JNPR - Earnings call transcript Q1 2021

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Operator

Greetings, and welcome to Juniper Networks First Quarter 2021 Financial 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] As a reminder, this conference is being recorded. I would now like to turn this conference over to your host Mr. Investor of VP Lubert, Relations. Jess sir. Please go ahead,

You may begin.

Jess Lubert

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

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

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

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

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

Rami Rahim

year-over-year, grew mid-teens Enterprise and verticals and we experienced Enterprise was orders Good expectation, growth growth a and for Product growing March in year-over-year, growing orders on Revenue discuss XX% our our call Cloud to during experienced we results. year-over-year. joining QX with XX% backlog sequential verticals strong quarter. especially you nearly afternoon, XXXX and both today’s our on the We exceeded us across and delivered and everyone, more all year-over-year orders strong year-over-year basis. than and Momentum thank results geographies. Cloud

given and large results on expect XXXX portfolio is actions exceeded to declined deliberate seeing, both our in have slightly orders part seeing X% go-to-market The due visibility strengthen even year taken our the our we’re our to enhance organization. and X% a we basis. is success in full to business grow momentum Near-term expectations. now to we’re Provider the here we strong, Service our While year-over-year,

leading end resonating on specific industry we across accelerate operations we a simplified our superior Networking focus is enabling solutions the customer Our to deliberate on in us and And what serve. areas experience, Experience-First the the our success user market. delivering is is call focus

interest not strengthening and XXX good our attractive Technology position several in only the the portfolio. Apstra, but end also which are broader early in Netrounds, seeing We’re success of Juniper enhancing markets,

of well Our and made the diversity. we’ve paying the go-to-market and customer are over years executing form is last improved investments organization off in few productivity the

only confident several position. benefit any conditions, out, invest several in product as and will strong where feel actions in to not us opportunities unfold. transitions continuing share are our these I that There We’re are both position from differentiation to capture also to remain beginning we end to go-to-market about industry a but play market our organization. large improvements potential

force in significant truly we AI-driven transition to transition end branch over campus a where is of likely where enterprise customer disruptive all AI the by operations, helps platforms. is present to optimize enhanced We experiences. architecture resonating. differentiation the maintain AI-driven and cloud streamline to the acquisition our XXX enterprise reduce costs significant and advantages First, Mist operations, the client-to-cloud was offering, competitive This user which market, networking cloud Technology, believe sustainable

as and cases. Cloud in both the is see area to continuing wide Second use where success, data Service to center transition XXX-gig well systems, Provider we’re as

several major hyperscale, in highly our remain and are ability optimistic over new opportunities opportunity, protect and that to our not the in see is we competitive, not cloud XXX-gig only we but Service growth capture net solutions Provider also Our footprint, the to a accounts. Last metro but to healthy Service Provider view years. as next XG which least, and markets, likely large

making us trends. market to to we technologies, over automation Service our us and sustainable to Provider over deliver emerge line few the the the investments success believe position taking not where top this enable we’re several firmly pandemic winning unfold new us plans in limited that see playing and should presence. opportunities introduction We entered, stronger than but the that growth the metro-oriented family and in will will solution historically position portion on the share that next market, gain believe the and are only to decreases in we’re capitalize years, award market to as also will Netrounds We I ACXXXXX such and years. we’ve had our the such our sensitivity bottom share win big from as broader vertical of macro the attractive investments believe of next

insight Service offering, Now is I’d solution, the the exceeded strategy a to our the customers, to some each is for quarter vertical, and optimistic In positive continuing remain year-over-year, Service healthy which period. double-digit developments entering from diversification yield we’re momentum the outlook June year-over-year. perspective. some results, and regarding our and with Provider Starting the cloud the into growth solutions our sales key we additional Service delivered our network ACX of solutions portfolio. of well-positioned fastest own We with new WAN customer in with highly of geographies and these Automation Provider portion which Cloud routing We strong win and address all growth believe We in which revenue to provide of and one like saw are year-over-year, our QX. product Provider automated experienced our both grew expectations double-digit the in growing market. strength combined competitive Paragon our seeing

also automated our solutions in market, orders important for are we I’d vertical. WAN to highlight As regarding that our remain WAN outlook the Provider QX. like in I Service automated our the particularly in had mentioned this win cloud I strong and customers optimistic previously, portfolio to playing from

our was While customer cloud multiple following with strength hyperscale quarters demand. activity saw also we softer improved our of across several accounts, largest

are where our automated for for regarding outlook solution, well-positioned the tailwind, that areas benefit wide ramping year. big growth. Our X% we are likely to this a XXXX later the above area from cloud Investor forecast our forming and confident particularly are but our to solutions, decline in at for strong, February And to start incumbency, pipeline maintain a to remains optimistic our X% Day, the long-term of expect year, provided slightly WAN we high-end for calling range be the we are outlook we in results we

high, Cloud, average size While due in customers. Service XX% declined across orders we our data Win and the based solutions Provider in material our nearly rate Apstra quarter. Enterprise strength saw improved have center to QX, we deal we center year-over-year grew cloud-ready if XX% year-over-year likely deal our increase during center and in to to broad wouldn’t Customer a us completed exceeded secure this remain opportunity and interest we our been data outlook regarding able the enabling already is portfolio and business. expectation, hadn’t the optimistic data for January. win cloud-ready is in

business this the revenue cloud-ready data center customer to results almost improved weakness positively orders also in decline materially single the due While quarter periods. in our and expected should in QX a impact was at customer, entirely with large future

year, slow the X% forecast the Investor year. center highlighted believe long-term to business at looking revenue achieve on track to despite X% remains For for data we the our range growth, to Day, we start cloud-ready the our

and growth expectations solution enterprise in quarter. experienced March the exceeded year-over-year, double-digit AI-driven our Finally,

with number experienced new differentiation nearly deals logos Our record another and Mist Mist triple-digit orders greater growth of AI market doubled to million. in the $X a than quarter continued as resonate QX of in

QX. Assistant Our pull saw Mist of EX client EX Network doubled record wired year-over-year, LAN, Marvis we access,, in pull-through through business wireless Virtual and approximately associated and

innovations momentum strength with to offer further across continue offering in to large verticals. AI to and which improved In future addition success our customers, the highlights in Mist Fortune strength also to leading accounts, user sizes we’re all experiencing unique smaller believe customers all leadership, best market of the operator bring AI-driven resulting this experiences. value with market continued commercial continues that the should to in of we our To and accelerate channel XXX periods. We and and enhance enterprise differentiation, new

needle-in-haystack Juniper’s Virtual coupled SD And AI-driven same capability access. the that’s our using top on with the which AI AI-driven and resolution allows via the simple level problem the the integration configuration capabilities innovation and that, include industry-first deliver Session first EXXXXX, includes ease configuration already management, Smart Session Smart Some with we’ve router switch Technology’s security, Network customers fabric provides of up, troubleshooting and of Mist branch wired Mist and proactive announced the and like campus security industry’s SD-WAN for VLANs service misconfigured unique cloud Assurance to recently bad platform best-in-class customizable WAN the wireless of and XXX Add routing with find solutions. optimized of SD-WAN as branch on-boarding solution, Assistant to cloud automated operation, the which cables. scale AI-driven the and gateway, Mist-ification SRX problem of to of which and set

remains customer enterprise in While strong early, LATAM, won it providers We a had significant in we’re dollar Technology’s managed XXX routing deals Europe with and multi-million Session expansion Smart large interest with in closed the the and capabilities field. vertical. seeing service a global in U.S. opportunities federal

our likely XXXX. focusing and see excited seeing solutions on remain this of sales to encouraged success. We XXX accelerate confident we’re leveraging Technology and our are attention in by XXX remain organization in business Juniper our Technology’s to growth the enablement are about enterprise are momentum the Mist-ification I double-digit go-to-market and AI-driven

in and Our strong families. security in networking We market, resonating in during the orders across was the results experienced expectations of high-end with saw we that the are in Strength especially the customer growth exceeded provides focused. verticals we us revenue Security Security strategy period. portions and advantage notable of competitive although and a quarter of the where the March currently the all believe product is market the our Connected convergence and market,

benefiting Gartner’s quarters continue and firms highlighting believe reputable to of from We from such these will validation, our dynamics superior provide year. security during recent tailwinds current We’re and ratings. future as should in our the grow also cyber the to efficacy products us third-party business enable ICSA

services our related and certain such of and in by associated partially growth healthy as older period and of March in offset uptake the driven the ARR sales year-over-year X% level software of of revenue offering Mist grew carry services software related subscription offerings products security Our offering Flex software a A were the by our software. on-box Mist ratable with subscription, strong XX% offering. grew high these quarter. that perpetual in combination a software ratable lower

a were the broad-based strength on to than used and particularly rising basis due more verticals in quarter, cases. orders Software XX% strong year-over-year across

subscription Flex the outlook we’re momentum We’re the seeing, customer licenses, ARR improved and which ongoing long-term of the year-over-year verticals the we regarding of presented in seeing Based team at remain to would like all to ratable we traction are on adoption on our as offering the strength recent across continue strong renewals our serve. attach seeing on-box overall we and rates. and well for as software our that target our services quarter due delivered mention business service I to a Day. Investor solid another basis optimistic grow

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

Ken Miller

per Thank and $X.XX, quarter you, growth revenue end of $X,XXX both We guidance. the quarter I million our with was X% mid-point up our in afternoon our and start first above all Rami, will outlook. verticals XXXX across color discussing share results and ended first on some year-over-year, of with at earnings and by good Revenue geographies. of non-GAAP the everyone.

basis, revenue XX%, our by Provider X% year-over-year X%. grew Looking a grew grew Cloud at and Service vertical, Enterprise on

in strength year-over-year As our expected, verticals. particular in in a were all first basis. basis, the Enterprise mid-teens sequential verticals a and quarter, Cloud on the Orders on declined with growth strong with

is our customer to this enterprise. discussed solutions. WAN updated at technology we categories quarter solutions, data revenue cloud-ready categories are Day automated our February, AI-driven customer reporting, from Investor solution first the pivoting of The center in As and

change this aligns our revenue aligned is to key growth discussed, drivers reporting have strategy. we with As our better that

timing posting increased with year-over-year, automated data by of center WAN product revenue both the revenue XX% AI-driven strong solution, in finally, results, at families versus saw MX Cloud-ready decreased impacted year-over-year, year. revenue growth PTX Looking solutions order and year-over-year enterprise last growth. XX% the And revenue quarter. XX% shipments increased while the customer

both family product EX grew and Mist Our year-over-year.

was XX% security revenue which million, $XXX annual well Total mentioned, recurring security quarter, related and year-over-year. as In one grew Cloud, includes million, security related to were solutions, year-over-year. Enterprise. top customers And XX% an $XXX and Rami year-over-year. total increase software XX services As products revenue, of or for the Provider X% services reviewing our our an revenue of as was increase Service was were an our four ARR five

would Non-GAAP and our acquisition share, of the in and from million billion. The $XX paid other margin in last Our was primarily to was associated quarter guidance, $XXX supply dividend, operating in $XXX refinanced X% the of above of XXXX. quarter. sequentially, margin operating cash decline top million of for which X% revenue XX.X%, have to shares XX% flow guidance perspective, Non-GAAP and exited the with per the logistics expenses gross we with posted We approximately elevated debt and XX the XX.X% mid-point a capital of of primarily was quarter, due non-GAAP related that which our $X.X quarterly and accounted was Non-GAAP year-over-year total exceeded return a was of repurchased to chain gross Cash million. compared dividend due worth costs, our for the the revenue. total range. cash, we expectations. line cash increased XX%. sequential it $X.XX If investments operations our with was customers QX outflows From reflecting of for in our XX% the quarter remaining equivalents as higher first pandemic-related weren’t margin Apstra. repurchase

Turning to guidance. our

extended worldwide As you is others, a times. to sure semiconductors in there lead industries. ongoing I’m Similar experiencing are of aware, supply constraints, impacting shortage are have many we which resulted

to chain and our of have invested year. over have the strengthen course We inventory increased last supply levels the

Despite enhance the next actions, outside work our believe disruptions continue few we of with quarters. these lead for likely and mitigate to closely control. times suppliers will further extended We to our resiliency our persist

is situation financial meet access forecast. year dynamic, have in While time, to supply to will the at believe full we point sufficient semiconductors we this our

Looking second year-over-year. quarter, up X% guidance, expected specifically revenue mid-point at the is to of be at the

to We sequential expected and Service Provider growth verticals, is expect across remain Cloud while flat. Enterprise see to approximately our

related margins potentially We expect trends higher our to to than constraints. higher component mix, software second gross and benefit supply should from which quarter unfavorable non-GAAP more and volume mix offset incremental product costs

market we due operating are primarily We take advantage expense expect sequentially, non-GAAP to opportunities. increase making to to the future of investments

on our expectations XXXX. Moving to for

half updated we now to recently have X%, profitability to a from which to approximately revenue year revenue point our We of experience X% full and year growth the expect to come expect expectations account XXXX. We for is first of assets. expected upside full in acquired of growth the

range, is Cloud is of of line top X%. fastest, is for than revised model outlook unchanged provided the revenue QX X% to slightly a is vertical earnings to expected versus to From to our and expected long-term year previous XXX second the non-GAAP earnings the for points Provider to of expectation Enterprise Service half up expectations basis At perspective during XXXX, year. revenue this relative last Our now high-end XXXX higher our remain toward time, call. and forecast to the our flat grow we the grow expected our be

call, with consistent we our approximately While margin our well be February non-GAAP as gross XXXX Investor difficult to expect QX continue to at what XX%, non-GAAP margin to on said predict, XXXX be can Day. gross as we’ve earnings

is expected benefit levels. software costs up non-GAAP slightly to should and expect margin mix offset incremental now higher unfavorable operating flat product be supply higher We margin potentially mix, and service which gross non-GAAP to more volume, to Full improved versus constraints. related from year XXXX full-year component to trends than margin

our We non-GAAP XXXX continued to OI&E year. Juniper’s closing, the thank I’d team to like QX remain expect near for this especially In through of the their and commitment dedication levels in environment. course success, challenging to

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

Operator

conducting question a be from with of Sachs. the line time, Our session. this Instructions] [Operator Goldman Hall At we’ll Rod question-and-answer comes first

may your You proceed with question.

Rod Hall

the driving little a order into secondly, orders for about on dive software are are volume are prioritization us guys of those could into Mist particular that? maybe, you where of you give Is that, of wanted just Thanks a could a strong, Thanks. or could the guess, Ken, you dig ways. color coming book-to-bill And to so more that qualitatively, in I guys. things Hi, this number? bit or from? what orders it some then couple Yes. us talk I questions. book-to-bill One, give software

Rami Rahim

Thanks for the Rod. question,

then pass start with I’ll software, Ken. Let me over it to and the

XX% momentum in XX% year-over-year pleased with particularly at growth software momentum So our year-over-year. the our orders, pleased business, obviously, with very in

the Each that intense center, our that focus now meaningful strategy business is WAN. way on that solutions, Experience-First and right customer solutions AI-driven and ultimately significant we’re in embedded So we automated has drive a we delivers our running these the data in of an the differentiation market, component have invested of have on Networking. cloud-ready enterprise, an and software

but sell So know That selling along And a you with is is what enterprise like meaningful I actually Apstra like then without Mist. component AI-driven software especially well. off-box offerings software in in early, an as also increasingly driving solutions it’s it. the can’t solution momentum

in along gives and scale to simple Flex a flexibility is model. choose customers on-box licensing the is This the particular In model they their what deploy that that systems addition the traditional network. really to that with licensing want features they

to about for that space. to software event, we see momentum good very our us. achieve I in recent that the our So I in long-term continue good we’re working you and analyst provided well going very feel targets combination the to is to think solid ability

Ken Miller

of see bookings the software on did growth we very strong XX%-plus. just I’ll And side,

mostly delta a at obvious up backlog deferred really that orders shows software or where our not also piece haven’t of and there, deferred predominantly we actually it’s some see in X%. You which software shipped revenue. revenue, we service is The fulfilled, did if is revenue in book growing our there was yet is

we can show it some time us business, which that’s ARR the even quarter. our we are strong is over number, So Rod, grower we I it, right a backlog as the QX. kind bookings, a you, doesn’t very tell book-to-bill mean this in orders up one. we is perspective, and book-to-bill typically that unexpected due one. away fulfill really really also of recognized resulted We gets for clearly sequentially seeing that for disclose a revenue and saw, but when growth From and us, This something to grow it don’t mid-teens in quarter I it’s don’t over the sequentially. year-over-year backlog strength grew than order of both the in greater backlog growth a we

Rod Hall

Great.

Okay. lot, Thanks guys. a

Rami Rahim

Sure.

Operator

the question Amit next from line Our Daryanani with comes of Evercore.

You with your may proceed question.

Amit Daryanani

and Thanks I I well. follow-up. my a as for question have taking question one guess,

much with, budget wrap On given that seeing the a by about around especially positivity maybe I side, is that versus getting you Enterprise, resonating Juniper driven incumbents? versus cyclical that think is but think as have up-shift to perhaps with Enterprise the only well it of really the to about side gain that solutions is is Mist customers, start how better Enterprise your share appears their with on

Rami Rahim

Like a areas segments in have but solutions I related team growth, of market. said, we’ve the rapidly And dollar areas the the that powered built, number pretty inorganically. tailwinds growing in that COVID much and some the Enterprise, differentiated and focus phenomenal be a where Enterprise, going confident I taking Yes, job certain then to to vertical, into and space double-digit in doubt every million COVID this In really the we’ve very resilient, record by no headwinds meaningful that very has some customer introduced there in more the there in to year-over-year, we technologies I’m is of logos rapidly of Mist, share of growth. Enterprise, a Xx think that we’re the taking might of AI-driven is and share lot deals. new both organically and the Enterprise it’s add the are differentiation done Enterprise Amit, spending of and pivoting on are back enterprise, at I be some

Amit Daryanani

up on could on issues as revenue I think Got stack go headwind any the in number And the from put then the that it. chain you you And basis chain implied did have follow-up margin just then that the see logistics side, you you XX as chain through supply issues quarter. year? do supply table the you that supply point if I How into well?

Rami Rahim

specific worldwide tech every Before shortage want a I is say, to across I just question, that’s let company answer Ken that all affecting industries. this practically

that, So in chain is Juniper think I unique. Having I what our a lot of said have confidence strength don’t supply is of team. experiencing, the

current well. situation over I as helping phenomenally really that’s right his think supply us they a chain, in we’ve are navigating now. remarks, in prepared year And Ken the starting our invested mentioned ago,

and So have there our some the work And in that through of I be is no provide color. some this. but we doubt maybe challenges there are in around, to Ken, going team need with pulling additional suppliers the of relationships strength we confidence have a that the to lot

Ken Miller

of that for about we we’ve levels. the the that are last about per Yes. And was costs kind related paying XX elevated be quarters significantly points, cost kilogram of and some and basis mentioned, versus logistics talking COVID freight couple pre-COVID is predominantly impact the still as in QX in of the

predict that quarters. more normalize do expect when that a few that do normalize, that’s quarters maintained it’s be couple going I to take to eventually, We I for going next to to is think of but It over to normalize. difficult to the expect but

component due the before. constraints a In are potential mentioned to supply that creep factor perspective to we’ve that, addition to to we in some costs starting from

a continue and closely very we despite managing we’re this believe target guys factored is to keep full-year some costs, to updated increase of We for these a obviously in There something From for been, component incremental book that we right the that as period the XX% we’ll into have go. otherwise. on and the be would feel that not are the we have extended it’s as same our that still us current perspective, we forecast. an cost times, loss for amount means watching still some we as of have might in expectations, holds current it based uncertainty would you basis we is So seeing there, fair our year we’ll aggressively but have lead year, revenue costs, on a true. XX% we so order recognize it but target

the results we out However, we and guidance to the we supply quite our based we feel put that revenue need that just forecast. strong our about we’re posted in to just QX the good hit QX, strength we for on are demand ability seeing procure the revenue there feel

Operator

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

You question. with may your proceed

Simon Leopold

appreciate I you. that. Thank

if to little you us hyperscale. we’ve bit. Tier your called to Tier to And as wanted some disproportionately the Is cloud this tend see I insight maybe up dynamics that help can often breaking gotten unpack to vertical stronger going offer vertical? a that you with Thanks. maybe where X there could First, I’m what’s understand and be impression cloud the question you opposed is X, of

Rami Rahim

Thanks Simon. question. the Yes, for

believe. quite the none routing, is Our hyperscale in including hyperscale vertical is in share second I unique. industry, cloud we have The to that position the actually with in particular,

providers, within fairly the that So which just distributed, it’s one was of to that not cloud there that momentum. the seeing hyperscale accounts, they two cloud the good momentum strength have cloud that majors momentum. about contributed right well After certainly, QX even thing that, contributed hyperscale. international also smaller in actually we about or it’s hyperscale are the now diversification is amount And very providers, is nice broad-based, we’re to that saw the that

the mean I I look XXX-gig, the solutions, saw that providers cloud one competition think happening the engagement today our we will that because or enjoy. good QX the case routing, then use now about of But and manner. in bode our footprint is, double-digit in feel two certainly our especially competitive to for should the talked build-out year that XX%, a very we of at last you orders us that use started in the a from footprint. benefit the But future have. wide to year. the but use get have in indicative one especially well by note this nature that I you in this half then I’ve earnings in next growth we essentially we’ve broader the and the area that of see is today, think I that’s actually we to the year-over-year, into calls, customer on XX% and the but major resumption for up about second particular is that even based have need case. as deploys cloud will was in of a case it So large way investments, position again hyperscale have nearly customers. here down, of again, Switching you only And spend with customer there I the future cloud provider customers footprint,

Simon Leopold

you. Thank

Ken Miller

to… just And

Simon Leopold

ahead, Ken. Go Sorry.

Ken Miller

seeing mix And on really side. we’re WAN it data than piece. aggregate, X cloud-ready years, switching our But clarify right we’ve cloud that’s is the center side X, the data as seeing on X, that the the mentioned, area are where solutions. predominantly Sorry, vertical for it’s growth solutions we’re hyperscale the footprint networking aggregate, Tier center center hyperscale majors Tier X, But wide cloud in now, where so is Simon. I just our look our there Rami use Tier break X our more the you bigger to is automated in enjoyed and piece, it’s so toward in data the number majors routing the the cases Tier if footprint we’re Tier obviously many larger Tier side. our at in cloud kind into of wanted is to X, predominantly and of

Simon Leopold

Great. Appreciate that.

a Just realistic and both as to terms little enterprise see expectation points think And share my the market in what’s level your is help how you take of a for could goal – us on we follow-up. could Do to about many talk you bit milestones should Thanks. to I market some switching share? Do What’s wireless the time, intentions wanted sort campus objective. in LAN. understand a if your of your year? a XX% of in you look forward? get we

Rami Rahim

we over up because take of think result think of certain meaningful several have and even is we years that on that, enterprise. are share that share been we’re mean, growing differentiation I enterprise, a market solid meaningful And where to post-COVID. recovery replicate. are focusing COVID, AI-driven building five going just differentiation. given have all of we’re would and of of as segments I very the And that now, as the continue Well, last very this years also for solution in of happened market, think a there that we’re I we the Yes. forward. see result think, and in a And some this vertical doing learning fastest-growing is differentiation going is taking component the the campus some the of really branch add And is the quickest have headwinds a well. the now to fastest that, areas and going that’s campus be on enterprise I that to our really again the significant I difficult in I to And capabilities Juniper, market. we’ll significant

Operator

line the Samik Chatterjee of question comes JP next with from Our Morgan.

with proceed your question. may You

Joe Cardoso

much this on Samik My than first Chatterjee. Provider vertical, last Hi, better it. on is spoke Service when the question Cardoso on for guys just you Joe it’s sounding is

so there? and a So outlook can what you driving the fair improved us first of that visibility is all, if understand is and comment, help

Rami Rahim

be happy I’d Yes, to.

any that earnings over Add encouraging. customers in outlined for resumption we’ve Automation or life system suite we’ve well need that a addresses the see strength this phenomenon let’s for, or so assurance. is diversity then, operators Service as has Service the European introduced PTX XG XXX-gig Provider starting security a Paragon build-outs, diversity, from of solutions metro which with and weak metro geography, to but opportunity for seeing here, types performance looking contribute It’s to next ACX a X like and Tier tools in broad-based not the about as real and in in or is cloud address that technologies, delighted years. a not the has we’ve not and of solution compare the expect, which relative and across space spending by now the a our software momentum of call in we the will that Provider. into momentum signs but for America that to planning future presence continue standpoint the two workhorse both Service it platforms, the – that’s strong in space, Provider new also gear or routing And differentiation, QX, calls. by are Service really that add expect our to a few explained But our I line revenue market strategy, bit them you to more, in net some to some is solid strength capabilities, the the push provisioning standpoint. obviously in which U.S. I to one in in partially our new bids last XG exceed Service Provider last QX previous capacity the our good is expectations, last and X actually but cards, really had announced order as And new new Juniper, deployments; a year Tier spending but revenue and and insights the spending for and in we’re actually our So ready, we with time the performance been Tier and metro what seen we we an as shipped, over really I need of high been would high of launched Service of up always traditionally geography, is performance, competitive so Provider that the but we’re And every Provider that. would to from invest MX year, we’re platforms wins XG already did phenomenon. say, including metro frame, meaningful ACXXXXX, say the density, we a space seeing North big least, also X

our for the that So year it’s long-term up high full of for tracking reason model this end that now XXXX. we’re to

Ken Miller

Yes, Joe.

that year revenue it the X% vertical. to our up our it year further remarks, X% X% full the in most the about full Service a from a heard you did was As We was perspective, before basis. talking bring year were came on earlier in prepared up actually we being outlook stabilization. The up Provider to X% of vertical now, we’re

basis down full stabilization. that’s to XXXX, further you would the If we recall thought year negative this four we a year get to to something closer X% zero closer from zero we were and

the as on We’re were previously of end. year the end is first kind long-term now to in line flat full tracking to the which strength slightly low our on Rami model, be a half our up of model, with actually more calling whereas we toward the long-term high SP based basis, a mentioned of

SP, we seeing are strength in in some first particularly So here the half.

Joe Cardoso

guys. And that. my is acquisitions. the the just on color Thanks, question on then second Appreciate

broad-based? be You in the a just prepared guys in completed them. I lot driving appreciated. in highlighting been acquisitions you acquisition the has you. of a there, outlook spent guess, Thank recently the you to due would better the time color it there would is diving contributing outlook particular that part in Any of or kind highlight more different remarks, better

Rami Rahim

Yes, well.

phenomenally of approach solution us, So is do cloud-delivered AI-powered that Mist crossed close Mist for WiFi an well and since longer solution, anniversary we Mist the a that is architectural and continues two-year doing et Like recently to what umbrella, no all to deals, well, cetera. incredibly the number to doubling dollar cloud the million right. record client the new under and everything seeing we’re from of said, I logos, up Mist business is

And it’s fearful the clear cloud, private the best private ability that are there bit are as many of has acquisitions very many still a But is that’s encouraged, customers The complexity I’m customers. early solution from so out far. on there but solid. provides the and that other of interest for earlier. pipeline what cloud, multi-vendor. thus The very Apstra truly I’m newer, are it’s example operational deploy an to seen are looking Apstra, based still seeing little

seamless, not is underlay vendors it’s very for and the is a but experience. on best underlay, happening to market, any that need the it again Mist of of the just easy, XXX So rapidly. the technology I Technology, right intent-based working in have there Mist-ification technology, top that There now. provide firmly private Juniper umbrella under cloud solution believe we

and more more So we’re introducing capabilities.

the half going for year dollar to closing basis, providers. is be on solution, a really important of second managed even we’re multi-million but that service up The ramping stand-alone with deals

Technology. with franchises security existing of have Federal we XXX aspects in expansions seeing government is XXX the that We’re interested especially Technology. of

quite So I’m even far. we’re early, thus actually though what seeing it’s about optimistic

Operator

Wells line Our from comes question next the Aaron Fargo. of Rakers with

You proceed question. with your may

Jake Wilhelm

Jake is Wilhelm for this Aaron. Hi, on

First of I all, talk a wondering, customers your your changed? quarter. And if a congrats about you little bit on great has levels? that how was into visibility could inventory maybe

Ken Miller

the broke that… I’m on question that bit there, little you repeat a sorry, you up Jake, could

Jake Wilhelm

talk changed? you inventory I that. levels about your how has visibility that cloud customers wondering was could about Sorry if into and

Rami Rahim

it. Got

phenomenal. basis. on predict the difficult So cloud the has beginning quarter-by-quarter since of been cloud our to with customers, yes, – year demand I always momentum first a It’s mean the

are take business latest suspect, businesses investments they well. networks. quite to doing. cannot well continue that that going in are And I at without say their headlines seen fuel the ongoing do they’re haven’t if you and today, would I I their to However, I a quite but how doing look suspect they

trying that probably sort some of happening don’t cloud the the the yes, is, So ahead the believe, of within believe here demand of but if constraints only the happening. of that happening industry? I that’s thrust I the now, that’s some is that’s thing supply get that’s question is in the provider of right space to that’s there there

executed to preserved we the cloud full It’s and broad-based high for more reason long-term cloud now as partners to our year and the I within the We well. end think cloud on been model. We’ve customers. across the footprint cloud be the expect of that vertical. in it’s majors engaged we’ve that our hyperscale our

Ken Miller

XX%, revenue the Yes. as in reminder, nearly at a a And vertical cloud saw X% was just bookings clip. we growth

cloud clearly So – vertical as backlog building we’re some well. with in the the

expect from We be a up revenue to cloud sequentially perspective.

Jake Wilhelm

of component And maybe thanks. any you Great, little on talk pressures this kind a you’re as pricing? follow-up, and could but you earlier, know inflationary about bit I a touched then seeing

Ken Miller

Yes.

point, this difficult at really it is predict. So to

with working obviously We’re our suppliers.

et contracts, in contracts long-term cetera. have We many long-term cases, pricing

I it be, expecting would super say to not material. we’re So

it factoring a think and full at some are it’s is think we on impact However, adapting basis. take are to it enough be We of to regular our there could don’t something that be have long-term do to at this into gross our it’s some We have model But year some impact. early, point. margin point. we expecting It us will going probably XX% this impact. off target we’re

Operator

Our next Tim of Long Barclays. question comes from line with the

You with your may question. proceed

Tim Long

for some can could. about us, still of the strength and vertical I looking Ken cloud questions maybe think the Two the Rami, mentioned those if you. update hyperscalers. wins I in something you in Thank XXX-gig

of Nokia Service that side, on in across far of their you competitive the obviously then the a base and as just if Provider little the have customer and you’re you little seeing of a there, boxing bit across a to the on risk? update could us work Huawei you base And kind about as well talk customer white progress be kind secondly So could could maybe what as seems struggling businesses. bit landscape, and some does struggles as rest

you you point? advantages of competitive how favorable can this about at So a you. Thank kind of context talk industry in the backdrop, see

Rami Rahim

Sure, Tim.

or confident well and as XXX-gig as space the particular cloud a that the be the cloud major, footprint is I in cloud hyperscale X able feel broader as providers, Things XXX-gig both cloud across this win to providers XXX-gig. to very and we’re with Tier-X, market increasingly provider well are start going progressing well. the in let’s So

we with that. mean I market, there out let’s good. Now bake-offs that actually say I are how testing are of is in the had what’s happening, feel and practical out solutions get a feel the hoped competitive sort the of good just to we and the achieve differentiation fairing competitive out

one is this both cloud hyperscale data XXX-gig well And cases. use across the as area wide provider. in data the cases. center, smaller as even the especially in then use winning center And we’ve We’re

to good ready merits center. of go on to yet continue data announce competitive this our and wide at Huawei after what aggressively that. delivered very answer they And front, capabilities, the needs hyperscale the strategy and point, and our going center we’re area capabilities I out our solutions of With listened full is customers. and their biggest we solutions, an yes. that’s both very feel data our that whether the We’ve solutions there want. is sort on delivering – out that based think much And requirements. issue there area to have The products, and a the but not own were win understand that’s strengths I addresses We’re to us? our about SP wide XXX-gig market We there, automation for closely and opportunity our presents

they’re shift see out but news they share we customers and decisions do there of that rethinking Huawei, have the sort right opportunities some This the I results The never the are be good typically now. opportunities are going is, thing, made a play frames think that in of of time in see around of concerns that to overnight happens specific of in year, the world. geographies time. some we an do sort to going some about is

Operator

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

with may proceed your question. You

Meta Marshall

I the of with that kind be in inclusion a portfolio the – integrated cross-Mist just integrating grown you alluded kind just Thanks. ask the the Enterprise far guess And of kind and to the cross-sell year-over-year security have in of it pipeline, just wanted Great, far to, down portfolio? of how mean into without thanks. XXX you about I segment so then XXX? the that in how or security can are portfolio, I

Rami Rahim

more you then add the specific on colors question. Ken some Yes, can so me and let start

integrate more integrates XXX part provides offering. is a simplicity enterprise provisioning become with over everything of with architecture interest built applications, we of because offerings the be But has I then acquisition security that’s with seamlessly solid, it a a being win rate with So Technology. of element is around there automation, security introduce as our and the have client integral that, in it’s that this, XXX mentioned, still really to the is it has the security visibility customer And day-to-day cloud is AI-driven pipeline into seamlessly and And lot strategy, which long-term. time to will is as ease that successful days so that cloud-based an on-prem of to solid. early confidence solid, – I going from our

Ken Miller

Products XX% would driving have modest all Security And growth. had actually actually services products products was of and grown most quarter. more the includes grew Yes. than growth, XX% grew in T. up, better which services, yes, without it that services XXX

less as plan, the quarter. T, accounted Juniper. expect for in track In year full fact, recent all XXX point be aggregate growth about XX% three to in of acquisitions revenue a the to Netrounds, of Apstra, than we a well On as for of it the

$XX it in or for million call So revenue the total so year.

track expected. that QX we’re than less for was $XX on as So although million

Operator

Notter of from Our the next line Jefferies. comes question George with

You may your question. proceed with

George Notter

of into revenue you what see of might Can just end Thanks. I and coming but certainly exposure part ask I your space, to Hi, small growing I Obviously, from this and dollars you lots that there, piece. is of might sales in stream, percentage guys. stimulus rural your lots wanted a that that realize much. and about going relatively of Thanks the LAN how very needs probably forward? the think broadband new market. piece coming about be market in terms routing talk

Rami Rahim

even we off actually Yes, our this, market. you Ken some on have top stimulus of way broadband that focus we sort of years that eye of of I’ll the restructuring if with X up, or head. part rural their on are had can service the pull an tell into sales the into Maybe so providers but did we’ve figure making Tier deliberate I that the a the dollars know as X, Tier tapping don’t two last over something

actually important seeing but deal geographical doubt matter us. And to it. dollars We’ve really are you no – of for the density is is matter actually in becomes the especially manages well into there got products spending. got or have to some more think products, So the the we’ve going actual a it’s for just pass, of areas present lot just goods, It I Automation is sort of for a not going stimulus where to prepared opportunities technology. it if their that way have we’re typically think solution. a weave with sparse Biden’s to infrastructure deal, we rural fact it’s in I the areas,

Ken Miller

out solutions Yes. our way. Unfortunately, automated business, we WAN break not do that business our in

the with you mentioned, as think numbers, seen on So last we’ve couple we diversifying forward. And I focused that and of can’t years continue but we’ll going tremendous do we’re over Rami diversifying that to share success the business.

Operator

Our comes from line Suisse. next question of the with Credit Sami Badri

with proceed question. may your You

Sami Badri

Provider as in said to dynamic of have at you may is Hi, know new misheard the kind think you kind flat with same think growth some kind the cloud of get me so just the the the I your guide, gave that growth, thank or Service slightly you I in giving question. remarks a better Ken, thing, that pertains higher cloud message. on up, but the the a Cloud the vector that kind to unpack was for slot And model about the you points talked looks you and end Could a the I of it of to data your coming regarding us for to give ask outlook what granular you revenue that idea long-term of like company? I One it’s customer. just trending, and prepared it way

Ken Miller

absolutely. Yes,

Investor of Day, X% expect basis. Cloud model year, we our range. a X%, on X% long-term growth high-end model basis, plus being to the that a of to for at actually to Cloud, So long-term talked the so CAGR kind we This X% about three-year be

be actually Previously for of we’re previous quantifying was seeing guidance Cloud, So to of on now the based end start of it year. to X% to high the right. the we’re year end it thinking for their X%, growth, ago. X% our we’re a just, range, that that X% And X% range. the days of to closer XX to would from kind higher at X% the or That’s change strength

Operator

David from question the line Lloyd next Our with of comes UBS.

may You your question. proceed with

David Lloyd

guys. out Thanks, you acquisitions you and Can show laid sort quarter, double-digits, intimating My I Enterprise and the Service then weighing by it sort and you a that up, full of the Ken, somewhere was guys in some the assuming this there? off just Enterprise like growth – but it year million? out of you’re if Great. commentary showed on the for in I whether of that apologize. imply $XX does what bit. first for of I’m about on sort the guidance, based touch And $X the little between that and a follow-up from commentary Thanks. Cloud think your most of this you covered there, on of quick million Provider year. revenue kind contribution up can the back And went segment guidance half it should be it of that’s the of line sounds sort the

Ken Miller

Yes.

we for $XX acquisition our aggregate, the the expectations for – on less the quarter. with in than front, line mean So I was QX, revenue in million

$XX was million. So a than QX we’re to off start, strong less but

So Enterprise Enterprise, oriented AI-driven and have accelerate up that the products center and being products. given showed of most revenue in the customers, would data cloud-ready relatively immaterial, predominantly

by X% aggregate think revenue the take year from We’re and get for still the in in here to perspective. on we will that across acquisitions for $XX second or be accretive growth half as $X.XX, something actually be dilutive pressure track in to and do said the in full we a year, to FYXXXX these we that’s before And XXXX. about million, expect give

overall this So expect a them earnings bit beyond. XXXX expand us while in year, they of enable to are and on a to margins drag we

sorry, the the part Second was was part What acquisitions. I’m one second of of your about your question? question,

David Lloyd

of the in of in digits double of imply sort where back of of will half sort in this guidance, either Enterprise year, sort revenue for be terms When the the the of given Cloud you of does the rest that about year? rest think

Ken Miller

Yes, expect our I to Enterprise we fastest be vertical. mean growing so

you if talking of to to math, you’re the kind do going about. think I the you’re get numbers

believe the talked which sell growth. AI-driven double-digit as vertical. We of predominantly long-term center, growing although, growth, Enterprise, cloud-ready high-single is we well we middle We being to digit expect it be toward Service those be about our Provider as those of obviously kind do will are Enterprise to solutions the Cloud. fastest data And model,

Jess Lubert

Operator, we’ll take two more questions.

Operator

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

You with question. proceed your may

Alex Henderson

much. Thank you very

So a upsell really initial generates when multiple you talking spent amount you that. sales imposed other into it guys update start time of about on about through Mist, talking fair how the of haven’t much over a I heard time. products

what it the multiple like of bit anything it end benefit. you about a if fact, seemed in at In last the like around extent seeing quarter, upsell but talk I traditionally products Can more of been forth? lower little upsell sale, an become kind the switches had it’s so that rackables been architectural is there what an has it what standardized and get to and you’re

Rami Rahim

entirely some can in look your innovation that I where my prepared wireless, no wired Mist plays. if Juniper, did right, at the adoption, in the of a maybe here. switching, meaningfully. mention if this touch by all provisioning, points longer it’s our and a of powered The the that’s about color. Enterprise us for announced of year-over-year sort solution, really very is Yes, Mist starting small native, start business AI-driven around that’s I’m Ken anything that switch that we’ll access remarks, new form in phenomenal you fuel and the a is just head is I really it honestly of for capabilities fast nature in the AI-driven associated add and and wired for bit let We Mist products, see just on come to more a orders now scratching of which and then we all my that doubled rapid, breed innovation, all the software me and and cloud slowdown. contribute Mist comments take basis, up, pace we the you that includes mean true it’s wired you’ve to expect today. EXXXXX, next a where don’t I little launched already, aspects to business generation fire wired love their campus intended zero first solution the of essentially haven’t now pouring shortly, of switch on and ship Mist-optimized Mist applying fact

Ken Miller

just related a actually would that mentioned we record I QX. Yes, the that pull-through remarks Mist EX is to add in our prepared in

have right is subscriptions more high. of they selling we as and the way, that don’t obviously a over time. lot So to are of Mist And all-time actually well, the kind the they show because in continuing EX we’re solution subscriptions, we’re recognized revenue obviously are of gradually sell up

much So a to Wi-Fi. solution, very necessarily that our big tied the growth of the just full not part ARR XX%, we mentioned Mist of also is

of solution value the will, we talked of we think Wi-Fi times that aggregate the Day non-wireless you about the the Investor about kind if in So lifetime LAN the business. in is X.X pull-through,

the put to out that So of there. these very through still that’s we’re We continue rest parts of times portfolio. of innings itself, other grow in EX we and confident and the lifetime Mist early the pulling value kind customers that something X.X with of with ratio the we But feel leading still and then in And largely that. we’re solution. see as

Operator

next the comes Paul question Silverstein from Cowen. with Our of line

with proceed You question. may your

Paul Silverstein

I last or more it your back sell go me about Ken to it sound apologize, stated you I guys. question already did quarter, sounds, But Thanks, timeframe? it both looking like, out year. Question read but or if from of for you’re Appreciate total gross Any you, for margin, what beyond this squeezing in. you go it where if but this, doesn’t constructive seems changes gross and what could I guidance. you margin thinking Rami

Ken Miller

So you’re right.

point bringing some increased guidance you up, see expect incremental in our for have change would factoring not and some honestly, by the there some gross typically would Paul, costs We shortages, margin revenue. we’re we increase semiconductor a is and these volume, We of there. you margin. margin some for constraints, and that and did guidance changed some with some it gross not gross quite our for in reason supply are of the of is uncertainty still We

want So our at I to, margin just this we’re keeping point targets the same.

optimization cloudy. Beyond this control COVID-related or said, things some makes control organization, be we our these good. that less shortages, on very think the of year, very like within I That et whether it have software costs I mix even things it of freight it some on feel and semiconductor cetera. services

no we beyond point, have this at year. So update this really

be to target change outlook able this expect year, to at no We point. beyond our to the but for XX% really that, to this manage

Rami Rahim

have... Paul And we

Operator

gentlemen... and Ladies

Rami Rahim

question a him think me, I already. he lost Paul, maybe we but had for

Operator

gentlemen, and reached end would remarks. turn to back the session. we of Ladies question-and-answer like this have closing I today’s call over for

participation. rest may this your Enjoy evening. time. lines Thank of you the your at You for disconnect

Juniper Networks (JNPR) 28 Apr 212021 Q1 Earnings call transcript