UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

	
 	
FORM 8-K

	
 	
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) April 28, 2020

	
 	
JUNIPER NETWORKS, INC.
(Exact name of registrant as specified in its charter)

	

	
					
Delaware	 	001-34501	 	77-0422528	
(State or other jurisdiction
of incorporation)	 	(Commission
File Number)	 	(I.R.S. Employer
Identification No.)	

				
1133 Innovation Way	 		
Sunnyvale,	California	 	94089	
(Address of principal executive offices)	 	(Zip Code)	
Registrant’s telephone number, including area code (408) 745-2000
Not Applicable
Former name or former address, if changed since last report

	
 	
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

		
☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	

		
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	

		
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	

		
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
Securities registered pursuant to Section 12(b) of the Act:

			
Title of each class	Trading symbol(s)	Name of each exchange on which registered	
Common Stock, par value $0.00001 per share	JNPR	New York Stock Exchange	
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

	

Item 2.02 Results of Operations and Financial Condition.
On April 28, 2020, Juniper Networks, Inc. (“we”, “our” or the “Company”) issued a press release in which we announced preliminary financial results for the quarter ended March 31, 2020. The Company also posted on the Investor Relations section of its website (www.juniper.net) prepared remarks with respect to the quarter ended March 31, 2020. Copies of the press release and prepared remarks by the Company are furnished as Exhibits 99.1 and 99.2, respectively, to this report. Information on our website is not, and will not be deemed, a part of this report or incorporated into any other filings the Company makes with the Securities and Exchange Commission.

The information furnished pursuant to this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed as “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.

			
Exhibit
No.	 	Description	
99.1	 	Press release issued by Juniper Networks, Inc. on April 28, 2020	
 	 	
99.2	 	Prepared remarks by Juniper Networks, Inc. dated as of April 28, 2020	
 	 	 	
104	 	Cover Page Interactive Data File - the cover page iXBRL tags are embedded within the Inline XBRL document	

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

				
                                                                                	 	Juniper Networks, Inc.	
 	 	 	 	
April 28, 2020	 	By:	/s/ Brian M. Martin	
 	 	Name:	Brian M. Martin	
 	 	Title:	Senior Vice President and General Counsel	

Exhibit 99.1

Investor Relations:
Jess Lubert
Juniper Networks
(408) 936-3734
jlubert@juniper.net

Media Relations:
Leslie Moore
Juniper Networks
(408) 936-5767
llmoore@juniper.net

JUNIPER NETWORKS REPORTS PRELIMINARY FIRST QUARTER 2020 FINANCIAL RESULTS

SUNNYVALE, Calif., April 28, 2020 - Juniper Networks (NYSE: JNPR), a leader in secure, AI-driven networks, today reported preliminary financial results for the three months ended March 31, 2020 and provided its outlook for the three months ending June 30, 2020.

First Quarter 2020 Financial Performance
Net revenues were $998.0 million, flat year-over-year, and a decrease of 17% sequentially.
GAAP operating margin was 3.9%, a decrease from 4.3% in the first quarter of 2019, and a decrease from 14.8% in the fourth quarter of 2019.
Non-GAAP operating margin was 10.6%, a decrease from 11.2% in the first quarter of 2019, and a decrease from 20.3% in the fourth quarter of 2019.
GAAP net income was $20.4 million, a decrease of 34% year-over-year, and a decrease of 88% sequentially, resulting in diluted earnings per share of $0.06.
Non-GAAP net income was $77.2 million, a decrease of 17% year-over-year, and a decrease of 61% sequentially, resulting in non-GAAP diluted earnings per share of $0.23.

"Orders grew 10% on a year-over-year basis during the March quarter and improved across each of our core industry verticals. With our stronger than expected demand, we believe our financial results would have exceeded the mid-point of our guidance if not for supply challenges we faced resulting from the COVID-19 pandemic," said Juniper's CEO, Rami Rahim. “While we are starting to see some weakness in our enterprise pipeline, which is impacting visibility into the second half of the year, we believe the overall momentum we are seeing speaks to the strength of our solutions, our strong customer relationships and the efforts we undertook to diversify the business across verticals and customers over the past several years.”

“We are executing well despite the significant challenges created by the COVID-19 pandemic,” said Juniper’s CFO, Ken Miller. “We are making progress ramping our supply chain back to full productivity and continue to effectively manage costs while positioning the business for future growth. Our balance sheet remains strong and we continue to generate cash, which we expect will position us to not only weather the current crisis, but also to come out stronger on the other side.”

Page 1 of 11

Balance Sheet and Other Financial Results
Total cash, cash equivalents, and investments as of March 31, 2020 were $2,529.9 million, compared to $3,502.7 million as of March 31, 2019, and $2,543.6 million as of December 31, 2019.
Net cash flows provided by operations for the first quarter of 2020 was $272.2 million, compared to $159.4 million in the first quarter of 2019, and $95.7 million in the fourth quarter of 2019.
Days sales outstanding in accounts receivable was 61 days in the first quarter of 2020, compared to 58 days in the first quarter of 2019, and 66 days in the fourth quarter of 2019.
Capital expenditures were $21.8 million, and depreciation and amortization expense was $53.7 million during the first quarter of 2020.

Outlook
These metrics are provided on a non-GAAP basis, except for revenue and share count. Non-GAAP earnings per share is on a fully diluted basis. The outlook assumes that the exchange rate of the U.S. dollar to other currencies will remain relatively stable at current levels.

While we are seeing uncertainty in our business due to the COVID-19 pandemic, we expect to see sequential revenue and non-GAAP earnings growth in Q2. Confidence in our forecast is driven by strong backlog and healthy momentum with our Service Provider and Cloud customers. We believe these factors should help offset increased uncertainty in certain segments of the Enterprise market. Due to the uncertain macroenvironment we have widened our revenue range for the second quarter.

We expect non-GAAP gross margin to be essentially flat sequentially relative to Q1. We expect to see sequential volume driven improvements in margin during the June quarter to be offset by certain strategic insertion opportunities in addition to increased logistics and other supply chain-related costs due to the COVID-19 pandemic.

We expect second quarter non-GAAP operating expense to decline sequentially as we continue to focus on prudent cost management while continuing to invest to capture future opportunities.

Our Board of Directors has declared a cash dividend of $0.20 per share to be paid on June 22, 2020 to shareholders of record as of the close of business on June 1, 2020. We remain committed to paying our dividend. While we expect to remain opportunistic with respect to share buybacks, we expect to place a greater emphasis on further building liquidity in this uncertain environment.

Our guidance for the quarter ending June 30, 2020 is as follows:
•Revenue will be approximately $1,060 million, plus or minus $50 million.
•Non-GAAP gross margin will be approximately 59.5%, plus or minus 1.0%.
•Non-GAAP operating expenses will be approximately $480 million, plus or minus $5 million.
•Non-GAAP operating margin will be approximately 14.0% at the mid-point of revenue guidance.
•Non-GAAP tax rate will be approximately 19.5%.
•Non-GAAP net income per share will be approximately $0.34, plus or minus $0.05. This assumes a
share count of approximately 332 million.
All forward-looking non-GAAP measures exclude estimates for amortization of intangible assets, share-based compensation expenses, acquisition and strategic investment related charges, restructuring benefits or charges, impairment charges, strategic partnership-related charges, legal reserve and settlement charges or benefits, gain or loss on equity investments, loss on extinguishment of debt, retroactive impact of certain tax settlements, significant effects

Page 2 of 11

of tax legislation and judicial or administrative interpretation of tax regulations, including the impact of income tax reform, non-recurring income tax adjustments, valuation allowance on deferred tax assets, and the income tax effect of non-GAAP exclusions, and do not include the impact of further changes to previously announced tariffs and the impact of any future acquisitions, divestitures, or joint ventures that may occur in the period. Juniper is unable to provide a reconciliation of non-GAAP guidance measures to corresponding U.S. generally accepted accounting principles or GAAP measures on a forward-looking basis without unreasonable effort due to the overall high variability and low visibility of most of the foregoing items that have been excluded. For example, share-based compensation expense is impacted by the Company’s future hiring needs, the type and volume of equity awards necessary for such future hiring, and the price at which the Company’s stock will trade in those future periods. Amortization of intangible assets is significantly impacted by the timing and size of any future acquisitions. The items that are being excluded are difficult to predict and a reconciliation could result in disclosure that would be imprecise or potentially misleading. Material changes to any one of these items could have a significant effect on our guidance and future GAAP results. Certain exclusions, such as amortization of intangible assets and share-based compensation expenses, are generally incurred each quarter, but the amounts have historically and may continue to vary significantly from quarter to quarter.

Withdrawal of Full-Year Commentary
While we are optimistic regarding our long-term prospects and opportunity to gain share across each of our customer verticals, we are withdrawing our previously announced full-year 2020 commentary because we cannot predict the specific extent or duration of the impact of the COVID-19 outbreak on our financial results.

First Quarter 2020 Financial Commentary Available Online
A CFO Commentary reviewing the Company’s first quarter 2020 financial results, as well as the second quarter 2020 financial outlook will be furnished to the SEC on Form 8-K and published on the Company’s website at http://investor.juniper.net. Analysts and investors are encouraged to review this commentary prior to participating in the conference call webcast.

Conference Call Webcast
Juniper Networks will host a conference call webcast today, April 28, 2020, at 2:00 pm PT, to be broadcast live over the Internet at http://investor.juniper.net. To participate via telephone in the US, the toll-free number is 1-877-407-8033. Outside the US, dial +1-201-689-8033. Please call 10 minutes prior to the scheduled conference call time. The webcast replay will be archived on the Juniper Networks website.

About Juniper Networks
Juniper Networks challenges the inherent complexity that comes with networking in the multicloud era. We do this with products, solutions and services that transform the way people connect, work and live. We simplify the process of transitioning to a secure and automated multicloud environment to enable secure, AI-driven networks that connect the world. Additional information can be found at Juniper Networks (www.juniper.net).
Investors and others should note that the Company announces material financial and operational information to its investors using its Investor Relations website, press releases, SEC filings and public conference calls and webcasts. The Company also intends to use the Twitter account @JuniperNetworks and the Company’s blogs as a means of disclosing information about the Company and for complying with its disclosure obligations under Regulation FD. The social media channels that the Company intends to use as a means of disclosing information described above may be updated from time to time as listed on the Company’s Investor Relations website.

Juniper Networks, the Juniper Networks logo, Juniper, Junos, and other trademarks are registered trademarks of Juniper Networks, Inc. and/or its affiliates in the United States and other countries. Other names may be trademarks of their respective owners.

Page 3 of 11

Safe Harbor
Statements in this release concerning Juniper Networks’ business, economic and market outlook, including currency exchange rates; our expectations regarding revenue, earnings and non-GAAP gross margin growth; and the expected impact of COVID-19 on these measures; our expectations regarding our liquidity and operating expenses; our financial guidance; and our overall future prospects are forward-looking statements within the meaning of the Private Securities Litigation Reform Act that involve a number of uncertainties and risks. Actual results or events could differ materially from those anticipated in those forward-looking statements as a result of several factors, including: the duration, extent and impact of the COVID-19 pandemic; general economic and political conditions globally or regionally; business and economic conditions in the networking industry; changes in overall technology spending by our customers, including Cloud providers and Service Providers; the network capacity requirements of our customers and, in particular, Cloud and telecommunication service providers; contractual terms that may result in the deferral of revenue; the timing of orders and their fulfillment; manufacturing and supply chain costs, constraints, changes or disruptions; availability and pricing of key product components; delays in scheduled product availability; adoption of regulations or standards affecting Juniper Networks products, services or the networking industry; product defects, returns or vulnerabilities; significant effects of tax legislation and judicial or administrative interpretation of tax regulations and judicial or administrative interpretation of tax regulations; legal settlements and resolutions; the potential impact of activities related to the execution of capital return, restructurings and product rationalization; the impact of import tariffs, depending on their scope and how they are implemented; and other factors listed in Juniper Networks’ most recent report on Form 10-Q or 10-K filed with the Securities and Exchange Commission. In addition, many of the foregoing risks and uncertainties are, and could be, exacerbated by the COVID-19 pandemic and any worsening of the global business and economic environment as a result. We cannot at this time predict the extent of the impact of the COVID-19 pandemic and any resulting business or economic impact, but it could have a material adverse effect on our business, financial condition, results of operations and cash flows. Note that our estimates as to tax rate on our business are based on current tax law and regulations, including current interpretations thereof, and could be materially affected by changing interpretations as well as additional legislation and guidance. All statements made in this press release are made only as of the date set forth at the beginning of this release. Juniper Networks undertakes no obligation to update the information made in this release in the event facts or circumstances subsequently change after the date of this press release. We have not filed our Form 10-Q for the quarter ended March 31, 2020. As a result, all financial results described in this earnings release should be considered preliminary, and are subject to change to reflect any necessary adjustments or changes in accounting estimates, that are identified prior to the time we file the Form 10-Q.

Use of Non-GAAP Financial Information
Juniper Networks believes that the presentation of non-GAAP financial information provides important supplemental information to management and investors regarding financial and business trends relating to the company’s financial condition and results of operations. For further information regarding why Juniper Networks believes that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the "Discussion of Non-GAAP Financial Measures" section of this press release. The following tables and reconciliations can also be found on our Investor Relations website at http://investor.juniper.net.

Page 4 of 11

Juniper Networks, Inc.
Preliminary Condensed Consolidated Statements of Operations
(in millions, except per share amounts)
(unaudited)

	
								
 	Three Months Ended March 31,	
 	2020	 	2019	
Net revenues:	 	 	 	
Product	$	608.8		 	$	618.7		
Service	389.2		 	383.0		
Total net revenues	998.0		 	1,001.7		
Cost of revenues:	 	 	 	
Product	269.0		 	270.0		
Service	149.7		 	149.4		
Total cost of revenues	418.7		 	419.4		
Gross margin	579.3		 	582.3		
Operating expenses:	 	 	 	
Research and development	232.5		 	227.6		
Sales and marketing	239.2		 	228.5		
General and administrative	59.3		 	68.2		
Restructuring charges	8.9		 	15.3		
Total operating expenses	539.9		 	539.6		
Operating income	39.4		 	42.7		
Other (expense) income, net	(11.1	)	 	1.8		
Income before income taxes	28.3		 	44.5		
Income tax provision	7.9		 	13.4		
Net income	$	20.4		 	$	31.1		
 	 	 	 	
Net income per share:	 	 	 	
Basic	$	0.06		 	$	0.09		
Diluted	$	0.06		 	$	0.09		
Weighted-average shares used to compute net income per share:	 	 	 	
Basic	330.8		 	348.1		
Diluted	335.1		 	352.7		

Page 5 of 11

Juniper Networks, Inc.
Preliminary Net Revenues by Product and Service
(in millions)
(unaudited)

								
 	Three Months Ended March 31,	
 	2020	 	2019	
Routing	$	314.5		 	$	374.7		
Switching	219.8		 	176.4		
Security	74.5		 	67.6		
Total Product	608.8		 	618.7		
Total Service	389.2		 	383.0		
Total	$	998.0		 	$	1,001.7		

Juniper Networks, Inc.
Preliminary Net Revenues by Vertical
(in millions)
(unaudited)

								
 	Three Months Ended March 31,	
 	2020	 	2019	
Cloud	$	261.9		 	$	223.1		
Service Provider	375.5		 	435.6		
Enterprise	360.6		 	343.0		
Total	$	998.0		 	$	1,001.7		

Juniper Networks, Inc.
Preliminary Net Revenues by Geographic Region
(in millions)
(unaudited)

								
 	Three Months Ended March 31,	
 	2020	 	2019	
Americas	$	579.5		 	$	543.6		
Europe, Middle East, and Africa	255.0		 	286.2		
Asia Pacific	163.5		 	171.9		
Total	$	998.0		 	$	1,001.7		

Page 6 of 11

Juniper Networks, Inc.
Preliminary Reconciliations between GAAP and non-GAAP Financial Measures
(in millions, except percentages and per share amounts)
(unaudited)

	
													
 	 	Three Months Ended	
 	 	March 31, 2020	 	December 31, 2019	 	March 31, 2019	
GAAP operating income	 	$	39.4		 	$	178.6		 	$	42.7		
GAAP operating margin	 	3.9	%	 	14.8	%	 	4.3	%	
Share-based compensation expense	C	42.0		 	55.1		 	33.9		
Share-based payroll tax expense	C	4.0		 	0.4		 	4.7		
Amortization of purchased intangible assets	A	9.9		 	9.9		 	4.9		
Restructuring charges (benefits)	B	8.9		 	(0.3	)	 	15.3		
Acquisition and strategic investment related charges	A	1.3		 	1.0		 	10.2		
Strategic partnership-related charges	B	—		 	—		 	0.8		
Non-GAAP operating income	 	$	105.5		 	$	244.7		 	$	112.5		
Non-GAAP operating margin	 	10.6	%	 	20.3	%	 	11.2	%	
 	 	 	 	 	 	 	
GAAP net income	 	$	20.4		 	$	168.4		 	$	31.1		
Share-based compensation expense	C	42.0		 	55.1		 	33.9		
Share-based payroll tax expense	C	4.0		 	0.4		 	4.7		
Amortization of purchased intangible assets	A	9.9		 	9.9		 	4.9		
Restructuring charges (benefits)	B	8.9		 	(0.3	)	 	15.3		
Acquisition and strategic investment related charges	A	1.3		 	1.0		 	10.2		
Strategic partnership-related charges	B	—		 	—		 	0.8		
Loss on equity investments	B	1.5		 	0.8		 	1.1		
Recognition of previously unrecognized tax benefits	B	—		 	(25.4	)	 	—		
Income tax effect of non-GAAP exclusions	B	(10.8	)	 	(11.2	)	 	(9.3	)	
Non-GAAP net income	 	$	77.2		 	$	198.7		 	$	92.7		
 	 	 	 	 	 	 	
GAAP diluted net income per share	 	$	0.06		 	$	0.49		 	$	0.09		
Non-GAAP diluted net income per share	D	$	0.23		 	$	0.58		 	$	0.26		
Shares used in computing diluted net income per share	 	335.1		 	340.8		 	352.7		

Page 7 of 11

Discussion of Non-GAAP Financial Measures
This press release, including the tables above, includes the following non-GAAP financial measures derived from our Preliminary Consolidated Statements of Operations: operating income; operating margin; net income; and diluted net income per share. These measures are not presented in accordance with, nor are they a substitute for GAAP. In addition, these measures may be different from non-GAAP measures used by other companies, limiting their usefulness for comparison purposes. The non-GAAP financial measures used in the table above should not be considered in isolation from measures of financial performance prepared in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In particular, certain of the adjustments to our GAAP financial measures reflect the exclusion of items that are recurring and will be reflected in our financial results for the foreseeable future.
We utilize a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of our business, in making operating decisions, forecasting and planning for future periods, and determining payments under compensation programs. We consider the use of the non-GAAP measures presented above to be helpful in assessing the performance of the continuing operation of our business. By continuing operation, we mean the ongoing revenue and expenses of the business, excluding certain items that render comparisons with prior periods or analysis of on-going operating trends more difficult, such as expenses not directly related to the actual cash costs of development, sale, delivery or support of our products and services, or expenses that are reflected in periods unrelated to when the actual amounts were incurred or paid. Consistent with this approach, we believe that disclosing non-GAAP financial measures to the readers of our financial statements provides such readers with useful supplemental data that, while not a substitute for financial measures prepared in accordance with GAAP, allows for greater transparency in the review of our financial and operational performance. In addition, we have historically reported non-GAAP results to the investment community and believe that continuing to provide non-GAAP measures provides investors with a tool for comparing results over time. In assessing the overall health of our business for the periods covered by the table above and, in particular, in evaluating the financial line items presented in the table above, we have excluded items in the following three general categories, each of which are described below: Acquisition and Strategic Investment Related Charges, Other Items, and Share-Based Compensation Related Items. We also provide additional detail below regarding the shares used to calculate our non-GAAP net income per share. Notes identified for line items in the table above correspond to the appropriate note description below. With respect to the items excluded from our forward-looking non-GAAP measures and reconciliation of such measures, please see the “Outlook” section above.
Note A: Acquisition and Strategic Investment Related Charges. We exclude certain expense items resulting from acquisitions including amortization of purchased intangible assets associated with our acquisitions. The amortization of purchased intangible assets associated with our acquisitions results in our recording expenses in our GAAP financial statements that were already expensed by the acquired company before the acquisition and for which we have not expended cash. Moreover, had we internally developed the products acquired, the amortization of intangible assets, and the expenses of uncompleted research and development would have been expensed in prior periods. Accordingly, we analyze the performance of our operations in each period without regard to such expenses. In addition, acquisitions result in non-continuing operating expenses, which would not otherwise have been incurred by us in the normal course of our business operations. We believe that providing non-GAAP information for acquisition-related expense items in addition to the corresponding GAAP information allows the users of our financial statements to better review and understand the historic and current results of our continuing operations, and also facilitates comparisons to less acquisitive peer companies.
Note B: Other Items. We exclude certain other items that are the result of either unique, infrequent or unplanned events, including the following, when applicable: (i) restructuring charges or benefits; (ii) strategic partnership-related charges (iii) legal reserve and settlement charges or benefits; (iv) gain or loss on equity investments; (v) significant effects of tax legislation and judicial or administrative interpretation of tax regulations, including the impact of income tax reform; (vi) recognition of previously unrecognized tax benefits that are non-recurring in nature; (vii) the income tax effect on our financial statements of excluding items related to our non-GAAP financial measures. It is difficult to estimate the amount or timing of these items in advance. Although these events are reflected in our GAAP financial statements, these transactions may limit the comparability of our on-going operations with prior and future periods.

Page 8 of 11

Restructuring benefits or charges result from events that arise from unforeseen circumstances, which often occur outside of the ordinary course of continuing operations. These expenses do not accurately reflect the underlying performance of our continuing business operations for the period in which they are incurred. We also exclude certain expenses incurred for the formation of a strategic partnership, as they are directly related to an event that is distinct and does not reflect current ongoing business operations. In the case of legal reserves and settlements, these gains or losses are recorded in the period in which the matter is concluded or resolved even though the subject matter of the underlying dispute may relate to multiple or different periods. As such, we believe that these expenses do not accurately reflect the underlying performance of our continuing operations for the period in which they are incurred. Additionally, we exclude previously unrecognized tax benefits that are non-recurring in nature which are recorded in the period in which applicable statutes of limitation lapse or upon the completion of tax review cycles as the tax matter may relate to multiple or different periods. Further, the impact of certain income tax reform, including the revaluation of our deferred tax assets and liabilities are unique events that occur in periods that are generally unrelated to the level of business activity to which such tax reform or legislation applies. We believe these tax events limit the comparability with prior periods and that these expenses or benefits do not accurately reflect the underlying performance of our continuing business operations for the period in which they are incurred. We also believe providing financial information with and without the income tax effect of excluding items related to our non-GAAP financial measures provide our management and users of the financial statements with better clarity regarding the on-going performance and future liquidity of our business. Because of these factors, we assess our operating performance with these amounts both included and excluded, and by providing this information, we believe the users of our financial statements are better able to understand the financial results of what we consider our continuing operations.
Note C: Share-Based Compensation Related Items. We provide non-GAAP information relative to our expense for share-based compensation and related payroll tax. Due to the varying available valuation methodologies, subjective assumptions and the variety of award types, which affect the calculations of share-based compensation, we believe that the exclusion of share-based compensation and related payroll tax allows for more accurate comparisons of our operating results to our peer companies and is useful to investors to understand the impact of share-based compensation to our results of operations. Further, expense associated with granting share-based awards does not reflect any cash expenditures by the company as no cash is expended.
Note D: Non-GAAP Net Income Per Share Items. We provide diluted non-GAAP net income per share. The diluted non-GAAP net income per share includes additional dilution from potential issuance of common stock, except when such issuances would be anti-dilutive.

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Juniper Networks, Inc.
Preliminary Condensed Consolidated Balance Sheets
(in millions)
(unaudited)

								
 	March 31,
2020	 	December 31,
2019	
ASSETS	 	 	 	
Current assets:	 	 	 	
Cash and cash equivalents	$	1,398.6		 	$	1,215.8		
Short-term investments	523.0		 	738.0		
Accounts receivable, net of allowances	675.1		 	879.7		
Prepaid expenses and other current assets	376.0		 	376.3		
Total current assets	2,972.7		 	3,209.8		
Property and equipment, net	802.9		 	830.9		
Operating lease right-of-use assets	165.8		 	169.7		
Long-term investments	608.3		 	589.8		
Purchased intangible assets, net	170.7		 	185.8		
Goodwill	3,337.1		 	3,337.1		
Other long-term assets	552.0		 	514.6		
Total assets	$	8,609.5		 	$	8,837.7		
 	 	 	 	
LIABILITIES AND STOCKHOLDERS' EQUITY	 	 	 	
Current liabilities:	 	 	 	
Accounts payable	$	236.4		 	$	219.5		
Accrued compensation	165.9		 	229.0		
Deferred revenue	854.7		 	812.9		
Other accrued liabilities	279.5		 	282.5		
Total current liabilities	1,536.5		 	1,543.9		
Long-term debt	1,712.9		 	1,683.9		
Long-term deferred revenue	400.1		 	410.5		
Long-term income taxes payable	369.9		 	372.6		
Long-term operating lease liabilities	153.6		 	158.1		
Other long-term liabilities	45.8		 	58.1		
Total liabilities	4,218.8		 	4,227.1		
Total stockholders' equity	4,390.7		 	4,610.6		
Total liabilities and stockholders' equity	$	8,609.5		 	$	8,837.7		

Page 10 of 11

Juniper Networks, Inc.
Preliminary Condensed Consolidated Statements of Cash Flows
(in millions)
(unaudited)

								
 	Three Months Ended March 31,	
 	2020	 	2019	
Cash flows from operating activities:	 	 	 	
Net income	$	20.4		 	$	31.1		
Adjustments to reconcile net income to net cash provided by operating activities:	 	 	 	
Share-based compensation expense	42.0		 	33.9		
Depreciation, amortization, and accretion	54.0		 	48.7		
Operating lease assets expense	10.5		 	9.6		
Other	10.3		 	(2.2	)	
Changes in operating assets and liabilities, net of acquisitions:	 	 	 	
Accounts receivable, net	202.6		 	108.6		
Prepaid expenses and other assets	(37.1	)	 	(9.1	)	
Accounts payable	18.4		 	10.1		
Accrued compensation	(59.8	)	 	(54.9	)	
Income taxes payable	5.1		 	(5.7	)	
Other accrued liabilities	(27.0	)	 	(27.9	)	
Deferred revenue	32.8		 	17.2		
Net cash provided by operating activities	272.2		 	159.4		
Cash flows from investing activities:	 	 	 	
Purchases of property and equipment	(21.8	)	 	(27.9	)	
Purchases of available-for-sale debt securities	(257.1	)	 	(884.4	)	
Proceeds from sales of available-for-sale debt securities	94.0		 	232.8		
Proceeds from maturities and redemptions of available-for-sale debt securities	354.0		 	578.3		
Purchases of equity securities	(3.1	)	 	(5.1	)	
Proceeds from sales of equity securities	3.1		 	2.2		
Subsequent payments related to acquisitions in prior years	(0.2	)	 	—		
Net cash provided by (used in) investing activities	168.9		 	(104.1	)	
Cash flows from financing activities:	 	 	 	
Repurchase and retirement of common stock	(203.2	)	 	(2.9	)	
Proceeds from issuance of common stock	27.1		 	29.5		
Payment of dividends	(65.5	)	 	(66.2	)	
Payment of debt	—		 	(350.0	)	
Net cash used in financing activities	(241.6	)	 	(389.6	)	
Effect of foreign currency exchange rates on cash, cash equivalents, and restricted cash	(16.2	)	 	1.6		
Net increase (decrease) in cash, cash equivalents, and restricted cash	183.3		 	(332.7	)	
Cash, cash equivalents, and restricted cash at beginning of period	1,276.5		 	2,505.8		
Cash, cash equivalents, and restricted cash at end of period	$	1,459.8		 	$	2,173.1		

Page 11 of 11

Exhibit 99.2

Juniper Networks, Inc.
1133 Innovation Way
Sunnyvale, CA 94089

April 28, 2020

CFO Commentary on First Quarter 2020 Preliminary Financial Results

Related Information
The following commentary is provided by management and should be referenced in conjunction with Juniper Networks’ first quarter 2020 preliminary financial results press release available on its Investor Relations website at http://investor.juniper.net. These remarks represent management’s current views of the Company’s financial and operational performance and outlook and are provided to give investors and analysts further insight into the Company's performance in advance of the earnings call webcast.

Q1 2020 Preliminary Financial Results
GAAP

																		
(in millions, except per share amounts and percentages)	 Q1'20		Q4'19		Q1'19	 	Q/Q Change	 	Y/Y Change	
Revenue	$	998.0		 	$	1,208.1		 	$	1,001.7		 	(17	)%	 	—	 %	
Product	608.8		 	791.9		 	618.7		 	(23	)%	 	(2	)%	
Service	389.2		 	416.2		 	383.0		 	(6	)%	 	2	 %	
Gross margin %	58.0	%	 	59.5	%	 	58.1	%	 	(1.5	)pts	 	(0.1	)pts	
Research and development	232.5		 	239.6		 	227.6		 	(3	)%	 	2	 %	
Sales and marketing	239.2		 	246.5		 	228.5		 	(3	)%	 	5	 %	
General and administrative	59.3		 	54.9		 	68.2		 	8	 %	 	(13	)%	
Restructuring charges (benefits)	8.9		 	(0.3	)	 	15.3		 	N/M		 	(42	)%	
Total operating expenses	$	539.9		 	$	540.7		 	$	539.6		 	—	 %	 	—	 %	
Operating margin %	3.9	%	 	14.8	%	 	4.3	%	 	(10.9	)pts	 	(0.4	)pts	
Net income	$	20.4		 	$	168.4		 	$	31.1		 	(88	)%	 	(34	)%	
Diluted net income per share	$	0.06		 	$	0.49		 	$	0.09		 	(88	)%	 	(33	)%	
______________________
N/M - Not meaningful

1

Non-GAAP

																				
(in millions, except per share
  amounts and percentages)	Q2'20 Guidance	 	 Q1'20		Q4'19	 	Q1'19	 	Q/Q Change	 	Y/Y Change	
Revenue	$1,060 +/- $50	 	$	998.0		 	$	1,208.1		 	$	1,001.7		 	(17	)%	 	—	 %	
Product	 	 	608.8		 	791.9		 	618.7		 	(23	)%	 	(2	)%	
Service	 	 	389.2		 	416.2		 	383.0		 	(6	)%	 	2	 %	
Gross margin %	59.5% +/- 1.0%	 	59.6	%	 	60.7	%	 	59.3	%	 	(1.1	)pts	 	0.3	 pts	
Research and development	 	 	215.8		 	213.4		 	213.5		 	1	 %	 	1	 %	
Sales and marketing	 	 	222.9		 	228.8		 	217.3		 	(3	)%	 	3	 %	
General and administrative	 	 	50.2		 	46.4		 	50.9		 	8	 %	 	(1	)%	
Total operating expenses	$480 +/- $5	 	$	488.9		 	$	488.6		 	$	481.7		 	—	 %	 	1	 %	
Operating margin %	~14% at the midpoint	 	10.6	%	 	20.3	%	 	11.2	%	 	(9.7	)pts	 	(0.6	)pts	
Net income	 	 	$	77.2		 	$	198.7		 	$	92.7		 	(61	)%	 	(17	)%	
Diluted net income per share	$0.34 +/- $0.05	 	$	0.23		 	$	0.58		 	$	0.26		 	(60	)%	 	(12	)%	

Q1 2020 Overview

We ended the first quarter of 2020 at $998 million in revenue, flat year-over-year, and non-GAAP earnings per share of $0.23, both slightly below the low-end of our guidance range. If not for supply constraints related to the COVID-19 pandemic, we estimate that revenue and non-GAAP EPS would have been between the mid and high-end of the range we provided in January. While supply constraints negatively impacted financial results, we had strong demand in the quarter with orders growing 10% year-over-year exceeding our expectations. All verticals and all geographies saw year-over-year order growth.
Looking at our revenue by vertical, on a year-over-year basis, Cloud increased 17% and Enterprise increased 5%, while Service Provider declined 14%. If not for supply constraints related to the COVID-19 pandemic, we estimate that Service Provider revenue decline would have been in the mid to high-single digits.
From a technology perspective, Switching increased 25% year-over-year and Security increased 10% year-over-year. Routing, which was the most impacted by supply constraints related to the COVID-19 pandemic, decreased 16% year-over-year. Our Services business increased 2% year-over-year.
Software revenue was approximately 11% of total revenue and grew 9% year-over-year.
In reviewing our top 10 customers for the quarter, four were Cloud, five were Service Provider, and one was an Enterprise.
Non-GAAP gross margins were 59.6%, in-line with our expectations.
Non-GAAP operating expenses increased 1% year-over-year and were flat sequentially, which was slightly below the low-end of our guidance range.
As expected, cash flow from operations in the first quarter was strong at $272 million. We paid $66 million in dividends, reflecting a quarterly dividend of $0.20 per share. The accelerated share repurchase program ("ASR") we entered into in Q4'19 settled on January 7, 2020, and we also repurchased an additional $200 million worth of shares in the open market early in the quarter.

Total cash, cash equivalents, and investments at the end of the first quarter of 2020 was $2.5 billion which was flat from the fourth quarter 2019.

2

Revenue

Product & Service

•	Routing product revenue: $314 million, down 16% year-over-year and down 26% sequentially. The year-over-year decrease was primarily due to Service Provider and to a lesser extent, Enterprise, partially offset by strength in Cloud. The sequential decline was primarily due to Service Provider. The COVID-19 pandemic-related supply constraints impacted both the year-over-year and sequential results. The PTX product family grew year-over-year and the MX product family declined year-over-year.	

•	Switching product revenue: $220 million, up 25% year-over-year and down 18% sequentially. The year-over-year increase was primarily driven by Cloud, and to a lesser extent, Enterprise and Service Provider. The sequential decrease was primarily driven by Enterprise. The QFX product family increased year-over-year and decreased sequentially. The EX product family was essentially flat year-over-year and declined sequentially.	

•	Security product revenue: $75 million, up 10% year-over-year and down 26% sequentially. The year-over-year increase was due to Cloud and Service Provider, partially offset by decline in Enterprise. The sequential decrease was primarily driven by Enterprise, and to a lesser extent, Service Provider.	

•	Service revenue: $389 million, up 2% year-over-year and down 6% sequentially. The year-over-year increase was primarily driven by strong sales of support contracts. The sequential decrease was primarily due to timing of renewals and professional services projects.	

Vertical

•	Cloud: $262 million, up 17% year-over-year and down 6% sequentially. The year-over-year increase was primarily driven by Switching and to a lesser extent, Routing and Security, partially offset by a decline in Services. The sequential decrease was primarily driven by Routing and Services, partially offset by an increase in Security.	

•	Service Provider: $376 million, down 14% year-over-year and down 24% sequentially. The year-over-year decrease was primarily due to Routing. If not for supply constraints related to the COVID-19 pandemic, Service Provider revenue would have been down mid to high-single digits. All products and Services declined sequentially.	

•	Enterprise: $360 million, up 5% year-over-year and down 17% sequentially. The year-over-year increase was primarily driven by Services and Switching, partially offset by declines in Routing and Security. All products and Services declined sequentially.	

Geography

•	Americas: $579 million, up 7% year-over-year and down 14% sequentially. Year-over-year, the increase was primarily driven by Cloud, and to a lesser extent, Enterprise, partially offset by a decline in Service Provider. All verticals declined sequentially.	

•	EMEA: $255 million, down 11% year-over-year and down 24% sequentially. Year-over-year, the decrease was primarily due to Service Provider, and to a lesser extent, Cloud and Enterprise. All verticals declined sequentially.	

•	APAC: $164 million, down 5% year-over-year and down 16% sequentially. The year-over-year and sequential decrease was primarily due to Enterprise, and to a lesser extent, Service Provider, partially offset by growth in Cloud.	

3

Gross Margin

•	GAAP gross margin: 58.0%, compared to 58.1% from the prior year and 59.5% from last quarter.	

•	Non-GAAP gross margin: 59.6%, compared to 59.3% from the prior year and 60.7% from last quarter.	

•	GAAP product gross margin: 55.8%, down 0.5 points from the prior year and down 1.4 points from last quarter.	

Year-over-year, the decrease in GAAP product gross margin was primarily due to product and customer mix, and higher intangible amortization associated with the acquisition of Mist Systems, partially offset by better inventory management.

The sequential decrease in GAAP product gross margin was primarily due to lower revenue and increased logistics costs due to the COVID-19 pandemic.

•	Non-GAAP product gross margin: 57.5%, up 0.1 points from the prior year and down 1.0 points from last quarter.	

The year-over-year increase in Non-GAAP product gross margin was primarily driven by better inventory cost management and lower China tariff related costs, partially offset by product and customer mix.

The sequential decrease in Non-GAAP product gross margin was primarily due to lower revenue relative to fixed costs of goods sold.

•	GAAP service gross margin: 61.5%, up 0.5 points from the prior year and down 2.4 points from last quarter.	

•	Non-GAAP service gross margin: 62.8%, up 0.5 points from the prior year and down 2.1 points from last quarter.	

The year-over-year increase in service gross margin, on a GAAP and non-GAAP basis, was primarily driven by higher revenue relative to fixed costs of services.

The sequential decrease in service gross margin, on a GAAP and non-GAAP basis, was primarily due to lower revenue relative to fixed costs of services.

Operating Expenses

•	GAAP operating expenses: $540 million, flat year-over-year, and a decrease of $1 million sequentially.	

Operating expenses were substantially flat on a year-over-year and sequential basis.

GAAP operating expenses were 54.1% of revenue, up 0.2 points year-over-year and up 9.3 points sequentially.

•	Non-GAAP operating expenses: $489 million, an increase of $7 million year-over-year, and flat sequentially.	

The year-over-year increase in operating expenses was primarily due to higher headcount related costs.

Non-GAAP operating expenses were 49.0% of revenue, up 0.9 points year-over-year and up 8.5 points sequentially.

4

Operating Margin

•	GAAP operating margin: 3.9%, a decrease of 0.4 points year-over-year and a decrease of 10.8 points sequentially.	

•	Non-GAAP operating margin: 10.6%, a decrease of 0.7 points year-over-year and a decrease of 9.7 points sequentially.	

Tax Rate

•	GAAP tax rate: 28.0%, compared to 30.0% in the prior year and 3.2% last quarter.	

The year-over-year decrease in the effective tax rate, on a GAAP basis, was primarily due to the impact of discrete items in the current period.

The increase in the effective tax rate compared to last quarter was primarily driven by the level of discrete items in the comparative period, which included a reduction of income tax reserves and favorable changes in foreign statutory rates.

•	Non-GAAP tax rate: 19.5%, compared to 19.6% in the prior year and 17.5% last quarter.	

The increase in the effective tax rate compared to prior quarter was primarily driven by favorable changes in foreign statutory rates in the comparative period.

Diluted Earnings Per Share

•	GAAP diluted earnings per share: $0.06, a decrease of $0.03 year-over-year and a decrease of $0.43 sequentially.	

The year-over-year decrease in EPS on a GAAP basis, was primarily due to lower interest income.

Sequentially, the decrease in GAAP EPS was primarily due to lower revenue.

•	Non-GAAP diluted earnings per share: $0.23, a decrease of $0.03 year-over-year and a decrease of $0.35 sequentially.	

The year-over-year decrease in EPS on a non-GAAP basis, was primarily due to lower interest income and higher operating expenses.

Sequentially, the decrease in non-GAAP EPS was primarily due to lower revenue.

5

Balance Sheet, Cash Flow, Capital Return, and Other Financial Metrics

																				
(in millions, except days sales outstanding
   ("DSO"), and headcount)	 Q1'20	 	Q4'19	 	Q3'19	 	Q2'19	 	Q1'19	
Cash(1)	$	2,529.9		 	$	2,543.6		 	$	2,826.7		 	$	2,875.0		 	$	3,502.7		
Debt(2)	1,712.9		 	1,683.9		 	1,687.6		 	1,790.0		 	1,789.6		
Net cash(3)	817.0		 	859.7		 	1,139.1		 	1,085.0		 	1,713.1		
Operating cash flow	272.2		 	95.7		 	185.0		 	88.8		 	159.4		
Capital expenditures	21.8		 	26.1		 	28.3		 	27.3		 	27.9		
Depreciation and amortization	53.7		 	55.2		 	56.1		 	56.4		 	51.0		
Share repurchases(4)	200.0		 	200.0		 	50.0		 	300.0		 	—		
Dividends	$	65.5		 	$	63.7		 	$	64.7		 	$	65.5		 	$	66.2		
Diluted shares	335.1		 	340.8		 	345.5		 	349.1		 	352.7		
DSO	61		 	66		 	51		 	54		 	58		
Headcount	9,586		 	9,419		 	9,283		 	8,995		 	9,068		
______________________
(1) Includes cash, cash equivalents, and investments.
(2) Debt includes change in fair value of fixed-rate debt swapped to floating rate, equally offset on the balance sheet by a swap asset. No new debt or loans were issued in Q1’20.
(3) Net cash includes cash, cash equivalents, and investments, net of debt.
(4) For Q4’19, $200.0 million represents the full amount under the new ASR. 6.4 million shares were received initially for an aggregate price of $160.0 million. The Q4'19 ASR concluded in Q1’20, and at final settlement, an additional 1.8 million shares were received. For Q2’19, $300.0 million represents the full amount of the Q2'19 ASR. 8.6 million shares were received initially for an aggregate price of $240.0 million. The Q2'19 ASR concluded in Q3’19, and at final settlement, an additional 3.0 million shares were received.

Cash Flow

•	Cash flow from operations: $272 million, up $113 million year-over-year and up $177 million sequentially.	

The year-over-year increase was primarily due to timing differences related to customer collections and payments to suppliers. The sequential increase was primarily due to timing differences related to customer collections and payments to suppliers, partially offset by higher payments related to variable compensation.

Days Sales Outstanding (DSO)

•	DSO: 61 days, a 5-day decrease from the prior quarter, driven primarily by lower overall invoicing in Q1’20 as well as higher collections of in-quarter invoicing, partially offset by lower revenue.	

Capital Return

•	In the quarter, we paid a dividend of $0.20 per share for a total of $66 million.	

•	In the quarter, we repurchased $200 million worth of shares. In addition, the $200 million ASR entered into in Q4’19 settled in the quarter.	

Demand metrics

•	Total deferred revenue was $1,255 million, up $24 million year-over-year and up $31 million sequentially.	

•	Product deferred revenue was $112 million, down $28 million year-over-year and down $21 million sequentially.	
The year-over-year and sequential decline in product deferred revenue was primarily due to the timing of the delivery of contractual commitments and to a lesser extent the timing of software subscription orders.

•	Service deferred revenue was $1,143 million, up $52 million year-over-year and up $53 million sequentially.	

6

The year-over-year and sequential increase in service deferred revenue was primarily driven by the timing of contract renewals.

Deferred Revenue

												
(in millions)	March 31, 2020	 	December 31, 2019	 	March 31, 2019	
Deferred product revenue, net	$	111.5		 	$	132.6		 	$	139.6		
Deferred service revenue, net	1,143.3		 	1,090.8		 	1,091.3		
Total	$	1,254.8		 	$	1,223.4		 	$	1,230.9		

Headcount

•	Ending headcount for Q1'20 was 9,586, an increase of 518 employees year-over-year and increase of 167 sequentially. The year-over-year increase was primarily a result of the acquisition of Mist Systems in Q2'19, additional hires in our R&D and go-to-market organizations, partially offset by outsourcing IT services. The sequential increase was primarily a result of additional hires in our R&D and go-to-market organizations.	

Outlook
These metrics are provided on a non-GAAP basis, except for revenue and share count. Non-GAAP earnings per share is on a fully diluted basis. The outlook assumes that the exchange rate of the U.S. dollar to other currencies will remain relatively stable at current levels.

While we are seeing uncertainty in our business due to the COVID-19 pandemic, we expect to see sequential revenue and non-GAAP earnings growth in Q2. Confidence in our forecast is driven by strong backlog and healthy momentum with our Service Provider and Cloud customers. We believe these factors should help offset increased uncertainty in certain segments of the Enterprise market. Due to the uncertain macroenvironment we have widened our revenue range for the second quarter.

We expect non-GAAP gross margin to be essentially flat sequentially relative to Q1. We expect to see sequential volume driven improvements in margin during the June quarter to be offset by certain strategic insertion opportunities in addition to increased logistics and other supply chain-related costs due to the COVID-19 pandemic.

We expect second quarter non-GAAP operating expense to decline sequentially as we continue to focus on prudent cost management while continuing to invest to capture future opportunities.

Our Board of Directors has declared a cash dividend of $0.20 per share to be paid on June 22, 2020 to shareholders of record as of the close of business on June 1, 2020. We remain committed to paying our dividend. While we expect to remain opportunistic with respect to share buybacks, we expect to place a greater emphasis on further building liquidity in this uncertain environment.

Our guidance for the quarter ending June 30, 2020 is as follows:
•Revenue will be approximately $1,060 million, plus or minus $50 million.
•Non-GAAP gross margin will be approximately 59.5%, plus or minus 1.0%.
•Non-GAAP operating expenses will be approximately $480 million, plus or minus $5 million.
•Non-GAAP operating margin will be approximately 14% at the mid-point of revenue guidance.
•Non-GAAP tax rate will be approximately 19.5%.
•Non-GAAP net income per share will be approximately $0.34, plus or minus $0.05. This assumes a
share count of approximately 332 million.

7

Withdrawal of Full-Year Commentary
While we are optimistic regarding our long-term prospects and opportunity to gain share across each of our customer verticals, we are withdrawing our previously announced full-year 2020 commentary because we cannot predict the specific extent or duration of the impact of the COVID-19 pandemic on our financial results.

8

Forward-Looking Statements
Statements in this CFO Commentary and related conference call concerning Juniper Networks' business, economic and market outlook, including currency exchange rates; our expectations regarding revenue and non-GAAP gross margin and the expected impact of COVID-19 on these measures; our expectations regarding our liquidity and operating expenses and non-GAAP tax rate; our financial guidance; and our overall future prospects are forward-looking statements within the meaning of the Private Securities Litigation Reform Act that involve a number of uncertainties and risks. Actual results or events could differ materially from those anticipated in those forward-looking statements as a result of several factors, including: the duration, extent and impact of the COVID-19 pandemic; general economic and political conditions globally or regionally; business and economic conditions in the networking industry; changes in overall technology spending by our customers, including Cloud providers and Service Providers; the network capacity requirements of our customers and, in particular, Cloud and telecommunication service providers; contractual terms that may result in the deferral of revenue; the timing of orders and their fulfillment; manufacturing and supply chain costs, constraints, changes or disruptions; availability and pricing of key product components; delays in scheduled product availability; adoption of regulations or standards affecting Juniper Networks products, services or the networking industry; product defects, returns or vulnerabilities; significant effects of tax legislation and judicial or administrative interpretation of tax regulations; legal settlements and resolutions; the potential impact of activities related to the execution of capital return, restructurings and product rationalization; the impact of import tariffs, depending on their scope and how they are implemented; and other factors listed in Juniper Networks’ most recent report on Form 10-Q or 10-K filed with the Securities and Exchange Commission. In addition, many of the foregoing risks and uncertainties are, and could be, exacerbated by the COVID-19 pandemic and any worsening of the global business and economic environment as a result. We cannot at this time predict the extent of the impact of the COVID-19 pandemic and any resulting business or economic impact, but it could have a material adverse effect on our business, financial condition, results of operations and cash flows. Note that our estimates as to the tax rate on our business are based on current tax law and regulations, including current interpretations thereof, and could be materially affected by changing interpretations as well as additional legislation and guidance. All statements made in this CFO Commentary and related conference call are made only as of the date set forth at the beginning of this document. Juniper Networks undertakes no obligation to update the information made in this document or the related conference call in the event facts or circumstances subsequently change after the date of this document. We have not filed our Form 10-Q for the quarter ended March 31, 2020. As a result, all financial results described in this CFO Commentary should be considered preliminary, and are subject to change to reflect any necessary adjustments or changes in accounting estimates, that are identified prior to the time we file our Form 10-Q.

Non-GAAP Financial Measures
This CFO Commentary contains references to the following non-GAAP financial measures: gross margin; product gross margin; service gross margin; product gross margin as a percentage of product revenue; service gross margin as a percentage of service revenue; gross margin as a percentage of revenue; research and development expense; sales and marketing expense; general and administrative expense; operating expense; operating expense as a percentage of revenue; operating income; operating margin; provision for income tax; income tax rate; net income; diluted earnings per share; diluted shares outstanding; and free cash flow. For important commentary on why Juniper Networks considers non-GAAP information a useful view of the company’s financial results, please see the press release furnished with our Form 8-K filed today with the SEC. With respect to future financial guidance provided on a non-GAAP basis, we have excluded estimates for amortization of intangible assets, share-based compensation expenses, acquisition and strategic investment related charges, restructuring benefits or charges, impairment charges, strategic partnership-related charges, legal reserve and settlement charges or benefits, supplier component remediation charges and recoveries, gain or loss on equity investments, loss on extinguishment of debt, retroactive impact of certain tax settlements, significant effects of tax legislation and judicial or administrative interpretation of tax regulations, including the impact of income tax reform, non-recurring income tax adjustments, valuation allowance on deferred tax assets, and the income tax effect of non-GAAP exclusions, and do not include the impact of further tariffs and the impact of any future acquisitions, divestitures, or joint ventures that may occur in the applicable period. These measures are not presented in accordance with, nor are they a substitute for U.S. generally accepted accounting principles, or GAAP. In addition, these measures may be different from non-GAAP measures used by other companies, limiting their usefulness for comparison purposes. The non-GAAP financial measures used in this CFO Commentary should not be considered in isolation from measures

9

of financial performance prepared in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In particular, many of the adjustments to our GAAP financial measures reflect the exclusion of items that are recurring and will be reflected in our financial results for the foreseeable future.

A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis due to the high variability and low visibility with respect to the charges which are excluded from these non-GAAP measures. For example, share-based compensation expense is impacted by the Company’s future hiring needs, and restructuring actions, the type and volume of equity awards necessary for such future hiring, and the price at which the Company’s stock will trade in those future periods. Amortization of intangible assets is significantly impacted by the timing and size of any future acquisitions. The items that are being excluded are difficult to predict and a reconciliation could result in disclosure that would be imprecise or potentially misleading. Material changes to any one of these items could have a significant effect on our guidance and future GAAP results. Certain exclusions, such as amortization of intangible assets and share-based compensation expenses, are generally incurred each quarter, but the amounts have historically and may continue to vary significantly from quarter to quarter.

10

Juniper Networks, Inc.
Preliminary Supplemental Data
(in millions, except percentages)
(unaudited)

Deferred Revenue

								
 	As of	
 	March 31,
2020	 	December 31,
2019	
Deferred product revenue:	 	 	 	
Undelivered product commitments and other product deferrals	$	121.0		 	$	141.7		
Deferred gross product revenue	121.0		 	141.7		
Deferred cost of product revenue	(9.5	)	 	(9.1	)	
Deferred product revenue, net	111.5		 	132.6		
Deferred service revenue, net	1,143.3		 	1,090.8		
Total	$	1,254.8		 	$	1,223.4		
Reported as:	 	 	 	
Current	$	854.7		 	$	812.9		
Long-term	400.1		 	410.5		
Total	$	1,254.8		 	$	1,223.4		

Vertical Reporting: Revenue Trend

																																		
 	Q1'19	 	Q2'19	 	Q3'19	 	Q4'19	 	Q1'20	 	Q/Q Change	 	Y/Y Change	
Cloud	$	223.1		 	$	285.0		 	$	271.9		 	$	279.8		 	$	261.9		 	$	(17.9	)	 	(6.4	)%	 	$	38.8		 	17.4	 %	
Service Provider	435.6		 	447.2		 	452.5		 	492.5		 	375.5		 	(117.0	)	 	(23.8	)%	 	(60.1	)	 	(13.8	)%	
Enterprise	343.0		 	370.3		 	408.7		 	435.8		 	360.6		 	(75.2	)	 	(17.3	)%	 	17.6		 	5.1	 %	
Total revenue	$	1,001.7		 	$	1,102.5		 	$	1,133.1		 	$	1,208.1		 	$	998.0		 	$	(210.1	)	 	(17.4	)%	 	$	(3.7	)	 	(0.4	)%	

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Juniper Networks, Inc.
Preliminary Reconciliations between GAAP and non-GAAP Financial Measures
(in millions, except percentages and per share amounts)
(unaudited)

												
 	Three Months Ended	
 	March 31, 2020	 	December 31, 2019	 	March 31, 2019	
GAAP gross margin - Product	$	339.8		 	$	453.2		 	$	348.7		
GAAP product gross margin % of product revenue	55.8	%	 	57.2	%	 	56.4	%	
Share-based compensation expense	1.4		 	1.4		 	1.9		
Share-based payroll tax expense	0.2		 	—		 	0.3		
Amortization of purchased intangible assets	8.4		 	8.3		 	4.4		
Non-GAAP gross margin - Product	$	349.8		 	$	462.9		 	$	355.3		
Non-GAAP product gross margin % of product revenue	57.5	%	 	58.5	%	 	57.4	%	
 	 	 	 	 	 	
GAAP gross margin - Service	$	239.5		 	$	266.1		 	$	233.6		
GAAP service gross margin % of service revenue	61.5	%	 	63.9	%	 	61.0	%	
Share-based compensation expense	4.2		 	4.3		 	4.5		
Share-based payroll tax expense	0.9		 	—		 	0.8		
Non-GAAP gross margin - Service	$	244.6		 	$	270.4		 	$	238.9		
Non-GAAP service gross margin % of service revenue	62.8	%	 	65.0	%	 	62.4	%	
 	 	 	 	 	 	
GAAP gross margin	$	579.3		 	$	719.3		 	$	582.3		
GAAP gross margin % of revenue	58.0	%	 	59.5	%	 	58.1	%	
Share-based compensation expense	5.6		 	5.7		 	6.4		
Share-based payroll tax expense	1.1		 	—		 	1.1		
Amortization of purchased intangible assets	8.4		 	8.3		 	4.4		
Non-GAAP gross margin	$	594.4		 	$	733.3		 	$	594.2		
Non-GAAP gross margin % of revenue	59.6	%	 	60.7	%	 	59.3	%	
 	 	 	 	 	 	
GAAP research and development expense	$	232.5		 	$	239.6		 	$	227.6		
Share-based compensation expense	(15.2	)	 	(26.0	)	 	(12.2	)	
Share-based payroll tax expense	(1.5	)	 	(0.2	)	 	(1.9	)	
Non-GAAP research and development expense	$	215.8		 	$	213.4		 	$	213.5		
 	 	 	 	 	 	
GAAP sales and marketing expense	$	239.2		 	$	246.5		 	$	228.5		
Share-based compensation expense	(13.8	)	 	(16.0	)	 	(9.4	)	
Share-based payroll tax expense	(1.1	)	 	(0.2	)	 	(1.4	)	
Amortization of purchased intangible assets	(1.4	)	 	(1.5	)	 	(0.4	)	
Non-GAAP sales and marketing expense	$	222.9		 	$	228.8		 	$	217.3		
 	 	 	 	 	 	
GAAP general and administrative expense	$	59.3		 	$	54.9		 	$	68.2		
Share-based compensation expense	(7.4	)	 	(7.4	)	 	(5.9	)	
Share-based payroll tax expense	(0.3	)	 	—		 	(0.3	)	
Amortization of purchased intangible assets	(0.1	)	 	(0.1	)	 	(0.1	)	
Acquisition and strategic investment related charges	(1.3	)	 	(1.0	)	 	(10.2	)	
Strategic partnership-related charges	—		 	—		 	(0.8	)	
Non-GAAP general and administrative expense	$	50.2		 	$	46.4		 	$	50.9		

12

Juniper Networks, Inc.
Preliminary Reconciliations between GAAP and non-GAAP Financial Measures
(in millions, except percentages and per share amounts)
(unaudited)

												
	Three Months Ended	
	March 31, 2020		December 31, 2019		March 31, 2019	
GAAP operating expenses	$	539.9		 	$	540.7		 	$	539.6		
GAAP operating expenses % of revenue	54.1	%	 	44.8	%	 	53.9	%	
Share-based compensation expense	(36.4	)	 	(49.4	)	 	(27.5	)	
Share-based payroll tax expense	(2.9	)	 	(0.4	)	 	(3.6	)	
Amortization of purchased intangible assets	(1.5	)	 	(1.6	)	 	(0.5	)	
Restructuring (charges) benefits	(8.9	)	 	0.3		 	(15.3	)	
Acquisition and strategic investment related charges	(1.3	)	 	(1.0	)	 	(10.2	)	
Strategic partnership-related charges	—		 	—		 	(0.8	)	
Non-GAAP operating expenses	$	488.9		 	$	488.6		 	$	481.7		
Non-GAAP operating expenses % of revenue	49.0	%	 	40.4	%	 	48.1	%	
 	 	 	 	 	 	
GAAP operating income	$	39.4		 	$	178.6		 	$	42.7		
GAAP operating margin	3.9	%	 	14.8	%	 	4.3	%	
Share-based compensation expense	42.0		 	55.1		 	33.9		
Share-based payroll tax expense	4.0		 	0.4		 	4.7		
Amortization of purchased intangible assets	9.9		 	9.9		 	4.9		
Restructuring charges (benefits)	8.9		 	(0.3	)	 	15.3		
Acquisition and strategic investment related charges	1.3		 	1.0		 	10.2		
Strategic partnership-related charges	—		 	—		 	0.8		
Non-GAAP operating income	$	105.5		 	$	244.7		 	$	112.5		
Non-GAAP operating margin	10.6	%	 	20.3	%	 	11.2	%	
 	 	 	 	 	 	
GAAP income tax provision	$	7.9		 	$	5.6		 	$	13.4		
GAAP income tax rate	28.0	%	 	3.2	%	 	30.0	%	
Recognition of previously unrecognized tax benefits	—		 	25.4		 	—		
Income tax effect of non-GAAP exclusions	10.8		 	11.2		 	9.3		
Non-GAAP provision for income tax	$	18.7		 	$	42.2		 	$	22.7		
Non-GAAP income tax rate	19.5	%	 	17.5	%	 	19.6	%	

13

Juniper Networks, Inc.
Preliminary Reconciliations between GAAP and non-GAAP Financial Measures
(in millions, except percentages and per share amounts)
(unaudited)

												
	Three Months Ended	
	March 31, 2020	 	December 31, 2019	 	March 31, 2019	
GAAP net income	$	20.4		 	$	168.4		 	$	31.1		
Share-based compensation expense	42.0		 	55.1		 	33.9		
Share-based payroll tax expense	4.0		 	0.4		 	4.7		
Amortization of purchased intangible assets	9.9		 	9.9		 	4.9		
Restructuring charges (benefits)	8.9		 	(0.3	)	 	15.3		
Acquisition and strategic investment related charges	1.3		 	1.0		 	10.2		
Strategic partnership-related charges	—		 	—		 	0.8		
Loss on equity investments	1.5		 	0.8		 	1.1		
Recognition of previously unrecognized tax benefits	—		 	(25.4	)	 	—		
Income tax effect of non-GAAP exclusions	(10.8	)	 	(11.2	)	 	(9.3	)	
Non-GAAP net income	$	77.2		 	$	198.7		 	$	92.7		
 	 	 	 	 	 	
GAAP diluted net income per share	$	0.06		 	$	0.49		 	$	0.09		
Non-GAAP diluted net income per share	$	0.23		 	$	0.58		 	$	0.26		
Shares used in computing diluted net income per share	335.1		 	340.8		 	352.7		

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