Juniper Networks (JNPR)
Q2 2010 Earnings Call
July 20, 2010 4:45 pm ET
Kevin Johnson - Chief Executive Officer, Director and Member of Stock Committee
Kathleen Bela - Vice President of Investor Relations
Robyn Denholm - Chief Financial Officer, Executive Vice President, Member of Concerns Committee and Member of Stock Committee
Sanjiv Wadhwani - Stifel, Nicolaus & Co., Inc.
Tal Liani - BofA Merrill Lynch
Nikos Theodosopoulos - UBS Investment Bank
Jeffrey Evenson - Bernstein Research
Troy Jensen - Piper Jaffray Companies
Rod Hall - JP Morgan Chase & Co
Jess Lubert - Wells Fargo Securities, LLC
Paul Mansky - Canaccord Genuity
Jeffrey Kvaal - Barclays Capital
Mark Sue - RBC Capital Markets Corporation
Brent Bracelin - Pacific Crest Securities, Inc.
Ehud Gelblum - Morgan Stanley
Simon Leopold - Morgan Keegan & Company, Inc.
Simona Jankowski - Goldman Sachs Group Inc.
Previous Statements by JNPR
» Juniper Networks, Inc. Q1 2010 Earnings Call Transcript
» Juniper Networks, Inc. Q4 2009 Earnings Call Transcript
» Juniper Networks, Inc. Q3 2009 Earnings Call Transcript
Greetings, and welcome to the Juniper Networks Second Quarter 2010 Earnings Results Conference Call. [Operator Instructions] It is now my pleasure to introduce your host, Kathleen Bela, Vice President, Investor Relations for Juniper Networks. Thank you, you may begin.
Thank you, Joe. Good afternoon and thank you for joining us today. Here today are Kevin Johnson, Chief Executive Officer; and Robyn Denholm, Chief Financial Officer.
A couple of housekeeping items before we begin. First, as a reminder, there is a slide deck that accompanies today's conference call. To access the slides, please go to the IR section of our website at juniper.net. This call will also be available to download as a podcast. For details, visit our website. If you're having any trouble accessing the slides, please try logging out and logging back in to the call and that should bring you back to the section on slides.
With that, I would like to remind everyone that statements made during this call, concerning Juniper's business outlook, economic and market outlooks, future financial operating results and overall future prospects, are forward-looking statements that involve a number of risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including economic conditions, generally or in the networking industry, changes in overall technology spending, the network capacity requirements of service providers, the timing of orders and shipments, manufacturing and supply chain constraints, variation in the mix of products sold, customer perception and acceptance of our products, litigation and other factors listed in our most recent report filed on Form 10-K with the SEC.
All statements made during this call are made only as of today. Juniper undertakes no obligation to update the information in this conference call in the event facts or circumstances subsequently change after the date of this call. In discussing the financial results today, Robyn will first present results on a GAAP basis. And for purposes of today's discussion, we will also review non-GAAP results. For important commentary on why the management team considers non-GAAP information, a useful view of the company's financial result, please consult our 8-K filed with the SEC today. For the detailed reconciliation between GAAP and non-GAAP results, please see today's press release.
In general, non-GAAP results exclude certain non-recurring charges, amortization of purchased intangibles, other acquisition-related charges and expenses related to stock-based compensation. In today's call, Robyn will also be providing forward-looking guidance. As a reminder, guidance is provided on a non-GAAP basis. All guidance is forward-looking and actual results may vary for the reasons I noted earlier. GAAP guidance measures are not available on a forward-looking basis due to the high variability and low visibility with respect to the charges, which are excluded from the non-GAAP guidance estimates. Please note that today's call is scheduled to last for one hour, and please limit your questions to one per firm. With that, I will turn the call over to Kevin.
Thanks, Kathleen, and welcome, everyone. Juniper had a strong second quarter, including record revenue and operating margin expansion. We're executing well against the 2010 operating principles we outlined at the beginning of the year. As we look towards the second half of the year, we intend to drive our growth agenda and build momentum going into 2011.
I will comment briefly on the current business climate and some progress against our strategic agenda. I will then hand off to Robyn for more details on our results and guidance for Q3.
The global economy continues to recover, yet the pace and trajectory of that recovery varied by geography. A number of economists now expect global GDP to grow in the low mid to single digits this year.
In this economic climate, we have seen growing demand for our products and services and we delivered growth in all three theaters: EMEA, the Americas and Asia Pacific. Economic recovery in Europe continues to lag and the sovereign debt situation in southern Europe added to concerns about the pace of recovery across Europe. The U.S. continues to show modest GDP growth, though experts continue to debate the pace of the recovery.
Asia continues to grow, yet economic recovery in Japan continues to lag. Global demand for networking is increasing as more traffic is being carried over the Internet. Computing is being centralized in massive data centers, and more people and businesses rely on digital devices connected to the network.
Our investment in R&D and expanded routes to market support our growth agenda and position us well for spending cycle in some key scenarios, including mobility, video, security and cloud computing.
We continue to win deals globally as customers embrace our vision for the new network. Our business grew 24% year-on-year, with Service Provider growing 21% and Enterprise growing 31%. We are expanding our footprint with Service Providers, and we are pleased with the growing demand for our MX 3D edge routers and SRX security platforms.