security portfolio excluding Splunk saw double-digit order growth across new and refreshed products with strong double-digit order growth year-over-year in firewalls. Additionally, over 1,000 new customers purchased our new products, including Secure Access, XDR, Hypershield, and AI Defense in Q3, bringing the total of net new customers to approximately 5,000 since launch. The decline in our prior generation portfolio continues to offset the growth in our new and refresh portfolio, but to a lesser extent than in the first half of the year. Turning to Splunk, as expected, we continue to see an acceleration in the shift to cloud subscriptions and away from on-premise deals, creating a near-term drag on revenue growth. As we've previously outlined, we expect the mix of cloud business to continue to grow in Q4, while we are on track to exceed our target of 1,000 new customer logos for Splunk in fiscal year 26. AI is accelerating the pace of innovation for security defenders and adversaries, and we are innovating with speed and scale to help create an asymmetrical advantage for defenders. In March, we announced a major expansion of our secure AI factory with NVIDIA, giving customers a framework for deploying AI across their entire infrastructure from data centers to local sites, eliminating the need to stitch together disconnected systems and embedding security from the start. We have also introduced several new security innovations designed to protect the entire AI lifecycle. Defense Claw is an open-source solution that helps customers safely deploy agents using common frameworks such as Open Claw by enforcing guardrails and protecting against malicious behavior and attacks to deliver an integrated zero-trust solution for the agentic workforce. We introduced zero trust access for AI agents and recently announced our intent to acquire Galileo and Asterisk to expand our security and observability platform to include agentic identity access management and behavior monitoring. We also announced new capabilities for the agentic SOC and observability for AI to help detect and respond to new emerging threats at machine speed and scale. We are working collaboratively across the industry to help defend against AI-enabled threats and shape next-generation security capabilities. Cisco was a founding member of Project Glasswing and is participating in private testing of Anthropic's Claude Mythos preview model specifically designed for proactive cybersecurity defense testing. We are also part of OpenAI's trusted access for cyber program. Building on these initiatives, we announced earlier this week that Cisco is open-sourcing the Foundry Security Spec, a production-grade blueprint for building scalable agentic security evaluation systems using both available and new AI models. We are providing this blueprint to customers to accelerate their ability to take advantage of agentic AI and stay ahead of adversaries. Turning to our innovation in other areas, Cisco IQ, our unified AI-powered delivery engine for Cisco services, is now generally available with more than 250 customers already onboarded. Cisco IQ provides customers with a real-time benchmark view of Cisco assets and configurations in their environment, helping to future-proof it against emerging architectural threats. We also continue to accelerate AI advancements internally for our teams. Circuit, our proprietary AI assistant, is now fully embedded in how Cisco operates with near universal adoption across our employee base and over 8 million total quarterly interactions. Circuit leverages a network of advanced third-party AI models, automatically choosing the best engine for every task or letting users make that choice. As a founding design partner with OpenAI on Codex, our engineers have been using it from the beginning, and as of this week, we have made Codex available to our entire product organization to enable them to build tools and reimagine new products at unprecedented speed. Finally, we're also proud of our incredible progress in quantum networking. We recently introduced a working research prototype of the Cisco universal quantum switch designed to route and preserve quantum information between systems at room temperature and over standard telecom fiber. By building this infrastructure now, we are helping to accelerate the entire quantum ecosystem that will power the data centers of the future. To ensure we are capturing the significant opportunities in silicon, optics, security, and AI, we announced a restructuring plan today to reallocate resources and allow us to invest in these key growth areas. These actions are building from a position of strength and focusing on the technologies that will accelerate our growth, deliver unmatched innovation to customers and partners, and define our future. To summarize, our innovation pipeline is accelerating and our latest offerings across the portfolio are seeing some of the fastest adoption in our history. This is translating to broad-based record-high demand for our technology, which has never been more relevant to customers than it is in the AI era. This combination, as well as the outstanding execution by our teams, is driving record results and delivering value to our shareholders. Now I'll turn it over to Mark for more detail on the quarter and our outlook.

Thank you, Mark. Before we start the Q&A portion of the call, I'd like to remind analysts to ask one question and a single follow-up question at the same time. Operator, can we move to the first analyst in the queue?

Thank you. Amit Daryanani with Evercore ISI, your line is open.

Thanks a lot. Good afternoon everyone. Congrats on a nice set of numbers. I guess Chuck, maybe just to start with, the first question was, if I think about the back half guide, specifically the July quarter guide, it really implies that revenue growth is accelerating into the low teens, which is a nice bump up from the longer-term framework you guys have historically had. Can you just talk about the durability of this double-digit growth? Are you starting to see enterprises starting to upgrade their networking architectures and that's really what's helping it, or is this pull forward? I'd love to just understand the durability what you see in the back half. And maybe I'll ask my follow-up as well. It's really on Silicon One. I think you folks mentioned about a P200 design win for scale across. That's the first one you folks have talked about. Maybe you should spend some time on when customers choose Silicon One versus other offerings or merchant offerings that are out there. What is the value proposition that Cisco is providing that's so attractive to them and how big and how far can it scale from a market perspective for you folks? Thanks a lot.

Thank you, Amit. I'm going to let Mark start on the durability of the growth question and I'll comment, and then I'll take the Silicon One P200 question.

Thanks, Mark. On the Silicon One P200 win in particular, let me clarify a little bit about this. During Q3, we were awarded by two different hyperscalers P200 design wins, which is our product, our silicon that goes into our product that is used for scale across applications. So these were our first scale across wins. In addition to that, in the first week or two of this quarter, we won a third hyperscaler P200 design win for scale across as well. So we're really excited about the uptake there and really pleased with the work the teams are doing on the silicon front. If you look at Silicon One, the reason we're winning is because of Silicon One. I've said repeatedly on these calls over the last couple of years that as we move to the future, if you don't have silicon, you're going to struggle to be relevant to the hyperscalers. And I think that's what we're seeing. When you look at the number we put up, roughly half is systems which is Silicon One. It's a massive differentiator for us. It also gives us a lot more control over the supply chain and allows us to be a little more confident in our ability to deliver to our customers. So we're really pleased where we are.

Thank you. Michelle, we can move to the next analyst in the queue.

Thank you, sir. Tal Liani with Bank of America, your line is open, sir.

Hi, guys. Welcome back to 1999. It's great to see the stock going up and orders 35% up. That's great. But I do have a question about orders. And I'm looking at it the other way. Non-AI orders grew 19%, that's excluding hyperscalers. Now the non-AI environment is not that better this quarter versus last quarter, and I'm wondering what drives it and are you concerned that enterprise non-AI customers are buying ahead of time because of supply constraints, because of difficulties to get products on time? Just question about the sustainability of this kind of growth. Thanks.

Thanks, Tal. So what do we see happening right now that we think is contributing to the acceleration? First and foremost, we see continued expansion of a focus on AI in the enterprise. We see customers now preparing for inferencing and agentic applications, and in those cases the network is incredibly important and moving the bits around with low latency is super important, and customers are realizing that they have to modernize. That's why we saw our enterprise data center switching business up over 40% in orders for the quarter, and that's just pure enterprise buildout. So we see that accelerating. Second, leading through this is the modernization, but also we believe customers are preparing for increased levels of cybersecurity threats. We'll talk a little bit about Mythos in a bit, but I think there are some customers that are starting to think through the implications and what they need to do to be prepared for that. And obviously, we continue to see the design wins in the hyperscaler space and continued adoption of our both silicon-based products as well as our optics. So that's sort of how we see things happening, and Mark's going to talk a little bit about some of the numbers. I also don't think you'll see that our lead times on the traditional networking side — Mark, keep me honest — but they're not extreme right now.

Thank you, Tal. Michelle, can we move to the next analyst?

Thank you. Ben Reitzes with Melius Research. Your line is open, sir.

Hey guys. I kind of make it a rule to only congratulate management teams when they're making people money, and it's worthy of a congratulations here. So thanks for the question. I wanted to talk about the comment Mark made around the non-AI portion growing in line with the model next year. Two to 5% I believe is what you said at your analyst day. Maybe I got the wrong number. Maybe I'm too low. But I would think that on the non-AI portion, the price increases would, even though you have a tough comp by the 3Q, the price increases would pretty much get you above that. And so I just wanted you guys to dissect that a little bit more. If the non-AI when you talk about the long-term model is indeed two to five, and don't the price increases get you above that given everything we're seeing and these strong trends? Thanks a lot.

Thank you, Ben. Michelle, we can move to the next analyst in queue.

Thank you, sir. Aaron Rakers with Wells Fargo. Your line is open, sir.

Yeah, thanks for taking the question, and I'll ask them both at the same time. I guess the first question is going back on the supply chain. One of your competitors recently alluded to things getting even tighter and even throughout the comment of possible decommit. So I'm curious if you could give an overview of your assessment of what's going on in the overall supply chain maybe beyond just memory, as far as what you're doing to get allocation of wafers for Silicon One or anything you can share on that front. And then my quick follow-up is that you've got a very significant increase implied in your AI order intake into fiscal 4Q, up from $1.9 billion, I guess if my math's right, close to $3.7 billion. Just curious what's driving that? Is that the scale across wins? Are you starting to maybe see scale-up build in your pipeline? I'm just curious if you can unpack that pretty notable jump into this next quarter. Thank you.

Yeah, I'll make a quick comment and then Mark, you can talk about supply chain stuff that we've done. I just want to remind you this is one of the big advantages of Silicon One. We control so much more of our supply chain and we don't have the number of dependencies that others may have. But Mark, you want to go through some of the actions we've taken and how we're feeling and the fact that we haven't really seen any decommits at all.

Yeah. And then on your second question about what's driving the AI orders, the significant AI orders, I mean, most of what we'll see in Q4. First of all, I just want to remind you, we've said that this business is nonlinear. And if you look at the chart that we put in the prepared remarks, it really does indicate that Q3 was $1.9 billion, a little lower than Q2, but then Q4 accelerates. So there's a lot of timing dependencies here. Just remember that this is nonlinear as we go to the future. I mean, these are Silicon One wins. Half of the wins were in optics. Our optics business really accelerated. The Acacia business is on fire. It's a lot of scale out primarily. We just got the word on the scale across. So there's actually no scale across in the numbers yet. We would expect of those five design wins that we talked about, we'll begin to see some early orders in Q4, but not at scale until we move into fiscal year 27. So I think it's a byproduct of just a lot of great relationship work that the teams have been doing over the years. They love our silicon, they love the supply, and they love our optics. And that's really it. So we just intend on continuing to work really hard and deliver what they need.

Thank you, Aaron. Michelle, let's move to the next analyst.

Thank you. Meta Marshall with Morgan Stanley. Your line is open.

Great. Thanks. Maybe building on that last question, just between what you're laying out for fiscal 26 and fiscal 27 AI revenue, the AI orders certainly don't have the longest duration, but just wanted to get a sense of what kind of duration increase you're seeing in those orders just given concerns around supply chain that may not be as applicable to you, but definitely apply along the chain. And then just on a second question, any way to kind of split the gross margin headwind on product just between memory and product mix. Thanks.

Thank you, Meta. Michelle, we can move to the next analyst in queue.

Thank you. David Vogt with UBS. Your line is open.

Great. Thanks guys for taking my questions. I'll give my two at the same time. So, Chuck, you talked briefly about the security of the software portfolio. I know it's been kind of a thorn in the side of the company, but can you speak to how you're thinking about that business as it improves going forward relative to the old portfolio versus the new and how do we think about the impact of the Splunk model transition as we go into fiscal 27 as customers continuously move from license to subscription? I know you've given sort of a range in terms of where you think that portfolio could end up from a growth rate perspective next year, but just would love an update on that point. And then I'll give you my second question around margins. So I think I heard you guys say margins are kind of stable which makes a lot of sense. How much of that margin dynamic is largely driven by the mix to hardware? I know you didn't give specifics, but obviously if we expect $6 billion of AI revenue next year up from $4 billion, what are the offsets that you're thinking about to help mitigate that product mix versus effectively software and security mix if that's going to grow 50% next year from a baseline of $4 billion this year. Thanks.

Thanks, David. On the security front, we actually saw some pretty good improvement during the quarter. The new and refreshed stuff continued to grow in double digits. We saw obviously the legacy stuff is still a drag, but it wasn't near the drag as it was in the first half of the year. But what we really have seen the last few quarters in particular is strength in our firewall business. Last quarter we saw very strong double-digit order growth in firewalls. So I think last call I said we would exit this fiscal year approaching double-digit revenue growth on the traditional, on the organic Cisco security portfolio, and I think we're heading in that direction and I feel good about us actually making that happen. I think we'll continue to just quarter after quarter see slow steady improvement there. So the firewall results are really giving me a lot of optimism right now. We've had a several quarter run of big win rates and we're feeling good about that. And then on Splunk FY27, I think it's going to be highly contingent upon what happens with this cloud versus on-prem mix. Does it continue to shift? I think we saw another two or three points during the quarter in Q3 from where it was in Q2. And if it stabilizes, then we'll lap the compares obviously and then next year it shouldn't be quite the drag, but we'll just have to see how that mix evolves. Mark, any comments on that and if not you can take the margin question.

Thank you, David. Michelle, can we move to the next analyst?

Thank you. Samik Chatterjee with JP Morgan. Your line is open.

Yep. Hi. Thanks for taking my question and congrats on the results. Chuck, maybe to start off, earlier in the call you did mention being part of Project Glasswing and wanted to get your thoughts around what you're seeing in terms of implications on your business from Mythos and how do we think about implications to your security business overall in the long run? When do we start to see maybe certain drivers to your security business from that front? And then Mark for you, with the restructuring that you're announcing today, should we think about the operating leverage in the business to be marginally better next year compared to what we saw this year? How should we think about how much of those savings get reinvested in the business and how to think about operating leverage next year? Thank you.

Thanks, Sam, and I appreciate the kind words on Glasswing. Yeah, I think the implications. First and foremost, we're using it meaningfully to test our own code and I think you're just going to see us accelerate patches and things of that nature out to our customers. So that's all positive. From a business implication perspective, which I think is the crux of your question, I think there will clearly be security implications for us and I think there could be opportunities for us for sure. As we talk to customers today and I've talked to so many of them over the last few weeks since this has become public, there's a lot of concern obviously about unpatched technology in their infrastructure, not just ours, and there's a particular focus on last day of support equipment or equipment that's past the last day of support and that technology that can't be patched. So I actually think while there will be a security opportunity there, there's going to most likely be a lot of focus from our customers on modernizing their infrastructure so that they don't have this risk from technology that just can't be patched because it's well past last day of support. So that's how I'd think about it and I would tell you that in Q3 I would effectively say there's really no Mythos driven orders. There may have been one or two from a customer who decided to do it and they were already planning on it. Mythos pushed them over the edge, but I don't think we had any meaningful orders in Q3 as a result of Mythos, but that could change in the future as we continue to work with customers.

Thank you. Michelle, can we move to the next analyst?

Thank you. Karl Ackerman with BNP Paribas, your line is open.

Hi, this is Sam Feldman on for Karl Ackerman. Thanks for taking my question. First question, can you comment on why the fiscal 26 AI orders were so conservative? I know you mentioned nonlinearity and customer orders, but is there also a function of market being larger than you anticipated? Any color would be greatly appreciated. Thanks.

Yeah, thanks, Sam. I would say that I think we've had just probably more design wins and more success than we expected at the beginning of the year is one thing. But the other thing is that sometimes these customers, they make decisions and when they decide to go, it sometimes you don't know about it three months ahead. You find out about it and they're like we're ready to move. And so the more they use our products, the more comfortable they become with them, the more comfortable they are with our road maps. I think it's just led them to have more confidence in continuing to invest with us. I don't think it's anything more than that. But it's really that in some cases these massive opportunities will arise and you won't know about them and then all of a sudden you have a big number in the pipeline 30 days later. So hopefully it continues, but that's sort of what I would attribute it to.

Thank you, Sam. Give our regards to Karl. Michelle, can we move to the next Q?

Thank you. Ben Bollin with Cleveland Research. Your line is open, sir.

Good afternoon everyone. Thanks for taking the question. Chuck, I was hoping you could elaborate a little bit about this internal inference effort you guys have with Circuit. Could you talk a little bit about what that's solving for topline opex efficiency? Just what you're seeing from that and then also I'm curious where you think big enterprise is with their own efforts around other activities in that category.

Yeah, a lot of companies have done exactly what we're doing by creating Circuit as a front end to these models. It allows us to put Cisco-based guardrails in place for how we want these models to be used in addition to the guardrails that they provide. And then it allows us to combine both public model information with proprietary Cisco information and give our teams the ability to leverage AI on both public internet data as well as our own proprietary data. So as an example, a sales rep can go in and leverage it and have Circuit actually build a sales presentation on our products based on internal information about our products. So that's a simple example of how it could work, in addition to having APIs out to the different models and the individual can choose the model they want to use or we will default to what we believe to be the best model. But we're also working on delivering independent agents for every employee in the company so that they can have agents that are working on their behalf. There's a lot of work that our teams are doing. I'm really pleased with where we are. And I think other companies are doing the same. On the inferencing front, I think you see customers actually doing exactly that. They're trying to build up their own infrastructure to support a combination of inferencing applications leading to agentic applications that they're using a combination of APIs into public models as well as information in their proprietary data sources using different protocols that are available today, like MCP connectivity. So I think that's part of what's driving the increase in our private data center business, customers just preparing for this.

All right. Thank you, Ben. Michelle, can we move to the next analyst?

Thank you. Michael Ng with Goldman Sachs. Your line is open, sir.

Hi, good afternoon. Thank you for the question. Mine's just on pricing. In response to an earlier question, I think you said there was four to five percentage points of benefit on ex-webscale order acceleration from pricing. I was just wondering if you could talk a little bit about the pricing strategy this year, across what products did you guys implement it, and anything that you guys are doing around changing your approach to leaving offers open, like are you repricing POS? Just anything that you're seeing around price elasticity as well? That would be helpful. Thank you.

Thank you, Michael. Michelle, can we move to the last analyst in the queue?

Thank you, sir. George Notter with Wolf Research. Your line is open, sir.

Hi, guys. Thanks very much for getting me in here. I was just curious about the pricing impact. You mentioned four to five points in this past quarter. As you look forward, is it fair that in the July quarter you'll get a more significant impact from pricing being fully baked into the full quarter? Is that a dynamic here that is part of your guidance? Thanks.

Thank you, George. I'm going to hand it over to Chuck for some closing remarks.

First of all, thanks to all of you for joining our call today and I want to thank our teams. I'm very proud of what we've been able to achieve, the great results really driven by the relevance of our technology and our role as what we believe to be the critical infrastructure player for this AI era. We've made incredible progress with hyperscalers based on Silicon One and optics positioning us so well. We continue to be incredibly relevant in the enterprise and see this AI buildout and modernization continuing. And as AI continues to highlight the importance of security posture, I think it underscores the criticality of fusing security into the fabric of the network and we're uniquely positioned to do that. So I'm very confident about what's ahead. Big thanks to our teams again and thanks to everyone who joined us today. Sammy, back to you.

Thank you, Chuck. As a reminder, Cisco will be welcoming thousands of Cisco customers and stakeholders to its annual user conference, Cisco Live, in Las Vegas from May 31st through June 4th. The keynotes and other content will be live-streamed and available on demand, and we look forward to connecting with some of you there. Cisco's next quarterly call outlining our fourth quarter FY26 results will be on Wednesday, August 12th, 2026 at 1:30 p.m. Pacific time, 4:30 p.m. Eastern time. This concludes today's call. If you have any further questions, please feel free to contact the Cisco Investor Relations department. And we thank you very much for joining the call today.

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