When Cisco Systems Inc. (CSCO) - Get Report reports fiscal first-quarter earnings on Wednesday, Nov. 15, CEO Chuck Robbins will provide an update on the company's transformation from a legacy hardware provider to software and services with recurring revenue.

Investors also will listen for details on Cisco's M&A strategy, sales of data center switches to Alphabet Inc. (GOOGL) - Get Report and Microsoft Corp. (MSFT) - Get Report , and how the company would spend its offshore cash stockpile if Washington were able to pass a tax bill.

Wall Street expects Cisco to earn 60 cents per share on $12.1 billion in sales. Shares of the networking giant were up 0.5% on Wednesday afternoon to $34.22, while the stock is up 13.2% on the year. The company reports after the market close, with the related earnings call to follow at 4:30 p.m. EST.

While Cisco faces a "soft networking market," Brian White at Drexel Hamilton LLC suggested in an earnings preview that the company will continue to draw value investors because of its 3.4% dividend yield, a valuation at 12 times Ebitda for calendar year 2018, an increase in recurring revenue and a potential haul from a tax holiday on overseas cash. 

Robbins likely will tout progress on Cisco's long-term shift toward recurring revenue, which represents about 31% of sales.

"While still a long way to go in the journey, [Cisco] has shown solid progress in its shift to a recurring software revenue operating model; this shift is depressing current revenue growth while enhancing future revenue visibility," Cowen & Co. analyst Paul Silverstein wrote. 

Cisco has used M&A as a tool to boost its software and recurring sales businesses.

"Cisco has been expanding its software portfolio this year with acquisitions such as Springpath (hyperconvergence software), Viptela (SD-WAN), MindMeld (AI) and App Dynamics (application and business monitoring)," White wrote.

The company said in October that it would buy cloud phone, messaging, conferencing and communications provider BroadSoft Inc. (BSFT) for $1.9 billion in cash.

"We believe BroadSoft can be a more powerful force under the Cisco umbrella, leveraging Cisco's global reach, financial resources, portfolio, brand and scale," White added.

While Cisco has spent cash on acquisitions, Republican tax proposals could replenish the company's liquidity. In particular, Cisco would benefit from a proposal to tax offshore profits at 12%. The company held $67.5 billion at overseas subsidiaries at the close of fiscal 2017.

"Assuming reduction to 12% tax rate, [Cisco] should be able to monetize over $7 net cash/share, which currently, we believe, most investors assign little, if any, value to," Silverstein wrote. 

Look for progress in selling data center switches and gear to large cloud operators such as Alphabet's Google, Microsoft, Alibaba Group Holding Ltd. (BABA) - Get Report and Baidu Inc. (BIDU) - Get Report , Silverstein wrote after checking with companies that do business with Cisco.

"These checks indicate that [Cisco] has secured recent awards or expanded footprint at, among other customers, [Google], [Microsoft], Alibaba and Baidu," he wrote.

Cisco has narrowed the price gap with Arista Networks Inc. (ANET) - Get Report , which improved its position in the market for data center switches. With Google alone, Silverstein estimated, the company generates $200 million a year in sales.

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