Earnings call transcript Q4 2022

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Operator

Greetings. Welcome to the Juniper Networks' Q4 2022 Financial Results Conference Call.

At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded.

the begin. to turn Lubert, host, now may you will conference your over Jess I

Jess Lubert

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

Miller, Chief Joining Officer; Rami today Officer. Rahim, me and are Ken Chief Financial Executive

subject and Today's uncertainties risks SEC in release CFO our -- call our with press and commentary the other to furnished statements XX-Q, X-K contains these and -- are in filed filings. today

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

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

take people hand will as question who ask remarks, ask to have With Following We a yourself limit to I over will that possible many question now please our so as chance. the Rami. a one call prepared questions. to would like that you we that,

Rami Rahim

everyone, of below thank our timing the full the call and due joining discuss for end We to were and billion supply total of you us of some to QX of today's quarter. XXXX although sales record at quarter, and on revenue the our fourth results. delivered the during midpoint challenges $X.XXX slightly year the afternoon, guidance Good logistical

revenue growth. second performance challenges, these record highest consecutive quarter. we quarter Despite A revenue achieved year-over-year a our double-digit and Cloud Enterprise of by business our second

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

highlight supply more Juniper challenged the a which year we by record XXXX, our us our environment. also our diversity grew than as Our QX of global The XX% growth a saw business was in strength despite capped Enterprise year during accelerate revenue for the chain results year-over-year.

business by we year-over-year, of high the with end approximately of business revenue Provider our our more X% each than the growth grew Cloud model. Service our grew exceeding XX% for year-over-year long-term by and We verticals, these

I by use and win our strong execution where believe the verticals and teams, we of these to results speak across compete. the to each our customer strength cases the of portfolio ability our

was than and quarter, for the overall XX% growth demand in as of in total December healthy we revenue year-over-year. XXXX, While orders year QX moderated more declining full the with expected,

Enterprise our flat were despite difficult orders very comp. Although year-over-year a

in demand a amongst moderation to This Service of by lead Provider normalization orders accounts Cloud many multiple extended quarters placed which of patterns year times. these our primarily in total buying for customers. knowing and was driven of a account requirements follows of advance This in

customers many Now prior on periods orders at is placing Provider orders these year, of half which that Cloud books upcoming are placed and significant shipping least Service the new expect and the for current fewer trend year. a the through we in continue of are the orders with to first

are acknowledge important lines that due and customer each continues, As verticals, uncertainties our we the plans world. deployment next to seeing demand economic across I'd quarters. to customers happening that closely revenue normalization several will over metric scrutinize spending of we most process be the this time order to gauge like more growth around are some the the think customer

in customers' Order to that prior low remains appetite receive our and cancellations orders to placed high. continue periods remain were

financial certainties into backlog improves. confident our our we're remain As to we in closely and That have ability factored these strengths our as the result, said, outlook. monetize watching a supply

automation simplify on the include: AI-driven and First, user our current leveraging end Five Despite optimistic my customer cloud-based macro to tools experience. remain improve I the these regarding our reasons driving prospects year. uncertainties, for upcoming focus optimism operations

be across campus superior Mist the Experience data service call Networking to we these in center market, whether to Apstra to resonate the Paragon it in Juniper to enabling provider effectively First verticals for to line deployments. in the to serve, cases, accelerate network tools are human continues customers What customer automation many achieve the the we rapidly intervention scale the network identify software and without time need cost problems for and in remediate

return us capabilities increasingly These customers plays may which is to even value tangible deliver current more an win and customer resonate in decisions. role market important enabling in the to environment investment if on

large compete, level ability to portfolio remain our differentiation, optimistic I share regarding challenged revenue markets of macro our the against environment. grow even we Given modest relatively balanced a more in our where in

quota product go-to-market organization in of our Second, since our invested headcount, take this wind the point, demand our to creating presence increased we steadily that more share, the selling generation more XXXX, enterprise. carrying our and modern on and have channel both and in market. in meaningfully and to tools we To are increased capitalize continue differentiation invest the in particularly beginning effect

to us XX% and the the in over last time QX frame. also in growing year-over-year deal our several vertical, year-over-year are accelerate particularly years, While tailwinds they to continuing momentum the commercial in provide the from XX% enterprise these growing have channel the growth enabled order with investments registration market

We in expect and this growth further momentum continue future periods. to benefit

center than wins data area of new quarterly last Third, progress we cases strong are continue and period. present these for a likely our more wins that wide see to franchises XXX-gig use multiyear revenue XXX over to Many since tailwinds constitute update. with across

is critical we are add growth to they solutions in of meet network, network projects. improving to these likely efficiency resilience the customers important are the the bandwidth, enabling to cost critical continuous for power and to also which XXX-gig think While operating

to and continue monetize Fourth, introducing our of more licenses, includes progress perpetual the to more offerings offerings better business software organization of term-based our to software-centric transforming our a stack. ratable value transitioning our model. more subscription make sales we to This training

revenue grew in XX% total QX XX% services we related encouraging time year-over-year experienced for innings, our efforts sales. frame, in and software these remain total accounts While saw the and momentum which early of the

solely subscriptions. services ratable and demand truly recurring subscriptions related strong of software annualized XX% revenue, and consists increased due year-over-year Our certain to Mist for which security

strategy we revenue streams progress our in as pull-through making software and these transformation We by infrastructure improve are of are the are recurring, many margin. encouraged

Finally, we exceptional approximately visibility to with than where billion, backlog million is providing and revenue of of us another remains backlog entered us growth. year from $X an up year above the enable levels. we exited $XXX is deliver with healthy more which exceptional This XXXX and should well historical

a demand margin assumptions customer backlog, expansion current in least of non-GAAP currently to our we revenue least on deliver X% our regarding supply, at expect and growth point operating and XXXX. at Based

assumes modestly end the only remains market improves and the Our uncertain. expectations of supply for that environment XXXX availability

Now perspective. address I'd the WAN from into key with some provide developments the customer solutions some like insights solutions. to seeing automated our a Starting additional quarter we're and of

our revenue prior This shipments during said, quarter. our strong the That exceeded fourth grew during a expectations very WAN long-term experienced business which XX% quarter the due model. our weakness following basis, of on full the high-end the business supply to of automated and timing year

new and regarding remain products. of emerging MX XXX QX line long-term fastest products to business our We card the and our as for ramping we're MX based last with XXX securing XXX one for well; continued point, XXXX the this logos over new years. of exceptionally LC momentum the perform in optimistic five outlook newer on our XXX-based seeing our To win the several automated

the Service across over PTX of perform In new than million wins QX, Our than PTX will platform next Provider $XXX to years. expect collectively more that Enterprise Cloud, and use opportunity portfolio incremental secured continues five also XX to case accounts. well more we our drive three

new our Not saw which overlooked, progress orders year-over-year metro be to we're to with than on cloud basis. double make more continuing a portfolio,

Our is add pipeline capabilities in new to to AI-driven market, cloud-based strong, the portfolio few we our and as the quarters. ability we of especially encouraged the opportunities over win next by remain automation

grew Our in wins an cloud-ready year include than on and XXX-gig revenue performance now center majors, than and full data more strong, Service a and XXX remains Cloud we large accounts. experienced XXX-gig basis. exceptional that momentum Enterprise XX% more data Provider center have QX

and Interest and freeform on which new capabilities and in year-over-year XXXX. hardware for our address both pipeline potential a address to of Apstra we we increased sequential in strong continues Our as capability, provides experienced to pull-through plan Apstra new dollar every basis, customers is and build we can options that software. expands meaningfully new a of logos will software further more can the cases list deployment expand introduce encouraging, flexible use we the

about Customer ability our given next we've over interest on several optimistic the capitalize remains this in to healthy. portfolio our secured, market cloud-ready data attractive within already I'm growth the the years. And center wins

area business, which record sales basis. XX% and led AI-driven This more our the significantly year-over-year revenue This of driven the and was segment AI-driven outpace Our with both saw continued strength full by frame. QX on revenue more campus mid-to in grew enterprise the Mist and orders growing portfolio time our year-over-year, switching five branch than by a market, EX year than AI XX% QX cloud. and XX% is in and to the WiFi of

in full basis, revenue which a year was On from in $XXX was approximately our Mistified XXXX, million $XXX up million XXXX.

results the differentiation orders driven $XXX annualized strong clearly Mist million continued with industry offerings, Mistified by recognizing fourth an and quarter on of AI. campus also basis. momentum surpassing to The Our see is branch Juniper's

was Enterprise to in wired released infrastructure Gartner's of in Quadrant highest ranked LAN consecutive We and reflected where both vision for Juniper of for was second is December was a consecutive third year. named completeness execute a for a leader year believe in XXXX this latest Magic and that wireless and ability

published XXXX, of Juniper the wireless and use was top wired of Enterprise infrastructure four report Gartner the in January critical cases. received in five that capabilities Additionally, the LAN out score

customers we seeing WiFi real heavily early as market. new and Hybrid XX AI-driven including key switch variants such side, strong continue adoption invest value in both to new are of areas which EX the that product the in drive the and partners, to XX On

to only assistance the continuing also network virtual make AI. driven Marvis, Mist enhancements industry's by to We're

traction customer the remains enterprise for Lastly, exceptionally AI-driven strong.

purchasing products year. number during two saw we nearly at XX% Mistified recent example, accounts the most in increase least For the a of

managed This which early and land AI stacked expand remains and as engine opportunities innings. highlights the well in the the cloud Juniper our and attractiveness full partners, of believe sellers offering available common a as to via we

optimistic a regarding as us returned security business currently over from as software this an for portions We appliance the with revenue advantage business be although networking of long-term where market the competitive remain the QX, we in growth the of to a we security in expect to security convergence ratable model. quarters transition believe are outlook to the we Our next and subscription few provides we our focused. pressured

at notably a single customers security to provides to the This architecture. firewalls, Zero encouraged edge the our also which in all product migrate the Security Director is interest Trust on-premises our or whether whether policy essential by data and We're their cloud, software customers or or to offerings, in SASE in cloud the framework center platform. most manage help

CRN Edge an secured This XXX we has future platform recently Year view and of sign already Platform named of wins, the was as more which success. Magazine's than encouraging

quarter, mention record growth to strong the business of attach year-over-year I'd our another Services our well and as and delivered that our renewals like business. as Services to to team due continued rates grow SaaS

remain margins of compared all-time scores our all-time the service achieved year margins satisfaction costs. points and basis record service On revenue and higher at prior customer to to better year. came up expected our new a as than highs, in full XXX lower a due XX.X%, Our basis,

through is well efficiencies focused Our and new not and to revenue benefit on cloud-delivered automation but driving margin insights also Services organization and opportunities, incremental continues experience. customer create that extremely only execute

to to like employees for to would and their extend in dedication, continued want support results now their year in our will I customers, to discuss to thank more full stakeholders. shareholders the Ken, creating which and over hard is and work quarterly our the essential detail. partners confidence value will I my for Juniper. our and thanks call I who especially turn for financial

Ken Miller

XXXX results, and color cover good outlook. with Thank by and our I everyone. some fiscal our quarter fourth our year you, then afternoon, on end discussing Rami, will start

above challenges record up midpoint was our with XX% XXXX towards below timing end We $X.XXX which $X.XX supply by Despite year-over-year slight better-than-expected of of fourth and of some a shortfall, the ended the result quarter. our of and gross of and was driven This we of due of to margin the operating expense midpoint earnings prudent share non-GAAP revenue the the and guidance, per X% sequentially. billion, logistical revenue quarter the the guidance the delivered of management.

Service more In Provider This terms customers. Cloud was buying as customers of we pronounced due decline a orders. placed normalizing orders, product expected, consuming previously saw our to with and and patterns

We normalizes. supply expect improves this dynamic to continue and as backlog

year-over-year. for declined quarter, sequentially. XX% digits orders fourth extended single the orders to versus comparison, year-over-year times, During total difficult placed declined but than a grew lead the accommodate Adjusted product more

one-way due Our reduce adjustment calculation adjusted orders ordering. bookings includes to a only to accelerated

the been grown placed. reported have adjusted have we add in added entire XXXX. we During that normally back accelerated would we've that would to orders, into not have back if of those adjusted where orders were periods future those We QX time orders orders, they believe

with of exited more is $X up million backlog slightly We than which sequentially on billion, a $XXX but basis. XXXX approximately year-over-year down

declined our and Enterprise X% Looking Cloud XX% and grew year-over-year quarter. our largest year-over-year vertical. had was at Provider vertical in fourth revenue sequentially. increasing X% revenue the Service sequentially. by XX% year-over-year XX% and record and sequentially. XX% increased

WAN XX% XX% XX% automated revenue was and XX% year-over-year grew grew year-over-year solutions down Cloud-ready a center X% XX% From sequentially. revenue Enterprise customer data and and and sequentially. solutions sequentially perspective, year-over-year AI-Driven

and year-over-year. sequentially. XX% software XX% an and exited $XXX revenue total XX% or revenue revenue, Total year-over-year year security up in million, Annual and was up of $XXX the $XXX we related was million, million ARR. year-over-year, X% ARR, recurring The increase services grew with

reviewing six Provider Service the for were In were X customers and an Enterprise. X Cloud, XX our was quarter, top

of Our top for our quarter fourth revenue XX in XX% customers the compared XXXX. of as to XX% accounted total

quarter, estimate with more XX.X% a in costs Non-GAAP and software driven was gross improvement costs. extent, times elevated an long chain non-GAAP Supply posted we which the we supply the for supply midpoint, lesser gross some approximately continues lead constrained mix XX%. mix. elevated and above our If costs, in not to transitory would guidance offset by margin be favorable which of that the chain than product was primarily margin have chain unfavorable to

investments exited cash, Non-GAAP due up We total and cash $X.X operating quarter costs. with year-over-year to and billion. primarily X% expenses increased of sequentially, headcount-related was X% the equivalents

operations Cash was for quarter. the flow from million $XXX

of Turning dividends, $X.XX a reflecting in to dividend quarterly capital share. return. million We paid $XX per

repurchased $XX quarter. in also shares million the worth of We

Moving on to our full results. year

XXXX which growth billion, revenue Our verticals, and growth $X.XXX of customer is at record, supply a the we constraints, geographies. was chain in Despite saw XXXX. across solutions XX% for impact all coming versus

largest became vertical and Our Enterprise our XX%. grew business

solutions grew XX% Our Cloud revenue AI-driven a revenue and business XX% and automated From grew year-over-year. Provider XX%, full while year grew perspective, customer XX% Cloud-ready Service revenue on enterprise grew X% increased solutions center data WAN a basis.

XX% services revenue which software expectations a Total our was of an This as software $XXX meaningful year-over-year. to and of exceeded model. we business our related and to million, transitioning increase make was continue more SaaS-centric progress in

and was Total In top XX for was our down Service security revenue Cloud, Provider six reviewing three million, year, Enterprise. were the customers which was X were an $XXX X% year-over-year.

to customers XX XXXX. for XXXX top accounted XX% in as XX% our compared of Our total revenue

we was non-GAAP supply gross XXXX. due estimate margin margin XX% that Non-GAAP XXX primarily increased of we elevated basis have would gross a supply XX.X%, of chain and approximately points If versus in mix the decline chain XXXX, not for product costs. costs, to posted

primarily X% headcount-related due increased was XX% diluted $X.XX share year-over-year to Non-GAAP XXXX. earnings an of versus higher expenses costs. increase XXXX, per operating in Non-GAAP

and $XXX of During worth XXXX, in repurchased we $XXX paid million dividends. million shares

with I financial in the and fourth throughout am XXXX. very performance, quarter pleased our both

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

first expect our quarter of billion, growth revenue midpoint which guidance, we the $X.XX is XX% At year-over-year. of

chain-related associated XXXX. well components as supply headwinds of improve expected freight costs, experiencing the which still course and are elevated through modestly We to shortages as are with

expected is to First and software due sequentially mix XX% quarter non-GAAP normalized gross seasonality. be to a down margin to

Despite than versus fringe expense typical seasonal quarter sequentially, XXXX. is costs. to margin driven operating first increase primarily points increase the non-GAAP increases, basis non-GAAP by to expected operating XXX of increase more these expect We QX

Turning to year the our full expectations XXXX. for

and Given our improved customer demand we're expectations revenue XXXX at for at X%. ongoing the product, to least from for backlog exiting solid updating least supply, growth X%

grow sequentially chain current we XXXX, This but revenue expect supply the the first improves of quarter remains environment the modestly course assumes of the to Beyond year. throughout challenged.

as as the during year. we reduced course forecast of the This soon backlog

backlog year to historical the elevated we levels. normal compared to However, exit with expect

gross While by be gross full to be year margin We least non-GAAP predict, difficult remain margin and slightly committed to to expected non-GAAP full we margin non-GAAP basis flat year-over-year. at disciplined expense is XXX to to operating year expect up management can XXXX. points versus expand

we said, basis. a full advantage That will expense and of to up be is non-GAAP continue invest take to expected on market to opportunities year operating

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

full Our non-GAAP digits is EPS basis. grow double expected a on to year

$X.XX paid our we cash record. to pleased declared of to per to in a quarterly X% be stockholders quarter I'm share announce Finally, dividend have to this increase

closing, would In success, in team and to their environment. Juniper's our I commitment for thank to dynamic dedication like this continued especially

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

Operator

And first Tim Long Barclays. Instructions] [Operator from question the is with

Tim Long

two-parter I start a you. with if could. just Yes, on the orders, Maybe, Rami

obviously environment to, customers You're Service so, in of and trend period, a up view out below coming it kind well and just Or with this the six tough Provider multi-quarter your that going next works ordering. over months the be the that over time? well line is are ordering strange Cloud or consumption? over under something Is compares

could you if the Ken, here. just maybe, on math then little us more give a And

$X.X XX% decline. or this I backlog last a was quarter, for so quarter billion think little it than lot and more billion implies over if a $X a

the there order So is math that something there missing? we're in backlog else

Rami Rahim

Tim.

pass you. it on Okay, start, to I'll Ken, and then I'll

order expected. standpoint what period, providers year to of get an getting in are placing Service and A Providers Yes, So QX supply very in much for from definitely were Cloud ago order multiple pretty is difficult. we constraints. compares saw quarters orders ahead the

different was type but in off in XX% where momentum segment, Enterprise a difficult QX, very order a flattish little grew over compare period of be saw 'XX, a of QX, a actually year-over-year. story. in that ago in is this a on bit would year-over-year year Enterprise basis orders the We

So Cloud for to providers Enterprise, I as order momentum question, quarters, the couple looking in the patterns your a and of a they forward Providers for think think year order period that will of re-normalization actually will continue. be I and there consume placed ago at next do least orders were Service that

from to Enterprise a standpoint think if it see we at order standpoint. look as as I to solid should from revenue continue well I growth, both XXXX, an

Ken Miller

think I we remarks in orders, on when that year-over-year about were it's first even are And sequentially, that my I to. time Yes. for referred a talk adjusted comment which worth we a I just though made prepared up reiterating, basis, down one-way really doing adjustment that but the

to would those were orders sides did only back added quarter, would QX had takeaway have 'XX, last if to that in believe will, actually we normalize growth, back you accelerated and adjustments we shown and we some on equation, the if So those made the of proper period, add the you have of the been side. it both

want I to make that's So clear folks. sure to

I a on XX% down the orders backlog is mean, greater math driver the gross than why -- being perspective, a really From of primary the was decline basis. backlog order

that of versus We of deferred revenue. in backlog to and as business in is get gives doesn't also invoice point to revenue until or immediately, did backlog some the that revenue recognized delivery SaaS the which some growth that as I see deferred growth actually execute we in some software that subscriptions revenue particularly well would

So on also backlog. has that growth an impact

Operator

with Alex Henderson from The is next question Needham. coming

Alex Henderson

to rolls wanted to you hard product sales more tie equation. how us a the on And the Obviously, it's as ship accelerating, with I was that income the question into first for side product. rapidly future of clear services determine Services ask The to there's statement. the

give could kind of kind is do you think for a what us to hoping contributing might and anticipate year, much around you Services going quarter first granularity more was I in of growth revenues little the are increase. the bit we the to So growth there? How that what

Ken Miller

Yes, one. I'll take that

results opportunity are believe, going -- mentioned, revenue positive as does and going Alex, you positive gets to have a revenue So XXXX installed pretty as Services Product on bigger, I we given the product both revenue to base our of that Service seeing direct are see, a you the XXXX, have impact our correlation forward.

Services convert to strong expect Services would is strong lagging indicator. of So to of installed as and decreases continue bit volatile. it business doesn't -- or won't has But I of as little base in be you large of it is not normalized, a XXXX Typically, product increases been but kind to see gets trying our to large It as as as a a XXXX. services. in bit

quite I really satisfying renewals, only in team point is is Services our but has our the great there. to other job down thing and margin And cetera, the also positive business. also done Not et customers The would a costs. working

Alex Henderson

that X%. of rate the to and March should accelerated anticipating in rate the both year? growth be single The to from Is X% digits, quarter X% the we kind high

Ken Miller

specific Yes. I but lagging a that guidance unit We're on would giving it care, is Services, not say, it's -- mentioned, of volatile. kind I it's as not

So expect changes soon. significant wouldn't function I anytime step

form is the getting services element which the last business the which in revenue of majority, our but software a of of the SaaS said, there is is element, been recognized our as software big has revenue. is SaaS growth more few our of part also a over years business maintenance That vast

Alex Henderson

Okay.

nonetheless, ask in significant fourth for of Is center increase quarter. That the reasoning a in What's wanted to a that? available looks segment it's you year-over-year the in a that supply? increase. getting function is I the the question year of very somewhat second a The cloud-ready that ago, had more significant versus but spike like a of decline the data

Rami Rahim

take that Yes. Alex, one. I'll

frame. obviously, So pleased cloud-ready QX saw data and momentum that very success our with time in center we

did wins, in quarters, particular, meaningful that XX cloud couple Top several of data in center provider last one we highlight win. a a the a Over was

business part be would in that solutions a the we're that developing this business. of CRDC and our So

we're that actually orders, quarters, prior starting in whereas revenue contribution. sort of to the So of now terms was shown see in

elements as other There well. are

sales Mist center still we've on we're much but same is success Cloud-ready AI-driven the data data as net see center software-led to phases pickup way period, in I type logos are on to as of kind logos of do strategic the not well. I'm think and would contribute this data about actually in cloud-ready in earlier ongoing new a in lead the the those that performance an Apstra-led basis, but seen growth enterprise. to where of nature this center opportunities nicely again, the sort starting the think our prospects I overall growth focus of the optimistic expect I for business. starting that

Operator

The from with George next is question Notter Jefferies.

George Notter

wanted I composition guess the your this the on I of thoughts to ask about growth year.

and X% How we X% if units? that You guys much at do QX you think you really But least increases, price have look said instituted revenue versus know about growth do of from plus how included. I comes think back, think you it? pricing growth I some

Ken Miller

Yes.

revenue less The based. pricing factored obviously, be There we I majority we also at definitely volume in, be we as incremental we X% Obviously, George, of a least if the is of out put a but would there X%. bit volume assuming would were but to X% our at half, we faster that So grow that grow, to a talked eight, expect is about outlook. pricing to did than floor, majority able X%. the of is related. was way element, be And would than it, we did describe it

George Notter

do really Or by initiatives versus got? products, or other what's some new driven sort think dynamic the you've that products? Got And -- the ACX new piece. between the then you volume Mistified Is new it. existing think of of as I or about it's unit

Ken Miller

in would the actually I growth think that too much exactly I Yes. last the we've that long-term composition though. on of this, detail and couple model We're of not But giving relative say the outlined mean, we've for I years. XXXX. delivered our

campus vertical, So look as and at with products Enterprise our to of are and the if would vertical associated you branch, and be Enterprise products. some well I predominantly CRDC fastest-growing it our as expect by AIDE

routing switching Provider our then which and and predominantly be by follow Then center followed you could Service is that by data slowest-growing Cloud, would vertical.

verticals do growth. point, think mix our out this I likely similarly products relative rate the early at XXXX. it's the from in little So components our of growth and a mix of is perspective a to exact call play revenue to But bit too of

Operator

Samik is The from Okay. next Chatterjee question JPMorgan. with coming

Samik Chatterjee

I guess my judge about down I you demand revenues Provider us driver more mentioned sort and revenue or And question from. Rami, be metric sort if and give script, was think be It quarter-over-quarter. Service of in was year-over-year some sort to of color could is going to your to of you the there. going the

you mentioned from in to from of that So relation demand what are sort You seeing scrutiny vertical? customers.

customers So here impacting should are telco XX next bit of months? verticals? think positions the And how of other sort scrutinizing over we budgets a more the than CapEx the you

Rami Rahim

Yes. question, Thanks for the Samik.

the kind very of on And products So came you orders that's quarter was to to great actually was large Service volume what to for this And was able after a if required a strong a happen we ship that quarter. recall, we new in saw supply. and in, quite not of QX pullback totally unusual our in be sheet QX was a also see mostly, not of that balance Provider entirely because that if function quarter. a

there's but in that's -- So segment. more Service happening the Provider

of closely we're segment. terms us of confidence really if First, some years a for that introduced dynamics this strong monitoring think gives in we're new the let's have last, next seeing so. and years, year or few over will, which products pickup, or in you a we the I say, the couple

just are the opportunities there the well. as that about the product family, XXX center. out is in which the the five finished is PTX of performing I The the data years, MX fastest-growing product XXX-gig last really answering really questions well heart cloud-ready goes to

Service among our of the things the driving is we're are a approach kind of that all of fact the our more of delivering past. segments is delivering Providers One in there that in including actually to services solutions diversity strong interest that especially virtualized CRDC of the moving that's momentum a to

long us to revenue, we long order this term. going two I discussed. through number a But minus of of being get patterns our the with possible. of normalization there's So line model, think to better in In two term, definitely business this just is even short that for as positive to long-term plus we're elements are term, or

Operator

is question Sami Credit next Suisse. with from The Badri

Sami Badri

least you I you words I assume it the about had the the growth X%, prior, two that's When for X% believe Is word XXXX? versus use is is you're should first at would using floor the questions. we question. of -- floor. So talk

question XQ was how other 'XX, the a then backlog change driven volume can in and price in of that so of on XQ? composition is increases much And idea by submitted of the versus of the that we how get were the product better orders just growth

Ken Miller

Yes. those of I'll both take questions.

we're when really at floor, same we range -- officially describe really at it's the starting at use a often to a I I much -- to if the least the on it meant words we and least you, that floor. when X& times, it's And putting as X%, referred right, we're be confuse the not described That's it. not, the why is guidance. I do X%. ceiling as So setting because But

as It the majority our would taken. I is as it in share base growth, As AI-driven of had we're benefit a vast growth minority And we volume, absolutely as those volume think enterprise in is to pricing are but we versus is strong we've of that such center again, data sales right? some and from impacting the and definitely taking far getting the say honestly, branch in our and price very quarter the a I growth, of well. campus actions markets quite shares taking tied

team than the taken. I the much more our pricing actions we've execution the So I of prescribed success do and growth do to

Operator

Raymond from Okay. The next Leopold question with Simon James. is

Simon Leopold

absorption and sense from I 'XX that. inventory you're the quarter of or better to a like have their in gear. their about. manage fourth exposed been wanted some or flow first Providers of slowing manage down the on chain, but It that this there's own the either talked as cash they of of operators half Inventory maybe some to weakness get in others that relative supply coming trends sounds vertical Service quarter's blaming

that that's able issue first here stockpile sense been of around But get I'm the directly want don't on really your you factor I you half for or whether warehouses customers to equipment just going concentrated component from if shortages. of that presuming your inventory 'XX. a it's a to have and in haven't what's and

Rami Rahim

Let start, and as to then, want you might Ken, in weigh me well.

So are challenges weighing on segment. of Provider sort there the macro in Service

remarks, As as time scrutinizing sure as bit for that there segments, orders say, definitely customers are just they're all making at spending prepared including in are, a more, lines efficiently I Providers in said that possible. Service let's looking my projects, across

that doubt. So a happening is without

these couple Having I is with even said last there, two model think we're managed Provider are still, the of can our years. plus that minus that that exceed range. to of a long-term outlook, for maintain of We've our challenges sort -- long-term macro sort sorts over that, of range. seeing we Service to two actually out that

there exceptionally their are answering of prior out Just in remain the demand ahead are pattern based Service Providers question, keep to I in networks. on for projects mentioned their right, factors order that that still XXX-gig some just important there that in these of

Metro definitely market highly this amount The in Metro networks. automated be of there, for are to a and need new fiber an still traffic carry solutions opportunities for continues The to is optic opportunity there. net need increased us. XG

term, that the of some quite this actually optimistic be might concerns am segment long I despite macro net-net, about there? out So

Ken Miller

of a given either before, quarter. really would lumpiness bit any Q-to-Q to we're The I what vertical only solution thing and ship to is able little based as you're see cuts. supply inventory or any add factor period, and XX-day on going is in of customer That said I've cuts a

Service 'XX a more indicative did FY we longer-term of of and was business is doing, post Provider what mentioned, our think as model. above view growth, our I X% Rami

I good overall. the So space feel about

and something the we're over honestly, customers on quite that It's few customers we've constraints, we Based believe that conversations the not at particularly the about last worried this excess quarters, sitting not on inventory had supply at do had point. levels. we've are

because able are -- orders longer actually they clearly previously. booked accelerating as the they orders not did They prior and as they're are to book much actually delivering no we're

that getting impacted. we're seeing impact. revenue So perspective, is But a the not bookings from

Operator

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

David Vogt

but wanted pretty were You think, I a in and I takes question on to all the clear, 'XX, guys puts normalization. ask about

your strong, the exiting last and backlog of your And pattern years, so bigger been you XX% XXXX business couple $XXX about about over order incredibly it's but today. about growth if million, roughly think your was is

were, So should to ago like relative years where look stock backlog and like, be should we obviously demand. you let's buffer X.X where when backlog we desire to say, customer ago growth looks build about start to two how to think some about years rates or meet what normalized think order your and

sort uptick of Should we to backlog past? things the a should be normalized in expect we've slightly a period in higher going normalize? Or the seen we the when with commensurate forward backlog ratios of that expect sort

Ken Miller

you Yes. I really happen. you, to perfect honestly, a I'll And a quite if have know It's question. I to good don't but what expect something, let answer

normalize, us reduce the So exit I to exit expect the don't expect as that for the we'll have to elevated. think I and XXXX. I year exactly number backlog. refer year we'll absolutely with expect you, backlog I to to in to start elevated I do -- what still but backlog I

And what new start will be my reduce, say. the would to it is remain to hard but elevated, normal So expectation.

I to react. that, giving new lead we've think $X million quite be to customers longer maybe going that million billion been a times value think And a of little giving that orders $XXX little between like as for you mentioned, us understand greater to kind I us range million bit to time. as in would historically, the closer and normal is to somewhere $XXX $XXX of than earlier, the some

a normal a little not years it I'm with we the hoping that starting when less was quarter is frantic ago as were just new few the enough backlog.

So position, good I feel obviously, the of our about it. backlog variability

it hard but we where couple to XXXX elevated in work throughout would than remain were now, and but like speak finally from settled of more will decline predict, to I think it's a years I that XXX-level.

Operator

The with Evercore. next question is coming from Daryanani Amit

Amit Daryanani

it be the talked they've had guess on I you flattish be was talk Cloud you trends And is the trajectory, about Enterprise X. share? put but auto talked deviation the on one wondering can why about versus the you was up are side. running Provider in you buckets? there going seeing about on flat other I What's a I auto Enterprise X Service to first when performance picking side, and side, if you're to down order because between such those the better

Rami Rahim

start. I'll Yes,

SPs that, fact not and ago they unusual multiple we because for just quarters year doing and supply And the ordering Cloud, ahead it's the So primarily were more were large. and a be period facing. upfront more just that reason, not tend very in for just are planning same abundance. and ordering lot that happen a happening did to require that strategic, just and They Enterprise engaging of projects of typically because kinds think get SP the that before that the Clouds was extent. It very of of in to to constraints also I early

in why. I think of sort your seeing second we're the Enterprise question part of and about momentum the is the order

AI-driven we pretty federal well firing solution, much exceptionally be are, of on in even think the quarter, of executing I for great course, we're every sort the enterprise cylinders. the just across our had WAN, center, we're a area, it example, government data Enterprise solution all on whether board,

And reason, largest Enterprise whether especially Enterprise, can Juniper's solution years differentiation is the this now and work AI-driven or point. solutions, pretty actually to our win continues really well us ago, behind segment. the our about there was that in much I competitive Our Juniper and doubts at few enterprise are in those succeed think some A for for us. doubt is

Ken Miller

and to thing we've a growth a bookings, and year naive the a Enterprise, several is there. we from as well aren't for order of perspective a only momentum last perspective know for as lot years, XXXX we Enterprise some The be add macro had out the would revenue I both to in of actually I expect conditions

us, product of pretty confident given front macro in we kind market the opportunity enterprise kind we to But differentiation the grow we of conditions. the the share XXXX have, of despite the in have, can feel some continue of we

Operator

The with America. Bank next question is Liani from Tal of

Tal Liani

down is the $XXX have If that -- are or into backlog. in two I and the we on questions year backlog million related be entering Do $XXX to supposed to QX. -- million basis, Does for because tougher backlog declines the is a basis, this really starts year dollar on that only first accelerate question. mean it's this really the cetera? could That's -- it only et spending sequential you year. a

adjusted trying the what should about if adjustment growth environment question order think if about not to how the could after I'm down I the rate is changing. the -- is second think backlog be is backlog? the And the of

is XX% was So were when the year had last I XX% delta of remove down you XX%. And instead backlog, roughly. up XQ, this if look at of you the it a and the being year, this growth up if between backlog, you basis quarter, year, this I sequential last I remove year without XX% the because the there growth have

And environment in progresses then question and when the and XQ, how spending worsened the much is is, XQ? XQ, order environment the between some on XQ So sense. year that does deteriorate XQ, the it to carry

about doesn't is how So if again, look backlog like the the order much. change understanding environment consume question could more you the environment my once

Ken Miller

Yes.

let me So that. with start

see as we did backlog a sequentially. in noted, quarter, you the So perspective, from a fourth decline

However, backlog I to right? up approximately important think note, it's $XXX was million year-on-year,

full a the bookings starting say that I we and year strong say, that's pretty actually orders, you're the to actually, for grew see right and normalized, had are but but really see year, starting to way to decline you not So it. would backlog,

we placed are shipping Customers and those have orders, orders. now already

adding because as have And will, if I periods are they've the the to that demand in. time overstating whereas So back opposite not account through lead happening. actually multiple of for is kind been quarters, adjust orders of true been demand you we're times, the orders the orders accelerating X past mentioned, now to understated,

bookings to This been on number has be going believe. like the the positive it So is side. I unusual, very

to couple going on which you're going over quarters, demand is best think of the metric the next negative think see similar side you revenue have. the is I really why we something

our uncertain orders throughout as we've as ability exit depend point, timing expect haven't remain on customers stated how it, to to we the will we received. is it year come already but come do XXXX, it at of down high supply, backlog capture much basically does which this And really we the consuming and are exactly but down,

look already rates growth where the bush So the that that current for to period scenario, as demand than we two is on And orders. for the at a XXXX it's orders going hand it burden play really have I we as kind havoc shift of in better in-house.

Rami Rahim

And on add just this. I'll

Orders already really especially we had QX I think that hand in well. situation for early Cloud. of received SP were the because that in ordering, them customers summarized in and Ken otherwise we would QX, have

grow we they XXXX, growth order at Enterprise, it for us the don't revenue least in to I But hit in grow. they orders to grow. believe can at actually I think will And need the in to As look for the X% year.

Operator

The next Piper with question Fish James is from Sandler. Okay.

James Fish

the to the Rami, throughout Is opportunity the of or be AI that workloads. there for you, to a big topic -- that's up coming way going about year? is think course a out is Thanks.

Rami Rahim

for -- the our Provider the and I Paragon metro Enterprise XXXX business, Service taking our -- it's and that debate. think that within drive demonstration for market share a automation

demand. the having question term, quite Now is up to cloudified long-term cloud providers with opportunity that, about of us And call, one I'm because businesses. presents and around that bullish how the think AI of And long this of terms necessary mentioned earlier said keep supplying reasons infrastructure more in I your in I the actually AI. to is

leading going that traffic in among the data or all in a I to data to another or increase cloud be this their WAN within centers yet ending initiative believe more big centers centers the is and providers area ahead of data performance, that that the get cost-efficient get cost they by building effective, wide networks, network. ahead higher more and within they have in will of. And the both to catalyst

already major cloud you as -- as space the that within we top that well. providers from benefit pretty have existing will the of providers, all cloud we're much in We the because cloud know, and of XX the hyperscale footprint

our exceptionally new cloud this become cost provider effectively. run. that well carry for long business the think Add I that traffic bodes important to all opportunities And XXX-gig to it in the

Ken Miller

remain extremely from low I Yes. your our remain so to expect cancellations right to that QX. we backlog backlog compared remains to up QX Level mix perspective, second miss extremely From QX and question, a you're durable. basically And that in in forward. going level a the the timing low cancellation levels, that believe we of of backlog perspective, revenue -- made of made kind

into it days. a expectation, thing. So but a was had We timing made that that really QX. few quarter's have the slip more rate did up. already would We We've made

we which that can of QX You than sequential guide QX normally see see $XX.XX reflected from lower the in a QX. to

that I made has believe up. been So

is the on I'd we thing other asked And about, favorableness in QX did margin. margin, the mention see wasn't some which QX

because Some was margin. ship ship, a of to we some of hardware that expecting is some due the that's lower to software quite were couldn't which at of we honestly, mix and

more margin on as of for impact software where down XXXX, do -- margin and in be it guidance little has also comes comes that up. I normally to an to you're opportunity it down flat So off always QX. mix there's more It than to it down, QX modestly to little a seasonally that think margin normal a come relates seeing

the as you there they for improvement are keep feel they XXXX. the costs. expedite encourage uncertainty that to models those expect questions. as expectations in fees those do would to currently there's I we'll of more there I be freight Operator, I a with and some gross lot That some take said, two has, of street margin, and are,

Operator

Aaron Rakers with is coming next Wells Fargo. from question The

Unidentified Analyst

little on if changes there? in seeing more you're could momentum you in the was just a Aaron. the competitive wondering I is Jake and about for This landscape any bit talk XXXG

Rami Rahim

be Yes, I'd happy to.

a there's update, between last Service since for quarter Cloud So Providers been our XXX-gig and new was XXX providers wins which ago.

In terms been always competitive competitive a environment. landscape, of it's

basically footprint and I know-how, cloud our service WAN providers feature of and where gig. in the understand to for believe leverage incremental we the that specific do experience existing hyperscale order feature providers can sort to and strength, have XXX requirements by we especially in real upgrades

data basically cloud-ready fabric center center data XXX innings data XXX-gig the seeing really total and believe the inside they success, the promising also with switching that you center do now. wins in actually we're early now will, and right if I in But some space, cumulative we're

inflection bit, any sort opportunity because the talking speed we've like of to new actually, I have know of a get with still introduction optics early the XXX-gig But been the the time question about become cost-effective. it's quite while. period of I part a Ethernet it optics, that starts feels this in point for periods this where early there's

to start a and Then especially early a opportunity the SP actually a I that of do it's and project we're wonderful and I the to period sort now be there is kick think that stages deployment need in. There's of actually growth, for testing us, going to Cloud. period. in right that believe in

Operator

This completes question Last Najam is from Capital. the coming Fahad -- with absolutely. Loop

Fahad Najam

of you times place dimension times will as orders as I are hate expect times are? topic to normalization. lead go we on trending? should add normalize. the customers lead where how back they maybe order maybe lead Can to help Any And a now, us of indication

on market I then the question trends. have seeing what of in another you're demand terms broader on And

tech helpful. macroeconomic You is pertaining color or some broad? high it Any more site like be Is segments would cited more challenges. very there to it also

Rami Rahim

they're more uncertainty that's it second project some we some, Ken, on scrutiny the budgets. you, hand the no placing we're really. a push-outs, Let to there, part. been part, that first out conversations then and say There me When with the over cancellations customers, it's really with have in few having I'll start for

many momentum because we're for think importance optimistic. talked that our the intelligence think, Enterprise in especially that, unique strategic that The of projects, that opportunity have about, are ways, plenty differentiation, on. I Juniper the there then to that and I digital network, be to Ken? that transformation artificial But us just the we despite reasons XXX-gig backlog I in the is of of sitting

Ken Miller

XX XX time some X cases. months hard be overall really to lead backlog. to Yes, even upwards days look perspective, our from it's the the all different in to lead range would way it months, One reality get have a at is But of specific because products is from times.

just you basis, of on roughly have we If went a two FIFO quarters backlogs.

lead and down months might on a at entered quarter. we So one look times average bit as it it's roughly from where six the

there. improvements seeing So we some are

Jess Lubert

concludes your Thank today's time. for you, everyone, That call.

Operator

This today's gentlemen. conference, time. you Thank concludes Thank participation. disconnect this your and lines may you, at your you for

Juniper Networks (JNPR) 31 Jan 232022 Q4 Earnings call transcript