Juniper Networks Reports Q3’07 Financial Results

Q3’07 Net Revenue of $735.0M, up 28% from Q3’06;
GAAP Diluted EPS $0.15; Non-GAAP Diluted EPS $0.22

SUNNYVALE, Calif.- Juniper Networks, Inc. (NASDAQ: JNPR) today reported its results for the three and nine months ended September 30, 2007.


Net revenues for the third quarter of 2007 were $735.0 million, compared with $573.6 million for the third quarter of 2006, an increase of 28 percent. Net revenues for the nine months ended September 30, 2007 were $2,026.9 million, compared with $1,707.8 million for the same period last year, an increase of 19 percent.

Net income on a GAAP basis for the third quarter of 2007 was $85.1 million or $0.15 per share, compared with a GAAP net income of $58.3 million or $0.10 per share for the third quarter of 2006. Non-GAAP net income for the third quarter of 2007 was $124.5 million or $0.22 per share, compared with non-GAAP net income of $106.2 million or $0.18 per share for the third quarter of 2006. Net income on a GAAP basis for the nine months ended September 30, 2007 was $237.9 million or $0.41 per share, compared with a GAAP net loss of $1,072.4 million, including $1,283.4 million of impairment charges, or $1.89 per share for the same period last year. Non-GAAP net income for the nine months ended September 30, 2007 was $352.8 million or $0.61 per share, compared with non-GAAP net income of $327.7 million or $0.55 per share for the same period in 2006. The reconciliation between GAAP and non-GAAP results of operations is provided in a table immediately following the Net Product Revenue by Operating Segment table below.

“We are pleased with both the results for the quarter and the momentum we are seeing, which reflect confidence in Juniper to address the high-performance networking requirements of our customers,” said Scott Kriens, Juniper Networks’ Chairman and CEO. “Our strategy and focus on the delivery of high-performance networking, coupled with the ongoing implementation of operational discipline across the company, adds up to continuing opportunity for growth.”

Net cash provided by operations for the third quarter of 2007 were $193.2 million, compared to cash provided by operations of $164.9 million for the same quarter of 2006. Net cash flows from operations for the nine months ended September 30, 2007 were $549.9 million, compared to cash provided by operations of $521.4 million for the same period in 2006.

Capital expenditures and depreciation during the third quarter of 2007 were $35.9 million and $26.5 million, respectively. Capital expenditures and depreciation during the first nine months of 2007 were $111.0 million and $73.4 million, respectively.

“Our focus on execution has resulted in ongoing improvement in the company’s operating metrics,” said Robyn Denholm, Chief Financial Officer of Juniper Networks. “While there is much work ahead to be done, we expect our commitment to operational excellence and strong financial management will position us well to achieve our long-term business model goals.”
Q3 Highlights:
High-Performance Network Infrastructure

For Service Providers, Juniper announced the expansion of its MX product family, with the addition of the MX240 and MX480, designed to enable providers to more efficiently and cost-effectively deploy Ethernet networks and services. The breakthrough performance and scale and simple deployment and management of the MX family places Juniper in a good position to capitalize on the Carrier Ethernet market that is expected to nearly double in size from $3.7B in 2007 to $6.8B in 2011 according to IDC.

Juniper also announced a suite of new Dense Port Concentrator (DPC) cards that maximize MX-series system flexibility, enabling providers to drive new sources of revenue while reducing cost and complexity. Juniper is also delivering three new processor cards for the high-performance M320 multiservice edge router. These new FPC-E3s take advantage of Juniper’s new I-chip ASIC development that increases system performance, scalability and provides additional QoS capabilities.

For enterprises, Juniper announced software enhancements to the Secure Access (SA) SSL VPN appliances. These appliances now offer support for a broader array of applications and platforms, enhanced granular access control, and flexible policy enforcement capabilities to meet the requirements of high-performance businesses. Through these enhancements, Juniper is providing customers with a single, open platform for secure remote access that delivers enterprise-class scalability, simplified usability and ongoing investment protection.
Company Initiatives

In the quarter Juniper appointed Robyn Denholm from Sun Microsystems to the role of chief financial officer; Mark Bauhaus, who also had a distinguished career at Sun, to the role of executive vice president and general manager of the Service Layer Technology Business Group; Penny Wilson, formerly of Macromedia, to the role of chief marketing officer; and Haley Tabor formerly from Computer Associates to the role of vice president, U.S. Enterprise sales.

Juniper announced its sponsorship and continued participation in the Carbon Disclosure Project (CDP) fifth report, as part of its overall corporate social responsibility efforts. Juniper inventoried and measured its carbon footprint, identifying both efficiencies and opportunities for reduction and future focus.
Fueling High-Performance Businesses

In the service provider market, Juniper announced that BELNET and Juniper’s partner Telindus, part of the Belgacom Group, will help build BELNET’s next-generation research network based upon Juniper Networks T1600 Core Routers and M-series multiservice edge routers. iAdvantage, a leading IT Infrastructure Provider (IIP) in Asia, has bolstered the performance and reliability of its network by deploying M-series multiservice routers and HiWAAY Internet Services, one of the largest privately held ISPs in the southeastern U.S., has deployed Juniper Networks M-series multiservice routers and J-series services routers to increase the capacity and extend the reach of its network. And PEER 1, a leading IT infrastructure provider to startups and small and medium-sized enterprises, will deliver highly scalable hosting solutions with the addition of Juniper Networks Secure Services Gateways (SSGs) as they scale to meet the demands of the largest enterprises.

In the enterprise market, Juniper announced that Roland Corporation, a Japanese-based manufacturer of musical instruments, has deployed Juniper Networks’ Secure Services Gateway (SSG) purpose-built security appliances to underpin its high-performance global WAN connecting domestic offices with over 20 overseas branches. San Francisco Bay Area Rapid Transit (BART) District deployed the Juniper Networks DX load balancing and application acceleration platforms to speed up response times for employees using its Oracle applications and Sharekhan, one of India’s top five securities trading firms, boosted the responsiveness, security and scale of its stock-trading website with Juniper Networks DX 3280 load balancing and application acceleration platforms. Banco del Bajío, a leading Mexican financial institution, has chosen a comprehensive security and remote access solution from Juniper Networks to secure its network from threats and provide branch office connectivity and IGDAS, Istanbul’s leading natural gas distribution company, upgraded its Wide Area Network (WAN) infrastructure with Juniper Networks J and M-series routers between its branch offices in support of a 24x7 operation to supply gas to its three million subscribers. Finally, JS Investments Ltd.(formerly JS ABAMCO), one of Pakistan’s largest private asset base management companies, deployed a new high-performance IP/MPLS network infrastructure based upon Juniper’s routing, security and application acceleration solutions.

In the public sector market, Juniper announced that France’s Ministry of Labor, Social Affairs and Solidarity has deployed its Secure Access SSL VPN solution to manage and control remote access to government data and applications, helping to reduce ongoing costs and eliminate significant IT inefficiencies.