In a conference call with analysts on financial results, Juniper executives said that the company’s enterprise business had experienced “record performance”, and the fourth quarter of 2022 was the second highest quarter of the company’s cloud business revenue.
Juniper reported that in the fourth quarter, the sales revenue of enterprise business increased by 32% year on year, and the cloud business increased by more than 14%, but the business of service providers often in trouble fell by 8% year on year. In the whole year, Juniper’s enterprise business grew by 21%, becoming the company’s largest vertical business. At the same time, the cloud business grew by 13% year-on-year, and the service provider business grew by 3% year-on-year.

Simon Leopold, managing director of Raymond James, said in an email: “The growth and forecast of the enterprise’s business are very prominent, which is in sharp contrast to the concern about the economic recession.”
In 2022, the sales revenue of Mist AI will reach US $500 million, up from about US $300 million in the previous year. (Juniper acquired the AI network startup Mist Systems in 2022 for $405 million.)
In general, Juniper achieved sales revenue of 1.45 billion US dollars in the fourth quarter of 2022, up 11% year-on-year and 2% month-on-month. In the whole year of 2022, Juniper’s sales revenue reached US $5.3 billion, an annual increase of 12%. Juniper’s capital expenditure in the fourth quarter reached $31.7 million, up nearly 33% month-on-month.
It is worth noting that Juniper’s sales revenue in the fourth quarter is $30 million lower than that predicted by Seeking Alpha, which predicted that Juniper’s sales revenue in the first quarter of 2023 will reach $1.34 billion.
Rami Rahim, CEO of Juniper, said that the company had a backlog of orders of US $2 billion in the fourth quarter, an increase of US $200 million over the same period last year, far higher than the historical level.
Total number of orders declined
However, the total number of orders fell by more than 20% year on year.
Rahim explained: “The slowdown in the total order volume is mainly due to the normalization of the purchase mode of our cloud and service provider customers. In the previous year, considering the extension of delivery time, many customers advanced their demand after multiple quarters.”
Rahim expects that the purchase trend of this order reduction will continue until the first half of 2023, because the orders placed in the previous quarters are now being shipped.
Simon Leopard of Raymond James also held the same view on the reduction of orders, believing that the reduction of orders was due to “the normalization process brought by the improvement of supply chain”. Leopard said: “The highlight of Juniper in the service provider field is that its business does not need to face the problem of customers digesting inventory; this means that when the backlog returns to normal, its orders should increase.”
Ken Miller, chief financial officer of Juniper, said that the company continued to feel the pressure of supply chain shortage and increased component and transportation costs, and predicted that these challenges would be moderately improved in 2023. He said that the company had raised its forecast of sales revenue growth of 7% in 2023 to 8%.
Analysts at Rosenblatt Securities worry that the reduction of orders may have a long-term negative impact. Mike Genovese, Managing Director and Senior Research Analyst of Rosenblatt Securities, said in an email update to users: “We believe that a better recent performance report may be at the expense of the next few years, because we are worried about the new order rate. In our view, service providers and cloud customers cut orders faster than Juniper shortened the delivery time, which seems to have a negative impact on the overall growth in the future.”
Win on 400G
However, Juniper CEO is optimistic about the growing demand for 400G services from service providers and data center operators. Rahim reported that “since the last quarter, we have won more than 100 new victories in wide area and data center use cases”, and said that 400G service is crucial to customers’ ability to increase network bandwidth, improve energy efficiency and operate networks more cost-effectively.
Genovese of Rosenblatt Securities said: “We agree with Juniper’s management that the service provider routing market is flat in the long run (- 2% to+2%), but the 400G market is now very hot due to the upgrade disruption and strong demand caused by the epidemic and supply chain crisis.”