Dubai, UAE, January 30, 2019:   Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, today reported preliminary financial results for the three months and twelve months ended December 31, 2018 and provided its outlook for the three months ending March 31, 2019.

Fourth Quarter 2018 Financial Performance

Net revenues were $1,181.0 million, a decrease of 5% year-over-year, and flat sequentially.

GAAP operating margin was 16.7%, an increase from 16.4% in the fourth quarter of 2017, and an increase from 13.6% in the third quarter of 2018.
Non-GAAP operating margin was 21.1%, a decrease from 22.7% in the fourth quarter of 2017, and an increase from 20.0% in the third quarter of 2018.
GAAP net income was $192.2 million, compared to a net loss of $148.1 million in the fourth quarter in 2017, and a decrease of 14% sequentially, resulting in diluted earnings per share of $0.55. The year-over-year change in GAAP net income was primarily due to a lower effective tax rate.

Non-GAAP net income was $205.7 million, an increase of 3% year-over-year and an increase of 8% sequentially, resulting in non-GAAP diluted earnings per share of $0.59.

Full Year 2018 Financial Performance

Net revenues were $4,647.5 million, a decrease of 8% year-over-year.

GAAP operating margin was 12.3%, a decrease from 16.9% in fiscal year 2017.

Non-GAAP operating margin was 18.1%, a decrease from 22.8% in fiscal year 2017.

GAAP net income was $566.9 million, an increase of 85% year-over-year, resulting in diluted earnings per share of $1.60, an increase of 100% year-over-year.

The change in GAAP net income was primarily due to a lower effective tax rate in fiscal year 2018.

Non-GAAP net income was $666.4 million, a decrease of 18% year-over-year, resulting in non-GAAP diluted earnings per share of $1.88, a decrease of 11% year-over-year.

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 are disappointed by our Q4 sales, as continued weakness with several of our cloud and service provider customers more than offset solid momentum in our enterprise business,” said Rami Rahim, chief executive officer, Juniper Networks. “We are taking actions to drive improved sales execution and capitalize on the attractive end market opportunities that we expect to emerge in 2019. We remain confident in our strategy and believe we have the products needed to win in the market.”

“We demonstrated strong financial management during the December quarter as non-GAAP gross margin and non-GAAP earnings per share came in toward the high-end of our guidance and non-GAAP operating expenses were below the low-end of our guidance,” said Ken Miller, chief financial officer, Juniper Networks. “Given our confidence in our long-term financial model and commitment to creating shareholder value, we plan to enter into a $300 million accelerated share repurchase program and increase our quarterly dividend by approximately 6% to $0.19 per share.”

Balance Sheet and Other Financial Results

Total cash, cash equivalents, and investments as of December 31, 2018 were $3,758.1 million, compared to $4,021.0 million as of December 31, 2017, and $3,648.0 million as of September 30, 2018.

Net cash flows provided by operations for the fourth quarter of 2018 was $212.4 million, compared to $212.6 million in the fourth quarter of 2017, and $207.3 million in the third quarter of 2018.

Days sales outstanding in accounts receivable, or “DSO,” was 58 days in the fourth quarter of 2018, compared to 62 days in the fourth quarter of 2017, and 49 days in the third quarter of 2018.

Capital expenditures were $36.5 million, and depreciation and amortization expense was $52.2 million during the fourth quarter of 2018.