SUNNYVALE, Calif. -- Juniper Networks (NYSE: JNPR), a leader in secure, AI-driven networks, today reported preliminary financial results for the three months ended September 30, 2021 and provided its outlook for the three months ending December 31, 2021.

Third Quarter 2021 Financial Performance

Net revenues were $1,188.8 million, an increase of 4% year-over-year and an increase of 1% sequentially.

GAAP operating margin was 10.1%, a decrease from 11.0% in the third quarter of 2020, and an increase from 7.3% in the second quarter of 2021.

Non-GAAP operating margin was 16.6%, a decrease from 17.1% in the third quarter of 2020, and an increase from 15.8% in the second quarter of 2021.

GAAP net income was $88.9 million, a decrease of 39% year-over-year, and an increase of 43% sequentially, resulting in diluted net income per share of $0.27.

Non-GAAP net income was $152.0 million, an increase of 5% year-over-year, and an increase of 8% sequentially, resulting in non-GAAP diluted net income per share of $0.46.

The reconciliation between GAAP and non-GAAP results of operations is provided in a table immediately following the Preliminary Net Revenues by Geographic Region table below.

“We reported a fifth consecutive quarter of year-over-year revenue growth and a second consecutive quarter of exceptional order growth during the Q3 time period,” said Juniper’s CEO, Rami Rahim. “Our strategy is working and the investments we have made both in our customer solutions and our sales organization are enabling us to capitalize on the strong demand across each of our end markets. Based on the momentum we are seeing, I am confident in our ability to not only grow our business in the December quarter, but also to do so again during the upcoming year.”

“Our teams executed extremely well despite the challenging supply chain environment and demonstrated strong financial management during the September quarter,” said Juniper’s CFO, Ken Miller. “Our strong order momentum, record backlog, and actions to strengthen our supply chain provide confidence in our future growth prospects and our ability to deliver improved profitability in 2022 and beyond.”

Balance Sheet and Other Financial Results

Total cash, cash equivalents, and investments as of September 30, 2021 were $1,835.8 million, compared to $2,561.2 million as of September 30, 2020, and $1,815.4 million as of June 30, 2021.

Net cash flows provided by operations for the third quarter of 2021 was $136.7 million, compared to $116.4 million in the third quarter of 2020, and $257.2 million in the second quarter of 2021.

Days sales outstanding in accounts receivable was 59 days in the third quarter of 2021, compared to 60 days in the third quarter of 2020, and 59 days in the second quarter of 2021.

Capital expenditures were $28.4 million, and depreciation and amortization expense was $56.7 million during the third quarter of 2021.

Outlook

These metrics are provided on a non-GAAP basis, except for revenue and share count. Non-GAAP earnings per share is on a fully diluted basis. The outlook assumes that the exchange rate of the U.S. dollar to other currencies will remain relatively stable at current levels.

There is a worldwide shortage of semiconductors impacting many industries, caused in part by the COVID-19 pandemic. Similar to others, we are experiencing an ongoing component shortage which has resulted in extended lead times and elevated costs of certain products. We continue to work to resolve supply chain challenges and have increased inventory levels and purchase commitments. We are working closely with our suppliers to further enhance our resiliency and mitigate the effects of recent disruptions outside of our control. We believe that even with these actions, extended lead times and elevated costs will likely persist for at least the next few quarters. While the situation is dynamic, at this point in time we believe we will have access to sufficient supplies of semiconductors and other components to meet our financial forecast.

Q4 2021

Our guidance for the quarter ending December 31, 2021 is as follows:

• Revenue will be approximately $1,265 million, plus or minus $50 million.
• Non-GAAP gross margin will be approximately 58.0-60.0%. The sequential decline is due to higher costs related to supply constraints and product mix. If not for elevated supply chain costs due to COVID-19, we would have forecasted non-GAAP gross margin of ~61.0%. Despite an expected sequential decline in Q4, on a full-year basis our gross margin guidance remains at ~59.5% which is in-line with what we provided previously.
• Non-GAAP operating expenses will be approximately $525 million, plus or minus $5 million.
• Non-GAAP operating margin will be approximately 17.6% at the mid-point of revenue guidance.
• Non-GAAP other income and expense (OI&E) will be near Q3'21 levels.
• Non-GAAP tax rate will be approximately 19.5%.
• Non-GAAP net income per share will be approximately $0.53, plus or minus $0.05. This assumes a share count of approximately 330 million.

For more detailed insight on guidance, please refer to the CFO Commentary that can be found on our website.