JNPR - Earnings call transcript Q2 2021

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Operator

Greetings and welcome to the Juniper Network's Second 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 the conference over to your host, Jess Lubert, Vice President Investor Relations.

Jess Lubert

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

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

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

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

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

Rami Rahim

everyone, revenue and afternoon, second to joining We us results. XXXX expected you and all across saw better for call than QX our which year-over-year quarter results, reported delivering discuss consecutive QX geographies. on a growth verticals today's thank Good

by spread QX, which geographies. diversity We strong seeing, and encouraged customer year-over-year. grow of the entering of are which also Momentum vertical the we is the orders the experienced backlog solutions record in I'm year. is us strength helped both sequentially across second and half

Service we're seeing factors new an greater driving trends three customers, million of in our increased strategic than with is would out strength particularly verticals, logos in with to Enterprise due also and some Cloud number call the the in vertical. momentum. of momentum especially our and deals improved I While part $X strong the large Provider

focus in and experience call superior our is the experience first resonating networking industry operations and simplified a leading delivering what market. on the First, user we

and particularly tools Astra Service campus that the second deliver Mist, the to share, take are meaningful control leveraging Provider Paragon like management and and and AI success in to experience. By data customer to Juniper But Cloud and verticals. point improve and value enterprise us in also enabling our is software Our customer software markets. operations none center and accelerate

We not suite but broader of software sticky only creating that creating are pulls infrastructure. new Juniper also a revenue core platform through stream,

our executing Second, teams well. are extremely

Our are differentiation seeing. we're internal solutions from our conditions organization to customer market technical enabling end alignment capitalize investments and around in and on go-to-market our benefit us improved

are to extremely an engineering meet our strong our team, tirelessly highs, addition, organization tight customer chain which as environment. supply of the work ratings record work reflecting our customer demand to as satisfaction In and continues services supply well in

and we across end are conditions market improved verticals geographies. Third, seeing

increasingly reliant the and reopen video many to businesses and the global a are to distributed to back workforce on which As many bring companies ones Service new a and investing and as projects halted customers the bandwidth recognizing support workers are such office, which Provider were is network all more real-time of importance strategic Cloud applications look resuming high are starting collaboration.

especially challenges providing environment significantly challenges. positive placing demand Provider chain more visibility Customers our supply have the through managing as true and customers Service a either While significant insight of Cloud aware particularly strong, with in early or others of strategic industry verticals. and early into plan some orders future projects. customers, we, into longer-term like the development. are view orders is these these We our become many in large our This greater is and are

the approximately now mid-teens are customer period we XXXX verticals our expect solutions. across Based on this to have and basis, full despite this orders off our Importantly, confident business growth we're paying a sustainable even on I'm the we're momentum basis. making backdrop. do year to experienced excluding in The increasingly trend, investments the a in momentum in year, chain but on I'm are with grow by not X% and to estimated business accelerations, grow these healthy only seeing. so excited our challenging supply ability to

few Our we succeeding down attractive and is and over several are big the opportunities provide tailwinds that strategy investing industry in should next years.

vision approach since winning land one the same with acquisition The transition enterprise we to is enabling cloud opportunity the and stack to of client superior architectures. the have on accounts. insight was first our wireless, wired area, cloud land operator wired the win. to new both automation Mist delivered end off to now is deliver WiFi, wins user the with the driven as and unique expand defined and to existing us first large for AI brought we're AI the SD-WAN [ph] this agility which This and experiences full

AI differentiation to that the While quarter-over-quarter also driven optimistic of net to believe We as in share new key take our well unified and wireless enabled cases. in assistant, We're more years data industry's marketing test span networking protect segments, basis. microservices Hyperscale, Service has fundamental only ability accounts. center the sixth will advantages success to $XX wins also continuing the our on data than accounts, billion driven campus Provider support area branch will expertise, market messages not to but conversational to led come. which Cloud stand at purpose-built science with XXXG architecture, we capture us remain including footprint, and a cloud LAN sound by and continue the AI opportunities to major can as now maintain that in which both larger in use these offerings, across materially regarding with only is the architecture XXX up SD-WAN wide transition Marvis. believe We see This a similar, engine across has LAN generation Mist time cloud architectural Juniper AI AI we our a

tailwinds few years. begin continue year present expect deployment We increasing the next to XXXG to and over later this

addition, as metro ACX our about to are sizable metro access believe Paragon portfolio on in the and XG growing aggregation investments optimistic us as making opportunity. We well capitalize we're In will automation and this position our Juniper we market. suite

early, customer healthy enhance it introduce to continue new solutions the ability seeing to portfolio expect interest in our that we're market. we to our next in new While further over Metro and this remains months should succeed XX

a some the with perspective. Now, and I'd into like our Solutions seeing of Starting insight automated Customer quarter WAN to provide developments the some additional key from we're address solution.

Cloud healthy cloud, our demand our our declined momentum Provider improved solid software of adoption PTX MX orders product strong across We due slightly to timing families we as automation year-over-year in revenue segment. and of saw products experienced as both well in our with Service the portfolio. and shipments While the newer and both

solutions net enabling us are well only new XXXG also performing to protect secure not several footprint, wins. Our our and existing to but

our and us to customer demand for therefore products WAN difficult currently chain the see continuing most impacted are these we to strong predict. are for While most automated the supply solutions, challenges by

determinant a As to decline growth we our segment will calling we where within our long-term now during a strong ultimately X% a likely orders, fall this very of this despite result, with the for X% model, within biggest expect of to supply range to results year be minus the the to to return from range.

over Service encouraging the $X deals million has Cloud, is including ready after growth customers. Cloud second Center Customer and XX% and order stack during well it's exceeded to trend meaningful saw year-over-year increase regarding This and portfolio part leading software as outlook in an expectations experienced consecutive June in remain Our quarter, in from its a our quarter high optimistic and we period, new cloud more increase for data market. in center with wins. significant Enterprise Ready solution momentum the We the Provider business. a average of a deal logos opportunities center data is size as this in an strong our Data creating interest full the

we the long-term tracking For Cloud looking to year, Data the Center growth high year-over-year. slightly at to above Ready of our X% end is business for our X% model, believe now

year-over-year. Solutions Enterprise our Finally, XX% grew also driven AI

Mist in as year-over-year continues logos XXX% orders quarter experienced to new another the resonate Our and Mist of growth. triple-digit differentiation AI market, increased solid

Network from technology, gateways saw our common believe the business, through the with QX. with well performed impacted SRX continue another a nearly of remains grow, to introduction which we combines EXXXXX, new will wired progress insight to Branch positively driven also branch groundbreaking opportunities Mist action. continue which unified to access we year-over-year And ease Virtual make Mist WAN cloud I operations. and record. the revenue true from the performance which through we that our pull under associated a differences of [ph] potential XXX integrating and and AI with a are quarter with Security Enterprise and DX secure cloud client-to-cloud unique the The wireless AI technology doubled and of recent SD umbrella. LAN, pull to pipeline thanks mystified synergy with grade, Juniper scalability assurance, Marvis thanks these portfolio of automation, end-to-end Our Assistant strong opportunity enterprise of coupled in

in experiences. strength continued differentiation, I resulting and growth to and all We smaller in to enterprise we our of sizes believe strong encouraged verticals. AI the driven highlights by XXXX. of remain we're Mist see in success the the addition all double-digit AI commercial operator in the continues during best AI seeing driven In and with and offerings large with are unique to this to and customers accounts value to channel leading solutions momentum which user customers, see enterprise remain our QX, very confident Fortune offer business likely momentum market XXX across

orders families. the the we notable Our in although where during especially all been Security high June Strength results product the strong, experienced historically end we strong exceeded saw also across growth of was customer and and those expectations. verticals have quarter, market revenue

portions gaining the and both objectives. provides networking with Security convergence quarters Connected is advantage competitive of of networking security are provide to currently the and traction should We in in our future will strategy Our we business achieve us enable the market growth our market our technical security Security tailwinds focused. strength a in where because to believe the continue in

is software strong. also momentum Our

broad seeing grew combination and experienced with offerings. verticals and XX% of and ARR we we of the of we Software remain period, the seeing renewals traction XX% quarter due record verticals experienced Our to year-over-year by our software Flex are offerings in which growth mention Flex delivered due targets subscription We're presented ratable ratable all serve. subscriptions, offerings adoption recent and these with in in we're seeing and licenses. strength and related that Mist perpetual the improved updates and Based Day year-over-year our orders we across on like licenses, the the customer ratable our in certain across software on security I'd Investor cases. another solid associated on-box basis, software term and subscriptions, confident Services services QX, related ongoing revenue momentum long to of on-box solid driven in a strong at team ARR our services of strength grew continued to attach service year-over-year rates. growth strong sales that software use Flex as quarter based licenses We the software

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

Ken Miller

effort year-over-year, of that $X.XX, growth attributable increase causing are adjusting significant I'll during revenue earnings improved backlog outlook. orders guidance. non-GAAP certain XXXX an and across with is with when by second everyone. billion some an with Customer secure believe Thank after midpoint in provide per resulted chain of of strength good in Solutions. orders, into up the on to $X.XXX and year-over-year, Even geographies. verticals Solutions. experienced start orders expectations. this quarter, We discussing and us quarter ended to second industry product for all and color both With supply and XXXX. verticals estimated customers in the at was needed. quarter across share of mid-teens the levels total strength you, to Rami, are verticals We and grown early These these supply in visibility our Customer growth across results orders the afternoon, place end our some of and all above of second We half our challenges [indiscernible] with early all Revenue our to X% orders record second have exceeding year-over-year early

our All grew at sequential by Looking declined on Enterprise X% From Cloud Provider and revenue verticals solutions X%, basis year-over-year XX% year-over-year. perspective, grew a Solution a a on Customer vertical Service grew basis. automated grew XX%. WAN

PTX family declined While offerings year-over-year. growth, product MX posted our year-over-year

While grew QFX driven experienced to Data our last declined as XX% of year-over-year, across due to strong automated year. demand product versus family revenue XX% Center timing for revenue orders finally, customer and verticals the we WAN Ready And increased Cloud our year-over-year. shipments, all AI geographies. enterprise revenue increased

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

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

high a the Which for midpoint $X.X equivalents which expectations Cash was by XX.X% of was and was worth returns primarily flow in XX% XX.X%. due $XXX capital which capital was our revenue cash top higher for the reflecting of guidance, cash, From chain as XXXX. to compared gross year-over-year we of Primarily it compensation approximately margin due variable above to the midpoint expected related margin weren't Our have momentum. Non-GAAP X% higher to than free $XX perspective, with program. dividend $X.XX increase cash XX%, costs. range. our the accounted order supply related increased quarter strong exited in guidance $XXX other and guidance and of quarterly return delivery customers offset Non-GAAP million X% in our the sequential repurchased looking service above posted for If gross expenses share partially shares a operating and better quarter, sequentially, second logistics of the costs, our slightly XX.X%. the XX of revenue and investments margin billion. was was non-GAAP to generation, QX operating We of quarter. from exceeded and Non-GAAP XX% we lower to per paid elevated total would The our total due million. for end of million dividends, flow operations

Similar supply guidance, our aware, you I'm experiencing all others, a sure of Turning which in we semiconductors there ongoing lead is and as costs. shortage to are have worldwide impacting to constraints elevated extended resulted many are industries. times

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

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

point Vector financial this at our time meet access will dynamic, have Senect for is supply in year we full to to sufficient [ph] forecast. situation the While we believe

At guidance, revenue Looking specifically year-over-year. the of third the to is quarter. be expected up at midpoint X.X%

tight to expect factored has in into quarter, our been constraints We supply guidance. be the particularly third which

to costs. are grow the expected in expect third expected component supply delivery constraints. supply be gross non-GAAP our revenue higher constraints the earnings faster service to of margins expected We related period, midpoint quarter guidance, higher the from impacted to At despite than by costs pressure and

Moving our expectations for on to XXXX.

is to our growth the QX assets. We current expected XXXX. of X%, of than and point expectations account recently now from half approximately expected second expect growth full-year our results and to acquired We full-year come a which revenue expectations have updated profitability for for revenue better of

higher of our last our is XXX the is to model grow Service previous of slightly X% up line X%, top to year X% Enterprise high Cloud long-term outlook flat range is end of vertical high points towards range. From be expected revised long-term of to range X% midpoint Our X%. perspective and the toward a to to of is the guidance our basis than expected XXXX, expected than to our end grow faster expectation X% of to for versus Provider

gross non-GAAP gross our can XX.X% of approximately approximately cost are we be difficult to to non-GAAP for to due experiencing. freight previous expectation predict, to margin be and margin from XXXX, related While now the down expect XX% supply we constraints elevated now

expect to grow especially commitment non-GAAP for challenging slightly expect We full-year In their continue earnings than operating success, like in full versus I Juniper's be environment. to our to closing, basis, dedication year a to thank margin non-GAAP XXXX levels. revenue. to to team faster and continued On we this flat would up

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

Operator

you. Thank

now will Our Morgan. be proceed. Samik first [Operator question JP question-and-answer conducting Chatterjee We session. Instructions] from from a is Please

Joseph Cardoso

Hi, thanks Joe question. for is for Samik. This Cardoso on the

here on question first my the So is guide.

for Thank guide up Service which conservative a you expectations this half then into implies for that year, be year. that help bridge Service the appear wrong? slightly is optically year the to have the given I flat the Provider second And or of your revenue full to reiterated decline of thinking maybe revenue that in to is You vertical flat to half how up. be which second ramp to you. likely variance follow for for Can would there Providers spending the and

Rami Rahim

then and Yes, let the Ken WAN. me would maybe start, Joe, like

we year So the for solid a of Service had first Provider. half

in solid QX the the X We're business half Providers MX both new which Technology change the across in yet, very second wins in that in half also XXXG, we're but with expectations. strength aren't the Service to exceptional, backlog. year. strong, country, by was seeing expect the and with line very wins, of products think internationally, the tier entering routing second performance of number I the performing and to by the really of PTX QX revenue way Our encouraged this those products are I year was in both well. We're encouraged that meaningful also a US, contributing momentum

has we're So second one There I trends year. in are the dynamics element the seeing the of around supply a SP provided the SP watchful great that all half the all that of for? of you certainly like year want start have being the And we dynamic a Ken, up, of lot of a to keep into on. that we segment. outlook that for eye that just been

Ken Miller

constraints Joe, guide Yes, I supply unchanged. full-year your are guide. the into point, is full reiterate To that year would just our factored

stronger-than-expected We seeing are bookings.

is So in strong, but most improved said, visibility where is to quite constraints, feel time this the point a because at it momentum was levels. us, that's see we That visibility, basis supply That beyond the prudent we resulting kind improved of this perhaps of backlog ultimately and guide at the year. backlog the revenue in will that on for full-year do. thing result increased this keeping

Joseph Cardoso

And my is color. the question second the it. Got supply Appreciate then shortages. on

Given today any to the on to on you into that seeing top appear to couple any levers pricing here line are you of if for we're baked any offset of price here. plan be the hear it passing pulling supply to is or increases on and shortages a curious if like quarters, whether guys that customers better

Rami Rahim

changes some price time periodically. do QX take for to price we so our We frame. -- in products recently time through. products. That in the have a will of significant many and our uplift We play some that pretty Yes, did adjusted list

of should backlog But forward, on our was amount positive As previous but levels, to out increase continue to the it products, products play from ship. but of going bookings of we're kind we was a changes. period our some a It across an but impact will have it pressures of recent our pricing percentage we pricing to we the for good fair a offset a fair over see do that still as know, need seeing all wasn't in attempt time. of you board

improved on change time. deliver the didn't and something an came in really the any sure over right form do our price It several on expect the the of periodically, to have will the on we value over have very have customers focused play that quarter the Something play QX that to second next than impact price the we making impact towards right is we're of end for something we we profitability QX. out results, quarters and rather out

Operator

you. Thank

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

Jeff Kvaal

It time, intensity XX.X% was the we as bit. though to the quarter for also the third thinking I same fourth hoping like it unpack constraints acute little margin in the supply sounded should Thank most a gross was dynamics At quarter. you. sounds of and the quarter. be third the

increase just [indiscernible] be mean pricing little plus the higher? in that maybe quarter higher So fourth ought volume to

Ken Miller

provided particularly Both the have that gross definitely line that early as than well Yes, full somewhat our our haven't tight, math QX, our volume We QX. expect that mentioned on the guidance. too supply it we bit top specificity applies obviously gross constraints up. the we so with be guidance, QX directionally think call where and year are remarks margin given think QX, we said, to as flattish correct factor and and it's do margin that. while guidance specific more little is we a as your guidance. any prepared That to QX compared I pretty into to

be tailwinds improvement. mix obviously to which would margin Our be gross drivers and gross positive improvement, potentially should up, margin software potential

aspects supply a to continue full the the it's and where year on to work we we dynamics as unknown guidance prudent of the honestly have kind it given we through this, think However, basis. quite the keep

Jeff Kvaal

additional thank to have. would the little bit Okay, than visibility a be you second usual. be And in nice having visibility you. position question that my on It's a

us revenues for a year? your is or you should for durable this uptick beyond, think the think of hand, relative into bit that strength persist that are this little questions this XXXX these and trends you On And that one. like other a invites the cyclical How do do all? in

Rami Rahim

It What geos. really cuts second is this the It this Yes, strong We're Customer cuts is that Solutions. It let me I momentum. it diverse. of momentum question. with across across start. the It's half our segments. really about entering cuts vertical good like across year a

that let's cylinders element So making out, very But even definitely ahead a new starting we're again, that potential need starting, There we're seeing projects with momentum customers capacity are where on keep getting to is on on front. resume that customer that order build that to projects supply of say, the out are factoring are, paused firing coming old network are were all ahead they're that COVID to all the of sure related solid to demands constraints. fruition.

I think we're executing well, so we're essentially setting in ourselves up to markets. the benefit from that recovery

So, perspective. and market short-lived that that of going think I improved sustainable is think don't confidence differentiation, demand those -- a -- have us be that from to thing own market on for to good a I going I is condition execution, work something very to forward. strength not us this go-to-market the for is product combination basis. going strength our all my the dynamics

Ken Miller

would had actually Yes. from stronger growth revenue is going durability say having the then quarters perspective, given that our have that's that a to would ago saw. I a we revenue belief to I for that few say And bookings happen, a

result that up first our February strength raised the that in gives across guidance to going revenue in strength in to the revenue confidence increased in that and is of first the part is me we're we've confidence that seeing second setting booking the on solid growth X% clearly us is full-year year. So increased board. of a backlog, very half, on which a since we've now strength the We've full-year have year with raised year an side, half the and this much X% visibility pretty we that second the half momentum the seen well the the basis, time

Operator

Thank you.

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

Bala Reddy

is Reddy Rod. on questions. Bala this for for my taking Hi, Thanks

and on Firstly, here. on quarter think geography we don't good congrats guide I here. touched

are And CapEx good an if has the year the looks different -- been I because Provider the we quarters, see at strong but Americas here. a Could follow-up. this to EMEA see if improvement and of you verticals Service stronger is have in, look the thing be let's number you may last Telco number tie expecting to say, guidance? Now

Rami Rahim

the Yes, question. thanks for

broad seen So The QX and every the based. across Americas, is strength we've cuts EMEA Pacific. geography. in that It Asia

Center You're saw that But we we has especially growth XX% and year-over-year we right. growth strong, solution in is every special saw even all QX the true been saw -- and all in in vertical and verticals frame the EMEA. the time enterprise EMEA AI enterprise areas strength well there Pacific, those we in executing the well verticals. in extremely growth in driven Center, driven opportunities Data vertical, Data Enterprise, opportunities are the and I in And AI across with growing across strength and Asia Cloud think in as Americas, in solutions.

strength think the a that result are market capture I'm definitely we I just extremely with the is encouraged, of executing the mentioned fact but to we're this dynamic So very -- well across there's There seeing earlier, as a where I diversity opportunity. working market geographies. of that things are that favor, to our

Bala Reddy

Okay.

the opportunity Secondly on natural Provider. in Service

are in we levels the new the that is So plan this there? talk more you products I there products near and about new are looks seeing [indiscernible] Italy Juniper. opportunities you about know that you term. ACX Could in talk if interest like launch for to

more give insight you the Thanks. on some could past? So maybe

Rami Rahim

Yes, more more not excited bringing products with We shipping absolutely. today. we're I'm very about very Despite the the of quite Metro frankly available elements market solutions already or to early solid that a solution have that the entrant. is the solution to and with over opportunity the so and year that market. solution will and year, fully complete out or the that we half next into round fact enter plan that really

this with the for year next growth laying foundation I think year. Metro we're

to new the in where is comes especially rounded automated market automated into I fact, So solution now that is suite and Pacific will this Asia a only WAN the would get recently next very Tier recently software, And for strength solution in vector actually X picture. win our introduced Paragon in the again our that segment that that of won solution, capabilities the into there automation within software operator We've with stronger WAN time. be of elements this a important growth and market Service the is Provider have we a year. which volumes think in just telecom the and in competitive speaks a and out

So a I bullish to us and for wonderful the net opportunity it. it it's going about think is, of quite I'm be

Operator

Thank you.

question with next Please Amit Our from proceed. is Evercore ISI. Daryanani

Irvin Liu

revenue This was had gross I can forward saw also Hi, as supply on And impact well? on shortages headwind topic environment, revenue is Irvin you basis and QX question your supply wondering deteriorating June? I do constraint quantify point the you versus thanks. and on semiconductor perspective, margin this a orders. the Amit. of if your your a Essentially, XX see or And follow of guidance in improving sort Liu for up. had fulfill what supply you ability to on a from headwinds the if impact perhaps

Rami Rahim

constrained good while purchasing us into a have and and especially much with challenges they And Yes, you. talk maybe can quantification. industries, you worldwide in now frankly, bit for what It's color result that's we of just resulted of visibility better very customers but about many trend Ken terms IT this a their frankly our us can these just lead It's has times, not I It come all as I'll start extended affecting and networking. a quite of in little providing future a have in to provide expect and that -- then quite I clearly shortage. environment.

our these sometimes chain alleviate a team much to which have from things been personally involved from week let job, those month by trying are. start with Ken over has to working doing I month constraints strategic phenomenal challenges in challenges And very change supply Our basis navigating there considered, I'll partners. there. all where And in terms of over-week been a

Ken Miller

perspective, impacted don't materially. metrics with Yes, I were revenue the our pleased a of the so We're $X.XXX Obviously, strong is which QX in results towards also quite high of from results end QX. it range. billion, posted believe very profitability our we the

growth year guidance revenue guidance year We to future believe the an considering don't X% X%. So increase previously to for QX something year results. the of full it were it this time the That rest I had is we as year-on-year full again at second we're we on year. up the X% did set and said, for and the our impact

increase we'll guidance. able the at secure believe to secure be least So and our are to able ahead go the supply, we to supply revenue we

very So negatively. it's impacting us not

However, it that is of guide. part

forward to considering we the We to call, margin supply ability last gross set in talked have alleviating time going call the our pressures on as we that definitely also are to on the But clearly some because that of expected point it this coming towards supply knew a when were from be back perspective. time some constraints. we secure COVID pressures our last there guidance. we perspective, what's From at happening at

cost expecting of year. second towards were reduction half we the in freight the some So

Our current call expectation does not that anymore. for

from down our rest year full throughout and the coupled we're costs us So freight seeing of guide resulted the with costs elevated remain the increased seeing fees, current the et bringing year. to we're That the cetera expedite That's XX% anticipation. in XX.X%. that component has

believe or you at least it a are do these in said, next we but gross I the expect as and level and to robustly I us where this more in costs year's will this margin from temporary do than transitory as earnings to recover quarters, expand or, profits quarter do they will I do something will. even recovering faster the think It's longer right? operating well take few growth term recover be revenue. should That these. -- think not from allow expansion, margins should we anticipate if we some I our operating So,

metrics profitability the year on our down profitability allow these pressures double these quite they as -- strong us pressures, we just are goals. despite alleviate to this So

Operator

you. Thank

from question Barclays. with Please proceed. Long Tim is next Our

Tim Long

if two well. could as I and you, Thank

back to First, does quarters. want understand guys go did line it I kind the but numbers beat I of impacts, to two implied on kind like QX the were to able supply you chain the seem of guidance. top this the revenue last

able through were somewhat. to you So fight that

clearly the orders there. for year are supply and like have the Sounds you

QX about there? an to Rami, are getting Maybe two from dig where grow bit, what's deals. more enterprise. to update Thanks. compared or high with rates growth Can we And maybe on talked little give with is give also more secondly, bit you and this So here salesforce. could in Enterprise. scale you if into a it you about us just win mid-single a with dollar were the little more that can Is talk to or single-digit able at-bats? in you If an us changing a to mid the do the you little bit what ability then quarters? the continue million to just prior update

Rami Rahim

the chain with Yes, to and maybe bit question I'll second to I'll it then you question. a pass little about talk more supply first related Ken the start

I'm pleased through that performing to disruptions a There are down. emphasize open no component starting have that great very faced. recover again will our in new as of AI-driven the onset another doing course and Enterprise with pandemic has we a seeing there a up the of been to to projects that. been in Like the take and doubt Center. frankly. missed industry leg performance of end essentially good Data it's of enterprise, the and of getting Enterprise the [ph]carpeted also very beginning -- Enterprise, is being enterprise persists, I So, for but of net market traditional economic stool our that But growth that opportunities are time better, never our the to We're despite from and important is want it's has space result and and market for that because this is well, differentiation us quite the elements starting example, have COVID of shut better uncertainty well emerge

done the of Center think the we've to always differentiation real the lift addition but quite solution and our I with Team, well the Data in Astra that space the created to we've now the technology, Now some space. Enterprise, in

grew So continues. XX it just phenomenal Mist wireless, Mist revenue the which from year-over-year. Solutions it includes nearly and includes includes at standpoint, a software, wired, growth momentum

run about we million. over in order now terms $XXX you of are all Mist rate, annualized up If think

And pretty a frankly absolutely has from pipeline been quite add that, phenomenal. days it's So win Astra, the built our significant customers, business. component then of we've that early to rate although with initial and expectations the exceeded total the has it's feedback the initial Juniper

that think early from made the lot Mist the and shortly Data Center of So got Astra opportunities acquisition a after that we we I XXXX. in signals have that

Ken Miller

Yes. in X%. raised call our full-year raised perspective. on in And you QX both mentioned, this solid Tim, QX, as and QX and guide half, on Beat at QX of the and the QX, midpoint in here raised we again had very guidance first a guidance,

the first shortages lot we're has revenue of and really the the said, with some the That efforts the clearly own A they with do now the So our some second -- the place than anticipating help stock, were of we we're continue to pleased starting tighter momentum year first last execution buffer some and were to inventory us supply going seeing helped this of half. the on they're into and redundancy of we this side. the in and to half in us are constraints half. put levels in

tighter. material is However, getting

where and which factor and into full our is something we QX. up that's guide, going year earlier us were the make we that to in basis half sure is wanted a So again on year our a it second from we to impact bit to and

second for as leak full pleased it we set result. is but the strength I'm the And the of think into up FYXX, only and not FYXX bookings a half, are year well. to I So likely the backlog with good pretty given we a good build,

and I sets up start, least for XXXX. favorably range bookings pretty for us head actually guidance now, us single-digit X% revenue growth, enter growth a think we the and that gives that solid a into well we have we're our above So this momentum line there's a good seeing as it low at this year

Operator

you. Thank

Henderson Our is next with proceed. Needham. from question Alex Please

Alex Henderson

thank a very few Hi, I much. wanted things. clarify you to

our the you that's misstatement. that it And of had have did, question variance was in asked. you're but numbers saying I any you what was I expected. the we the with Therefore, you may just And a You see stated don't that that question didn't haven't been expectations. to you seen earlier think your didn't supply line see from from that -- impact think kind Clearly chain. a

question heard asked -- constraints, if that asking than I the point the you different supply revenues to you what So clarify would much was could what I impact key relative was have had much think you're he how larger because question been? probably that would no it a question. and think analysts was how answering

growth you what growth two? also in products. The in us and those other give organic give software, ARR, the thing Can revenues rates Thanks. in rates revenue I clarify gave growth is wanted security to on both you you were

Ken Miller

this take one. I'll Yes,

to own from So supply The from where had it we to with clarify. and expected land. on a just comment yes, QX constraints the impact about the -- our was quarter guidance

midpoint kind was the points. XX margin above margin, impacted negatively gross of was for a in results remarks quarter in it out some year's constraints but in hit impacting in QX. not ability been would as of did it favorably are from costs impact some it freight our COVID-related XX%, right it that set called QX. bit one it our XX.X% of expected, starting out result we little when impact the and in of by So some prepared carryover which a the these quite factor than you're constraints we transitory our actually as but didn't at to largely we negatively last we is was And -- and supply have to we were Gross of costs, that line The supply the played more QX solid both well guidance. that basis about QX in area

say. is that So, what yes, to we that, clarify to intended

or organic, very of can most excited momentum the acquisitions I'm We're there. you the not to so, track. understand I the it's or we're and are on quarters to referring the we out don't about the recent when organic. are say On three organic you break trying really last tell seeing you non-organic, those

growth. expect We point to a of add them revenue

significantly there Mist results a most recent that due on business well to the our the strength days, in Mist have were is is and-or significant QX are growth but to if our go million full not the by on to acquisition They to you as impacted a both our those year on that's growth on back our the as to quarterly business. impact part Security, So acquisitions. we the as Clearly, embedded minority Software that million Those security really our software growth. Security. basis. on our side of a to-date in service Software business, Software significant impact a impactful side, the our to compared business, big They're big in future, a Software which a number. and $XX for Security Software software overall particularly $XX basis particular, But numbers is a Mist on our area driver zero aren't is as

Operator

you. with next Raymond is question Thank Leopold Simon from James. The Please proceed.

Simon Leopold

IBM. question. particular for Great, of taking often essentially Tier-X, thank operators the Cloud in thinking builders, and the refer about that as you vertical to just and cloud Tier-X for wanted to and I first the we like group Oracle illustrative I'm the purposes ask

you you smaller of do got the to for and builders material group your they are they segment. spending see your that hyperscalers. of Provider Cloud segment then in would business that those behaving how not then, How to with regardless in of kinds And the a confirm you want you? where not you? I Cloud are or of put how So follow-up. them, I've Service Enterprise operators And first all opposed the put as that's

Rami Rahim

Simon. Sure,

start. me Let

Cloud first, a was It quarter in timeframe. us quarter that had for we record So in a QX. phenomenal

up were fact in XXX% orders cloud over Our year-over-year.

of businesses we full indicated the double strength providers as our it as whose into Tier-X, So resumption major what Data cloud evolved that delivering QX operating customers it cloud as as on deliver the switching where market so our to across the spend there for seeing I hyperscale the the there customers, silicon that as across customers cloud system some majors, it's based. customers depend differentiation Tier-X from sort also well that introduced great we -- double-digit broad We and the momentum defined timeframe, been provider a well continues rest say Momentum well from strength we're customer of would of there but broader of seeing with And Tier-X into there. wins routing define have cloud And encouraging. wins. last stack then by network XXXG the as in and services; true our both the largest real the Center. that continued it's WAN large in of products terms is and quarter XXXG digit, and we're in is very, our territory hyperscale very the technology cloud into has technology.

We have inserted decided are example, market us would silicon on, capabilities that paying security, off -- and now things are for that in that us. we've that be what we that for wins the differentiated, for us around have that lot design gives chosen that the anticipated of now actually we confidence a resulted we points in have

full all faster the year last that than anticipating going grow we we're Analyst now why provided guide Day. in to Cloud that provider the So is this up, for we're

Simon Leopold

gross normally then And we the relative gross is, Because surface this than mix what on to average product better up terms follow just would expect unfavorable quarter the margin. my the of routing margin. was has in Thanks.

help But business segments Software is could you're that's of Software that of Center they contributing more have favorably us don't the necessarily in gross to margin than I in need understand better breakdown have disproportionately Enterprise reported segment. Software segments So managing or distribution historically. and I'm Data complete segments? -- and those helping the by some you

Ken Miller

Yes.

in determinant, and-or our -- software do right highly Mix a is vertical biggest did overall product the gross correlation. that you help are absolutely is margin. mix I So,

some where more you we a example. within even parts an margin time, other might advantage vertical where Tier we have did as an have might geographic, some than the example, However, as Xs of Asia customer periods say maybe than higher and mix sometimes US your in they're of

growth, that particularly AI but it Center routing offset service fair a more is a which where generally margin traditional was vertical/product have of with So as a in do software, is more our is that than slanted, of consider, Enterprise Data our some mix little domain software provider margin aggregate little on box We higher our driven it's overall. unfavorable. more a amount software off Ready you're there lot as speaking, percentage less of correct to some Cloud businesses in impact the in -- but little mix and is a higher enterprise we box a

last the going that why in beyond was saw largely The which overall primary with in exceeded very So Services margin mid-point. we you're the in gross guidance. our mix of our strong was about, is mix margin came line I'd midpoint the our which out in resulted gross expectations that part the Even call increase with forward. reason the of our the talking QX, margin from shift Services thing And QX, expectations. product

Jess Lubert

two more questions. take we're Operator, to going

Operator

Okay.

Our is proceed. Sami with Badri Credit this next Suisse. question from Please

Sami Badri

thank you. Hi,

earlier Rami. that most The orders normally kind just of I customers vendor been this that Have the regarding some their in have event follow the on of of the ask would, another of equipment a that networking to up the doing first submitting is wanted your are most able there order cancel thing postpone vendor deliver to some routing you optionality than And to have any was or or that they on of your customers with equipment? any customers networking think full base? to is, potentially I made is comment,

Rami Rahim

for Yes, question. hi, Sami. Thanks the

already I've sorry, the question. first first the think forgotten I question.

Ken Miller

orders getting earlier. Are

Rami Rahim

Yes.

peers industries. customers based. entire the and many peers, All the the other difficult supply seeing the comment -- on to in and the what They're felt demand, what very for industry. challenges across likely across felt constraints our I from it's I sorry are very are is think that me is our know industry broad our they're

supply understand supply high the silicon to these upstream to way that have chain, that are overall the around We are fabrication very the houses all world. in the constraints

likely from case industry. in similar very most it's the all our seeing customers peers So of are that the our trends

Ken Miller

And orders are our Yes. cancellable.

times not the a cancellation to of us expect and returns We're are And hands orders way. time in any We increase advance cancellation do significant better customers that to giving visibility to deliver their deployment activity make quite cancellations However, those that feel we fee would in sort just our to or published say aware of most our strength lead of that as orders extremely they our stated would backlog. come of cancel. sure to for history if low. I customer against with in confident us And our want their goals. us they get needs in true giving obviously they're is

to expect to sort from be So any a I of perspective. our disruption there backlog don't or bookings cancellation

Operator

Thank you.

is Our Silverstein next question from Paul Cowen. proceed. with Please

Paul Silverstein

if squeezing is this been and out. has appreciate said me come My clarifications. couple what's I in I before. in. repetitive you apologize line of all A

pricing, the change, pricing, meaningful on On any Ken?

Ken Miller

QX. Paul, change amount in board, in over list play quarters, but increase frame, do a don't in majority price of in products of couple next is going something in say see did did a Yes, we increase want our I products late time we fair we QX. That's to to we QX, did the our across out prices. QX the a but did it

Paul Silverstein

wins I the appreciate scalers, maybe talking driver not I understand assume where scalers? intra-data related of with to they that. you And other driver, didn't, product the if I switching, about center respect web Rami, say understood with but I outlook? improved the you correctly, was the web you're you only question I have the the primary then, to that than did

Ken Miller

And in quarter So just with Service in the growth well. in are I Cloud from I an trends the space. based, broad double-digit they're standpoint, color growth in the provider a Cloud of segment. as Provider, think Provider you the order double-digit from that momentum very over a in and strong standpoint, order growth But then XXX% certainly Enterprise provided

future very broad bodes quarters it's and clearly it terms in encouraging based revenue. well of and it's So, for

have. terms of visibility In we that

our Interconnect of opportunities space, an that as Cloud in board center inside data right, well the across WAN as pursue. wins data we have although Center. use Center specific the the Data continue we of is You're cases be the terms And to yet include of Data the Provider within intra center, wins that wins not hyperscalers, that and WAN, rest the are these inter

Rami Rahim

Okay.

like like So we benefit from as I which with and question couple making, the the recovering of. we that set our maybe was the end are that strength just I I that that close we're have that the are allows building it think well the encouraged up speaks it and the proud strategy, our next sets thoughts. by that believe execution strong profitability investments seeing greater up that -- by I I'm in very to in start we're related chain to transitory to momentum I'd supply the demand it speaks to that as think to strength it of us And of now business. backlog and markets a to last diversity year, team speaks also the our deliver that I'm the to very recede. some as we're improvements smart especially the recovery. costs

with very So team. Thank us. this for that, the remains important your I management want you. thank and you and area confidence time to And focus in all my a just myself for

Operator

This concludes today's conference.

day. participation. your much you time. You lines your for may Thank disconnect very a Have at this great

Juniper Networks (JNPR) 28 Jul 212021 Q2 Earnings call transcript