Juniper Networks (NYSE: JNPR), a leader in secure, AI-driven networks, today reported preliminary financial results for the three months ended September 30, 2022 and provided its outlook for the three months ending December 31, 2022.
Third Quarter 2022 Financial Performance
Net revenues were $1,414.6 million, an increase of 19% year-over-year and an increase of 11% sequentially.
GAAP operating margin was 10.6%, an increase from 10.1% in the third quarter of 2021, and an increase from 8.5% in the second quarter of 2022.
Non-GAAP operating margin was 17.2%, an increase from 16.6% in the third quarter of 2021, and an increase from 13.9% in the second quarter of 2022.
GAAP net income was $121.5 million, an increase of 37% year-over-year, and an increase of 7% sequentially, resulting in diluted net income per share of $0.37.
Non-GAAP net income was $190.8 million, an increase of 26% year-over-year, and an increase of 40% sequentially, resulting in non-GAAP diluted net income per share of $0.58.
The reconciliation between GAAP and non-GAAP financial measures is provided in a table immediately following the Preliminary Net Revenues by Geographic Region table below.
“We delivered record revenue results during the September quarter. Product sales grew 25% year-over-year and we saw double-digit year-over-year growth across all customer verticals and all customer solutions,” said Juniper’s CEO, Rami Rahim. “Our teams are executing extremely well. Based on our current demand, our strong backlog and the actions we’ve taken to procure more supply, we expect to deliver continued revenue strength in Q4, and sustained growth in 2023 and beyond.”
“We had very strong financial performance in Q3, as revenue and non-GAAP EPS both exceeded the high-end of our guidance range,” said Juniper’s CFO, Ken Miller. “Non-GAAP gross and operating margins also came in ahead of our forecast and we see the potential to expand profitability in 2023.”
Balance Sheet and Other Financial Results
Total cash, cash equivalents, and investments as of September 30, 2022 were $1,254.9 million, compared to $1,835.8 million as of September 30, 2021, and $1,285.6 million as of June 30, 2022.
Cash flows provided by operations for the third quarter of 2022 were $51.8 million, compared to $136.7 million of cash flows provided by operations in the third quarter of 2021, and $266.9 million of cash flows used in operations in the second quarter of 2022.
Days sales outstanding in accounts receivable was 65 days in the third quarter of 2022, compared to 59 days in the third quarter of 2021, and 74 days in the second quarter of 2022.
Capital expenditures were $23.9 million, and depreciation and amortization expense was $52.7 million during the third quarter of 2022.
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 and other components impacting many industries. Similar to others, we are experiencing ongoing supply chain challenges, which have resulted in extended lead times, as well as elevated logistics and component costs. 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 disruptions outside of our control. We believe that even with these actions, extended lead times and elevated costs will persist into 2023. 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.
For the fourth quarter, we expect to see solid revenue growth driven by the strength of our demand forecast, our backlog, and an improved supply outlook.