Juniper Networks Reports Preliminary Second Quarter 2015 Financial Results
Jul 24, 2015
SUNNYVALE, Calif.--(BUSINESS WIRE)--Juniper Networks (NYSE:JNPR), the industry leader in network innovation, today reported preliminary financial results for the three months ended June 30, 2015 and provided its outlook for the three months ending Sept. 30, 2015.
Net revenues for the second quarter of 2015 were $1,222 million, a decrease of 1% year-over-year and an increase of 15% sequentially.
Juniper’s operating margin for the second quarter of 2015 increased to 19.9% on a GAAP basis, a year-over-year increase of 10.5 points and an increase of 7.6 points sequentially. Non-GAAP operating margin for the second quarter of 2015 increased to 25.2%, an improvement of 2.9 points year-over-year and 6.7 points sequentially.
Juniper posted GAAP net income of $158.0 million, or $0.40 per diluted share for the second quarter of 2015, a decrease of 29% year-over-year and an increase of 97% sequentially. Non-GAAP net income was $208.8 million, or $0.53 per diluted share for the second quarter of 2015, an increase of 33% year-over-year and an increase of 66% sequentially.
The reconciliation between GAAP and non-GAAP results of operations is provided in a table immediately following the Preliminary Net Revenues by Market table below.
“We are pleased to report strong sequential revenue growth from the first quarter across all technologies, which reflects the strength of our innovative product portfolio as well as our continued focus on execution,” said Rami Rahim, chief executive officer of Juniper Networks. “Overall, this quarter is a good proof point that Juniper’s strategy is winning and the investments we have made are producing positive results. Our results reflect the diversity of our customer base and we believe this positions us well to capitalize on the market opportunity throughout 2015 and beyond.”
“We exceeded both our revenue and earnings expectations for the quarter, a reflection of the strength in our underlying business and the focused execution of our strategy,” said Robyn Denholm, chief financial and operations officer of Juniper Networks. “We remain committed to our strong focus on operational fundamentals and the effective management of our cost structure. I want to commend our team for remaining laser focused on driving revenue growth and operating efficiency.”
Other Financial Highlights
Total cash, cash equivalents, and investments as of June 30, 2015 were $3,076 million, compared to $3,451 million as of March 31, 2015, and $3,960 million as of June 30, 2014.
Juniper’s net cash flow provided by operations for the second quarter of 2015 was $263 million, compared to net cash provided by operations of $219 million in the first quarter of 2015, and $424 million in the second quarter of 2014. Cash flow in the second quarter of 2014 reflected the gain of $75 million related to the Company’s litigation settlement.
Days sales outstanding in accounts receivable or “DSO” was 39 days in the second quarter of 2015, compared to 43 days in the prior quarter, and 41 days in the second quarter of 2014.
Capital expenditures were $40 million and depreciation and amortization of intangible assets expense was $40 million during the second quarter of 2015.
Juniper’s Board of Directors has declared a quarterly cash dividend of $0.10 per share to be paid on Sept. 22, 2015 to shareholders of record as of the close of business on Sept. 1, 2015.
During the second quarter of 2015, the Company repurchased $600 million of common stock, completing its commitment to repurchase a total of $1.0 billion of shares from January through June 2015. Additionally, the Board of Directors has approved an incremental $500 million share repurchase authorization. Juniper now has a total of approximately $675 million remaining on its share repurchase authorization.
Since the first quarter of 2014, inclusive of share repurchases and dividends, the Company has returned approximately $3.4 billion of capital to shareholders against its commitment to return a total of $4.1 billion by the end of 2016.
Industry trends continue to unfold largely as the Company expected. Consistent with its views last quarter, the Company anticipates an improvement in revenue in the second half of 2015 relative to both the first half of the year and the second half of 2014.
Juniper Networks estimates that for the quarter ending Sept. 30, 2015:
- Revenues will be approximately $1,230 million, plus or minus $20 million.
- Non-GAAP gross margin will be approximately 64%, plus or minus 0.5%, consistent with the Company’s long-term model.
- Non-GAAP operating expenses will be $485 million, plus or minus $5 million.
- Non-GAAP operating margin will be roughly 24.5% at the midpoint of revenue guidance.
- Non-GAAP net income per share will range between $0.50 and $0.54 on a diluted basis. This assumes a share count of 390 million and a non-GAAP tax rate flat from the second quarter, and assumes no renewal of the R&D tax credit for 2015.
All forward-looking non-GAAP measures exclude estimates for amortization of intangible assets, share-based compensation expenses, acquisition-related charges, restructuring and other (credit) charges, impairment charges, professional services related to non-routine stockholder matters, litigation settlement and resolution charges, professional fees and other income and expenses associated with the sale of Junos Pulse, gain or loss on equity investments, retroactive impact of certain tax settlements, non-recurring income tax adjustments, valuation allowance on deferred tax assets, and income tax effect of non-GAAP exclusions. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis.
Second Quarter Financial Commentary Available Online
A commentary by Robyn Denholm, chief financial and operations officer, reviewing the Company’s second quarter 2015 financial results and third quarter 2015 financial outlook will be furnished to the SEC on Form 8-K and published on the Company’s website at http://investor.juniper.net. Analysts and investors are encouraged to review this commentary prior to participating in the conference call webcast.
Conference Call Webcast
Juniper Networks will host a conference call webcast today, July 23, 2015, at 2:00 pm PT, to be broadcast live over the Internet at http://investor.juniper.net. To participate via telephone in the US, the toll free dial-in number is 1-877-407-8033. Outside the US, dial +1-201-689-8033. Please call 10 minutes prior to the scheduled conference call time. The webcast replay will be archived on the Juniper Networks website.
Statements in this release concerning Juniper Networks' business outlook, economic and market outlook, future financial and operating results, ability to deliver significant margin expansion, innovation pipeline, capital return program, and overall future prospects are forward-looking statements that involve a number of uncertainties and risks. Actual results or events could differ materially from those anticipated in those forward-looking statements as a result of several factors, including: general economic and political conditions globally or regionally; business and economic conditions in the networking industry; changes in overall technology spending and spending by communication service providers and major customers; the network capacity requirements of communication service providers; contractual terms that may result in the deferral of revenue; increases in and the effect of competition; the timing of orders and their fulfillment; manufacturing and supply chain constraints; availability of key product components; ability to establish and maintain relationships with distributors, resellers and other partners; variations in the expected mix of products sold; changes in customer mix; changes in geography mix; customer and industry analyst perceptions of Juniper Networks and its technology, products and future prospects; delays in scheduled product availability; market acceptance of Juniper Networks products and services; rapid technological and market change; adoption of regulations or standards affecting Juniper Networks products, services or the networking industry; the ability to successfully acquire, integrate and manage businesses and technologies; product defects, returns or vulnerabilities; the ability to recruit and retain key personnel; significant effects of tax legislation and judicial or administrative interpretation of tax regulations; currency fluctuations; litigation settlements and resolutions; the potential impact of activities related to the execution of capital return and product rationalization; and other factors listed in Juniper Networks' most recent report on Form 10-Q filed with the Securities and Exchange Commission. All statements made in this press release are made only as of the date set forth at the beginning of this release. Juniper Networks undertakes no obligation to update the information in this release in the event facts or circumstances subsequently change after the date of this press release.
Juniper Networks believes that the presentation of non-GAAP financial information provides important supplemental information to management and investors regarding financial and business trends relating to the company's financial condition and results of operations. For further information regarding why Juniper Networks believes that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the discussion below. The tables and reconciliations can be found on our Investor Relations website at http://investor.juniper.net.