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Juniper Networks, Inc. Reports Q3'99 Financial Results Net Revenue $29.6M; Net Loss Per Share $(0.04)

Mountain View, CA - October 19, 1999 - Juniper Networks, Inc. (Nasdaq:JNPR), a leading provider of next-generation Internet infrastructure systems, today reported its third quarter results for the period ending September 30, 1999.

Net revenues for the third quarter were $29.6 million, compared with $17.6 million for the second quarter, an increase of 68%. Net loss for the third quarter of 1999 was $1.6 million or $(0.04) per share, compared with a loss of $3.9 million or $(0.22) per share in the second quarter of 1999. Pro forma basic and diluted net loss per share (including the effect of the conversion of convertible preferred stock prior to the initial public offering), was $(0.09) per share for the second quarter of 1999.

Net revenues for the first nine months of 1999 were $57.2 million. Net loss for the first nine months of 1999 was $12.1 million or $(0.47) per share, compared with $21.7 million or $(1.82) per share during the same nine month period in 1998. Pro forma basic and diluted net loss per share would have been $(0.29) per share for the nine months ended September 30, 1999, compared with $(0.60) per share for the same nine month period in 1998.

In a recent Data Communications test of high performance routers, the Juniper Networks M40 Internet backbone router earned the "Tester's Choice" award as the best Internet backbone router available today. Data Communications, well respected for its sophisticated testing, stressed the M40 by exposing it to unpredictable, high volume data and control traffic.The M40 proved that it can handle an Internet six times larger than today's version, and it moved packets faster than any device we've ever tested. *

"The Data Communications testing, coupled with our third quarter results, reflect independent confirmation of both the technical and commercial strengths of the Juniper Networks franchise," said Scott Kriens, Chairman and CEO of Juniper Networks. "The world's largest service providers continue to make Juniper Networks their choice to build the new IP infrastructure," Kriens said.

About Juniper Networks, Inc.

Juniper Networks is a leading provider of next-generation Internet infrastructure systems that are designed to meet the scalability, performance, density, and compatibility requirements of rapidly evolving, optically-enabled IP networks. The company's purpose-built M40 Internet backbone router uses JUNOS software, ASICs, and line-rate performance to provide new Internet infrastructure solutions for service providers. The M40 router is used by some of the world's leading service providers.

Juniper Networks service, manufacturing teams, and Internet engineers support the M40 router. The company is headquartered in Sunnyvale, California**, with international offices in Leatherhead, UK, Tokyo, Japan and Amsterdam, The Netherlands. For more information on Juniper Networks, please contact the company at 408-745-2000 or visit the Web site at https://www.juniper.net.

Juniper Networks is a trademark of Juniper Networks, Inc. All other trademarks are property of their respective companies.

Actual results could differ materially from those anticipated in forward-looking statements in this release as a result of certain factors, including those set forth in the risk factors described in the Company's SEC filings, including its recent S-1 Registration Statement.

* Source: Data Communications

** Address and phone number have been updated since original publish date.

(In thousands)
September 30, 1999 December 31, 1998
Assets (Unaudited)(2) (1)
Current assets:
Cash and cash equivalents $ 36,475 $ 20,098
Short-term investments 48,124 -
Accounts receivable 13,623 8,056
Prepaid expenses and other current assets 3,471 680
Total current assets 101,693 28,834
Property and equipment, net 9,352 7,702
Long-term investments and other long-term assets 36,576 135
Total Assets $ 147,621 $ 36,671
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 8,375 $ 4,745
Other accrued liabilities 10,659 1,798
Deferred revenue 15,359 5,639
Current portion of obligations under capital leases - 2,220
Total current liabilities 34,393 14,402
Long-term liabilities 48 5,204
Common stock and additional paid-in capital 172,097 65,351
Deferred stock compensation (3,670) (5,153)
Accumulated deficit (55,247) (43,133)
Total Liabilities and Stockholders' Equity $ 147,621 $ 36,671
(1) Derived from audited financial statements
(2) Subsequent to the end of the third quarter, the Company closed a public offering raising net proceeds of approximately $324.2 million.

    Three Months Ended
September 30,
  Nine Months Ended
September 30,
    1999 1998   1999 1998
Net revenues   $ 29,564 $ -   $ 57,164 $ -
Cost of revenues   12,490 382   26,883 601
Gross profit (loss)   17,074 (382)   30,281 (601)
Operating expenses:
Research and development   11,510 8,284   25,682 17,842
Sales and marketing   5,610 1,215   12,062 2,498
General and administrative   1,701 562   3,454 1,341
Amortization of deferred stock compensation   802 374   2,597 587
Total operating expenses   19,623 10,435   43,795 22,268
Operating loss   (2,549) (10,817)   (13,514) (22,869)
Interest income, net   1,365 238   1,925 1,184
Loss before income taxes   (1,184) (10,579)   (11,589) (21,685)
Provision for income taxes   403 -   525 2
Net loss   $ (1,587) $ (10,579)   $ (12,114) $ (21,687)
Basic and diluted net loss per share   $ (0.04) $ (0.82)   $ (0.47) $ (1.82)
Shares used in computing basic and diluted net loss per share   45,153 12,895   26,009 11,906
Pro forma basic and diluted net loss per share (i)     $ (0.29)   $ (0.29) $ (0.60)
Shares used in computing pro forma basic and diluted net loss per share (i)     37,008   42,417 36,019

(i) 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. For the quarter ended September 30, 1999, approximately 9.5 million common stock equivalent shares were excluded, which had they been included would have resulted in 54,661 shares outstanding, or a loss of $(0.03) per share.