Data Center Interconnect

Juniper: Packet-Optical Convergence Driving BTI Acquisition

Juniper has shed a few more glimmers of light on its BTI acquisition. The purchase, announced Tuesday, is driven by convergence of packet and optical networking to serve the data center interconnect and metro markets, CEO Rami Rahim said on the company's Wednesday earnings call.

"The goal of this acquisition is not to build a large optical business inside of Juniper. The goal is to capture what we believe are very significant market inflection points with regard to the convergence of packet and optical," Rahim said. (See Juniper Flies Into DCI With BTI Acquisition.)

Network operators demand new architectures for DCI and metro connectivity "sooner rather than later," Rahim said. The BTI acquisition, he added, will give Juniper "key building blocks" and "talent."

Because the acquisition is about technology and talent, Juniper doesn't anticipate it will have a significant material impact in 2016.

Overall, Juniper's business is shifting to a software business model, with an increase in software revenue as a percentage of total revenue over time, Rahim said.

In the earnings call, Juniper reported strong growth for the quarter and the year across sectors, geographies and technologies. First-quarter projections were cautious, but Juniper's leadership was optimistic over the long term. (See Juniper Reports $4.9B 2015 Revenue, up 5%.)

However, the stock price took a tumble on a weak forecast. The stock traded at $23.81 after hours, down 10.32%.

The outlook for the first quarter of 2016 will be affected by "near term global macro environment and potential lumpiness in customer investment patterns," the company said in a statement. Revenues will be $1.17 billion, plus or minus $2 million, and non-GAAP net income per share will be $0.42 to $0.46 on a diluted basis.

The first-quarter projection reflects Juniper being "cautious and prudent," based on past experience, not "wholesale signs of any weakness," CFO Robyn Denholm said.

Find out more about key developments related to the systems and technologies deployed in data centers on Light Reading's data center infrastructure channel

Net revenues for the fourth quarter of 2015 were $1.3 billion, up a hefty 20% year-over-year and 6% sequentially. GAAP net income was $197.8 million, consistent with the third quarter and a big improvement on the GAAP net loss of $769.6 million a year earlier. GAAP net income per diluted share was $0.51. Non-GAAP net income was $247.6 million, or $0.63 per diluted share for the fourth quarter, up 38% year-over-year and 12% sequentially.

For the year, net revenues were $4.9 billion, up 5% year-over-year as reported or 7% adjusted for the sale of Junos Pulse in 2014. Net income was $633.7 million or $1.59 per diluted share. (See Juniper Sells Security Unit, Feels Carrier Pinch.)

The service provider market led growth, with telecom, cable and cloud providers each increasing revenue more than 20% year-over-year. Of Juniper's top ten customers, seven were telecoms and three were cloud or cable providers, with five located outside the US, "reflecting our strategy to diversify our revenue across multiple verticals and geographies," according to written CFO commentary.

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Keebler 1/28/2016 | 1:40:25 PM
Winter of love? It's been almost a year since Dan's Optical Summer of Love article (4/29/15) http://www.lightreading.com/optical/packet-optical/a-guide-to-opticals-summer-of-love/a/d-id/715369 

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