SEC Form 10-Q filed by Juniper Networks Inc.

4/26/24 4:32:36 PM ET

Computer Communications Equipment

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from_________ to_________

Commission file number: 001-34501

JUNIPER NETWORKS, INC.

(Exact name of registrant as specified in its charter)


Delaware		77-0422528
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1133 Innovation Way
Sunnyvale,	California	94089
(Address of principal executive offices)		(Zip code)

(408) 745-2000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.00001 per share	JNPR	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

There were 324,987,897 shares of the Company's Common Stock, par value $0.00001, outstanding as of April 24, 2024.

Juniper Networks, Inc.


Table of Contents

PART I - FINANCIAL INFORMATION
			Page
Item 1. Financial Statements (Unaudited)			3

Condensed Consolidated Statements of Operations Three Months Ended March 31, 2024 and March 31, 2023			3

Condensed Consolidated Statements of Comprehensive (Loss) Income Three Months Ended March 31, 2024 and March 31, 2023			4

Condensed Consolidated Balance Sheets March 31, 2024 and December 31, 2023			5

Condensed Consolidated Statements of Cash Flows Three Months Ended March 31, 2024 and March 31, 2023			6

Condensed Consolidated Statements of Changes in Stockholders' Equity Three Months Ended March 31, 2024 and March 31, 2023			7

Notes to Condensed Consolidated Financial Statements			8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			32

Item 3. Quantitative and Qualitative Disclosures About Market Risk			42

Item 4. Controls and Procedures			42

PART II - OTHER INFORMATION

Item 1. Legal Proceedings			43

Item 1A. Risk Factors			43

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			63

Item 5. Other Information			64

Item 6. Exhibits			65

SIGNATURES			66


	Three Months Ended March 31,
	2024		2023
Net revenues:
Product	$	651.9	$	912.6
Service	497.0		459.2
Total net revenues	1,148.9		1,371.8
Cost of revenues:
Product	323.9		454.9
Service	144.1		145.7
Total cost of revenues	468.0		600.6
Gross margin	680.9		771.2
Operating expenses:
Research and development	296.6		284.8
Sales and marketing	305.4		303.2
General and administrative	60.7		68.0
Restructuring charges (benefits)	4.1		(0.5)
Merger-related charges (1)	28.3		—
Total operating expenses	695.1		655.5
Operating (loss) income	(14.2)		115.7
Gain (loss) on privately-held investments, net (2)	(14.3)		0.2


Other income (expense), net (2)	2.1		(8.8)
Income (loss) before income taxes and loss from equity method investment	(26.4)		107.1
Income tax (benefit) provision	(27.7)		19.6
Loss from equity method investment, net of tax	2.1		2.1
Net (loss) income	$	(0.8)	$	85.4

Net (loss) income per share:
Basic	$	(0.00)	$	0.26
Diluted	$	(0.00)	$	0.26
Weighted-average shares used to compute net (loss) income per share:
Basic	322.6		322.3
Diluted	322.6		329.1


	March 31, 2024		December 31, 2023
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,069.8	$	1,068.1
Short-term investments	187.9		139.4
Accounts receivable, net of allowances	814.9		1,044.1
Inventory	958.2		952.4
Prepaid expenses and other current assets	510.1		591.5

Total current assets	3,540.9		3,795.5
Property and equipment, net	688.6		689.9
Operating lease assets	158.4		111.4
Long-term investments	277.2		116.8
Purchased intangible assets, net	74.6		91.8
Goodwill	3,734.3		3,734.4
Other long-term assets	1,004.2		978.7
Total assets	$	9,478.2	$	9,518.5
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	250.2	$	295.1
Accrued compensation	210.9		292.2
Deferred revenue	1,205.5		1,130.0

Other accrued liabilities	363.4		386.7
Total current liabilities	2,030.0		2,104.0
Long-term debt	1,607.1		1,616.8
Long-term deferred revenue	919.4		894.9
Long-term income taxes payable	173.5		204.5
Long-term operating lease liabilities	130.6		82.9
Other long-term liabilities	136.4		122.7
Total liabilities	4,997.0		5,025.8
Commitments and contingencies (Note 13)
Stockholders' equity:
Preferred stock, $0.00001 par value; 10.0 shares authorized; none issued and outstanding	—		—
Common stock, $0.00001 par value; 1,000.0 shares authorized; 324.9 shares and 320.3 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	—		—
Additional paid-in capital	6,776.1		6,740.0
Accumulated other comprehensive income	12.1		49.1
Accumulated deficit	(2,307.0)		(2,296.4)
Total stockholders' equity	4,481.2		4,492.7
Total liabilities and stockholders' equity	$	9,478.2	$	9,518.5


	Three Months Ended March 31, 2024
		Common Stock and Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders' Equity
	Shares
Balance at December 31, 2023	320.3	$	6,740.0	$	49.1	$	(2,296.4)	$	4,492.7
Net loss	—	—		—		(0.8)		(0.8)
Other comprehensive loss, net	—	—		(37.0)		—		(37.0)
Issuance of common stock	5.0	32.1		—		—		32.1

Repurchase and retirement of common stock	(0.4)	(4.8)		—		(9.8)		(14.6)

Share-based compensation expense	—	80.2		—		—		80.2
Payments of cash dividends ($0.22 per share of common stock)	—	(71.4)		—		—		(71.4)
Balance at March 31, 2024	324.9	$	6,776.1	$	12.1	$	(2,307.0)	$	4,481.2


	Three Months Ended March 31, 2023
		Common Stock and Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders' Equity
	Shares
Balance at December 31, 2022	322.9	$	6,846.4	$	4.2	$	(2,375.5)	$	4,475.1
Net income	—	—		—		85.4		85.4
Other comprehensive income, net	—	—		4.1		—		4.1
Issuance of common stock	3.3	31.1		—		—		31.1

Repurchase and retirement of common stock	(4.8)	(60.2)		—		(91.1)		(151.3)

Share-based compensation expense	—	61.4		—		—		61.4
Payments of cash dividends ($0.22 per share of common stock)	—	(70.6)		—		—		(70.6)


Balance at March 31, 2023	321.4	$	6,808.1	$	8.3	$	(2,381.2)	$	4,435.2


	As of March 31, 2024								As of December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized and Credit Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized and Credit Losses		Estimated Fair Value
Fixed income securities:
Asset-backed and mortgage-backed securities	$	99.3	$	—	$	(0.5)	$	98.8	$	38.2	$	0.2	$	(0.4)	$	38.0
Corporate debt securities	234.1		0.4		(1.0)		233.5		160.2		0.7		(1.3)		159.6
Certificates of deposit	16.2		—		—		16.2		3.0		—		—		3.0
Commercial paper	92.1		—		—		92.1		41.1		—		—		41.1
Foreign government debt securities	5.3		—		(0.1)		5.2		5.3		—		(0.2)		5.1
Time deposits	282.1		—		—		282.1		273.6		—		—		273.6
U.S. government agency securities	—		—		—		—		4.0		—		—		4.0
U.S. government securities	72.0		—		(0.2)		71.8		54.8		0.1		—		54.9
Total fixed income securities	801.1		0.4		(1.8)		799.7		580.2		1.0		(1.9)		579.3
Privately-held debt and redeemable preferred stock securities	46.0		—		(15.4)		30.6		20.6		37.4		(8.3)		49.7
Total available-for-sale debt securities	$	847.1	$	0.4	$	(17.2)	$	830.3	$	600.8	$	38.4	$	(10.2)	$	629.0

Reported as:
Cash equivalents	$	340.2	$	—	$	—	$	340.2	$	328.2	$	—	$	—	$	328.2
Short-term investments	183.1		—		(0.8)		182.3		135.7		—		(1.4)		134.3
Long-term investments	277.8		0.4		(1.0)		277.2		116.3		1.0		(0.5)		116.8
Other long-term assets	46.0		—		(15.4)		30.6		20.6		37.4		(8.3)		49.7
Total	$	847.1	$	0.4	$	(17.2)	$	830.3	$	600.8	$	38.4	$	(10.2)	$	629.0


	Amortized Cost		Estimated Fair Value
Due in less than one year	$	523.3	$	522.5
Due between one and five years	277.8		277.2
Total	$	801.1	$	799.7


	As of
	March 31, 2024		December 31, 2023
Equity investments with readily determinable fair value:
Money market funds	$	379.6	$	337.5
Mutual funds	42.6		38.0
Publicly-traded equity securities	5.6		5.1
Equity investments without readily determinable fair value	45.8		45.8
Equity investment under the equity method of accounting	24.2		26.4
Total equity securities	$	497.8	$	452.8

Reported as:
Cash equivalents	$	379.6	$	337.5
Short-term investments	5.6		5.1
Prepaid expenses and other current assets	3.3		2.5
Other long-term assets	109.3		107.7
Total	$	497.8	$	452.8


	Fair Value Measurements at March 31, 2024								Fair Value Measurements at December 31, 2023
	Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Remaining Inputs (Level 2)		Significant Other Unobservable Remaining Inputs (Level 3)		Total		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Remaining Inputs (Level 2)		Significant Other Unobservable Remaining Inputs (Level 3)		Total
Assets:
Available-for-sale debt securities:
Asset-backed and mortgage-backed securities	$	—	$	98.8	$	—	$	98.8	$	—	$	38.0	$	—	$	38.0
Certificates of deposit	—		16.2		—		16.2		—		3.0		—		3.0
Corporate debt securities	—		233.5		—		233.5		—		159.6		—		159.6
Commercial paper	—		92.1		—		92.1		—		41.1		—		41.1
Foreign government debt securities	—		5.2		—		5.2		—		5.1		—		5.1
Time deposits	—		282.1		—		282.1		—		273.6		—		273.6
U.S. government agency securities	—		—		—		—		—		4.0		—		4.0
U.S. government securities	48.9		22.9		—		71.8		20.0		34.9		—		54.9
Privately-held debt and redeemable preferred stock securities	—		—		30.6		30.6		—		—		49.7		49.7
Total available-for-sale debt securities	48.9		750.8		30.6		830.3		20.0		559.3		49.7		629.0
Equity securities:
Money market funds	379.6		—		—		379.6		337.5		—		—		337.5
Mutual funds	42.6		—		—		42.6		38.0		—		—		38.0
Publicly-traded equity securities	5.6		—		—		5.6		5.1		—		—		5.1
Total equity securities	427.8		—		—		427.8		380.6		—		—		380.6
Derivative assets:
Foreign exchange contracts	—		5.6		—		5.6		—		7.2		—		7.2

Total derivative assets	—		5.6		—		5.6		—		7.2		—		7.2
Total assets measured at fair value on a recurring basis	$	476.7	$	756.4	$	30.6	$	1,263.7	$	400.6	$	566.5	$	49.7	$	1,016.8
Liabilities:
Derivative liabilities:
Foreign exchange contracts	$	—	$	(9.8)	$	—	$	(9.8)	$	—	$	(7.2)	$	—	$	(7.2)
Interest rate contracts	—		(83.7)		—		(83.7)		—		(73.6)		—		(73.6)
Total derivative liabilities	—		(93.5)		—		(93.5)		—		(80.8)		—		(80.8)
Total liabilities measured at fair value on a recurring basis	$	—	$	(93.5)	$	—	$	(93.5)	$	—	$	(80.8)	$	—	$	(80.8)


		As of
	Balance Sheet Classification	March 31, 2024		December 31, 2023
Derivative assets:
Derivatives designated as hedging instruments:
Foreign currency contracts	Other current assets	$	3.8	$	4.4
Foreign currency contracts	Other long-term assets	1.7		2.7


Total derivatives designated as hedging instruments		$	5.5	$	7.1
Derivatives not designated as hedging instruments	Other current assets	0.1		0.1
Total derivative assets		$	5.6	$	7.2
Derivative liabilities:
Derivatives designated as hedging instruments:
Foreign currency contracts	Other accrued liabilities	$	8.3	$	6.0
Foreign currency contracts	Other long-term liabilities	1.4		1.0

Interest rate swap contracts	Other long-term liabilities	83.7		73.6
Total derivatives designated as hedging instruments		$	93.4	$	80.6
Derivatives not designated as hedging instruments	Other accrued liabilities	0.1		0.2
Total derivative liabilities		$	93.5	$	80.8


Balance as of December 31, 2023	$	29.4
Provisions made during the period	12.8

Actual costs incurred during the period	(11.6)

Balance as of March 31, 2024	$	30.6


	Revenue Recognition Expected by Period
	Total		Less than 1 year		1-3 years		More than 3 years
Product	$	105.3	$	90.7	$	12.3	$	2.3
Service	2,032.3		1,121.0		696.1		215.2
Total	$	2,137.6	$	1,211.7	$	708.4	$	217.5


				As of
	Maturity Date	Effective Interest Rates		March 31, 2024		December 31, 2023
Senior Notes:
1.200% fixed-rate notes	December 2025	1.37	%	$	400.0	$	400.0
3.750% fixed-rate notes	August 2029	3.86	%	500.0		500.0
2.000% fixed-rate notes	December 2030	2.12	%	400.0		400.0
5.950% fixed-rate notes	March 2041	6.03	%	400.0		400.0
Total Notes				1,700.0		1,700.0
Unaccreted discount and debt issuance costs				(9.2)		(9.6)
Hedge accounting fair value adjustments(*)				(83.7)		(73.6)
Total				$	1,607.1	$	1,616.8


	Outstanding RSUs, RSAs, and PSAs
	Number of Shares	Weighted Average Grant Date Fair Value per Share		Weighted Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value
Balance as of December 31, 2023	20.2	$	28.10
Granted(*)	3.0	35.19

Vested	(3.6)	26.24
Canceled	(1.2)	27.28
Balance as of March 31, 2024	18.4	$	29.67	1.2	$	681.7


	Three Months Ended March 31,
	2024		2023
Stock options	$	0.3	$	0.8
RSUs, RSAs, and PSAs	72.9		53.0
ESPP purchase rights	6.7		7.1
Total	$	79.9	$	60.9


	Three Months Ended March 31,
	2024		2023
Customer Solutions(*):
Wide Area Networking	$	350.4	$	474.5
Data Center	163.1		193.6
Campus and Branch	240.5		317.0
Hardware Maintenance and Professional Services	394.9		386.7
Total	$	1,148.9	$	1,371.8


	Three Months Ended March 31, 2024
	Employee severance		Facility exit-related and asset impairments		Contract terminations and other		Total
Liability as of December 31, 2023	$	30.0	$	0.4	$	3.2	$	33.6
Charges	2.3		1.7		0.1		4.1
Cash payments	(16.5)		(0.1)		(3.1)		(19.7)
Non-cash items	(0.1)		(1.7)		—		(1.8)
Liability as of March 31, 2024	$	15.7	$	0.3	$	0.2	$	16.2


	Unrealized Gains/Losses on Available-for- Sale Debt Securities		Unrealized Gains/Losses on Cash Flow Hedges		Foreign Currency Translation Adjustments		Total
Balance as of December 31, 2023	$	28.9	$	102.3	$	(82.1)	$	49.1
Other comprehensive loss before reclassifications	(29.0)		(5.4)		(3.7)		(38.1)
Amount reclassified from accumulated other comprehensive income	(0.1)		1.2		—		1.1
Other comprehensive loss, net	(29.1)		(4.2)		(3.7)		(37.0)
Balance as of March 31, 2024	$	(0.2)	$	98.1	$	(85.8)	$	12.1


		Incorporated by Reference
Exhibit No.	Exhibit	Filing	Exhibit No.	File No.	File Date
2.1	Agreement and Plan of Merger, dated as of January 9 , 202 4, by and among Juniper Networks, Inc., Hewlett Packard Enterprise C ompany, and Jasmine Acquisition Sub, Inc.	8-K	2.1	001-34501	1/10/2024
3.1	Certificate of Amendment to the Restated Certificate of Incorporation of Juni per Networks, Inc. dated April 2, 2024.	8-K	3.1	001-34501	4/2/2024
3.2	Restated Certificate of Incorporation of Juniper Networks, Inc.	8-K	3.2	001-34501	4/2/2024
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934*
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934*
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350**
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350**
101	The following materials from Juniper Network Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in iXBRL (inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Changes in Stockholders' Equity, and (vi) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text*
104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL (included in Exhibit 101)*


	Juniper Networks, Inc.

April 26, 2024	By:	/s/ Thomas A. Austin
		Thomas A. Austin
		Group Vice President and Chief Accounting Officer (Duly Authorized Officer and Principal Accounting Officer)

Date	Price Target	Rating	Analyst
9/24/2024	$40.00	Neutral	Citigroup
6/18/2024		Hold → Buy	Argus
10/10/2023	$32.00 → $29.00	Overweight → Neutral	JP Morgan
7/24/2023	$38.00 → $37.00	Strong Buy → Outperform	Raymond James
7/20/2023	$31.00	Neutral	Exane BNP Paribas
6/30/2023	$38.00	Buy	Citigroup
3/30/2023	$34.00 → $38.00	In-line → Outperform	Evercore ISI
3/7/2023		Buy	Goldman

SEC Form 10-Q filed by Juniper Networks Inc.

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