JNPR - Earnings call transcript Q4 2020

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Operator

Greetings and welcome to the Juniper Networks Fourth Quarter and Fiscal Year 2020 Financial Results Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Jess Lubert. Jeff. you, Thank

begin. You may

Jess Lubert

operator, quarter good to you and afternoon conference call. fourth XXXX our Thank welcome

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

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

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

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

Rami Rahim

work vertical also the thoughts those our we the world. The emergence none thank the everyone pandemic. employees, This personal year year, your business and year, of QX out was way our today’s us health grew we us with our this impacted could collaborate for business on to event call results. supply employees afternoon growing in joining executed presented basis by made have orders these though well thanks consecutive our the of business have only ago, we give and adversity. I us the which global the consecutive engage who enterprise pandemic. of all chain, of not the around impacted of cloud predicted progress being and and results declined. with that lives. the an you our and made a pandemic them for special of and Good service revenue challenges, customers, even to people a biggest year year we These but customers were year materially provider for on in how well exceptionally face excelling a our a and my possible are challenges we hope all fourth to you a to stabilizing close discuss XXXX like families affected I and full by full our Despite for the unprecedented to in our go efforts XXXX second grew enduring would and our

key than to are be global of Internet We in the and one world ever. XXXX the proud Internet more players the of the needed

go align sales create strategic the to exiting are This thoughtful with business acquisitions quarters We how we pull-through we around how the our such that year following with how and and market, our direct momentum. and business Mist actions growth result new revenue a we of consecutive of taken stream year-over-year our new products. organic have XXXX we existing as two entering is good of complement

key grow about highlight February Year, New in on strategic sustainably this you’ll business to Investor up to our XXth. year, us which us set should actions talk hear I’d down event our the areas we these where like several double to While more Day upcoming starting plan focus of during

engagement, customer and quality First, delivering industry-leading technology, support. experiences through superior

we markets think better. ever highest outcomes and of across customer we to and customer north serve. satisfaction we XXXX all will we enable delivering true to have as even seen, experience We scores are doing are us customer superior with While win the entering committed view the verticals our

large we resources unfold. over These our these should include tailwinds specific and centers these the connected use and Each opportunity represent several enable embedded data focusing areas automated next these likely across serve. WAN years market in that as our use is on on opportunities the each. a spans growth attractive cases our see us to focusing of to security accelerate AI-driven with cases cloud-ready Second, cases, business which enterprise, verticals each use

reorganized QX As begin I discussed sales, our management and our in opportunities these mix when revenue teams last we format around product engineering we quarter, report we have business will and disclosing this our results.

macro we is and in the challenged. we share the believe customer deliver recent and sustainable which market entered that and end plans to the with stronger XG and Mist, each to very value will top interest next our XXX and of Juniper deliver which success as some the on over to these Apstra investment actions and pandemic presented the opportunities with we several sure market big to should years us the by sales even in the Technology, returns that positively it’s gig investments if Netrounds I’m our taken market future. Third, over expectations to conditions continues acquisition encouraged made will We broader exceed what making us businesses but and are trends. capitalize on XXX impact we the position our not believe next line decreases taking than similar transactions, of to sensitivity deliberate impacting confidence the few our that the the years, performance bottom enable along such only of broader also have capturing We these portfolio. see unfold we’ve building are by early remain firmly positively emerge growth seeing will from

address and within into of exceeded Starting with Now, market the verticals. year-over-year, core experienced in the key and December I’d our each of record enterprise, we our revenue we delivered developments some quarter order expectations. the single-digit seeing are like growth some to own provide insight high additional which quarter

wireless, strength on our our wired particularly enterprise to for opportunity in secured saw taking vertical in that geographies with and based growth global demand likely Mist portfolio is our we driven XX fastest business by our Based SDRAM are we significant broad be and While AI a North share the we differentiation. believe XXXX. our market, strong across international and we American was account multi-year an results,

optimism is to Mist, specifically more and around response Our offerings the year-over-year increased saw AI-driven nearly seeing grow XXX% our by than momentum the XXX% and by new enterprise by orders building which we logos customer are year-over-year. fueled

business SD-WAN recognized In and a In in materially in few market technology and Leaders does the we wireless a automation IT wired network the application capabilities secure generating to service from LAN, deferred a unique leader the in acquisition also worth and enable experiences superior in delivers action, expect addition value for this resonating we AI-driven portfolio. software solution reasons terms execute. strong next our would of is extend Mist business to The pull-through is offerings of more Mist to our that Not next capability the Wired our end-to-end user cloud. Assurance $XXX experienced AI-driven the generated Juniper Quadrant robust represents our record which business growth Gartner were to and with with compared you EX client and Technology provide to Assurance, over current of but other focus million than grow only We minimize leaders the driven is AI, of stream, cloud revenue will not remind Marvis, will by of Wired of assures each cloud pull-through Wireless vision. healthy associated assistant market, secure The one we wireless adoption and to years. SD-WAN recognized for proactive access AI XXXX truly cost and switching of as support. deal Mist our XX% of also named client of but levels and enterprise subscription end-user Mist to AI-driven be ability XXX Mist positioned it compelling EX us evolution mystified where the revenue experience XXX engine in all future. virtual the experience-first Technology of This to our self-routing a ratably in is management only total, of with solution to of recently the XX% operations. and

that U.S. in have automation aggregate half software expectations The business service XXXX enable and present facing and we this years. also improved further to that segment vertical. our in second current diversification Our Not upcoming growing and deployments. X efforts this is our year we provider $X we confident see regarding billion to service and optimistic a routing to year in QX strength large opportunities, ongoing deliberate introduced metro through these the the to opportunities service win attractive to interest of of difficult seeing full encouraged addition challenges year remain exceeded introduce for our believe in stabilize have the trends XXXX. customers which to our we core value products combination to capabilities pipeline, product of We opportunity is to encouraging this targeting several we during many with we more and Tier overlooked, despite following plan results aggregation portion customers. ability first us the to represents in played. at provider historically international is delivered which Based regarding business of edge for provider XXXX Juniper of remain carriers switching both operators the a cable access where our the and compelling and year market provider routing the security to stabilize enable proposition portion of believe net our ability upcoming the the and hasn’t We Netrounds the and continue our remain been part this large this solutions vertical the begin U.S. we likely several should us in the on are would past in and Early course be weak in of undertaken, in spending our offerings we our optimistic capture market. service the due overcome QX additional to during in with are through within

plan expectations business our largest grew a been full anticipated has cloud customers, call forward. in QX an year improved majors to through spending with exceeded this by we what for growth historically to success a Tier cloud despite our customer. continued and consecutive also going our decline Our year with basis and second X which hyperscale been on achieve accounts cloud able in momentum We’ve other

we important routing during healthy both revenue an these remains and and continue pipeline strong experienced the wide orders perspective to momentum recent area quarter. strong our most from hyperscale see customers, growth a for which particularly with Our solutions,

remains exceed to remain customers new the been up, headwinds we While also ramp is with old in projects completing. new this and value footprint as lumpy, these continues have of projects funnel complete The likely to opportunities projects our the software especially business the customer of routing will old this use high-value we from delivering see new some stack value seeing critical around customers technology further opening TAM are and innovations we critical our routing and SONiC in to up of and of the that containerized our expand to set. increase cases been these have

remain majors, our Importantly, which optimistic growing as we gain view we market cloud regarding with to share and also potential opportunity. large a

seeing cloud Our see share current potential of where up by opportunities enhance Based an our XXXX. business driven here gaining and at strength we are on further through accounts and only I efforts. not in go-to-market but our momentum logos new to Apstra opening this by an position, existing we diversify portfolio hyperscale both is pipeline our expect incremental our us grow also will cloud is to within majors, and the the and area

currently addressing for wins we're also an have in increased have make historically more continuing while capable success level than gig of wide to strong. gig area cases products, of our XXX We're where progress switching wins been are many data use center and on Importantly, our XXX opportunities. we seeing XXX

which two deliver our area last Fabric gig market starting unfolds our management We both switching the I'd point, set XXX to closed Apstra quickly gig area both of opportunity. in believe like Apstra, troubleshoot features cycle allows of We of in opportunities data switching across are protect to here, new critical a customers accounts. determinant in center loop Apstra's key best the environments. differentiated the day enterprise cloud offer on cloud continue us have switching We accelerate success the to believe in as wide customer highly customer and improve experience and both with products in footprint problems the majors provides expand one On many zero, within day we to capabilities these customers carrier the as but the and and in day majors data have operations. also later share center and to and think significantly needed not in which and share this environments. enterprise and assurance, potential to capture customers momentum product market, large accelerate is and industry's cloud this our large XXX and abilities spend leadership engagement right large our well potential business, gain these only automated as We our year. the data a this minutes center has remediate few success to

sales. of business for software accounted well performed in our overall XX% Our QX and

in more As focused SaaS a company, software. and particular, we remain capturing software more and subscription-based laser on

expect growing Apstra to mention the of our in team our as like year and strong overall subscriptions. next This full growth to as revenue software is software-based delivered years driven service and we due and I'd of was by and Technology, recent solid well other percentage capture are While strong in well being of XXXX another adoption that the is and continue Mist high Cloud, primarily tax over a years. growth rapidly, software renewal rate today, to value revenue which staff smaller will stream SaaS subscription trend quarter more acquisitions services are XXX revenue another further our they our to a the The as of on Netrounds basis, efforts as offerings. several software subscription growth year software our accelerate to come.

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

Ken Miller

across fiscal and Rami, $X.XX, Revenue were earnings and the ended by will you, mid-point growth. verticals. revenue consecutive of in guidance. of driven color results We our quarter I fourth quarter good by the non-GAAP share the both billion which and XXXX of X%, XXXX end per The year-over-year outlook. quarter at second start results and year afternoon, $X.XXX above the our grew cover mid-point was of than strength everyone. all higher Thank fourth some discussing with on then

XX% Security increased Looking growing record at revenue declined and was year-over-year by XX% Cloud a XX% grew and X% and our X% essentially XX% Service X% on Provider grew Switching sequentially. perspective, year-over-year Enterprise sequentially. sequentially. flat and increased X% sequentially. basis, vertical posted a year-over-year quarter grew X% From year-over-year year-over-year sequentially. a Routing decreased XX% year-over-year and slightly sequentially. increased decreased year-over-year and technology

increased Our X% Services X% business decreased and year-over-year sequentially.

In with one fourth Software quarter. was in Provider, revenue our which were the the Enterprise. in-line total quarter, expectations. was was XX customers XX% Cloud, six for was revenue quarter, Service Non-GAAP were the our reviewing in and three an XX.X% margin approximately of gross Top

are by $XXX mostly as XX% Top of year-over-year the as year-over-year, as quarter organization the higher revenue XX Our costs which software as result last increased of sequentially. was $XX timing accounted customers We than year-over-year the to the contractual related our million, in sequentially. in was higher and X% Technology. as Cash flow paid revenue both to services deferred fourth compared subscription offerings, Product were in dividend commitments. up X% for Deferred operating our and year. $XXX Service million of X% included grew the anticipated for compensation, to of the of a increased sequentially higher and variable and revenue quarter down Software a Non-GAAP deferred operations quarterly reflecting share. acquisition due a well revenue. million dividends, expenses of delivery our revenue driven XX% XXX year-over-year and The total of Go-to-Market XX% per from in $X.XX

XXXX We retirement shares. of debt I’d completed Total timing million to a billion. quarter the $X.X end cash, between and full out that was investments of January. difference the equivalents, was the which previous of point of there and was the fourth our new also in debt $XX repurchased cash like worth at issuance

are this and our result timing by $XXX of balances approximately and year-end. As a of debt difference, elevated cash $XXX total million respectively, as million

flat Moving on to results. versus full for year XXXX. our billion, which was was $X.XXX revenue Total XXXX

the growth impact the was for full Our the pandemic. of This X% despite year, our Enterprise Enterprise. year consecutive grew fourth in from year business

year grew growth. X% the business Cloud for of the year, consecutive second Our

X% stabilize full Our Service performed and business to declining began Provider the year. expected, as for

technology, declined X%, Switching Looking X% declined year-over-year. Security our Routing and grew at X%,

Our Services business grew X%.

second Top Non-GAAP costs of $X.XX of revenue; the and were total a Non-GAAP the were reviewing one Software in by revenue of modest level. a was gross five percentage the diluted above declined Service XX% XXXX, points non-GAAP additional offset as than year, in year, margin Enterprise. continued we was Software margin. expense expense our being basis. X%, Non-GAAP gross on four primarily earnings or to logistics of partially supply to In customers by for related XXXX. this Provider, improvement operating XX.X%. less related our XX on in basis with year XX a to disciplined an per was other due the increase at operating Throughout and Cloud, share management was focus COVID-XX, Service chain

operations we to XXXX. the $XX of increased cash compared from million had year, flow which For $XXX million,

of total a balanced we We XXXX, worth million to and approach shares XXX% million to in repurchased of cash flow took shareholders. $XXX capital a return $XXX for allocation. free capital During of dividends paid

revenue margin help growth-oriented expansion believe growth sustainable that and we over In will companies addition, us return time. acquired to two we

structure our our uncertain historically low proud the our in refinancing improved while extending of financing strategic our rates grade average resilient profile. investment credit long-term portion a challenging this has team also and taken through capital We financial ensure debt, I’m of our maturity, and times. to the by locking preserving approach

some revenue $XX Now, of our guidance, is be than less Relations details on the revenue recent to acquisition. can I'd available commentary year-over-year, on our color website. our up Investor expected X% CFO provide to our like which mid-point includes At you from the find which million guidance, in

quarter. seasonal first normal margin We experience the in expect non-GAAP gross to patterns

the Excluding costs, year. of be gross versus margin approximately quarter anticipated the last flat of would impact first increased COVID-related non-GAAP

We expense sequentially, expect to and approximately first expenses to recent acquisitions reset non-GAAP offset $XX the operating well the quarter inclusion annual of related increase by due of increase operating in costs, as a expense. to primarily of decline million compensation the the typical seasonal fringe of variable commission as partially

In quarter includes recent impact of acquisitions. first addition, the EPS non-GAAP our guidance dilutive the

the Before we some I move on comments year full to to the provide like our XXXX. on for Q&A, expectations would

earnings revenue call. XXXX during Our unchanged and provided expectations forecast the our non-GAAP relative QX we to remain earnings XXXX

However, guidance. growth the earnings updated mid-point XXXX upside in account of we and revenue we have our the the to compared non-GAAP expectations our for experienced as QX to

have dilutive the factored in first-half also basis. which during be on but XXXX, We be the a acquisition full-year non-GAAP expected to earnings Apstra, breakeven is our to of of

and anticipate of revenue, an approximately organic year additional full we of the terms growth acquisitions. growth recent In from we to X% of X% expect X%

grow each expect sequentially XXXX. to first the quarter, Beyond in quarter we revenue

COVID-related non-GAAP of with higher the approximately services be to volume, gross levels. full-year Through expected be course is volume. of reduced difficult full near remain expect margin course to costs, margin well we gross of we first mix, to logistics Non-GAAP levels expect and as flat margin can XX% improve improved to the year. higher software as due year, gross approximately operating expected margin XXXX costs. operating non-GAAP the non-GAAP The predict, to to is year quarter the through expense While

the advantage basis market While invest recent total absorb also first committed I and expense the as operating remain would we to that of our full-year remain non-GAAP be to longer to through other we we near quarter and term. year. to expense on expanding management opportunities, acquisitions levels expect to up non-GAAP disciplined expense a margin expect income and operating like take of course we note

rate worldwide plus be Our minus on or non-GAAP tax is XX.X% X%. earnings expected to

grow non-GAAP year revenue. to full expect EPS faster than We

would to our of has cash paid our closing, be like Juniper's team dedication Board a this Finally, thank per quarterly especially of their and to stockholders this of $X.XX commitment share success, challenging dividend environment. for record. Directors to quarter continued declared to In I in

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

Operator

you. Thank Instructions] [Operator you. Thank

question comes Leopold with first question. with Raymond Please Our Simon your proceed from James.

Simon Leopold

Thanks way. the a I question. the on to appreciate of wanted of I out sort for one simple get full very the the commentary just year. taking

thinking thinking the be One coming XXXX, I'm things just we kinds something I've this post would some second of about that later the picture trends expenses about the rising coming you're and you're of like year If got how those the than catch it's half with rather back. would pandemic. in question afterwards. expenses occur in back. bigger assuming then of assume wondering a happens normalization travel up expenses And year? I'm

Rami Rahim

Sure. you, Simon. Thank

the for of million acquisitions OpEx, guide our driver growth closed, number. the sequential $XX So QX in the million is $XXX that about recently QX of in that's really and QX, OpEx we at the primary

$XXX into We some equation perhaps roughly of the million plus those costs people a et bit. in QX the to levels or year back We expect the start do rest around half. coming for when to cetera, there travel again, minus being maintain the anticipate second

be the point normal is determined. expecting to costs However, And all back. at I think do come still not to yet the I'm new this

to we I efficient travel be forward. think move able as and conservative with cetera, basically we'll et our be

current our do large this year I some of have data time. COVID So we costs although come to a at don't forecast full amount back, into expect

Simon Leopold

profile terms that the affected and this market different become multi-year doing vertical you And enterprise maybe your the in the end that very seems the talk Thanks. trend, Thanks XXXX. long-term in the that. it clearly so different get clear of by here, then largest done how you've will roots, of pretty has business culture thinking of the go-to-market? is for space the And but strategy Juniper's about could something company's than on to just

Rami Rahim

Yes. address that I'm Simon. happy to

XXXX would our So year fourth vertical. enterprise growth be this in be would consecutive the of –

this new for thing is So not us. a

we've sales in have and number goes strategic sales actions However, way enterprise I there a few taken efficiently. been the do a structuring over of believe last after that Equipping that effectively years. and that the

Our to set organic innovations, us part inorganic acquisitions up of business. our accelerate this have our

grew challenges So a grew we saw despite the vertical COVID, we of in that this as result we and XXXX it nicely.

I think created we're in as taking share. done and think share has as never We've I by believe but just the focusing on I Mindshare efficiently market our eye not with an doing and our large on and possible it differentiation growth, the technology growth business we've been enterprises. so growth stronger. industry

big success Global sales where as from it these large investment comes can X,XXX Fortune of as So is XXX our for component efficient that a accounts be Enterprise.

enterprise all for in opportunity the about space. I better these I've honestly, reasons, our felt never So,

Simon Leopold

much Thank that. for you very

Rami Rahim

You bet.

Operator

you. Thank

from with question. comes question next Cowen. Our Silverstein with Paul proceed Please your

Paul Silverstein

questions. taking all you appreciate I

terms First off, is that given a And I've follow-up constraints, growth not Ken, the of the supply in Cisco revenue an or in forward suppliers, disadvantage bigger into and volume and issue just vis-à-vis pricing? of both picture other got Broadcom terms how question. [indiscernible]

Rami Rahim

Yes.

exiting would have pandemic, might back We it due articulate the about XX% of if lead backlog experience as with normal. beyond expectation We've with we some and clearly month. the improve the of we elevated That entered. exited constraints true supply We're as peak will, backlog COVID some to times proceed. did we pretty of I'm to We're supply supply has summer constraints. in adapted pretty the but is So then. the here and a there, I kind you and our how more then much pleased had more year. we kind improvements year team very than said that's demanding material significant since higher. in the really

of summer we competitive So et extended into this through backlog believe at we the at we us the we're supply really I times, are saw cetera, months that and as are move most largely lead maintaining this year a XXXX in point. healthy don't constraints, disadvantage. behind

to does components and that team manufacturing need. great Our supply job the negotiate a component with suppliers we

Paul Silverstein

I an signs then from ask this, hate which of while, upside? think switching for any you because think you is awards cases? the All concern away to I share been investor on the right. any and but about And in my every where's apologies, so losses your as asked the have WAN, you ongoing cloud I or any the on, GCI can quarter, in it's for seen all a there terms for the insight And side you opportunity of optimism routing the specifically or other in Rami comments give incremental you use of equation, cloud, greatest I

Rami Rahim

Certainly, Paul.

is answer to the So short no. your question

timeframe. up cloud cloud not year-over-year the footprint double in in routing have mean, routing We today, should share QX lost I or our in period, I say. digit saw We

the an retained vertical of us. in the is that for indication this footprint extremely we of that health think important I have

majors among practically X, call see of cloud within enjoy to footprints diversification the also hyperscale them, continue both healthy providers, all to we where the cloud think We more forward what we used market also across Tier selling. greater I'd diversity we're – technology more going within in cloud Tier that area but share there calling X, well. of as a is that now we're and which that

important just it's it's switching, routing, this also very about vertical. security also So not it's in about about

going is right go-to-market, major I some that that to we can the out technology in happen in share we us, any that's anticipate that know as believe additional the taking We share vertical. believe the in with for XXXX, that this we can achieve that cloud have, focus I the in retain right. I But in I to do we within growth into I think competitive, As that take we XXXX achieve XXXX. know fact well very look didn't work space going is to additional our footprint

Paul Silverstein

it. guys. Thanks I appreciate

Rami Rahim

You bet.

Operator

you. Thank

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

Tim Long

you. Thank Yes, could as two, well. if I

Rami enterprise side. bit about maybe First, a little talk the

bit kind little ramp doing of seems a And Mist. a rates, more good – rolling? obviously with with deal cross-selling bit how and Could company? them or really having and a talked you. a them? sizes and Thank that us business the easy lot of bunch keep well. mentioned on that you for for of get to Salesforce about to the ball to that you've type You kind of how them. you there's all of It second you size very the talk talk be one, the at out And of potentially have of two, impact and three win it's acquisitions is then a other be the going framed of make of you engage to about little that Can similar those Mist

Rami Rahim

a you. question, Tim. Thank it's Yes, great

So indication couple to an just you of a you as just how with Mist. well points of we're for doing give data

business a annualized and sold that's is exceeded Mist it's order really And annualized million. the $XXX framework wireless already. around so if EX standalone Mist standalone in under you include QX Our for basis, million XXX on wired, Mist automation this really order

Mist well. Apstra in for really same made being that implemented as acquisitions data unique last solution to and interesting and playbook year. take playbook the to you're that the everything the cloud improve with beautifully to you're extracting it vision, applicability in amazing. SD-WAN under provide other has momentum the worked know cloud position that mostly doing suited user first to are and really and getting this client from to verticals client XXX, in between fits we networking in a We're apply but particular, path which we enterprise, data this we've XXX differentiated something is client have which that With that data, the insights so is the apply to differentiation, telemetry our insights where automation sellers to our campus exact the end very experience been effectively able in that and the and center. improve the technology, approach the right, So for customers. going and Apstra cloud takes really in the proficient to has the Mist experience

beyond service interest box Netrounds to is want between assured to verticals, in understand extremely And one, building, interest like early SPs applicability we the connectivity on where then our we provider from we're been little better has experience, but as smaller closed to SLAs well. early last So, assured pipeline – that with but the the expectations also been has Apstra, pleased And service the yesterday at sell just technology that a Netrounds. just an ability vertical, honestly, interest acquisition the the to story now very and this The have together encouraging. although all and a deal especially bit boxes, exceeded has we're an in the point. in is providers customers which

Ken Miller

leveraging install-based install-base on to would new are Juniper a growth, is Rami's asset the the also for our question, And existing growth of Mist. are percentage did really customers a kind logos, did those Mist net I mean, customers that with part to in good our prepared mentioned of new tell increase we enterprise Juniper. customer but in acquisition accelerate the those pretty see much the you of Mist percentage I strategy remarks Yes. Tim, of of logos we that XXX% good

lead the really expand where portfolio. land rest to with might is the expand and engine, and the and Mist we AI So Mist the a then opportunity of there

So a it seeing from and perspective. about the we're enterprise excited customer then really acquisition

Tim Long

Okay, great. you guys. Thank

Rami Rahim

Tim. Thanks,

Operator

Thank you.

next Chatterjee question question. JP Morgan. Please with with comes Samik proceed your Our from

Samik Chatterjee

taking do in spending, the in stress within spending of stabilization weak, that you – U.S. just maybe what kind And in think you mentioned the some these talk the of I of about your this but the been have long Hi, seeing prepared thanks kind U.S. And continue? spending up. whereas on you are mentioned service the for provider service relation Telco, provider a U.S. you to kind kind weakness on Telco's just has auctions U.S. question. you follow going from in Can customers. remarks impact think I think provider are cable Rami, of service having how spending? of I

Rami Rahim

as reason providers to results franchises expected providers enjoyed revenue expectations strong, the We happy Europe bit. our played with trust the especially standpoint. out a Tier We're healthy in X very are a very some be here weakness all a spectrum so world. placed that and of of expenditure I that lot We SPs. has QX largest the service worldwide the by did capital XX know technology. I'd in see think America. been in been Juniper for our auctions service Yes, of with a Samik. providers, around has service top from And pleased North in exceeded XX probably largely customers our we The there forth.

we to traditionally the don't in. investment So strong are forever. expect case network, the of that business I the away be areas from it's diverted that the

XXXX, our XXXX, benefit developed further X X resume even been out has outlook then we business and they so significant strategy and by with working an cable increased of to are look If on, effectively sell, XXXX we you i.e., providers. we service results spending Tier that resumption us we of diversification country, SPs. not in that a the The end do that international outlook and executing this spending Tier that space we Tier better large even strength obviously that very providers do technology and than in saw I the our resumption in in saw the did have more. think kind IP for anticipate If in we into provided X that would any in service that penetration stabilization,

our SP, had healthy And out all just a Pacific. diversification not I'm of the the quarter showing very of You'll notice kind driving that's through verticals. that for we proud APAC business. Asia really of very in an but indication we're across results, team in just in

Samik Chatterjee

of Got talked you you as and about, in of most the a it. said I that gig them it. but wins portion a XXX have think Got follow I well. wins there's in switching you center had them the on WAN, data up XXX are

talk come switching is use center If wins gain you of or the you've it's customer those position a kind you position there, the managed where how a that to a which about kind opportunity? incumbents, and kind wins new data with just of up new many you met of versus can of case that's displaced kind of are, already incremental had where an in

Rami Rahim

cloud that high. of for where in asking you don't us this the are that's I not many provider point. split give existing share mostly the you're wins going our I'll be is exact data for, net business but all know Yes, switching, new that because center data around share to

the timeframe, XXX in compared If in to switching customers, invested of you number of metric that's at the that in in foundation of doubled. technology the number customers timeframe XXX gig of and XXXX capable switching number QX gig the cumulative cumulative look our same customers invested business QX today XXX that gig of and measured that technology,

and customers total So, That's comparison encouraging from small XXX in is us. is whereas momentum very the that the measure it still momentum we revenue to and you that gig a today wins can see way switching relatively the business, quite is point momentum switching data for and solid. and

Samik Chatterjee

you. Thank Interesting. it. question. my Got for taking Thanks

Rami Rahim

My pleasure.

Operator

Thank you.

question next from Sachs. with question. your comes with Goldman Rod Please Our Hall proceed

Rod Hall

question. guys. of the had Hi, a on than clarification I quick Yes. Thanks for the couple question number a products.

is Is then the growth X% So acquisitions? X% to X% on can you X% that included… on X%? and top set it Or of for the numbers, to X%

Ken Miller

would be be top that of. – would that yes, top on Yes, of, on so

Rod Hall

Okay.

Ken Miller

X% to to expect we navigate So in total. X%

Rod Hall

Right.

costs, Could you a costs I assuming of percent. on just Okay, I'm that's you few case? COVID gross excluding margins, would tenths that just the thought. a COVID the confirm then what And be said there that's

Ken Miller

given between to be material basis I expect points to QX. similar past are our any running remain so come XX do Our a XX first that bit XXX XXX basis should half think quarter, I second impact quarters it's in it costs few fairly and COVID and to to in be expect points that impact. of in half, maybe the in I but down the it

Rod Hall

Okay.

costs. for to COVID back XXX to XX add account the we So

Ken Miller

what to would Yes, expect that's cost see. Yes. normalized, once the we

Rod Hall

that on networking wanted do check to I people a well as in Rami, that know this their to campus the like people networking. reopened, gosh, we that environment oriented don't investing a for. for of the understand have about us products, kind from just is market they I I invest lot lot long-term more Okay. going people of broader there's going back just audience, reopening that think, it's kind for when believe could there's guess quite maybe the that thing in – Mist of of to and Thanks. that, and lot campus there from that for get think help again, then a investors reasons namely sort kind we on I of bit people And are a thing? think are But an through maybe all you customers' hard why that that and products would And a help to continue of where to in minds you go the environment home share that working what's

Rami Rahim

great question, It's certainly. Yes, a actually Rod.

investments to pandemic federal be – think where areas going so all cloud complex the legacy be government, frankly think way get today. an think the strong is you Juniper there acceleration resilient as in we see we've important the part spending you the most the going SP, enterprise we'll made on-prem recover must not IT retailers, in perturbations IT, this the services, education investments large maintained course to actually are that out quite are happens college my we But be pandemic, crisis. that's cloud the networking look of U.S. here pandemic to big when in primarily enterprise that IT beyond sub-segments I strategy, These higher economic on campuses, financial technology traditional so technologies warehouses. it's patterns start and driven. box type as out about and and be from of that our to So to delivered AI technology will cloud on COVID not but delivered, a of our momentum not are that that in or focusing a throughout in towards It's what of is and and belief the pivot

with capture is post-pandemic. setting done going to geared the that's view a investments ourselves we're to where that and necessary my what's are So share to we've pandemic strategy up be be greatest going to during

Rod Hall

as of thing kind that of themselves more people they through workforce investing that side resiliency, flexibility the think the So you thinking more other pandemic. to would are give be

Rami Rahim

costs magic of is running and of don't the think it whether to just human of that for to because framework wireless networks full they flexibility cloud Technology need of is LAN. wired, automation by And AI want replacing elements network now Absolutely, with that because or Mist. that the and the running Mist is powered as client automation with they WAN cloud wireless, XXX that again, delivered experience. Mist crush

Rod Hall

Thank you, great. That's Okay. Rami.

Rami Rahim

pleasure. My

Operator

you. Thank

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

Jeff Kvaal

centers their is now question you know the of cloud. CapEx as to couple for growing the of some. in we've first tough than better up my the guess same are years than flattish year? of time the and these wondering what see clip decent doing. are I at are gave a that we and cloud had a say growth – about their But your a in within And I And building or you faster than new And do. that at that that expanding better data cloud revenues context had companies revenues clouds couple for do statement I'm I we you. I Thank opportunities in Yes. guess you, sure, I'm there years

I'm there's even it's so XXXX grower. close the high to or mid opportunity the single cloud sustainable of little a or wondering here make XXXX bit or if gap kind road digit down whether And an and more

Rami Rahim

Yes. Yes.

So, Jeff, a good question. it's

them will feel growth kind we're but good you footprint to represent any for were those opportunities our say cloud. absolutely that statement I them not a would would for the in see would of. of XXX that point XXXX, major sleeves I seen are I be mean, – type opportunities and take If growth. in take for and just and would we're certainly major and we're at of do like want outlook not additive about we When our opportunities of we net up this, beyond there yet the ask thing outlook that now provide gig assuming actually score we've and two aggressively really XXXX. we're new I call fighting note rolled that's share them, that I So where that accelerate years to we mean, we

Jeff Kvaal

a back are enterprise talk here? are right. these are do How And like they digital And bit. Where is from doing there acceleration Are people Okay. the yet? up we perceiving then different customers two, Rod's more or are on quarter back I fully to think we All feel your Or cycle – well a invest? on the to just you now willingness are their [indiscernible] question about, back. secondly there like companies we recovery in for we transformation feels zone? opportunity is spending follow

Rami Rahim

believe yet. that fully we No, don't we're back we're anticipating to that will we there think face. were I related facing and are still I COVID headwinds that continue

of should business enterprise outlook go from but should think more let's recovery, In then – absolutely in spending a in significant I used type they strongly I in fact, enterprise, that would that been like enterprise We're in accounting better COVID enterprises believe have our spending back performed benefit to recovery the not for from on to that even half XXXX, COVID. major second a in for the our that. year will not say, reverse, it had

where solution we're time the say, be differentiation be most, about a of spending technology. differentiation that now IT campuses, our in for more where the education, are a justifying projects smaller The And in services, say mentioned just in is teams mid-sized we've more let's on investments it – felt argue our to even won type this, verticals enterprises, to appetite of many factor of would as opportunities around seen by question the COVID more there merits, strong going your is never based technology, merits that appetite I for actually retailers, thing last enterprise. I considered large Rod differentiation large financial for projects. right. is as in measured matters headwind, say to I've of the far the and the we've those a let's our living As higher I the government, would enterprises, federal of

Jeff Kvaal

Rami. you, Thank Okay.

Rami Rahim

bet. You

Operator

Thank you.

Our your question. proceed next question comes from Sami Badri with with Credit Suisse. Please

Sami Badri

for question. you thank Hi, the

you the one things projects for now, just back on segment? the the seeing completing potentially question up of means be down is the are of timing XXXX seeing should of they or the you you And things seasonality two quickly instead and first projects. in of clarification of some these? some kind kind which very of some more Rami, there comments. commencement cloud back of could expecting of other The Is and and of wind to revenue? cloud mentioned that that Are half quarter I timing kind an a lumpiness XXXX? right could on you cloud want be then of are or slow your just we idea get in of anything ramp then

Rami Rahim

I'm Yes. to that answer happy Sami.

sort it within maybe see on that's not vertical some So which first, what that's of I indicates two say necessarily of orders quarter the timing year, the because we of wouldn't seasonality cloud and we're seeing. based What are really dynamics.

a the used is deployment them of of of One natural evolution cases.

cases they're They always the kind of more older diminish. older, cases use to we going sort start of time, over win mature use with customer. use reduced to cases same that new continue that even within but So offsetting those be to we're

use deploying evolution cases So been there. technology any hyperscale different our cloud number be of a in to it's and especially provider going cases of cloud is natural use always provider, how that

and will will grow. decline others Some

customers. puts within cases naturally element are We're so of customers, our our of hyperscale more or that offset in cloud really and diverse among diversity vertical among The we're there within be seeing just seeing use some the of many second where cloud to diversity customers. and cloud of opportunity is And within the takes largest each factor the customers strength that majors the healthy is business. going

Sami Badri

Got or half so the like just can frame be like XXXX to we surprises, year should kind anything the it. no little But of expecting lock of be out should just bit? first that, relatively on or kind here; I of real lumpiness a

Rami Rahim

of also any taking business into of we're customers we're mean, an counting outlook not cases I we're in used got factoring and anticipating not surprises. net on totally provide when course we've We're growth of any that diversity and account major like we wins. clouds in a this No. our in new I transition of said, footprint where

Sami Badri

Got to just a big PTX it. dynamic really you ago, shift that. recently? come bit something much back wanted thank about years for was Got gears that it. the This the MX, two I to want hasn't transition. a little I to up

Rami Rahim

move are to next to we we on Operator, – have our question.

Sami Badri

Okay.

ahead. Okay. Go

Operator

you. Thank

next question proceed with Please comes David from Our your Vaughn UBS. question. with

David Vaughn

Great. Thanks guys.

on enterprise to back the Clearly on want second. that circle really company critical for M&A going clearly a driver it's Just And segment. the becoming has a been forward. the focused recent of

have Just wanted where there forward to to follow going market that or bad then you on going just going need question. forward any quick I And address the are portfolio do and forward? really think today a solidify wide touch you spaces to if about our how up

Rami Rahim

there I cases. question, Yes. solutions, each used going and don't do our David. our value business Thanks last saw momentum for our I and achieving three my mind M&A, focus my on integrating that at where really the think year. important where any frankly out success enhancing looking glaring landing be made kind right in opportunities for we've now, these position, the but really is quite acquisitions always we to time. portfolio at that point think this that successfully is and for of we We're and our Mist are at rounded gaps with to of is

David Vaughn

the activity. Great. And follow-up just on a M&A quick all

commentary the the mentioned, and XXXX you your expect sounds from expectations? conservative initial the around certainly post year or Does XXX, from little transaction that you receptiveness perspective sort that today of enthusiasm has of gotten the of in is completed? M&A you this given point clearly ahead like bit that probably growth have you've quarter of last think is a I that would feedback of a closing Apstra that the the client that suggest an sort your expectation from transaction

Ken Miller

XXX point we about nearly give Tech We David, our and us expect Yes. full a tweak being [indiscernible]. We do would We of the growth. did recent a of now point Netrounds language acquisition. We're little updating point growth. a that growth nearly there. from We the of did. talked a thought bit

So change it's a outlook modest our there. in

David Vaughn

Got it. That's Thanks, helpful. Ken.

Ken Miller

Sure.

Rami Rahim

questions. Operator two we'll more take

Operator

Our Aaron proceed line Aaron next Fargo. with your from Wells Please Rakers question your Rakers, is question. comes live. with

with You your question. may proceed

Rami Rahim

Maybe we to can go the question. next

Operator

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

Alex Henderson

Great. very much. Thank you

companies. resolved. patterns So little I enterprise seeing could SolarWinds fair impact hack? accounts potentially intermediate of IT budgets spending was hack. on COVID about you’re with on of impact that you’re a conditions the and And had the hoping by not ratcheted the are driven value-added accounts you as rather a recent fairly bit quite talking also really so well in enough at time and like an handle We’ve on as much increasing overall had talking intentions about does Have of did that and are the put that the even the have result from it resellers that individual up to spending amount whether soft intentions a but meaningfully, Not get any large survey you work talk during while or seems spending clear once around sized you your security as the impact a to which is improving the quite it quite to SolarWinds have C-suite on spent types commentary customers. by conversations significantly spending COVID to

Rami Rahim

Yeah.

to things few unpack. a are there there So

to anticipate what to want I actually spending post I mentioned we say was be healthy First COVID. enterprise

there use I the actually cases cases, the you in at more if resumption tailwind Company spend, acceleration, be of and that will in spending a use think on. that we many are especially will, enterprise So different focused

and to networks into of – own find way of say were to quickly we in our we that product once that news, I impact any we course, with our once looked put we customers. of exposures and we that respect SolarWinds we for any heard of And, want didn’t Juniper exposed. any we products and our sell SolarWinds, scoured Next never the

of get I’d that So out just way. the

leaders a the as appetite has it’s reason In I a very to for other terms never especially that type the mean, more address and is increased IT security, forethought, security I afterthought CISOs spending, been important to the that incidents sell networking solutions have or are not is you think the as yes. use there answer in competence an important to SolarWinds embed our on of security important. you security you focus all business. your of also cases That’s a that in that company absolutely

there end high our service in The is QX into grow lumpy. but our be not our to part solutions. a security there reason business strategy So did portfolios, where of providers, our broader it for cloud really this. we of embed is tends sell security to The providers typically security the that into large

our these invest - portfolio. for security business. about the reason, quite solution Mist actually to in we solution lot that secured our I’m departments Mist And appetite Mist. it’s that So to embedded have default optimistic a we talked by technology how for One and security going of IT is by to trends in with be client our the about element that cloud the

Alex Henderson

sweets we to because the to year. [Indiscernible] post like any a those talk the lines have in talked have that it's along intentions. me could you hack in from did they're December have So spiked December? spending CIC a C-suites it hack, you anybody this to If we heard in that, going broke wish every Have hack anything you've to?

Rami Rahim

Yes.

were an professionals. C-suite ongoing I remarks conversations based on on have with were basis Alex, – that my So absolutely

case making job. strategic of is security on It's it a our of So of all customers embedded providers spending, driving to solutions the sure part is to use large a part is is important my absolutely of understand my a net regular cloud providers, in big enterprises, that service is of big that consideration. of CEO, mind a basis CIO, job and very and top and security our talk CTO

Alex Henderson

Thank very Okay. much. you

Rami Rahim

bet. You

Operator

Thank you.

Our last with questions. question Koontz your comes with from Ryan Securities. Rosenblatt Please proceed

Ryan Koontz

and I with color progress the routing if service side simple or used you used cases? piece some and as some you're provider used am on of seeing, new the the any in it cases of I missing interesting the question, I cases think Is WAN other campus cloud. the Thanks. as would, enterprise there. DCI could give great us some stabilizing on the

Rami Rahim

cable and our both basis. in enterprises, governments Yes. providers saw momentum routing we and QX PTX pleased with I'm very and sequential grew was growth cloud year-over-year double-digit routing progress. and In a strong MX

and it's is today largely the $X And be Juniper. a routing untapped appear provides to roadmap. is it year probably used it, SLA rounds by we it but introduced our sub-market new to data for capabilities, high it The does The of already metro because and aspects when the address metro number are and within center These is wheelhouse, but we're can assurance, first our around this We've Net be excited power billion beautifully that – the a overall this certain this And expect a introduced it routing the fits interconnect. certain news automation routing important growing good represents that all to around broad-based. metro that's and thing routing are just the routing that's requires on. complete solution the opportunity of today isn't So us performance and comes a network, opportunity the into cases that product executing healthy fastest products efficiency core metro. to of DCI at really mostly going growing efficiency, certain features. that is for our footprint products another market. in really clip, roadmap your and portfolio. types I'm some of edge about routing, to you The on

that is I routing complete. especially is us in to when but help business when going our So the, in portfolio believe XXXX, the in XXXX,

Ryan Koontz

Helpful, much. Thanks very Rami.

Rami Rahim

My pleasure, Ryan.

Operator

closing back at over no comments. like any Jess time. turn Lubert are I this the for to further questions would floor There to

Jess Lubert

you, operator. Thank

which website. XXXX will be hosting to Eastern XX:XX link and Before posted I'd Executive today's at a its call, via be can Time Day like XXth. we remind our IR conclude AM Juniper to will we start Investor February everyone presentations accessed that virtual on Standard

We If look can you to call. you have today's the any That you. concludes questions me you regarding hopefully out there. to Thank participate at jlubert@juniper.net. forward to reach how in seeing event,

Operator

today's This conference. concludes

at a Thank your you wonderful evening. for this participation have may time. You lines disconnect and your

Juniper Networks (JNPR) 29 Jan 212020 Q4 Earnings call transcript