Juniper Networks (JNPR) 27 Jul 232023 Q2 Earnings call transcript

Greetings. Welcome to the Juniper Networks Q2 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 second

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-Q, 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 by delivered quarter, everyone, the grew across all of you afternoon, saw thank XX% and to results. growing revenue revenue year-over-year of on geographies. total we our Product XX% better-than-expected exceeding with midpoint XXXX for year-over-year and call today's discuss results Good during second guidance. QX We us and the growth $X.XXX billion,

$X.XX, non-GAAP in range. our exceeded margin, earnings strong of share our operating of quarterly both the high-end was gross resulting QX, non-GAAP as towards guidance also in and per expectations, Profitability

in reflect we're by supply. as the results well seeing as our QX team, availability execution of improvements strong the Our

we top-line We to We years. remain even which from with a their last where the we powered will an improve networks our the positioning to for go-to-market over our focus, us technology as meaningfully next believe ability but few enable challenged a environment. our decade, will sustained software confident along automation, believe profitability, these invested leverage area have growth, deliver customers also and our investments, capitalize, build AI perspective market only end in in not

to product a on respect sequential nearly XXXX. demand, relative And was rate due improved grew the to orders QX last year-over-year the performance decline With sequential total quarter, of double-digits strong still while basis. to meaningful in it

Enterprise timing is Cloud of Provider While with we continuing of business, positive the trends are Service momentum our due and experienced and to project the to believe we which our see weaker-than-expected purchases. digestion in we customers, prior

these our trends, next we a seeing as growing encouraged quarter. XX% soon by quarters than revenue, which business, over remain vertical more fastest I to Enterprise Despite for for consecutive results the decline as and further delivered representing this in few we're of the continue year. expect total our the to largest record accounted both third revenue momentum a vertical and our year-over-year growth moderate return perspective, orders of extremely and From potentially in QX to

frame, Not the in Enterprise XX%-plus product our period. QX only the in also year-ago orders by year-over-year grow healthy a comp growth time our did revenue despite year-over-year XX% nearly saw Enterprise

think accounts. which logos speaks the to registration after expand we an indicator, the more share. deal overlooked, many which through to to we Importantly, our XX% and commercial of landing and grew orders more both grew than than new forward XX% capture Not given opportunity to our year-over-year, differentiation channel by these the products view important year-over-year, be ability by as of

driven leadership our when operations revenue Juniper's are delivered with XX% and record in a to year-over-year. clear and QX campus growing recognizing our more business Within microservices Customers AI cloud. another branch quarter the via defensible had than AI-driven Enterprise it modern Enterprise, comes

While XX% visits history network AI the fewer trouble including and the in mobile solutions real rollout fastest deliver that a at ticket to of in worldwide we branch real by a of operator. IT retailer results, XX% the software a rest reduction store company, multinational industry talk, at have continues national a global the

and was portfolio year-over-year customers as branch SD-WAN where broad products Revenue stack frame, segment and our XX% record as QX well growing record business, these together. quarter, Strength which of revenue nearly from year-over-year. the the the Mistified had a a with campus products time by quarter, by by growing nearly orders in a wins purchase wired across with wireless, full of are Mist several AI, driven record the XXX% in

multinational Marquee Fortune We financial Fortune retailer with an XX every manufacturing for UK's AI-driven technology indicator, customers additional switching forward-looking opportunity. $X Enterprise the new is stack quarter there institution, include supercenter a that given this our largest cycling of as wins full dollar a belief these wired view a and to momentum company. company, XX a wireless, SD-WAN chain, $X and of positive American

the has introduced Access to several AI-driven, including to a dated very revolutionize Assurance the industry's network industry. innovations We ability new first which the Mist solution, NAC quarter, past portfolio this Cloud-based Juniper we believe

enhanced performance. Internet In integrating language video models. with for Virtual integrated collaboration ChatGPT we AIOps expanded leading by platform knowledge-based a superior Marvis our queries addition, using Network we Assistant And the leadership for with large

Apstra for a center prospects. a view for see strong positive continue which Enterprise a logos continues second quarter, to in new indicator we hardware QX, Our and dollar pipeline to grow every data quarter, year-over-year Apstra and perspective. reporting doubling performed orders a also The Enterprise with for more we than business pull-through software, well with our both consecutive revenue datacenter an as record from of

record of primarily driven revenue the posted to increasing quarter, in data center automation Enterprise a Our adoption due the Apstra.

financial quarter where us to Enterprise large and year, the expect more our a I center during our given we government large both New The and differentiation, modest our orders services grow wins our agency. a our XXX level shows restaurant against diversification firm, is relatively of portfolio working revenue challenged strategy in large Enterprise in Cloud-ready data a compete, and macro-environment. performance balanced a US share Fortune even the markets this chain include US of business

As see few seeing accounts highlighted future budgets we're and our verticals deployment due purchases we prior of the and happening macro scrutinizing to customer Cloud to pushing last customers the project particularly each projects This world. proving periods. that to be across over to in true digesting timelines around the closely continue more the more quarters, uncertainties where are is

our build-out footprint, few growth the are longer-term Cloud, customer our and environment in capitalize that that to optimistic to many remain expect rapid our wide of to While pressure Cloud large clusters. of Cloud last quarters, likely traffic growth opportunity is language dynamics strong continues over point, business we benefit area we wide traffic the in regarding and the AI meaningful model time. next of given adoption for adoption the the To likely area AI in to these footprint our these prospects growth drive this on the uptick a

well AI are cluster to us technologies to of embedded such that will see Junos our silicon, the on likely management we efficiency However, the position bet as an support center Cloud Major data support investment. RDMA system Ethernet networking our protocol emerging, attractive custom choice believe also for capabilities and congestion opportunity accounts particularly where capture our power their performance within of as and operating with the share, we to

already accounts. see we've fact, successes In to begun in non-hyperscaler

Service in in moderated and time both sequential basis, but QX frame. strong as shipments on business experienced performed Our following Provider expected the a QX, the year-over-year we

particularly lumpy X with macro-environment. going larger to respect business this continued is are we're impacted with offset forward, the remain X by of expect Tier some incremental weakness being momentum that our by with seeing We gig as and carriers XXX Tier X deployments customers softer the Tier being to

experienced Despite these encouraged a remain our cloud revenue strong. headwinds, both new portfolio, momentum pipeline and a opportunities in from ACXXK by and the the record in we're perspective, quarter, metro where remains we orders seeing of our platform

the material and in business year more the to become expect remainder and We build this through revenue of XXXX beyond. to

growth to as summary, as is SP our momentum our prospects. in remain attractive by we Cloud, continued confident metro our see in My optimistic well strategy and and In the enthusiasm opportunities fueled long-term I opportunity. continue longer-term the regarding the Enterprise

than Based XXX operating digestion quarters. and amongst profitability purchases have results uncertain some basis likely these on reducing to are the greater our of pressured forecast. full-year we expect of delivering to next revenue timing our growth few deployments, dynamics, our Cloud committed points However, particularly larger we in We deliver customer given be to prior the customers, and of of over less XXXX. improvement margin revenue still are the visibility improved remain and

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

the and outlook. of discussing guidance by driven guidance earnings diluted start of the year-over-year. midpoint color high-end $X.XX, Thank and by results, per our second We towards of you, XXXX I provide our the $X.XXX revenue quarter our up will with good ended then higher-than-expected delivered gross above range quarter on revenue, XX% margin. in and share billion non-GAAP some everyone. afternoon, of second Rami, our We

on basis, cloud-ready WAN X% of way XX%. with grew growth a solutions From customer Automated revenue Enterprise a solutions data revenue and year-over-year center perspective, AI-driven flat. was the led

was of in an to revenue license to increased revenue million, which Cloud $XXX see and year-over-year, million, related vertical, increased and XX% We of software supply. was up and in our Total software grew We confident on decreased Total was portion shipments year-over-year revenue. software year-over-year. our a year-over-year. X% Provider at revenue for our by X%. $XXX total of nearly Service increase to million, and security subscription remain were ARR growth. services Enterprise related XX% SaaS Looking was the our basis, timing year-over-year ARR growth XX%; XX% and outlook deferred pleased $XXX improved X% due

was for In were the six top Enterprise. our were XX reviewing and one Cloud, in customers Service quarter, Provider three

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

above higher volume, but margin the inventory-related expenses. margin sequentially. operating favorable Non-GAAP for gross due was software primarily XX.X%, to revenue by year-over-year, quarter, driven XX.X% partially better-than-expected revenue increased which by was margin. and Non-GAAP midpoint higher costs, driven higher above XX% offset was headcount-related our and the flat expectations, Non-GAAP by mix operating which of guidance, revenue was primarily expenses gross were

be We in payments reflecting dividends, Cash a paid will flows was from dividend share. benefited federal by $XX deferred later million $X.XX the $XXX tax that in in paid of million were approximately quarterly year. per operations which $XXX million,

second $XXX Despite commitment. shares the We total for repurchased the and equivalents with also billion. investments and very were with I'm quarter. million in challenging results $X.X the our We of macro-environment, our exited and pleased quarter of QX of XXXX strong, dedication worth cash team's cash,

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

see previously Cloud For to third orders, customer and, particularly orders a lesser to is We customers. to the in quarter, attributable pushed periods. future extent, the placed with to we digestion Provider expect of our weakness continued largely softness projects believe certain being Service and orders in our

These We spending. to revenue impacting may continue expect macro-environment factors which remain customer are to negatively the impact challenged expectations. our

margin relative to pre-pandemic in third Non-GAAP expected related gross assumes forecast modestly but increase supply-chain sequentially levels. XXXX. the to elevated cost is improve quarter This remain

manage We compared to will to the a in and the XXXX. non-GAAP operating expect quarter third second expenses as sequential prudently continue of quarter decline

expectations the our XXXX. rest for to of Turning

activity we a extent lesser our and weaker-than-expected our order in Service As to particularly mentioned Cloud experienced the Provider customers. second-quarter, with previously,

second-half into of We weakness year. the expect the this continue to

full-year our X% As X% guidance such, growth. amending are to we revenue to approximately

approximately than chain anticipated costs. raising full-year XX% to basis, we non-GAAP improvements on primarily However, from margin XX% our a by in guidance gross driven are supply greater

greater management still offset impact the points as than deliver expect of margin revenue. non-GAAP we expansion prudent higher should XXX to gross the benefit operating operating of expense and non-GAAP Additionally, margin lower non-GAAP from basis

digits earnings share is double in expected Non-GAAP grow per to XXXX.

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

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

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

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

Our Instructions] Simon from [Operator question first you. Please proceed. Thank Leopold with Raymond is James.

projects the on has Thank the of substance so, Juniper which about Thanks taking out comment? if for I'm bit you how eventual the extent cases. AI And the I I'm stemming from So called orders. where AI question. areas wanted pulling more think from that for could to see a budget wondering if really you. do issue understand be and use the actually the you longer-term I discuss you effect knock-on as its Cloud an tailwind. this a on weakness timing mentioned? little looking you

question, the for Simon. Thanks Yeah.

sure services and going intelligence, the with they're in that going artificial their they're place on be segment of to the that making while is on deal offering we're the just additional not not intensely demand think pretty the It's biggest segment any the specific to it that It It's negative for AI that's to focusing network the our quite Cloud being as have long us the one provider even I two It's no doubt see hyperscalers. definitely now a right around to for point and impact, might broad-based short a term, that includes the I your Cloud think attractive bit period in facing term To reasons. to Cloud the actually in is customer. a issue of priority, Major are equipped it. it's I customers well. question digestion. There

AI to remarks it's an it in to is I board, their going over to it's that wide choice center. increasingly a cloud in as now, participate right that new nice think the in today do in mentioned it's could alternative course, a footprint the us with in, and, built of going which have the to time an my And areas that's the in offered several is of traffic but opportunity where really of killer providers in I new timing the result in is Ethernet technology prepared we as To data significant for extent the app the by said, customers, call quarters. is clusters That to AI question data across be with your center offer increase to InfiniBand. what to being difficult -- the area

Great. Thank you.

is with JPMorgan. Samik Please question next from The proceed. Chatterjee

guide really Yep. much into of revenue or given to the mean, sort for sort to your guide you of of today are Cloud here, elevated I million limited. investors I and guess, mentioning discussion Service that how you're my coming year full backlog, that by the even Hi. weakness to quarter versus last revision $XXX for get Thanks so. the companies most if down a terms for or revenue Provider, but the taking question. sense, you're that the wanted incremental break about on trimming is that I can the in maybe while is reduction of have of sort Service backlog the thinking just elevated pretty from think the Providers about with just discussed going a question visibility remains I

terms you basis? So in implies how guys backlog of of that going still on are given of thinking a are particularly real macro Thank revenue trends what influencing sort forward, more time the some about backlog that you.

Cloud the Cloud. to our a the on so Thanks down for revenue our would say attributable XX%. Yeah, guidance, basis, is largely directly cloud business year-to-date business. but reduction the Sure. the for would the expectation question. in be Provider, a year is reduction On to degree, Service a to of Right? vast that for I a majority lesser

it think to QX ends digits. the to I year. we And the well what due double rest as the year late that likely down in see of the expect saw as we it's in weakness for orders really

the stay that of plus kind X%. Service our So will our I within of is or of minus vast Provider Cloud. believe guidance range majority business

largely model. with intact be to going that's So our long-term

I way ahead expect exit as Enterprise it long-term year. to ahead And of the model we way clearly our and remain

order that we bit this is QX. it a weakness you we that more From down given expected is out came I'll Cloud than year. down it backlog a clearly a the coming really in we So expected the little revenue called decline phenomenon. to perspective, backlog mostly as tell

coming is down. backlog So

of remains level. I still remain we expect Xx And However, at I the it exit normally expect still exit historical what the to in Xx, would about kind historical normal pre-pandemic expect of -- as we approximately elevated a level. year kind to year

it to still but down XXXX pressure some on quite is coming It it's growth. elevated. So quickly, revenue put remains going

not backlog to in have elevated The lead the for to orders. time. as recovery XXXX. expect through year as entering expect a we and year have is in and we at this It digestion good going strong the require year. verticals headwind It's have all will will next backlog, in be backlog The a of XXXX but I bookings recovery a us tailwind news we orders. go to as be we would is I to current did to next bookings of year that a this backlog our react kind period a

a lot bookings. in putting So backlog. resulting a this obviously year of declining pressure is It's on

year but drive would next normal, more will a growth. think be I revenue little bookings

you. Thank

we next, your Long proceed. line is Barclays. with Tim have Please Tim, Up live.

can more of backdrop I you where networking gain view that hit in the touch market kind the new a you impact we're sizes, soon. more you. other of you've good about customers. It just places. rates, that? with on Thank to pressure touch still kind going could might How the it's give a selling talk Could just seeing win the we're a share Enterprise you. wanted cross us little macro where business little area overall industry? in lot a if on do of on there, had start Yeah. we related, bit driving success looks you of lot you starting numbers color on Enterprise if Obviously, what's a deal of Thank at or to like And seeing be kind --

Tim. for the Yeah. Okay. Thanks question,

our level stronger. in largest, of total fastest our with pleased business. Enterprise of portfolio revenue. XX% performance really, the now we that Enterprise over The have our never been is macro-related QX of has differentiation in the of in growing with very face obviously And our I'm this So is Enterprise headwinds. segment

in it see numbers. the You

grew Our also Mistified data specifically AI driven and over year-over-year center, Enterprise again grew revenue with approximately in signs Apstra at saw Enterprise. business some at over the XX%, encouraging the we really XXX% for

of those The going say was headwinds really signs it's And early days a Absent registration over the results industry an were even be around question now. market? through of in indication during Enterprise consideration, we the success forward-looking like right of there the how a market which believe XX%. today. are encouraged deal were -- Juniper, is the be if growth how now. even in at doing actually our the opportunity much I'd partners weakness growth just new be take better. is is better even the very channel This at posting it's to the headwinds, durability. where than in XX%. business in seeing point business are Enterprise the there pandemic things of was really have peers taking, seeing come -- that we logos, I What not to logos, growth. sort to a share right Enterprise. And around of metrics, signs really happening new were are XX% these performs -- -- with -- commercial market I'm We'd look it if up happens as of This up that in bringing the our just in we'd

reason, fairly year revenue in the easy year, think business So for I the encouraged and order I'm it's growth by to this far, call traction Enterprise. thus revenue growth next for and growth that

Thank much. you very

proceed. Alex, with Henderson Needham. next is from question The please Alex

is outs a the And the you about give pricing you Cloud both were the and Service Provider little what XX that? couple in you more? headwinds, you of Great. bit talk scale the and very when much. Thanks. talked headwind, just in mechanics there the the And quarter, of issues. the scale some Is of on split push Thank A linearity Whether in it us in quarter? what's Enterprise, X% X% Provider. the Cloud? between about the X%, Can a sense Service can

more the Ken, I'll then, I appreciate Alex, and view XXXX And start question. little about with comment bit you and I'll Maybe let pricing. the linearity a

the guidance on the digestion little a a to cloud given that lesser seeing up, SP the early extent segment. and XXXX too especially it's we're provide all some So in in of to

meaningful Backlog do I'll headwind in just I revenue grow XXXX creates us is XXXX, However, to draws, in some and walk and think XXXX. through just it revenue in to for that. takes puts of the a Ken us mentioned you possible just for pretty

So it, next here about year from need related would that the if orders to you accelerate to headwind think backlog to this overcome presenting is year.

to the Enterprise. SP accelerate year across the order we is see fact, news in growth in all in and And and ‘XX. happen full orders expect good we in to Now for to in fact in the do customer segments, Cloud, grow

for an bulk little to the call and too as mentioned, SP, and a both backlog is to bit just going know overcome And year. to headwinds for early to for us business I’d growth revenue don't very just Orders next will if easy standpoint, which related well say Enterprise, the they're it's revenue now. the Cloud right year. order We I accelerate it's do Enterprise accelerate. fast to of call continues our next from the enough today

would And in and growth next the the So while say would XXXX irrespective possible, recovery I both is does. committed what margin order Ken full depend and and revenue of SP. is, year on SP I sure for Cloud Cloud if this EPS say to say, what timing would is to I'm of going don't, year XXXX growth summary, really it we're so I

a perspective, couple Yeah. going linearity of actually to answer a From I'm things.

weakness orders the late our up QX orders, from quarter. in First in the showed really

compared to So that are to happened our quarter. be visibility the Providers. down and degree, lesser that in Service previous current that in And our the expectations Cloud was going the the of is a something second also to half as year late

quarter. up So in show late it really did kind the of

little to bit than, do this more it's do I be year for going year, a as on touch to year. next well. want different I linearity of say, a believe loaded back-end

and It I would I a lot year say, current from of to possible, weakness full of year. is too opportunity but first next is half loaded a likely year, there. see bleed a half we the situation is back-end perspective. early moving But up to next set So growth into particularly is there's be, to the of see parts year call. would growth challenged now And given we going first the the

question Alex, The been deal, little a you didn't to a It's We bit of on, hand-to-hand pricing. material was pricing It's asked ways. other very environment. a really in notice combat competitive always in many activity. kind deal change pricing

So the point nothing really it's to of call out view from holistic a more side. on pricing

Great. Thanks.

question Vogt Please The David with from UBS. next proceed. is

Maybe, slots Juniper where start some of maybe putting servers point? some or and and of network spend? on from just this spending more reallocation other it's would order they pressure digestion CapEx parts hyperscalers main your at compute Great. I maybe Thanks really follow being a And or And providers? customers you in how guys thoughts CapEx customers, digestion lines, cloud slot Rami, as and the accelerate or my from GPU-enabled of of or what major providers to year hyperscalers kind of from those on either the Thanks. thinking seeing you're by on hearing the of in you thought maybe you cloud next maybe color are terms up of for on in And perspective? timing where are along here. of taking in you can question. Cloud just fits train pushouts Are kind a sort about driven the that's give whether the maybe Cloud

the Yeah, David. question, I appreciate

our think to need need factor digestion. then ordered, catch couple I to in where deploy period revenue years to unprecedented they recovery the work they've now them, over order being products or growth Orders revenue will receive by impacting that up. biggest It's and -- the Cloud a business afterwards. they of through up just them, last right catch now the need is that's they will followed

think AI opportunities of digestion. long-term big for can areas yes, this a impact clusters, and I provider for And a mentioned in net the not maybe I that say, And there of presents of investments thing. But to of sort market significant I which it's capital as that earlier, of becomes have that Juniper biggest As near for to definitely cluster of GPUs, example, big, in impact, as a where attention hyperscale true lot just the the nor AI short-term as view, not Cloud diversion as is time. even share some in participate but is Again, my Ethernet positive. impact. it I that would is negative AI investment, WAN, network more we cluster networking, have a also believe in -- dominant

Rami. Thanks, Great.

pleasure. My

Ackerman we Please next, Up Karl have Paribas. with BNP proceed.

discussed Yes. that Good were tie regard the I or toward time, of At One asked or afternoon, same is, end gentlemen. orders changed quarter. was you have understand earlier. the indicated the with yet. pricing question follow-up in a you really -- of comments hoping to I some the to that has not

that's are well. question guess for quarter? of on customers Cloud and pushing a Service end price I your of the So reason Is cautiousness? short have then that the I back a Provider clarification. as some the towards And

Yeah.

that mentioning quarter. end the quarter the in clarify, the at the So weakness showed orders, was just late up I of to

So actually, quarter than started we our the we orders expected end of would at were as the the weaker have quarter.

So not loaded. linearity was back-end

In fact, bookings the a would thought of in strong quarter as few from it the last perspective. it we as didn't come weeks over

suppose, I we just two in see. I Thank hoping have that hardware address moderated and the maintenance maybe you. improving strength Enterprise? to why should the last quarters was flip expect despite I And forward? you professional going services can

Yeah.

and So maintenance our base business hardware really is an business. installed

recent period. grows products several been much significant matters, it's but business we it have over it when And really is and even is growing revenue maybe last current as when has period pretty seen in obviously installed period about in where growing So well, down base. although revenue that the strength not product -- still grows a years, it product routinely, as the

So to as it's is There shift that's with line to you. our business honest growing a be with well more a stable expectations, happening pretty in software.

and software which maintenance a hardware underestimating of up that the in support, is line you business, are isolate you when true our which the on shows services just item. side, power kind of So different

Thank you.

George Jefferies. Up Notter is next with

Your line is live.

is months. Thanks Hi, I a Cloud back intensified this guess also, of commentary guys last do for go pointing that's share accounts? I it through of sense the last you observation? I a to some then why seems it market like If if the Thanks. much. get for market issue. isn't over I customers And any question is inventory about them quarter, period that your very in my that, digestion. were And you or guess to share really guys. these right three correctly, make just share-wise also intensified? participation sure going to remember And you from Any I want

Yeah.

to the answer no, market believe second of is share not question the issue. do this a first, So we part

hyperscale, that wide area. the mind in keep Just in in dominant our footprint is

and very is on. sort it intensity, wide so much around of specifically capital investment So area for

digestion that it's take working been The answer how long and expectation new elongated. long mean, is it of the intact. to for had of We first take, remain to how some part your period did has important deploy question, it would obviously and say we that, the have that Having projects said on yes. would competing intensify. it of I projects

generate that's in us the of in seen to Cloud capabilities. not might every important, moved an especially out projects. in time, more place deployments wide but be case. demand, have that Juniper. focus were been on not have AI projects they continues for across And invest to network incredibly eliminated. with Ultimately, providers area at We for area, intense have it XXX-gig And cloud to their providers going remain traffic cancel example, new growth having the in use

it. silicon for I you about are guys working a just think, PTX. for know new just where then an Got quick delivery Cloud curious on is. And follow-on. customers. product that the obviously, new I'm That's important I

where wondering is. that Just

Yes.

is market technology the some great, silicon and So addressing from that an just of believe big use are just we've have the standpoint, I of of mean, Customers early view and the excited had I looks getting mean we've of the cloud that absolutely sophistication absolutely just level innovation these close. that fit we're and what provider cases remarkable. developed, it. express latest discussed, I about incredibly it's it looking honestly. developed, I a silicon

stay tuned. So

you. Thank

is Ng question Mike. The with next Mike Sachs. proceed, Goldman from Please

question. comments you just good backlog. Samik's your Thank afternoon. on to some on I the follow-ups Hey, question had for

you $XXX XXXX Thanks. the And still million over with started backlog. vertical? where year levels sat backlog to then those reduction billion? the backlog billion expecting follow-up. to around I in $X So exit the Are with quick have comments on just by in year Any net you a customer $X

Yeah.

normal of exit expect level, period year we normal. Xx on a minus as -- time. for bit to million So were And an we historically or elevated a still quite define $XXX plus about the we

maybe billion talked of million would $XXX $XXX the So I'm of about the million to to about, year. the end talking range for the million, end that be minus $X I'd to that million expect middle plus or where our you high exit $XXX or $XXX backlog

fairly down I verticals, bit We we've exit year said, the we'll coming a through the with been on other our new think at the rate probably the That little the mentioned it's year faster more we'll backlog date, orders. Enterprise little is. and To the in weakness revenue of that than to a side, Cloud compared entered pretty given backlog some elevated. a proportionately the burn all still across as So what with balanced verticals.

mid-XXs you. Orders of That's down the year-over-year of digits basis. question. Is helpful. Thank my kind Great. implies And on double just in suggests a really being model up housekeeping kind sequentially, a nearly ballpark? that that

improvement basis, modest and as could return we soon QX. -- to as from did we And we going year-over-year modest quarter Yeah, expect expect see a on growth improvement last we forward. a

we So some did yes, are modest improvement. see we --

think, that's are. So with of line, kind I in where you

All great. right, Thank you.

The is live. Meta is with next question line Morgan from Stanley. Meta, Marshall your

of I new wins Thanks. that you was Tier customer you Those X elongation where and were saying lot X been and maybe in areas last had the Great. guys Tier some Providers there that a year. noted with Cloud. Service have

guess what supply overhang of taking broader kind that trying had wins of last expedite second you the it of if to the customers this margins of area? give or get kind the is And is over that or you to just the is question on within I'm some then so of And a across chain a the is kind costs? sense kind I all of year -- implement just longer new sense of fees could of from Thanks. gross still just

Okay. Thanks, Meta.

So the extent been of elongation has period SP. in mostly to at Cloud, lesser a

two And we of have there, these mentioned just deployments in secured projects have over out earnings we where that You are calls. time. year right, started on have the we've the even deployments, some won, new we have moved or last

have areas these elongation otherwise the new it's margin. we it then net have we to the had would started we've existing extent, some phenomenon Ken a not question, but And where see maybe Cloud it the mostly I'll place. on to in not leave the wins benefit had -- as enjoyed So as part footprint much to to SP. benefit, applies taken and of a this lesser And gross again, where second

Yeah.

those gross little we recovery in would that see the XX basis the some as there's maybe as I some logistics, little of supply margin seeing starting to well maybe more, to recovery think a we're particular, expedite points, side, still fees. there in On some a constraint less, point costs. impact costs. I are to

it get for better. opportunity still there's So to

and in is remarks, into The persist inventory-related that's QX, other I provided but on gross thing higher been were factored seeing second expenses did the are we out we prepared called I that margin. those call out expect we the to add -- into in guidance of my half, that some would I some

Thanks. Great.

Malik your with Atif from is Atif, line live. is Citi. question next The

because to a rationale even provide and guys and question. have outlook growing question your why Service supply a for into during new taking to Is see providing year I'm chain Ken, commentary just saw for Juniper. tightness the for COVID, sequentially. I'm Ken, and you my which digits thank of this lead Cloud good And that understand you. the behind year Hi, you apologize, a stretch trying covering I weakness? given times? double I orders this bit next outlook year. Thank to full

Yes.

provide. did too the way too given early call, next the our We differentiation an outlook So trying and Enterprise to number. and outlook the providing Enterprise We're products to takes, and And we year, be puts the we provide year for commentary clear, with therefore, that right? early do enjoy to we not call aggregate XXXX. to next are grow -- with strength do we expect of there. the think is one Cloud SP, you the to just But

it year, a year. and really what visibility, that do for we we're I rest of still QX, does for this going chunk the just of For we that's guidance. And to is backlog recognize good about have the comfortable providing think on based drive really -- the range, that provide that X% That QX. the year. guidance did X% full earlier. to the We mentioned current elevated a I with really feel we're rest the of for revenue

in the we we year. So the type a it's that with given felt just range are really visibility now, of comfortable we where have

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

for And main for think best is question. the Look, and given any handle why InfiniBand. is do of the highlighted Juniper's But protocol those I Ethernet workloads? for best AI orders this secondly, for be view AI, over And why the you, workflows? Hey know are to Ethernet reaccelerate so, of with guys. portfolio digestion Thanks AI part reason the optimism networking the just highlighting increased you you if updated demand as to guys the positioned in will Rami, XXXX? also kind for

Okay.

Cloud growth -- being that to majors. the you area, footprint. to continues So good of AI need grow. Eventually, benefit would got invest are extent fact they rooted in just in XX the know, to the providers networks. they're it. data is going optimism, happen technology that's in just deplete optimism and inventory Ethernet a Cloud on their broader the in I based cloud in component footprint to forever. And for a we and can't they're their top the around invest providers going through that as of wide of the is really we've choice say, not the on clusters, Digestion sort then very But that and from will center, the our to in going To the traffic

would however, and add Ethernet some with us. that present opportunity moving a and a to I broader it's not to clusters got And it's why mean, obviously, net standpoint, has economic most are Ethernet advantages. AI new addition And your to about Ethernet for would InfiniBand, From present clusters in that, future, today, AI I distinct the built ecosystem. InfiniBand. In an question

to number Juniper. be large a networking. cluster that AI I start the space capture just But or standpoint, quarters, just of several meaningful clusters This want a not for be happen a Ethernet not to likely does highlight Ethernet. model to over clusters. to AI it's will the customers requirements innovating means is to to to going take Ethernet order going volume so, having be moving business to year So They're that will from type in to something this tied overnight. are of of That from There economic players. that deploy language an going economically benefit in want

as how up theme Helpful. comments. deployment kind your on both? Providers inventory with Service follow is And much more are guys. excess of kind Service the on same and is across there the Cloud if inventory Any I Thanks side Provider versus issue it could the Is it to Or issue normal? on holding just of the the sense side? Cloud the

deploying down digestion, inventory it means Well, are it's networks. When on a sitting the provider mostly inventory. and Cloud into it elevated extent Provider talk about Service we thing. they're really, they a their lesser Obviously, that drawing that to It's in space

they to the be do again. acceleration there's we several to deployment see see we I acceleration think draw to can of with and inventory, know start down the question start as tell in you your the -- timing. certainty going really And they orders this before, is at getting don't time. I that to quarters point and

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

Yes. Hi, guys.

drawdown the time billion Sorry and in $XXX said right. is roughly This get $X.X about the numbers said $XXX third same topic. the quarter, you that backlog backlog million. -- on was the was to past, to ask $XXX question and that million just Last million. to the I you normal wanted

you're So this time, times the saying X backlog.

you're means and million backlog by sequentially. $X.X billion, end, it drawdown the take the then I the $XXX that million, $XXX year, if from at of to million that up billion. $XXX to $X end it But million So saying $XXX high the it's be will went

to backlog drawdown So quarters. in means that two expect the slow you the the down that -- next materially

that we are is want make the the understand be a Or more doing drawdown. little that -- sure to math with Thanks. have the I'm correct? specific because Just backlog everyone sure that numbers can same to bit give you if us

Yeah, add let the backlog. to some specificity me

million approximately we position about X ended the billion to backlog X last talked times $X.X my our between approximately right? $X.X We're And would at and have we expect average. billion. billion, times. between of exit and billion So year do I'm number quarter $XXX be That using current still at $X.X QX $X.X levels. the I as

$XXX So that means approximately million.

as slowdown half. billion that's a first that's expectations -- But approximately to a obviously billion, $X.X the currently, the bit does to $XXX second our and year So the compared $X.X of exit on bookings for shipments at at year. to of rest half based the presume in expect That million. the of

hand Cloud bit the if in order very topic, Got strong. differently, coming a less the is mainly it. coming And than on and Service weakness on other Providers. the but weakness the from -- your is is same little Enterprise

performance? if revenue and the mostly is So Cloud to is the that verticals? understand does given revenues a the the the drawdown more backlog should meaningful Providers towards that the percentage less drawdown assume difference in these it trying Enterprise, backlog Service So I'm to just your much in as and mean tilted of we

Yeah.

So I elevated. this we'll do with exit year, expect

proportional proportion be is said, Enterprise the the as our more That well. was versus revenue. starting much our to we revenue more towards will to how think also entered year, more I Enterprise which slag

that So the backlog growth. is bookings getting

a Service So other actually declining better, revenue, a bit verticals, half that particularly are in bookings which year-over-year the a basis up a on revenue perspective, Provider is less first is on decline the holding than up basis. from backlog little is which

as those to two So our yes, little bit more vertical. are verticals we burning in a Enterprise compared

it. Great. Got you. Thank

participation. reached you your have of This time. disconnect conference, end the concludes may you We your Thank lines question-and-answer for this and the today's session. at