Juniper Networks (NYSE: JNPR), a leader in secure, AI-Native
networks, today reported preliminary financial results for the
three months and fiscal year ended December 31, 2023.
Proposed Merger with Hewlett Packard Enterprise
As announced on January 9, 2024, Hewlett Packard Enterprise
(“HPE”) plans to acquire Juniper Networks in an all-cash
transaction for $40.00 per share, representing an equity value of
approximately $14 billion. The transaction is currently expected to
close in late calendar year 2024 or early calendar year 2025,
subject to receipt of regulatory approvals, approval of the
transaction by Juniper Networks shareholders, and satisfaction of
other customary closing conditions.
Fourth Quarter 2023 Financial Performance
Net revenues were $1,364.8 million, a decrease of 6%
year-over-year, and a decrease of 2% sequentially.
GAAP operating margin was 9.2%, a decrease from 14.0% in the
fourth quarter of 2022, and an increase from 6.3% in the third
quarter of 2023.
Non-GAAP operating margin was 18.3%, a decrease from 19.1% in
the fourth quarter of 2022, and an increase from 17.5% in the third
quarter of 2023.
GAAP net income was $124.3 million, a decrease of 31%
year-over-year, and an increase of 63% sequentially, resulting in
diluted earnings per share of $0.38.
Non-GAAP net income was $196.9 million, a decrease of 8%
year-over-year, and an increase of 2% sequentially, resulting in
non-GAAP diluted earnings per share of $0.61.
Full-Year 2023 Financial Performance
Net revenues were $5,564.5 million, an increase of 5%
year-over-year.
GAAP operating margin was 8.4%, a decrease from 9.8% in fiscal
year 2022.
Non-GAAP operating margin was 16.9%, an increase from 15.7% in
fiscal year 2022.
GAAP net income was $310.2 million, a decrease of 34%
year-over-year, resulting in diluted earnings per share of $0.95, a
decrease of 34% year-over-year. The year-over-year decrease was
primarily due to higher operating expenses which include higher
restructuring charges.
Non-GAAP net income was $736.4 million, an increase of 15%
year-over-year, resulting in diluted earnings per share of $2.26,
an increase of 16% year-over-year.
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 in 2023 and grew our
business on a year-over-year basis for a third consecutive year,”
said Juniper’s CEO, Rami Rahim. “These results reflect the strength
of our enterprise business, which not only delivered a second
consecutive year of solid double-digit revenue growth, but also
achieved positive product order growth in the fourth quarter and on
a full-year basis.”
“We achieved record non-GAAP earnings per share in 2023,” said
Juniper’s CFO, Ken Miller. “This was achieved through a combination
of healthy revenue growth, improved non-GAAP gross margin and
disciplined cost management, which enabled us to exceed our goal of
delivering at least 100 basis points of non-GAAP operating margin
improvement in 2023.”
Balance Sheet and Other Financial Results
Total cash, cash equivalents, and investments as of December 31,
2023 were $1,324.3 million, compared to $1,230.0 million as of
December 31, 2022, and $1,418.0 million as of September 30,
2023.
Net cash flows provided by operations for the fourth quarter of
2023 was $9.1 million, compared to $119.6 million in the fourth
quarter of 2022, and $329.2 million in the third quarter of
2023.
Days sales outstanding in accounts receivable was 69 days in the
fourth quarter of 2023, compared to 76 days in the fourth quarter
of 2022, and 60 days in the third quarter of 2023.
Capital expenditures were $35.4 million, and depreciation and
amortization expense was $47.3 million during the fourth quarter of
2023.
Capital Return
Our Board of Directors has declared a cash dividend of $0.22 per
share to be paid on March 22, 2024 to stockholders of record as of
the close of business on March 1, 2024. We remain committed to
paying our dividend; however we have agreed to suspend repurchase
of our shares in accordance with the terms of the merger agreement
with HPE.
Fourth Quarter and Fiscal Year 2023 Financial Commentary
Available Online
A CFO Commentary reviewing Juniper Networks’ fourth quarter 2023
and fiscal year 2023 financial results will be published on Juniper
Networks’ website at http://investor.juniper.net.
In light of the proposed transaction with HPE, and as is
customary during the pendency of an acquisition, Juniper Networks
will not be providing financial guidance in conjunction with its
fourth quarter 2023 earnings release.
About Juniper Networks
Juniper Networks believes that connectivity is not the same as
experiencing a great connection. Juniper's AI-Native Networking
Platform is built from the ground up across the AIOps layer and our
systems to fully harness the power of AI. From real-time fault
isolation to proactive anomaly detection and self-driving
corrective actions, it provides campus, branch, data center, and
WAN operations with next-level predictability, reliability, and
security. Additional information can be found at Juniper Networks
(www.juniper.net) or connect with Juniper on X (formerly Twitter),
LinkedIn and Facebook.
Investors and others should note that Juniper Networks announces
material financial and operational information to its investors
using its Investor Relations website, press releases, SEC filings
and public conference calls and webcasts. Juniper Networks also
intends to use the X (formerly Twitter) account @JuniperNetworks
and the Juniper Networks’ blogs as a means of disclosing
information about Juniper Networks and for complying with its
disclosure obligations under Regulation FD. The social media
channels that Juniper Networks intends to use as a means of
disclosing information described above may be updated from time to
time as listed on Juniper Networks’ Investor Relations website.
Juniper Networks, the Juniper Networks logo, Juniper, Junos, and
other trademarks are registered trademarks of Juniper Networks,
Inc. and/or its affiliates in the United States and other
countries. Other names may be trademarks of their respective
owners.
Safe Harbor; Forward-Looking Statements
Statements in this release concerning Juniper Networks’
business, economic and market outlook, our expectations regarding
our liquidity and capital return program; deal, customer and
product mix; costs and supply constraints; backlog; customer
demand; and our overall future prospects are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act 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: the completion of the proposed transaction with HPE on
anticipated terms and timing or at all, including obtaining
stockholder and regulatory approvals and other conditions to the
completion of the transaction; the fact that if the proposed
transaction is completed, Juniper stockholders will forego the
opportunity to realize the potential long-term value of the
successful execution of Juniper’s current strategy as an
independent company, which will also be affected by the ability of
HPE to integrate and implement its plans, forecasts and other
expectations with respect to Juniper’s business after the
completion of the proposed transaction and realize additional
opportunities for growth and innovation; the occurrence of any
event, change or other circumstance or condition that could give
rise to the termination of the merger agreement; Juniper’s ability
to implement its business strategies; potential significant
transaction costs associated with the proposed transaction; the
risks related to HPE’s financing of the proposed transaction;
potential litigation or regulatory actions relating to the proposed
transaction; the risk that disruptions from the proposed
transaction will harm Juniper’s business, including current plans
and operations, and risks related to diverting management’s
attention from Juniper’s ongoing business operations and
relationships; the ability of Juniper to retain and hire key
personnel; potential adverse business uncertainty resulting from
the announcement, pendency or completion of the proposed
transaction, including restrictions during the pendency of the
proposed transaction that may impact Juniper’s ability to pursue
certain business opportunities or strategic transactions; legal,
regulatory, tax and economic developments affecting Juniper’s
business; the unpredictability and severity of catastrophic events,
including, but not limited to, acts of terrorism, outbreak of war
or hostilities or current or future pandemics or epidemics, as well
as Juniper’s response to any of the aforementioned factors; general
economic and political conditions globally or regionally, including
the impact of a U.S. federal government shutdown or sovereign debt
default and adverse changes in China-Taiwan relations and any
impact due to armed conflicts (such as the continuing conflict
between Russia and Ukraine, the Israel-Hamas war, and escalating
tensions in the Red Sea in connection with attacks by the Houthi to
disrupt shipments, as well as governmental sanctions imposed in
response); rising interest rates; inflationary pressures; monetary
policy shifts; recession risks; business and economic conditions in
the networking industry; changes in overall technology spending by
our customers; the network capacity and security requirements of
our customers; contractual terms that may result in the deferral of
revenue; the timing of orders and their fulfillment; continuing
manufacturing and supply chain challenges and logistics costs,
constraints, changes or disruptions; availability and pricing of
key product components, such as semiconductors; delays in scheduled
product availability; order cancellations; adoption of or changes
to laws, regulations, standards or policies affecting our
operations, products, services or the networking industry; product
defects, returns or vulnerabilities; significant effects of tax
legislation and judicial or administrative interpretation of new
tax regulations, including the potential for corporate tax
increases and changes to global tax laws; legal settlements and
resolutions, including with respect to enforcing our proprietary
rights; the potential impact of activities related to the execution
of capital return, restructurings and product rationalization; the
impact of import tariffs and changes thereto; currency exchange
rates; and other factors listed in Juniper Networks’ most recent
report on Form 10-Q or 10-K filed with the Securities and Exchange
Commission. Note that our estimates as to the tax rate on our
business are based on current tax law and regulations, including
current interpretations thereof, and could be materially affected
by changing interpretations as well as additional legislation and
guidance. All statements made in this 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 made in
this release in the event facts or circumstances subsequently
change after the date of this release. We have not filed our Form
10-K for the year ended December 31, 2023. As a result, all
financial results described in this earnings release should be
considered preliminary, and are subject to change to reflect any
necessary adjustments or changes in accounting estimates, that are
identified prior to the time we file our Form 10-K.
Additional Information and Where to Find It
In connection with the proposed transaction between Juniper
Networks and HPE, Juniper Networks will file with the SEC a proxy
statement, the definitive version of which will be sent or provided
to Juniper Networks stockholders. Juniper Networks may also file
other documents with the SEC regarding the proposed transaction.
This document is not a substitute for the proxy statement or any
other document which Juniper Networks may file with the SEC.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY
STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL
BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO
THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY
CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION AND RELATED MATTERS. Investors and security holders may
obtain free copies of the Proxy Statement (when it is available)
and other documents that are filed or will be filed with the SEC by
Juniper Networks through the website maintained by the SEC at
www.sec.gov, Juniper Networks’ investor relations website at
https://investor.Juniper.net or by contacting the Juniper investor
relations department at the following:
Jess Lubert Juniper Networks (408) 936-3734
jlubert@juniper.net
Participants in the Solicitation
Juniper Networks and certain of its directors and executive
officers may be deemed to be participants in the solicitation of
proxies in respect of the proposed transaction with HPE.
Information regarding Juniper Networks’ directors and executive
officers, including a description of their direct interests, by
security holdings or otherwise, is contained in Juniper Networks’
proxy statement for its 2023 annual meeting of stockholders, which
was filed with the SEC on March 29, 2023. Juniper Networks
stockholders may obtain additional information regarding the direct
and indirect interests of the participants in the solicitation of
proxies in connection with the proposed transaction, including the
interests of Juniper Networks directors and executive officers in
the transaction, which may be different than those of Juniper
Networks stockholders generally, by reading the Proxy Statement and
any other relevant documents that are filed or will be filed with
the SEC relating to the proposed transaction. You may obtain free
copies of these documents using the sources indicated above.
To the extent holdings of Juniper Networks’ securities by its
directors or executive officers have changed since the amounts set
forth in such documents, such changes have been or will be
reflected on Initial Statements of Beneficial Ownership on Form 3
or Statements of Beneficial Ownership on Form 4 filed with the SEC.
Additional information regarding the identity of potential
participants, and their direct or indirect interests, by security
holdings or otherwise, will be included in the proxy statement
relating to the proposed transaction when it is filed with the
SEC.
Use of Non-GAAP Financial Information
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 Juniper Networks’ 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 of Non-GAAP
Financial Measures" section of this press release. The following
tables and reconciliations can also be found on our Investor
Relations website at http://investor.juniper.net.
Juniper Networks, Inc.
Preliminary Condensed
Consolidated Statements of Operations
(in millions, except per share
amounts)
(unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
Net revenues:
Product
$
858.6
$
988.3
$
3,632.5
$
3,539.9
Service
506.2
460.5
1,932.0
1,761.3
Total net revenues
1,364.8
1,448.8
5,564.5
5,301.2
Cost of revenues:
Product
410.4
472.7
1,781.6
1,761.7
Service
147.2
149.1
581.0
581.2
Total cost of revenues
557.6
621.8
2,362.6
2,342.9
Gross margin
807.2
827.0
3,201.9
2,958.3
Operating expenses:
Research and development
289.1
269.2
1,144.4
1,036.1
Sales and marketing
310.9
299.0
1,233.9
1,133.4
General and administrative
62.0
57.4
255.5
249.5
Restructuring charges (benefits)
19.5
(2.1
)
98.0
20.2
Total operating expenses
681.5
623.5
2,731.8
2,439.2
Operating income
125.7
203.5
470.1
519.1
Gain (loss) on privately-held investments,
net (1) (2)
(5.3
)
14.6
(97.3
)
20.4
Gain on divestiture
—
—
—
45.8
Other expense, net (1)
(2.8
)
(13.1
)
(23.8
)
(49.0
)
Income before income taxes and loss from
equity method investment
117.6
205.0
349.0
536.3
Income tax provision (benefit)
(10.4
)
22.4
29.2
60.5
Loss from equity method investment, net of
tax
3.7
2.2
9.6
4.8
Net income
$
124.3
$
180.4
$
310.2
$
471.0
Net income per share:
Basic
$
0.39
$
0.56
$
0.97
$
1.46
Diluted
$
0.38
$
0.55
$
0.95
$
1.43
Weighted-average shares used in computing
net income per share:
Basic
319.2
323.0
320.0
322.1
Diluted
324.6
329.9
325.9
329.5
_________________
(1)
The prior period amounts have been
reclassified to conform to the current period presentation.
(2)
Privately-held investments represent
investments in privately-held debt and redeemable preferred stock
securities and equity investments without readily determinable fair
value.
Juniper Networks, Inc.
Preliminary Net Revenues by
Customer Solution
(in millions)
(unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
Customer Solutions:
Automated WAN Solutions
$
454.1
$
479.0
$
1,839.3
$
1,865.3
Cloud-Ready Data Center
180.8
259.9
744.7
878.9
AI-Driven Enterprise
321.2
318.3
1,391.8
1,026.2
Hardware Maintenance and Professional
Services
408.7
391.6
1,588.7
1,530.8
Total
$
1,364.8
$
1,448.8
$
5,564.5
$
5,301.2
Juniper Networks, Inc.
Preliminary Net Revenues by
Vertical
(in millions)
(unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
Cloud
$
317.3
$
380.3
$
1,162.8
$
1,393.6
Service Provider
400.2
469.3
1,842.5
1,891.2
Enterprise
647.3
599.2
2,559.2
2,016.4
Total
$
1,364.8
$
1,448.8
$
5,564.5
$
5,301.2
Juniper Networks, Inc.
Preliminary Net Revenues by
Geographic Region
(in millions)
(unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
Americas
$
849.7
$
857.4
$
3,333.3
$
3,156.8
Europe, Middle East, and Africa
335.8
378.5
1,405.7
1,370.0
Asia Pacific
179.3
212.9
825.5
774.4
Total
$
1,364.8
$
1,448.8
$
5,564.5
$
5,301.2
Juniper Networks, Inc.
Preliminary Reconciliations
between GAAP and non-GAAP Financial Measures
(in millions, except percentages
and per share amounts)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31, 2023
September 30, 2023
December 31, 2022
December 31, 2023
December 31, 2022
GAAP operating income
$
125.7
$
87.6
$
203.5
$
470.1
$
519.1
GAAP operating margin
9.2
%
6.3
%
14.0
%
8.4
%
9.8
%
Share-based compensation expense
C
81.8
74.7
55.4
279.4
209.3
Share-based payroll tax expense
C
0.9
3.7
1.1
6.7
8.9
Amortization of purchased intangible
assets
A
17.2
17.1
17.2
68.6
74.8
Restructuring charges (benefits)
B
19.5
62.5
(2.1
)
98.0
20.2
Acquisition and integration-related
charges (benefits)
A
(0.1
)
0.1
0.2
0.7
2.2
Gain (loss) on non-qualified deferred
compensation plan ("NQDC")
B
3.5
(0.9
)
1.1
6.7
(6.9
)
Others
B
1.7
—
0.1
9.9
6.9
Non-GAAP operating income
$
250.2
$
244.8
$
276.5
$
940.1
$
834.5
Non-GAAP operating margin
18.3
%
17.5
%
19.1
%
16.9
%
15.7
%
GAAP net income
$
124.3
$
76.1
$
180.4
$
310.2
$
471.0
Share-based compensation expense
C
81.8
74.7
55.4
279.4
209.3
Share-based payroll tax expense
C
0.9
3.7
1.1
6.7
8.9
Amortization of purchased intangible
assets
A
17.2
17.1
17.2
68.6
74.8
Restructuring charges (benefits)
B
19.5
62.5
(2.1
)
98.0
20.2
Acquisition and integration-related
charges (benefits)
A
(0.1
)
0.1
0.2
0.7
2.2
Gain on divestiture
B
—
—
—
—
(45.8
)
Loss (gain) on privately-held investments
(1)
B
5.3
—
(14.6
)
97.3
(20.4
)
Loss (gain) on equity investments (1)
B
(0.8
)
(1.5
)
1.6
(0.5
)
2.7
Loss from equity method investment
B
3.7
1.7
2.2
9.6
4.8
Recognition of previously unrecognized tax
benefits
B
—
—
(8.1
)
—
(8.1
)
Income tax effect of tax legislation
B
—
(7.8
)
—
(7.8
)
—
One-time tax benefit (2)
B
(15.5
)
—
—
(15.5
)
—
Income tax effect of non-GAAP
exclusions
B
(41.1
)
(32.7
)
(19.6
)
(120.2
)
(83.9
)
Others
B
1.7
—
0.1
9.9
6.9
Non-GAAP net income
$
196.9
$
193.9
$
213.8
$
736.4
$
642.6
GAAP diluted net income per share
$
0.38
$
0.24
$
0.55
$
0.95
$
1.43
Non-GAAP diluted net income per share
D
$
0.61
$
0.60
$
0.65
$
2.26
$
1.95
Shares used in computing diluted net
income per share
324.6
323.8
329.9
325.9
329.5
__________________
(1)
The prior period amounts have been
reclassified to conform to the current period presentation.
(2)
Benefit due to a one-time change in the
geographic mix of taxable earnings.
Discussion of Non-GAAP Financial Measures
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.
This press release, including the tables above, includes the
following non-GAAP financial measures derived from our Preliminary
Consolidated Statements of Operations: operating income; operating
margin; net income; and diluted net income per share. These
measures are not presented in accordance with, nor are they a
substitute for GAAP. In addition, these measures may be different
from non-GAAP measures used by other companies, limiting their
usefulness for comparison purposes. The non-GAAP financial measures
used in the table above should not be considered in isolation from
measures of financial performance prepared in accordance with GAAP.
Investors are cautioned that there are material limitations
associated with the use of non-GAAP financial measures as an
analytical tool. Certain of the adjustments to our GAAP financial
measures reflect the exclusion of items that are recurring and will
be reflected in our financial results for the foreseeable
future.
We utilize a number of different financial measures, both GAAP
and non-GAAP, in analyzing and assessing the overall performance of
our business, in making operating decisions, forecasting and
planning for future periods, and determining payments under
compensation programs. We consider the use of the non-GAAP measures
presented above to be helpful in assessing the performance of the
continuing operation of our business. By continuing operation, we
mean the ongoing revenue and expenses of the business, excluding
certain items that render comparisons with prior periods or
analysis of on-going operating trends more difficult, such as
expenses not directly related to the actual cash costs of
development, sale, delivery or support of our products and
services, or expenses that are reflected in periods unrelated to
when the actual amounts were incurred or paid. Consistent with this
approach, we believe that disclosing non-GAAP financial measures to
the readers of our financial statements provides such readers with
useful supplemental data that, while not a substitute for financial
measures prepared in accordance with GAAP, allows for greater
transparency in the review of our financial and operational
performance. In addition, we have historically reported non-GAAP
results to the investment community and believe that continuing to
provide non-GAAP measures provides investors with a tool for
comparing results over time. In assessing the overall health of our
business for the periods covered by the table above and, in
particular, in evaluating the financial line items presented in the
table above, we have excluded items in the following three general
categories, each of which are described below: Acquisition Related
Charges, Other Items, and Share-Based Compensation Related Items.
We also provide additional detail below regarding the shares used
to calculate our non-GAAP net income per share. Notes identified
for line items in the table above correspond to the appropriate
note description below.
The above tables and reconciliations can also be found on our
Investor Relations website at http://investor.juniper.net.
Note A: Acquisition Related
Charges. We exclude certain expense items resulting from
acquisitions including amortization of purchased intangible assets
associated with our acquisitions. The amortization of purchased
intangible assets associated with acquisitions results in recording
expenses in our GAAP financial statements that were already
expensed by the acquired company before the acquisition and for
which we have not expended cash. Moreover, had we internally
developed the products acquired, the amortization of intangible
assets, and the expenses of uncompleted research and development
would have been expensed in prior periods. Accordingly, we analyze
the performance of our operations in each period without regard to
such expenses. In addition, acquisitions result in non-continuing
operating expenses, which would not otherwise have been incurred by
us in the normal course of our business operations. We believe that
providing non-GAAP information for acquisition-related expense
items in addition to the corresponding GAAP information allows the
users of our financial statements to better review and understand
the historic and current results of our continuing operations, and
also facilitates comparisons to less acquisitive peer
companies.
Note B: Other Items. We exclude
certain other items that are the result of either unique,
infrequent or unplanned events, including the following, when
applicable: (i) strategic investment-related gain or loss,
including gain or loss from our equity method investment and our
privately-held investments; (ii) legal reserve and settlement
charges or benefits; (iii) gain or loss on significant isolated
events or transactions, including divestitures and the
Russia-Ukraine conflict, which are directly related to the events,
objectively quantifiable, and not expected to occur regularly in
the future that are not indicative of our core operating results;
(iv) legal and advisory fees incurred to effect the acquisition by
HPE; (v) significant effects of tax legislation and judicial or
administrative interpretation of tax regulations, including the
impact of income tax reform; (vi) recognition of previously
unrecognized tax benefits that are non-recurring in nature; and
(vii) the income tax effect on our financial statements of
excluding items related to our non-GAAP financial measures.
Additionally, the non-GAAP results exclude the effects of
NQDC-related investments. It is difficult to estimate the amount or
timing of these items in advance. Although these events are
reflected in our GAAP financial statements, these transactions may
limit the comparability of our on-going operations with prior and
future periods.
In addition, we exclude restructuring benefits or charges as
these result from events that arise from unforeseen circumstances,
which often occur outside of the ordinary course of continuing
operations. As such, we believe these expenses do not accurately
reflect the underlying performance of our continuing business
operations for the period in which they are incurred or comparisons
to past operating results. We also exclude gains or losses related
to strategic investments as well as significant isolated events as
they are directly related to an event that is distinct and does not
reflect current ongoing business operations. In the case of legal
reserves and settlements, these gains or losses are recorded in the
period in which the matter is concluded or resolved even though the
subject matter of the underlying dispute may relate to multiple or
different periods. As such, we believe that these expenses do not
accurately reflect the underlying performance of our continuing
operations for the period in which they are incurred. Additionally,
we exclude previously unrecognized tax benefits that are
non-recurring in nature which are recorded in the period in which
applicable statutes of limitation lapse or upon the completion of
tax review cycles as the tax matter may relate to multiple or
different periods. Further, certain items related to global tax
reform may continue to impact the business and are generally
unrelated to the current level of business activity. We believe
these tax events limit the comparability with prior periods and
that these expenses or benefits do not accurately reflect the
underlying performance of our continuing business operations for
the period in which they are incurred. We also believe providing
financial information with and without the income tax effect of
excluding items related to our non-GAAP financial measures provide
our management and users of the financial statements with better
clarity regarding the on-going performance and future liquidity of
our business. Because of these factors, we assess our operating
performance with these amounts both included and excluded, and by
providing this information, we believe the users of our financial
statements are better able to understand the financial results of
what we consider our continuing operations.
Note C: Share-Based Compensation Related
Items. We provide non-GAAP information relative to our
expense for share-based compensation and related payroll tax. Due
to the varying available valuation methodologies, subjective
assumptions and the variety of award types, which affect the
calculations of share-based compensation, we believe that the
exclusion of share-based compensation and related payroll tax
allows for more accurate comparisons of our operating results to
our peer companies and is useful to investors to understand the
impact of share-based compensation on our results of operations.
Further, expense associated with granting share-based awards does
not reflect any cash expenditures by the company as no cash is
expended.
Note D: Non-GAAP Net Income Per Share
Items. We provide diluted non-GAAP net income per share. The
diluted non-GAAP net income per share includes additional dilution
from potential issuance of common stock, except when such issuances
would be anti-dilutive.
Juniper Networks, Inc.
Preliminary Condensed
Consolidated Balance Sheets
(in millions)
(unaudited)
December 31,
2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
1,068.1
$
880.1
Short-term investments
139.4
210.3
Accounts receivable, net of allowances
1,044.1
1,227.3
Inventory
952.4
619.4
Prepaid expenses and other current
assets
591.5
680.0
Total current assets
3,795.5
3,617.1
Property and equipment, net
689.9
666.8
Operating lease assets
111.4
141.6
Long-term investments
116.8
139.6
Purchased intangible assets, net
91.8
160.5
Goodwill
3,734.4
3,734.4
Other long-term assets
978.7
866.7
Total assets
$
9,518.5
$
9,326.7
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
295.1
$
347.4
Accrued compensation
292.2
306.1
Deferred revenue
1,130.0
1,020.5
Other accrued liabilities
386.7
404.9
Total current liabilities
2,104.0
2,078.9
Long-term debt
1,616.8
1,601.3
Long-term deferred revenue
894.9
642.6
Long-term income taxes payable
204.5
279.4
Long-term operating lease liabilities
82.9
117.7
Other long-term liabilities
122.7
131.7
Total liabilities
5,025.8
4,851.6
Total stockholders' equity
4,492.7
4,475.1
Total liabilities and stockholders'
equity
$
9,518.5
$
9,326.7
Juniper Networks, Inc.
Preliminary Condensed
Consolidated Statements of Cash Flows
(in millions)
(unaudited)
Twelve Months Ended December
31,
2023
2022
Cash flows from operating
activities:
Net income
$
310.2
$
471.0
Adjustments to reconcile net income to net
cash provided by operating activities:
Share-based compensation expense
279.4
209.3
Depreciation, amortization, and
accretion
194.7
217.7
Deferred income taxes
(262.1
)
(222.5
)
Provision for inventory excess and
obsolescence (1)
115.3
26.1
Operating lease assets expense
40.7
40.3
Gain on divestiture
—
(45.8
)
Loss (gain) on privately-held investments,
net (1)
97.3
(20.4
)
Loss from equity method investment
9.6
4.8
Impairment of assets (1)
28.0
5.1
Loss (gain) on NQDC and other (1)
(4.8
)
12.7
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable, net
183.4
(232.0
)
Inventory (1)
(489.9
)
(383.4
)
Prepaid expenses and other assets (1)
182.2
(299.0
)
Accounts payable
(51.9
)
67.4
Accrued compensation
(13.2
)
(23.1
)
Income taxes payable
(99.6
)
21.1
Other accrued liabilities
(7.5
)
(3.3
)
Deferred revenue
361.0
251.6
Net cash provided by operating
activities
872.8
97.6
Cash flows from investing
activities:
Purchases of property and equipment
(159.4
)
(105.1
)
Proceeds from divestiture, net
—
89.1
Purchases of available-for-sale debt
securities
(155.0
)
(104.1
)
Proceeds from sales of available-for-sale
debt securities
31.9
118.2
Proceeds from maturities and redemptions
of available-for-sale debt securities
217.3
390.3
Purchases of equity securities
(11.6
)
(16.5
)
Proceeds from sales of equity
securities
15.7
47.7
Subsequent payments related to
acquisitions in prior years
(0.7
)
(14.6
)
Funding of loan receivable and other
(5.8
)
2.5
Net cash provided by (used in) investing
activities
(67.6
)
407.5
Cash flows from financing
activities:
Repurchase and retirement of common
stock
(397.6
)
(315.2
)
Proceeds from issuance of common stock
61.9
57.2
Payment of dividends
(280.8
)
(270.4
)
Payment of debt issuance costs and
other
(2.3
)
—
Net cash used in financing activities
(618.8
)
(528.4
)
Twelve Months Ended December
31,
2023
2022
Effect of foreign currency exchange rates
on cash, cash equivalents, and restricted cash
0.2
(21.7
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
186.6
(45.0
)
Cash, cash equivalents, and restricted
cash at beginning of period
897.7
942.7
Cash, cash equivalents, and restricted
cash at end of period
$
1,084.3
$
897.7
Non-cash investing activity:
Equity method investment
$
—
$
40.3
__________________
(1)
The prior period amounts have been
reclassified to conform to the current period presentation.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240130296394/en/
Investor Relations: Jess Lubert Juniper Networks (408)
936-3734 jlubert@juniper.net
Media Relations: Penny Still Juniper Networks
+441372385692 pstill@juniper.net
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