SUNNYVALE, Calif. -- Juniper Networks (NYSE: JNPR), a leader in secure, AI-driven networks, today reported preliminary financial results for the three months ended June 30, 2020 and provided its outlook for the three months ending September 30, 2020.

Second Quarter 2020 Financial Performance

Net revenues were $1,086.3 million, a decrease of 1% year-over-year, and an increase of 9% sequentially.

GAAP operating margin was 8.3%, an increase from 7.5% in the second quarter of 2019, and an increase from 3.9% in the first quarter of 2020.

Non-GAAP operating margin was 14.3%, a decrease from 15.9% in the second quarter of 2019, and an increase from 10.2% in the first quarter of 2020.

GAAP net income was $61.2 million, an increase of 32% year-over-year, and an increase of 200% sequentially, resulting in diluted earnings per share of $0.18.

Non-GAAP net income was $116.3 million, a decrease of 17% year-over-year, and an increase of 51% sequentially, resulting in non-GAAP diluted earnings per share of $0.35.

“We experienced solid demand during the June quarter, as our combination of technological differentiation and go- to-market execution drove a second consecutive quarter of positive order growth,” said Juniper’s CEO, Rami Rahim. “While the global macro environment remains uncertain, the strategic importance of the global network has never been clearer and we remain confident regarding the long-term outlook for our business.”

“We delivered better than expected results during the June quarter, with both revenue and non-GAAP earnings per share exceeding the mid-point of our guidance,” said Juniper’s CFO, Ken Miller. “We are entering Q3 with healthy backlog and are optimistic regarding our ability to navigate COVID-19 related supply chain challenges and deliver improved profitability during the upcoming quarter.”

Balance Sheet and Other Financial Results

Total cash, cash equivalents, and investments as of June 30, 2020 were $2,570.3 million, compared to $2,875.0 million as of June 30, 2019, and $2,529.9 million as of March 31, 2020.

Net cash flows provided by operations for the second quarter of 2020 was $97.6 million, compared to $88.8 million in the second quarter of 2019, and $272.2 million in the first quarter of 2020.

Days sales outstanding in accounts receivable was 63 days in the second quarter of 2020, compared to 54 days in the second quarter of 2019, and 61 days in the first quarter of 2020.

Capital expenditures were $22.0 million, and depreciation and amortization expense was $51.0 million during the second quarter of 2020.

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.

At the mid-point of our Q3 guidance we expect to see sequential revenue and earnings growth. Confidence in our forecast is driven by strong backlog and strength within our Service Provider and Cloud verticals. We believe these factors should help offset continued uncertainty in parts of the Enterprise market.

We expect to see sequential volume-driven improvements in non-GAAP gross margin and a more favorable customer mix during the September quarter. We expect logistics and other supply chain-related costs to remain elevated, consistent with Q2 levels, due to the effects of the ongoing pandemic.

We expect third quarter non-GAAP operating expense to be essentially flat compared to Q2, as we continue to benefit from lower travel costs due to COVID-19. We will remain focused on prudent cost management while continuing to invest to capture future opportunities.

Our Board of Directors has declared a cash dividend of $0.20 per share to be paid on September 22, 2020 to shareholders of record as of the close of business on September 1, 2020. We remain committed to paying our dividend and will remain opportunistic with respect to share buybacks.

Our guidance for the quarter ending September 30, 2020 is as follows:

• Revenue will be approximately $1,125 million, plus or minus $50 million.
• Non-GAAP gross margin will be approximately 59.5%, plus or minus 1.0%.
• Non-GAAP operating expenses will be approximately $478 million, plus or minus $5 million.
• Non-GAAP operating margin will be approximately 17% at the mid-point of revenue guidance.
• Non-GAAP tax rate will be approximately 19.5%.
• Non-GAAP net income per share will be approximately $0.43, plus or minus $0.05. This assumes a share count of approximately 334 million.