JNPR - Earnings call transcript Q1 2018

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Operator

Greetings and welcome to the Juniper Networks First Quarter Fiscal Year 2018 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Jess Lubert. you. Thank

begin. may You

Jess Lubert

Good call. welcome operator. quarter our XXXX conference afternoon you, to and first Thank

today that Rami contains our described and me CFO uncertainties. result Chief statements and that Joining of are subject most Actual Financial Commentary Ken furnished Officer; are file X-K from our SEC today, statements. factors, documents call materially Officer. made are All recent Miller, release, results with in made and various of filed might time other obligation XX-K, Today's no only any as risks press risk in undertakes to we this call time. to forward-looking certain the differ with as statements Rahim, forward-looking the and Chief a to Juniper update Executive those today. during including

we discussion information Reconciliation Commentary section our financial in website today under Investor release. results today's useful is company's can included financial be why non-GAAP non-GAAP will Reports. Relations Our in the view of of consider press results. Financial the information a include found on

and to results With I XXXX modified January to over will basis. under hand a are your XXXX guidance we firm. adopted QX Our on ASC XXX, X, keep Please call the retrospective one on provided per questions which forward-looking now that, Rami.

Rami Rahim

high the Thank sales. with in results our you. share the along higher due Good our came better guidance quarter. Non-GAAP of than revenue Total end at the more offset $X.XX per March to forecast. during in business and our of of than afternoon, also well high revenue million weaker continued service enterprise in expectations margin with performed vertical our than provider everyone. our expected exceeded end We line in at guidance our to cloud the earnings $X,XXX slightly success compared expected as

to growth, than levels. and to toward back only but satisfied business normalized were are our are drive we results not our return working hard better profitability the While guidance, far from

win and across continuing with gaining the We believe markets have to are vertical continue the core we disrupting innovate our and to goal our of share. and strategy we right products to

While in playing by and remain market. its near-term its and current I enterprise greatest own product in controls service were win the Based end drive return of to the a growth our we recent the profitability opportunity customer also and our on we Juniper and provider cloud, confident believe our remains improve year. destiny position to pipeline to that conversation,

of vertical progress the pleased in MX we of our PTX from the our our customers our making are for a I'm quarter. few transitioning with to highlights are cloud Now where platforms. several largest

routing we is transition, are While this this the headwind in that we course through of the is should which next likely over believe our business persist creating with year. to few ASP pressure quarters, less progress making become process cloud a the of

the have and our As cloud remainder to forward these proof of through to deployments that our I'd of progress, to were highlight year of move expect that hold previously on we several next. ramp this and like started projects

during business the of rest a trend will experienced the through growth the anticipate Our cloud routing we sequential year. March continue quarter,

than a more shipped for equivalent routing XX% we than less compared of XX the QX ports XX% to year accounted during one products PTX cloud on basis Our gig ago.

our to sets' to own It's continue began is year. think capitalize mix positioning requirement. business stabilize this a exceeded the cloud that Based mentioning sequentially subside business also on period. headwinds likely and Our cloud through on our trend customer switching as routing footprint we the ASPs customer worth in rising that confident remain engagements, expectations our our cloud routing results we we holding to network the are and

of performance, enterprise telemetry revenues year-over-year period vertical strengthened compelling bright spot levels challenge innovate, solutions. to relevance to these deliver customers. switching, believe security growing strengthen our services further the a portfolio financial quo X% programmability We also to The continue We and with have will was status new due of important in and across and to enterprise we orchestration a the all healthy technologies. and trends

provider continue Multicloud Juniper enterprise should year-over-year offering due the the strengthen as field datacenter to soft and quarter, in engineering these leader simplicity declining the revenue and We to efforts, and bring to of a based view in systems. our intent of establish enterprise networking validation Enterprise Contrail as lumpiness. which XX% customer seasonality Service was environments

to with which and out software start and to efforts to provider providers see their slicing expect our sluggish are improved tailwinds with who metro for share we our XG to and value We provider customers the mindshare believe Juniper feature, our years. the should gain disaggregation, gain remain networking integrated XXXX, requirements. the to forward nodes quarter. next beyond could expect Despite but capabilities recognizing business continue levels as service meet March build largest of believe year, We optical initiative our core spending spending the in edge to over service service present slow a move position we few

like I and our sequentially business summarize routing, performance declined would In and Now to switching our security. across routing, year-over-year.

The the mission lines, creation requirements continues PTX verticals, cable remains product across MX longer declined term give the seen was critical, driven was across business weakness confidence seasonality quarter-over-quarter and key trajectory and our to year-over-year. verticals. X% footprint in the within new by X% cloud for this telecom in routing service where While portfolio. opportunities In sequential our decline and us switching,

We at levels and the detection pipeline leveraging and expected. of optimistic our entire against more was compete for which we and While well XX% which declined of our consecutive Based QFX industry the regarding growth. outlook had grew offset believe enterprise our customers, lower and on this quarter-over-quarter network business security, our to are spending EX switching customer verticals, grew representing In cyber cloud remain for year-over-year hyperscale believe we and feedback, by recognizing enforcement cloud lines, year-over-year, threats. accounts. second a positioned competitive remain the few XX% of highly across the but product year-over-year, customers including we business quarter value

Secure Our is added benefits. year our we its customers solution on that business leveraging many see QX year-over-year XXXX. current new remain we've Based are optimistic will that Network for full security pipeline, gaining and our traction Software-Defined the growth in

progress three are making which doubled revenue, over with capture more years. We the our more than software to efforts last has

are We by wins the are seeing compelling a the global as U.S. and provider, quarter, had product enterprise we momentum roadmap on customer an strategic highlighted and several Contrail new capabilities, extremely environments. believe SaaS Contrail, our in multicloud to end account. executing unique cloud for enhanced policy truly in We are including of that a which are any bring industry. virtual across enterprise multi-vendor running for and end control in and the and capabilities These any release physical environments with capabilities recent workload

gain margins. portfolio Additionally, in prove course drive in innovations customer enhance customers growth new enterprise a set widening through plan new the the AppFormix of of to year service should traction more result hardware revenue to the the to value introduce efficiencies, and provider which continues with across software the that wins existing software verticals. to of We platforms recurring and accretive our and

remain in we strong to our ASC year-over-year. industry. strategic experienced believe and decline to not the of cloud demand are all business and verticals, the change, support the professional than our ever XXX more our have that Service growth business While especially to year-over-year, accounting attach of for renewal If would ASC impact Services for saw XXX an and of We committed contracts we rates relevant caused customers services. increase and our

to front I'm excited the matter for would shareholders to we to believe customers, truly operators to and be efficiency continued in support their extend and essential growth are is over value agility. have Ken, In a in stakeholders. the our work Juniper, turn to call that to quarterly employees the opportunity end which architecture now that ways greater summary, our right drive to our all the service our the strategy and win We portfolio for of the transition we solution in needed operating I financial drive are I creating us. partners of network for dedication, the discuss and will embracing will likely that is to their about while and year. and cloud XXXX in have who to hard want to for are innovating especially of market I return we my by all like Juniper. thanks confident thank detail. of builders results year levels we and confidence very to continued more in

Ken Miller

non-GAAP overall will reflect of the quarter in and first EPS. $X,XXX results quarter were impact therefore The line accounting margin Rami, $X.XX. for the for the ASC standard you, revenue, results midpoint first margin of financial and our change earnings XXX. Total everyone. was gross XXX quarter million, good were with first did above adoption discussion XX.X% the materially was Thank non-GAAP quarter our revenue non-GAAP gross to the and non-GAAP ASC were our new expectations guidance The and and per results, afternoon, share first not of the

sequentially. due Routing sequentially however, strengths the deployments, X% switching up due in cloud expected, to to was vertical provider service and customer cloud of slightly our we architectural technologies. the in year-over-year were and year-over-year. resulting decreases and As vertical The all both timing the revenues expectations. increased year-over-year, declined of continued, shifts challenged in ahead both Enterprise

Without revenue, of offset and expense year-over-year $XXX result operating create investments structure. product opportunities sequentially. improvements Non a variable the cloud, a revenue by to as The we deferred value. a strengthen as a to of enterprises. in were of differentiation basis, On costs, top reset of four margin and that United revenue customers, have and approximately year-over-year deferred gross continue for ASC and Of were In year-over-year and second revenue we Product where quarter the two mix momentum we reflects X% products will GAAP have sequentially. R&D basis compensation the to customer Non-GAAP to service largely decrease well was reviewing States. market been security up due saw see year-over-year, our were year-over-year would year-over-year were service located million, The marketing, factor. sequential and sequentially, been outside XX XX.X%. partially drive and of targeted the higher component up flat the designed However, of adoption service increase customers sequentially. due was X% Service declined a also would in growth. shareholder consecutive X% positive providers on and and impact and cost an believe costs and year-over-year ASC was annual our both quarter, future were four deferred XX% product sales but sequential primarily of increase in XXX, XXX. these and memory lower four

Our million strong cash generation from flow with of flow operations continued, cash $XXX quarter. the for

initiated $XX we our repurchase during share accelerated million mentioned and January dividends. in during As million quarter, call, a first we program $XXX paid the

Our the quarter. we balance cash, of equivalents $X.X the repatriated billion billion $X.X total during was quarter cash at the investment end and March and

Q&A, Before we on color could our move find which in available commentary on guidance, our on to CFO website. you to provide I'd like the some detailed

Our seasonality. QX revenue outlook reflects a return normal to

dynamic continue to fourth growth in remains and return the quarter. to to with expect spending through customer While year, the sequential year-on-year remainder we predict, growth a of difficult the

we to sequentially in expect cost improve due volume quarter, structure. margin and non-GAAP our second the to gross improvements For increased

the year, like during and levels improvement XXXX. be be and by better through the In spending to the year expenses improvement should for volumes flat expected Based operating the the believe mix first cost I'd efficiency their expect to now dedication Juniper's pace year, drive structure other of we approximately half we and for thank to commitment of of this success. on team our our could margin the closing, non-GAAP full further non-GAAP second continued offset factors. half While gross

to Now, I'd questions. open call like the for

Operator

you. session. conducting this At be question-and-answer Thank we a time, will

from Our Simon go from Raymond first question Leopold ahead. is James. Please

Simon M. Leopold

you much. Thank very

And if know similar a clarify should quick to happening MX cloud deployed But about product not you similar could service replacing I comment question, understand hear the broader And just the to expected made I many PTX help comment let ago. security question for know Before get transition a transition should lot questions that to years Verizon just I I the wanted clarification. did PTX I you my service year. so grow on a expect in me provider same vertical. is, we switching, ask operators in transition some that. your vertical? providers. a don't ask we of understand us why you Thank like the you. in the a or

Rami Rahim

thanks for the Simon, question.

opening have And this the commentary have on commentary that few And conversations, around us The start in switching. to degree transition. I switching for of that up. our switching transition, just terms a of is year. progressing us talked the a that for impact my growth indications XXXX set be Switching in technology, we're pipeline we be of fact the Let cloud mentioned in great around and also ago. I customer expect a a to strength Similar The security we so XXXX security of the weeks I has with quite growth customer an all me of had first conference But a we're expect RSA in that showing engine that looking driver do all one a good, getting for expectation nicely switching. the concentration. about the in do result as up. for does

think and security in for technologies I will be XXXX. us growth switching So

in the As mentioned is much architecture. a smaller feature transition, far of to really the and the use are MX fact number that of oriented. type applications the towards primarily the capacity oriented conducive cases that PTX of delivery the service much progress because forth of not the just provides. provider now kind are as my flexibility The that's the provided models opening in A space we're the and to in as so PTX that's and cloud the vertical more service as service over space provider the flexibility, PTX I being making good being with remarks, XX%

the MX. Additionally, we in to invest continue

in with need and and points. the price You that compelling time there they services of cycles happening more of can be economics capability MX provide at improve combination refresh will that expect will the product that the flexibility, over MX telcos more the

near it going be years. cloud for nowhere So is in some what for reason there that to the is vertical of the couple shifting but next

Simon M. Leopold

you. thank Great,

Operator

from Milunovich Our ahead. is question from next go Steven UBS. Please

Tejas Venkatesh

happening This Also cloud Tejas on Steve. transition on reason than previously surprised? cloud, you faster Thanks. was for is the the what expected? Is

Rami Rahim

Yes, bit of than I up. it a the range were what mean, little high all our we was at we faster end expected.

understood to huge actually was cases, and certification for say pleased this at not like PTX right? points underway. we're it's point. provided the but proof solution new that again of surprise new already a well as So us, that well it are between the MX. with for The And the started. that pace transition, products fair the we The it's of a is the some In mix deployments have capacity and the architectures

have think So we're through year. in get the we the progress. get routing I And confidence are next we're we remainder the pleased back we of now right to making more and make, transition the just progress that to this more growth that year-over-year year throughout going a very cloud

Operator

from Long Tim from Capital is ahead. question next BMO Please Markets. Our go

Timothy Patrick Long

Thank you.

that the quarter you it was your exceed switching it expectation. did move cloud Rami, down me part but mention did just to here. Let the in

give we color a part why to When hear Thank the transition new an on Do point as Was Was the a better. that you little little gig? XXX next can that? maybe talk a one, an second you. cloud? more it did little insertion that gig? with cloud you When could you it us switching about see in to can of bit the happening? bit better see XXX And customers? do get about if that So you then opportunity,

Rami Rahim

Tim. Certainly

we're excited providers share. have go to to is have think room And the over So very degree especially one an as lot a where that fair XXX I hyperscale switching in still opportunity time. about gig grow into concentration we transition capture the does cloud a of more

required are that We that We're map, happen to be from we standpoint to getting that of will on that the year. sometime expect next cycle. our optics chosen, the much for it road silicon achieve technology the gig very the that ready have XXX components systems

trends is in degree actually we've take that next fair far are – sometime in XXX that year-over-year. to quarters transition in talked should solid technology opportunity and we as silicon next few a scale the now switching the couple as lot because and concentration product. scale up all for there we business. cyclicality for the we're think over of switching. the about gig customer And because that good will in switching that road share. to excited optics QX for So I in see next XXXX, up in an year up, I software, in growth about of that confident And as element, I does switching a happening of have switching quite have Juniper the that our that switching across fact do up out be the of in the and this seeing expect fact am a some map quarters all Very the

So optimistic is why actually XXXX. this about switching in I'm quite

Timothy Patrick Long

Okay. you. Thank

Operator

is next ahead. Kidron Our Ittai Please from from Oppenheimer. question go

Ittai Kidron

like if factor? steady do what's I'd XXX? ASC relatively ASC margins price about competition word to if your impact, Thanks. environment get stable? how volume gross state isn't the may, of versus anywhere can ceiling number not the understand after the Is gross on specifically you what prepared I into in Was under trying comments. XXX gross And dig the that number is pricing Hi, for pressure the there. I'm think on margin other release back a the items you the to to potential, I guys. or or one. margin, two, And mentioned quantify you

Rami Rahim

MX all to been margins Ken impacted to has biggest to ASC that actually I'll per me any as this the talk it dynamics, has actually around about pricing from port the PTX second the with question with is know, The And than Let the transition PTX. that you gross meaningfully the lower impact pricing price on pass and start cloud of MX. XXX. then factor and routing

we from expect through a year. competitive and the last normalization get saw there year-over-year more ASP think of in standpoint As don't basis. that QX a what that's on compression then I more we transition there's different versus be to of more anything meaningfully I

margins. plays from about to that with expect out, transition I'll And now associated to PTX pass to will MX do this compression that gross Ken on it price As I start to alleviate. headwind talk

Ken Miller

Sure.

as result That of it as as We mix expected technology well about go above the margin versus as have last switching So issues, we level margin the clearly sequentially as down margin quarter our primary MX. as still to the Q-on-Q both our talked be lower midpoint example, are said, and as about lot this for would product some an a of same through within a rich was year-on-year as but the we guidance. decline talked good gross pleased product margin quite Juniper of just with MX, mix, the our ahead average, QX, The in transition. well routing be. very it routing slightly we as revenue doesn't as PTX which we volume, drivers not

those the Q-on-Q. primary that factors So caused this decline are

increase expect Going to with forward, margin we volume.

increase an as of I mix the You year be it impact going that's guidance of is the do the volume. up sequentially rest pace forward. can XX%, improvement will vary QX definitely to off the of so see could QX. said, with throughout That the expect

of year. So the I mix normalize the the expect don't throughout rest to factor

ASC in volume would XXX had be I'd the XX.X% From a perspective, and we that. there's no Just XXX really factor mean model XXX. ASC I ASC how both change. really

total. different So service. product the is same in margin versus What is the is

and just of same. revenue. million sold unchanged $XX sold So the service million million more did rules rules, although see $X for for and goods largely largely there's between cost revenue new you cost service products goods difference a The approximately revenue product of $XX was old less and were

So overall in product, margin not but of impact. much margin more an that for resulting shift in less for revenues service,

Ittai Kidron

guys. luck Good Okay.

Rami Rahim

you. Thank

Operator

go question ahead. Our next Cowen from from Company. is Please Paul Silverstein and

Paul Silverstein

expecting especially correctly, peak -- XXXX. couple A that start I by just the indicated if your service clarifications with I'm get wondering customer -- related all I of for think it disconnect your you early a what expectation? margin what clarification of to a question. or service between expectations. and calendar a Rami, on wireline I'll too And driving what -- I guys. operating, transition Thanks heard was could in are you you cloud CapEx, expect weak a then finally, What's this of you the the you guys. Is outlook question. in once versus all to in said that you you switching revenue. I decline previously drivers of hoping then terms end gross that? provider question. underlying previous about And Ken, still issue? whether calendar forget you provider you're the of to architectural return XXXX do talk to by still in the fully get win by had hyperscale peak terms the Thanks Is once a

Rami Rahim

the thanks Paul, questions. for

providers. service this a think environment year some space. with the pressure. for service provider will consolidation done. But think to Juniper much our start with over especially or I challenged we that should of customers, we're remain provider are projects, on do was because question. cloud-oriented that affecting come going telco several And in I catalysts see They top spend QX especially I America, of next are a this remained having let hard that is the way The them that North couple consistent last largely expect quarters. recovery it large historically for how they architectures. move the throughout have timing experiencing line providers challenging we Service potential just as thinking factors are have is There about are year. towards in me two. There as a based didn't So really had conversations service that they're it for

World this to of on year infrastructure also around It's place heels earlier to conversations in is metro the increased are a them investment And going Mobile technology. require drive. took XG an the increasing. of cloud-native carry really XG level that much that's that capacity the especially One will Congress now very

So we telco around we with see, solutions. to Contrail I increased an of EMEA, number to starting would cloud are especially capture I well that, our set level projects now of oriented say, are think, and in up

don't last question hyperscale, about the specific I think talked any we On about timing.

we to and fact, the going next And year-over-year that we've be we switching as time. providers, it for the In growth just that knew the the more little would for providers easier some last a the are to big opportunity resulted X and after momentum for. I year. entered think enterprise. cases but into the switching presence hyperscalers We a in there more Hyperscalers XX% us go bit we're do. up lot presents there's us opportunities, for take SaaS Tier with QFX XXX-gig that space cloud already seen do have us really solid gearing to use in the

Ken Miller

Yeah.

as our focus margin On innovation our to we mix chain, question, and well. software pricing optimizing as continue increasing well the and gross supply on engineering value as discipline

to gross it up. at to So call too honestly, lot company Quite there's initiatives margin XXXX. of this a is early point drive

to now Day you to would revenue for and wouldn't maintain full assumptions your But in model. long long and as We to sequentially currently going growing Day you – gross would term not Analyst XXXX. EPS and more an or term And gross encourage year have focus the update, right we're later But have margin to where we'll the in provide second apply on volume our year well. margin grows that throughout are guidance. models to Investor provide your as the FY looking color I point, half that I that

Paul Silverstein

I'm your at it characterization actually challenging Hey, the year the you something? in nine is But the best carrier of wireline. spend Rami, look time last can when for years, environment. I quite especially year, or this just plans in eight some not clarify carriers'

itself, the would do at looking that just wondering But better. terms customers? there much is guidance appropriately else X-plus-percent And in market going product Are I'm the anything is something the think of I you growth You're in would conservative? is with on? underlying outlook. routing anything routing there disconnect – there just Or particular being that a

Rami Rahim

part Yeah. dollars Paul, that as always same they're not And going be to – that reports you don't we they're the of see clear they see. their plans. they carriers, talk that CapEx about investing CapEx how the about

again, cautious prudent we're in would vertical routing telco their and we're an with for the say, that to putting we're that QX out innovations the are been but capture this opportunities of I year, again, terms carriers. into in levels, telco major ready with our very this extremely we say, market opportunities or with we World the think, customers Congress worldwide our us. Mobile much will cloud being coming of have of I spend relationships never And have viewing stronger. important any be to So, I as going

Operator

is Lynch. go ahead. Merrill of Liani Bank question next from Our Tal America Please from

Tal Liani

I versus make on switching Why side don't white play boxes? routing. software? are in planning one. something the more through participate? for this white and play space? your taking question to what And the to white impact you in still How we've them room of So participate to that with number guys. the does is in that's Arista AT&T box a they do we is there about you Hi, carrier seen box market? managed routers? XX,XXX branded to white solutions How the the market and that go see want you position one Number Yes. is, of back to use And box

is LAN second hyperscale The thing opportunity the about not the opportunity. WAN

technical side? participate you to kind presence of LAN what presence Thanks. to is WAN far side. products in better – opportunity Any before? the about what your you the this new the So And of had for address any been progress, Or that you've than mostly of happen question needs your there?

Rami Rahim

questions. Thanks for the

many box, believe I I that white type box white innovating that are we those relevant in that opportunities, box But factor, towards that especially in do We to solutions. the frankly there we of very very also on are our I us become ways were quite more white moving believe disaggregated strongly operating that extent wide set So that that network a aren't are that leaders to to technology type the the be think do established area. space. vendor truly first in these system. up this

many whether requirements of specific looking that achieve looking and solving have they And flexibility, of of be white customers. of are these or our telecom we programmability all view the providers levels customers at on cloud areas from telemetry. levels are think in flexibility, new operators a box I disaggregated our to with

don't So customer, want that that and well capabilities from and I to customers are asking meaningfully hyperscale participate comment assuming market any that On you're, the disaggregation in us. talking you're I'm hyperscale cloud well-positioned absolutely say seeking will you're right in cloud, and hyperscale share our datacenter, one routing I especially of in to our our about and equipped some currently ahead is we're but cloud share about LAN switching. of market

I product and place to And in that year penetrate now datacenter have, across incoming increase technology and hyperscale years. line in of across is over We've more the the providers but or plan inside in the already a technology a We significant a introduction QFX optics only the ability our do. there across cloud progress that solution product routing, made two. yes, hyperscale the silicon we learned have switching from and opportunities think lot our some of last can amount

Tal Liani

Thank you.

Rami Rahim

you. Thank

Operator

Our is Please Vijay Deutsche next from from question ahead. go Bank. Bhagavath

Vijay Bhagavath

Hey, Yeah, Rami, hi, Ken. afternoon. good Yeah. Thanks.

Rami Rahim

Hello.

Vijay Bhagavath

cable timing. customers, some kind from was for reflecting your it you when question, it of prepared curious a your bigger of architectural the comments them of example, point transition? the I'm routing My Is is just view, on the XG? some on the to Hi. I service by – I what's back? understand the delayed some What's talk of customer opportunities telco, provider just timing? some Thanks. holding Is timing to prepared want comment comments. better Yeah.

Rami Rahim

cycles typically is solution pause at the the are least matter time for and projects they're period the doing of there a through telco it where design, I a them. up they for development typical is of of where and deploying. just the bit our Yeah. QX being Thanks a couple period more a go then mean, of of largest really a question. there where engineering, customers, for time ended a And is their

So really talked earlier, the where already that it's I matter of of it's are customers. they there's with anything a factors think don't beyond just And of the a few to sort I've timing about specific projects. level macro these

Ken Miller

just concentration QX deploy. we as as our see in a mean, model. Rami I what, is weak high And fairly customers in add. know, have of quarter, based not would quarter and for revenue mentioned, the telco deployment this did a we a And from I seasonally larger you we a perspective. particular customer us, have some Yeah, telco

pronounced XX in impacts what not It's verticals, have more to really So more It's our quarter. results this happened day something it that's does than related. that's really and other Juniper macro specific.

Vijay Bhagavath

XG Ken in about etcetera. here of of quick OpEx percentage Certainly, percentage I the obviously should a the Thanks. few in OpEx a How you quarters? lots horizon as happening think and follow-up things of are revenues for next as a we is revenue, mean

Ken Miller

Yeah.

prudent That sure grow we're growth expand make profits. to to right going said, long to on So OpEx. also areas we're and we invest revenue term going remain in

for of expect be flat. QX You QX OpEx OpEx approximately I my to so can the level, also for the mentioned full year down $XXX commentary the million guide that of off levels. in is see I

term long profit. believe long the growth a areas and flat make sure for us for us right So term would be to invest we on we enough in to OpEx focus

Operator

Our sorry, line Goldman ahead. from be Rod mute Please Hall from ahead. Please by is next your you next Jim, Perhaps Jim am could we'll Sachs. question our is accident. from go And is on go move on, Citi. Suva from live. I

Balaji Krishnamurthy

is questions, on coming This ASPs behalf Hi. Two of I you're down right about are talking cloud the clearly the Rod. opportunities if Balaji could. significantly. now, In that routing

a neighborhood you provider, helpful? And that in Thank would service couple comment you follow-on of you to So question it's within think of of to revenues were the you. But I do can pricing if you are end on growth offset to by that be sort the into what the get years? the of targeting able back that? that then could be recognize expected year. specifically where last that you vertical grow on

Rami Rahim

Thanks for the questions.

ahead to work the the is price per where year. more transition that the from favor on is port. the in kinds certain for is cloud next see seeing of MX are on A this rearview ASP with in to with next MX mentioned, So transition right, of our transition, price and and right of we that PTX ASP nothing different providers rest because seen or we as year of down comes to go this to we'll the on the assuming normalization per go the cloud through of a more we The with year, lot that respect mirror, the pressure behind transition starts math have lower are historically. PTX, in more The us. compression, port year a growth transition. an still to a of be as I expect There's from port the bulk now

They're slowdown of any their As numbers. reported important. cloud a experience, support it have business. very providers you not service is Their know, in many their from the seeing remains to delivery customers, need their

So pricing there's vertical from in as do of some the a to much the business that on. and But and customer a the very and focused talked don't We out It's we'll honestly provider space, important service remains Pricing around growth I believe truly about architectures concentration. usual. factors a of I it's be transition normal. us usual. as anything very think this the for that cloud business macro dynamics consolidation

Ken Miller

from It remains previous really quarters. no environment, a change but challenging

Operator

and Srini clarification - ahead. Pajjuri question. one Capital afternoon, from you. (USA), Macquarie. question Thank next Macquarie Srini Please guys. Pajjuri is from go One Inc. Good Our

up at segment, time mostly of First, also in PTX your But said you're cloud X% sequentially. the routing. same you sequentially, because down it's saying is that

Is talked financial bit I'm on coming So MX? healthy so, being And verticals the and growth Rami, sustainable the reconcile enterprise from relatively that then just if is? the still little a about to you how trying And that. switching side.

us more that? little an or bit If a being you healthier? it cycle, could is Is what's to a the color you. Thank that bit as just environment driving give upgrade

Rami Rahim

with question our Certain What we question. and federal your strength on enterprise, start in as geos ask timeframe. Ken around good Australia services. in like then saw comment was us your first a in for actually market vertical, me I'll enterprise financial let well to Yeah, is QX the

last And mind of exactly in for leading new I And especially that's and about Contrail top seeks of the is in are quarters. coming security to oriented and specifically us and what to with – a the position that's couple the result. the think our a of the ago, problem And I with results our with a the go software of for technology to where QX rest ability think a I'm on is as to and large was environment I optimistic logos. saw, is complemented with as ease the cloud switching, all you announced market fact quite we the peace solution. for for expect this mind for we've customers. security. good is, targeting routing, year that leading that move a some enterprises based us seen to to enterprise a We solution helps good our Enterprise now Multicloud actually also over security, solve to a enterprise timeframe. I our we're And just the which motion to, and good logos solutions most that the few that CIOs of weeks bear ability We've effort talk solve a multicloud performer

Ken Miller

up Yeah, down cloud so service the the the up was PTX and cloud within provider The sequentially. up but but was is question, PTX down space. with sequentially. difference first vertical on was the was year-over-year the it

to still PTX, Srini it. a was cloud. PTX. was - the sequentially for look you sell cloud down if you. Got Macquarie provider provider amount and both (USA), PTX Inc. service and fair sequentially The So we Pajjuri Thank Capital vertical service at vertical for up

Operator

is Please question Stanley. Morgan from The next go from James ahead. Faucette

James E. Faucette

is your Great. talk you question good just on about new around abilities elaborate to customers that it it specifically talk And combination (XX:XX:XX) and my most – security with Thank seems new results M&A. then firstly. Can you're Can opportunity you question bit just bit a those the new little related like or bit? follow-up little you. what of portfolio. a to little is targeting of a getting of multicloud, or second the customers, want I

invest, places investment your Thank at factor How into couple cetera. may You've (XX:XX:XX) of much. we to should think mentioned a et times you're that looking very you about plans?

Rami Rahim

broad that liked question. the appreciate based use our about In is I results across fairly were what our I our nature security, and in cases. they technologies

our refreshed portfolio refreshed see So started now to We've mid and and momentum we've there. seeing there. portfolio our good brands range momentum

attach. full seeing a The year a now momentum, track based that plus of growing data primarily is on that last a And a the firewall. we're think, that customers. centers about our good result basis. are cloud generation dollar the nicely. million We say nice we of customers also to layer four offering I case saw is that security thing, good on see we diversity we're good high-end expect we're opportunities to use seven should I between We're also is, I'd of security. software the software year-over-year next we as And seeing the seeing for sign attach, which growing value closely, track growth which pipeline do and

but enterprise On have strategy, would for to organic side, cloud, sheet. especially and look innovation balance the the cloud so around look we same opportunities accelerate for generating approach the to we cash M&A around We're our the good time primarily on. healthy and an our at we

that consider. as M&A. enhancing value accelerating is So strategy for view We fair there to an game opportunity

Operator

Our ahead. is Please Jaffray. Piper next from question go Fish from James

James E. Fish

Hi, and good question guys. Thanks the quarter. for

kind the of dotting moving our Just crossing And about was we're of should curious today switching any pull seeing and then and our how the as we impact think secondly sure i's making to quarter? what of there to just and you're SD-WAN forward. forward business this related year the t's, kind throughout

Rami Rahim

Let me the SD-WAN. first address about question

easy the element out SD-WAN network But So of virtual leverage the industry. one bit or feature opportunity at SD-WAN peers important we not as a fantastic ability an SD-WAN CPE, at different in We than solution around look our function. most that connectivity very look offers the embedded solution a as and of also we where but view a to offering third-party we're actually managed a little security cloud broader for just opportunity.

have service our way a our with targeting the initially to are way to customers after provider go them get enabling leverage We of relationships as the market That opportunity. we service we providers. great SD-WAN

after major and enterprise can muscle we deployments. earnings in own is mentioned that three so leverage the process the to have, revenue in market users. telco solutions, really in complement year. the deploying take going end of some last by I And wins our can the year growth also I of that believe, wins. we the can We are around their it go-to-market and end now we next This And call start seeing year the

the of it's we're early a in it's think lot I SD-WAN. know and it in but excited gets still press days opportunity the terms of about and attention, beginning it. I of stages total

we think year. in I it next a meaningful some start see way revenue to from

Ken Miller

switching perspective. any second into there's QX Yeah. don't pull On we from question, believe your a

XXXX do throughout in growth FY FY I the a sequentially should QX grow to return full XXXX. will again full it from switching over levels second year FY and growth And of believe fact, half year year XXXX. the be In

the the see improving year. we switching throughout momentum of the rest only So

James E. Fish

Thanks guys. Great.

Operator

live. sorry. Dmitry next ahead. Our Please Blair. from be question you William Dmitry, your go muted. is I'm from Netis line Perhaps, is could

Dmitry G. Netis

now? Yeah, I me hear okay apologize for that. Can you

Rami Rahim

Yes.

Dmitry G. Netis

Thanks for it. Rami and question, taking appreciate Ken, this

question, here. multipart a may, So if I

an not? sales can or to that and us touch in update one key Head of sort you've witnessing or the process That whether on I you search wanted you not the or give of First departures be topic there's some on Sales the sales where transition been that would are on. transition,

billion. Secondly, in out you repatriated you billion mentioned the $X.X $X.X of cash

you and into kind may, lastly, repatriation question But if and you cash much overseas, service carriers again that there's you. business? ask horse it pressure of to it reported quarter. this price is you're from specifically I dead change know and standpoint whether opportunistic? market. from across and North some specific to M&A businesses, relates in morning, always was the is being on anything any there still kind look And the just how beating sitting then I I So in wanted urgency Or American relates of noted price this been et prior increases the price had tough, It's and your pressure. as whether noted you cetera, to as mobility significant this the CommScope, see spectrum? which from earlier as could commodity provider connectivity incremental no Thank

Rami Rahim

the Hey, questions. thanks for Dmitry

your middle fantastic than right sales of on the bench executives, around There's I say question First Head now. about Sales, the process strength. really of much it can the in have set of that other not think great I we're fact a we

is Sales, transition. that orderly Our Vince seeing there making is to Molinaro an is -- existing see sure of Head

that for us. the of through as factor that the go MX no space, a what of progress service your of we the when the just the making with There terms a is that ahead In there. as the expect the new we Sales pricing transition around is second space rest in news pricing and dynamics. as And to the already. we cloud in new a from identify standpoint pleased out we we part nothing again quite provider question from I'm ASP biggest of And of individual. transition PTX. stand it Head subsides that by mix smooth ordinary be to said go we're the see So pressure, to But

Ken Miller

Yes, still offshore, offshore. have tax did XX% billion is so we repatriate cash our We billion $X.X roughly in QX. $X.X on of question, the

to so year it From this or expect I next. perspective $XXX an We repatriate late early urgent. or another wouldn't million call urgency

wouldn't QX us categorize M&A more pay back last or expense of good the really urgent It's so I of all the a practice it I perspective it good that's pending just bring from any anything. side. hygiene. just it bringing as just sort on gives did cash think business year, but tax to for us behind liability onshore more flexibility, And it's just offshore onshore. We in our for tax full

Dmitry G. Netis

thank Great, you.

Rami Rahim

That Excellent! you. concludes call. all for questions. your today's Thank Thanks

Ken Miller

you. Thank

Jess Lubert	Juniper Networks, Inc.
Rami Rahim	Juniper Networks, Inc.
Ken Miller	Juniper Networks, Inc.
Simon M. Leopold	Raymond James & Associates, Inc.
Tejas Venkatesh	UBS Securities LLC
Timothy Patrick Long	BMO Capital Markets (United States)
Ittai Kidron	Oppenheimer & Co., Inc.
Paul Silverstein	Cowen and Company LLC
Tal Liani	Bank of America Merrill Lynch
Vijay Bhagavath	Deutsche Bank Securities, Inc.
Balaji Krishnamurthy	Goldman Sachs & Co. LLC
Srini Pajjuri	Macquarie Capital (NYSE:USA), Inc.
James E. Faucette	Morgan Stanley & Co. LLC
James E. Fish	Piper Jaffray & Co.
Dmitry G. Netis	William Blair & Co. LLC

Juniper Networks (JNPR) 1 May 182018 Q1 Earnings call transcript