SUNNYVALE, Calif. -- Juniper Networks, an industry leader in automated, scalable and secure networks, today reported preliminary financial results for the three months ended June 30, 2018 and provided its outlook for the three months ending September 30, 2018.
Second Quarter 2018 Financial Performance
Net revenues were $1,204.1 million, a decrease of 8.0% year-over-year and an increase of 11.0% sequentially.
GAAP operating margin was 13.3%, a decrease from 19.7% in the second quarter of 2017, and an increase from 5.1% in the first quarter of 2018.
Non-GAAP operating margin was 18.5%, a decrease from 24.2% in the second quarter of 2017, and an increase from 12.3% in the first quarter of 2018.
GAAP net income was $116.5 million, a decrease of 35.0% year-over-year and an increase of 239.0% sequentially, resulting in diluted earnings per share of $0.33.
Non-GAAP net income was $170.2 million, a decrease of 23.0% year-over-year and an increase of 71.0% sequentially, resulting in diluted earnings per share of $0.48.
Balance Sheet and Other Financial Results
Total cash, cash equivalents, and investments as of June 30, 2018 were $3,530.5 million, compared to $4,214.6 million as of June 30, 2017, and $3,448.4 million as of March 31, 2018.
Net cash flows provided by operations for the second quarter of 2018 was $170.3 million, compared to $298.7 million in the second quarter of 2017, and $271.1 million in the first quarter of 2018.
Days sales outstanding in accounts receivable, or “DSO,” was 52 days in the second quarter of 2018, compared to 52 days in the second quarter of 2017, and 57 days in the first quarter of 2018.
Capital expenditures were $37.1 million and depreciation and amortization expense was $54.6 million during the second quarter of 2018.
Juniper’s Board of Directors has declared a quarterly cash dividend of $0.18 per share to be paid on September 25, 2018 to shareholders of record as of the close of business on September 4, 2018.
These metrics are provided on a non-GAAP basis, except for revenue and share count. Earnings per share is on a fully diluted basis. The outlook assumes that the exchange rate of the U.S. dollar to other currencies will remain relatively stable at current levels.
Our Q3 revenue guidance reflects stronger than expected Q2 business, particularly in Enterprise and the timing of certain Cloud and Service Provider deployments which are taking longer to materialize. While customer spending remains dynamic and difficult to predict, we continue to expect a return to year-over year growth during the fourth quarter.
We expect gross margins to remain stable in Q3, and improve with volume over time; however, the pace of this improvement could be impacted by mix as well as other factors.
We expect annual operating expenses to be approximately flat on a year-over-year basis.
Juniper's guidance for the quarter ending September 30, 2018 is as follows: