In discussing the financial results today, Robyn will first present results on a GAAP basis and, for purposes of today's discussion, 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 results, 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 and other acquisition-related charges and expenses related to stock-based compensation.On today's call, Robyn will also be providing forward-looking guidance. As a reminder, guidance is provided on a non-GAAP basis other than that with respect to revenue and share count. 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 certain charges, which are excluded from the non-GAAP guidance estimates. Please note that today's call is scheduled to last for one hour. [Operator Instructions] With that, I will now turn the call over to Kevin. Kevin R. Johnson Thank you, Kathleen. And welcome, everyone. We delivered third quarter results that were in line with our expectations and the performance benchmarks we articulated on our last conference call. We remain confident in our strategy and our momentum with customers as we execute on the fourth quarter and prepare for 2012. We achieved solid bookings in the quarter and secured important design wins that support the pipeline of new solutions we are bringing to market. The macro environment remains challenging with many economic indicators becoming more volatile in the recent weeks. In the near term, this environment may make certain customers more cautious in their CapEx spending. However, we believe our broader market opportunity continues to be strong, driven by the 2 key trends of mobile Internet and cloud computing.
In this environment, as we did in 2009, we remained focused on being agile and flexible, while making the right investments for the long-term. Looking at the customer environment, service providers continue to invest in their infrastructure. In Q3, our Service provider business grew 8% year-on-year. Year-to-date through Q3, our service provider business has grown 17% year-on-year. The fact that we had solid bookings this quarter, including a number of multi-quarter orders, reflects well on the wins that we have secured for new projects.We are seeing service provider sequencing these projects over the next few quarters based on their individual priorities, and we have also been notified of design wins that have not yet translated to bookings. So order flow and investment posture has been pretty healthy, but the timing of spending is being managed closely. On our Q2 call, we shared the view that large service provider spending for 2011 will be weighted closer to 50% in half 1 and 50% in half 2. That deviates a bit from the normal seasonal trend of higher second half spending that we've talked about in the past. Given the current macroeconomic volatility, we expect that service providers will continue to closely manage their Q4 CapEx investments with an eye on their priorities and financials for 2011 versus 2012. On the enterprise side, we grew 11% year-on-year. That's a pretty good result given that the verticals of financial services and public sector, 2 of our largest enterprise sectors, have slowed the pace of new projects as they work through either economic challenges, or in the case of the public sector, a constrained budget environment. The growth, in spite of these factors, demonstrates the strength of solutions like the EX portfolio and improved performance from SRX. We're also seeing good contributions from our key partners. That said, we expect the near term macro uncertainty to prompt enterprise customers to take a cautious posture on capital spending in the near term.
As we think about Juniper's position and how we manage through near-term uncertainty, we think it's important to keep 3 things in mind. First, beginning 3 years ago, we increased our investment in R&D. 2011 has been a pivotal year in delivering the strongest product portfolio in the history of the company. We remained focused on our strategy of innovation around the market trends of mobile Internet and cloud computing. Second, since 2009, we've managed the company to a set of operating principles that we update annually. A key underpinning of those principles is to remain agile, to invest in our growth and innovation agenda, while prudently managing our operating expense structure. We continue to remain agile through volatile economic periods, while driving our innovation and growth agendas. Third, as we position for the next fiscal year, 2012 is all about converting net innovation to revenue as we move throughout the year. To enable this, we have been prudently investing in our sales and marketing capabilities within our guiding principle of managing operating expenses carefully.With the wave of new products coming to market, we continue to be thoughtful about investments in quota-carrying sales professionals with a focus on near-term return on investment for each new sales headcount we add. As we look at the third quarter results and think about the months ahead, we are executing well. We have built backlog in our current offerings, showing particular strength in the MX and SRX series. We also continue to create demand and generate design wins that will begin to drive revenue from our new offerings in the data center, enterprise mobility and our Converged Supercore routing technology in 2012 and beyond. We have met milestones in shipment schedules for our new products. The QFabric Interconnect and Director have been released. The T4000 is scheduled to ship later this quarter with Comcast placing one of the first orders. And PTX routers are on the way. At the same time, we've been putting the right organizational structure in place to effectively drive our innovation roadmap and support our customers' next generation networking requirements.
As we announced in July, we have implemented the Platform Systems division and the Software Solutions division. Many of you have gotten to know Stefan Dyckerhoff who heads the platform's Systems division and oversees our efforts in the data center and core and edge routing. Bob Muglia officially joined us on October 4 as Executive Vice President of software, responsible for shaping and driving our end-to-end software strategy. I'm confident that Bob's vision, management strength and technical expertise will bring significant value to Juniper.We are sharpening our focus on systems and software as the 2 core engines of growth for the company. Our software business is already a key differentiator that drives customer adoption of our solutions, including our SRX and virtual gateway security offerings. Our MobileNext core for mobile operators, the Junos Pulse mobile security suite for managing devices and the Junos Space platform for developing and deploying network applications. I'm pleased to welcome Bob to Juniper. So to wrap up, while we are mindful of the macroeconomic backdrop, our strategy has not changed. We had a strong bookings quarter, we're building backlog, we're driving market interest in our products and we're poised to begin delivering revenue from our innovation roadmap next year. We have set up 2012 as the year when we will have the strongest product and solutions portfolio in the history of the company. We are being thoughtful as we build the go-to-market capability to drive the success of our new innovations. At the same time, we remain strongly committed to R&D. We're doing all of this with an eye on agility to ensure our approach to spending remains consistent with our stated operating principles. And finally, we're putting a strong organizational structure in place that is aligned with our vision and strategy for success. We look forward to keeping you posted in our progress. Now I'll turn it over to Robyn for her review of the quarter and our outlook. Robyn? Read the rest of this transcript for free on seekingalpha.com