JNPR - Earnings call transcript Q2 2020

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Operator

Greetings and welcome to Juniper Networks second quarter 2020 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. [Operator Instructions]. Please note,, this conference is being recorded. to Vice conference Investor President like host, to Relations. now Lubert, Jess and would turn over the your I Head of Thank you.

You begin. may

Jess Lubert

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

are today Financial and on risks uncertainties to Chief our call Ken Today's expectations. These me Executive statements Officer Rami Joining Officer. CFO statements are forward-looking the and risks furnished discussed and our materially. actual certain results filed XX-Q, and contains might current Miller, most Chief based our filings. X-K subject press our Rahim, These are release in other commentary differ with recent and in today SEC

speak to undertakes only statements today of no forward-looking update and statements. obligation forward-looking Juniper Our any as

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

take our call over question I the remarks, hand Following prepared With now Rami. will questions. we one Please follow-up. and to to that, one yourself limit will

Rami Rahim

clearer the network enabled of outlook strategic the call, taking leveraging Good the force. To been are the for serve the for technologies of productivity the and last thank environment. this during markets successfully to Most work by customers safety current a us difficult continuing needs continuing Like actions of our and network and the to this everyone we and our many home importance both remain you never COVID-XX the our various of and from long on work positive. joining global pandemic times. navigate of employees despite to the the of believe afternoon to maintain term these you we meet are high-level I has ensure point,

side. survive opportunities come our stronger on environment, capitalize markets the other We not but the out are current to and present investing only to on the

our June guidance. of to midpoint offsetting We in with and expected double during our than than respectively, the per on single cloud share million year-over-year of orders digit Now both the digit $X,XXX a results $X.XX revenue with earnings results. more and quarter and better digit improvements enterprise delivered non-GAAP our provider mid single service business. segments decline mid Overall in our growth experienced exceeding

We are ongoing our ability backlog supply regarding remain disruption. QX entering with strong to optimistic navigate chain and

We well the current executing are environment. in

likely the of that While bandwidth serve. them we the to that economy services. customers capitalize regarding needs the our meeting and COVID-XX that that are home leverage ability of the required transitions and next are work industry critical point, June on our we to the On play first from of years. believe remain we span large the our out We over our pandemic we people and with support opportunities the gigs increasingly deliver challenges, of would the quarter the win to this like of world highlight XXX verticals during secured competitive positioning last cloud-based around across few each geographies present many some helping to continue I successfully millions global to we optimistic and as

in and footprint software system density, wins share cases, opportunities the and power deliver area to area for our needed are these represent confidence cases. used both gain new initial our wide in data While to center wide use net increased ability programmability, and footprint

expect the entering with we of longer trajectory gig course begin many a wins latest gig limited, customer we bigger XXXX and our environment is and our secured, particularly While in healthy early to Based the and visibility of encouraged are uncertain revenue our second to yet XXX term of have the healthy half our be year, are more pipeline the to by continue our of decided. XXX targeting opportunities of material recent we conversations, opportunities driver business. the the during through respect to we opportunities on year. the remains become remains momentum earnest macro Despite very enterprise

offer As year a result, guidance model we your to encourage are you continuing would conservatively. limited to full build and

as comp. to was Now our experienced fifth I consecutive key slightly would core seeing quarter quarter cloud, and up we additional Starting year-over-year June grew difficult and the a we like each of healthy provide during insight some the some verticals. of are developments with the the into quarter business for despite more address results within

in to growth durable on cloud although cases to would continued from we see the low our area different Tier customers' X networks, to to as well-positioned wide our hyperscale to of our single see period. at Based quarter. QX to capacity customer quarter digit Order strong the multiple as at cloud within expect our compared seasonality of mid diversity each hyperscale maintain continue the customers benefit accounts March trends June with expect good well our some see the hyperscale particularly be Highlighting products. our customers. still momentum business, We some orders, should franchises of was recent and for momentum increased we routing growth use with cloud in largest We our as own. XXXX, results in during healthy the we September and remained

business While to growth. second during year-over-year QX, revenue a consecutive quarter most being supply with continued modestly challenges our our orders this service declined of impacted stock provider chain be by

customers of are carriers few over as with diversification and X capacity much this service Although momentum and benefits, efforts is related U.S. Tier order see experienced improved to we our in cable Tier provider the customers seeing some of to strength we the are we we To several markets. X point, well COVID-XX products across believe as attributable continuing our last international years.

provider efforts the year. our breadth with base our and carrier are increased to remain diversify through our service customers benefit platforms. and adoption this security of our we We in offering increase and our addition continuing routing of our switching of believe customer offerings remainder also should seeing that business traditional We well-positioned the to the

to of provider service impact customers momentum continue provider in decline challenges face to some in conversations, continuing are may we business mid acknowledge future and to spend recent believe our that our likely is our service customer that digit on single their ability see we While based quarters, business to a XXXX.

that some exceeded which federal services was accounts business current enterprise anticipated but largest financial declined the than Our more our impacted as during year-over-year, in strategic than dynamics expect of by reverse to COVID-XX slightly the offset the quarter. period. as for business our initial Strength our with U.S. business well weaker from results we expectations timing

more product. year-over-year. saw in Mist reflecting four quarter more and the secured year-over-year generation see to enterprise to share have overall logos would strong the Mist, uncertain orders caused business our reported customers macro on to differentiation gain Mist plans, rising are driving by and being a to To While record the is which this impacted continuing Fortune an channel return with our is another XXX% than like basis a has level than from demand to the we enterprise the environment true material we I of that some subsides. increasing pandemic accounts by ability increase and with growth of XXX% now in momentum very which once XX highlight confidence reevaluate point, new increasing

employees that generated to enable as Mist interest proximity its to they premium safe In enable new such subscription launched mapping addition, keep as tracing, use a has strong to distancing due and journey work. analytics zone social enterprises hot software returning to alerting cases ability start and help

enterprises to strong Our enterprise at the due home. home from work also offering from in increase interest generated

While helping security through and us exceed expectations, switching, take should Mist year is is incremental in periods. opportunities strategy future our continuing elements to our enterprise Mystify share from to of routing enterprise create the pull-through our offering and for portfolio additional competitors

and in well over quarter to Our grew subscriptions solid another quarter That outlook of orders should our to efforts confidence growth on would that term believe for sales like these software that to a software delivered revenue recurring year-over-year dynamic XX% is perpetual visibility long encouraging We of to licenses. drive and our attach lower transition and offerings attach strong the than certain I perpetual to in revenue. on-box us an of Mist grow team less as subscription. a our rates software and give service due improve due time declined services rates. term-based of combination to accounted basis mention continues software X% offerings security as year-over-year said, and strong our products that for software renewals in a to due certain mix higher the

at our Our improve and satisfaction services continued levels. customer to record margins rates are currently year-over-year

hard employees would like customers, shareholders extend call continued to confidence their in execute our to to Our creating to turn will dedication, support customers our more now an stakeholders. Ken ensure value the thanks receive Juniper. excellent their I which I our well thank will extremely partners financial for results detail. services and experience. especially work I continues in our my and for who and is our team to over want and quarterly discuss for essential to

Ken Miller

provide discussing and and year-over-year results, XXXX the earnings the our Rami exceeding at quarter quarter times start strong with guidance the ended our $X.XX, revenue will on quarter. then year-over-year, expectations. Revenue our you our of good $X,XXX throughout lead experienced was extended expected everyone. of quarter non-GAAP midpoint per some Thank digits second We orders million in I second outlook. the in growing constraints by resulted above both supply single afternoon in of color X% down range. as mid We demand share

while grew security vertical. all and basis, X% revenue growing From growing growing service basis, declined cloud by a Looking technology year-over-year routing cloud grew On perspective, and our X% X%. provider provider enterprise year-over-year a enterprise slightly X%. a switching at X% and XX%, year-over-year decreased with On decreased service sequential and year-over-year. both verticals

services year-over-year. increased Our business X%

of mentioned, Rami revenue quarter for was year-over-year. declined total XX% below and the revenue software As

X% service were guidance cost. X% to primarily in grew it COVID-XX non-gap for If weren't sequentially, we elevated which declined our operating year-over-year. related than due would and is anticipated However, expenses quarter, Non-GAAP top the have the of provider were posted cost, our for year-over-year flat with three margins COVID-XX was XX.X%, logistics our cloud, margins an In range. enterprise. were software one XX.X%. below line higher approximately Non-GAAP logistics bookings and XX six were gross reviewing customers expectations gross

from up billion, at in million. from We XXXX. benefited dividends $X.XX in quarter the per related savings. end $XX the of cash Our and operating quarterly equivalents of dividend expenses a was investments $X.X was million reflecting of cash, $XX COVID-XX slightly Cash quarter second XXXX from of QX the flow Total first paid operations share.

and website. our like our backlog detailed on find expect and in earnings market. our continued color provide would service we At I in offset sequential midpoint could growth. to of Confidence strong some cloud our should the our the factors guidance, We see you on to and strength these is Now verticals. provider revenue commentary CFO by QX help driven enterprise which in believe of guidance, parts uncertainty our forecast available within

We our expect driven quarter. a to more mix see September and sequential favorable in the margin gross non-GAAP volume during improvements customer

and QX logistics the with consistent related supply pandemic. expect other We chain costs the to levels elevated, remain effects ongoing of due to

We quarter from QX expenses compared to costs operating COVID-XX. as we due essentially travel to to continue lower expect be flat third non-GAAP benefit

cost management focused to future to remain invest continuing prudent capture on will opportunities. We while

capital Turning program. to return our

We paid continued Directors respect thank this team cash buybacks. I would during has environment. declared dividend be to committed success, to dedication closing, of to to especially remain challenging share commitment Juniper's in remain $X.XX dividend their paying opportunistic our for will per quarter. with a Board Our the our In and to third of and like share

I would for open the call to like Now, questions.

Operator

[Operator Instructions].

Our of your with comes question. proceed from Rod Please question line the Goldman Sachs. Hall first with

Rod Hall

the a to down with Actually, Yes. year-over-year much. the this provider way lot Those are the service better trends. I the sequential Hi been many quarter that than Thanks for is and wanted guys. for question. have start up quarters. not they on off

how and about you color? that maybe into got sustainable in I that if what a a to more, follow-up little I terms drove have a So bit wondered trend bit then could it little talk is And that. dig of

Rami Rahim

with of first in pleased to year. provider Yes. the we Thanks, saw for are half point whole QX not just service results Rod, we but that for the question. Revenue the the Certainly, doesn't story. in the

there network orders any digits. mentioned, to related, bigger in are of an with are for it. that we were have provider at or number different But diversity. of play get to is up factors. customers vertical trying the with things the a the couple an to increase double of that element capacity supply I potential that in element think factor As are deal chain trying that ahead customer service There And customers of here an actually That's is this of COVID are I disruptions. first think do a

We to both our telcos, Tier been telco saw matter strong switching there diversity of X diversifying We and here as strategy have well our technology as really segment momentum element Tier And the a as internationally. within X. a it. among e-security. reach is to and telco customers then

We some our customers. strong really security have especially related mobile solution and seeing a great with XG demand that's

at of and certainly, matter and really spending is think to dealing that And all meaningful well, capacity that that's with a execution are to really related we I new there where a Rod. extent the relative we not think telco in that's that a last. So that's just are element I COVID constraints, just should normal executing

Rod Hall

Rami. Thanks of supply follow-up, whether, know times I guys and quarter Or so now case a about and started last the it on elongation wanted you now are about saying trajectory? I Or result And the on actually into of might chain where chain as do of just that quarter in normalized effect on of thoughts keep got that you continued ask you terms supply Okay. well? we to disruptions? quarter. that? then continue And lead the comment the and kind the would following are we it they of be impact pushing should the Is for you ease have Can a will revenues future you any this think of are what that out you revenue expect in when you, it? losing revenue on as interesting these to because terms you underlying if talking revenue

Ken Miller

Yes.

remain challenges is about throughout quarter. we that quarter. last to two the Lead manage to extended lead weeks. average four us talked about supply are did times various for chain Normal continuing So through we time on

level. or We should closer are eight times average four lead that I seeing to say, lead times, QX's today's on to weeks

of QX over We throughout those some to end improvements things towards and to We can stabilize of second it, don't So quite of have perfect see sight half. going see happen. you extension do the line level better actually a just the are expect when We there. to bit the stabilization, did of QX. as get

our guide. factoring So QX any are we not improvements into

each However, clearly, the team and is driving to every week. get improvements

actually But that saw what is will of When faster more a you which build. book, QX half, see in we expect backlog we revenue saw saw similar ship the backlog I we was just we uncertainties you to QX, not QX perspective, start revenue but improvements it bookings. more saw growth than in to do we similar the So QX. all growth a factoring guide, modestly in say, quarter for second the the be where in the given a dynamic dynamic involved. similar bookings of revenue than in it's down, From a would kind we

Ken Miller

Yes.

on from the is a an think not that case to question. it's to situation. believe interchangeable a of particular technology that, losing we are we I that that Just challenge are these Juniper to think typically fact challenging to unique recognize provider, that no as our is here. dealing this the are this. it's provider industrywide There another you customers doubt, result technology depending are don't Couple Rod, one and with I with use But add, addressing. don't products I the

Operator

Please Tim Our proceed Long with line with question. of next question from your Barclays. comes

Tim Long

come. a after be you a about the come next started that breadth you this the you. about Does Nokia's go a you or just will side. us sense, playing? And curious larger I of talked with more? then of change bit market little give some business dynamic? thinking if of it follow-up. I still could the thoughts how some and there If Could separate give announcements kind you opportunity in a can And win us just just to to those that Thank as and your to have Rami, where gig off on XXX are materialize year, start

Rami Rahim

for Yes. Thank question, you Tim. the

This bet for technology, and stack and service new gig early pleased that to portions taken at as have of have we wins wins. silicon XXX that mentioned that have brand-new to essentially system includes net a significant couple deployments. cloud-ready they we previously, WAN us cloud as been area been has quite of an operating have we wins very because been new There they been a introduced have systems I deploy. least for that I are have up have technology those also have new is essentially now So have XXX And time. that providers invested been big WAN for that for providers revamped They we the really in. some we of know make our went it for gig fact net cases where use into well are competitive with networks. as into selected a

they revenue and although confidence is that us gives working we is the meaningful that for brought business, our not is competitive. new the standpoint are yet market working, from is that the of well technology all into it very have to stack important the So thing that me that

of So that your leads me part to question competition. around the next the

competitors. confident we We would there that are I where are say very competitive. used is technology we And have the operating just stack very that environment that competitors, to in strong are an

this to that launch grow we think, I after cases have the that I of it's the deployments, footprint to we use into absolutely part and the gives something to business. and use leverage our can providers XXX cloud seeing early gig are We the that proof truly then And among think telcos points. opportunity that, us

Tim Long

follow just And on the enterprise It up sounds to then side. Mist is like doing well. Okay. Great.

there. You have good a big guys obviously had push

on Just what like So an for talk, or there impact dynamic rate is term based unaffected? on think do you slope campus the is your of which medium the longer a little workspace Rami, employee the is do the you changing and enterprise to Or the obviously, Thank there the going to you. there a growth to growth number from the bit think look enterprise? about, of people? of scale you on repopulating is

Rami Rahim

going that is we and to to short answer of is the about. your there It's is some do reason one serve LAN of ability even and see I macro or the of whereas account focused believe pandemic, in enterprises, businesses terms thinking that, about we we driven our to an actually to just Yes. a that, we emerge being question be in end-to-end markets term, hard WAN. deployments, challenges and of many growth, there transform the take both really question a great result into on thought long will to the And some focusing strong and technology momentum LAN, and as their how to The to share. take the standard we take solution cloud-delivered solutions. the the legacy-based AI and obviously disruption today, enterprise that wireless from includes be and our are not that net of in wireless are these And advantage going on LAN that situation, your strength we as

in is environment. solution this rate Honestly, here phenomenal, is the strong. very I think even our win

our are share our will saw is, are weakness thinking strength actually in today. about QX we take really solutions was still what to pertinent of are customers what It we and So very than last that expected some addressing we I timeframe. portfolio. better mention comment believe the The we the on here I are yes,

to will if solutions return needs are problems employee customers that want company kinds work to allow there they that work. sick that them fact really go to of where be return there notified. solved an to to to that is or These in So be their in hotspots are been starts an who as of our need the understand can that employee heart solutions safe understand with issue has and getting to the a campuses

Operator

the Please Our proceed Alex next from your with comes question Needham. of line Henderson question. with

Alex Henderson

comment enterprise little you. you hoping talk was business. a Thank the your would about on I

the business you Specifically, that local third U.S. countervailing in What the physical trajectory government well-off in developing you rebound but spending quarter? recover the expected that state was of of COVID. in it going result you improve stated and it confidence the and constraints as and the given seemed that's quarter, federal to a to somewhat clear and gives to the are

Rami Rahim

the year-end traditionally the fiscal government. quarter for is federal third Well, the

stronger that. So than it's There that But is typically think quarter. been more I a dynamic. it's

don't we there reviews all there. at out are and been But those have meaningful are this any have been of are to out believe, had at the our don't business. a are project. the we opportunities about canceled as pipelines, out we are we remain has still business result in believe projects projects We short There We disruption in way. monitoring our looking term part projects optimistic obviously our looking of that timing although or very pretty there. dimensions, the we There even and closely, of moved of COVID

Alex Henderson

Mist of question Is is cast order? and function that. is It The of the of business business is recognition looks piece enterprise Is was that a the forward. current enterprise a very a a your driver Mist When somewhat? the the Mist that and piece timing going aside obviously booming incremental differential follow-up soft. puzzle post a key yet pull-through? important is, revenue pull-through lagged between your like would

Ken Miller

Yes.

in a in revenue model XX% upfront of amount delivered the that's cloud delivered recognized is then So SaaS license, there the form hardware of the Mist a license. is, and is deferred good about

of cases, et and highlight, security, business data our a also routing, is revenue use cetera. has would switching, Mist in is used amount there a I many large fair quite enterprise transaction. center deferred and So campus just cases, enterprise

quite the is small resolutions but obviously. our this enterprise other through point, And growing, is as rest Mist while compared of to the nicely portfolio is So growing as pulling of is sale. it it fast Mist part still it at relatively very

Rami Rahim

Yes. And Alex --

Alex Henderson

the orders. of how orders pull-through come the before through for pull relative in, time When question timing The products? a long lead you get was other to Mist

Rami Rahim

strategy to really we it you we it portfolio. acquired take LAN and Mist, company, I tell three experience our secret it that we scale a see. on real XX time. a begin when we glue, And under we AI-driven four mentioned Once time. LAN break especially much is the when our the our and first, SD-WAN switching know with in, selling that AI becomes in extend do when sort portfolio. it the started sell wired with combined start really you for was my at sauce wireless was Fortune of the a break to solution. to least Yes, and that that I I solution, are engine because solution. We But cloud-delivered typically wireless Mist a when it can with build The impressed in captured accounts those over with. large your to we it's customers in, Mist, prepared to remarks, the driven here LAN combined transformation, then you our have that across now Mist, did are our are entire of WAN switching starting incorporate and In then But customers. small cloud-delivered the you a over umbrella. easier to I account, have

the terms the of would reaping benefit say, solutions. days early full potential these of we or I So full are in

Ken Miller

models, Yes. through. the It's a to quantify Mist the start the six for hard But of of months see kind leverage our to three we of think really to effort precisely. rest to pull-through portfolio it's in the

Alex Henderson

That's you. Thank helpful.

Rami Rahim

Thank you.

Operator

Please line Our comes with of your Oppenheimer. proceed next with question. the from Ittai Kidron question

Ittai Kidron

Hi guys.

pattern Just even can from Or had a about sounded like a quarter. a of of last to Rami, I the lot on just the strong, a quarter or this it the ended enterprise end the kind not? linearity this enterprise. trying a am I quarter? soft? on started me, quarter? Was couple you know understand, repeat standpoint, seems issues it questions first an in did positive for have with note you talk like

Rami Rahim

dynamics. there normal. I it nothing Ken the think of think normal in based in competitive the terms little really out I as of a but the And expected we what I I left the saw on to the linearity or we mentioned, rates bit was It's positioning, better enterprise but was as our our seen, look taking we of were win enterprise. results believe than maybe I share be the here, considering the and quarter. to even in expected, that are

Ittai Kidron

of the from Got of was then there the follow-up that. Can that a you Mist good in on it. what Is well? as do quarter? help having And not a software It software that underperformed side quarter. the down with and clearly understand did me components software on-box assume I

Rami Rahim

software orders orders increased a year-over-year. increased business. by then increased off-box, XX% you XX%. year-over-year. give than me of couple over more than even that, our XX% by by And on Off-box And statistics let in subscriptions SaaS subscription Ittai, more

weakness And sold of many yet The happened timeframe So flex licenses. products benefit on-box in don't were component. did flex the off-box products the of just that a we that metrics are was or QX very result that it have the the not so on-box healthy. entirely licensing

Ken Miller

Yes. it the model model. license perpetual the are disaggregated And actually ramping actually The term-based some sold flex just that we is on-box of was Those to on-box. the clarify, licenses. as licenses within

the we licensing saw are a model. scheme software in licenses. had hardware we the decline past, subscription an perpetual disaggregated increase in We that that But seeing in term-based

Ittai Kidron

so Just I that, to add can maybe front. Ken, on that

or of be there learned mix was with or that to a anything and software that chassis perpetual to to respect Is perpetual, the between there from Given deduct that? is there like component something mix? correlation the your that versus that blades

Ken Miller

legacy into we important a models revenue those from not thing. chassis to metrics. driving. And perpetual more really us. blade transition really It's good really term-based we are recurring in what's subscription that a That's versus see Its did success

as from expect QX. into we software we to grow So QX enter

Rami Rahim

the number grow in add, out leverage of help our our going licensing been flex quarters. model just to And strategy that the is certainly to platforms to that will has and always

Ken Miller

Absolutely.

Operator

next line with your Our comes Notter the question. you Jefferies. from question Proceed of George are

George Notter

But Thanks are now Hi at guess XXX kind transceiver wanted feeding on you guys ask I working of gig and was is level? business. wins. to obviously I switching much. talk development bit Thanks. XXX into about terms gig success of transceiver development? that? it And you in very a is having win of your Where have efforts on guys. know been that translating I the you about customer can

Rami Rahim

of short where translating win that's differentiated pretty a level is else there. not project to is The that it's integration challenging we answer believe and better we a the we shipping no, truly anything will through. our that is achieve that But project, working a are have it's than one out a yet. This to transceivers difficult in project ambitious technology because optical actually

top, sort transceivers, our once Our objective, that what are system in is always of quite of success Transceivers, towards. been XXX early the merits our silicon seeing our optical gig, mandatory success on strategy. we working time we And an success, that's would year. products and are on the we gig. not to of our for for ship release goal them The the in icing has our of ramp really next gig XXX based be frankly, our software, XXX

George Notter

Okay. Thank you.

Rami Rahim

bet. You

Operator

the question. Samik from JPMorgan. Proceed line with comes of question Chatterjee with the next Our

Samik Chatterjee

I cloud and couple have wanted that. on a just to a question. here vertical for Hi. bit into taking questions of dig Thanks my the

and really But good it when look a with quarter routing came had like of seems you at cloud I segments the Firstly, product customers. the sort switching. there, strength the from

what have in of to draw more the customers Is wanted the terms Thank cloud of wanted product the to kind certain with of driving side? the your dynamics switching of there. really layers that's just you a follow-up. there? is spend it can from understand I not And I the you. just insights on I what So understand the upgrade benefiting

Rami Rahim

question, Thanks Yes. Samik. the for

area in the wide we keep mind that cloud are used space actually just into in that provider So solutions sell our networks. switching hyperscale

remains as quarter It talked is we you today. this So something that in have about to well. past true

wide-area And of was the and All switching, meaningful by deployments cloud sense on really traditional order our strength saw the our it's of provider use sort providers. the that the We hyperscale a in existing providers, not cases case switching especially cloud and routing of footprint think use to segment, year-over-year cloud that's or So I within think, a have we portfolio. of basis. hyperscale strength of very that's, the the strong. function deployed

Samik Chatterjee

the Tier And expecting But on of any XXX of a of in of XXX it in of kind on upgrade providers. most well timing win here. updates thinking gig cloud visibility, understand based you gig? the are on seems hyperscalers expecting like the terms cycles? timing, most then are one to following just have your of And it's terms their the timing for smaller are on as X similar you you up the, I about how

Rami Rahim

growth next really Yes. getting to I availability based believe be going optics. that very end XXX much sort of the of that's And it's very revenue year. to and on and year of gig much economics

the hyperscale cloud I well of as that's So for believe as both some true providers. smaller

Samik Chatterjee

Thank you. Okay.

Rami Rahim

Thank you.

Operator

next line Please with question Liani comes Bank Our proceed your of Tal question. of the America. with from

Tal Liani

year went to percent, sequentially, was guys. two previous it strong. quarters was last Hi. always I and this XX% XX% year X%. is Thanks back XQ up years ago, It

year, not was you difficult. Because down trends last So not trying are in to X% am understand year-over-year X%, down on The very on were comps the year-over-year. the the the I was comps focusing why sequential on year the trends? quarter and

see link you that positive given us? maybe is, for don't you to? the you of starting So numbers kind is are it are the be link or Or Can minus surface higher bigger there the projects that growth trends you the to some waiting any that question agendas Are anything declines of tell to you materialize? that to beneath that refer you and what you the products? like X.X% drives the of can can carriers some of XG year-over-year

Ken Miller

Yes.

a of We is the numbers, don't were the pass we Clearly as entered add compared we expectations as those do this commentary based in on, more those COVID, I in quarter. when and for as So compared why and Rami, we to bottomline. well. we absolutely had our the color. a grow year. enterprise. a when our start too impact pre-COVID expand Not With have expectation term was long kind have we to on but lot particularly lowered, That expectations of entered felt to believe principle to long year guidance that on a ago, that. were track topline could business, world, to to it But negative you, we

are And we so reset expectations. will. we And of ahead expectations, if those reset you

takeaway. see want but main any the is opportunity it to you there? good a the expectations sign. did color modestly internally down we deliver do I more From think was revenue feel growth add to bookings I perspective, in about. year-over-year the now, a have that's We against great which pretty Rami, year-over-year.

Rami Rahim

that, just Nothing underlying than are asking you about trends. other

think based executing order service we challenging digit year-over-year our is growth in segment. the provider, in dynamic well growth of that the double provider on I said, double a strength I just order environment think and side enterprise And basis on trend, the momentum like portfolio. the I digit a strength the are a cloud on in

Tal Liani

Got seven point it. because question. growing years, whether COVID under before? is the your need more for five starts power? let's don't a for years. pressure for And Touting we get routing I have just been question is where is processing there bandwidth But than if a to for have another has going And better now time routing know it aside. than I outlook finally

Rami Rahim

of single decline. would way. digit single full be me digit sort on and should said let a for providers year not grow all up basis, mid Well, service mid the it put your cloud this We provider year year-over-year

start very in to are of We a both those off strong segments.

let's perspective. to by not momentum see am yet are full But We today. our very year that just I encouraged ready say, the we change

Tal Liani

Great. Thank you.

Rami Rahim

bet. You

Operator

of Our comes Simon Leopold line Please the next from James. question. question with your with proceed Raymond

Simon Leopold

want Great. maybe Thanks could cloud unpack see a question. you little for the bit. to if taking customers the I

remarks than was And an quarter. to have cloud understanding different what And X I mention got to trying the of I kind and quarter prepared get in I you customer think concentration particular have that? of really a customers top get of last understanding group I hyperscale? is, you versus what of heard that the as the down then classify this the you in diversity what Just am mix really follow-up. maybe trying within this Tier to

Rami Rahim

Yes.

revenue, Let the them hyperscale, me customers. top is a revenue. see hyperscale services their of mean answer you always I There number there that. talking can very five about I fact by by high of how own few are just degree we when of measure are right, their concentration virtue

hyperscale And one So to within footprint some cloud as really had China enjoy providers in into in where provider not opportunity point emerge have then Tier and couple the quarter one as particular, cloud cloud think, I that the is hyperscale providers, fact is, broadening as the last is, there indicative in cloud wanted we seen broader our particular the cloud of two the Tier Asia hyperscale, providers success. that of solid have we really customer into just we well with of on have provider where we And It's we focused in a that. number customer X X, reach story. large make a unique the quarters them. different number

opportunity would the So around that's of how diversity opportunity. our respond question and your to the the concentration of I

Simon Leopold

to think how the X guess overall clarify, numbers? a that? I about of material Tier for it third way sort be would Is in Tier am looking to that Xs is? that just roughly cloud how Is I it? And material of

Ken Miller

Yes.

is. down vertical. feel Tier our exactly concentrated top X the big gives how customers you a broken account said haven't overall previously that but have That vertical. of good, XX pretty a Tier for we very the approximately a We It's XX% for good X business

Rami Rahim

by from what look of that spend you standpoint if would were to similar. at look those customers, it CapEx probably the And

Simon Leopold

follow-up the MX. then And had regarding the was I

have lot if You have cards. and the on didn't of refreshes refresh I for? a to if expected. got to If improved took this that completion announced of you Or contributing whether evaluations service come once line sort elements, evaluations sense still the the And to move of occurred new maybe I certification by is been needle? the longer looking customers not that series growth? of a the or see your or is MX impression provider you. want really And of that's have we what a you of than Thank router whether

Rami Rahim

some and And of yes, saw It's a PTX, solid basis. good bookings from Yes. line early momentum as strong emerged saw see we is these going MX and the the in are we in have a growth revenue starting part we standpoint MX a that phase sequential the the phase. are question. In revenue new ramp certification we expected very that to cards both of into growth year-over-year from they a on and

Operator

with comes question Meta your with from Our line of Marshall Stanley. next the question. Morgan proceed Please

Meta Marshall

additional Tier of are on Great. if home, in-home campus with as the take equipment? a maybe portion will they saw whether Thanks. of maybe to kind changes me. providers conversation on-campus it. to of leveraging been related in then Two employees questions cloud. increase those instances. a going kind And for has a versus started traffic any huge own second of X from greater work And data potentially either Clearly, due on lot to conversation what That's of the other question, change just their Maybe guys. in Thanks their SaaS build investments there place to as business. equipment centers public Have COVID continue to customers less or clouds?

Rami Rahim

questions. Two great Yes.

First on the opportunity. campus

I think there things couple we in a mind. are of keep should that

even that and more that state higher helping are think very that's And to our resilient, are the typically are on. it are that especially be COVID large, sector, I deliberately that much are current to to that focusing pandemic retail, large on post-pandemic. are certainly are going First are ed those is, focusing businesses us resilient will have the in that we resilient retailers e-commerce Government, that all, have in areas business help we crisis. that enterprises businesses are public

WAN now solutions. They sort element to cloud, and their And transforming we Tier there. is to very post-pandemic. of for good not true and opportunities laser are on-prem shift at LAN are sort that bag. the wireless that's cloud for our and And certainly cloud-delivered sort seeing it's solutions, of some now really many success the next-gen Tier driven second true The public X customers are those that we and X legacy right and On mixed it's are a stuff. LAN, AI looking are looking today targeting of

sticking from think through in There time I cloud there that and of a using the cloud providers particular, and Xs couple some takes. cloud honestly are will, from because them. are benefited momentum over in economical the quarters that last X forward have Tier most with this will serving they this of part to providers. business be cloud, Tier But are pivot X, lot our we there to are way their the of hyperscale benefit solutions that's that that and definitely to in puts Tier Xs believe public public just the for going own

Meta Marshall

Great. Thanks guys.

Operator

question. your Koontz Ryan Securities. Our with next the of Rosenblatt comes question from proceed line Please with

Ryan Koontz

programs question, XG in tribute to comment driving in And Thank But the Hi. Korea? both Thanks how of for broadly, and much do some and your that SPs. do then Japan second easy Metro on there. strength compares got can your have the APAC, you you question. how more Maybe Q-over-Q? You see of you globally in XG upgrades of kind fairly you. some like year-over-year

Rami Rahim

Yes. question. Great

results APAC. in I happy our So with am

our fact, geos sequentially In were all up. of

good I compare saw Americas, across several APAC, APAC. of you after sequentially right. and are quarters we easier mean of EMEA momentum off decline. So working it's an

are I executing APAC. we think well in

there to dealing also lot buildouts turmoil that and is of related economic it core Metro of emerging when bit and that pandemic telco it XG, the do it to from. ahead we number strength the some would little particular benefit. XG in comes of Asia-Pacific be benefiting transport, think opportunities. ways I from the is we A or are and that a U.S. edge is I in a And are is One of believe related. whether with

build not telcos one in strength now that we business out for telcos our and in to dimension of other be real where then have their quarters just last specific success we starting seen, for number preparation to And especially security in of would will really a that XG The seen XG. virtualized that that in the our APAC but security be Many are XG be offered again cloud but have security, included will we a are APAC essentially would have will the in in of that cloud a strong software be telco for we services solution. solutions. offered solution And in today be from. in form. worldwide very native benefiting infrastructure

Ryan Koontz

have telco that cloud. Are Helpful. A from announcements there. do you see the on looking back little towards the more playing cloud? telco cloud? to seen outsource there swinging how Microsoft out We follow-up you Amazon seeing in And that a telco of trend, and

Rami Rahim

very there question. good the and we comfortable an the work have where think think great technology locations already some available cloud they to I also Juniper again, services, partner to opportunity It's telco a, an that others that providers good the telcos is those solutions offer where build a put be lot indirect say momentum best and But to definitely together where be really it networks some with of themselves are wouldn't much to area ways. to Again, more we have there that Yes. going there And out customers. bag. to experience, I in benefit like are differentiated providers telcos see their want turns we edge with telco but I There technology deliver and it's hyperscale with in to want and very mixed a of services.

Operator

from with Evercore your the with question. Please ISI. comes Amit question line next proceed Daryanani of Our

Irvin Liu

in Irvin originations My software question momentum revenue? Liu, I story? these question Hi. still seeing above more software of wins some you Amit. driven this should Thanks. your of Or and of we off-box had a This trend these revenue sales? Mist. first Are the is XX% a longer is term, add-ons? talk on upgrade as to from by of you an is subscription from expect driven And well. about cycle mid-cycle Can dialing follow-up

Rami Rahim

Yes.

question, are are seeing wins momentum a and first logos. new the on So lot new we net of net Mist the

SaaS based renewals winning. of I been introduction of certainly new the essentially off is net new out are know head, some numbers opportunities XXX% we the the year-over-year are into result of has of a top there Mist services exact that There my growth net there. are the logos, accounts. new as momentum lot a don't the in but So subscription that

Ken Miller

Yes.

the the revenue, is XX% grow to On over our time. of clearly goal software that's

next beyond XX% years. couple goals that have We the over

than, yet more business but forward, going as as back there do to in surpass QX us do become in time on yes, XX% it commitment and story. to no QX over to the the expect get far levels, software we other forward, grow I relevant going more expect off overall and our As a starts really subscription

Irvin Liu

to there a forward? is wanted X other LAN on transition portion wireless Got Can you a potential on your which thoughts ask the it. revenue Thanks. when Wi-Fi become actually the more for revenue for you share about be to And cycle. technology your material P&L to expect wireless there near standalone in I LAN of future? breakout your looking the Is

Rami Rahim

Ken. for assignment homework a that's Well,

is offer X to We I today a that that many want that's is great not what it on our essentially, access that have X that are is are this, the Wi-Fi be solution But runs now. opportunity We comes and certain are Wi-Fi quite nothing on operators there its out comes just itself. front. I it to offer going to us. because market with cloud-delivered AI that already points Wi-Fi we Wi-Fi have opportunity a need of baking there vendors think But in X, a for X close X will powered even own, frankly, Wi-Fi it. there selling. And complexity level say overcome to you them out

we accounts the points that's as So well right combination the simplifies the solutions the these large ongoing the Wi-Fi world. high-performance operations around think as of deployments of helping have AI driven win X access the I and that solutions us

Jess Lubert

Operator, questions. more to take three we are going

Operator

No problem.

question. Our of next the Wolfe Jeff question Please Research. with from with proceed comes your line Kvaal

Jeff Kvaal

more for hand, and have business though color on nice. you you the it sounds very pretty little hoping one Thank the timing cloud was that. good bit got much. as of some teed I orders which Yes. At a up, all is

ferret On bit a bit? out be for that the September. we could in about us little should seasonality am hand, a wondering little you I And careful if other

Rami Rahim

Yes.

me want to start Let you color. then and add maybe, some Ken,

provided. up, in And a have our full that year that again, confidence For element in we that capacity where the first what is growth half would think Obviously, related actually sort us whether is be to a growth not either there network. momentum the of think providers I good we and we the seen their is this, year. make. our That But this, have cloud footprint related large cloud Tier or is digit supply the seeing a assumption there clouds, outlook the by gives X, component it chain solutions all to a COVID are that customers. lot small, cloud encouraged not of for been Tier meaningful unique also related are ability enjoy of I X meet to that in with exceed of single of saying if have which cloud, is execution, another international elements around we provider strength we our

Ken Miller

Yes.

last in it couple cloud we our be to We expect, business. expect have clearly. revenue of year the seasonality at on mentioned, years said, drop a we where obviously, a guidance. As in our QX Rami seen bit we do be That seen of full QX little to up have we it basis have of actually in do up a midpoint

provider you growth in we expect If enterprise vertical, service slightly growth down. be by to modest it and down break see and cloud in to

obviously expectation at but point. those could numbers those that's Now differ this our from current expectations

Operator

your of from Please Suva line the with question. next Jim Citigroup. Our question proceed with comes

Jim Suva

trends Why that to. is happened or the you. have you was going I a maybe in didn't we an that And Or full you. quite bit, used that this just selling said Rami, of trend there? Thank example that attach catch your typical, what is of you giving. rate the Can believe, some maybe kind it you you mentioned forward? why prepared I we example not? Thank or little comments products software are didn't expect a should clarify are

Rami Rahim

And that component. the than based to it some out might software entirely have sell Ken, we There products you have term-based that mix that time. products. over software are didn't component on just we a that anything? add of product sold turned change others. that more attached them It's of larger that want to And do

Ken Miller

say. to I Yes. just was going

And for we it or rest time. transitioning Junos. business long we have on-box of a been saw actually on in could in even was you in differences had additional buy license on-box via So a what more that's with software And and the for up has business business. that is are cloud-delivered a largely software. the how licenses And business sustained that time business buy the function you are long, and to features over overall but QX. have we products What doing perpetual what depending that subscription term really you licenses were have down, perpetual now monetized we licenses of revenue the SaaS it, we seeing, software

Rami Rahim

That is software strategy Flex scheme the across off-box our for to portfolio. overnight. make Again, add. one licensing our to can't of happen all just And and on-box

sort downs we We alleviate some of to time, these standpoint. portfolio. and touch from quarter-to-quarter portfolio, have been our ups of it all over as will throughout the see starts of this that methodically Flex And a working

Jim Suva

Thank I the comprehend for Now much so you clarification. fully it.

Rami Rahim

you. You bet. Thank

Operator

your comes of question Please Silverstein final proceed from Our question. line Cowen. with the Paul with

Paul Silverstein

asked the appreciate Tal, runs I out some to my hoping battery am squeezing of others. before cellphone questions greatly in. and return Simon by me you all I to

but respect looking First particular, upon that at a was with provider once I routing, not. routing, it's secular service to the in time thought routing numbers, decline, in off too

matter, is to modestly. that And is I the to were think for actually all-in many and of core. market true in same growing, investment albeit think, contrary also what community edge that

capacity mentioned You got next you increased XX to you, ahead the suspect leading Rami, provider XX your XG months. I to service of impact have among tight in customers. demand

for been You little line your be I in think They over now got new a have ramping. that should have year. MX the cards market

expansion, Nokia have You you got into that's or performance not have footprint of the as I in providers. whether Ericsson XXXX non-U.S. some Tier that or paper, But family at to strength. assume Cisco said, pay starting have same with pretty the on got relationship. X time, dividends ongoing impressive, at service the you you got least some

service I your low which for business, have single which been characterize question I for mostly some is, that you routing, digit but appreciate not is the now all the impact, semblance line all that there of perhaps just growth growth, some the business not in practical? not the So decline routing, that possibility, now. Why isn't provider all your assume is return cards, MX to time XG I new the a that referencing you mostly given albeit to et appreciate dramatic for market, cetera growth?? coming Or

Rami Rahim

great a look, Paul, it's Yes. question.

going for in just little well. are little deployments. footprint, relatively accounts, provider early new And is that element routing, earlier, tailwinds with are portfolio of is another early that could particular as there I footprints okay. wins us, what our but in XG a that where there XXX elements trends that's think there not is are way to with for something mean actually to international we accounts net service And telco have that. I coming be, a our of us going mentioned wins, we be be around gig capture, I to lot area. other

in business that the telcos think are we sometimes they challenged. Their telcos I margins. are around dealing just technology about And we when business that the are in cautious is their into models are pressure the vendors trends is At translate time, general, talk stagnate. growth revenue Juniper. somewhat why they challenged. pressure reason on same term puts on seeing like that their long are their And They networks. that telco pressure they with

can the So solutions we to opportunity. telco gig from are everything and modeling little have And into our that business. our XX% course, to in to doing telco cloud we to portfolio telco, cautious represents to that our and bit wide the careful for security But capture portfolio network of and area span automation Metro solutions of still certainly, be we long XXX a term outlook. our

vertical year I of important first say would So certainly us. a it by exceeded half it's the remains for and our this strength very I am very of expectations. own the encouraged

Paul Silverstein

asking final us before Rami, and is my question, percentage routing service what the question about what service percentage margins, of of can provider? is you routing just remind provider

Ken Miller

late but did We it haven't at XXXX in we the XX% was about time. that routing numbers, updated and

Paul Silverstein

providers, XX%. Service

Ken Miller

provider Sorry. Service routing. is

number. will that gone of haven't you give bit We other the lion you. share direction. But routing That help will the the

Paul Silverstein

a have I Is would you question quarter before something costs. margins. Ken, ask right. guidance assumption on It a All sounds to book you your it. XX.X% for for Got the question? I XX% expedite to third closer that be gross correct the like

Ken Miller

Yes. so in expect approximately the of That impact basis level QX, elevated is QX. value at be QX saw were would in and point similar in same a correct it We XXX point in I a assumption. and levels X.X impact

Paul Silverstein

are what you getting The the where margin there? basic get over XX next months, question to very Can of right. reasonable your can the remind a case? us levers you gross best key All in to is, in XX

Ken Miller

Yes.

So perspective, XX% we out, a from put XX%. to model

XX% is The as say. for basis And lift that couple I an carry of hovering have shift at growth that big a midpoint of annualized is multifaceted, software recurring that over of Clearly, part kind years. path a our us. to last we software of will on business We margin for should especially time, been to more strategy. the software,

doing front. lot are a the and We per perspective engineering and from design value value engineering an

as competitive we talked fixed excited are of our sold in line of needed. particularly about cost have in on going management and supply on goods have we past this cost that We the well the just thought opportunity have the and ahead, levels we get didn't switching as front, where think lot and right. up, in we about we as particularly in We XXX sure inventory we optimization, chain per bit that et making cetera as pricing. gig A

moving to one in to are would not meant parts that a I going of moving more there. lot say, headwind the is than but shift really be offset parts biggest it's just these So answer, business.

Our of And our less we outpace expect enterprise products, our products example. as to service margin service an provider. are profile for than enterprise many provider do

So we as of improve predominantly we need mix move to software do forward.

Paul Silverstein

Thanks it. guys. appreciate I

Rami Rahim

Thanks Paul.

Operator

session conclude as today's Ladies does as well call. and conference our question-and-answer gentlemen, this

You may wonderful lines. now Have disconnect day. your a

Juniper Networks (JNPR) 28 Jul 202020 Q2 Earnings call transcript