Juniper Networks eked out its second consecutive quarter of year-over-year growth in Q4, but its bottom line was down from the previous year's.
Driven by the results in its enterprise sector, which marked its fourth consecutive year of growth, Juniper reported net earnings of $30.8 million, or 53 cents per share, compared to a bottom line of $168.4 million, or 49 cents per share a year ago.
Juniper's revenue crept up by 1% to $1.22 million from $1.21 million a year ago. Analysts surveyed by FactSet had projected earnings of 53 cents per share on revenue of $1.19 billion.
"We are exiting 2020 following two consecutive quarters of year-over-year growth and entering the new year with good momentum," said Juniper Networks CEO Rami Rahim on the earnings call, according to a Seeking Alpha transcript. "This is a direct result of the strategic actions we have taken around how we go to market, how we align our business and how we complement our organic business with thoughtful acquisitions such as Mist that create new revenue stream and pull-through sales of our existing products."
In the face of the Covid-19 pandemic, which did lead to some supply chain issues, Juniper posted 2020 revenues of $4.4 billion, which slightly less when compared to 2019's revenues. Enterprise grew by over 7% year-over-year and accounted for 38% of Juniper's revenues in 2020.
Juniper's service provider sector has dug itself out of a hole over the past several quarters, but was relatively flat in the fourth quarter. Routing increased 9% year-over-year and grew 7% sequentially. Switching decreased 2% year-over-year, but increased 14% sequentially. Cloud was flat year-over-year with a 0.3% increase but was up by almost 11% for the fourth quarter. Juniper's security was down 14% while software revenue increased in the fourth quarter.
"Our software business performed well in Q4 and accounted for 12% of our overall sales," Rami said. "As a company, we remain laser focused on capturing more software and in particular, more SaaS and subscription-based software.
"The recent acquisitions of 128 Technology, Netrounds and Apstra will further accelerate our efforts to capture more software revenue in the years to come."
Juniper closed its deal to buy intent-based networking vendor Apstra earlier this week. Last year Juniper also acquired assurance testing vendor Netrounds and SD-WAN vendor 128 Technology. Rahim cited Juniper's 2019 deal to buy Mist System as an example of how he expects the company to benefit from its Apstra, Netrounds and 128 Technology deals.
"I’m very encouraged by the early customer interest in each of these transactions, which is building confidence these businesses will positively impact our performance in the future," Rahim said. "The acquisition of 128 Technology represents the next evolution of our AI-driven enterprise vision. 128 Technology will not only enable Juniper to provide a superior application end-user of our SD-WAN experience as compared to all other SD-WAN offerings in the market, but also to extend the value of Mist secure AI engine and cloud management capability from client to cloud.
Going forward, Rahim said Juniper was drawing a bead on specific use cases, which included AI-driven enterprise via Mist, cloud-ready data centers and automated WAN with connected security embedded in each.
"These use cases each represent a large opportunity that spans across verticals we serve," he said. "We firmly believe we are taking share and that the deliberate actions we’ve taken along with some of the investments we have made should position us to not only capitalize on the big market opportunities such as 400 gig and 5G that will unfold over the next few years, but also to see broader market success that decreases our sensitivity to the macro trends.
"We believe our plans will enable us to emerge from the pandemic stronger than we entered and deliver sustainable top and bottom line growth over the next several years even if end market conditions remain challenged."
Juniper projected revenue in the range of $1 billion to $1.11 billion for the fiscal first quarter while CFO Ken Miller said on the earnings call that he expected sequential growth for the remaining quarters of this year.