Q2 2013 FINANCIAL RESULTS CONFERENCE CALL Tuesday, July 23, 2013 - PowerPoint PPT Presentation

Q2 2013 FINANCIAL RESULTS CONFERENCE CALL Tuesday, July 23, 2013 2:00 P.M. Pacific Time

Forward Looking Statements Information, statements and projections contained in these presentation slides and related conference call concerning Juniper Networks' business outlook, economic and market outlook, future financial and operating guidance, and overall future prospects are forward looking statements that involve a number of uncertainties and risks. Actual results could differ materially from those anticipated in those forward-looking statements as a result of certain factors, including: general economic and political conditions globally or regionally; business and economic conditions in the networking industry; changes in overall technology spending and spending by communication service providers; the network capacity requirements of communication service providers; contractual terms that may result in the deferral of revenue; increases in and the effect of competition; the timing of orders and their fulfillment; manufacturing and supply chain constraints; ability to establish and maintain relationships with distributors, resellers and other partners; variations in the expected mix of products sold; changes in customer mix; changes in geography mix; customer and industry analyst perceptions of Juniper Networks and its technology, products and future prospects; delays in scheduled product availability; market acceptance of Juniper Networks products and services; rapid technological and market change; adoption of regulations or standards affecting Juniper Networks products, services or the networking industry; the ability to successfully acquire, integrate and manage businesses and technologies; product defects, returns or vulnerabilities; the ability to recruit and retain key personnel; significant effects of tax legislation and judicial or administrative interpretation of tax regulations; currency fluctuations; litigation; and other factors listed in Juniper Network s’ most recent report on Form 10-Q filed with the Securities and Exchange Commission. All information, statements and projections contained in these slides and related conference call speak only as of the date of this presentation and related conference call. Juniper Networks undertakes no obligation to update the information contained in these slides and related conference call in the event facts or circumstances subsequently change. Use of Non-GAAP Financial Measures These presentation slides contain references to certain non-GAAP financial measures. For detailed reconciliation between the non-GAAP financial results presented in these slides and corresponding GAAP measures, please refer to the appendix at the end of this slide deck. In addition, for important commentary on why Juniper Networks considers non-GAAP information a useful view of the company’s financial results, please see the 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 and judgment compensation expenses, acquisition related charges, restructuring charges, impairment charges, litigation settlements and resolutions, gain or loss on equity investments, non-recurring income tax adjustments, valuation allowance on deferred tax assets, and income tax effect of non-GAAP exclusions. 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.

COMPANY REVIEW Kevin Johnson CHIEF EXECUTIVE OFFICER

STRONG RESULTS & GOOD EXECUTION Fourth Consecutive Quarter of Y/Y Growth Service Provider • Good strength in revenue and bookings environment • Wireline/Wireless: Good overall demand; Strength in Americas; Emerging growth in EMEA • Cable/Content: Design wins in core routing and switching; Capex strengthening • Routing: Strong demand in edge; Expect investment in core to pick up Enterprise • Switching and Data Center performed well • Strong demand for EX9200; Record quarter for QFabric family of products • Positive activity in Security bookings

DRIVING INNOVATION AND DIFFERENTIATION OR OR SCALE AND AGILITY AND PERFORMANCE EFFICIENCY

2013 OPERATING PRINCIPLES 1. Expect macroeconomic environment to remain uncertain 2. Expect modest growth in the markets we serve 3. Take share in Routing and Switching and stabilize share in Enterprise Security 4. Expand 2013 operating margins over 2012 5. Continue to generate solid cash flows and prudently allocate capital

SOFTWARE SOLUTIONS DIVISION UPDATE Bob Muglia EXECUTIVE VICE PRESIDENT & GM, SSD

NETWORK SECURITY BUSINESS Bookings Grew 6% Q/Q with Strong Backlog Service Provider Customers • Enabling high-scale firewalls for mobile users • SRX ideally suited for growth of LTE networks Corporate End-users in Campus and Branch • Good Y/Y growth in branch SRX as transition from Screen OS continues • Recovery will occur over multiple quarters Data Center • Shipped Spotlight Secure in Q2; works in conjunction with Junos WebApp Secure • Generating good customer interest • Shipped Junos DDoS Secure

SDN AND SOFTWARE BUSINESS Strong Industry Leadership Position with SDN Strategy SDN CONTROLLER JunosV Contrail Controller Control • Entered Beta in May; pulled in ship date to 2H 2013 • Beta customers in both Enterprise and SP across all three geographies • Positioned to benefit in this area in 2014 and beyond Software Business • Small and growing bookings for broader software business • Moving our software licensing to Juniper Software Advantage

FINANCIAL REVIEW Robyn Denholm CHIEF FINANCIAL OFFICER

Q2 2013 RESULTS: REFLECT CONTINUED GROWTH AND OPERATING IMPROVEMENTS Revenue and Non-GAAP Diluted EPS Revenue ($M) EPS ($) Y/Y growth rate Financial Overview 7% 2% 1% Y/Y $1,200 $0.35  Revenue increased Y/Y for fourth Y/Y Y/Y $1,151 $1,141 -4% quarter in a row $1,118 3% Y/Y Y/Y  Revenue up 9% Q/Q and 7% Y/Y $1,100 $0.30 $1,074 $1,059  Non-GAAP Operating Margin of 18.9% $0.29 $0.28  Non-GAAP Diluted EPS up $0.10 Y/Y $1,000 $0.25 and $0.05 Q/Q $0.24 $900 $0.22 $0.20 Demand Metrics $0.19 $800 $0.15  Book-to-bill greater than 1  Healthy product backlog increased Q/Q $700 $0.10 and Y/Y  Product deferred revenue reduced $600 $0.05 modestly Q/Q $500 $0.00 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13

Q2 2013 REVENUE MIX Revenue in $ Millions Geography Segment Market APAC SSD $175 $235 Enterprise 15% 20% $425 -1% Q/Q -6% Q/Q -7% Y/Y 37% Americas -11%Y/Y PSD Service 23% Q/Q EMEA $675 8% Y/Y $916 Provider $301 59% 80% $726 14% Q/Q 26% 13% Q/Q 15% Y/Y 63% 4% Q/Q 13% Y/Y 2% Q/Q 1% Y/Y 7% Y/Y  Americas: Strong Q/Q growth  Total Routing: $578M  Service Provider : Strength in Enterprise; continuing Q/Q increase in Edge routing in US SP, especially Cable growth in SP with record quarter for MX; first and Content; pockets of revenue for MX2020 strength in EMEA and APAC  EMEA: Q/Q growth driven by  Total Switching: $160M  Enterprise: Q/Q growth Enterprise; SP flat up 22% Q/Q and 15% Y/Y; good driven by Federal and  APAC: SP saw Q/Q growth start to EX9200 Financial Services in US; driven by China, Taiwan and S. broad-based growth in EMEA  Total Security: $126M Korea; Y/Y decline due to weakness in Japan and Focused on stabilizing Enterprise Enterprise share

FINANCIAL RESULTS Non-GAAP Except Revenue Q2‘13 Q1‘13 Q2‘12 Q/Q Change Y/Y Change Revenue $1,150.7M $1,059.2M $1,073.8M 9% 7% Gross Margin % 63.7% 64.6% 63.4% -0.9 pts 0.3 pts R&D $224.5M $237.0M $240.1M -5% -6% Sales & Marketing $247.8M $239.7M $238.1M 3% 4% G&A $43.1M $41.3M $41.7M 4% 3% Total Operating Expense $515.4M $518.0M $519.9M -1% -1% Operating Margin % 18.9% 15.7% 15.0% 3.2 pts 3.9 pts Net Income $148.1M $123.8M $103.1M 20% 44% EPS (Diluted) $0.29 $0.24 $0.19 $0.05 $0.10

CASH FLOW AND BALANCE SHEET METRICS  Operating net cash, cash equivalents and investments of $2.8B Cash Position  Net cash flows from operations of $284M  $106M or 6.4M shares, average price of $16.45/share Share Repurchase  40 days DSO Product Deferred Revenue  Healthy level at $278M

HISTORICAL SOURCES/USES OF CAPITAL 2008 - 1H 2013 Demonstrated ability and commitment to generate strong cash flows, enabling investments in the business and capital distribution to shareholders $1.0 ($1.3) Financing Capital $4.4 Proceeds Purchases ($0.5) ($1.8) M&A Cash and Share cash Repurchases $3.8 (gross) equivalents from Operations June 30, 60% Offshore 2013 $2.0 Cash, cash FY08 equivalents Beginning & Cash & Investments 40% Onshore Investments Invested in Capital Cash the Business Generated Distribution In Billions Share Repurchases shown, net of proceeds from share issuances

Q3 2013 OUTLOOK 3 Months Ending September 30, 2013 Non-GAAP (Except for Revenue and Share Count) Revenue Between $1,140 million and $1,180 million 64.5%, plus or minus half a percent Gross Margin $525M, plus or minus $5 million OPEX At mid-point of revenue guidance, expect 19.5% Operating Margin Between $0.29 and $0.32 per diluted share EPS Approximately 28% Tax Rate Assume flat with Q2’13 Share Count

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