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Juniper Networks Disappointed with Performance in 2H17

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Revenue decline in Cloud

Juniper Networks’ (JNPR) revenues fell over 37.0% YoY (year-over-year) in 4Q17 in the Cloud vertical. In 3Q17, its Cloud revenues fell over 4.0% YoY. This vertical has been Juniper Networks’ primary revenue driver over the last few quarters.

Cloud revenues in 2016 rose 30.0% YoY to $1.3 billion, up from $1.0 billion in 2015. Juniper Networks attributed this decline in the last two quarters to a spending delay from large customers due to an architectural shift from scale-up to scale-out. Juniper Networks estimates year-over-year revenue growth in Cloud during the second half of 2018.

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Security revenues

Although Juniper Networks’ Security revenues rose 8.0% YoY in 4Q17, they fell 8.0% in 2017. The firm is banking on a refreshed security portfolio and competitive pricing to attract potential customers. Its security sub-segment, which includes next-gen firewalls and service provider offerings, drove revenues for the firm in 4Q17.

While Juniper Networks has expanded its product portfolio and has gained several customers, the firm is competing with niche players and tech giants such as Cisco Systems (CSCO), Fortinet (FTNT), Palo Alto Networks (PANW), and FireEye (FEYE) in network security. Juniper Networks’ revenues rose in 4Q17 after declining for seven consecutive quarters.

Juniper Networks’ CEO, Rami Rahim, stated, “In summary, while we’re not satisfied with our second half 2017 results or our outlook for Q1 2018, we’re confident that we have the right strategy and solution portfolio needed to win in the market and drive a return to growth by the end of 2018.”

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