Juniper Networks, Inc. (NYSE:JNPR) Q1 2023 Earnings Call Transcript

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Ken Miller: Yes. So backlog came down largely in line with our expectations, right? We knew the normalizations of ordering was coming as lead times were coming in and the need to place early orders was effectively gone, and customers are now comfortable consuming previously placed orders and no longer need to place new orders. So we knew that the bookings pattern was largely going to play out the way it did. Supply was also a little bit better than we expected, which is why we beat the Q1 revenue guidance. But we’re talking about an extra $30 million there. So maybe backlog is down about $30 million more than I expected. But overall, it’s pretty much in line with my expectations. I do think it will continue to come down.

I do not believe it’s going to be $350 million, give or take, every single quarter. I think as booking starts to normalize, and we’ve been talking about how we think that could start happening throughout this year, starting now, and we actually could return to growth in Q4 and be effectively normal by the end of the year, you will then see backlog moderate. The decline in backlog start to moderate. We expect to exit the year with elevated backlog, not normal, elevated backlog, greater than $800 million, which is more than 2 times kind of our normal backlog levels.

Operator: We have reached the end of the question-and-answer session, and I will now turn the call over to management for closing remarks.

Rami Rahim: So I’ll just end by saying despite the macro challenges that are out there, I remain very confident in the business. This is why we’ve, in fact, increased our 2023 revenue outlook to at least 9%. And also, we are — we believe that we will deliver over 100 basis points of operating margin expansion. But most importantly, I think that we can achieve sustainable revenue growth and profitability in this business, not just this year, but 2024 and beyond. And thanks, everyone, for participating in the call today.

Operator: This concludes today’s conference, and you may disconnect your lines at this time. Thank you for your participation.

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