Juniper Networks Juniper Networks 1999 Annual Report 1999 Annual Report
Significant Events Significant Events February 1996 – Juniper Networks founded June 1996 – Kleiner, Perkins, Caufield & Byers invested in Juniper Networks July 1996 – IBM technology partnership formed: ASIC tools and foundry August 1996 – New Enterprise Associates invested in Juniper Networks February 1997 – Management team put in to place July 1997 – Corporate investment round, Juniper Networks raised $46M September 1997 – Solectron manufacturing partnership established: 100% outsourced December 1997 – JUNOS operating system shipped to customers April 1998 – All ASIC chips completed, right the first time September 1998 – First wire-speed M40 Internet Backbone Router shipped December 1998 – First quarter of revenue: $3.8M March 1999 – Cable & Wireless USA deployed M40 backbone – Expansion into Europe: Ericsson investment + OEM agreement April 1999 – UUNET selected M40 router for core of its network June 1999 – Initial Public Offering: Proceeds of $63M September 1999 – Secondary Offering: Proceeds of $275M October 1999 – Alcatel signed global distribution agreement November 1999 – Three-for-one stock split announced – iaxis selects M40 router for Pan-European backbone – Expansion into Asia: Opened Hong Kong office December 1999 – M20 Internet Backbone Router announced – Verio selected M20 router for high-speed access – Annual revenue exceeds $100M – First quarter of profitability
Financial Highlights Financial Highlights Statements of Operations Data (In thousands, except per-share amounts) Years ended December 31, 1999 1998 1997 1996 Net revenues $ 102,606 $ 3,807 Pro forma net loss (i) $ (4,748) $ (29,736) Pro forma basic and diluted net loss per share (i)(ii) $ (0.04) $ (0.27) Shares used in computing pro forma basic and diluted net loss per share (ii) 131,480 111,210 Net loss $ (9,034) $ (30,971) $ (10,363) $ (1,799) Basic and diluted net loss per share $ (0.10) $ (0.80) $ (0.40) $ (0.15) Shares used in computing basic and diluted net loss per share 94,661 38,871 25,773 11,874 (i) Pro forma net loss excludes the amortization of goodwill, purchased intangibles, and deferred compensation charges. (ii) Pro forma basic and diluted shares outstanding include convertible preferred stock using the if-converted method from the original date of issuance. The calculation excludes common stock equivalents, as their effect would be anti-dilutive. All results reflect the three-for-one split of our common stock effective January 18, 2000. Balance Sheets Data (In thousands) As of December 31, 1999 1998 1997 1996 Cash, cash equivalents, and short-term investments $ 345,958 $ 20,098 $ 46,227 $ 9,468 Working capital $ 322,170 $ 14,432 $ 44,691 $ 9,315 Total assets $ 513,378 $ 36,671 $ 50,210 $ 10,388 Stockholders’ equity $ 457,715 $ 17,065 $ 46,048 $ 9,728 Actual results could differ materially from those anticipated in forward-looking statements in this document as a result of certain factors, including those set forth in the risk factors described in the Company’s SEC filings, including its recent Annual Report on Form 10K.
To our shareholders To our shareholders We have also expanded our T here have been two fundamental principles driving our business since its inception in 1996, and both remain true today. First, there is significant value in a global support through world- wide distributors, including purpose-built solution dedicated to serving the needs of Alcatel and Ericsson, as well Service Providers in this new Internet economy. Second, as numerous country-specific the Internet will expand to become the primary fabric distributors and resellers. with which we will communicate, based on the Internet We have gone through a Protocol (IP) standard. significant learning curve in 1999, starting in the discovery Purpose-Built Internet Solutions stage, establishing interopera- The success of the purpose-built approach depends bility, and rapidly entering the on a company being totally focused on solving the stage of production delivery in which we meet mission- problems of an entirely new market segment, and works critical expectations. Our strategy has been to maximize best if that segment is both fast moving and large. When the leverage gained from this learning to more fully serve these factors converge, history strongly supports the the IP infrastructure, and to hasten the deployment and emergence of a new company, a category leader, with the performance upgrade of the Internet worldwide. opportunity to control its own destiny. Juniper Networks has been purpose-built to lead the category known as Looking Forward the IP infrastructure, the heart of the exploding Internet As we enter into 2000, we believe that the Internet opportunity, and the accomplishments of the last year is evolving into a multiservice network carrying voice, have been the result of our focus on this mission. video, and corporate information, as well as the mail One cornerstone of our success has been timely and E-commerce services we have come to expect. delivery of quality software. We delivered four releases We see not only the coming of this concept in networks of our JUNOS operating system throughout the year and at an accelerating pace, but also the opportunity for early customers have successfully installed each of them. Such and aggressive adopters to stake their claims on increas- regular releases, particularly when delivered at the Juniper ing market share and customer coverage. We continue to Networks standard of quality, keep our customers on the push to new levels of performance, reliability, and intelli- cutting edge of technology. gence necessary to deliver these multiple services. We also continued to deliver on Application In summary, we are pleased with our results both Specific Integrated Circuits (ASICs), which, as optics technically and commercially as we exited 1999. Our make bandwidth plentiful, are a key and complex piece 1999 revenue of $102.6 million, up from $3.8 million in of the systems needed to provide both performance and 1998, was a confirmation of the quality of our execu- value-added functionality for global IP networking. tion, and the depth and commitment of the people at Juniper Networks. Leveraging the Lead In 2000, as in 1999, we remain very focused on both Our customer base has broadened to more than 50 the opportunities for our purpose-built approach in this worldwide, and Juniper Networks products have been market and the challenge of consistent execution, which deployed in the largest networks in the industry. New we must meet in order to achieve our goals. solution spaces have opened in the network as well, which are ideally served by the combination of JUNOS I would like to thank our employees, customers, software and our ASIC functionality. Hence, creating new investors, suppliers, and other business partners for platforms is a highly leverageable part of our product their continued confidence and commitment to strategy. We have seen the first example of leveraging Juniper Networks. this technology with the M20 platform, announced and delivered in December 1999, built to extend our success Scott Kriens at the core of the network. Increasing bandwidth at the Internet’s core has created demand for this new class of router at the network edge. Chairman, President and CEO
Solutions for the New IP Solutions for the New IP Infrastructure Infrastructure Our Business specialized needs of high-growth, high-speed service Juniper Networks provides high-performance IP providers, the M20 and M40 routers enable operators networking systems that enable service providers to meet to scale networks to OC-48/STM-16 speeds (2.5 gigabits- the infrastructure demands of the rapidly growing Internet. per-second). By supporting Multiprotocol Label Switching (MPLS), they offer a rich set of tools both for traffic engi- Market Opportunity neering and for leveraging a common IP infrastructure Juniper Networks has been born and bred for the for public and private services. Internet, or IP infrastructure market opportunity. We are the only company in our market that has been focused, Services Portfolio since inception, on the challenge of serving a network Juniper Networks provides world-class services of over 1 billion users. Today’s Internet has more than that help our customers fully maximize their network 250 million users and is more than doubling annually; investment. Customers can choose from a flexible, demanding new solutions that anticipate the performance comprehensive portfolio of offerings. and reliability expected of both business and consumer • Support services that meet particular maintenance users. The Internet is destined to become the unifying and hardware delivery needs connectivity fabric for data, voice, and video traffic, • Professional services for supplemental consulting, requiring a new infrastructure capable of meeting these design, and project management resources severe and unrelenting demands. It is our focus on the needs of large network providers that allows Juniper • Education services for product and technology training Networks products to be deployed as backbone tech- Manufacturing nology today in the world’s largest networks. The manufacturing of Juniper Networks products, is Our Solutions for the New IP Infrastructure entirely outsourced for better asset utilization, faster To help our customers remain competitive and grow time-to-market and time-to- with the new IP infrastructure, we have developed and volume, and the lowest total delivered a family of router platforms that deliver wire- product costs. rate performance, market-leading port density, flexible Juniper Networks has and manageable control over traffic, optimal bandwidth a strategic technology efficiency, and solutions that scale easily. This family relationship with IBM to consists of the M20™ and M40™ Internet backbone routers manufacture all the with JUNOS™ Internet software. Application-Specific Integrated Circuits (ASICs) Product Portfolio designed for our Internet back- The Juniper Networks M20 and M40 Internet bone devices. Under the agreement, IBM is responsible backbone routers represent an entirely new class of for all aspects of the production of the ASICs using the routers that share common JUNOS software, services, latest silicon production technologies. and ASIC technology for full compatibility across critical applications such as backbone bandwidth management, Solectron provides Juniper Networks with a turnkey high-speed access, public and private peering, and manufacturing operation. Solectron manufactures products content and web hosting. from the prototype stage to full production and performs tasks such as material procurement, final assembly, test- Both the M20 and M40 routers deliver wire-rate value ing, control, and shipment to our customers. added services at speeds of up to 40 million packets per second, during both normal and adverse network Sales and Distribution conditions. They use the same flexible portfolio of Juniper Networks complements its direct sales efforts interface types with the highest port densities per rack- with highly focused value-added resellers and distributors. inch on the market today. Designed specifically for the
Corporate Officers Corporate Officers and Directors and Directors Executive Officers Directors Scott Kriens William Hearst Chairman, President and Chief Executive Officer Kleiner, Perkins, Caufield & Byers Pradeep Sindhu Vinod Khosla Vice Chairman and Chief Technical Officer Kleiner, Perkins, Caufield & Byers Marcel Gani C. Richard Kramlich Chief Financial Officer New Enterprise Associates Steven Haley William R. Stensrud Vice President of Worldwide Sales and Service Enterprise Partners Gary Heidenreich Vice President of Operations Peter Wexler Vice President of Engineering Corporate and Investor Corporate and Investor Information Information Corporate Headquarters Transfer Agent Juniper Networks The transfer agent and registrar for the common 385 Ravendale Drive stock is Norwest Bank Minnesota, N.A. Mountain View, California 94043 800.767.3330 650.526.8000 Legal Counsel Investor Relations Wilson Sonsini Goodrich & Rosati For further information on the company, please Palo Alto, California visit www.juniper.net/company/investors. Auditors Stock Listing Ernst & Young LLP Juniper Networks common stock is quoted on the Nasdaq National Market under the symbol JNPR. Juniper Networks is a registered trademark of Juniper Networks, Inc. JUNOS, M20, and M40 are trademarks of Juniper Networks, Inc. All other trademarks, service marks, registered trademarks, or registered service marks may be the property of their respective owners.
385 Ravendale Drive • Mountain View, California 94043 • 650.526.8000 www.juniper.net