JNPR - Earnings call 3 2023 | Juniper Networks, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings. Welcome to Juniper Networks Q3 2023 Financial Results Conference Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Jess Lubert, Head of Investor Relations at Juniper.

You may begin.

Jess Lubert

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

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

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

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

questions. hand that, remarks, our Instructions] With I will Rami. to [Operator over now take will call Following we prepared the

Rami Rahim

and both as non-GAAP which guidance. in everyone, was strong quarterly XXXX range. operating resulting results. our the afternoon, guidance high of non-GAAP QX us third during the better-than-expected above results earnings was billion, of call delivered expectations, quarter QX exceeding our also and thank gross margins per Profitability share $X.XX, exceeded the today's in our of end $X.XXX of joining Good midpoint total discuss We revenue to you our for with on

best software costs, across operations to to as tool We along network call and and few from during in product compared and deliver of increasingly perspective us continue industry quarters. teams against user the and a backdrop We year-over-year our we our positioning remain order win Experience-First AIOps improve the as long-term reduce to go-to-market the environment. focus, as leverage customers ability customers expected position Our decline QX, healthy well largely profitability. Total prior orders our macro verticals attention to overhead to and look our with came to will continued improved the in what experience, automation believe a growth of with Networking. execute confident providing improved challenging rate to technology

growth expectations. prior experienced strength seeing Our once revenue Enterprise consecutive high new helped revenue purchases grew the service for sequential placing XX% offset remained and Juniper's Enterprise Enterprise as again exceeded of history. in business, our with represented our for vertical record encouraged total Total time our for fourth our and momentum our healthy the results order we're fastest-growing orders before single-digit Enterprise see first largest and time provider to delivered quarter. frame year-over-year we by accounted the where which and than digesting accounts revenue QX weakness business orders. I'm and extremely cloud continue in in XX% more nearly customers, by

growth the in new channel Importantly, continue capture share. by and XX% We enterprise more believe speaks growth, to and XX% and new orders double-digit logos grew the by deal ability our differentiation and healthy commercial continued grew year-over-year our through nearly we as than saw mid-market products strong to registration of of strength success another year-over-year. quarter to mid-market logos see

AI, consists revenue of segment of branch Mist in with Mystified record business, the record time driven a and year-over-year. products had QX our than nearly by year-over-year also in by Enterprise campus business the another frame. XX% quarter, Our from growing had quarter AI-driven more QX Revenue our XXX% growing which

and these from the solutions on-prem gain Mist next-gen by using cloud. million are leadership benefits and to in milestone managed surpassing and years early years notable AI people innings in opportunities the this represent a run defensible and QX clear milestone run crossing attractive recognizing on as annualized transition industry resulting will achieved legacy QX, in also $X solutions orders an opportunities XXXX. Customers billion managed customers We in architectural transition after for rate share believe X basis the $XXX growth when health less remains Mystified secured Our added than to provider the Juniper's can wired microservices of repair as rollout, provide and very retailers global include SD-WAN. and the cloud to automating with to their X and delivered network comes Mist across reducing come. In a operations time trouble manual we mean leader, platform. We QX, these tasks, full win compared our stack network its extended a modern competitive deployment time solutions care in speeding reducing AI-driven the Juniper a pharmaceutical to terms to world's benefit Juniper to via large it see and ticket, meaningful WiFi, rate to largest

SD-WAN purchased One and switching record little for dollar minutes campus in of of quarter than days rollout and wired products approaching wireless, NAC branch our from as is with together. being broad-based and given XX,XXX well these of of was SD-WAN wins, $X reductions time locations. Initial as quarter We highlighting portfolio differentiators. Mistified's cloud-based key view additional several customer more a than positive in network there to forward is a more for every revenue simplified control product securing wins indicator customers as the also our full-stack of $X strength belief full-stack in availability as access opportunity. with to retailers these with dramatic demand wireless, wired operations was XX strong, and wins momentum record the and across that a where these customers

of new the pipeline the strong Our year-over-year enterprise data to growing, indicator QX of center performed which every in market. opportunities in of software QX, with momentum business well Tier compete, has shows been business wins portfolio orders strategy even than as in positive providers differentiation solid. we in by and level of our environment. center XX% data international in also our see service manufacturers. and more global macro center X government our challenged Apstra and a our one balanced for dollar grew meaningful expect remain relatively logos agencies, The continuing in Enterprise where Hardware Apstra to in largest markets the more and XXXX data pull-through and prospects. Key diversification the our I And included our large we for Apstra forward us modest large quarter given and view is QFX switch grow of XXXX a offerings for revenue working. performance against our share Enterprise appliance Apstra the

line we This purchases. true has vertical, quarters, As uncertainties to the of the particularly closely cloud of in the are few customer each budget that time digesting process see our are over to the been many verticals world. in of scrutinizing highlighted last our macro prior deployment where around across accounts due happening project still and customers more continue the

dynamics in likely longer-term our are While next the Cloud to for remain least segment the prospects at few quarters, cloud. these pressure regarding our optimistic we

strong rapid front-end, optimism array increasingly the we capitalize networks. language by customer industry that as wide-area footprint, of choice as our back-end, the on a to in right AI Ethernet growth of opportunity cases, AIML benefit of build-out opportunity wide the our regarding driven seeing adoption are including environments is continues considers optimism model clusters, strong and many the use is and large Our for customers' the in-print driving storage engagement of traffic these the that to and where

likely meaningful time. in uptick we benefit mentioned last wide-area traffic AI quarter, is our a to footprint adoption drive I to that expect growth As cloud over

operating our We of data to opportunity, support seeing custom and we already efficiency with switching embedded performance system power silicon, and also enterprise but our due such optimistic congestion our RDMA regarding cloud capabilities remain for AI technologies networking. as and the are the management Junos center our major success within accounts

deliver Apstra reliable operations is turnkey deployment ability critical of design, AIML our performance team. achieving required differentiated Additionally, by in by AIML clusters, incorporating and its to in the Juniper AIML goals the to which

impacted to QX has remain by a seeing happening provider perspective. in that causing U.S. service X macro encouraged X a including international Cloud products the These we're year-over-year orders of and, well be Metro new record true found X case, large an many more footprint new the These as customers growth harder frame, some while ACXXXXX budgets Tier to wins in Tier uncertainties business around and networks largely operators from we solid closely plan. Despite revenue this where Tier an softened our are momentum X scrutinize as quarter run Our We saw planned. secured account. according international their our are to QX accounts, some Tier the with in certain by macro these time our win portfolio the dynamics and was platform than to tracked activity headwinds, world. X the had carriers and particularly amongst in with

year opportunity. I'd strategy execute and to we for near-term momentum years environment the and it well time and remains the basis delivering to the expect our is to remain see of and regarding optimistic margin and enterprise to the deliver revenue outlook, XXXX. highlight business remain to QX attractive opportunities efficiencies. In business the well our we through fueled expect more operating impacting growth underappreciated this as continues like only record Services that represents My and and during to our presents non-GAAP macro improved the XX% team build identify grow margins service also the extremely is like than of for time delivered cloud remainder to in XXXX to more of to the XXX expansion in prospects. of capture as the frame. total than the team greater frame enthusiasm services We and that provider opportunities emphasize metro an material aspect profitability improvement margin summary, continued continued revenue but of with our quarter our to while our in by and another likely beyond. I'd accounts points become we committed as believe not and to is still continue that revenue longer-term also and recurring come, I long-term confident uncertain in

improvement XXXX. also in expect We further

reducing more to we will as our view who in never profitability to financial call protect we growth areas while the in strategic an easy, Ken, lever profitability costs achieving results discuss improved preserving of turn announced quarterly over primary While outlook action recently will the revenue detail. is and investments now the to company. I and

Kenneth Miller

perspective, improved were on high and in sequential Enterprise Service to demand an center will with the discussing in then quarters. solution of results We enterprise basis, prior as share previously above remained of be revenue single in came orders was improved largely unfavorable non-GAAP the digestion environment. From our with continues on range, placed compared diluted orders high $X.XX gross rate which the results delivered revenue start driven margins. Total a expected, approximately expectations, demand growth revenue of basis to that everyone. the XX%, customer revenue, and digits Automated as $XX $X.XXX by but a which to end product resulting good decline guidance data some We few $X.XX, outlook. by XX%. due a Thank our way million quarter solutions I of record of the our billion strong Rami, year-over-year macroeconomic midpoint our the WAN provide year-over-year. and third Provider cloud-ready pressured flat quarter third color was ended of the revenue over afternoon, on orders in our Cloud above and you, declined XXXX and and exceeded led declined better-than-expected grew of earnings XX%. operating guidance. per and year-over-year and and AI-driven

grew XX% increased declined related was at $XXX decreased million, year-over-year. Service XX%, million, year-over-year. XX% On growth. Total XX%. business was which vertical. an ARR our and was and Deferred Total year-over-year. $XXX confident revenue Looking We revenue SaaS Enterprise revenue than year-over-year more transformation XX% XX%, year-over-year. software Security from a and and Cloud million basis, grew services remain of $XXX was our our software XX% in increase revenue by ARR Provider up

and points points and X.X revenue for versus Enterprise $XXX remained gross for and improvements and growth strong XX.X% Non-GAAP Our and X% in Service of services posting QX, service XX% We grew and reviewing X was revenue a Service the year-over-year continued year top improved services XX quarter, million were profitability. In Providers. ago in sequentially. were margin sequentially. were the X our profitability. business X.X Cloud, see customers record potential revenue X

offset inventory-related operations logistics expenses. Non-GAAP XX.X%, was by $XX operating expenses margin. which reflecting our above revenue quarterly top XX% by the of gross higher the for primarily margin, Our partially to total X% in operating in was of due was margin guidance high range. quarter, third of as XX% from primarily service the customers XXXX. Non-GAAP million. We flows favorable compared driven expectations, This driven lower count-related accounted $XXX was at was XX by head our $X.XX XX.X% sequentially. revenue and of were quarter costs, which were the to software year-over-year primarily increased which margin X% improved a Non-GAAP gross dividends, for but per mix was costs Cash better-than-expected million dividend paid share. end down

We quarter. We of in XXXX shares the exited increasing total $X.X and investments also third repurchased $XXX cash, worth cash of million billion. quarter equivalents the with to

against support Lastly, we goals. to in of profitability the the delivering of $XX.X our in quarter incurred efficiently plans amount charges strategic reallocate resources XXXX with an million restructuring aggregate third to while connection in priorities our

restructuring to plan resulting more information. SEC this team's disclosed reduce head an our month, Please solid filed reference in for by results this and worldwide employees, the Overall, delivered XXX and count the a announced in X-K third of As I'm quarter, in dedication charge. we with our pleased majority filings approximately commitment. earlier we

outlook. Now is on Investor our provide I would factored environment challenged, remain Relations has macroeconomic to like website. details into expected color which some our you find could which our commentary in guidance, CFO the been on available The to

declines For the sequential fourth expect year-over-year and the to of quarter growth of to bookings XXXX, order expect we rate moderate. further see in

the grow quarter year healthy We see continue a and momentum basis. expect to both Enterprise on orders and to full in fourth

orders. Non-GAAP to is remain demand to to gross to expected expected previously XXXX Provider the fourth we to increase continue modestly Cloud they However, in margin chain approximately Service as placed expect quarter of digest supply from XX% and customers due constrained costs. lower

decline on basis, a will to year continue fourth $XX margin million. With manage expand operating approximately sequential than guidance, and XXX expect full XXXX more total will expected X% to approximately X% We is our expenses grow points. non-GAAP to and operating prudently revenue by a of non-GAAP quarter basis

expected XXXX, previously profitability. are share and per to grow for in stated earnings double digits revenue non-GAAP Additionally, guidance meeting our

initial While the current we next would Bookings color all regarding current like global a verticals basis. uncertainty, macroeconomic to expected some year year provide are full some grow environment on poses our for XXXX. to across outlook

to Enterprise our expect grow. We revenue

results levels, traditional more of patterns order return of will Provider revenue the uncertain total However, pace the expect and on this XXXX. our a our current in in expectations depend Service and quarter and on recovery which verticals, remain Cloud beginning backlog we at revenue rate first to time. Based seasonal

a double-digit the remainder historically As prior chain reminder, quarter the supply in throughout year. growth industry-wide of revenue to first by we shortage, experienced sequential revenue the the sequential declines followed

non-GAAP expand XXXX. expect in We gross margin to

We in margin continue expect expenses prudently non-GAAP and operating non-GAAP to expansion manage XXXX. operating will

objective results. partially will ability our this to be on However, achieve revenue dependent

improved have not and objectives deliver financial long-term operating expansion over margin earnings revenue changed. plan growth, We time. Our to sustainable

Juniper to in pleased continued be especially environment. quarterly I'd share dedication Juniper's this I'm record. In thank and commitment of Finally, have of announce quarter to the stockholders a to closing, dynamic to to like success, $X.XX for team per declared paid we cash dividend their this

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

Operator

today Amit Daryanani [Operator first question from Instructions] from is Evercore. The coming

Amit Daryanani

last is versus curious related they customers this to have quite really Good question pretty the a saw sense do deployments? as impressive. on leakage maybe your I'm product And the but a you job Cloud out in Or days pushing a last mega because Provider you from that seeing about I'm in more perhaps the already to guys the starts that segments, really much Provider maybe how coming Fairly historical digest I answers of segments. change is Cloud, the Service you've little My on a how across talked the typically curious this more weakness any perspective, from lot is last then the you both long the around stuff think on if here. correction seen easy over across segment, on tone XX And new and perspective looks. that historical well. over the market have? having you're and it Service the is is you what know aggregate.

Rami Rahim

Amit, I'll Rami. this is start.

really you're reason, some For choppy.

So hope is our not the on I end. issue

that probably caught -- I challenging. segment. I'd incrementally that environment and in the we're not terms say, around think commentary of asked around seeing that SP, Service of think really the and for and seeing has of that I first, the for some you're challenges of you from cloud I the duration what what changed most is sort quarter we're seeing demand looking in Provider SP Cloud. much more last in we're

being them. and be digestion think cluster more for start opportunities much and pursue. a space, wonderful in to the And the out as space, in really. going especially as so momentum. to think that to or quarters. Having to my of line there Tier better, I we're for, we're not vertical in mean of to next some the is expected. ongoing. contribute competing few more all there X top in for great it's for X, I just the it's that, in go think meaningfully example, from the us begin early new play U.S., X And projects is where year. In quarters remarks, certain. opportunity about is The I we provider that and service providers going that's to period mentioned competing to really more digestion that those that to to last our are As service metro, gotten to going and, expected the because think, challenging negative. faced don't a that Tier don't the seeing before I there of Cloud expect are prepared We're extent, Service AI said we've international. Cloud plenty opportunity are I Provider emerge, as always worse I for out I it's cloud benefit well, several opportunities is for in we Tier projects going provider

Operator

The next question Goldman is Sachs. coming from Michael Ng from

Michael Ng

have encouraging about professional to was year-over-year there bit on did more first, incremental challenges in you the was and bit improved. around about talked -- hardware, services. good just was whether that helped little maintenance? And in growth. maintenance then the it's just that maintenance second, orders side, talk I in a the that and have expectations can orders. SP if you a line I I product something may It's decline may have to in if quarter-on-quarter Was more how talk wondering strength decline you Very hear wondering led with could But that more just little actually it product to the quarter? the much

Kenneth Miller

Yes.

So those I'll questions. take

services on as result the the the up both we've So XX% side, proud services on record some the side, of revenue very as seen team. year-on-year, margin And well side. on

really phenomenal So there. results

it The of include our does services professional predominantly services our include than services growing business does which SaaS but has been growing results. a business, software, maintenance faster overall portion the

SaaS the there's really, look and as the past just years the maintenance of about helping product at you lagging there, business is So of the business, couple a overall. But growth you talked the what side. seen what on we've which is services in absolutely indicator

the years over installed opportunity last So and have the now. attach the benefit of couple given and that product expand realizing growth to we're the to contracts, base our service of more us really

So great. that's been

little and the weaker had as that the lessen order than we to lessen we've of year-over-year side, was was bit in of come was little And we but quarter. predicted, aggregate, anticipated, originally maybe further at side as to more we Service starting booking the Enterprise did we anticipated a it fourth decline are the last as expected. product I a start than favorable expect in and quarter. Provider that the it the On couple here us quarters, we that decline in expected.

Operator

The is from next question JPMorgan. coming Samik from Chatterjee

Samik Chatterjee

see about I you're revenue the to margins margin next sort if guess do expanding I margin expansion, with of you that the of gross what front, like. outlook caveat start year. operating looks guiding I sort although on

here. is of the you the outline expansion with So look of is can takes amount gross revenue just puts margin next still and just margin sort clarification absorb year? And sort can and to as what Michael's of on sort you of here? you deliver quick question decline expansion a What operating even

to be So tracked more orders seem moderating a but now XQ modest saying of though last saying increase you you it's where of said trajectory maybe that you largely even what Can led incremental in the an earlier quarter an to line as order quarter. in quarter seems just have change the in change? have decline your it's clarify line, you to tracked There were or so. in it there the been

Kenneth Miller

Absolutely.

this So Ken. is

improvement year. expansion margin On are we expecting anticipating, next -- year, we for which are gross we the to next are going a margin

to We we controls. will cost -- also -- be prudent be on continue

as basis, will year the it's XXXX, full potentially year-on-year growth the return might my have return confident to us growth But we necessary, So we all in last protecting XXXX, growth. challenging. taking would you're year QX, be QX. And as year-on-year of decline case. into business gross that, our verticals the to on QX would or is on mention expect larger we stay prior in out did as laser-focused perspective, margin would XXXX. return further I we to we order controls, QX. in still the lessened if cost And quarters. with well apply as declines than will in may if to expect margin. That operating year full levels. to profitability. it protect a quarters, from factored couple that a say, consider to return to current expansion early right, to we get margins. On would If we year-on-year thought not year-over-year the expand will growth I believe be costs year-on-year growth but do base soon full we to significantly growth on decline, Quite one, But revenue revenue prudence at, more do of really in modest would were We in there

Operator

The question Alex Needham. from coming Henderson is from next

Alex Henderson

assume some are what normalize. the your your of specifically, us I you give fully do at you think to hoping could think was you excess inventory most think when that we're normalized? you And any that to what risk the do will with some obsolescence is going And juncture going as changing sense within think backlog in these things -- juncture you normalize? at there that's inventory I your through delays backlog. there's might And problem? lag an you a that do environment? Is anything inventory think be and

Kenneth Miller

questions. Good

the backlog On we front, chain has because supply from backlog time has the we improved normalized quicker a expected come faster down actually or than much faster expected year largely this than perspective. lead

quarter we well. I prior point, elevated Xx down. year come an continue the So it been in we it periods. to at I -- I do not will the will have in backlog about fourth that backlog believe But position. position seen to remain believe expect the elevated we'll down talking we've this still at come as exit be

to the normalize down be last going and elevated should to backlog take growing I expect will ever think to think in XXXX. kind do longer. opinion. in next of we'll few been with the of It kind years, down would next fully a of I chain half Xx. come will, at not point it's the get it throughout by don't think of lessons some to would year. To previous the point, but middle the quite learned inventory fully probably going normalized. Inventory to recent your And supply take plateau has couple be if the to situation. we've first some normalization, start I say is I right? normals, years. my you to I of probably this So I expect year, backlog middle

come strong I a the continue few did, really the but inventory-carrying sizable reduce of we mean historically margin we we'll gross are by in quarter some goodness on it mentioned well by charges. inventory And the i.e. was I some services. to offset to in I carry transitory we had and as highlighted expedite just of guidance, inventory, charges. the and is carrying room would gross earlier years. And down. cost in at there obsolescence next margin for costs. margin reserves seeing the That increase still gross of software, are logistics higher fees, that as the But a an very than over levels include think excess costs, fairly there

obviously, we now. longer-term near-term paying as factored inventory results for in, over are to for reduce normalize. there's our guidance. to those to and do and time That's So those to I think starts our opportunity

Operator

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

Simon Leopold

simple. a take just return in normal expect First, talked you to past. you prepared remarks, if a Are QX quick by double-digit being XXXX, reference your I might. down In in That's clarification, a a a to to make about digits seasonality that rate? we and clarification, it also down 'XX the double you QX to be

confident I from decelerating, the of the grow. will LAN research environment, your of wireless firms number assume good it's you've I research but question, both some broader very here. experiencing us view what expect And see firms? Could in and help you the third-party however, decline the that been XXXX. switching, growth you'll sound a terms separates still campus In unpack market campus market you

Rami Rahim

Thanks for first, the Simon. I'll I'll question second with hand Ken. question, to start your and it then over

So and branch am I first, business. in confident our you're right, campus

in saw our for declines, campus example, COVID and of peers consistently in have growth a some some seeing face the few pretty branch where our We time middle of last significant the were even headwinds. we when, the business. of years over grown At

basically situation with them That's where really solutions less transformation our a business of digital of value their I part enabling projects with that's their that resonate solutions operations AIOps on actually budgets that include we're think of of total in customers are to are truly challenged, resonating. the right? cost cost We're that looking that the proposition ownership. offering for simplify and the transform reduce executing

of In we're that's all. room the much small even of campus opportunity, grow, $XX addressable addition that, total or WAN market growing all a even of plenty to and player market wireless for you even billion market not not give wired, that is a branch include at the and and all up in take, a which growing to face us if or

super So these our business I'm of forward. for branch moving optimistic Enterprise reasons, about especially our all business campus and and

Kenneth Miller

on short question, I realm a QX traditional the decline And expect to from yes, in previous double-digit sequential is QX kind on Yes. based patterns. clarification answer that your of would

Operator

next David is UBS. The Vogt coming question from from

David Vogt

to related, of if things a me. -- I'm all here, may of you kind let going bundle you couple if

understand you getting into to going cloud sort it trying stronger, imagine stronger a than today the the have and the much deeper that you anticipated. is would bit referenced right? severity Mist I'm business is QX would So pre-COVID, because in business and the of is of much of different I than decline the then seasonal was patterns little sequentially

I And Or the around should first hold? the normal as expecting the that, question the in patterns there the first So does I backlog follow-up. think quarter. mean normal of half seasonal then backlog have variability a seasonal you're is, years million, roughly XXXX in revenue COVID? from is some $XXX million, prior that then with said of you of guess patterns to end sort I conjunction Does to normalized show get maybe $XXX the And up million revenue? by second $XXX the of in

Kenneth Miller

Yes.

say the a the quarter. I QX would of the uncertain So about just rest about year recovery as there, size I'll we've next expect growth we the do we -- sequential and to timing of it's and unclear one. pace throughout then from seasonal expect pattern the mentioned. and timing SP. lot the within Cloud And talked because address QX predominantly was We revenue the decline double-digit

point that recover next revenue. to at does, year So when. to expect we that that some not sure but should And that when accelerate me exactly it just implies

expect would of a revenue was I kind maybe So It more a flattish of this loaded, year, patterns kind traditional back-end the perspective to XXXX probably a growth be sequential XXXX was throughout from bit quarter-to-quarter closest quarter not last year. a quarter. or year. this

down start as it we'll think will I year, back year up and the Next progresses. build

David Vogt

the sounds second it's going be because the And then normal backlog it end the on quarter. like to after of

healthy despite the quarter. pretty the tailwind like sort sounds commentary first it of sequential that a So for be pressure would in

to I that. clarify wanted So just

Kenneth Miller

Yes.

our of starts So after each to quarter normalize. a it to but quarter bit quarters, a backlog tailwind in it's continues lessening be as of

other but that but to than year previously it think Xx above exit to still not So previous historical were the be was it going be elevated thought. any will we specific to do We now expect levels. degree it guidance than levels. that I thinking the as less not giving We we remain of historical kind be

Operator

question next from coming from Jefferies. Notter The is George

George Notter

It of terms like walk I gross I'm a some are some components of now. I -- more. more that's us associated there's the in gross on as gross line supply like through I gross how dig wanted guess the margin? componentry you I well. right and in guess to crunch. sense excess of with inventory on margin? Also, I running guess, and margin through you the there's sounds margin give on big puts chain it impact high-cost thinking breakdown impacts certainly those us can Could takes bit the sounds their about imagine some for on here obsolete a

Kenneth Miller

Yes.

with lead mean a higher will, we margin this completely, not just we're prices, from are to standard product These time purchase I last prior lead products inventory transitory and as are right, scarce, balance as inventory one our a gross that's the paying some refer logistics carrying. point. of costs those more seeing quarters. side. Logistics gotten the has has if completely logistics we next where the do worse the expedite in fees bought over costs, going we able that And on obviously inventory cost more or you times more really additional expedite But hold -- and and clearly the that bleed that mentioned, negative, and mentioned. was carrying recovered that to area variance those are or that's XX and the quarter, have getting the where to that we to through And were you predominantly logistics were pretty and fees elevated completely our -- to that benefiting months get we're right? we're what gone has still costs we're current we get. So benefit over as factor or less supply that's fees the of results going I that price paying are improvements have hard expectations on of more some time effectively fees, seeing definitely we of less just to have We paying each at get a at normalized. few of perspective. But forward. The chain normalized sheet any those The much used fees

those next is well. higher-than-normal on as guidance, our as next well but margin. do into those few remain to our see expect QX for that quarters expect would costs to gross I higher-than-normal as levels we inventory to this factored a grow as All remains obviously, recovery for path So the expectation I levels, year,

George Notter

it. Got

to But back business. did it was margin And curious in or wondering I on gross sounds there's just probably margin detail up that Okay. I'm things That services function the more QX. helps. that SaaS the quarter, like gross guess this there. work the strength. I strength that really was then guess, driver at if exactly other step also services It drove for I'm what

Kenneth Miller

quite SaaS The revenue call, on the continual Yes. as of of the our of million it has few last we disclosed all-time at SaaS our and an growing part bigger business. a part a a nicely. for high and $XXX -- part definitely business at years been becoming it was overall ARR is

is factor So becoming that of a services. bigger overall

our in the and getting which within quarter I to nicely also organization. the efficiencies the grew maintenance we're However, don't services business, discount want

and revenue situation So the this a growth that cost decline, revenue really, margin of that's and expansion you're in resulting is seeing. of

George Notter

fair items you that One going continue driving should Is kind related say onetime forward? it. off of to one. that to no Got move Is there's that's margin say? of to last it quarter this fair gross baseline that

Kenneth Miller

up fair grow you we of quarter, Any feel directionally, moving forward. we given think should continue good period margin do time in to I basis. to anomalies, ability the about more move a say but gross aggregate an to as be that I it's might see small some

Operator

[indiscernible].

James Fish

necessarily, orders not QX. to XX% XX% the work, That having year. QXs working Mist. due us are round I to let not year. averaged your What actually, huge the the Ken, to hear question Zoom need behemoth. growing, constantly but next talking for We Simon's matured, It's meetings to of the X% specifically that the a on decline upgrade wireless in see before Teams to those do back actually you just and decline declines still Kind and of on you, know of year and versus of potentially And all LAN left number going been you in have that this, just back you're with share you while been office are is Rami, this as chain really we've the supply from discussion, to in perspective, much -- guys out, business prior bandwidth more opportunity? And gains. is the outright Those pointed separate backs like a said. for a pipeline next And core this about into to going about the obviously And for mean, XX% in a the XX% strength left improvements. in you been LAN seeing office. in kind of looked how for me Simon glut it about now. And wireless apps let's I as market about like the you're out showing and as

order for I for, we as for you modeling? single-digit kind are of next low thinking are growth? of magnitude what So looking be should And of year decline it is guess, the you way

Rami Rahim

Okay.

And question. little I'll you a bit about let Let next me more your the start with for year. first Ken, talk commentary

market happening business -- both really standpoint, I sort the branch market then market dynamic market a slow, dynamics up, that that's and think flattish-type look our So the it's standpoint from if I'll with specifically. From and opportunity. to you what's the question Mist more at understand address maybe of of important the and all campus a sort

branch continue basically that solutions is ran I really and are market through market, really is segment is expect branch. Within a done part opportunity the the campus healthy a clip, next the through least at cloud-managed. that will cloud. to control we it solution at where And growing the and and enterprise that comes when as the it management that there's grow These well. focused of of on, campus actually the to are that actually and And entirely year

the And through cloud engine access connected cloud. in the with Now one every single seeing we're all the a the the in an cloud, happening that wired security we've network as as managed in through as the our cloud-based as of is even And now growth of point is well. solution to switching that is well AIOps Marvis the such WAN control the capabilities, introduced, cloud. access

just comes bit cloud-connected the of up. little actually it in market there. proof words a it's to growing and of really, I at pudding. a It's wrong to portion look useful from solution clip. Then out of the it of a the AIOps, when used the that it's a is abused to know I the in itself, it's mean market think campus I the So at bit standpoint branch terms and the faster all much harnessing of the of and that's more -- look growth at actually power

time to all to are weeks, seeing from not percent; has been in we're -- cause essentially all today do of XX-plus the the analysis use of matter Reduction of proactively number so. tickets used root to customers a solution month time, to in used because a Our year by time real identifying to total take what them. of network a people new the be most and that a want they whatever the frame to deploy do to that of trying fixing takes at no maybe days issues to reduced benefits. with or The frustration reduction if it are

Zoom. You mentioned

already see. capability really, are the really whether more the that's we customers provide staff into issue integrated happy fact, cloud, some our side, our not solutions so in the cetera. side, side, proactively, there is, is to the wireless sort of the And IT application have visibility the in issue, that IT into wired et video instantly can, the Zoom We a if Mist visibility that when

optimistic So or a in I know here. challenged very of the little the of market, it a I'm be maybe solution a our market horse not. dead about whether bit beating competitiveness I'm

Kenneth Miller

XXXX going the going headwind backlog year expect we're it's let XXXX. with to to we're revenue weakness experiencing significant some some of a headwind puts But seeing from perspective offset through expect a the revenue just a the full is are to of drawdown mean, little customers. I me do to too need XXXX, comes it in and XXXX year in verticals. also to we're all some expect and our accelerate the to revenue through of I for that early clearly, Service in guidance Enterprise growth when provide particularly Provider orders on basis. XXXX. With to I XXXX in said, in growth, with takes. I you Cloud backlog-related that that to accelerate walk going that revenue XXXX. to grow pretty And provide Orders full across a of

down comes too call that this at to SP bit it and Cloud early pace to little really timing of a So that's the recovery. And and and point.

expectations other based in the a backlog our XXXX do to we more traditional than order expectations see on on return QX, patterns. expect and guidance specific giving to not we're So

Operator

The Paribas. Ackerman next question coming is from Karl from BNP

Karl Ackerman

to you have start. X for question I questions. a perhaps Rami,

Service is way. So services to while dynamic product is are a is on on be at the Enterprise. and growth on I mix the side, for the in do Provider seeing hardware? upside give spending where company going that cycle there growth you the services in understand in we quarter But product appears the think play other Cloud the the

Rami Rahim

Yes.

in years, I of as order SP, equipment. for XXX% couple if year-over-year -- and of for their the have segment us digestion were or you was last definitely they're of Cloud in of sort recall, bought after going mean, lot a Provider So period vertical through a the where mentioned, they Cloud us, there quarters a growth for range. the few a I

to well. that take consume that space SP go to as to to expected. and deploy time within it happening as this And is fact the inventory So some also they're is going the

would expect I the Ken always is They And that in lumpy. at the next cloud these structural I ebbs The over right anything verticals new SP other is look and you the flows. not can the these have in will thing say is, that mentioned, that as have that this I do will either years, that now both there's back. both been happening that year. believe there been businesses suggest recover And normal. space space they orders bounce or of if

Service going timing, optimistic start is it's that digestion the very decided of it normal, we, of of the Cloud to And the In to benefit continue an Enterprise. SP that our over years at say. fact, before going can in will the strategically, eventually, very first historically. recovery, tell time to all terms the which, of that us And mentioned. is last is to it's going to take I the It's quarter Cloud perform this endured XX% typical gyrations our business addition we new weather a rebounding SP are for go away. I going resilience and time Enterprise Enterprise, to well as we challenges have business history, SP we'll challenges and in represents without now believe Cloud in business revenue in to be past of the the giving the our that of and the that need Cloud. Those to not thing a It's diversify in meaningful rebound, see Enterprise business I is, the and have I frame, the lumpy we into a the been difficult it's this these maybe that point ago, verticals, traditionally few you following. to All more Providers, to deliberately but to fact several I'm quarters the have very and would meaningful pursue come. And say

Operator

from And Malik the coming is question from Citi. next Atif

Atif Malik

I have X.

Rami. clusters. adoption instructive Rami prepared for sounded on your for AI The is remarks, you first Ethernet the in quite one

of rail Can seeing XXXX storage. adoption? Ethernet You back-end, you Is you rollout? the this infill Or front-end, are timing like event? the talk volume about something talked about pilot or

Rami Rahim

Yes.

about opportunity. quite bullish the AI actually cluster I'm So

choice today, clusters GPUs we connectivity and or have As is It's inference that all I in last between call, learning the technology of not think I acknowledge mentioned the InfiniBand. for Ethernet. to either

Ethernet industry behind in is momentum the However, the strong. very

And this in And AI Ethernet matter believe opportunities the as so of clusters. believe present do fabric of I I time us. technology is reigns before will it for choice a

pursuing our the into AI for that optimism feature the fair have good All learning of how cluster share, where solution, technical how customer specifically terms which automation even There solutions. And solution; maybe cloud of more they're enterprises, that of private stack choice this we our customers especially more, in standpoint the cluster dialogue in visibility opportunities for large Apstra, are technology silicon; timing, and enterprises, the to I Ethernet been majors companies, technology fact, become for and second merchant and for In projects. closer more asked. it, about capturing these XXXX, inference not system good of large financial with of our among of us, there we I services, insurance up, lot the in There that developed market we health think Ethernet year sort and and a if out seeing even clusters. opportunity. particular, seeing, are of lot their care, to up from for a a Junos gives provides combination me Ethernet there cluster we move I'm like half about the we're we're that being next some optimistic the or are either what year, the opportunity. operating

Samik Chatterjee

guys about growth overall Enterprise? next market then, talk you grow are your Ken, grow And when you attributable also mostly share? market that Enterprise for the Or year, is Great. seeing revenues the to to

Kenneth Miller

Yes.

So revenue faster business Enterprise than market. to I grow -- our expect Enterprise I our expect

market, we to expect predicting, our many slightly year to would slow market will we do is we significantly to but market are is The this grow take next year, pretty even to I as as if to -- able grow compared expected So business. share. Enterprise think down down, the be expect

market taking. expecting absolutely are we So share

Operator

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

Meta Marshall

the seeing to are from that in. of a campus guys given wanted kind time switching WiFi you sales the you're the share it's to more whether position question, of just not shorter initial given around in of actually maybe macro of a side, gain you're on just if the as know elongation I of But then commentary question, first as Maybe to Enterprise just just kind a get visibility. just tied sense or ROI. And the challenged upsell an macro SD-WAN, additional just or second compelling any additional

As customers of the period is when visibility have have sense inventory to could inventory there? we've they more sense dialogue Cloud just just a guys just get visibility kind a of much within bit have. of those extended ongoing of this that Service What digestion on of kind and you the you how Provider, little

Rami Rahim

for Thanks Meta. the questions,

map. over timing a one solution use with subsequent It start the cases. let and first the of macro, the So think sort specifically sale honestly is all between me on initial to Mist of I

the been traditionally accounts the and operations have many loved cases, WiFi seen that to full have in customers et day we're saying, us technology, years wired, X. like of selling introduce we'd have actually back We stack come ease later, cetera. But technology have hey, to the WAN,

frame wireless, definitely record network these tracking in starting we're hit around -- would wired and would incenting which We're control, combination it's to where quite motion. NAC, of of we example sellers et enabling deliberately of solutions, to and the an be the In fact, our in cetera. sales and adding capabilities, added grow to sales of wired more be we access are We're a WAN, and WAN, full-stack continuously full-stacksolution more them and we alone, another cross-sell. It's and our QX, wireless some customers time record cases, where use QX cross-sell. of part And XX new rapidly. a

have both the SP I least focus we do in On their recently. what the the running make they goes few It's Cloud, know question it customers to it, for on levels quarters how know it the inventory just in to few they they -- quarters. visibility, and It's receiving first really next going a to difficult I have at be that, to meaningful to bought, have, our before again. to measured guess, exactly is deploying much getting back but be bought need start answered feel going up just and orders what deploying

Operator

is And Bank from coming Liani question America. Tal of next the from

Tal Liani

very to tell year -- the basis it. quarter. happen Number orders? you understand quarter What to the to rate? qualitatively Can Is Cloud the the next back, this quarters the questions. the just And basis? is we declined doubled Or decline? once vertical and historical is quarters, get I one from absorption what's is it what's one. And the the quarter X number XX% Or Two comps again, decline the following is if what's Cloud number this quarters. X it? it's -- us same, here. you this is do of the it kind that the vertical, driving And very, growth That's projects? strong tough. delays driving growth of fourth very of of less, X growth, XX%. previous more And or then look two, the think And I'm the What to for question are is the Enterprise you asking going

Rami Rahim

the Okay. Thanks questions, for Tal.

a biggest weeks. thing lead what Let's over Cloud to from decline fact the year gone a driving Providers. was start today that The times few just have normal, the with is

from the reduced not like they've to And need the purchase them is upfront orders therefore, needs so in that anymore. just of for placing. just sort there they're when their And are way

So thing. There have are not definitely affecting there some business. definitely been our is only the -- the pushouts. that that's It's #X thing project

businesses need affected and own their the macro has think for equipment. I

which, second as the would And I is you thing. that of think example, So shifted expensive. have extremely AI, priorities some know, for other thing be the are GPUs, their to, they

recovery and just I at the that I'm It's time and be business. nothing we'll rebound that So I to to our see have need of see important incredibly therefore, continue part it Cloud believe about businesses those to start changed long Mist. to term. we we strategic going reasons. I I an bet would against of optimistic I the again And the I've believe do feel before there. In believe length Enterprise, of and yes, reiterate: remains strength. are has main talked seen the the not a in Providers. structurally, matter

also solution, time. data pulling intent-based incredibly business. at remiss to hardware what's XX% data We center solution remains for had record Apstra center, is meaningful the in So is by on mention our new I'd automation the be a not our point year-over-year pipeline in sale, automation this revenue. logos happening have Apstra Apstra solid. basis, Each which and grown

order no draw that orders more Enterprise Next growth next continue very to become space, mentioned Ken the year. robust, in does Enterprise, as And and affect backlog year, I in Enterprise both compares just difficult and the XXXX that be doubt. this the in well. we It's have expect

the more path growth year it So much obviously, revenue to But clearer. next standpoint. is yes, becomes a difficult from year-over-year

just factor into your should that So model. you

Operator

conclude that today, does That we the all today's conference. questions had you. Thank was and

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

Juniper Networks (JNPR) 26 Oct 232023 Q3 Earnings call transcript