Juniper Networks Reports Preliminary First Quarter 2021 Financial Results
Juniper Networks (NYSE: JNPR) reported preliminary financial results for Q1 2021, with net revenues of $1,074.4 million, an 8% year-over-year increase but a 12% sequential decrease. GAAP operating margin dropped to 2.6%, while non-GAAP operating margin rose to 12.1%. The company experienced a net loss of $31.1 million, representing a 252% year-over-year decline. Non-GAAP net income was $98.5 million, up 28% year-over-year. For Q2 2021, revenue guidance is set at approximately $1,140 million, with a predicted non-GAAP gross margin of 59.5%.
- Net revenues increased 8% year-over-year.
- Non-GAAP net income rose 28% year-over-year.
- Guidance for Q2 2021 revenue is approximately $1,140 million.
- GAAP operating margin decreased to 2.6% from 3.9% year-over-year.
- Net loss of $31.1 million represents a 252% increase in losses year-over-year.
- Sequential revenue decline of 12%.
Juniper Networks (NYSE: JNPR), a leader in secure, AI-driven networks, today reported preliminary financial results for the three months ended March 31, 2021 and provided its outlook for the three months ending June 30, 2021.
First Quarter 2021 Financial Performance
Net revenues were
GAAP operating margin was
Non-GAAP operating margin was
GAAP net loss was
Non-GAAP net income was
The reconciliation between GAAP and non-GAAP results of operations is provided in a table immediately following the Preliminary Net Revenues by Geographic Region table below.
“We reported strong March quarter results. Revenue exceeded our expectations and we experienced better than expected product orders across each of our customer verticals,” said Juniper’s CEO, Rami Rahim. “Momentum is strong entering the June quarter and we are confident regarding our growth prospects. We believe the success we are seeing is a result of the deliberate actions we have taken to strengthen our product portfolio and go-to-market organization, both of which are enabling us to capitalize on attractive end-market opportunities now and in the future.”
“We delivered a strong financial performance during the March quarter as revenue, non-GAAP operating margin and non-GAAP earnings per share each exceeded our expectations,” said Juniper’s CFO, Ken Miller. “Backlog grew both sequentially and year-over-year and near-term visibility is strong. We believe the investments we have made are paying off and should enable us to not only return to sustained revenue growth, but also to deliver improved profitability over time.”
Balance Sheet and Other Financial Results
Total cash, cash equivalents, and investments as of March 31, 2021 were
Net cash flows provided by operations for the first quarter of 2021 was
Days sales outstanding in accounts receivable was 64 days in the first quarter of 2021, compared to 61 days in the first quarter of 2020, and 71 days in the fourth quarter of 2020.
Capital expenditures were
Outlook
These metrics are provided on a non-GAAP basis, except for revenue and share count. Non-GAAP earnings per share is on a fully diluted basis. The outlook assumes that the exchange rate of the U.S. dollar to other currencies will remain relatively stable at current levels.
There is a worldwide shortage of semiconductors impacting many industries. Similar to others, we are experiencing ongoing supply constraints which have resulted in extended lead times. We have invested to strengthen our supply chain and have increased inventory levels over the course of the last year. We continue to work closely with our suppliers to further enhance our resiliency and mitigate recent disruptions outside of our control. Despite these actions, we believe extended lead times will likely persist for the next few quarters. While the situation is dynamic, at this point in time, we believe we will have access to sufficient semiconductor supply to meet our full-year financial forecast.
At the mid-point of guidance, revenue is expected to be up
We expect our Q2'21 non-GAAP gross margin to benefit from higher revenue and incremental software mix, which should more than offset unfavorable product mix trends and potentially higher component costs related to supply constraints.
We expect non-GAAP operating expense to increase sequentially, primarily due to the investments we are making to take advantage of future market opportunities.
Our guidance for the quarter ending June 30, 2021 is as follows:
-
Revenue will be approximately
$1,140 million , plus or minus$50 million . -
Non-GAAP gross margin will be approximately
59.5% , plus or minus1.0% . -
Non-GAAP operating expenses will be approximately
$512 million , plus or minus$5 million . -
Non-GAAP operating margin will be approximately
14.6% at the mid-point of revenue guidance. -
Non-GAAP other income and expense (OI&E) will be an expense of approximately
$12 million . -
Non-GAAP tax rate will be approximately
19.5% . -
Non-GAAP net income per share will be approximately
$0.38 , plus or minus$0.05 . This assumes a share count of approximately 330 million.
For more detailed insight on guidance, please refer to the CFO Commentary that can be found on our website.
Capital Return
Our Board of Directors has declared a cash dividend of
First Quarter 2021 Financial Commentary Available Online
A CFO Commentary reviewing the Company’s first quarter 2021 financial results, as well as the second quarter and a full-year 2021 financial outlook will be furnished to the SEC on Form 8-K and published on the Company’s website at http://investor.juniper.net. Analysts and investors are encouraged to review this commentary prior to participating in the conference call webcast.
Conference Call Webcast
Juniper Networks will host a conference call webcast today, April 27, 2021, at 2:00 pm PT, to be broadcast live over the Internet at http://investor.juniper.net. To participate via telephone in the US, the toll-free number is 1-877-407-8033. Outside the US, dial +1-201-689-8033. Please call 10 minutes prior to the scheduled conference call time. The webcast replay will be archived on the Juniper Networks website.
About Juniper Networks
Juniper Networks challenges the inherent complexity that comes with networking in the multicloud era. We do this with products, solutions and services that transform the way people connect, work and live. We simplify the process of transitioning to a secure and automated multicloud environment to enable secure, AI-driven networks that connect the world. Additional information can be found at Juniper Networks (www.juniper.net).
Investors and others should note that the Company announces material financial and operational information to its investors using its Investor Relations website, press releases, SEC filings and public conference calls and webcasts. The Company also intends to use the Twitter account @JuniperNetworks and the Company’s blogs as a means of disclosing information about the Company and for complying with its disclosure obligations under Regulation FD. The social media channels that the Company intends to use as a means of disclosing information described above may be updated from time to time as listed on the Company’s Investor Relations website.
Juniper Networks, the Juniper Networks logo, Juniper, Junos, and other trademarks are registered trademarks of Juniper Networks, Inc. and/or its affiliates in the United States and other countries. Other names may be trademarks of their respective owners.
Safe Harbor; Forward-Looking Statements
Statements in this release concerning Juniper Networks’ business, economic and market outlook, including currency exchange rates; our financial guidance; and the expected continuing impact of COVID-19 and the consummation and integration of, and financial impact resulting from any acquisitions on our guidance; our expectations regarding our liquidity, capital return program, backlog, product mix, costs; and our overall future prospects are forward-looking statements within the meaning of the Private Securities Litigation Reform Act that involve a number of uncertainties and risks. Actual results or events could differ materially from those anticipated in those forward-looking statements as a result of several factors, including: the duration, extent and continuing impact of the COVID-19 pandemic; general economic and political conditions globally or regionally; business and economic conditions in the networking industry; changes in overall technology spending by our customers, including Cloud providers, Service Providers and Enterprises; the network capacity and security requirements of our customers and, in particular, Cloud and telecommunication service providers; contractual terms that may result in the deferral of revenue; the timing of orders and their fulfillment; manufacturing, supply chain and logistics costs, constraints, changes or disruptions; availability and pricing of key product components, such as semiconductors; delays in scheduled product availability; adoption of or changes to laws regulations, standards or policies affecting Juniper Networks' operations, products, services or the networking industry; product defects, returns or vulnerabilities; significant effects of new tax legislation and judicial or administrative interpretation of tax regulations and judicial or administrative interpretation of tax regulations, including the potential for corporate tax increases under the new Biden Administration; legal settlements and resolutions, including with respect to enforcing our proprietary rights; the potential impact of activities related to the execution of capital return, restructurings and product rationalization; the impact of import tariffs, depending on their scope and how they are implemented; and other factors listed in Juniper Networks’ most recent report on Form 10-Q or 10-K filed with the Securities and Exchange Commission. In addition, many of the foregoing risks and uncertainties are, and could be, exacerbated by the COVID-19 pandemic and any worsening of the global business and economic environment as a result of the pandemic. We cannot at this time predict the extent of the continuing impact of the COVID-19 pandemic and any resulting business or economic impact, but it could have a material adverse effect on our business, financial condition, results of operations and cash flows. Note that our estimates as to tax rate on our business are based on current tax law and regulations, including current interpretations thereof, and could be materially affected by changing interpretations as well as additional legislation and guidance. All statements made in this press release are made only as of the date set forth at the beginning of this release. Juniper Networks undertakes no obligation to update the information made in this release in the event facts or circumstances subsequently change after the date of this press release. We have not filed our Form 10-Q for the quarter ended March 31, 2021. As a result, all financial results described in this earnings release should be considered preliminary, and are subject to change to reflect any necessary adjustments or changes in accounting estimates, that are identified prior to the time we file the Form 10-Q.
All forward-looking non-GAAP measures exclude estimates for amortization of intangible assets, share-based compensation expenses, acquisition and strategic investment related charges, restructuring benefits or charges, impairment charges, strategic partnership-related charges, legal reserve and settlement charges or benefits, gain or loss on equity investments, loss on extinguishment of debt, retroactive impact of certain tax settlements, significant effects of tax legislation and judicial or administrative interpretation of tax regulations, including the impact of income tax reform, non-recurring income tax adjustments, valuation allowance on deferred tax assets, and the income tax effect of non-GAAP exclusions, and do not include the impact of further changes to tariffs and the impact of any future acquisitions, divestitures, or joint ventures that may occur in the period. Material changes to any one of these items could have a significant effect on our guidance and future GAAP results. Certain exclusions, such as amortization of intangible assets and share-based compensation expenses, are generally incurred each quarter, but the amounts have historically varied and may continue to vary significantly from quarter to quarter.
Juniper Networks, Inc. Preliminary Condensed Consolidated Statements of Operations (in millions, except per share amounts) (unaudited) |
|||||||
|
Three Months Ended March 31, |
||||||
|
2021 |
|
2020 |
||||
Net revenues: |
|
|
|
||||
Product |
$ |
672.4 |
|
|
$ |
608.8 |
|
Service |
402.0 |
|
|
389.2 |
|
||
Total net revenues |
1,074.4 |
|
|
998.0 |
|
||
Cost of revenues: |
|
|
|
||||
Product |
316.5 |
|
|
269.0 |
|
||
Service |
142.3 |
|
|
149.7 |
|
||
Total cost of revenues |
458.8 |
|
|
418.7 |
|
||
Gross margin |
615.6 |
|
|
579.3 |
|
||
Operating expenses: |
|
|
|
||||
Research and development |
254.7 |
|
|
232.5 |
|
||
Sales and marketing |
252.7 |
|
|
239.2 |
|
||
General and administrative |
61.1 |
|
|
59.3 |
|
||
Restructuring charges |
19.3 |
|
|
8.9 |
|
||
Total operating expenses |
587.8 |
|
|
539.9 |
|
||
Operating income |
27.8 |
|
|
39.4 |
|
||
Loss on extinguishment of debt |
(60.6 |
) |
|
— |
|
||
Other expense, net |
(5.0 |
) |
|
(11.1 |
) |
||
Income (loss) before income taxes |
(37.8 |
) |
|
28.3 |
|
||
Income tax (benefit) provision |
(6.7 |
) |
|
7.9 |
|
||
Net (loss) income |
$ |
(31.1 |
) |
|
$ |
20.4 |
|
|
|
|
|
||||
Net (loss) income per share: |
|
|
|
||||
Basic |
$ |
(0.10 |
) |
|
$ |
0.06 |
|
Diluted |
$ |
(0.10 |
) |
|
$ |
0.06 |
|
Weighted-average shares used to compute net (loss) income per share: |
|
|
|
||||
Basic |
326.3 |
|
|
330.8 |
|
||
Diluted |
326.3 |
|
|
335.1 |
|
||
Juniper Networks, Inc. Preliminary Net Revenues by Customer Solution (in millions) (unaudited) |
|||||||
|
Three Months Ended March 31, |
||||||
|
2021 |
|
2020 |
||||
Automated WAN Solutions |
$ |
386.4 |
|
|
$ |
315.5 |
|
Cloud-Ready Data Center |
157.4 |
|
|
174.4 |
|
||
AI-Driven Enterprise |
161.2 |
|
|
143.4 |
|
||
Hardware Maintenance and Professional Services |
369.4 |
|
|
364.7 |
|
||
Total |
$ |
1,074.4 |
|
|
$ |
998.0 |
|
Effective in the first quarter of fiscal 2021, we began reporting our revenue by customer solution in the following three categories: Automated WAN Solutions, Cloud-Ready Data Center, and AI-Driven Enterprise. In addition, we will report Hardware Maintenance and Professional Services. The change provides for alignment on key growth drivers that is consistent with our strategy. Historical quarterly revenue dating back to Q1 2019 is available on Juniper's Investor Relations website in the Financial Reports section under the Financial Statements and Supplemental Data.
Juniper Networks, Inc. Preliminary Net Revenues by Vertical (in millions) (unaudited) |
|||||||
|
Three Months Ended March 31, |
||||||
|
2021 |
|
2020 |
||||
Cloud |
$ |
270.7 |
|
|
$ |
261.9 |
|
Service Provider |
438.2 |
|
|
375.5 |
|
||
Enterprise |
365.5 |
|
|
360.6 |
|
||
Total |
$ |
1,074.4 |
|
|
$ |
998.0 |
|
Juniper Networks, Inc. Preliminary Net Revenues by Geographic Region (in millions) (unaudited) |
|||||||
|
Three Months Ended March 31, |
||||||
|
2021 |
|
2020 |
||||
Americas |
$ |
583.0 |
|
|
$ |
579.5 |
|
Europe, Middle East, and Africa |
311.1 |
|
|
255.0 |
|
||
Asia Pacific |
180.3 |
|
|
163.5 |
|
||
Total |
$ |
1,074.4 |
|
|
$ |
998.0 |
|
Juniper Networks, Inc. Preliminary Reconciliations between GAAP and non-GAAP Financial Measures (in millions, except percentages and per share amounts) (unaudited) |
||||||||||||
|
|
Three Months Ended |
||||||||||
|
|
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
||||||
GAAP operating income |
|
$ |
27.8 |
|
|
$ |
98.1 |
|
|
$ |
39.4 |
|
GAAP operating margin |
|
2.6 |
% |
|
8.0 |
% |
|
3.9 |
% |
|||
Share-based compensation expense |
C |
57.5 |
|
|
50.9 |
|
|
42.0 |
|
|||
Share-based payroll tax expense |
C |
3.4 |
|
|
0.5 |
|
|
4.0 |
|
|||
Amortization of purchased intangible assets |
A |
19.1 |
|
|
11.9 |
|
|
9.9 |
|
|||
Restructuring charges |
B |
19.3 |
|
|
53.1 |
|
|
8.9 |
|
|||
Acquisition and strategic investment related charges |
A |
2.3 |
|
|
17.7 |
|
|
1.3 |
|
|||
Gain (loss) on non-qualified deferred compensation plan ("NQDC") |
B |
0.7 |
|
|
2.9 |
|
|
(3.7 |
) |
|||
Legal reserve and settlement charges |
B |
— |
|
|
0.3 |
|
|
— |
|
|||
Others |
B |
— |
|
|
0.9 |
|
|
— |
|
|||
Non-GAAP operating income |
|
$ |
130.1 |
|
|
$ |
236.3 |
|
|
$ |
101.8 |
|
Non-GAAP operating margin |
|
12.1 |
% |
|
19.3 |
% |
|
10.2 |
% |
|||
|
|
|
|
|
|
|
||||||
GAAP net (loss) income |
|
$ |
(31.1 |
) |
|
$ |
30.8 |
|
|
$ |
20.4 |
|
Share-based compensation expense |
C |
57.5 |
|
|
50.9 |
|
|
42.0 |
|
|||
Share-based payroll tax expense |
C |
3.4 |
|
|
0.5 |
|
|
4.0 |
|
|||
Amortization of purchased intangible assets |
A |
19.1 |
|
|
11.9 |
|
|
9.9 |
|
|||
Restructuring charges |
B |
19.3 |
|
|
53.1 |
|
|
8.9 |
|
|||
Acquisition and strategic investment related charges |
A |
2.3 |
|
|
17.7 |
|
|
1.3 |
|
|||
Legal reserve and settlement charges |
B |
— |
|
|
0.3 |
|
|
— |
|
|||
Loss (gain) on equity investments |
B |
(2.1 |
) |
|
(2.3 |
) |
|
1.5 |
|
|||
Loss on extinguishment of debt |
B |
60.6 |
|
|
55.0 |
|
|
— |
|
|||
Income tax effect of non-GAAP exclusions |
B |
(30.5 |
) |
|
(31.8 |
) |
|
(10.8 |
) |
|||
Others |
|
— |
|
|
(4.3 |
) |
|
— |
|
|||
Non-GAAP net income |
|
$ |
98.5 |
|
|
$ |
181.8 |
|
|
$ |
77.2 |
|
|
|
|
|
|
|
|
||||||
GAAP diluted net (loss) income per share |
|
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FAQ
What are Juniper Networks' Q1 2021 revenue results?
Juniper Networks reported net revenues of $1,074.4 million for Q1 2021, an 8% increase year-over-year.
What is Juniper Networks' outlook for Q2 2021?
For Q2 2021, Juniper expects revenue to be approximately $1,140 million, with a non-GAAP gross margin of around 59.5%.
How did Juniper Networks perform in terms of non-GAAP earnings?
Juniper reported a non-GAAP net income of $98.5 million for Q1 2021, an increase of 28% year-over-year.
What was the GAAP operating margin for Juniper Networks in Q1 2021?
The GAAP operating margin for Q1 2021 decreased to 2.6% from 3.9% in Q1 2020.
What was the net loss reported by Juniper Networks in Q1 2021?
Juniper Networks reported a net loss of $31.1 million for Q1 2021, which is a 252% increase in losses year-over-year.
Juniper Networks Inc
NYSE:JNPRJNPR RankingsJNPR Latest NewsJNPR Stock Data
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Communication Equipment
Computer Communications Equipment
United States of America
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