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Juniper Networks Reports Preliminary Third Quarter 2015 Financial Results

The following excerpt is from the company's SEC filing.

Company delivers good revenue growth and strong year-over-year earnings expansion

SUNNYVALE, Calif., Oct. 22, 2015

- Juniper Networks (NYSE: JNPR), the industry leader in network innovation, today reported preliminary financial results for the three months ended Sept. 30, 2015 and provided its outlook for the three months ending Dec. 31, 2015.

Net revenues for the third quarter of 2015 were $1,248.6 million, an increase of 11% year-over-year and 2% sequentially.

Junipers operating margin for the third quarter of 2015 increased to 20.7% on a GAAP basis, a year-over-year increase of 5 .4 points and an increase of 0.8 points sequentially. Non-GAAP operating margin for the third quarter of 2015 increased to 25.5%, an increase of 4.0 points year-over-year and 0.3 points sequentially.

In the third quarter of 2015, Juniper posted GAAP net income of $197.7 million, an increase of 91% year-over-year and 25% sequentially. GAAP net income per diluted share was $0.51, inclusive of a $0.06 benefit from a lower tax rate primarily due to changes in the year-to-date geographic mix of earnings and a nonrecurring tax benefit relating to a change in the tax treatment of stock-based compensation and R&D cost sharing arrangements due to a July 2015 Federal Tax Court decision in the case known as Altera Corp. et al. v. Commissioner. Non-GAAP net income was $221.7 million, an increase of 34% year-over-year and 6% sequentially. Non-GAAP net income for the third quarter of 2015 was $0.57 per diluted share, an increase of $0.21 year-over-year primarily due to the positive impact from higher revenue, reduced share count, and lower operating expenses. The sequential increase of $0.04 was primarily due to higher revenue and an approximate $0.02 impact from the lower tax rate.

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 delivered another solid quarter of growth, demonstrating our continued momentum across the business and ability to execute our clear and deliberate strategy, said Rami Rahim, chief executive officer of Juniper Networks. We continue to challenge the status quo and bring new product innovations to market that bolster our position as a leader in network innovation. Im proud of the results our team has yielded and have confidence in our prospects for the future.

We once again delivered good revenue and earnings for the quarter, a testament to our focus on our financial performance across key business metrics, said Robyn Denholm, chief financial and operations officer of Juniper Networks. We delivered significant year-over-year earnings expansion, maintained our focus on cost control, meaningfully improved our operating margin and continued to return capital to shareholders. Im pleased with the significant progress our team has made and continue to see growing, evolving and diversifying demand for the solutions we provide.

Page 1 of 12

Other Financial Highlights

Total cash, cash equivalents, and investments as of Sept. 30, 2015 were $3,247 million, compared to $3,076 million as of June 30, 2015, and $3,321 million as of Sept. 30, 2014.

Junipers net cash flow provided by operations for the third quarter of 2015 was $293 million, compared to net cash provided by operations of $263 million in the second quarter of 2015, and $(70) million in the third quarter of 2014.

Days sales outstanding in accounts receivable, or DSO, was 42 in the third quarter of 2015, compared to 39 days in the prior quarter, and 49 days in the third quarter of 2014.

Capital expenditures were $71 million and depreciation and amortization of intangible assets expense was $41 million during the third quarter of 2015. Capital expenditures for the quarter increased as we focus on investments to drive long-term productivity and support continued innovation and development of new products.

Junipers Board of Directors has declared a quarterly cash dividend of $0.10 per share to be paid on Dec. 22, 2015 to shareholders of record as of the close of business on Dec. 1, 2015.

During the third quarter of 2015, the Company repurchased $50 million of common stock and paid $39 million in dividends. Since the first quarter of 2014, the Company has returned approximately $3.5 billion of capital to shareholders against its commitment to return a total of $4.1 billion by the end of 2016.

Outlook

The Company expects the demand environment across multiple verticals to remain healthy and anticipates the diversification of its revenue to continue.

Juniper Networks estimates that for the quarter ending Dec. 31, 2015:

Revenues will be approximately $1,290 million, plus or minus $20 million.

Non-GAAP gross margin will be approximately 64%, plus or minus 0.5%.

Non-GAAP operating expenses will be $500 million, plus or minus $5 million. The increase in expenses is primarily due to variable costs given higher revenue and for certain strategic go-to-market investments.

Non-GAAP operating margin will be roughly 25% at the midpoint of revenue guidance.

Non-GAAP net income per share will range between $0.57 and $0.60 on a diluted basis. This assumes a flat share count from the third quarter and a non-GAAP tax rate of approximately 25.5% for the fourth 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 (benefits) 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.

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Third Quarter Financial Commentary Available Online

A commentary by Robyn Denholm, chief financial and operations officer, reviewing the Companys third quarter 2015 financial results and fourth quarter 2015 financial outlook will be furnished to the SEC on Form 8-K and published on the Companys 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, Oct. 22, 2015, at 2:00 pm PT, to be broadcast live over the Internet at

. 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.

About Juniper Networks

Juniper Networks (NYSE: JNPR) delivers innovation across routing, switching and security. Juniper Networks innovations in software, silicon and systems transform the experience and economics of networking. Additional information can be found at Juniper Networks (

www.juniper.net

) or connect with Juniper on

Twitter

Facebook

Investors and others should note that the Company announces material financial and operational information to its investors using its Investor Relations website, press releases, SEC filings and public conference calls and webcasts. The Company also intends to use the Twitter accounts @JuniperNetworks and @Juniper_IR and the Companys blogs as a means of disclosing information about the Company and for complying with its disclosure obligations under Regulation FD. The social media channels that the Company intends to use as a means of disclosing information described above may be updated from time to time as listed on the Companys Investor Relations website.

Juniper Networks and Junos, are registered trademarks of Juniper Networks, Inc. in the United States and other countries. The Juniper Networks logo and the Junos logo are trademarks of Juniper Networks, Inc. All other trademarks, service marks, registered trademarks, or registered service marks are the property of their respective owners.

Safe Harbor

Statements in this release concerning Juniper Networks business...


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