Juniper Networks executives argued a massive order backlog will help the company maintain consistent revenue growth as it weathers ongoing supply chain issues which ate into its margins in the second quarter. CEO Rami Rahim also highlighted opportunities for the vendor to grow its 400G, metro and enterprise SD-WAN businesses.
On an earnings call, CFO Ken Miller said Juniper’s order backlog reached $2.4 billion in Q2, a figure more than six times normal levels.
Within its backlog, Rahim said it is taking market share in the enterprise client to cloud market with its wired, wireless and SD-WAN solutions. It’s also picking up steam in the 400G market, he added, noting it now has approximately 80 design wins with data center customers and nearly 400 design wins overall. The CEO noted that figure includes a recently secured 400G core win with a Tier-1 U.S. carrier. But there’s still plenty of room to run.
“If you looked at port mix between 100-gig and 400-gig, both in terms of orders and shipments, it's still at early innings for 400-gig. There are a lot more networks that are going to be built out with 400-gig,” Rahim said. “We're now at the beginning stages of one of those inflections and that's good for our industry, certainly good for Juniper.”
Rahim also noted Juniper saw “another quarter of triple-digit order growth” for its ACX metro portfolio and recently fleshed out its offerings in the segment to provide a complete end-to-end portfolio. That solution “should essentially come together and be fully in production by the early part of next year” and contribute to even greater order growth.
Consolidated Juniper revenue grew 8% year on year to $1.27 billion in Q2, with net income jumping 83% to $113.4 million. However, its margin took a hit due to supplier decommits that forced the company to seek alternative partners and pay more to ensure it can get the components it needs.
Miller warned Juniper expects the supply chain environment to “remain challenged through at least the second half of the year.” Rahim added the actions it took to secure components will likely impact profitability over “the next few quarters” but said the move will allow it to better satisfy customer demand.