Juniper Networks, Inc. (NYSE:JNPR) Q4 2022 Earnings Call Transcript

Ken Miller: Yes. So pricing is factored in, obviously, to our outlook. And the way I would describe it, George, is we expect the majority of that 8% to be volume based. There is definitely a pricing element, but it would be less than half, assuming we did revenue at 8%. Obviously, as we grow, if we were able to grow faster than eight, we did put 8% out there was a bit of a floor, but we talked about at least 8%. The majority of that incremental would also be volume related.

George Notter: Got it. And then as I think about the unit volume piece. Is that really driven by new products, Mistified or ACX or some of the other new initiatives you’ve got? Or do you think it’s — what’s the dynamic between sort of existing versus new products?

Ken Miller: Yes. We’re not giving too much detail on exactly the composition of 2023. But I would say this, though. I mean, I think the relative growth that we’ve outlined in our long-term model and actually that we’ve delivered for the last couple of years. So if you look at it by vertical, I would expect Enterprise to be our fastest-growing vertical and the products associated with Enterprise are predominantly AIDE and campus and branch, as well as some of our CRDC products. Then you could follow that by Cloud, which is predominantly routing and data center switching and then followed by Service Provider would be our slowest-growing vertical. So I do think relative mix of our products and the mix of our verticals from a growth rate perspective is likely to play out similarly in 2023. But at this point, it’s a little bit too early to call the exact components of revenue growth.

Operator: Okay. The next question is coming from Samik Chatterjee with JPMorgan.

Samik Chatterjee: I guess my question was going to be about Service Provider revenues and if you could give us some more color there. It was down year-over-year and quarter-over-quarter. And Rami, I think in your script, you mentioned sort of revenue is going to be the driver or sort of the metric to judge sort of demand from. So what are you seeing in relation to sort of demand from that vertical? You mentioned scrutiny from customers. So are telco customers scrutinizing budgets a bit more than the other verticals? And how should we think of the CapEx positions impacting you here over the sort of next 12 months?

Rami Rahim: Yes. Thanks for the question, Samik. So what we saw in Q4 was mostly, if not entirely a function of supply. And that’s not totally unusual to see this kind of a pullback after a very strong quarter. And if you recall, Q3 was actually a great quarter for Service Provider because we happen to be able to ship quite a large volume of products that was required that was on our balance sheet and also new orders that came in, in the quarter. So — but there’s more that’s happening in the Service Provider segment. First, we’re monitoring closely new products that we have introduced over the last, let’s say, a year or a couple of years or so. and we’re seeing some really strong pickup, which I think gives us confidence in the next few years, if you will, in terms of the dynamics for this segment.