JNPR - Earnings call transcript Q2 2022

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Juniper Networks' Second Quarter 2022 Financial Results Conference Call. At this time all participants have been placed on a listen-only mode and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Jess Lubert, Vice President of Investor Relations. The floor is yours.

Jess Lubert

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

statements in Chief today SEC and and furnished CFO might discussed today Today's and with These forward-looking and XX-Q, and current uncertainties are 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 that will possible our please question will the to you we ask I to chance. yourself one have over to questions. call many hand that ask a a as With take We prepared would like remarks, that, question, now people so limit Rami. who as

Rami Rahim

times. a and everyone call discuss consecutive delivered supply for a lead year-over-year saw billion $X.XXX product and second to when double-digit of QX account of guidance challenges joining thank us with mid-point our to quarter June Demand chain our perspective. for growth We results double-digit on and despite strong total XXXX remained from seeing revenue orders product today's results. expectations during growth exceeded year-over-year ongoing line extended of adjusted strong revenue you our top the afternoon as Good quarter exceeded the

of as better given orders single this for began extend. sequential increased orders growth backlog duration this decline, difficult end level, in than record to Total to the year, experienced comp gross normalize. year-over-year year-over-year up digit and us of well both basis backlog begins a future last QX While product customer setting to on expected a when the meaningfully revenue a a was at eventually

customer also solutions and we both as QX focus offerings, this we and revenue verticals. differentiation XX% delivered and our each Demand what orders record operations signals only Cloud gain which growth reflective revenue technology delivering as are enable factors user of in remain said, We to is in periods Enterprise by in affect but all growth are start markets. saw year-over-year. attractive enterprise particularly increased believe our of across saw the our data which our campus to sustainable investments quarter, markets. in future our a believe strength experience, Service is experience-first these and on continues business, our us our QX well and Our resonate across that year-over-year go-to-market sustainable networking our if customer should across even the in deliver We we've encouraged evident With organization. markets made share headwinds macro center results, the serve. we seeing Provider by healthy we to improve opportunities and enterprise This that momentum not call

them accounts, Another diversification saw we service healthy of should are XXX Cloud increased customers provider we a just success We overlooked, recently win attractive new view the portion gig diversification where momentum also illustrates We're carriers. top enhance improved platforms our XX competitive U.S. XXX seeing. in one Of momentum will further highlight that in X the Cloud a market. Tier June business Not adopting position in was positive the introduced growth. long-term were progress the our within continue this which Metro diversification our multiple new Cloud technology. we hyperscale accounts, the with in core recently the providers several Cloud the and market of our sustainable development, gig vertical, quarter, where with of with this see quarter increased major are making for we and of continued be six as which the vertical which position both to to in our secured

with digital continue are Service over XXX architectures. good Based teams present clarification and big the well should broader Cloud to and these upgrades tied Our executing initiatives about services Cloud-based for key our of durable years. ability to initiatives, several provider the conversations on and business opportunities next customers, to represent opportunities gig we our feel on at adoption capitalize network and enterprise that a customers and transformation my strategic tailwind

came was I'd like to to revenue address. EPS a remained strong, chain of and than due costs we lower than perpetual both in than margin demand expected bright expected software While which spot higher and expected weaker revenue, customer supply and

saw supplier as First, of volume secure the from of customers uptick remained quarter, order at and a incurred the we a to we supply challenged the possible, chain availability perspective, decommits. additional June costs beginning in during as the anticipated extremely soon access as we to to higher meaningful quarter. the products parts of get In than

to longer While more better business. next should for satisfy which some term demand, impact will positive, the implications profitability have our of enabling these few parts quarters, actions are us customer they access also over and

deferred seen solutions, which with can seeing software and in out-of-the-box this our mix Space component to We regarding of lower subscription remains incrementally top our encouraged business are software, outlook remains the built, revenue revenue we've software products expected, and deferred ability taken with sequentially our basis. software-as-a-service half confident grew customers. In and and on Flex Mist. we're line strong this we X% summary, as customer more to more than doubling outlook year-over-year. came grew we're our we've than a the momentum accounts from though such backlog which supply, software the truly believe our our software nearly momentum by the demand even ratable XX% given we offering, along Secondly, XX% more faster, of grew actions revenue for the still The to Junos be in even year-over-year. ship secure and now for revenue, strong total, of year-over-year Much

As a to least now sales growth in deliver digit and approximately XXXX. revenue growth expect at in result, mid-single XX% XXXX we

While we non-GAAP XXXX. be delivering to profitability likely to still expect non-GAAP grow. is expand operating than margin entirely focused to down and remain flat expect, earnings slightly non-GAAP due on lower improved margin margin We to expect we the to XXXX gross in in anticipated now

major Now and solutions seeing strong of developments we're with the WAN, I'd some some lines, and key Revenue exceeded quarter we ACX Starting timeframe delivered in insights the including into Automated and grew like a address QX customer once MX, PTX results across verticals, to geographies did our product the all provide but orders expectations, again, decline perspective. all year-over-year families. additional and all year-over-year. from customer

the newer efficiency cloud X superior This see this momentum industry-leading with our provider including the PTX service necessary embedded logical of previously to scale, see new deliver based U.S. that and which demanding family, strong power security needs another delivered line to I win demand product continuing customers, and XXXX MXXXX. MX embedded meet encouraged power are MXXXK, win including our strength the card the XXX-gig also was edge quarter efficiency XXX the scale, security the our was the customer secured and the silicon, referenced. to We I platform for LC core important strong These on environment. and XXX-gig the the provider leveraging our most requires. Tier with of platforms multiservice of

platforms We as another and expand our portfolio several of such automation plan the capabilities Metro also our saw quarter ACXXXXX, in attractive the with ACX introduce triple-digit new and Metro address. ACXXXXX growth further future order the to of which service the both industry-leading of position new can for of our market. number provide we in portfolio that and and use hardware, will provider Metro this competitive portion further enhance cases We quarters enhance software, performance

Our a Orders decline in hyperscale ago but to the an shipments. due exceeded year account to exceptionally of due flat the large QX timing entirely cloud-ready revenue center with deal expectations, data did year-over-year quarter. was

momentum this major customer, year-over-year double orders see we growth, Cloud experienced large and accounts. continue healthy with to Excluding digit and enterprise

market, service wins approximately several XXX-gig cloud span cloud-ready high the center and resonating we optimistic data XX enterprise I ability to we've given secured, over growth data already our the switching center that are the solutions on the within provider this across attractive portfolio years. about accounts. am secured and remains and interest our Customer capitalize XXX-gig market Our have majors, now opportunities in in next

both growing and Our more materially by than to which another AI-driven record Mist-ified outpace for XX% Mist-ified XX% quarter achieving year-over-year, year-over-year. strength revenue enterprise Wi-Fi the grew portfolio, led continued revenue. Mist was our market, This

these global financial which purchased furniture Juniper. seeing with we're at encouraged We a AI-driven the manufacturer, products car the with global wired, and build WAN momentum access enterprise products access global native as SD family EXXXXX are recently combination grade customers are To groundbreaking setup deliver we traction with wireless, a wins of each on a year, from of AIOps globe especially AI-driven security by enterprise switches launched to operator that coupled family end both and a with last management scalability, easy and truly new best-in-class recently optimize continue in cloud and performance. such user the security announced born experiences the switches. EXXXXX and/or large of across this bank, a ensuring retailer, Like

business. such AIOps brought simplify location AI indoor orientation more recently delivering to are recent DHCP that our generation to address wireless highly superiority six failures of services our we with enterprise networking branch even validation order problems, now client-to-cloud and features point and In AI access and actions we complete addition, and driven errors. Based placement regarding third-party remain technical announced common as I portfolio, driven the our outlook campus and on momentum, confident wired authentication the of

us security our the tailwinds with a and connected both future quarter are and currently of to I'd confident quarters. quarters that to strong provide in focused. offerings. the attach enable results advantage of over believe team believe record industry We our the Despite rating recently remain mention cyber the competitive our our where in challenges, to ratings technical declined provides to security portions services year convergence security we in us our due the better a comp our a market strategy a networking We Our delivered We has and hardware as a in security products in block security cloud supply saw constraints healthy ago validated mid-range tests. leading, in number well platforms from firewall momentum our which by is AAA quarter. on rate XXX% been revenue firewall software-only of QX we these a with chain independent offerings. of like for Most rates. in and deliver due receiving as networking few renewals performance and strength difficult should portfolio, will and our believe largely the next

In we addition to another service achieved margin. strong revenue, also of solid quarter

for employees support financial Our that to continues Juniper. on and detail. benefit for our continued and extend is customers, value Ken through want automation work their services more hard efficiencies customer quarterly my delivered margin stakeholders. I essential would our our focused in confidence discuss only thank to shareholders and create but will in will their to thanks the call driving execute I for new to not which results and organization revenue also to experience. now especially turn the over to dedication, I creating who and well extremely opportunities, and cloud incremental like insights partners is our

Ken Miller

will results our outlook. you, Rami, billion the with up and by in $X.XX margin. quarter XXXX and color guidance below quarter second on some midpoint midpoint our discussing year-over-year. of due above ended Thank of I the everyone. $X.XXX lower was end We afternoon, X% our earnings good revenue share entirely expected gross Non-GAAP and at start to our per guidance the than second range of

exceeded a supply costs delivering customers strong procure margin. and our orders higher unprecedented constrained gross our the costs quarter as to and second remained products. timely We with to in deliver possible, We which expectations. resulted products prioritize in continue during and Product environment lower to our be components as

are resulting customers orders in some to rate supply attributable account a of time. challenges the ahead experiencing industry’s order for chain As order extended we reminder, to strength their placing lead normal

solution customer with Solutions on gross was Center single-digits on demand strong sequential $XXX more declined difficult a year-over-year. orders and Adjusted particularly perspective, orders orders saw year-over-year million a both increased double-digits both enterprise driven We to growing grew year-over-year, vertical and While enterprise backlog product comparison. year-over-year. grew our a a and than due adjusted revenue XX% basis. From Cloud-Ready and year-over-year WAN Automated Data essentially basis. AI flat revenue

Looking was XX%, increase revenue cloud, growing sequentially Software grew business revenue year-over-year which and year-over-year by by service an year-over-year and cloud three grew X%. And reviewing million, $XXX XX% Services six on were XX% of our Related was an X% all a basis. at was in followed our and on customers who vertical, ARR our enterprise. XX revenue provider top a Revenue were quarter, one Total recurring year-over-year. verticals grew approximately provider, service and basis. Annual for or Enterprise the

component We Our customers was of top total supply to supply due chain mix. and below in experienced and customers elevated related that Non-GAAP primarily to of not margin timely prioritized was of lower greater costs for costs the resulted XX.X%, non-GAAP posted than XX the would’ve range supply we XX%. challenging environment supply delivering If chain possible. which XX% we costs, for QX our compared revenue to we elevated to accounted margin XXXX. as as expedite increased our which volume software as XX% de-commitments estimate guidance gross anticipated gross in as a the products approximately quarter, in

supply remain of half second expect year. the at least the chain the environment challenged We through to

and basis, Moving expectations on to We deposits million approximately outflow quarter, X% to on in additional a than was margin expected to XX.X% result. X% $XXX million cash quarter. the lower prepaid the expense, margin outflow the quarter sequentially. in Non-GAAP and had of in the gross payments The our $XXX which operating includes suppliers cash year-over-year, below for due operating increased was which non-GAAP million capitalization invoicing and as of X, as requirements inventory and to tax Act to an customer purchases January which on into lower Approximately Tax strategic went collections XXXX, attempt meet related cash Cut and million of approximately $XXX our delivery development to and amortization expenditures research payments the of of for and XXXX. demands. customer well linearity related effect $XX additional Jobs the

to flow of time, of also we Over be we to cash positive expect in are half these While the cash half second likely relatively at XXXX normalize and second cash results. be cash, of impact to expect of items levels. XXXX, flow cash our do some in second end negatively with differences flow timing cash flow profit $X.X equivalents was should the Total and investments line the results billion. quarter

detailed available our Now, some guidance, Investor you I’d in can Relations commentary our the like on CFO which provide find to color on website.

driven we see quarter, our growth For approximately the backlog, the revenue improved by and third year-over-year strength strong of of expect XX% an to demand supply outlook.

have expected to supply we the strategic to is Our access better outlook than result of our actions components. improve taken

impact prioritize We over quarters. several secure higher possible. as our will we will costs negatively customers continue incurring timely The to to as delivering products margins next supply are the to

and continue third In we addition, margin overall profitability. in software the quarter. we gross to as saw see similar expect the mix a in second factors These will pressure quarter our to

Turning to for XXXX. full expectations year our the

backlog, as XX%. the with we we our raising the to current the not for This chain revenue our are does supply strong growth well current environment year improved coupled supply outlook, deteriorate. have as approximately further expectation momentum seen order assumes Given an

through to elevated of XX%. We at also the for is our year backlog XX% from anticipate expected gross remainder the to full remain year. to expectations be original Non-GAAP margin down approximately of XX% XXXX the levels

$XXX more transitory than approximately beginning constrained component year. will a absorb than costs million chain We in these to at expect believe we the environment, of had now supply of As over result and we the freight elevated time. anticipated costs XXXX, higher be elevated of the XX%

a implemented to pricing levels. some to second as offset remain costs close is begun actions, some, have are not In of but the year the QX of to parse we the percentage XXXX total incurring. all software addition, XXXX, which half In expected in revenue the we increased

offset planning these to take costs. additional are We pricing further to actions incremental

However, operating and increase said, our we expense given to opportunities expense our to to actions is management, invest We our to and of a expected disciplined non-GAAP will positively expect grow operating size basis. than backlog, That take time we the remain slower year to of advantage will on to market revenue. continue impact committed full take results. expense these

seeing Given least margin, operating at no non-GAAP we sight longer pressure expansion margin. non-GAAP of are a of in gross to we XXX basis the line points have

margin be We is expectation grow year. full year current the to for Our basis. still down non-GAAP non-GAAP will flat operating EPS to a full slightly expect on

at to for expectations on While backlog digits basis year What color seeing the our expect current our and elevated in provide macroeconomic pandemic a full environment some XXXX. global revenue on current We would order some like outlook for of and growth we momentum uncertainty. ongoing XXXX. least the supply, early the we posed mid-single are

expect In and closing, commitment I to and to margin improved for our success, dedication especially would challenging also expansion Juniper in profitability We team continued their this like in thank XXXX. environment.

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

Operator

The ladies gentlemen. question Silverstein is Cowen. Instructions] [Operator coming open Paul you, First with for and is Thank questions. from floor now

Your line live. is

Paul Silverstein

companies difference. of challenged being get I throwing environment case stability. either or changed impacted. but the of accounting modest And the terms for chain, heard [indiscernible] a And decommits Thanks. but about at morning, general over year the asking and changed a will. but two of speak not ask trend been I to of companies. Rami, supply guess somewhat what I of I there, what's yourselves, some in out to or hate terms or one you? for a just stones. appears that handful not stability We you you improvement, I a the it last of randomness risk I'm in but in – for There where other what have this and Ken it's just

Ken Miller

Yes.

extremely remains has Lead from times quarters. for supply and several are been challenged the chain it very as to us suppliers last extended. the environment So

at difficult. from a proving volume comes coming suppliers. that historically more a heavily cost. And remarks QX at is is in leverage be forced see And times in the We And broker very on supply to the prepared have. we did more markets pay higher at mention particular, us really an did this to we increased that of decommits cost. than and higher fees expedite Sourcing

navigate – I beat So albeit, and to they abilities actions the actually the our very proud us actually we for we we these of cost. good midpoint getting is, quarter. guidance And balls year. taking, saw, we for confident actually revenue to curve supply. these And news more as And our based you situations. the access raised a at our on these do come We are that we're full feel feel for

So we different an a volume at do challenges. opinion, a mean, perspective, every difficult. seem improving we it to see in from those challenge, absolute incremental it's be doing good job pretty coming seems but supply cost to and but getting is be an I navigating quarter my

Paul Silverstein

how Key, many how about can us the a talking compared you're previous quarter? you decommits of to idea give and rough that

Ken Miller

difficult Yes. the were of the quarter. supply It's quantify. it some that some expecting tell had in we in we I'll to quarter early later we We received large received. you strategic than that suppliers

other perspective we impacted. negatively the impact from invoicing was The shipping had was also a linearity perspective in quarter and

past, really compare Paul, So it hard to we was in numbers the normal, definitely but given so greater these norms. historical to than it's haven't

Paul Silverstein

any Can – ask right. Rami, referring progress I insight granular you to? Can heard on or on your more think what reference – one I insight us with momentum hyperscalers. All give I follow-up you're

Rami Rahim

Paul. I'd be happy to

results our with with cloud all up. pleased really providers our actually I'm So

cloud think in is name diversification. I the space the game for the of us provider

X the seeing to diversification think increased among we're Tier I hyperscaler. hyperscalers

of our brought in one orders in happened saw in one accounts another some of QX for step past more placed customers opportunities. then gig majors broadly, digesting in that routing, data in hyperscale our finding but that just And is momentum happened and also great more and in – and they've that cloud switching or center XXX not goes with orders. that period top the of and through compensate So if will

and optimistic So I'm all forward. the up, going the vertical with we're I'm cloud provider very seeing pleased about momentum

Operator

is live. Barclays. Up with your Tim next we Tim, have line Long

Tim Long

Thank you.

talk to business a wanted enterprise on the bit. Just little

growth and could you about quarter. So Rami, the a a been pulling little of talk market, just kind little on you're bit bringing or go Thank enterprise. products into and bit, market obviously and this technologies traditional to it's some you're sustainability through SD-WAN good to the great how a whether elevated continuing wired new you. you're results how other of a bit that invest there or of little Talk if it's the the

Rami Rahim

I'd Yes, to. be happy

team both diversity grew continuing the but say, in needless incredibly technology growth, very to of terms of results the also up, in XX% all the segment revenue, in the of I'm strong enterprise of So to they're that that year-over-year, terms deliver proud in terms offering. orders for

obviously that in quarter. by even driven AI automated our was our seeing continue. continued that the last a of the of by saw great kind weak a going So we're for WAN but that spend enterprise this lot a momentum really several momentum And expect with driven some do to resumption was which is of quarters. solutions, And I government, federal

quite about I'm actually optimistic So that.

segments keeping are we're indicators early order and you but on eye standpoint, time. any warning a see I of the a has absolutely done a on And any just of at enterprise sort resistant of macro the point from of the in seeing, can far, it focusing sort momentum so more this really from any team We not macro headwinds, think that close we're market. seeing job of nice

strategic their also I working offering solutions initiatives. to the that the believe that customers data kinds kinds that think transformation technologies cloud of in digital AI automated that's our solutions, prospects I our highly solutions it favor. I driven customers of are be view as we're our center delivered or very think to

think in of might issues And sort come future. see to the going just I to that, of and resilience way our so that more you're – any

forward. about crushing market, be reasons, those our all just going for our I differentiation, of team, the business continue So focusing right on go-to-market bullish sub-segments very technology enterprise it to the

Tim Long

you. Thank Okay.

Rami Rahim

My pleasure.

Operator

next Amit The from Okay. coming Daryanani from Evercore. is question

is live. Your line

Amit Daryanani

question. any guess, I’ve of and I Are bit macros your the Thanks one I’d I’d seeing were of my about, companies European the a is of that things love But little I some you that perspective revenues weaker. talked that? the love to for get signs in And related understand give the macro just on terms for to just gives side. least the I’m of elongation confidence cycles XXXX then you’re conviction that curious, of if an this to calendar anything in framework process? at the earlier seeing sales anything taking you know demand. the and impact to or initial what

Rami Rahim

let Ken me I’m as start to Amit, weigh Yes. and sure well. would in like

remains our all So order strength and robust it robust across remains of segments.

know I concerned what year-over-year. happen it I might to you double enterprise, growing comes there, but saw enterprise to when XX% people orders digit enterprise indicators, growth, So the at mostly macro revenue think are about

to And is But to concerned be isn’t macro that we’ve sort got anything to immune there scoping sure far going any we’re making that major warning there indicators and happen. be of not sort say not. about. our of thus We’re early – changes of I’d sort

teams I a the opportunity situation think markets we to especially strategic, for And in small relatively there think solutions where pressures cutting IT tons of that playing in with have we are I be where compete. are very where large, that to need are for competing us costs. and share start going we’re to there’s cost that are

challenges related for for well. actually Ken that I’ll that just additional on it commentary. even think to the pass And in macro we I do So quite – can reasons, said, challenges there with these event were

Ken Miller

Yes.

last On as know, definitely kind historically we us up had. several the backlog. an greater exceptional visibility framework, FYXXXX we’ve of than you providing built is the much This over quarters, long-term

believe to year full half backlog Xx is XXXX. levels, raise we least in this the year. more we normal a year, raised XX% we’ll we’re starting have get the which believe full the we digits off. did next single get now pay Also in $X.X mid billion, guide an to to are supply year making is exceptional access to backlog chain Our investments second And than to approximately so at We supply to the build.

low yet. provided felt FYXXXX given least was you believe this the mid kind the we least right point, have we long-term digits We at at haven’t half which we single digits. provided over we of mid at year think guidance the as that single demand our signals guidance given procure, a be only would we’re of framework model, be ago. digits, And which at The supply and a seeing, will able time, this to is single

Amit Daryanani

Perfect. Thank you very much.

Ken Miller

Sure.

Operator

question coming Hall Okay. Sachs. Goldman The line next Rod your with Rod, live. is is from

Rod Hall

the Yes. then cost makes one curious And is We just X.X Is QX. Hi what on follow of visibility you. there? or sequentially up. points that? what X.X or what I’m have guys, it QX. for you guys implied the is calculate And expect points, – I you I had two it pricing kind of gross the is driver in just there One percentage off margin thanks about for maybe question. percentage increase

Ken Miller

Yes.

a I’m expect We So your the we XX%. Really QX. without do about be QX, there think would in year pretty models getting be benefit volume on sure Rod. are specific accurate to

we’ve We play passes. taken the that as time actions and out expect see more to more pricing of also

be do prediction primary mix place providing be at I’m don’t point. now. those the the this not QX specific factors. the believe So would have Again, year right guidance. is to exact XX% But right I I for

Rod Hall

Yes.

what kind QX what of Ken, get of – if we plug that’s Just QX. we guide out in the spits

Ken Miller

models sure in don’t front of model Yes. close. Yes. the your And I me. have I’m just are

Rod Hall

some driver a wanted also, is as I on there’s you well. the backend in the could for DSOs are just thing is up you and linearity the DSOs was to the supply quarter, And Yes. quarter comment I or other ask if wondered and lot shortage linearity then Thanks. there in the

Rami Rahim

Yes.

the abnormally from see very bookings didn’t from a quarter. order’s really the an from see backend That we quarter a saw linearity right? a any We very we pretty shipping strong of and So linearity said, was demand normal, sort perspective invoicing, perspective. And quarter. throughout in loaded therefore did a and

recover supplier remarks, and we in mentioned had kind we to had of my react and I that. some As de-commitments to prepared

normally but ship them. the on So an quarter on cash impact an on routes DSO. that impact made the had faster to to an to we in take we impact commitments flow, had we in than the had It as did had to cost freight later do get products we customers also

had it a few metrics. on So our negative of a impact

Rod Hall

you. Got

That’s Okay. Thanks, helpful. very Ken.

Ken Miller

Yes.

Operator

next live. The with is Needham. coming your Alex is from Alex, Okay. Henderson line question

Alex Henderson

Great. Thank you very much.

you with the visibility ability to of billion to test CYXXXX, for is quarters the forward declines end of and half of declines look back of somewhere revenue X.X bank and the or go up how through to the or next an vicinity a were a produce we critical your that’s hitting that’s to increase at the because the year, to plus plus broad it back if stability the versus run for backlog outlook to the $X.X the are you of the year-over-year relative backlog four the on growth normal, still end of is orders and mid-single-digits stress the looks into historical the in as And likely And of still enormous could right a the we numbers. these in XXXX, book-to-bill to view I we So through XXX% go XXX% do year? variables as sustain equivalent XXXX end really backlog three company. a what backlog XX% XX%, norms as like of least in XX%, the

Ken Miller

Yes.

we And So, and, they’ll would backlog you you I where single for period you’re unprecedented similar But see our year right. product of the they year. will second the example also next good that this not a levels The correct gross are mentioned my XX% where And in that, now. remain this as in half give orders fact, revenue quarter’s are support digits. demand on time, a of were down of call precise delivered That our expectation we can’t kind down. only here. the are I kind I orders we growth. this out, should be finish that, revenue to playing I number if think I of say even actually the of this, mean, elevated, are how as is levels backlog

room mid-single-digits million, there in raised to also was at year. of why future. sustainable And So confidence one fair revenue orders. least next just that our guidance $XXX And grew ability that’s We in we for us amount a gives to generate there our reason backlog right?

Unidentified Analyst

Yes.

your talk the you point And still XX% clarify, you in So, growth question for line to test can the when your it’s, declines stress any are geography, that fact, particular quarters, in the put a about end have XX% that’s first-out, a to you not then of are top want function deliver I therefore timing note and real and over if these is and of with bank, absorb clearly key given where XXXX, supply change in you the chains, that backlog orders. in the or on the this, which orders timeframe in four than the or massive assume a you, in print, of was, to geographies of when X% went the better up just because question exiting increased. demand analysis particular came and improvement backlog like the in. through first-in, reflective your ability that three only a case any

it’s question, a I assume therefore So not question. demand a allocation

Ken Miller

Yes.

absolutely right. you’re So,

such have of orders, you declines would a to the If sustain types XX% those in those at test our given still model, were XX%, stretch, backlog, our declines. perform model, revenue we

couple lot And of next growth years your So correct. is that math here. the our gives sustainability of again, in comfort revenue a us for

I we On supply dynamic, the It’s we to what some and supply available is simple procure? because very say not chain honestly, quite What others. and first-out, of quite we’re would ship? as mix, we’re in have the to shortages as parts, first-in, geo parts have a able factor able is in absolutely it more

So is you revenue about the it’s really supply that cases, really solution really at across and as that cuts well really level about in views as in this the board, in availability. see some results supply – the And profiles point. vertical the customer some geographically,

Operator

question from George, is Notter Okay. George is live. The with line next your coming Jefferies.

George Notter

much. very to wanted I guess, ask margins. some affecting the mix Thanks guys. about I gross Hi items of

it’s of there? what was getting You more precisely Thanks. mentioned recognition what the realize drives the be quarter. but sales it QX, revenue software QX was in what specific smaller that? bigger Can was? lumpy, that cadence license you I lower in QX and And in about that

Rami Rahim

a take me you let And George, it. can in. at crack Ken, then Yes, jump

offerings. from sequentially. strong, XX% be ARR, you they was routing can software can state have but total you down on year-over-year. result, that softness really positively The of all year-over-year, lumpy, at Subscription be the grew of good based see in revenue, it a that importantly they margins can because So timeframe. or software in those orders really QX grew largest that for that’s see affected can products. was capabilities our And And around negatively at which swing remains XX% some our that – we in switching mix of and perpetual the our deferred can in customers certain and software

confident mix more to as little software And then really the ARR. So, about well long-term projections our achieve can in our in talk I’m ability issues actually [ph], bit you a QX. our as Ken,

Ken Miller

Yeah.

is So our as of refract services bit shortfall And Junos there to in was our some of and These that's perpetual various Rami predict mentioned, timing a really Junos system. licenses. Space sequentially within it that on-box operating functions difficult of features a here. are to provide really

maybe upgrade buying level also of There's of and to it customers hardware Some time software an that software true-ups purchase whether some system behaviors, buy operating base might on with license or not advance periodically. later. customer some happens the premium lowest between or is an at

and the all it. vary they timing buy So could it's but the recognized they buy perpetual on based choose immediately, to software, of what timing all when it's this recognition,

our here. software perform So Overall what seeing business quite continues that's well. to really we're

ago the well we're set year ahead perspective, ARR half and Day our an a think I with as as we overall ourself target. of a for targets the both from Investor software

I very So story. transformation software expect about a continue moving to software very our strong feel forward, and us have I to good

Unidentified Analyst

mix quarter, that follow-up, access this up access know last missed of margins MX as lower of Thanks. And I was how with talk shift, those did you think components can quarter, I pieces points, about then just go Got a a it. or points, a did mix drove more shipments, did in but how MX around QX? higher down obviously of of you mix on narrative the mix the

Rami Rahim

our perpetual were that Yeah, up solutions. actually hardware went these automated was so so before on licenses to the our MX mix WAN up, WAN software some actually routing that mentioning said I side attributed up, automated was and side of

some was So points. licenses that overall was wasn't mix we've down with at of it bit, but WAN perpetual the mix these But of the software a automated hardware the about, talked up. access expense

points sell to access a of continued as lot We well.

as in saw the results up as business, strength the IDE our really in XX%, both so IDE You business. well MX/automated-WAN

Unidentified Analyst

it. Got

thank you. Okay,

Rami Rahim

Yep.

Operator

The David from Vod with question UBS. is Okay. coming next

Your line is live.

David Vod

question. Great. Thanks guys for taking my

I on questions related have of sort two margins. So

So that getting better. you I think chain a in the going remarks, forward noted prepared is little bit supply

we above well it's are So expected year seeing for are a your next like kind margin if if like expedited fees, Thanks. in margin sounds the into the what you chain potentially XX% a pushing not effectively is that and more margin out XXX it the year, fees does sight revenue with give above of quarter, And to expectations, it of trend. of expedited entered confidence of that that prior but supply basically just expansion be you'd this line getting Why basis against year, better? looks year? third points it's despite the about quarter-over-quarter, leverage as on by backdrop, along you improving gross sort going

Ken Miller

Yeah.

said message action So sure understood. actually on extremely of we've kind a getting still some highly is the supply. make to times nuanced supply taken supply is to well more to are still want Lead us into is better, really Access procure I constrained. limited. That

more So a when supply think good have thing. the originally which than year, expected we started we'll is we I

So but is an several we We're broker really for cost. pay paying we in here that the should improvement times particular fees. it's going coming component paying We're that's that markets for having in And that's expedite than more. be market. and this, open more to more offset to supply, are at the paying

So cost. it at is coming a

is on probably costs going but up the improving is the supply summary short are volume side. So

related For it question as XXXX on the a well? supply, was supply

David Vod

mean, your you I Well, said, came I in expedited Ken, expectations. about think above fees

that would or little point north bit $XX a translate So million of of almost margin. the into

next year? that does play how So into

Ken Miller

see difficult do $XXX know, don't out, I exactly million years go but I predict, majority, couple I away. those all do so if believe referenced those to not of if the the component costs transitory that you go I expedite two, Yeah, fees is of is and timeframe costs believe and you'll a three the

However, start think we're what hard the quantify predict to elevator I'm I timing, freight how exactly see to paying not many we're but XXXX, to paying, – some should that the we're to fees ready it's expedite see do much. benefit we the going in normalize. how

David Vod

guys. thanks Great,

Operator

Simon, is right. Raymond The live. from with is All question Simon James. Leopold your next line coming

Simon Leopold

in terms your taking Thanks your of get where market your be? of could versus you’re on you see question. understanding if do gaining you I to share? based I’m market might describe want categories what where to happening awards trying for the the see backlog, and within major an share product you

Rami Rahim

Hey, Simon.

Simon Leopold

Yes.

Rami Rahim

Sorry.

little We interrupt a to the Could going repeat We’re question? glitch had here. you. you

your part and to need it. missed to we but question you, we’re of a to going bother So repeat sorry you

Simon Leopold

No problem.

You hear okay, me, now?

Rami Rahim

Yes, we can.

Simon Leopold

if could the bit just to if campus other know product seen a about you you great. your talk pipeline, Okay, category? see backlog, do where we’ve area the talked how want little about in a about yourselves yourself lot categories an as market So products most major within see the your see share your I could we’ve share you more confirm verticals you wanted and or what the mix? most broadly see where talk I to share. do trends major you you gaining gaining vulnerable and in I see campus?

Rami Rahim

Yes, I’d happy to. be

do think be to where area in to and is the share obviously more enterprise the I So going taking cloud. one in most the client we specifically are

much XXX and capability. wireless, to end-to-end that solution So that of because a includes into we’re increasingly going it’s enterprise wireless AI driven our SD-WAN wired, wired, integrated Technology full solution SD-WAN stack now and include pretty

are obvious do opportunities. last I real little is really outs results very an about and well revenue I do think where order double-digit has WAN and very don’t do think remark XXX-gig core, that. from Metro. that think do and I into that now that be going think very new fiber our moved XG growth, it revenue we double-digit growth prepared our is The where results. will win, driving where center, this where area data pleased mention time themselves, new for my about I discussions think XXX-gig is share, this wherever we’re competitive speak we’re cloud just I all of taking performing area I are there Very, we only and opportunities to be there. share. place because numbers a taking place to that service for in the translates is is talked an thing. starting going winning we’re terms as actual build actual by I share and share think the we’re will PowerPoints in in tell It’s a new net I to take service that’s from our bakeoffs. share. the providers. So opportunity,

and very are come be production really part together a never next year. in complete and because essentially that announced in small players complete by Metro the just it early of the portfolio essentially and we’ve we had We fully portfolio should

of even growth XXX a plus seeing that in So ACX. percent in solution, for orders the year-over-year we’re absence

are that very share only mind say in think that I areas terms will data but right for that accelerate where sure complete I’d we’ve example, now take. doing top areas we’re biggest got opportunity the those there the I’m of for are once other center solution. of well

Simon Leopold

the Thanks for questions. taking

Rami Rahim

you. Thank pleasure. My

Operator

Samik, from Okay. Samik we Chatterjee live. JPMorgan. line have your next, Up is

Angela Jin

in of portfolio a Samik. respond macro aligned for Jin versus more recession a slowdown on slowdown would ask more the event this Angela a is of was cyclical curious trends? are to I I you resilient I each don’t what but vertical the – hate to that areas Hi, are and the to question, think how

Rami Rahim

headwinds, strength job because indicators. obvious stay remains for Angela that make warning it’s early high. but any it’s of to hypothetical think we’re looking that think indicators order I We there and to Thanks macro question, sure I’ll first, vigilant very be I just very any going question. a I start, is our see the course for said, to don’t

that expect expect one what other expect the where tend with very reason, areas, projects. would enterprise in be would would would of challenging even terms and have service providers be I say providers that strategic long-term And would more resilient. to the I cloud they In would to that markets, for as macro But cloud TAMs, people macro massive were mentioned I for total have billion that most us, what XX going and we risks earlier dollars across plus there be addressable billions might there there the is biggest headwinds, if we data our client have – center.

TAM. and room that I in a with we’re very differentiated even of little of to fact that. headwinds share, And there a posting if macro affect relatively are small the bit proof for are a player results that part solution point think We’re grow of small plenty

Operator

from Okay. next with live. coming Aaron is your Aaron, Wells is The question Fargo. Rakers line

Aaron Rakers

bit. I do but the back to hate the taking Yes. Thanks go little for to want question. to I backlog a this,

forward. I'm remarks, past disclosed like over XXXX. that more considering sounds think of in to you had prepared you going I likely implemented you're increases some significant going curious that's the the the those How the that in price in the it been mentioned effect backlog to I to You It going actions gross the amount million know actions chain dynamics the past said starting think built of alone XQ some provide, you back, implement here we really to do got about understanding and a through you've on? $XXX first the half or of maybe backlog starting price through margin year. first million filter half through a supply the lot let the positive year $XXX just

Rami Rahim

Yes.

feather to going So over time. is it in

more are benefit quarter. each more We seeing and

move incremental than benefit XXXX into I benefit quarters. right? in place, expect in we in expect over in overshot undershot seeing really benefit And The to incremental overtime the the or assumptions XXXX, expectations. pricing we that second the we're and here us time should again, this is saw cost, more I from until see the overshot great we more and put play take, by had last expedite those reality more we about the QX be the FY getting fees, probably as When say given the actions to the unfortunate feather quarter some The the we're actions. than – start So costs, cost half to ready And actions we cetera, we offset saw aren't on et QX. the we we costs, going backlog. to to I is

future pricing come, the we are going more So at help we year this that really don't some quarters. keep backlog see that's margin benefit enough the seeing yet started in the to to at point the to us help continue the benefit. But is in we XX There of just range XX. to where to

Aaron Rakers

wins? halfway across just follow-up just asked were XXX-gig wins I And question design XX actually Yes. I just think quarter mentioned seeing do thinking for point? mentioned had those the as that this you kind curious at had last as XXX-gig, kind think of terms we're in in quick what trajectory through this really deployments, if of like – XX you're XX, we're continued on those think do you you and you a traction at I'm XXX-gig when quarter inning wins. those deployments And volume about design the of know of you

Rami Rahim

It's question. good Yes. a

wins First, data area XXX-gig segments. center actually I data the to now seeing are service XX close accumulative The and we've just wide so want in wins, provider or across provider center we're and cloud to clarify. wins XXX in

are, mean, to of terms are out There be lot for if shipments, in I orders XXX-gig, mix are more built you and XXX-gig. XXX-gig at where terms networks at innings of with early both it's going and we still XXX-gig. port In that looked between a

those certainly happen Juniper. for good or of or every and several inflections industry, that's beginning of So We're five network we at for viewed stages our these years interface once years, sorts now good maybe the four one of so.

Aaron Rakers

you. Thank Yes.

Rami Rahim

pleasure. My

Operator

Okay.

Stanley. Meta is with Next your we have Meta, live. Marshall line Morgan

Meta Marshall

trying mentioned do that get the of And you're George's just pronounced of following amount some this revenue the uncertainty where you answer you future? on period to maybe up be causing because kind accumulation inventory of consider comes in just just to servicing volatility? insight the volatility elected on I is of what this that Maybe kind more – that of inventory of you'll Thanks. some quarter that or trying kind of question, addition then peaking, cloud or in more what kind software. as still just foreseeable was of to sense of the you a might customers some terms where perpetual Great. for get an question; kind kind be of follow-up in into for is would Thanks. of think a quarter just

Rami Rahim

Yes.

year, of their we saw of level upgrading above buying the in from were QX normal more base system some reality level. on and true-ops did, year So either of software advanced this vary is or customers a volatility, where last or doing premium we mentioned I the those maybe a software buying and QX patterns to patterns

to rest and I'm available I in software of some of when decide that of might That that. little in water the, the the largely upgrade did stack point few at customers said we will surprise of a kind kind the obviously – high to In of So software marks attach, saw their bit of they for year be futures more this see that we normal expecting to QX. volatility the to me the past be similar and and here hardware QX, quarters. a do could if think

they kind difficult a well beyond quarters couple a as we're more It's perpetual normal, just of really any I software timing we our our I perpetual it Rami a of of had software, normal highs sort about think as perspective, and right. is SaaS to now mentioned, it's subscription back call of growing So wouldn't customer pattern. when out predict. And purchase to software. from

our extremely inventory perspective, we've portfolio. that high grow an We the software the seen part levels I don't of inventory to end From built. of continue at on think

backlog think at is orders out certain we happening more And there you seeing inventory, our, You that going you're, absolutely are definitely signal to there parts, parts, bill parts look our the get we see demand open we'll what's part we inventory And and supports start that's know, but there's are as up, the able the if the the in ship, building that result constrained. to putting is inventory constrained we out still, are level are a, that's that's not a be what some other purchase go to demand of that's more of our start critical we'll we of down. really to opportunity. in material of

don't So down. to come and levels chains inventory's going backlog start I supply start think decline improve to until to, we start to see really

Jess Lubert

Operator, take questions. we'll two more

Operator

is next coming Okay. Juniper. Badri Sami The with from

is live. Your line

Sami Badri

you. thank Hi,

that all XXXX, reflect what and in those First of and XXXX of revenues percentage percentage the a question percentage revenues mix the what of were just is coming we take is, through, to objective price reflect just the increase maybe of if like increases action XXXX? actions, XXXX, will are price

Rami Rahim

this level normalize not say call to of detail Sami would it quarters out. a I sorry, I'm on, but prepared that, to four on I'm of Yes. comment expect that's call. I'll by,

far prepared should by So revenue, from I'm as this as normalization comment at But call. the some this percentage we took year, late we see not to the last action total year. of on the

Operator

Okay.

Bank Tal live. Next with is Tal, we line America. your Liani of have

Tal Liani

The some very, is high should next backlog you're to very is Hey, the guys go see or we certain is four of of there areas and or XX.X, looks just it your me very so revenues, to revenues, I In quarters to to year. your decline tried steep growth look you're ways assuming this low guidance. the year, the X.X. at It, that being either released, banking it year conservative. released. want XXXX this growing multiple back substantial in that in And I you're

then growth, XX% alone of looks year. revenues plus what I So revenues contributes we're next your also, at that substantial enterprise weak this year give growth, or seeing about if X% X% And looks, versus this just year. it's of take your look

going saying basically assumptions basic assumptions about When to mark, your be which or are project projects, or better, what in it's you more, cloud X% telecom you when assumptions are X% X%? your What X% say declines about market? your you the So are understand are what assuming the better? the assuming are I or end market of you

Rami Rahim

any I that it's least at key as or is me the just for here setting to some bit, is Let we thought major Yes, absolutely ourselves. next start fact I've early just think I a there outlook. markets clarification XG of said, and opportunity single think sort didn't I even Yes. start, at the typically say give we mean, X%. If at about on that talked yes, gig we'd least think right out, we catalysts catalysts we now. in the I macro mean, there challenges on exceed And but a to play It's for all little meet, that don't opportunity in color of can around We exceed the provide enterprise. quite wise. this that's we not timeframe, digits. us call to aren't X%, this bar alone it's, the us, year are I time. that XXX mid in expect, these point the this efforts, are but

Ken Miller

the good level the being its Rami point. comment, things of for demand the lessened. given supply, at revenue constraints single news a digits. the we all mid a really primary view would see we has And a, XXXX. backlog, at mentioned mid would we least driver is our supply, constrained is I seeing It's strength, higher the That demand definitely outlook have, than this just given the the momentum And imply, a not

volume expect than to a had improve, historically, least which We why point. which with the digits low thing is prudent this what you at do you thought number giving at single we greater to was

Jess Lubert

questions call. we the Operator. That all you, have. concludes today's Thank That's

Operator

conclude you, conference today's and call. This gentlemen. Thank ladies does

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

Juniper Networks (JNPR) 27 Jul 222022 Q2 Earnings call transcript