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CNBC Transcript: First on CNBC: Cisco CEO Chuck Robbins Speaks with CNBC’s “Squawk on the Street” Today

WHEN: Today, Thursday, February 11th

WHERE: CNBC's "Squawk on the Street"

Following is the unofficial transcript of a FIRST ON CNBC interview with Cisco CEO Chuck Robbins on CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET) today, February 11th. Following is a link to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000493301.

All references must be sourced to CNBC.

JIM CRAMER: LET'S TALK ABOUT REAL NUMBERS. LET'S GO TO CHUCK ROBBINS WHO DELIVERED INCREDIBLY REAL NUMBERS. IT'S UP SHARPLY THIS MORNING. NOT JUST BECAUSE THE QUARTER WAS BETTER THAN EXPECTED BUT ALSO BECAUSE THEY RAISED THE DIVIDEND SO MUCH THAT IT NOW IS THE HIGHEST YIELDING STOCK OTHER THAN VERIZON OUT THERE. CHUCK, FIRST OF ALL, CONGRATULATIONS. THIS WAS THE NUMBER WE'VE BEEN LOOKING FOR. 4.6% YIELD, 24% INCREASE IN THE DIVIDEND. BUT YOU TALK ABOUT THE MACRO AND WORRIES ABOUT THE MACRO. I'M TRYING TO REALLY UNDERSTAND. WHY THROW IN THAT MACRO WHEN IT IS VERY CLEAR THAT CERTAIN THINGS THAT YOU'VE DONE LONG TERM MAKE THIS STORY A LOT BETTER ON A CYCLE BASIS THAN WHATEVER HAPPENED IN JANUARY. GO AHEAD, CHUCK. CAN YOU HEAR ME?

CHUCK ROBBINS: OH HEY JIM, I'M SORRY, I COULDN'T HEAR YOU. HOW ARE YOU GUYS THIS MORNING?

CRAMER: WELL, GOOD. YOU KNOW, WE'RE LOOKING AT YOUR STOCK AND WONDERING WHETHER – I'M SURE SOME PEOPLE THINK IT'S AN ABERRATION, THEY WANT TO KNOCK IT DOWN. BUT THE FACT IS YOU RAISED THE DIVIDEND BIG, THE NUMBERS WERE BETTER THAN EXPECTED. I'M TRYING TO FIGURE OUT HOW YOU CAN DO THAT IN AN ENVIRONMENT WHERE EVERYONE SAYS THE WORLD IS ENDING. BECAUSE IT DIDN'T SEEM LIKE A WORLD IS ENDING QUARTER.

ROBBINS: YOU KNOW JIM, IT'S AMAZING. IT JUST FEELS LIKE THIS MARKET IS BEING DRIVEN SO MUCH RIGHT NOW BY EMOTION. AND WHAT WE SAW DURING THE QUARTER WAS AS I SAID YESTERDAY A TALE OF TWO QUARTERS. THROUGH THE FIRST TEN WEEKS, WHICH WAS THROUGH THE END OF DECEMBER, WE ACTUALLY – THE QUARTER WAS MOVING ALONG AS EXACTLY AS WE WOULD HAVE EXPECTED. AND THEN THE LAST THREE WEEKS, AS I STATED YESTERDAY, WE HAD THE DUBIOUS HONOR OF ENDING OUR QUARTER AT THE END OF THE THIRD WEEK OF JANUARY. AND WE ALL KNOW WHAT WAS GOING ON IN THE MARKETS AT THAT TIME. AND WE DID SEE A SLOWDOWN IN THOSE LAST THREE WEEKS, BUT, YOU KNOW, WHAT I WOULD POINT OUT IS THAT IN LIGHT OF THAT OUR TEAMS EXECUTED INCREDIBLY WELL AND THAT IS OUR COMMITMENT IS THAT WE WILL CONTINUE TO EXECUTE DESPITE WHAT THE MARKETS HAND US. AND I'M REALLY PROUD OF THE TEAM.

CRAMER: CHUCK, THE OTHER CRAMER, OF COURSE THAT IS YOUR CFO CRAMER, TALKED ABOUT A NUMBER THAT I'VE NOT SEEN FROM CISCO IN SOME TIME. OPERATING CASH FLOW UP 36%. I KNOW YOU WERE ABLE TO TAKE ADVANTAGE OF THE PROBLEM WITH UNICORNS BECOMING PUBLIC. THIS JASPER ACQUISITION, NOT AT ALL ASKED ABOUT BY THE ANALYSTS WHO REALLY OUGHT TO START THINKING ABOUT THAT AND NOT JUST BUILDING THEIR MODELS, 1.4 BILLION. THIS TO ME, WHEN I LOOKED AT JASPER'S CUSTOMERS, MEANS THAT YOU ARE CLOSER IN PARTNERSHIP WITH ATT, YOU'RE CLOSER IN – WITH NTT DOCOMO AND WITH FORD AND GM. IS THIS THE ACQUISITION THAT ELIMINATES THIS IDEA THAT YOU ARE NOT A CLOUD COMPANY?

ROBBINS: WELL JIM, I APPRECIATE THE FACT THAT YOU REALIZE THE STRATEGIC VALUE OF THAT ACQUISITION. I THINK IT'S INTERESTING. A LOT OF PEOPLE OVERLOOKED THAT ACQUISITION. THOSE PEOPLE WHO UNDERSTAND THIS MARKET REALIZE THE RELEVANCE OF THAT ACQUISITION. AND AS I THINK ABOUT WHAT WE'RE TRYING TO DO AS A COMPANY, WE'RE REALLY OPERATING ON TWO FRONTS. WE'RE FIRST AND FOREMOST FOCUSED ON EXECUTING IN LIGHT OF WHATEVER MACROECONOMIC SITUATION WE FACE. AND ON THE SECOND FRONT, WE ARE INVESTING AND BUILDING OUT FOR THE FUTURE. AS OUR CUSTOMERS MOVE TO THIS NEXT WAVE OF DIGITIZATION AND THIS TECHNOLOGY TRANSITION THAT WE SEE HAPPENING, YOU KNOW, WE'RE INVESTING AND I THINK THAT JASPER WAS A GREAT EXAMPLE. AND THE THING I WILL POINT OUT JIM, IS, AND YOU GET THIS, JASPER SITS IN THE MIDDLE OF THE SP NETWORKS TODAY AND IT IS GOING TO REQUIRE A COMPANY THAT REALLY CAN CONNECT THE ENTERPRISE VALUE THROUGH THE SERVICE PROVIDER TO THOSE CONNECTED DEVICES. AND THAT IS WHAT WE THINK WE BRING IN ADDITION TO SECURITY AND ANALYTICS WITH WHAT THE PLATFORM THAT THEY HAVE ALREADY BUILT.

CRAMER: OK, YEAH, TO ME IT WAS THE MOST OVERLOOKED STORY. NOW, THERE USED TO BE THESE THINGS CALLED BRIC. THEY'RE ALL WRITTEN OFF. I'M LISTENING TO YOUR CALL. INDIA, BECAUSE OF THE DIGITIZATION EFFORT, WAS A HUGE POSITIVE FOR YOU. AND THEN I'M JUST GOING TO QUOTE FROM YOU BECAUSE NO ONE IS GOING TO BELIEVE THIS ONE AT ALL, CHUCK. "GROWTH WE SAW IN CHINA WAS VERY WELL BALANCED." I KNOW YOU ARE STARTING FROM A LOW BASE THERE BECAUSE OF WHAT HAPPENED IN CHINA. BUT INDIA AND CHINA, TWO BRIGHT SPOTS FOR YOUR COMPANY?

ROBBINS: YES, JIM. YOU KNOW, WHEN WE LOOK AT HOW WELL OUR TEAMS EXECUTED THIS PAST QUARTER, ONE OF THE KEY THINGS THAT I THINK HAS BEEN A HALLMARK OF CISCO AND WILL CONTINUE TO BE IS THE BALANCE OF OUR PORTFOLIO, WHETHER YOU LOOK AT IT GEOGRAPHICALLY ACROSS OUR PRODUCT LINES. AND IN THIS CASE, WE HAD VERY GOOD PERFORMANCE IN INDIA AS WELL AS IN CHINA. AND I'LL TALK JUST A MINUTE ABOUT INDIA AND SOME OF THE COUNTRIES THAT WE'VE LAUNCHED DIGITIZATION EFFORTS. AND THESE COUNTRY LEADERS UNDERSTAND THE POWER OF TECHNOLOGY AND FUNDAMENTALLY WHAT IT IS GOING DO TO CHANGE THE LIVES OF THEIR CITIZENS, CREATE JOBS, POSITION THEIR STUDENTS AND THE YOUNGER GENERATION FOR THIS NEXT GENERATION OF TECHNOLOGY. AND WHETHER IT'S GERMANY, ITALY, FRANCE, THE UK, INDIA, WE'VE REALLY SEEN ACCELERATION WHERE WE'VE ENGAGED WITH THOSE LEADERS AND WE'VE LINED UP AGAINST THEIR PRIORITIES. IN CHINA, OUR TEAM HAS DONE AN AMAZING JOB. WE HAD A ROUGH FEW YEARS THERE. THE TEAM STEPPED BACK AND REBALANCED AGAIN AND LOOKED AT THE PORTFOLIO. THEY DIVERSIFIED GEOGRAPHICALLY, THEY DIVERSIFIED ACROSS CUSTOMER SEGMENTS. AND YOU KNOW, AS I SAID, OUR SWITCHING BUSINESS WAS UP IN DOUBLE DIGITS IN CHINA, OUR ROUTING BUSINESS, OUR WIRELESS BUSINESS, OUR SP VIDEO BUSINESS. SO IT WAS A VERY BALANCED PERFORMANCE AND WE'RE QUITE PLEASED IN WHAT THE TEAM HAS DONE THERE.

CARL QUINTANILLA: HEY CHUCK, IT'S CARL. YOU TALKED LAST NIGHT ABOUT CUSTOMERS HOLDING SOME NONESSENTIAL BUYS. HOW LONG OF A JUMP IS IT BETWEEN THAT AND ENTERPRISE BUDGETS REALLY GETTING SHUT?

ROBBINS: YEAH, YOU KNOW CARL, WHAT WE SAW THIS PAST QUARTER IS WHEN YOU GET INTO THAT THREE WEEK PERIOD IN JANUARY, IN OUR SWITCHING PORTFOLIO AS WE TALKED ABOUT, WHEN A CUSTOMER IS LOOKING AT DOING A REFRESH ON THEIR CAMPUS SWITCHING INFRASTRUCTURE AS AN EXAMPLE, THAT IS EASY FOR THEM TO SAY, "I'M GOING TO WAIT A MONTH OR TWO MONTHS BECAUSE WHAT I HAVE IS WORKING. WHAT I'D LIKE TO HAVE IS GOING TO BE BETTER, BUT WHAT I HAVE IS WORKING." BUT WHAT WE SEE NOW ARE THAT OUR CUSTOMERS ARE JUST FUNDAMENTALLY CHANGING IN HOW THEY THINK ABOUT TECHNOLOGY. I'LL GIVE YOU A STATISTIC. IN THE LAST TWO QUARTERS, WE HAVE 400 CUSTOMERS COME THROUGH OUR CUSTOMER BRIEFING CENTER EVERY QUARTER, THEY ARE NOW BRINGING AN AVERAGE OF 13 EXECUTIVES FROM THEIR COMPANIES INTO OUR BRIEFING CENTER AND THE STATISTIC THAT IS REALLY TELLING IS THAT 70% OF THE ATTENDEES WHO ARE COMING TO OUR CUSTOMER BRIEFING CENTER ARE NOT FROM I.T., FROM THE I.T. ORGANIZATION. AND I THINK THAT SPEAKS TO THE FACT THAT TECHNOLOGY NOW IS NOT ONLY VIEWED AS SOMETHING THAT IS BEING BOUGHT DURING TIMES OF PROSPERITY, BUT THEY ALSO VIEW IT AS JUST A FUNDAMENTAL ELEMENT OF HOW THEY THINK ABOUT THEIR STRATEGY GOING FORWARD. AND I THINK THAT IN THIS CASE, WE SAW SPENDING ON SECURITY, WE SAW SPENDING ON NEXT GENERATION DATA CENTER. THOSE AREAS THAT ARE STILL VERY MISSION CRITICAL TO OUR CUSTOMERS. AND THEY PAUSED THOSE AREAS THAT THEY FELT LIKE THEY COULD.

CRAMER: YOU KNOW, I GOT TO TELL YOU, WHEN I LISTEN, CHUCK, TO WHAT YOU'RE DOING, I WAS SURPRISED. YOU HAVE SO MUCH MONEY OVERSEAS. DON'T HAVE THAT MUCH HERE, BUT YOU STILL FELT CONFIDENT ENOUGH TO BE ABLE TO INCREASE THAT DIVIDEND THE WAY YOU DID. SO OBVIOUSLY, YOU DIDN'T HAVE TO BORROW MONEY. PRUDENT AT THIS PARTICULAR MOMENT IN THE CYCLE TO BORROW THAT MONEY?

ROBBINS: WELL JIM, I THINK, I WAS LISTENING TO YOU EARLIER TALKING ABOUT THE YIELDS. I WAS GLAD YOU GOT THE AROUND TO TALKING ABOUT THE STRENGTH OF OUR YIELD. AND YOU KNOW, WE HAVE A GREAT DEAL OF CONFIDENCE IN OUR BUSINESS AND OUR SUSTAINABLE CASH FLOWS GOING FORWARD. AND CERTAINLY RATES ARE AT A VERY REASONABLE CLIP RIGHT NOW REGARDLESS OF WHAT THE FED DECIDES TO DO. SO WE FELT LIKE IT WAS A RIGHT TIME. OUR STRATEGY AROUND OUR CAPITAL ALLOCATION HASN'T CHANGED. WE'LL STILL RETURN 50% OF OUR FREE CASH FLOW THROUGH A COMBINATION OF BUY BACKS AS WELL AS DIVIDENDS. AND IN THIS CASE, WE LISTEN TO OUR SHAREHOLDERS WHO HAVE BEEN ASKING FOR A GREATER DIVIDEND AND WE FELT LIKE THE TIME WAS RIGHT GIVEN OUR CONFIDENCE IN THE BUSINESS.

CRAMER: ALRIGHT AND ONE LAST QUESTION, CHUCK. NOT AGAIN MENTIONED BY THESE ANALYSTS. YOU BEAT ARISTA IN A VERY IMPORTANT PATENT CASE. IMPACT CUSTOMERS TAKING FROM ARISTA?

ROBBINS: YOU KNOW JIM, AS WE THINK ABOUT WHAT IS GOING ON IN THE DATA CENTER IN PARTICULAR, THE AREA THAT WE'RE REALLY FOCUSED ON IS THIS NEXT GENERATION BUILDOUT, WHICH IS GOING TO ENABLE THE APPLICATIONS THAT ARE GOING TO POWER MOBILE, POWER CLOUD, POWER IOT. AND OUR PORTFOLIO IN THAT SPACE, WHICH IS THE FUTURE, WAS A $2 BILLION PORTFOLIO RUN RATE THIS LAST QUARTER. $2 BILLION AND IT GREW AT 100%. AND SO, I DON'T KNOW OF MANY BUSINESSES AT $2 BILLION GROWING 100%. SO WE'RE VERY PLEASED WITH HOW WE'RE EXECUTING IN THAT SPACE AND WE THINK WE ARE DOING VERY WELL. AS IT RELATES TO CUSTOMERS, I THINK THAT SPEAKS TO HOW THEY'RE ADAPTING TO OUR TECHNOLOGY AND HOW THEY BELIEVE THAT WE ARE GOING TO BUILD A NEXT GENERATION STACKS FOR THEM AND REALLY ENABLE THIS HYBRID CLOUD, WHICH WE STILL BELIEVE IS WHERE THIS MARKET IS GOING TO END UP.

CRAMER: WELL CHUCK, I WANT TO THANK YOU. AND THANK YOU FOR SHAREHOLDERS TO GIVING YOU THAT DIVIDEND. CHUCK ROBBINS, CEO OF CISCO, GOOD TO SEE YOU, SIR.

ROBBINS: THANKS FOR HAVING ME, GUYS.

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