- Earnings call transcript Q3 2022

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Juniper Networks Third 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. Sir, the floor is yours.

Jess Lubert

Thank you, operator. to quarter welcome conference and afternoon, our XXXX third 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 now possible our please question will call to you we ask I’ll to chance. yourself one has to Rami. questions. over many the that ask a a as With take We prepared would like remarks, that, question hand people so limit who as

Rami Rahim

we revenue better the verticals the high and end our year-over-year of across Juniper. double-digit joining Good call expected for record discuss quarterly product all set guidance today's Total you grew We and but all-time not only QX billion of than solutions. all year-over-year $X.XXX September saw our revenue an customer sales XX% also customer during delivered afternoon, XXXX growth for us results quarter to as results. revenue everyone, thank and on total exceeded

which our above per exceeded expectations, quarterly the share operating high margin of in resulting Our of also non-GAAP gross guidance. end earnings was $X.XX, and

market. customer as continue and chain as procure strong demand the supply results verticals incremental to exist year the actions overcome since reflect across to QX beginning supply challenges the the well that we Our taken of last and have experienced in we've solution the many

related the have only the these services course of alignment but not strong many company to with strength past us demand the teams go-to-market, challenges. QX exceptional year from helped of due are for in organizations, supply customers product and early extremely extension product QX year-over-year with us engineering, continued Our position chain September in along executed our to Overall well time the the sustained to to adjusted XXXX the quarter over across growth efforts high supply growth being should healthy orders deliver and results This others. has achieve orders to beyond. in and remained due when and results, chain possible single-digit lead only placing management, the account also

economic uncertainties there to a early patterns due quarter prior are normalize While this service as customers, a when the decline, where provider new given supply gross the the improves. particularly year-over-year and happening orders ordering, orders in mid-teens order willingness attention was around both a as becomes close last this various experienced of projects network invest very customers' supply year, to primarily difficult comparison same of We're our paying now consume amount large amongst in to was available, and cloud to world. beginning

strategic solution network's time are expectations our past nearly saw across momentum gig momentum wins the encouraged center upgrades, environment. and by differentiated where have scrutinizing seeing, customers remain overall accelerated wind has as early-stage to we more pre-pandemic reflects growing portfolio initiatives, as by and some levels ever budgets we well XXX certain this we the digital entering We with had believe above quarter data the cloudification seen spread While had. this most and well the cyclical customers which we our projects large, remains Juniper as closely well as importance opportunities, such for as momentum Bolstering surrounding transformation certain and tailwinds the we is year. XXX the line momentum new

focused not also results believe with Our we we enhance only our to each investments center and data organization experience, while This and, user the but solutions on area double-digit modernization dramatically First us made network focus is customers year-over-year. which, particularly in go-to-market with consecutive cases, We growing demand along to transformation initiatives our revenue growth, in we we've capitalize and wide QX, of enabling call differentiated many achieved continues and resonate strength is Experience delivering our across truly customer third simplify scaling digital enterprise of end the share Networking that in revenue our enterprise, serve. on record will confident campus, a orders remain in what continued of on operations solutions and enterprise true our the the that from valuable that markets Kaddaras, mid-teens year-over-year competition. I'm we and insights Officer, quarter success. business, new portfolio is Chris saw experience our will accelerate Chief We bring Revenue further and shift

increased accounts top to remains and cloud amongst of the of providing diversity an for any that consuming be as five with in their competing could increased from long-term deals XXX-gig this result cloud customer positive XX% also future on and in lumpiness that of additional cloud of tailwinds reliance our are and and diversity cloud growth continue data are performing, one I cloud increased customer important this well upgrade development and customers reduced during potential improve. past vertical's is large our saw momentum view additional quarter. we navigate announced majors purchases center encouraged likely business several any continued prior as to supply deployment I this confidence our are delivered four The opportunities periods. solid growth large year-over-year. and forward we QX ability spending. large-scale are visibility by our as in high. strong prospects These previously Many in growing are we customers Our to revenue revenue revenue business growth multiyear builds results present that early in

We and the capabilities scale, Our provider service QX, to customers, our I'd consume about provider and capitalize provider confident also routing XXX-gig the XX% ability and our efficiency big market make business with opportunities our customers enterprise tied and new digital we services results to of macro we believe key strategic adoption represent the conversations to metro tailwinds over purchases, that initiatives, soften. as present for rising service emphasize on even durable sizable several and feel superior we my service business initiatives good remain on year-over-year. recent at broader like to market. automation regarding next revenue cloud strong our clarification where ability these and in Based business our transformation prior customers delivered portion to with power event to in the conditions grow upgrades and bring cloud traction network continue solutions the cloud-based metro growing that opportunities of the years, with will architectures. our

supply, along our share. remains with focus we secure our top to and artificial the products actions and And reduce to ship ability to given leveraging built, automation on shift we've line also our backlog the and more regarding overall more intelligence healthy. are outlook confident to we've now incrementally truly taken customers. opportunities summary, tools software and cost to demand improve creating differentiated In We believe is network operations

least a XX% at at to XX% in in revenue margin remain XXXX revenue non-GAAP result, profitability least XXX we operating points XXXX. delivering improved year-over-year focused deliver As to XXXX. by approximately expand X% to in year-over-year growth expect We growth now expect on and and basis

the strong and quarter the Now in key growth such Revenue QX the to saw into our to time exceptionally delivered developments continued solutions some like LCXXXX Trio with strength I'd provide WAN. additional particular the double-digit frame. the with family across automated seeing all year-over-year a our the product address perspective. MX We from as Line insights Card and perform we're in some products verticals MXXXX Starting customer newer well. results X-based customer of where MXXXK,

now cloud for nearly strong cases area provider our MX, products are have continuing see wins our XXX We to across with service products. wide ACX and for customers demand and PTX and XXX-gig our use

ACX strong attractive and portion Paragon automation plan for quarters market. our another saw software that quarter in service and our portfolio, metro also automation introduce will this to of hardware future We in We new provider position of suite. capabilities cloud software competitive order further growth the our enhance

Our and growth saw than cloud-ready franchises also due data successfully these center QX deals new growth the we revenue continued year-over-year with momentum major also accounts strong with accounts. to saw a double-digit cloud $X generate in strong year-over-year and strong greater remained solid million. with develop momentum as Orders to

that our span cloud are Our resonating accounts. XXX-gig service in XXX approximately have solutions secured opportunities solutions and data enterprise now provider majors, center data market, switching center the across and

approximately build to continues on basis. doubling a leads pipeline sequential Apstra Our qualified with

every pull-through which healthy New logos momentum, for positive indicator dollar hardware saw seeing of and software, is we're future growth. for a strong

the options to I'm our Customer about cloud-ready ability And the several of Freeform, can opportunity. our customers and market we this address, capitalize remain which outlook high. our given on attractive the list provides expand interest for we've already more recent wins regarding deployment over the data With in optimistic within we and flexible Apstra center Abstract growth launch next optimistic of secured, data potential the center portfolio years. the remains

choosing rising the continues than portfolio year-over-year, the time quarter Mist during rate with sales market annualized AI-driven rate is of large a Mistified provider XXXX. saw growing of access, wins business We we both traction of provider order with year-over-year. this QX XX% and/or Juniper universities via Mist health the and and more encouraged was our the which year-over-year driven a we several the a we're service $XXX in run for meaningfully frame, by in by and This outpace managed This global as customers, AI million enterprise remain surpassed On top Our orders XX% provider, provider, area and access, segment around top a led global business, and world. cloud. record switching. international AI-driven Notable our orders more enterprise largest US, wins, AI. revenue to run campus SD-WAN last care XX Mist US which those strength seeing and with the the wired full our by the basis, up energy wireless grew than WiFi a edge materially revenue is combination which include an large define logistics the mystified QX especially from stack products EX disclosed for branch security of XX%

product This operations. a to and and SD-WAN wireless, common in indoor the amazing indoor industry-leading continues in new XX save retail more continues with several saw services also a via including innovate quarter, in large combine experiences access renewal new provides insights remain industry to new enhancements product, of deliver time to to these aggressively a with as user groundbreaking location microservices account. AIOps sixth-generation Marvis Juniper and that EXXXXX, the highly money, areas by experiences managed from wired, AIOps breadth differentiated our even cloud and We resulting wireless networks. with client and announcements Juniper this that when into AI-driven AI-driven insight exciting features to automation, Fortune switch, evidenced cloud. client full location all deploying

operations new a features Juniper and announced partners. agility bringing customers of service, that and options and flexibility, facilitate consumption to we addition, as more Juniper network and AI-driven even insight the In payment

areas And most We're XXX research taking two position key their prospects Juniper distinguished continue leader wireless we where like to Our the wired stronger. third and as indoor Gartner, share market enterprise parties fastest-growing the outdoor wireless respected recent access market have for enterprise been recognized as the be who infrastructure the in Magic and location for most services. in Quadrant AI-driven in in us vendor never by report. recent LAN Group such have wireless,

the As enterprise key the in of Juniper be years. our enterprise remains to expects a and AI-driven a catalyst coming result, enterprise go-to-market a in promises for efforts cornerstone growth the

present next which due to QX the deliberate upfront few shift appliance software is from in to to a quarters. model, declined over revenue headwinds to likely revenue security sales ratable the subscription Our

saw which our to our strength as XXXX, see confident We in in has in also Security to Director we cloud well of already security software the we strong time While a single second as the to during framework grow center some high-end and in architectures. on-premises the year-over-year of manage edge security XXX of to the software their help offerings. customers. We Trust by whether expect Juniper's and connected security QX our This revenue whether Zero in is the business lumpiness data to to midrange total launched Customers our business, we and frame, firewall our migrate Cloud saw half experienced platform related account or software-only ratable in in continue at provide or XX% more cloud, as value or and the essential build this more appreciate momentum SASE firewalls, all to portfolio platform policy remain than growth XX% return software for services revenue. revenue. total QX and up which to strategy customers

seen Much Flex the Our annualized due off-box renewals our deferred are are than from year-over-year. for strong, recurring ratable to subscription total component attach ratable deferred of which we be a revenue on subscriptions. the truly for our software, offerings truly XX% solutions, with another of as software-as-a-service sequentially Mist. momentum can more remains which increased to XX% the encouraged quarter We services software accounts by XX% and even business momentum our and of mention to Services solely of and this faster, Mist security customer in and software grew subscriptions revenue, strong rates. due The we this and for which revenue, Junos-based seeing and outlook such software record half year-over-year demand year-over-year grew delivered I'd yet believe the doubling team consists strong that related our basis. like

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

opportunities our their automation and customer well cloud margins. for will dedication, continued our support creating Our now and call want and the focused stakeholders. extend to essential I to insights, thanks who and to results. revenue extremely to partners to continues over my shareholders especially is success hard benefiting execute organization new customers, through like for on services also is employees financial quarterly confidence to value in Juniper. delivered I our and I our driving which would Ken, thank work creating turn for their discuss will and

Ken Miller

range good by delivered on afternoon, $X.XX, record due were per also We higher-than-expected which the Thank in color and you, above our during third range Non-GAAP was third and third of our will results year-over-year. our and XX% growth our expectations gross earnings quarter Rami, in billion Product quarter was XXXX, $X.XXX discussing the in orders share above quarter. outlook. revenue, some at revenue of to start everyone. with end margin. with revenue I guidance and guidance line our the

times over have we As of experienced from the chain a to an strength to in decreased placing XXXX. course past industry account orders challenges The at of third customers ordering pace order reminder, of accelerated for related the accelerated year. the extended supply quarter lead impact

over We expect this time. continue to dissipate to impact

growing the year-over-year. due product continued basis. year-over-year, grew orders total the year-over-year in adjusted total While to difficult mid-teens digits high-single declined comparisons, orders Strong demand enterprise in vertical on orders a with mid-teens

due sequentially declined improves. but decline improvements further elevated, would to remains supply backlog backlog as to expect supply. in Our We

with XX% XX%. Enterprise up AI sequential On Cloud-ready basis, data XX%. Enterprise a XX% AI-driven automated Cloud-ready revenue the center basis. quarter in of and increased on solutions solutions growth a and and the driven WAN verticals. Automated double-digit customer data across on solutions customer We center was pleased year-over-year very year-over-year third balance revenue solutions in a saw increased and grew WAN increased XX%. are XX%, increased sequential We all revenue growth basis.

customers the five quarter, customers. from margin first sequential two a customers XX XXXX of our revenue and our to our Looking provider digits our basis. versus XX% a total vertical. guidance, revenue XX% last million, time, and million, at was Provider compared was grew which business primarily enterprise service our volume. In for year-over-year recurring double reviewing of Non-GAAP of were top XX% the third and Annual revenue related chain approximately Enterprise by increase three last The came services to down for This year-over-year. XX%. grew as increased top on XX our cloud, grew result lead revenue in sequential year-over-year. above the in of year-over-year. cloud our the vertical. gross quarter revenue higher service provider enterprise quarter year-over-year. year which XX.X%, favorable All revenue with revenue software due On ARR, the increased was of and for XX% XX% a verticals record and XX% long cloud and $XXX product increased to Total security Enterprise an continues revenue, $XXX million mix Total times supply third was be Service was $XXX year. and basis, was or XX%, XX%, and midpoint and elevated costs. XX% grew constrained were was

seen which higher the end third operations increased expectations to in We not XX.X% supply on gross If $X.XX due quarter XXXX equivalents and would supply. reflecting the for and we non-GAAP million revenue from costs, cash expense those quarterly of X% margin have XX%. was of headcount-related operating compensation. non-GAAP quarter, $XX the of the the at we of posted to higher-than-expected and approximately was billion. have was gross variable Cash Operating investments volume our sequentially we and in basis, year-over-year a above However, chain XX% Non-GAAP that some flow dividend dividends, $X.X margin due per million. improvement cash, elevated of costs estimate Total a share. paid $XX for margin. was primarily

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

levels. increased resolve supply We chain continue work to to have and challenges inventory

these with into actions, enhance elevated closely resiliency persist XXXX. will to mitigate disruptions that We costs effects our and of of suppliers further times extended our We outside with and even are the working believe our control. lead

to of this believe semiconductors dynamic, our components to sufficient access at meet financial supplies time, forecast. and the will we point in is other While have we situation

For midpoint be XXXX, forecast, gross quarter Non-GAAP year-over-year by margin the is approximately an see to we driven to the the of demand fourth backlog growth is approximately of billion of at outlook. our XX%. revenue our supply expected expect XX% improved of our which guidance, of $X.XXX strength and

Our assuming non-GAAP earnings $X.XX, approximately million be $X.XX per of share or expected XXX plus count minus a shares. share is to on

some additional global XXXX. current provide our would regarding environment current for outlook color macroeconomic to poses like the some While we uncertainty,

we momentum We and seeing on With for supply, the gross or a our revenue margin non-GAAP expect full at basis. visibility on of current year to well expand are for basis. XXXX we year as see an opportunity growth in expectations slightly least order as X% stabilize a full backlog

operating this to in at points However, revenue expect constraint mix see to basis to historical expect XXX this revenue expected this a year on full costs, earnings expand as will depend Non-GAAP future supply elevated margin modestly digits time, are With XXXX. as but grow related per well by trajectory mind, we improve in over expect to the seasonality levels. on we time, in non-GAAP point to remain we double At least to share in basis. XXXX. which relative of

be the will impacted seasonality may and vary availability historical of supply directly trends. of by However, degree to relative

margin throughout expected course year. constraint-related be in As the Any the is lower supply quarter first toward to a related our of the improvements reminder, of the gross volume gradual half costs to year. in second be weighted seasonally the tends with improvement

to operating growth, Juniper's plan team financial commitment sustained margin not improved for continued objectives would I revenue expansion to and In thank earnings long-term success. time. to We changed. have our their like closing, dedication Our over and deliver

I'd Question-and-Answer Session the for Now to like questions. call open

Operator

[Operator Rakers Wells gentlemen, question open and from now coming Certainly. Aaron Your first floor questions. Ladies for is Instructions] from the Fargo. is

live. Your line is

Aaron Rakers

think I of the Congratulations guys. I Ken, alluded flat of me and execution. expectation you, to backlog correct was what through to had remain half if quarter, you quarter, on year. good I last the the that Thanks ask kind wrong, wanted I'm Yes. an great guess calendar would back

expected. fiscal helping bit How you and how to will, as maybe quicker like drive or recognition do just XQ, you a kind chain your that not kind is move loosening sounds of backlog, it of expectations, than XXXX. but for is unlock the can supply you kind through this So if much updated Maybe previously that also here forward? backlog up just expect into little trend dive of year, supply of you we

Ken Miller

Thanks Aaron. That's Yeah. the good question. a for question,

built So and and an revenue high next yes, bit this predominantly extremely great we quite quarters. result several $X.X of still in visibility, our the that the did number revenue great really $XXX to down backlog enjoying as bit, past, also and year. relative still the demand a saw you we the million over declined supply, And And was It a quarter, in approximately honestly. well. past of to we're in factor a to a lot billion, raise more decline raised QX guidance that backlog

a bit a of supply period or of to So in mean, start backlog improve. this bit levels is demand time. we in enjoy little should to normalize at over better decline satisfy honestly. supply long were That hopefully, expect are more declining these likely would point, we quite backlog backlog continue result as blacklog to seeing we over than past. I at billion customer I QX do the At volume little in sustainable, a expect to and I $X.X not a time.

be next it backlog beginning a year, couple the likely year of here you to of by still surprised year. throughout not decline point as quarters. elevated, but extremely I'm I performance. do some as well And see to to we'll the I decline start we're the the and expect next still think think the up backlog, So to at compared over

Again, I down which but will it of of Our next I exit times that levels elevated will year at would elevated significantly – backlog, enter some expect hope at kind see and lead that still for we'll next record of we normalize, happens, we're off I expect supply or I come normalization year think now. level. a improved matter,

Aaron Rakers

question. one stick Thanks, the Ken. I'll to

Operator

you. Thank

next from from is JPMorgan. question coming Chatterjee Your Samik

is line live. Your

Samik Chatterjee

going remarks as squeeze – the can look But we you're more guide wanted trying one the second the the just were scrutiny in did expecting? first margin and fiscal you I is bit more, I about sir, seeing for a you to to taking gross supply And think which just of earlier than on here, And does start you trying visibility XXXX some enterprise for about here, think a of well the my I Hi, sort your with, which have about modest but that in and into margin drive to in lot what baking discussion your potentially seeing probably And what guys. cloud to wondering, from What to one of market you. I you sort had evaluating could question. that cloud into for prepared customers. mention that, as if guess macro? next Thanks I year? other two there's for from as could been in potentially customers provider the service of provider some vertical? Thank vertical to upside what response drive know, a like supply are from broker on number? terms service spend that in, gross the that upside what back number? seeing

Rami Rahim

gross for start a around little I'll to with question Ken thanks and the So I'll margins. bit it pass to question. talk Samik, then on the customers, about

I healthy mentioned demand the prepared remarks, for our as quarter. So in remained

into that had I the above we above pre-pandemic remains entering expectations year. think it It remains levels.

are demand If bit different color SP of think two cloud dynamics you little segments. of those a between more do versus bit little about enterprise, want sort the I a

year of a ordering at amount starting don't Cloud that normalizing early look happening there completely normalize. but was I to normal it's just And SD that's first, normalize. all, ago. and huge think at if I it's was starting to to a -- So

to demand, and year, if we a enterprise, happening was give to you of was both positive following year. that the Cloud feel think next you raising ordering some And especially about doing year the think SP differentiation, combination reason, In our there's component our that why ago, the I that as great as think growth, just right much a for in it's there both, And but is. growth us in and now. there see and was look our competitiveness for SP market at solution the do AI-driven good want nowhere I outlook are enterprise. for so a the the we what Cloud. visibility to have in happening enterprise, a into near early order orders order well our offering, revenue. so of and mystified why view And great really continue of mid-teens think very that is execution, I I and also market is

Ken Miller

And margin environment very everybody, it's unpredictable. going perspective remind XXXX, have to I'm to Yes. supply gross a a from for challenging still world in chain and very

will. fees So when to margin for next gross from improved think do expectation I and we transitory But some we're of down comes do costs, see I the I of is modestly cost, gross timing to expecting if believe stabilize plan than the prudence. upside opportunity it year. and in really prudently A an have The should and certain margin those level wanted to expedite freight these forecasts, lot gross come down, when a the and they going margin. a margin have on next want we of year. that's to I the question depend quicker

Samik Chatterjee

you. Thank

Operator

you. Thank

question next coming is Your Simon from Raymond from James. Leopold

Your line is live.

Simon Leopold

Thanks I product or your you maybe us the are on assumptions see revenue. could insights XXXX what if thoughts mix for question. your wanted give to taking for

how expect of it give to the maybe But of rank order sense to segments can sort perform you reported end of you a understanding So, X% us your if that relatively? growth. low

Ken Miller

Yes. question. Thanks, Good Simon.

indicator So think best the model. I would probably actually be our long-term

model likely long-term model. the But outperform from still think at to pretty X% Now the least basis, the a I number is of much relative applies.

by to and enterprise expect the would be be service then vertical. rider I our our slowest-growing cloud vertical followed So fastest-growing

enterprise followed perspective, lead perspective, to cloud-ready by If solutions in add customer center at data growth a the driven would you look automated an way expect the I from WAN. to

we do relative And this I overall, next outperformed those all So from the have in an the model will but think company still year, all as hold has think the to a to model the I I But year. verticals, relative perspective, solutions well. outperform opportunity results hold. the model, think

Simon Leopold

as for just And Thanks. a down EMEA year-over-year follow-up. very you. was quick

business seeing Just whether really that? your pressuring on Thank like or the region in you. macro exchange that shifts not you're or foreign anything

Rami Rahim

it. there really I this that than -- say take say, weaker EMEA patterns, other at would no is time. in I'll point nothing are regions Honestly, would

was deployments of EMEA and I to time timing that was think of the performance in in that ship to more solution. frame our ability product necessary related the

a deteriorate. anything now, keep for obviously we specific EMEA. not But very honestly, So in do we're eye close sure things not to make seeing

Simon Leopold

you. Thank

Rami Rahim

You bet.

Operator

Thank you.

Your from UBS. next coming from question Vogt is David

Your live. is line

David Vogt

Hi, love more conversations cancellation Rami, your point backlog it's when they that early sort would customers Any about us quick anything Ken. Hi, I on shipped? your follow-up rates a is of you of kind of thinking Thanks. point, it's then question comments guys. this that. that us but this perspective on or being the a any of with Thanks that low. how a different you've revenue what Maybe backlog little went how is than historically. about cautious. get commentary over seeing period? backlog about think share to customers. and converts just had I into or know maybe from although to go-forward kind maybe share customers you're your can quantifiable it's terms from with just atypical, you're in on you And at on you Rami. could I know that been bit But indication

Rami Rahim

Yes.

push-outs, have any to the Let is first, times been Ken. And but time. second The period that atypical the there project no. this push-out cancellations, in hand I'll not over well. in of normal question and of push-outs, also We're with are part are cancellations, answer a to, there few start there at me seeing nothing it as

So that for are going headwinds, on macro-related we're happening in are terms how the seeing there's is again, that patterns. say event few on there that nothing outside things things customers. more to this think that keep with ground, very close we evolves. the is eye I'd to of I have normal we so a good In our have what conversations, ourselves. the And a just projects But and market is so far, obviously where see

the do better unlikely -- of cloud foremost, others. verticals can view that will because impacted our verticals there that some and be equally, across of we SP, these diversity and rely enterprise and my than on it's in First business all

the types of that running likelihood customers we're all really think would our that around reason, network for And solutions the higher solutions. transformation fact to the efforts I that our multibillion markets, cost future, projects relatively the massive small even share the solution of there's any the time. going confidence example, have for of well are sort AI-driven competitiveness digital are protected with quite happening. our in actually do think take, a complexity in offering there and we enterprise dollar I that can such The give event be period that that that of be we that resonate that through is reducing in that these me headwinds, all of

Ken Miller

Yes.

for few are, getting their cases, to place of mean, want than order. surprised a we customers lead an able quarters part, the most months, not typically also products we not our several I the provide so in say, after they it it. I'd times, backlog many earlier actually they're that ship order, if they On conversion, aware

the than in currently four to expect period have kind time. of to to we the would beta I three ship now, and of it our are that get customers trying majority be So product next will quarters, vast phased over of The to able we're completely the quicker in deliver.

takes we a supply improves. entire we the that given expectations can with quarters when are few customers' So we it lead doing turn our the backlog accordance have. accelerate to us best orders times in the to the But for

David Vogt

Thanks, helpful. guys. Very Great.

Operator

you. Thank

coming Your Suisse. Sami from Credit Badri next question from is

line Your live. is

Sami Badri

terms I you. moving company both your how way et when pricing Hi, XXXX? and trying And kind thank how that numbers. of actual to we're been much fiscal bit increasing cetera, like wanted but of into different at XQ of RFPs, understand customers all And a make I finally pricing really every different increases pace, a offering XXXX? guess, price their the products impacts impacted these has has on to understand little of products effect the and

of the part question. that's kind of first So the

or amounts in right, units, number we looked single just part at XXXX, just second and year at the is ports, your we devices, an include look pricing X% greater being on guide mainly of XXXX digit The units, appliances, doing. if revenue via get does of just or increase in that idea fiscal of shipped, units kind is achieved is to growth Juniper high how

Ken Miller

Yes.

we've seeing past we and performance -- It's are the it's actuals QX expectations and impact – actually an over over for pricing QX this the time. actions few from for taken year, quarters. increasing So

as we the But we that's as year, in is not revenue results. to you grew vast particular, well larger growth. expect would of as based. impact product QX, I holding caution XX% the as revenue was I unit year-over-year. It's share. this than And driving The -- market in year really larger the would be saw well impact up It's So majority volume margin. that I in is gross impact on taking in QX's next significant these this showing QX. and pricing saw is mean, than QX up

play more would we be really if force. that role a pricing the be majority, if is believe you driving as significant kind were year, the to of volume volume, our outsize see if that you'll volume would able I closer to result supply, will, more the that with see more the – -- still you in but revenue range, overall the Next to X%, low we're inventory, end number you'll of

Operator

you. Thank

is coming George from from Notter question next Your Jefferies.

Your is live. line

George Notter

Hi, guys. Thanks very much.

Going the margins. back on to discussion gross

margin how of from supply impact fees, thing. supply get the gross XXX much guess, the chain going about to chain I'm I'm of about I curious much of here results. points Ken, wondering that environment off alluding starts in that that forward? better came I to expedite fees, impact broker fall sort QX think, basis how might just you're of as

Ken Miller

Yeah.

would kind range XXX of that it that little or broker of extra fees XXX the to it's to range, XXX purchase of kind a the So performance. XXX time exit paying normalize paying get is earlier that, is want on more the QX in but basically of it bit part. otherwise was whether basis short And for points, products we or markets we if get or variance, you delta than majority that to were price

majority. So the that is

in is that believe number elevated to The we are other compared freight to factor normalize costs still where at. they're going

to numbers supply-constrained we the customer in I I like environment are do in of a and that some going long our are times, big think lead with those improvement satisfying the very to to the still delta. two next year. see still think demand ability. we'll we're So would prioritize best

don't soon. believe I I take as go early entirely away get some So that. benefit next sure of the think But see just next as that particularly could and comes. it make we it's those to or anytime I to too time we away going year. we into second half year costs count do want are But on to go really,

George Notter

flowed therefore, component some a follow-up that. kind level of of you at which I a market point investment components know big rate pricing? go inventory have of you to more a quarter guys that just through a will there to of on know model? in made And Is back ago. the I

Ken Miller

us So -- we or about? and from price a component talking are costs to

Rami Rahim

at stuff cost. of bunch a bought I

Ken Miller

Yes.

it So sheet. we'll ship will right? inventory elevated and elevated, And we it, to continue pay cost been if to be that the on I our has able when mean, will turn think have we're our balance I

is paying go same we costs to is a if future, our customer The not those demand reason the ability. The satisfy we primary we're just pay the exercise. resiliency of to won't supply cost. up be So – clear, is really not for of sure good supply and though, we'll news can in the really carrying costs. the components, to have cost-driven some it It's the best in inventory. getting for about be and making

Operator

Thank you.

Your question from from is next Stanley. Morgan Marshall coming Meta

line Your is live.

Meta Marshall

and kind difference your Great. what terms hyperscale to between just Thanks. on your get a versus of I cloud sense in you're demand customers wanted you're seeing seeing from the what from you of you cloud there? influences just kind that of X how also, Tier XXXX? new if at given into and And how that anything had to Thanks. customers a note there's project look just ramping, maybe you

Rami Rahim

last Meta. the WAN our had our data very more wins question, also also year-over-year. hyperscalers. Yes. segments. to And a type The solutions segment, more in few selling the is broad. Tier and wide XX% we've and growing technologies is our a the on alluded It's Thanks cloud great strength into remain automated few area I of terms in the solutions, that broad QX we're at It's it cloud the provider is X we that We've quarters. for Obviously, majors. had transport in bullish wins. in that center cloud

deep seen that center our differentiation strong new the wide maybe And SP is wins as we engagement but well. as the I at remains also with that XXX, existing even In level, across we're level enterprises cloud think a large have. healthy. speaks projects. and around data opportunities few then across cloud, fact, engineering and where engaging board to roughly area XXX-gig in the adoption We've now the and new providers the well exceptionally as XXX-gig very in engagement

always but have So, to ups think to direction all-in-all, I the the general and up and be cloud downs is its had right. going should as

Meta Marshall

customer doing like a But are you're that how understand those them. very about within your budgets? just how well from customers cloud -- general feeling their I

Just trending their their or you're kind how are trying get to trend? a of how sense just of seeing activity demand budgets

Rami Rahim

In that are for think terms most of the us, projects meaningful good. they're I feeling

up those to in their long for which with is well, the quite are demand provider then the As well, cloud need to to they as invest all doing going cloud network infrastructure services. doing business keep they're

it's say would I speaking, good. generally So

Operator

you. Thank

Your next Silverstein from Cowen. question coming Paul is from

is live. line Your

Paul Silverstein

Thanks question. guys for the taking

of got center clarification you've Did Ken and then a a intra-data if are that broader XXX gig I've which First, XXX, heard right? correctly, hear you clarification, and On wins, question. Rami, switching. XXX I

Rami Rahim

correct. that's Yes,

Paul Silverstein

macro wins? question from broader then And quarterly what's I've the forward? with us what's a basis cycle Can XXX-gig are And decipher number of the sizes going upgrade the you terms share a on growth in you. or in what been for deal got trying of the to average the annual growth

Rami Rahim

question, quarter-to-quarter. And because a So, initially, off number all so don't these an to going be typically, They're Paul, not large in are -- they typically continue on think in the I meaningfully they're generally probably the It be are it's large added basis my we XXX they with that time. quarter-over-quarter wins, fairly I because but head. know then of -- and speaking, a XXX-gig grew start good top they going deployment necessarily to projects. but from the or just initial

last XXX and sold or The seen, WAN in vast whether WAN it much thing still -- I'll deployed being center still days, as the is we're say the it early So as innings. gig. and ports of majority are that be the we've whether the the these data in progress about or data center XXX-gig, in be

from transition happening process that from is still We in the of XXX XXX should benefit continue So it. right to gig to gig now.

Paul Silverstein

coming to given you it so, given sounds referenced nature said market, But asked fairly reported you, that I that et they not customer you? that might the they product may. America, XXX-gig number referenced to in – just tonight of how impact am or seeing clear in its And of the in recognize the respect for US, projects future, your much order previous adoption. broader was referenced terms And the a they pretty alongside like it extent, if particular, you be not it to Rami, what the abroad, revenue with North to downturn meaningful clear, delays. of and seems to My of will innings got indicate but projects, for and specific so to customers, say downsizing on be clear, I your but abroad, what said, questions, pretty terms the significant, pullback, cetera, whether I I your to early is trying assume downsizing it what I but to the commentary of book, breadth what significant of depth number both just question they some plus FX ask and numbers, – whether very don't I relative behavior in question, a in think they're you, your for delays,

Rami Rahim

Have customers the thinking but been Yes. some are budgets I been has mean, that been say nothing that we projects. time that -- there line more projects canceled? some their and all is that about there Yes, been of we No. canceled. There's Have projects see there have are can delayed? answer this honestly, well. Pacific anything not same to seeing point Asia would or much versus is of sort that's worldwide that as that more in of there North more The we the really And It's than America? see normal EMEA we're question like at times in in is time. kind geo-specific no. certainly

Operator

Thank you.

from question is Amit next coming Daryanani from Evercore. Your

live. is line Your

Amit Daryanani

taking for the to back to Thanks I guess just question. my said what prior I maybe think you question.

are You at are is much talked -- that also about budgets, networking Maybe least X% bogey. talk enterprise about, that growth fiscal versus yet in XXXX I you can just think of how grow but fastest pronounced companies enterprise the will growing picking in if the are manner. talk gains seeing the versus where share a happening? you more just at share? And you Maybe share you gains up

Rami Rahim

that is once we'll enterprise share And only And also question. the an to my great strong know sure happening a is and revenue actually see that's this versus the that's the to they But reports are taking what there share and share there's orders because enterprise. to taking in component So analysts obviously, feeling revenue. extent for obviously, revenue out. track we're

in the to we markets our center think believe AI-driven have healthy. very But data well. offerings is enterprise solutions that that I today as also in some I the and we're -- are across be market competitive appear there participating

I It's solution. a pipeline my the $XXX time rate reported in You and revenue prepared million. myst It's heard enterprise order frame. you is that's and cloud run architecture just our runs AI-driven that Wi-Fi. mystified QX in across and in about of if wins, our we at of an stack. crushing We're annualized longer The is mean XXXX and our me was full And no selling that Wi-Fi, lot look QX wired delivered at last now $XXX remarks, time stack it. We're selling SD-WAN. full an million

we benefit just now. of that. period for I I the think have going a from remain it will right time. we're exceptional And differentiation And to exceptional think is

We are benefiting from that.

Operator

Thank you.

Your next coming from is question Alex Henderson from Needham.

is line live. Your

Alex Henderson

Great. Thanks.

of you think, whether the could change got a the a Cisco company Mist you've to as clear time, And companies at to and see architecture the this I in strategy on company. that you have to any you've strategy. I look changed being that bit business and about between follow lot a the pivot data decide think you to And well getting providers. to a and to made a it on to you're guys talk area proven gone driven service your dynamics pretty upsell. if product, competitively, point when to entire all been have obviously the really major introduced strategy. same don't execute whole to of It's competitors beyond it's was in even instance, buy-in strategy enablement that platform suit that, drive as differences across effective the And is for pretty AI little But seems to and the the because AI taking follow your capabilities employee and run open seems people company-wide to the I of ability by with broad executed. home me the of able your I over for could think done at I one metro of the that to like, this it making acquisitions for going moves out that's of this center, entire terms WAN your announce the off drive cloud-native that the you're taking microservice set wondering suit premiums

Rami Rahim

and the Alex, excellent insight. great the thanks for question

and taught very of on with valuable that's to a We've the cloud-delivered with us AI-driven some new to automation automation it has level strategy the really take lessons take I enterprise that whole and strategy. in how picking and AI capabilities, and a think had at you're important. enterprise always right, up AI-driven around being But automation-led. Juniper something you're a the miscomponent

first solution our customers, automation So, selling made example, our we're the in we've cloud that to for now and metro AI-driven.

have I same potential do think we well. the to in the the center exact as thing data

to happening described sort more And broadly. a We've exactly we others. learned Juniper. better segment of lessons applying need and is what one them what's to do valuable from So, communicating in job we're that you've at

I think it. that's great feedback appreciate I and

Alex Henderson

anybody it's you else -- you similar to or -- can whether whether about a anybody else Competitively, Arista, talk it's your HP it's or whether able execute do see strategy Cisco?

Rami Rahim

there AI-driven think more solutions; AI-driven tend our capabilities vast customers sell the honestly, more cloud because time. The an we we majority win differentiation and fun we to add our the is is to today anything to delivered And a I give to where competitive the ourselves. opportunity to compete of of

Alex Henderson

lot. a Thanks

Rami Rahim

Thank you, Alex.

Operator

Thank you.

Fish is coming Your Sandler. next question from James from Piper

live. is Your line

James Fish

given quarter guys. Hey Nice the environment.

putting too without if there. kind in of made w backlog this Ken, of getting of on digits a some year guys but I to kind continues from hat flush prevent of with in the You function you comments supply better, double chain the growing is step that would Juniper agree much actually? you next hole And it some improve here, would

Ken Miller

in nothing the digits we reason see to year given would growing X%, than nothing is at I chain, going the at differentiation north is perspective, back backlog Really, at customers see There's given model at I supply floor with be the least meaningfully from supply great this is the part our and least to next would And and we my the Yeah. want and we enough. us year. I other the the – increase chain really this sales the easing mean supply a expect, demand the supply constrained time. we us say, were at digits. reality execution, of with the why prevent we double have, at or if have holding prudent X%. be that's to double year from it visibility next X%

established not point. at a this have viewing We

Operator

you. Thank

Your next from coming from Fahad is Loop Capital. Najam question

live. is line Your

Fahad Najam

probably half? And are seeing Is because my impact little Europe? Rami, than more question expand security. that around in maybe my in the on is your pronounced business what budgets Can taking for that It is first of maybe something question. were bit. you second a seeing? declined And is impacting half you some loaded security Hey. that security any Ken, you're macro? in Thank you it more

Rami Rahim

Yeah. Thanks for the question, Fahad.

is we're in business. the there's that Part last is me which It the let first seeing decline we're security part has of don't no, I Juniper So subscription-based appliance-based model with that deliberately answer to more revenue. do think our it, an that geo-specific with self-inflicted. anything software-based and the of that's executing recurring right transition will of now on to a come model at from

of that there's see to more of our all a We buy large which through to the our to a security customers start in tends lumpy. so be solutions we in see an to strategic is our least the that from said going will before we half the embedded our standpoint. element There's security that we and that we security be period component for particularly of headwinds time, that at way buy And Having was security reason, There there's We're sort integration QX next of or our high-end we and security, that, just that starting measure high-end – to recovery. until second get are AI-driven at that. believe we success for expect customers of security weak that, sell the high-end either security look the of enterprise component. ongoing another into is solutions. that a and have more year don't

to our let we're transitions, customers, some that these to of as capabilities to in need that – have be from of data strong It's also to important in product let is having increasingly security play just software – particular, going see that of sort some we out. believe also hardware we're to our center transitions to solution going we're to and starting We well. going

Ken Miller

take we'll Operator, more two questions.

Operator

Certainly.

from Suva Citigroup. coming is question next from Your Jim

is Your live. line

Jim Suva

become early component constraints, given Can in does about great Given you XXXX earlier was for supply us increasing seasonality in more A exit of that? we XXXX, easing success I the and seasonality. on your as know the had orders little give XXXX, backlog success, with if Because pronounced less Thank coupled you. insights bit commentary given the you've made little backlog it's a chain? I wonder

Ken Miller

seasonality degree see bit. be that mid-teens I could great historically, I question, do point, see to QX that expect lessened Jim. to early do to I on it's QX. I lessened to mean At point the we've think I too a you Yeah, sequential we this a at is seen the decline expect And a think from a that do decline kind valid. of sequentially and seasonality, be bit to some but a of a a seasonality your in little there from do see remain this business it's being revenue point, but basis, I call, decline little some a perspective. possibility some but of

Operator

Thank you.

Your next question is coming from Tal Liani from Bank of America.

is line live. Your

Tal Liani

and to you. Thank high-level in. you relates before. have a want I it answered me to I that squeezing something for question very understand Great

risk of your your I'm on How XXXX it's And planning? that much negative understand their just of as assess surprise customers? the budgets, how nothing surprise, just XXXX work the related. across spending How have It's plans much the the much end? visibility few macro will you weakness off question there in budgets because macro, the projects, into set specific. the not is there's is So be next have the trying only to to of be company-specific, biggest future we to I more the in involvement months. is fear going into is a board. involvement

Rami Rahim

Yes.

in to our that backlog. I then especially comes designed to most with that say to to muscle that but large happening are diversification strong make competitiveness there, is is there re-honed for us change. would customers, I if, are great. visibility part, would from in fact, The to customers, we our the visibility time, close enterprise really today don't understand event that have hyperscalers, orders -- actually things that here course, change. resilient this our say projects, the be strategic enterprise, Even change visibility comes made large of of would go-to-market we're things point were see will strong. will we more the visibility see year, very will start you that we our plans sub-segments And been at These to, service So again, in that customers providers. our on for risk if doing the resilient. Again, we things very and I'd in the existing stay the of And say only reiterate that that look question, the mean recession be solutions. a enterprise downturn, our having the conversations a very there good there's in are business, deliberate the I have it's believe more Tal. that first we've if I is a with

So public be to sector End those Q&A campuses, adjustments and prepare. we're just areas I to examples now healthcare, a of making would less and changes of that downturn, prone college be think would

Operator

and today's ladies This you, gentlemen. event. concludes Thank

disconnect time, day. at a and this have wonderful may You

Juniper Networks (JNPR) 25 Oct 222022 Q3 Earnings call transcript