SUNNYVALE, Calif. -- Juniper Networks today reported preliminary financial results for the three months and twelve months ended Dec. 31, 2015 and provided its outlook for the three months ending March 31, 2016.
Q4 2015 Results:
Net revenues for the fourth quarter of 2015 were $1,319.6 million, an increase of 20% year-over-year and 6% sequentially.
Juniper's operating margin for the fourth quarter of 2015 increased to 21.2% on a GAAP basis, from 20.7% in the third quarter of 2015, and increased from (63.7%) in the fourth quarter of 2014. Excluding the non-cash goodwill impairment charge related to its security reporting unit, the GAAP operating margin for the fourth quarter of 2014 would have been 13.5%.
Non-GAAP operating margin for the fourth quarter of 2015 increased to 26.0% from 25.5% in the third quarter of 2015, an increase of 4.1 points year-over-year and 0.5 points sequentially.
Juniper posted GAAP net income of $197.8 million, consistent with the third quarter, and increased significantly compared to a GAAP net loss of $769.6 million for the fourth quarter of the prior fiscal year, even when adjusted for the $850 million non-cash goodwill impairment charge taken in the fourth quarter of 2014. GAAP net income per diluted share was $0.51, inclusive of a $0.03 benefit due to the renewal of the R&D tax credit for 2015.
Non-GAAP net income was $247.6 million, or $0.63 per diluted share for the fourth quarter of 2015, a strong increase of 38% year-over-year and an increase of 12% sequentially.
Full Year 2015 Results:
For the year ended December 31, 2015, Juniper's net revenues were $4,857.8 million, an increase of 5.0% year-over-year as reported, or 7.0% adjusted for the sale of Junos Pulse in 2014.
For fiscal year 2015, Juniper's GAAP operating margin increased to 18.8%, compared to (9.1%) for the prior fiscal year. Excluding the non-cash goodwill impairment charge, the GAAP operating margin for fiscal year 2014 would have been 9.3%.
Non-GAAP operating margin for fiscal year 2015 was 24.0%, compared to 20.7% in fiscal year 2014.
For the year ended December 31, 2015, Juniper posted GAAP net income of $633.7 million, or $1.59 per diluted share. Non-GAAP net income was $2.03 per diluted share for fiscal year 2015, an increase of 40% year-over-year.
"2015 was a year of solid execution and product innovation for Juniper Networks. I am very proud of the many accomplishments we've made as a company to drive growth and create value," said Rami Rahim, chief executive officer at Juniper Networks. "As a challenger in this industry, we plan to remain nimble, anticipate and deliver what our customers require for network innovation, and continue our relentless focus on execution to maximize long-term value for our shareholders."
"Our record fourth quarter 2015 results reflect strong year-over-year and sequential revenue and earnings growth," said Robyn Denholm, chief financial and operations officer at Juniper Networks. "I'm pleased with how well we've diversified our customer base across multiple verticals and geographies, and improved our operations. Our focus continues to be on our fundamentals -- improving execution, continuing cost discipline and operational efficiency."
Juniper Networks to Transition to New Chief Financial Officer
Juniper Networks also announced today that Denholm notified the Company of her intention to resign as chief financial and operations officer following the filing of the Company's Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2015, and is expected to remain at the Company over the next several months to help facilitate a smooth transition. Based on the Company's succession planning, the Company announced its plans to appoint Ken Miller, the Company's senior vice president, finance, to succeed Denholm as chief financial officer.
Other Financial Highlights
Total cash, cash equivalents, and investments as of Dec. 31, 2015 were $3,192 million, compared to $3,247 million as of Sept. 30, 2015, and $3,105 million as of Dec. 31, 2014.
Juniper's net cash flow provided by operations for the fourth quarter of 2015 was $117 million, compared to net cash provided by operations of $293 million in the third quarter of 2015, and $285 million in the fourth quarter of 2014.
Days sales outstanding in accounts receivable, or "DSO," was 53 in the fourth quarter of 2015, compared to 42 days in the prior quarter, and 49 days in the fourth quarter of 2014.
Capital expenditures were $55 million and depreciation and amortization of intangible assets expense was $43 million during the fourth quarter of 2015.
Juniper's Board of Directors has declared a quarterly cash dividend of $0.10 per share to be paid on March 22, 2016 to shareholders of record as of the close of business on March 1, 2016.
During the fourth quarter of 2015, the Company repurchased $93 million of common stock and paid $38 million in dividends. Since the first quarter of 2014, the Company has returned approximately $3.6 billion of capital to shareholders against its commitment to return a total of $4.1 billion by the end of 2016 and reduced its total share count by 21%.
Given the uncertainty of the near term global macro environment and potential lumpiness in customer investment patterns, the Company intends to continue to manage its business prudently. With its current demand metrics and visibility, Juniper Networks estimates that for the quarter ending March 31, 2016:
- Revenues will be approximately $1,170 million, plus or minus $20 million.
- Non-GAAP gross margin will be approximately 63.5%, plus or minus 0.5%.
- Non-GAAP operating expenses will be in the range of $490 million to $495 million.
- Non-GAAP operating margin will be approximately 21.5% at the midpoint of revenue guidance.
- Non-GAAP net income per share will range between $0.42 and $0.46 on a diluted basis. This assumes a flat share count from the fourth quarter and a non-GAAP tax rate of approximately 26% for the first quarter and full year, which includes the benefit of the permanent R&D tax credit