SUNNYVALE, Calif. – Juniper Networks, a leader in secure, AI-driven networks, today reported preliminary financial results for the three months ended March 31, 2020, and provided its outlook for the three months ending June 30, 2020.

Net revenues were $998.0 million, flat year-over-year, and a decrease of 17% sequentially.

GAAP operating margin was 3.9%, a decrease from 4.3% in the first quarter of 2019, and a decrease from 14.8% in the fourth quarter of 2019.

Non-GAAP operating margin was 10.6%, a decrease from 11.2% in the first quarter of 2019, and a decrease from 20.3% in the fourth quarter of 2019.

GAAP net income was $20.4 million, a decrease of 34% year-over-year, and a decrease of 88% sequentially, resulting in diluted earnings per share of $0.06.

Non-GAAP net income was $77.2 million, a decrease of 17% year-over-year, and a decrease of 61% sequentially, resulting in non-GAAP diluted earnings per share of $0.23.

"Orders grew 10% on a year-over-year basis during the March quarter and improved across each of our core industry verticals. With our stronger than expected demand, we believe our financial results would have exceeded the mid-point of our guidance if not for supply challenges we faced resulting from the COVID-19 pandemic," said Juniper's CEO, Rami Rahim. "While we are starting to see some weakness in our enterprise pipeline, which is impacting visibility into the second half of the year, we believe the overall momentum we are seeing speaks to the strength of our solutions, our strong customer relationships and the efforts we undertook to diversify the business across verticals and customers over the past several years."

"We are executing well despite the significant challenges created by the COVID-19 pandemic," said Juniper's CFO, Ken Miller. "We are making progress ramping our supply chain back to full productivity and continue to effectively manage costs while positioning the business for future growth. Our balance sheet remains strong and we continue to generate cash, which we expect will position us to not only weather the current crisis, but also to come out stronger on the other side."

Balance Sheet and Other Financial Results

Total cash, cash equivalents, and investments as of March 31, 2020 were $2,529.9 million, compared to $3,502.7 million as of March 31, 2019, and $2,543.6 million as of December 31, 2019.

Net cash flows provided by operations for the first quarter of 2020 was $272.2 million, compared to $159.4 million in the first quarter of 2019, and $95.7 million in the fourth quarter of 2019.

Days sales outstanding in accounts receivable was 61 days in the first quarter of 2020, compared to 58 days in the first quarter of 2019, and 66 days in the fourth quarter of 2019.

Capital expenditures were $21.8 million, and depreciation and amortization expense was $53.7 million during the first quarter of 2020.

Outlook

We expect non-GAAP gross margin to be essentially flat sequentially relative to Q1. We expect to see sequential volume driven improvements in margin during the June quarter to be offset by certain strategic insertion opportunities in addition to increased logistics and other supply chain-related costs due to the COVID-19 pandemic.

We expect second quarter non-GAAP operating expense to decline sequentially as we continue to focus on prudent cost management while continuing to invest to capture future opportunities.

Our Board of Directors has declared a cash dividend of $0.20 per share to be paid on June 22, 2020 to shareholders of record as of the close of business on June 1, 2020. We remain committed to paying our dividend. While we expect to remain opportunistic with respect to share buybacks, we expect to place a greater emphasis on further building liquidity in this uncertain environment.

Our guidance for the quarter ending June 30, 2020 is as follows:

Juniper Networks