Juniper Networks (JNPR) 25 Apr 232023 Q1 Earnings call transcript

Greetings. Welcome to the Juniper Networks Q1 2023 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 to turn Lubert. host, now will conference your over Jess I

may You begin.

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

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

the expectations. X-K Today’s call statements differ commentary and portion are the forward-looking CFO most contains materially. uncertainties, release filed These to and with results discussed press other These in today recent the our risks our SEC on based subject actual Investor statements our on of certain today, and current our might risks our furnished in posted are filings. XX-K, Relations website

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

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

we We like to that question Following as would as who will so our a chance. possible have take many question you prepared ask please ask yourself one questions. remarks, people to limit that a

call With Rami. hand that, the over I now will to

our year-over-year joining grew and delivered quarter everyone, the sales across all of you afternoon, saw thank XX% and to solutions results. growing revenue product year-over-year of on customer total we our all geographies. Total XX% better-than-expected exceeding with midpoint XXXX for year-over-year and call today’s discuss results Good during first guidance. QX We us and the growth $X,XXX million,

improvements margin healthy for resulting range. seeing our non-GAAP in availability high both supply. in These $X.XX, end guidance the QX as of we’re the expectations, well our earnings Profitability results above non-GAAP in of our and strong reflect as as demand was operating the gross of solutions customer also per quarterly share exceeded

requirements our we supply well, customers’ to perspective, to continue teams extremely go-to-market on and years. our capitalize likely execute several and that to the cloudification chain a initiatives from in increase technology, next remain are and over digital network confident transformation Our positioning further

basis during placed expected, As not total previously underlying that to and consumption times on quarter, would normalizing would reduced This customers’ orders see to are believe as seasonal return a need patterns basis, have traditional said, ordering orders that true With more lead that new the QX order expect sequential return than year-over-year a our and March this our customer go-forward and starting early demand XX% to as growth the improve should quarter. imply I early we orders due declining patterns on do this we believe declines year. softened potentially to for year-over-year. year-over-year this reflects a as of improved. more soon

momentum which by extremely growth both in business, enterprise nearly From the we’re QX our the I XX% encouraged branch a and grew basis, the remain data double-digit year-over-year in and campus center. revenue in vertical seeing with

year-over-year. more and strong momentum XX% commercial market, XX% orders grew in channel in deal where the We than by also grew registration saw year-over-year, by where the

total March second Enterprise quarter. represented more largest consecutive for fastest-growing the our the quarter, our and XX% a of for of As and accounted vertical our revenue than both

XX% and in with exceptionally business branch QX revenue nearly campus Enterprise performed Our well growing year-over-year.

to Our optimize cloud proactive them our customers experiences minimize recognizing which are user clearly through helps costs of architecture, value automation. AI-driven operating cloud-native the and client from

are switching market QX business, logos Mistified attach of AI-driven with year-over-year time SD-WAN as in outpace by our increased our record which seeing the to as by nearly momentum continues the pull-through nearly new offerings. segment as and of products AI of from Revenue XX% driven wired by frame grew Mist defined increasing the year-over-year. XX% we well is Wi-Fi

a retailers, U.S. pipeline logos top-tier a more largest Apstra to positive data company of U.S. provider and our global just for overlooked, a and leading to included quarter view as this on Not a which top wins be strong center name build one as the to than few. logistics year-over-year Important pharmaceutical a bank, software, continued Enterprise doubled indicator hardware new we prospects. our for pull-through a basis we every dollar experienced of

environment. level balanced year both of where Given Enterprise expect our during the and share challenged against portfolio compete, our to even large modest a relatively more the grow revenue I we orders markets differentiation, macro in in us

Tier Our customers, PTX timing larger in supply service large due in our some QX provider Service of platforms. orders performed which with of part to for us Provider particularly fulfill prior well business the and X enabled our also to MX

revenue about opportunities our likely many optimistic we’re the quarter-to-quarter year business a this these I’m around is based remain customers to ability customer large in on on basis, momentum wins, the with remain While of grow seeing of early during deployment. XXX-gig which stages to lumpy the

our our metro suite. led cloud automation We by strong also in interest see portfolio, Paragon to continued early

platform order another ACXXK of triple-digit more growth. our fact, business we material revenue beyond. to momentum year year later With saw XXXX expect this portfolio within build become and and to and year-over-year this in to enhancements the next, In further this quarter expected through

lines verticals, time project we around world. that uncertainties I’d like to across to more accounts to deployment the macro closely each acknowledge and of see scrutinizing due customer happening the continue are our budgets

series While low, saw periods dates be line. time during certain to improves, pushed vertical, the extremely in delivery March future is where This continue to of cloud better current more to are supply the we project particularly prior projects and true digesting as seeing proving customers quarter. order are reschedule remain to we match a cancellations customers purchases,

negatively confident to conversations the function growth on in we’ve these remain our year, may regarding with our ability timing accounts, cloud long-term cloud. While current business outlook grow based of the of impact these these a our are delays many delays had positive in and we’re

see seeing uncertainty. we’re Service My to XXX-gig Provider historical is enthusiasm by the the Enterprise ongoing the remains our market improvements deployments, I in which backlog our regarding navigate strength success In remain our confident summary, well above strategy continued optimistic levels Longer meaningful I attractive and of new the term, to our fueled of around and we’re the and we on ability and momentum, drivers. in in cloud, while continue additional supply. present maintain that these opportunities opportunities many both footprint with in area customers wide seeing engaged the growth remain potential a could closely already center growth data

one diversity weakness the enabling opportunities. of resources encouraged business greatest I pockets vertical the our in to improved is by which and our Finally, remain any us or pivoting to to sensitivity areas of by navigate market lessening the customer of

for our full and year. year at are QX raising actuals growth revenue expectations the currently for QX, we expect to Based on outlook these dynamics, coupled deliver with our X% and least

than deliver to improvement We continue on to delivering operating improved margin XXX profitability and of XXXX. points basis remain focused in expect greater

I results will financial now in the our turn quarterly detail. to call over who will more Ken discuss

Thank everyone. Rami, afternoon, and good you,

gross by by revenue, of start non-GAAP guidance year-over-year. outlook. the margin. of and first XXXX then discussing $X.XX, million of the above our will with on above which color $X,XXX I our share guidance provide our higher-than-expected the first in delivered the earnings driven some is We and results, XX% revenue range, quarter per midpoint quarter We ended up

grew led all revenue a X%. areas. revenue XX%, enterprise XX% From cloud-ready way saw with the growth perspective, increased solutions center customer revenue and of automated in solution AI-driven growth revenue data we year-over-year WAN

at basis, remain Cloud increased year-over-year. grew increased ARR, revenue related revenue, ARR software was XX% Service growth X% our an year-over-year. XX% decreased revenue year-over-year. We $XXX Deferred or recurring which was Total $XXX for subscriptions and and a Looking Enterprise SaaS our outlook was services million Annual year-over-year total XX%. in On growth. license confident our XX%, and software and grew XX% software vertical. from revenue Provider by of million, and increase

reviewing for security to the the X Service quarter, our was of first $XXX from million, due X up an X was Cloud Total of supply. year last improved top XX customers were were and quarter related Enterprise. revenue the timing Providers, shipments XX% to In

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

by the higher margin gross which favorable above revenue Non-GAAP guidance, and XX.X%, mix volume. customer primarily was midpoint our driven of was

supply While costs, would for those posted estimate chain we chain gross of elevated. have of certain If remain and non-GAAP we the supply costs constraints our to for we majority a has elevated approximately XX%. supply products, margin not experience for that improved components continue supply

headcount-related Non-GAAP margin. by driven operating due Non-GAAP operating expenses quarter, to was increased costs. margin expectations, gross primarily which XX.X% for the XX% and year-over-year X% and better-than-expected our sequentially, above higher was revenue

first As XX% in quarter. down more year-over-year the bookings Rami mentioned, were than

were a supply with dealing and orders reminder, we lot extended times. as customers in early lead of QX still getting XXXX, As were constraints a

$X.X orders QX billion. our product In over XXXX, were

combination This supply in we as no customers is placing improved year-over-year consuming moderate and a lead early and in to orders are are Now bookings, are going times shortening. longer those constraints have forward. resulting which expect decline orders early

but backlog due historical remains the normalizing. Due levels relative factors, improvements but elevated further in to we Our of to in expect remain declined these continuation elevated and to exiting million more to $XXX backlog by supply decline order than XXXX, year. the patterns

million from share. We dividend dividends, per of quarter. million the flows $X.XX Cash $XXX operations in $XX in reflecting was quarterly paid a

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

This to in testament pleased a very commitment to and financial performance our I’m our the is quarter. dedication first excellence. with team’s delivering

the on our commentary million, XX% guidance provide we you to second on year-over-year. CFO Relations find which At is our like growth would in available expect website. of of I the color which Now, revenue Investor detailed quarter some guidance, our midpoint $X,XXX can

backlog improved supply by the elevated Our is driven of confidence an our forecast, outlook. and demand our strength

is be XX%. Second quarter approximately margin non-GAAP gross expected to

We sequentially. non-GAAP to flat be operating expenses expect quarter second

Turning rest to XXXX. of our the for expectations

are and QX least raising have expectation for embedded reflects and With in our expectations growth. to from guidance. at visibility within at X% our our current least expectations we year revenue and the full the X% supply, order backlog QX our This revenue guidance the increase overachievement we

revenue of the more seasonal remainder sequential patterns. growth line we XXXX, normal to with in see For expect

availability be However, seasonality of of the requested by and timing delivery will customer supply dates. the degree of impacted

in We slightly is expect up versus above flat XX.X% to non-GAAP of to prior approximately gross the expand margin to XX% in This slightly guidance XXXX. XXXX.

However, results non-GAAP and year on margin on costs. to mix basis. by this than the points we XXX in expect will chain operating full mind, of a depend revenue trajectory margin With gross future greater basis expand supply

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

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

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

for Now, to I open the would questions. call like

Our Instructions] is from question with first Evercore. Amit [Operator Daryanani

there’s maybe suspect decline just you look just is looks touch notable Could variance is then think around I -- of on guess that, XX%. about across around And here. three do I segments? like normalized the really normalized What right is level I billion. obviously world? order you’ve that seen billion, backlog now for order do you what question some number trends be think What have might $X.X the I level related to post-COVID the a the the there. It’s $X.X in backlog the like?

Yes.

So want from perspective, it decline the really an that is would you to remind order comparison. I about

I So receiving were prepared still of ago, a were year my mentioned in a year remarks, we a billion. as the orders over $X.X lot early ago, orders,

receiving as coming Now lead are in. no is now actually are early longer those what’s happening orders are orders placing customers and times

than is really what leveraging orders say year, actually early greater if you’re they booked the longer This So, you than as less will. last booking as no real were they’re what already demand, and demand normalize, we orders. I real would seeing they’re year

you’re So those year-on-year why seeing that’s declines.

the very Service Provider was decline and a a Enterprise, a were did client perspective, The the decline see slight that more of From there. our majority normalization were Cloud his the having say, in those see I perspective QX, in as bookings. slight an of orders to in in we vertical reasons did required was prior from weakest vertical we And prepared that for remarks. mentioned some Rami compared particular, would Cloud in the ones

backlog normally we to expect at I year backlog elevated from the definitely a pre-pandemic. exit more levels. perspective say than twice perspective, would were we what On the

close million, So be of out. give used the or a take, year million, $XXX around I we than $XXX to we exit double more bit. expect as normal to north little levels

The next comes Long Barclays. with from Tim question

impact it’s as little just there that I could a in are out the one, tell or happening you or what kind us future the anything bit. you across products it network do the cloud on just anything players? other think secondly why the into larger you periods, and was any orders, Maybe technologies push-out the pieces straight into with on tidbits on keeping a do And of could hoping orders? push the later have or just think more Is digestion, these then, period happening? those on your dig will of push-outs you board,

Yes.

that, take Tim. me Let

So QX, segment first, function wanted. ship mostly I what the Cloud that want products to of highlight our a was ability saw in that our we to in customers

Your DR, engaged been not out remain in a the would interconnect, move cases the only optics, specific that, sort one not X the an in projects, of segment. say little certain XXX-gig said There in than question, projects did those type the of bit emphasize cancellations for even seen It’s of I data were want bit I more demand impacting I that we data It’s to in center of is think, dynamics sort center around hyperscale say I’ve cloud. upgrades, project have adjustment projects. a on some the the to is that, Cloud. pluggable all it’s environment customer. that. time. intact. timing specific broader I which to not around any And have the Having in cloud I seen Cloud Tier of DR-plus use definitely fabric, provider. that scrutiny example, projects that there I’d that demand more mean, in is

sort that that expect I next that of will -- impact it recover. do for fully I to last few So but quarters, that the expect

of the supply norm. Rami from deployments. new largely the quarterly for is timing from just cloud revenue revenue levels. to and QX do timing We going And the said I’ll think expect levels due of a just reiterate Yes. to I recover is don’t to results perspective, that be what cloud QX

of down normalize QX. Service little through in was bit timing in growth expected That a Service more we You Cloud will shift demand. QX and and with the from Provider saw towards a proceed backlog of a in a supply large Provider. burn as than to projects

Silverstein The next Paul from question TD Cowen. with comes

I issue delays customer to Ken are Returning beyond question, and this hoping some just downsizing cancellations. on Cloud, for was -- focused what hoping on not if and more insight, Tim’s Rami, what severe that trended increased terms is XX you does how delays, of and over seeing and and time has to those recently? it scrutiny, it days the compare how are ago how

thanks. Paul, Okay.

I the color I’ll I some if can that important it’s we that The I’m delays give said, more I any don’t you started highlight in provided. to to that I not quarter. the permanent. So just do you specific not see this sure I think of Like to is much customer. one most than say to thing I believe is that want all early

motion. power features, was are in matter customers engaging it density, in, lot very say cloud active. are of to projects mean, They the I then much XXX-gig capabilities, we if our labs, are engaging I in that So, when that things testing specific permanent in still efficiency, these all -- a

in it’s terms simply of And thought time. exactly, sort in going the certain come but sort And much, that of moved say out to and I few projects a fully by what this I’d has of some is know end And to cloud not how year, we so difficult then year. ramp if of back quarters. demand next the for by expect environment

Cloud we carrier, be to it to clear, just same environment. is comment? the you Enterprise demand beyond But cloud if specifically look referenced Rami, and

didn’t more thought this Paul. you, actually I I Okay. Thank Cloud. catch around was that.

a it’s No, question. broader

totality Enterprise Cloud. including the at Looking and business,

Okay.

I clarification. that appreciate So

did mention all broader orders professionals, So say IT about a let the things are that up. CIOs environment. me few customers, We scrutinizing

we very AI with are massive as enterprise very applies our business, also statement enterprise in And to enterprise itself I digital the feel environment fact in verticals. relatively well that’s very for data across well solutions the good said suited are that demand a are projects about for all Having modest in the share. very our that think about that strategic center. opportunity the which generic both a about in good player large that, cloud I still there I really feel differentiated client a transformation around as

macro Ken for this is can enterprise orders opportunity that segment as a and should the grow environment business in see I vertical, to which us say, is the just mentioned that year. in in even this So, in or why anticipate we we for I good, growth that challenged well. revenue certainly, our beyond And very believe

I’m and this I will feeling service for are projects just core there. the space, also service edge XXX-gig provider still business add then for to that, good in quite about year. our provider actually upgrades

in to all, sort the service don’t last revenue a a -- to actually, you for beat much timing current the all saw function the our that’s of a timing And supply. same provider’s should of expect it frame row. very because for the going model -- QX to But this I on You’re we’ve years we in in think year. two time of vertical beaten repeat the long-term expect of based again trends,

enough didn’t more might number And a the to some in time. environment. that to right. where just follow-up you Any forecasting you hard margins longer Did shareholder appreciate this this environment. this made give you order you XX-plus, It beyond But year Historically, will hospitable Presumably, model. -- quick letter. hard I All clarification. you kind I much it thoughts can look the trajectory? thoughts margin have good miss missed term see could improve be normalized one in any as this share it? were XX-plus adjustments. gross back I that in of I in question. operating getting But I share? to is, question will My things that Ken, appreciate ever enough it’s terms over environment, a if

Yes.

placed really no adjusted no we longer is early necessary. no or Lead ahead, early we phenomenon… consuming longer orders are -- are times is right? did orders, call ordering to orders. That’s was orders, phenomenon fact, so orders longer It’s we in in, not normalized no talked stopped create normalized coming are because orders we there early longer a that just previously why last adjusted just customers have opposite on happening, providing is ordering. Since ordering they’re So what we disclosing happening that the the removed really

made apologize. also thought you looking, I the adjustment an backward I in but

problem. No

situation margin expect to greater absolutely for this a XX-plus phenomenon. On the due continue won’t than come. reason margin add for we It’s line margin to lower course. operating leverage perspective, expand the is back our to operating perspective, I basis years points to the expanding very operating operating as in one-year we revenue margin XXX into to something on margin expand than leverage year. not come. we to years this expect actually why as focused we’re growing no sustainably That There’s grow and business expenses on get we top and

should faster rate, lift capability. bit least, Last to lower-margin would Gross some help just mix, to be overall are transitory have margin we the Clearly, have more not some that expanding obviously into some future. volume but the headwind headwind to I’ll give will of and we is a will of where at margin normalization going of predict. a which difficult be help, levers. will of the a little software the us our give right, a you costs the systems also a but of

I’m I and on there’s operating margin, without So confident feel a about expand think really one very to but is opportunity the expanding focused number, margin. giving gross

David question Vogt UBS. from comes Next with

in release year, first talking on it commentary you’re in sort March just a go from I the adjusted the But to out you’re little maybe quarter I’m not the bit growth number XX% and based trying about of to the of your commentary, out rates order in parse of your maybe kind Ken, giving that trying know that to would order is use signposts maybe below the I suggest kind last we release. comment. of figure backlog if of orders. what can back Just

at basis something feel any Just that margin maybe expansion, Thanks. able there more the quarters anything little a than at confident second, see you And limit surprised to of up XXX And maybe gross take basis be the there that next the more would sort couple in Is given of points. bit operating I’m help least to that when obviously, you didn’t then points. be that you margin, about you great. least over do a to bit strength your little visibility? think XXX

Yes.

more So provide color. XX%. last and year for than kind tried we order it’s by X.X, the did greater -- decline this than provide growth year’s of I mean greater to number provide difficult I of did I to

point that’s for know will how So I mean, some account one that business. I works. really models don’t the out our I math SaaS folks thing is

up And not backlog. shows So business a show stream, from of SaaS a our lot number. is bookings, backlog a SaaS up the in service is does but It’s product since it in only revenue missing model.

So results. kind that translate model our of might versus actual you help your

really operating for the target margin provided we question, or a the On year. haven’t guide a

minimum XXX basis should margin providing the up plus margin, margin the there’s give than on gross estimate take, did factor deliver still greater than gross XX%, guide, a line to minus a or there. translate or right, operating of current or the is XX% we more If our floor, points. approximately Yes, that but We’re I XXX.

an of than haven’t XXX. a we target, provided more margin operating So, of floor just greater really

comes question JP Chatterjee from Next Samik Morgan. with

QX, financial services relation recently, and Is to things here the wanted deteriorated you any banking dive a particularly that? need into getting mean, you orders Ken, I just terms of all seen back guess the Have sort verticals? Maybe check QX order just to wanted have in if I think I across sort about for consistent three of that check QX. mid-teens I on Is of a more back think think, growth particularly across side. doing increase you, math, forward, the in touch commentary that relative you you get of from an had the just a the recently verticals, to And going to on the on I I improvement bit. impression more of seasonal enterprise, there the orders given are secondly, from that. I of that to seeing right? levels to consistent some improvement to growth that my to on in in more more or a can wanted math, sort in seasonal challenges we customer there’s that.

start, me let So Samik.

in year. So, of of and our was depend think, will broad seasonally, I’d statement a the definitely the I revenue little Provider. be terms to return again, some for that project more it around that, will say it our provider Enterprise a push-outs bit Service applies of on Cloud temporary. just to I the our highlighted that

next things change might in quarters Cloud. of that So for the couple

fact, think material have also fact impact in seen a by environment greater fears, demand ways, levels exist in and of operations of of challenges at the our means intelligence, in efficiency is demand digital on in we is that in to business. enterprise artificial touched AI to the take forcing element say do impact no, some today And solutions. hard and that et to us transformation I of biggest leveraging And enterprise in as where differentiation macro automation, view the for the kind some of creating a anything look you their enterprises cetera, I would that the not Enterprise I’ll of be expect and significant our or it that, in you environment, banking our to would solutions.

a bit of -- enterprise effect business of creating it’s our somewhat parts taking of a a in we’re that advantage of. So, positive certain

understand to way prior this normalized just that’s normal, they’re to XXX, say, normal growth seasonality orders were best normal, want orders were sure If than the XXXX make $XXX year I sure about Yes. talked get think back normal. I but below And the greater think I below true the of of order the -- just orders we’ve on to say, to XXX. kind make QX quarter, and really it, mean, of to people rates, the it. about were I want XX,

mentioned. orders normalization So normal, which largest is XXX to is to the that quarter. end back that’s the what’s you’re typically by happening closer our to our of seasonally by in results, the the year-on-year expect way, that year, we closer to seeing why decline get QX QX I QX. And by

absolutely So I this to are growth see mean, growth And directionally correct. QX. to sequential fairly do between expect you’ve here and by QX we those mentioned from QX expect level. significant from rates order returning I growth possibly growth QX

The comes Fargo. with next Wells question from Aaron Rakers

I’ve got operating the can. some thing want One that if guess, like to sequentially back time. the two and well, me out it to I stands headcount that is level I I trajectory that is we’ve trend in as to here. margin highest the go looks your seen growth quite

is operating that as do capacity? up was XXX to the XX%. If So that investing margin investment a headcount? sales I’m I it think far as just I tied of to about making you’re and guess how Just in sequentially. so, curious, employees -- returned I’m think curious I there that is on kind in back change headcount back going

Yes.

differentiation lot particularly of quite have we’ve things opportunity we and do to talking we’ve the a have in bit, take really doing, for we about is market, So headcount business faster is One, obviously, and a to sales, advantage continue we of sales, of which we believe and to grow investing some and a quite expect which up are much enterprise there’s couple been product that year-over-year, time. happening. been than as scale

in investment globally. sales intentional an is there enterprise So

about really as is lower-cost I thing low mention cost cost, -- in high predominantly about is it would we other of some The grow it’s regions. continue to

we’re operating to big necessarily focus the dollars is headcount the that growth the seeing not you’re you expect. tied that. So leverage. seeing And might margin And

from the to We year. to revenue to last perspective expect expense a years, have this couple that of ratio and been delivering we that do continue over

expanding to margin. very are operating we committed and bottom managing So line the

a And follow-up. earlier. asked Okay. then quick Not

real Just like us the it that amount can guess side. that? appreciate help over it’s the by size The again, of on seeing that pull-through logos of the the curious, seems is up of you’re crux effect business, year-over-year. Xx And though, Apstra hardware you increased garnering traction with I

little unpack bit maybe a further. Just that

Yes.

truly of We the measure does matters most broken weapon networking us us that really center part it displacements. open that data do is to is give just a what first that competitive like that it’s market haven’t that super management really data success a for the intent-based I pioneered that ongoing scalable will solution, out And that of fabric But say operations makes and the is the center the it Apstra business. enables it’s solution, us, of the Apstra solution to a in truly center data unique simple. sort the sales because of only concept -- is a

standpoint, from that it’s So meaningful. becoming increasingly

wins basis. the if pull-through sale large. we’re component the even And New effectively. is on deals, in relatively Apstra what the growing year-over-year can are in spear hardware of the that is those customer finding of of software quite small, the we is a And compete actually tip meaningfully be terms how

Badri Suisse. comes question from next Sami with Credit The

Yes. Francis Sami Badri. on for

by verticals trends reports? company is order or I return XQ question growth will that had was ‘XX, growth confidence first what the giving type confidence recent demand giving you are from customer you other to what year-on-year considering The product of that

Cloud, scrutinize in This to across offerings board. have that the funnel every customer of of we XXX-gig of course, conversations right have pipeline SP day really Enterprise differentiation solutions each we The normal carefully. our we due business. the course and and and also for really that comes down a now, of the competitiveness

end should give in improve here factors confidence us year. of these growth year-over-year of and order from fact, could, All in patterns by result the that the

and grew question. software difference a and grew only two through how a between you There’s last one ARR services And growth Thanks. those related XX%. Could actually of walk bit us just little X% Great. why rates.

little color a just growth maybe and So those the between bit takes between puts rates? more two

Yes.

period. say, think of ARR than, see share I is tend still there Flex overall, is piece, our is less of driver that but minority the And it’s -- primary seeing why software our overall fastest-growing more lumpy. which software lion’s did. be our growing year ratable model period our perpetual still we piece -- like business on-box clearly does to it’s the grow as particular sustainably, it you’re a a SaaS this the software, bit in ago is of The Flex is little which licenses the software did the

with from next comes question Jeffries. Notter The George

provider would is were ask were stream an I provider your maybe correction. guess seems and of now your content physical revenue that’s reduced. inventory Thanks. build shortening network. capacity It maybe an that that are of Any helpful. bit your as be lead lead that’s in you products And holding here to orders, appetite I inventory quarter. for their for on And it inventory, seeing possible quite customers or here obviously, softer that about built inventory a cloud might the conditions wanted times Is like be as going inventory that’s times longer. are sense the excess this

placing year think orders I Well, and factor biggest think -- times terms I product, as year-plus for demand that Juniper same the were the is for cloud if dynamics, ago, out. were Ken provider in just of order to to on they touched a not long. an they the wait a Today, lead have would environment make extended order the this, but

combination this of of year. to a the them period through two place QX last need QX is in going them of no things digestion. to as for many So results quarter there Basically, these compared orders

the that is say I way in honestly, is simplest think right what can I segment Cloud now. the happening

to is, customers quarters those you think the I it guess into inventories? think the you into networks, that went shipped do follow-on or product recent went you to that in do

optimism of to be of back quarters affairs of say, get it suspect But let’s me some that we level the through it a into the don’t to of the to is early -- net for which they of need on year have deployments. I they are visibility, normal go couple for next of next gives engaging of In some they’re the so meantime, by that they gear getting this working some going go going do are of future orders, year. year orders lot a to into And build-outs. it mean, a I place or to consume placed they did the inventory. orders in not honest. that will did to place network, future effect because full projects, a or, with I us additional going actual end less state Cloud be ago

Thanks That’s any versus lead And can year product vary I’d a currently, it the be by times you curious. in your of line for have sense it. lot. summer Got realize great. back generally last maybe lead where then also, I times? SKU. But and sense a were for

Yes.

of we’ve X times generically average talked that kind of the were of range. in months lead kind So kind

greater Some products time back of of even XX actually the was a which year height or were the ago. lead in about extension, slightly kind months

X months, Now, than would we’re average. a I would something say, kind We’re better of seeing X to kind seeing, months of average be less X right? on

So have. a fine months out, quarter customer quarter and in or degree bookings literally provide X-plus quarter with no our quarter a where coming consistently basically new full to in they and that still that’s was a be buying could skip that times and the lead

Next Marshall question comes Morgan Meta from with Stanley.

Maybe on builds question. first for me somewhat George’s question

this Just on much surprised use a portfolio is bit if constrained. of of inventory give cash still of can a how was a little guess quarter. I sense I you the that was -- still

you when expect to build work kind of be or of constrained of inventory some inventory products? situation just to able other on down the out not you’re So an just because would

Yes.

constraints are inventory lessened. the getting So,

amount why fairly coming lead is coming the our are of to are mentioned, our That’s average, constraint on I down times customers lead As times down, less. materially.

in been They’re were the backlog committed see, put are outflows orders, purchase almost are see the ago starting cases, you’ll sure quarter, inventory they faster we’re bit. So, what about of many billion. A you’ve component They’ve seeing And a think, lead of to a to are a plateau start year is upwards the quite -- $X.X our commitments. turn to than QX. billion, our QX the or we still long. probably of that right? receiving purchase going $X orders, north year the billion then, right? purchase ago, year order to times summer, books over But because providers I those we, previously quicker. in So come inventory I’m this the be to inflows down tracking we’re orders inventory expected you but on able of $X.X the

seeing the that flow So, inventory. through you’re

Great. And maybe just as a follow-up question.

You guys had least at win in of a year. you last very QX cloud that announced sizable

worth it’s maybe Just get is out, inventory the -- this has of that of across that across cloud really your trying how kind calling customers? of order, or customer’s a to headwind an much additional initial comping not board, sense

of we’re cited some in past they all help will important, us push-outs some or we’ve in the Well, the will wins win meaningful, as even our event maybe the of business. it mean still projects. cloud slowdown we are remain I and something as quarters having a If and of will that and that they is later, proud help expected, help. little very soon still but not,

read beyond much think too I that, I wouldn’t it. into

Yes.

on year worth ago had that’s really They lead were. commentary, a to ago. our where cloud XX times year think some what they large have I you’re of see right, at to might months’ going a demand bookings because were a book lumpiness

of book longer Now they demand. need to that level no

about side. that some normalization result we’ve the talking been of bookings this So in could on

timing going see it’s to ups I side, downs. and really about revenue the you’re On of mean supply.

past of in it what new to is recover I cloud is not be. the of just and sure from seen what will we a for see factor You’ve shipped it the going there norm I’m QX, forward. quarters, you’ll going XX% in decline forward. is It The going revenue believe

The Mike Sachs. Ng next from Goldman question with is

appreciate an revenue positive you wondering XXXX orders or for exiting elevated give some the to I With was plans us around and could to growth exit become year, year this backlog just with if directional expectation the make much does considering. achieve challenging in the year. early backlog next? that factors to some it’s of it this key year, more How Certainly Thanks. discuss for growth burn that just you’re

Ken, start, and me as jump want probably you here well. Let to in

can do I we think in grow So revenue XXXX. that

first, I’ve are we in improve I provided going how we would be, XXXX. to The closer, on I call, the the Cloud weaker on business big do this temporary, to We are can to were Cloud good not environment. but for reason in believer largest believe, about commentary of term. a in And our that optimism fastest also achieve provide. we number now And from will QX. is profitability potential going I provider and I get segment and in Enterprise growing. in the think even am economic growth patterns a our already is Enterprise provide my certainly, am a And long where weakness, mid- Order bullish the we as

order by we’ve backlog in better and year. still a start should trough elevated historicals end to we see the forward, think patterns of relative hit I QX, going and the to

absolutely factors these that possible, revenue lead All it. to believe profitable for of me and growth do is can we ‘XX

I reflecting the well in for as I we expectations revenue at least as this agree, mean the did QX X%, really guidance overachievement QX. embedded year raise the to

and the would than least year, to greater at exit year. a We for for backlog unchanged. are we backlog levels, come are estimates completely. second twice in you probably backlog to those this levels. that doesn’t expect raise that consider But does normalizing this But the currently still at as we comfortable result be with year normal estimates they half encourage We keep what double to

year So, that’s something next well. will that also lead as into

James Sandler. have Fish we next, Piper with Up

Hey year mine about from price guys. margins been backlog increase we Most But want to have you guys on versus It ask, of prices really I did would asked. benefit that then. the gross raised now. to should kind imply now of be starting a ago that get a

well with that guys prices half in would a of And in have the the are gross as what margin greater backlog freeing a So get last versus why as shouldn’t, itself supply we back you seeing price uplift the up price result of the bigger it that higher as kind then? Ken, of order of this availability year a year? terms flush to

Yes.

of over years So the took are past we a playing the pricing couple benefit. actions

our going to If that that’s likely pricing. likely revenue full increases. pricing would was X% you were to to take, roughly least give year growth we this revenue to look growth think And X% growth the I posted, at be just that roughly X% impact of you this be or attribute could to our at year, of X%, tied of to

gross was the about show You’re line. to just margin. recover up really gross wasn’t But our remind margin you, It gross also to seeing that price increase profit. in intended

So we gross costs offsetting is a although the under are one-for-one pressure, on getting margin basis. that we’re

for EPS. them having and absorb, one not to We’re offset those trying but the necessarily it we’re on XX% bouncing help bottom costs which margin increases we’re and back, that we’re cost creating obviously line make but -- in one, result not actually margin, just the does does to

So, you we took. were expansion because still when could that’s see we of costs would to start normalize to margin actions price, and hold as the

reductions, So there far, And supply for some be we’re pricing a you’re down not seeing might stable. costs where all. of seeing part, component but at maybe the most are materially couple components staying come fairly

freight costs that out some see kilogram and signs a we on side. the seeing encouraging. basis was point did reduction are good We I in per freight will QX, in that a on

the of costs, starting to have on So, costs but reduction. other we yet to meaningful a see parts freight the normalized, see transitory the we’re those of side, some transitory on

next is with Simon from James. question Raymond Leopold The

routing. This term? the position in in metro share targets and about Victor understand product us incumbents help edge Can are where And see longer what for you maybe taking Juniper’s Simon. kind for tell key of your Huawei? in In your displacing the us past, for you’ve discussed plan taking question. is Thanks current you differentiators intentional being the like share

certainly. Yes,

addressable layer us. total you different Metro, network are interesting that, which look area there vertical think me fastest the market opportunity that little the is standpoint up, a is the of the an growing bit let Service in it’s of talk for fact, a such if from Provider about network, why all the because market first So at layers we is the

segment Juniper leverage straightforward network that relatively love their of system, Metro network. that to Junos, the extend customers solutions our the enter us core, for to would love great into into this it’s see have operating we the Second, in edge, our market and because in layers

just market a number seen of already of liking the is of serves of which our much name operational family product wins network we’ve fact, familiar a ACX the the the Metro operating being portfolio, very result as aspects and with In with system. our customers that

way us built coming of very that has behind the us The more we’ve many technology, importantly, ahead latest on now taking that’s solution the that of engine, really a the ops the the still of a security Enterprise the we we with do network opportunity, Metro. in automation of efficient, because differentiation our certain strategy and And very with than applying it’s fact And portfolio to segment together. capabilities. embedded learned are has to lessons and that phenomenal. sustainable just silicon of have our In terms operations in terms Marvis really is has customer the feedback AI power the leverages been

of year. the good successful in think can feel bullish I’m part us why that somewhat the for for again, And So strategy, be this I this very about part about -- and it of I weighs really into future. the our SP

the insight I into the attached is composition touched versus are little but this And can How software the demand give That’s the kind you for solutions? the helpful. software? think you a bit of little stand-alone, primary hardware what us driving factors a on earlier, of much

three In center we enterprise, that our solution attach. the optional is necessary wired of Well, strategic an every across is so solution the software across Mist the the space, a sell wireless, is In Apstra we’re solution every data pretty increasingly much an software right? SaaS and component WAN. element of selling areas,

we the which is and I’m Provider of and seeing right sales the in I effectively the as color data Metro. we early share Service But in call we Paragon just really still days opportunity. terms together, data sure question, your most provided solution it and the center in hope I the a that did. addressed Metro growth I early this center of if happening segment like not some now it’s mentioned, now in the wins. I’ve we’re sort relatively to putting are but competing way are I taking However, In is Apstra-led with that’s software today, space,

helpful. That’s good. Thank That’s you.

Thank you.

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

Tom Hey. This Tal. for Zilberman on is

to your backlog, that come last sequentially, and backlog So down, you you going accelerated million million. but back this quarter, expected noted $XXX $XXX $XXX to it to it to between declined quarter million

any your do color target new this can that Thanks. days the ago? we of the year? expectations of versus on end acceleration or that by So, that and -- you normalized does And XX the think it drawdown reach

Yes.

need of new gone, place with times line orders ordering So consuming orders expectations, right? longer in now and backlog in comfortable We largely knew customers place as the were normalizations down early coming coming placed orders. our previously was lead the was to need to and are came no and effectively

So bookings largely about play little was going knew beat extra we’re bit the we a why way the it is also did. was out pattern an better which to there. million $XX guidance. Supply expected, the than that we But talking revenue we QX

million But it’s not backlog expected. will be with believe it’s is about much line quarter. maybe overall, down. So give or it pretty in single I to million, every take, do going $XXX my down I do $XX than I think come more to continue expectations.

starting the could actually normalize, you decline effectively and start now, to growth to in this by normal and throughout starts backlog The return we’ve booking that of how backlog start moderate. as end will then to we been year, QX the about think year, and talking I could be moderate. in think happening see we

to expect kind is X than levels. times elevated backlog, which backlog not We more million, normal with greater the $XXX of elevated exit backlog, normal, than year our

call question-and-answer reached end have of the the We remarks. now will for the closing to management I session, turn and over

for saying by but most we the today. participating macro margin the just thanks, at revenue everyone, we to can believe in call I and business, X%. XXXX beyond. will revenue the is in end very XXX we’ve, and This expansion. are And that business. that achieve basis why that increased in remain are think also, not I XXXX And just our I’ll deliver in sustainable over -- confident out points of importantly, profitability fact, But outlook operating despite So we this we this challenges there, year, growth least

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