Jul. 23, 2015, 7:33 PM
- Juniper (NYSE:JNPR) has made fresh 52-week highs after beating Q2 estimates with the help of a slight Y/Y increase in Service Provider revenue (contrasts with an 8% Q1 drop). In addition, Q3 guidance is for revenue of $1.23B (+/- $20M) and EPS of $0.50-$0.54, above a consensus of $1.16B and $0.46.
- Business line/segment performance: Routing revenue -3% to $602.4M; switching -5% to $190.2M; security -4% to $107.1M. Service provider revenue up fractionally to $835.3M; enterprise -3% to $386.9M.
- Financials: $600M was spent on buybacks, and another $500M has been added to Juniper's authorization, bringing its size back up to $675M. Thanks to job cuts, R&D, sales/marketing, and G&A spend respectively fell by $3.9M, $25.6M, and $4.3M Y/Y to $251.6M, $232.4M, and $56.3M. Juniper ended Q2 with $3.08B in cash/investments, and $1.95B in debt.
- Archrival Cisco (NASDAQ:CSCO) is following Juniper higher AH. Cisco rose 1.7% in regular trading after announcing it's selling its set-top unit (has been seeing major sales declines/share loss) to Technicolor for $600M. The company remains a major provider of infrastructure hardware and software - for example, the cloud-based Videoscape platform - to pay-TV providers.
- Juniper's Q2 results, PR
Jul. 23, 2015, 8:37 AM
- France's Technicolor (OTCQX:TCLRY) is buying the set-top box and cable modem business from Cisco Systems (NASDAQ:CSCO) for €550M (about $600M) in cash and stock, after many Cisco investors called for the company to get out of set-tops entirely despite billions invested.
- About $450M of the deal is in cash and $150M in stock. The deal is expected to close in Q4 or the first quarter of next year, after regulator OKs.
- Set-tops have been in decline, making for a drag on Cisco's video business. Google offloaded its own Motorola Home business to Arris Group for more than $2B last year.
- Premarket: CSCO +1%.
Jul. 14, 2015, 7:08 PM
- "Cisco's (NASDAQ:CSCO) analysis suggests that the average large enterprise has 54-plus security vendors, with chief information officers finding it an extremely tough and convoluted landscape to manage," reports UBS' Amitabh Passi in a Tuesday note. "We don't believe Cisco has any delusions of replacing 50-plus vendors with just itself, but the goal is to simplify the landscape."
- Passi adds new CEO Chuck Robbins wants to grow Cisco's share of enterprise security infrastructure spend to 20%-30% from a current 9%, something very tough to do via organic growth alone. He adds John Chambers (still chairman) has a "mandate" to build out Cisco's security ops.
- After meeting with Cisco security execs, BMO's Tim Long also suggests more M&A is on tap. "Cisco believes that one of the key changes that will occur in the industry over the next few years is that customers will increasingly move from point vendors that provide niche solutions to companies that can provide an architectural approach ... This should also drive increased industry consolidation."
- Passi doubts Cisco will go after a bigger fish such as Check Point or Palo Alto Networks, and instead expects targeted purchases in growth markets where the company has little or no presence, such as identity access, data loss management, and app security testing. Cisco recently spent $635M to buy DNS security tech provider OpenDNS.
- Security's share of IT spend has been steadily growing, thanks in no small part to a flurry of high-profile cyberattacks. Cisco has held its own within the segment, but various smaller firms (FireEye, Fortinet, Palo Alto, etc.) have grown much faster.
- Last month: Cisco outlines security strategy
Jul. 7, 2015, 12:32 PM
- Cisco (CSCO -0.8%) is acquiring MaintenanceNet, a provider of cloud software for managing, renewing, and selling recurring service contracts, for $139M in cash and retention incentives.
- In a blog post, Cisco exec Debbie Dunham notes her company has been offering joint solutions with MaintenanceNet since 2009 to Cisco distributors and resellers. "MaintenanceNet’s software identifies customers with service contracts that are coming up for renewal, overdue, or with products that are not yet covered. Their low-touch solution enables automated quoting, notifications, and, in some cases, ordering online. This helps Cisco partners capture high-volume and low-dollar sales opportunities that may risk being overlooked."
- The deal follows Cisco's $635M deal to buy DNS security software/services provider OpenDNS. In late 2012, the company set a goal of doubling software revenue within 5 years.
Jun. 30, 2015, 8:50 AM
- Continuing its efforts to profit from growing corporate cybersecurity spend and keep fast-growing upstarts (Palo Alto Networks, FireEye, etc.) at bay, Cisco (NASDAQ:CSCO) is acquiring OpenDNS, a provider of cloud-based cybersecurity software and services (e.g. malware/phishing-protection, Web filtering, threat intelligence) that revolve around handling and analyzing domain name requests.
- Cisco is paying $635M in cash and assumed equity awards. The deal is expected to close in FQ1 (the October quarter). The purchase is Cisco's first big acquisition since Chuck Robbins was named John Chambers' successor.
- OpenDNS' products are offered both to businesses and individuals. The company claims 65M+ users, including workers at "thousands of companies from Fortune 500’s to small businesses." It handles over 60B daily DNS queries requests (over 2% of all global requests). For now, partners include a slew of Cisco rivals, such as FireEye, Check Point, and Aruba Networks.
- Cisco: "Combining OpenDNS' broad visibility, unique predictive threat intelligence and cloud platform with Cisco's robust security and threat capabilities will increase awareness across the extended network, both on- and off-premise, reduce the time to detect and respond to threats, and mitigate risk of a security breach." The company recently outlined a security strategy focused on embedding security features throughout its hardware lineup, as well as protecting endpoints.
- The acquisition could pose a challenge to DNS and IP address management hardware/software vendor Infoblox (NYSE:BLOX), which has been growing its security exposure.
- Past Cisco security acquisitions: ThreatGRID, SourceFire
- Yesterday: Cisco unveils IoT System, launches 15 new products
Jun. 29, 2015, 12:52 PM
- Cisco's (CSCO -2.2%) IoT System fuses new and existing hardware, software, and services with the goal of providing an end-to-end networking solution for Web-connected embedded devices used in enterprise and industrial deployments - a device category expected to see major growth in the next several years. GE, Intel, Rockwell, and Toshiba are among Cisco's launch partners.
- Cisco declares its IoT system rests on 6 "pillars": IoT-focused switches, routers, and Wi-Fi hardware (some built in rugged form factors); security products to monitor, detect, and respond to attacks; network analytics software; management/automation software; APIs for developers to build apps on top of the system; and an infrastructure for providing local/distributed computing services for IoT devices (referred to as Fog Computing).
- 15 new products have been announced in tandem with the launch. They include IP surveillance cameras, security analytics software, Fog data services and management software, 7 4G/WiFi-capable industrial routers, an Ethernet switch for factories, and a Wi-Fi access point for mass transit systems.
- "IoT is complex, but many customers want an integrated system within a heterogeneous environment, says Cisco exec Kip Compton about the company's solution, which features proprietary hardware meant to work with 3rd-party devices and software. Colleague Andres Sintes: "[We're] going to help [partners] find a solution down to that specific area of that factory floor, or wherever they need to be, to address that customer need."
- Aside from direct product sales, Cisco benefits from IoT deployments to the extent they increase the amount of traffic handled by carrier and data center networks using Cisco gear. IoT services for Cisco's Intercloud platform were launched earlier this month.
Jun. 24, 2015, 11:54 AM
- Baird has downgraded Fortinet in response to a healthy 2015 run-up, and many security tech peers have joined the company in seeing profit-taking (HACK -1.3%). The Nasdaq is down just 0.1%.
- Decliners include FireEye (FEYE -2.3%), Qualys (QLYS -6.7%), KEYW (KEYW -5.1%), Check Point (CHKP -1.9%), Barracuda (CUDA -2.5%), Vasco (VDSI -2.5%), and Proofpoint (PFPT -1.8%). UBS downgraded FireEye to Neutral two days ago while citing valuation, and also cut Symantec to Sell. RBC has hiked its Qualys target by $6 to $44 today, while reiterating a Sector Perform.
- The selloff comes as an Office of Personnel Management (OPM) official states up to 18M Social Security numbers may have been stolen in a recent breach. FireEye recently ID'd a Chinese group it believes was responsible for the hack.
- Meanwhile, the WSJ has published a column about Check Point's efforts to expand beyond its core firewall market, and thereby keep the likes of Fortinet and Palo Alto Networks at bay. Gartner estimates Check Point had a 22.7% 2014 firewall share, well above #2 Cisco's (NASDAQ:CSCO) 15.9% but down from a 2013 share of 24%.
Jun. 23, 2015, 8:25 AM
- In tandem with its FQ1 report, BlackBerry (NASDAQ:BBRY) has announced a patent cross-licensing deal with Cisco (NASDAQ:CSCO) that will result in BlackBerry getting a license fee; other terms are confidential. The company has also announced pharma industry exec Laurie Smaldone will replace Procter & Gamble vet Claudia Kotchka on the board.
- Segment performance: Though FQ1 revenue missed estimates, software/tech licensing revenue (closely watched) was strong, rising 150% Y/Y to $137M and totaling 21% of revenue vs. 10% in FQ4. Services (hurt by fee cuts) fell to 38% of revenue from FQ4's 47%, and hardware to 40% from 42%.
- Revenue was recognized on 1.1M phone sales, down from 1.3M in FQ4 and 1.6M a year ago; ASP rose $29 Q/Q to $240. 2,600 enterprise customer wins were recorded; 45% of software licenses for the deals were cross-platform.
- Geographic performance: Thanks to the software growth, North American revenue rose 3% Y/Y to $285M. EMEA revenue fell 41% to $245M, Latin America 66% to $42M, and Asia-Pac 43% to $86M.
- Financials: Cost cuts remain aggressive: R&D spend fell 41% Y/Y to $139M, and SG&A 56% to $174M. GAAP Gross margin was 47.1% vs. 48.2% in FQ4 and 46.7% a year ago; non-GAAP GM was 50.3%. The cash balance rose by $50M Q/Q to $3.32B; debt stands at $1.25B.
- Free cash flow was $123M. BlackBerry "continues to target sustainable non-GAAP profitability some time in fiscal 2016."
- Shares have risen to $9.70 premarket. They had sold off in the weeks going into earnings.
- FQ1 results, PR
Jun. 17, 2015, 3:26 PM
- With its Chinese sales continuing to fall in the wake of the 2013 NSA spying scandal and non-stpp hacking accusations between the U.S. and China, Cisco (CSCO +1.1%) says it will invest over $10B in the Middle Kingdom over the next several years, in partnership with local firms and institutions.
- Details about Cisco's spending plans are vague; the company says its funds will go towards equity investments, job creation, and R&D, among other things. The announcement followed meetings between senior Cisco execs, Chinese vice premier Wang Yang, and other government officials.
- The news follows a WSJ report that several Chinese Cisco execs have been asked to step down, and come as Chuck Robbins gets set to take office as CEO, replete with a new management team.
- Cisco's Chinese product orders fell 20% Y/Y in the April quarter; all other Asia-Pac markets were up a combined 8%. In February, Reuters reported Cisco's products had disappeared from a Chinese government list of approved products.
Jun. 11, 2015, 10:09 AM
- Shortly after announcing a debt offering of undisclosed size to help pay for capital returns, Cisco (CSCO +1.7%) has announced it's selling $5B worth of senior unsecured notes.
- The notes have maturity dates ranging from 2018-2025, and sport interest rates ranging from 3-month LIBOR + 31 bps to 3.5%. As previously stated, the funds will at least partly be used to pay for dividends/buybacks.
- Meanwhile, Cisco has continued its Live conference product launches by unveiling an expansion of its Intercloud cloud services platform. A variety of popular cloud developer environments (Docker, Apprenda, etc.) and open-source cloud app platforms (OpenShift, Cloud Foundry, etc.) are now supported, and partnerships have been struck with 35 independent software vendors.
- Cisco is also rolling out services meant to work with IoT devices and extend the reach of enterprise big data/analytics projects, and (notably) to manage hybrid clouds consisting of Intercloud services and enterprise private clouds. Microsoft and VMware have made hybrid cloud management a big selling point for their cloud platforms.
- Cisco says Intercloud is now offered via 65 service provider partners, and has 100+ customers. Last week, the company announced it's buying OpenStack cloud management software vendor Piston Cloud Computing to strengthen both Intercloud and its private cloud offerings.
- Yesterday: Cisco plans debt offering, updates SDN platform, outlines security strategy
Jun. 10, 2015, 12:03 PM
- Cisco (CSCO +1.9%) plans an offering of senior unsecured notes; its size and pricing haven't yet been determined. Net proceeds will be used to help pay for dividends/buybacks, and for other "general corporate purposes."
- The networking giant had $54.4B in cash at the end of its April quarter, but much of it was offshore. Debt stood at $21B.
- Separately, Cisco has used its annual Live conference to announce a refresh for its ACI SDN/network virtualization software platform, as well as additional SDN features for its Nexus data center switch lineup. New ACI features include better integration with Microsoft's Azure cloud platform and System Center systems management tools, better multi-site support and operational ease-of-use, and (with the help of partner CliQr) automated app deployment.
- An SDK supporting 3rd-party app development for Nexus switches been unveiled, and so have new top-of rack Nexus switches. One delivers up to 128 25-gig ports, and another up to 64 40-gig ports.
- Cisco says it now has 2,655 Nexus + ACI customers, and over 585 customers for its APIC SDN controller. The company has been selling clients on ACI's hardware/software integration and support for deep network/app visibility, as it looks to fend off VMware's (NYSE:VMW) rival NSX platform, which can work with commodity hardware.
- Also: Looking to keep fast-growing upstrarts such as Palo Alto Networks and Fortinet at bay, Cisco has unveiled a security strategy that centers around embedding security features throughout its hardware lineup, as well as providing endpoint security software. As part of the effort, Cisco plans to extend the network reach of its FirePOWER security services, and better integrate its NetFlow network monitoring platform with its ISE security policy platform.
- Shares are rallying on an up day for equities.
Jun. 9, 2015, 1:42 PM
- Summit Research's Srini Nandury thinks Nimble Storage's (NYSE:NMBL) recent rally has been fueled by M&A hopes ... and considers them justified. He believes Cisco (NASDAQ:CSCO), EMC, and NetApp (NASDAQ:NTAP) could be among the larger OEMs willing to bid for the hybrid storage array upstart.
- Nandury: "Given that Nimble is one of the best Hybrid storage assets in the market, any buyout offer for Nimble will likely trigger a bidding war as we had seen previously with both Data Domain and 3Par. And, given that Nimble is executing solidly in both SMB and enterprise storage environments, and is expected to roll out both NAS and Object storage in the near-term (12-18 months) and will most likely get acquired, we reiterate our BUY rating on the stock and maintain our $40 PT."
- EMC has bought flash array vendors XtremIO and DSSD; Cisco has bought flash vendor Whiptail; and hard drive giants Seagate and Western Digital have also used M&A to expand their flash offerings. NetApp has relied more on internal R&D to flesh out its product line, but the company's recent top-line woes and CEO change have fueled speculation it could turn to M&A.
- Of note: With a market cap of $2.2B (a deal premium could bring it near $3B), Nimble would be digestible for larger industry players, but not cheap.
Jun. 4, 2015, 9:22 AM
- Officially, Warrior will transitioning to a "strategic advisor" role, as will services SVP Edzard Overbeek. Replacing Overbeek is Joe Cozzolino, formerly the head of Cisco's service provider mobility and video infrastructure ops.
- EMEA/Russia sales chief Chris Dedicoat has been named Cisco's SVP of worldwide sales, and go-to-market chief Karen Walker is now chief marketing officer.
- CIO Rebecca Jacoby has been named Cisco's SVP of operations. She'll "oversee the global supply chain, global business services, security and trust, and IT." IT exex Guillermo Diaz has been promoted to CIO.
- Recently-appointed CFO Kelly Kramer maintains her position, and Pankaj Patel is still in charge of Cisco's tech portfolio and ~25K development engineers.
- Cisco adds it "plans to conduct a comprehensive external search to fill a number of leadership roles for key strategic growth areas for the company." Incoming CEO Chuck Robbins has provided a blog post with more details about the appointments.
- CSCO -0.5% premarket to $28.96, following equity futures lower.
- Three days ago: Cisco presidents Lloyd, Moore leaving
Jun. 3, 2015, 1:26 PM
- IBM (IBM +0.1%) has acquired Blue Box, a provider of managed cloud services for companies deploying private and hybrid clouds based on the open-source OpenStack cloud infrastructure (IaaS) platform.
- Cisco (CSCO +0.1%) is buying Piston Cloud Computing, a provider of software (called CloudOS) for managing and deploying services on commodity servers running OpenStack, as well as popular big data/analytics software platforms such as Hadoop and Spark. Terms for both deals are undisclosed.
- IBM, whose SoftLayer unit already offers OpenStack services, will use Blue Box to "help businesses rapidly integrate their cloud-based applications and on-premises systems into OpenStack-based managed cloud," and that the deal allows it to offer a remotely-managed OpenStack private cloud solution.
- Cisco asserts Piston and its engineers will "help accelerate the product, delivery, and operational capabilities" of its Intercloud platform, which (via service provider partners) provides a network of OpenStack cloud infrastructures running on Cisco hardware and software, and within which workloads can be moved between data centers. It also expects Piston to strengthen its OpenStack private cloud offering, the fruits of last year's acquisition of private cloud services provider Metacloud.
- IBM ended Q1 on a $3.8B/year run rate for its various "cloud delivered as a service" offerings. Synergy Research believes IBM is the third-largest player in the public/private/hybrid cloud services space, trailing Amazon (easily the market leader) and Microsoft.
- Many tech/telecom giants have embraced OpenStack in their efforts to compete against Amazon, Microsoft, and Google's proprietary platforms. Rackspace (RAX +0.7%) remains a top independent OpenStack provider
Jun. 2, 2015, 6:41 PM
- Meg Whitman states at HP's (NYSE:HPQ) annual Discover conference the company's PC/printing spinoff will go into effect on Nov. 1, the start of HP's FY16.
- HP has also used the event to announce a partnership with fast-growing data center switch vendor Arista (NYSE:ANET) to provide a joint reference architecture for deployments combining Arista's switches, HP's servers and storage, and HP's OneView data center management software. The solution is partly aimed at common rival Cisco (NASDAQ:CSCO), which offers solutions pairing its UCS servers and Nexus data center switches.
- Other HP announcements: 1) A new hardware line for its 3PAR StoreServe array family (the StoreServe 20000) declared to provide flash capacity for 25% less than older offerings, as well as much-improved storage densities. 2) Helion CloudSystem 9.0, a new version of HP's cloud management software that supports Amazon Web Service, Microsoft's Azure, and OpenStack, among other cloud environments.
- Arista rose 2.7% in regular trading. After the close, Nomura launched coverage with a Buy rating and $79 target.
Jun. 1, 2015, 2:54 PM
- Cisco (CSCO +0.1%) CTO and chief strategy officer (CSO) Padmasree Warrior will be joining presidents Rob Lloyd and Gary Moore out the door before Chuck Robbins takes office as CEO, Re/code reports. Warrior has been Cisco's CTO since 2008, and its CSO since 2012.
- Meanwhile, Robbins has written a blog post noting Lloyd and Moore's pending departures, and his planned reorg. "Going forward, we will move to a flatter leadership team designed for the speed, innovation and execution that is required of us over the next decade ... I will announce my next generation organizational structure and my leadership team within two weeks."
- Earlier: Cisco presidents Lloyd, Moore leaving as Robbins takes over
Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol based networking products and services related to the communications and information technology industry. It provides a broad line of products for transporting data, voice, and video within buildings and across campuses. The... More
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