Sunnyvale, California – Juniper Networks (NYSE: JNPR), a leader in secure, AI-Native networks, today reported preliminary financial results for the three months and fiscal year ended December 31, 2023.

Proposed Merger with Hewlett Packard Enterprise

As announced on January 9, 2024, Hewlett Packard Enterprise (“HPE”) plans to acquire Juniper Networks in an all-cash transaction for $40.00 per share, representing an equity value of approximately $14 billion. The transaction is currently expected to close in late calendar year 2024 or early calendar year 2025, subject to receipt of regulatory approvals, approval of the transaction by Juniper Networks shareholders, and satisfaction of other customary closing conditions.

Fourth Quarter 2023 Financial Performance

Net revenues were $1,364.8 million, a decrease of 6% year-over-year, and a decrease of 2% sequentially.

GAAP operating margin was 9.2%, a decrease from 14.0% in the fourth quarter of 2022, and an increase from 6.3% in the third quarter of 2023.

Non-GAAP operating margin was 18.3%, a decrease from 19.1% in the fourth quarter of 2022, and an increase from 17.5% in the third quarter of 2023.

GAAP net income was $124.3 million, a decrease of 31% year-over-year, and an increase of 63% sequentially, resulting in diluted earnings per share of $0.38.

Non-GAAP net income was $196.9 million, a decrease of 8% year-over-year, and an increase of 2% sequentially, resulting in non-GAAP diluted earnings per share of $0.61.

Full-Year 2023 Financial Performance

Net revenues were $5,564.5 million, an increase of 5% year-over-year.

GAAP operating margin was 8.4%, a decrease from 9.8% in fiscal year 2022.

Non-GAAP operating margin was 16.9%, an increase from 15.7% in fiscal year 2022.

GAAP net income was $310.2 million, a decrease of 34% year-over-year, resulting in diluted earnings per share of $0.95, a decrease of 34% year-over-year. The year-over-year decrease was primarily due to higher operating expenses which include higher restructuring charges.

Non-GAAP net income was $736.4 million, an increase of 15% year-over-year, resulting in diluted earnings per share of $2.26, an increase of 16% year-over-year.

The reconciliation between GAAP and non-GAAP financial measures is provided in a table immediately following the Preliminary Net Revenues by Geographic Region table below.

“We delivered record revenue results in 2023 and grew our business on a year-over-year basis for a third consecutive year,” said Juniper’s CEO, Rami Rahim. “These results reflect the strength of our enterprise business, which not only delivered a second consecutive year of solid double-digit revenue growth, but also achieved positive product order growth in the fourth quarter and on a full-year basis.”

“We achieved record non-GAAP earnings per share in 2023,” said Juniper’s CFO, Ken Miller. “This was achieved through a combination of healthy revenue growth, improved non-GAAP gross margin and disciplined cost management, which enabled us to exceed our goal of delivering at least 100 basis points of non-GAAP operating margin improvement in 2023.”

Balance Sheet and Other Financial Results

Total cash, cash equivalents, and investments as of December 31, 2023 were $1,324.3 million, compared to $1,230.0 million as of December 31, 2022, and $1,418.0 million as of September 30, 2023.

Net cash flows provided by operations for the fourth quarter of 2023 was $9.1 million, compared to $119.6 million in the fourth quarter of 2022, and $329.2 million in the third quarter of 2023.

Days sales outstanding in accounts receivable was 69 days in the fourth quarter of 2023, compared to 76 days in the fourth quarter of 2022, and 60 days in the third quarter of 2023.

Capital expenditures were $35.4 million, and depreciation and amortization expense was $47.3 million during the fourth quarter of 2023.

Capital Return

Our Board of Directors has declared a cash dividend of $0.22 per share to be paid on March 22, 2024 to stockholders of record as of the close of business on March 1, 2024. We remain committed to paying our dividend; however we have agreed to suspend repurchase of our shares in accordance with the terms of the merger agreement with HPE.

Fourth Quarter and Fiscal Year 2023 Financial Commentary Available Online

A CFO Commentary reviewing Juniper Networks’ fourth quarter 2023 and fiscal year 2023 financial results will be published on Juniper Networks’ website at http://investor.juniper.net.

In light of the proposed transaction with HPE, and as is customary during the pendency of an acquisition, Juniper Networks will not be providing financial guidance in conjunction with its fourth quarter 2023 earnings release.