Cisco Systems, Inc. Common Stock (DE) Goldman Sachs Communacopia + Technology Conference 2026

Great. Well, thank you everybody for being here. Welcome to the Cisco Fireside Chat at the Goldman Sachs Communacopia + Technology Conference. It's my privilege to welcome Cisco's CFO, Mark Patterson, alongside Cisco's President and Chief Product Officer, Jeetu Patel. My name is Michael Ng, and I cover Cisco and Comtech here at the firm. We have about 35 minutes for today's session. First and foremost, Mark, Jeetu, thank you so much for being here today. It's an absolute privilege to have you on stage with us.

Thanks for having us. Thanks.

Wonderful. Jeetu, I'll start with you. In the most recent earnings call, I think you described this as the beginning of a multi-year networking super cycle. Talk a little bit about some of the demand signals, the customer deployment milestones that give you the confidence that this AI-driven network demand represents a multi-year durable ramp. Also elaborate a little bit about how Cisco's positioned, not just for the networking piece of the super cycle, but also the growing security needs that you've been investing and planning for.

Yeah. It's a great question. If you just take a step back on what's happening right now, I think it's non-debatable at this point that this is one of the largest secular shifts that we have seen in a long time, if not ever. If you think about, there was a very interesting data point that came out with a study from OpenRouter, which was in February, the consumption of tokens by agents actually exceeded the consumption of tokens by humans. Since then, agents' consumption of tokens has gone up 14x. Now agents consume about 60% of the total inference capacity or the total token volume that's out there. That's a pretty meaningful shift. The second thing that you're seeing is the global compute capacity in the world, 60% of that is being consumed by inferencing rather than training.

Why is that significant? Because we are no longer just in the experimentation phase of building a new model, hoping that the volume is going to come. It's actually the models have been built and people are using them, and they're using them at a pretty hefty rate. If you think about the fact that there's probably only sub 2% of the humans in the world that are probably using agents in any kind of power user capacity, right? This is the first time that you've seen in the secular shift that you don't need to have 70% of the humans using it in a power user capacity for there to be massive supply shortage at a macro level on the infrastructure that's needed. I actually don't see an end in sight as far as the demand signal, because we're just getting warmed up with agents.

The agents have not even gone to 2% of the enterprise yet on going out and automating the business processes. Consumers are just starting to get warmed up with agents. This is going to continue for a while from that perspective. If you assume that the demand signal continues this way, which every piece of evidence shows that it does, then the question is: What are the other tailwinds that are also going to continue to persist? Right now, most organizations need fast infrastructure that's low latency, high performance. These agents tend to be far more consumptive on network bandwidth than humans. About 450% more network bandwidth gets consumed by an agent to conduct the same task that a human would conduct, right? One is you have many more agents. You're going to have trillions of agents.

These agents are going to be working 7 by 24, and they consume more network bandwidth than ever before. Five times as much as a human does. On top of that, you then have a huge emphasis on machine scale defense because the attacks are going to be machine scale with agents as well. The post-Mythos effect is going to need to make sure that people are saying, "I need to have the right level of security and observability for agents." It turns out Cisco is in the center of all of these macro trends, whether it be the data platform, whether it be the observability platform, whether it be the security platform, and then the entirety of the networking super cycle for hyperscalers, for neo clouds, for sovereign clouds, for service providers, and for the enterprise.

I feel like this is a very durable trend for a long time to come.

Great. Just on that, Cisco was among the first to highlight how agentic AI traffic was going to impact the network. I remember that chart very clearly where the human traffic was very spiky, agentic traffic was high and sustained.

Physical AI is not too far now.

Physical AI is not too far now. I was wondering if you could bring that back to the Cisco business, right? Talk a little bit about how this impacts the portfolio, the Cisco core business growth relative to what we may have seen in historical networking cycles.

See, in the past, what we used to have. We missed the cloud wave at Cisco, right? That's pretty well known. In any of these major shifts that have happened, there was a favorable architecture for Cisco and an unfavorable architecture for Cisco. In the cloud wave, the favorable architecture was on-prem, the unfavorable architecture was hyperscalers, right? We missed that wave. Right now, there's three variations of architecture that'll persist. There's going to be hyperscalers. There's going to be actually some kind of a minor variation of hyperscalers, which is neo clouds and sovereign clouds. There'll be the enterprise, for on-prem data centers. Then there's going to be the edge. It turns out that regardless of the variant that the market chooses, Cisco has a tailwind.

If you go into hyperscalers, we have a tailwind because we have actually grown our business on the hyperscaler side in two years from almost zero paper taken on AI orders to $9.3 billion.

Right In the last quarter, in the last year, in the last fiscal year, you will see the same kind of tailwind happen within the enterprise, as people are going to want more control.