SUNNYVALE, Calif.–(BUSINESS WIRE)– Juniper Networks (NYSE: JNPR), a leader in secure, AI-driven networks, today reported preliminary financial results for the three months ended March 31, 2021 and provided its outlook for the three months ending June 30, 2021.
First Quarter 2021 Financial Performance
Net revenues were $1,074.4 million, an increase of 8% year-over-year and a decrease of 12% sequentially.
GAAP operating margin was 2.6%, a decrease from 3.9% in the first quarter of 2020, and a decrease from 8.0% in the fourth quarter of 2020.
Non-GAAP operating margin was 12.1%, an increase from 10.2% in the first quarter of 2020, and a decrease from 19.3% in the fourth quarter of 2020.
GAAP net loss was $31.1 million, a decrease of 252% year-over-year and 201% sequentially, resulting in diluted loss per share of $0.10.
Non-GAAP net income was $98.5 million, an increase of 28% year-over-year, and a decrease of 46% sequentially, resulting in non-GAAP diluted earnings per share of $0.30.
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 strong March quarter results. Revenue exceeded our expectations and we experienced better than expected product orders across each of our customer verticals,” said Juniper’s CEO, Rami Rahim. “Momentum is strong entering the June quarter and we are confident regarding our growth prospects. We believe the success we are seeing is a result of the deliberate actions we have taken to strengthen our product portfolio and go-to-market organization, both of which are enabling us to capitalize on attractive end-market opportunities now and in the future.”
“We delivered a strong financial performance during the March quarter as revenue, non-GAAP operating margin and non-GAAP earnings per share each exceeded our expectations,” said Juniper’s CFO, Ken Miller. “Backlog grew both sequentially and year-over-year and near-term visibility is strong. We believe the investments we have made are paying off and should enable us to not only return to sustained revenue growth, but also to deliver improved profitability over time.”
Balance Sheet and Other Financial Results
Total cash, cash equivalents, and investments as of March 31, 2021 were $1,764.6 million, compared to $2,529.9 million as of March 31, 2020, and $2,430.6 million as of December 31, 2020.
Net cash flows provided by operations for the first quarter of 2021 was $179.8 million, compared to $272.2 million in the first quarter of 2020, and $125.8 million in the fourth quarter of 2020.
Days sales outstanding in accounts receivable was 64 days in the first quarter of 2021, compared to 61 days in the first quarter of 2020, and 71 days in the fourth quarter of 2020.
Capital expenditures were $19.7 million, and depreciation and amortization expense was $58.6 million during the first 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. Similar to others, we are experiencing ongoing supply constraints which have resulted in extended lead times. We have invested to strengthen our supply chain and have increased inventory levels over the course of the last year. We continue to work closely with our suppliers to further enhance our resiliency and mitigate recent disruptions outside of our control. Despite these actions, we believe extended lead times will likely persist for the next few quarters. While the situation is dynamic, at this point in time, we believe we will have access to sufficient semiconductor supply to meet our full-year financial forecast.
At the mid-point of guidance, revenue is expected to be up 5% year-over-year. We expect to see sequential growth across our Cloud and Enterprise verticals while Service Provider is expected to remain approximately flat.
We expect our Q2’21 non-GAAP gross margin to benefit from higher revenue and incremental software mix, which should more than offset unfavorable product mix trends and potentially higher component costs related to supply constraints.
We expect non-GAAP operating expense to increase sequentially, primarily due to the investments we are making to take advantage of future market opportunities.
Our guidance for the quarter ending June 30, 2021 is as follows:
- Revenue will be approximately $1,140 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 $512 million, plus or minus $5 million.
- Non-GAAP operating margin will be approximately 14.6% at the mid-point of revenue guidance.
- Non-GAAP other income and expense (OI&E) will be an expense of approximately $12 million.
- Non-GAAP tax rate will be approximately 19.5%.
- Non-GAAP net income per share will be approximately $0.38, 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.
Capital Return
Our Board of Directors has declared a cash dividend of $0.20 per share to be paid on June 22, 2021 to stockholders of record as of the close of business on June 1, 2021. We remain committed to paying our dividend and remain opportunistic with respect to share buybacks.
First Quarter 2021 Financial Commentary Available Online
A CFO Commentary reviewing the Company’s first quarter 2021 financial results, as well as the second quarter and a full-year 2021 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, April 27, 2021, 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 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.