Summary of Extreme Networks (EXTR) FY Conference Call - May 13, 2025 Company Overview - **Company**: Extreme Networks (EXTR) - **Industry**: Networking and Hardware Key Points Macro Environment and Demand - **Current Demand**: No significant impact from macroeconomic concerns observed; demand remains strong, particularly in the education sector [2][3][4] - **Growth Opportunities**: Extreme Networks is experiencing growth in higher education, capturing market share despite being a smaller player [5][6] - **Market Characteristics**: The company operates in 19 different markets, each with unique growth characteristics [5] Supply Chain and Tariffs - **Tariff Management**: The company has established processes to reclaim tariffs and has adapted its supply chain to mitigate impacts [11][12][13] - **Supply Chain Resilience**: No current impact from tariffs; supply chain operations have been adjusted to include manufacturing in Taiwan, Vietnam, and other countries [11][12] - **Pricing Strategy**: The company plans to maintain stable pricing through June 30, 2025, despite potential tariff-related price increases [16] Bookings and Sales Strategy - **Bookings Performance**: Reported the best bookings in six quarters, with minimal pull-in action from customers [20][22] - **Sales Execution**: Improved execution attributed to a revamped marketing strategy and targeted regional sales efforts [21][22] - **Large Deals**: Increased success in securing deals over $1 million, indicating a shift towards larger contracts [24][26] Competitive Landscape - **Market Positioning**: The company is focused on taking market share from larger competitors like Cisco, leveraging differentiated technology [34][41] - **Technology Differentiation**: Unique capabilities in network provisioning and resilience are key competitive advantages [34][36] - **Customer References**: Winning large customers enhances credibility and opens up further opportunities [39][40] Future Growth Drivers - **AI Integration**: The company aims to lead in AI for networking, with plans to unveil new capabilities that enhance operational efficiency [42][46] - **Campus Refresh Drivers**: Upgrades driven by advancements in WiFi technology and the need for high-performance networks [54][56] - **E-Rate Programs**: The E-Rate funding program for K-12 schools is significant for the company, contributing about 7% of its business [61][64] Financial Outlook - **Gross Margin Goals**: Targeting gross margins of 64% to 66% through product margin improvements and higher recurring revenue from the new platform [65][67] - **Capital Allocation**: Focused on share buybacks with a new authorization of $200 million, while remaining cautious about M&A opportunities [68][71] Customer Retention and Platform Strategy - **Platform One**: The new platform is expected to enhance customer retention due to bundled services, similar to a SaaS model [72][73] Additional Insights - **Visibility and Reporting**: Enhanced visibility into customer inventory and bookings compared to the post-COVID period [29][32] - **Cybersecurity Concerns**: Increasing importance of modern networking infrastructure due to rising cybersecurity threats [60] This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting Extreme Networks' current market position, growth strategies, and financial outlook.

Summary of Extreme Networks (EXTR) FY Conference Call - May 09, 2025 Company Overview - **Company**: Extreme Networks (EXTR) - **Industry**: Networking technology Key Financial Performance - **Quarterly Performance**: Achieved sequential revenue growth, bucking typical seasonal trends, with strong bookings performance, the best in the last six quarters [4][5] - **Cash Flow**: Strong operational cash flow of $30 million, with a healthy non-GAAP earnings of $0.21 per share [6] - **Fourth Quarter Guidance**: Projecting to reach $300 million in revenue at the midpoint of guidance, indicating improved scale and bookings [7] Geographic and Segment Performance - **Government Sector**: Strong performance in government spending, particularly in Europe and Asia Pacific, with limited exposure to federal risks in the U.S. [10][11] - **Europe**: Notable recovery in spending, with expectations for sustained growth due to increased military investments amid geopolitical tensions [14][15][16] - **Education Sector**: E-Rate program remains unaffected by federal spending cuts, with strong bookings driven by the uncertainty surrounding competitors [25][26][27] Competitive Landscape - **Tariff Management**: Implementing various mitigation strategies to manage potential tariff impacts, with limited exposure of approximately $1.5 million expected in the fourth quarter [20][21] - **Competitor Pricing**: Awareness of potential price increases from competitors like Juniper and Cisco, with a readiness to adjust pricing accordingly [23][24] - **Market Dynamics**: Favorable competitive environment due to challenges faced by larger competitors like HP and Juniper, and Cisco's struggles with integration and licensing complexity [71][76][82] Product and Technology Developments - **Platform One**: Introduction of a unified platform that integrates AI, security, and cloud management, enhancing customer experience and operational efficiency [90][91][110] - **AI Integration**: Focus on bringing advanced AI capabilities to networking, differentiating from competitors by offering automation and improved network management [66][68] - **Channel Strategy**: Strengthening relationships with channel partners and expanding managed service provider (MSP) offerings, with a goal to increase the number of MSPs to 75 by year-end [35][92] Future Outlook - **Gross Margin Targets**: Aiming for gross margins of 64-66%, with improvements expected from a shift towards subscription and recurring revenue models [99][100] - **Inventory Management**: Plans to normalize inventory levels to around $80 million over the next few quarters, with a focus on balancing raw materials and finished goods [55][57] - **Market Share Growth**: Anticipating growth in subscription revenue through bundled offerings and private offers for large customers [93][94] Conclusion - **Investor Message**: The company is on track for consistent growth, with excitement surrounding the launch of Platform One and its potential to differentiate Extreme Networks in the competitive landscape [114][115]

Investors might want to bet on Extreme Networks (EXTR) , as it has been recently upgraded to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.Individual investors ...

Group 1 - Extreme Networks (EXTR) has shown a significant price increase of 26.3% over the past four weeks, with a mean price target of $18.75 indicating a potential upside of 33.8% from the current price of $14.01 [1] - The mean estimate consists of six short-term price targets with a standard deviation of $3.31, suggesting variability in analyst predictions; the lowest estimate is $15 (7.1% increase), while the highest is $22.50 (60.6% increase) [2] - Analysts have shown strong agreement in revising earnings estimates higher, which correlates with potential stock price movements, indicating a positive outlook for EXTR [11][12] Group 2 - The Zacks Consensus Estimate for EXTR's current year earnings has increased by 4.9% over the last 30 days, with two estimates moving higher and no negative revisions [12] - EXTR holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, suggesting a strong potential for upside in the near term [13] - While price targets can be misleading, the direction implied by the consensus price target for EXTR appears to be a useful guide for potential price movement [10][13]

Market Overview - The total addressable market for Enterprise Networking solutions is estimated to exceed $47 billion, growing at approximately 13% annually over the next five years[141]. - Cloud networking is projected to be an $11 billion segment, with a growth rate of 14% annually over the next five years[144]. - The company aims to expand its technology foothold in the cloud networking segment, anticipating that the cloud networking compound annual growth rate will outpace that of on-premises managed networking[148]. Product and Technology Developments - The Platform ONE solution integrates networking, security, and AI, aiming to reduce complexity and improve productivity for enterprises[143]. - AI capabilities in Extreme Platform ONE will enhance network performance and troubleshooting, optimizing mean time to resolution for technical issues[145]. - The introduction of Extreme AI Expert aims to optimize networks and reduce costs in design and implementation[145]. - The integration of AI into networking and security solutions is set to enhance the overall customer experience and operational efficiency[146]. Financial Performance - Net revenues for Q3 fiscal 2025 reached $284.5 million, a 34.8% increase from $211.0 million in Q3 fiscal 2024[148]. - Product revenues increased by $71.6 million or 67.3% to $178.1 million in Q3 fiscal 2025 compared to $106.4 million in Q3 fiscal 2024[149]. - Subscription and support revenues rose by $1.9 million or 1.8% to $106.4 million in Q3 fiscal 2025, compared to $104.6 million in Q3 fiscal 2024[151]. - Total gross margin improved to 61.7% of net revenues in Q3 fiscal 2025, up from 56.8% in Q3 fiscal 2024[148]. - Operating income for Q3 fiscal 2025 was $10.4 million, a significant recovery from an operating loss of $62.5 million in Q3 fiscal 2024[148]. - Cash flows from operating activities were $70.1 million for the nine months ended March 31, 2025, compared to $40.0 million for the same period in the previous year[148]. Cost Management and Expenses - Total operating expenses decreased by $17.3 million or 9.5% in Q3 fiscal 2025, reflecting cost management efforts[156]. - Research and development expenses increased by $1.1 million or 2.1% for Q3 fiscal 2025, primarily due to higher personnel costs[158]. - Sales and marketing expenses decreased by $7.9 million or 9.0% for the three months ended March 31, 2025, primarily due to a $4.3 million decrease in personnel costs[161]. - General and administrative expenses increased by $4.3 million or 17.1% for the three months ended March 31, 2025, mainly due to a $6.7 million increase in system transition costs[164]. Cash Flow and Financing Activities - Cash flows provided by operations for the nine months ended March 31, 2025, were $70.1 million, including net income of $0.3 million and non-cash expenses of $86.0 million[189]. - As of March 31, 2025, cash and cash equivalents totaled $185.5 million, an increase from $156.7 million as of June 30, 2024[179]. - The company repurchased 853,247 shares of common stock at a total cost of $13.0 million during the three and nine months ended March 31, 2025[180]. - Net cash used in financing activities for the nine months ended March 31, 2025, was $23.1 million, compared to $109.9 million in the same period of 2024[188]. - Cash flows used in investing activities for the nine months ended March 31, 2025, were $18.1 million, an increase from $13.6 million in the same period of 2024[191][192]. Debt and Commitments - As of March 31, 2025, the company had $182.5 million of debt outstanding, with an average daily outstanding amount of $194.3 million during the quarter[196][201]. - The company had non-cancelable commitments to purchase $36.0 million of inventory as of March 31, 2025[197]. - Contractual commitments to suppliers amounted to $19.4 million due through fiscal year 2027[198]. - The value of obligations under operating leases was $55.3 million as of March 31, 2025[198]. Foreign Exchange and Interest Rate Sensitivity - Foreign exchange forward contracts not designated as hedging instruments had a notional amount of $52.2 million as of March 31, 2025, compared to $15.5 million in 2024[204]. - For the nine months ended March 31, 2025, the company recognized foreign currency transaction net gains of $0.5 million, slightly up from $0.4 million in the same period of 2024[204]. - The company experienced foreign currency transaction net losses of $0.9 million for the three months ended March 31, 2025[204]. - Interest rate sensitivity indicates that a 100 basis point increase in interest rates would result in an increase in interest expense of $1.943 million[202].

Extreme Networks (EXTR) came out with quarterly earnings of $0.21 per share, beating the Zacks Consensus Estimate of $0.19 per share. This compares to loss of $0.19 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 10.53%. A quarter ago, it was expected that this maker of network infrastructure equipment would post earnings of $0.18 per share when it actually produced earnings of $0.21, delivering a surprise of 16.67%.Over the l ...

Extreme Networks (EXTR) Q3 2025 Earnings Call April 30, 2025 08:00 AM ET Company Participants Stan Kovler - SVP of Corporate Development & Investor RelationsEd Meyercord - President & CEOKevin Rhodes - Executive VP & CFODavid Vogt - Managing DirectorTimothy Horan - Managing Director Conference Call Participants Mike Genovese - Senior Research AnalystChristian Schwab - Senior Research AnalystRyan Koontz - Senior AnalystDave Kang - Senior AnalystEric Martinuzzi - Senior Research Analyst Operator Thank you for ...

Financial Data and Key Metrics Changes - Revenue for Q3 reached $284.5 million, a 35% increase year over year and a 2% sequential increase [6][18] - Earnings per share were $0.21, consistent with the prior quarter and significantly up year over year [17] - Gross margin for the quarter was 62.3%, reflecting a 110 basis point sequential decrease but a 470 basis point increase year over year [22] Business Line Data and Key Metrics Changes - Product revenue increased to $178.1 million, up 67% year over year and 3% quarter over quarter, with wireless solutions growing 12% sequentially [18] - Subscription business saw annual recurring revenue reach $184 million, up 13.4% year over year [18] - Total deferred recurring revenue grew 7% year over year to $578 million, indicating strong momentum in the recurring revenue model [18] Market Data and Key Metrics Changes - The Americas region revenue grew 19% year over year, while EMEA revenue surged 81% year over year [19] - APAC revenue remained flat year over year, but bookings were up double digits [19] - The company reported its best bookings quarter in the past six quarters, with strong performance across various verticals including government, transportation, and education [20] Company Strategy and Development Direction - The company is focused on expanding its market share through innovative solutions like Extreme Platform One, which integrates AI for networking [14][61] - The competitive position is strengthening with significant wins against major players like Cisco and HP, driven by differentiated campus fabric solutions [8][42] - The company is committed to operational efficiency and product mix optimization, with expectations for increased margins and cash flow [22][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained customer demand based on strong funnel generation and pipeline growth [7][16] - The company anticipates continued revenue growth and improved profitability in Q4, with guidance for revenue in the range of $295 million to $305 million [28][29] - Management noted that the tariff situation is dynamic but currently has minimal impact on demand [35][38] Other Important Information - The company repurchased $13 million worth of shares during the quarter and announced an additional $200 million buyback authorization for the next three years [25] - The company has transitioned to a net cash position of $3 million, a significant improvement from a net debt position of $15 million [26] Q&A Session Summary Question: Feedback from customers regarding tariffs and future outlook - Management indicated that there is currently minimal impact from tariffs, with customers showing early buying behavior to mitigate potential price increases [31][35] Question: Competitive trends among Cisco, Juniper, and HP - Management noted that HP is struggling and losing market share, while Cisco remains competitive but faces dissatisfaction from customers regarding complexity and cost [42][45] Question: Growth potential in SaaS ARR - Management highlighted strong bookings in SaaS subscriptions, with expectations for growth driven by the adoption of Platform One [48][49] Question: Update on customer adoption of WiFi 7 - Management reported strong adoption of WiFi 7, with enterprises increasingly confident in using it for mission-critical solutions [64][66] Question: Regional demand and inventory feedback - Management noted a return of real demand in the marketplace, particularly in the Americas, and highlighted a resurgence in the EMEA region, especially Germany [77][79]

April 30, 2025 3Q25 Financial Results DISCLAIMER Non-GAAP Financial Measures This presentation includes certain financial measures that are not presented in accordance with generally accepted accounting principles in the United States ("GAAP), such as, among other things, Non-GAAP Gross Profit, Non-GAAP EPS, Free Cash Flow, Non-GAAP Gross Margin, Non-GAAP Operating Margin, Net Cash (Debt), Non-GAAP Operating Income (Loss), EBITDA, Non-GAAP Net Income (Loss), Non-GAAP Operating Expense, Gross Debt, and Adjus ...

Financial Performance - Total revenue for Q3 2025 was $285 million, representing a year-over-year increase of 34.8% and a quarter-over-quarter increase of 1.8%[5] - GAAP diluted EPS was $0.03, a significant improvement from a loss of $0.50 per share in the same quarter last year[5] - Non-GAAP diluted EPS was $0.21, compared to a loss of $0.19 per share last year[5] - GAAP gross margin improved to 61.7%, up from 56.8% last year[8] - Non-GAAP operating profit margin was 14.1%, compared to a loss margin of 12.2% last year[8] - Operating income for Q3 2025 was $10.4 million, a significant recovery from an operating loss of $62.5 million in the same quarter last year[24] - Net income for Q3 2025 was $3.5 million, compared to a net loss of $64.4 million in Q3 2024[24] - GAAP revenues for the three months ended March 31, 2025, were $284,505 thousand, compared to $211,036 thousand for the same period in 2024, representing a year-over-year increase of 34.7%[43] - GAAP operating income for the three months ended March 31, 2025, was $10,377 thousand, compared to a loss of $62,469 thousand in the same period of 2024, indicating a significant turnaround[43] - GAAP net income for the three months ended March 31, 2025, was $3,458 thousand, compared to a loss of $64,425 thousand in the same period of 2024[44] Revenue Breakdown - SaaS ARR reached $184 million, up 13.4% year-over-year and up 1.5% quarter-over-quarter[5] - Total net revenues for Q3 2025 reached $284.5 million, a 35% increase from $211.0 million in Q3 2024[24] - Product revenues increased to $178.1 million, up 67% from $106.4 million year-over-year[24] - Gross profit for Q3 2025 was $175.4 million, compared to $119.9 million in Q3 2024, reflecting a gross margin improvement[24] - Non-GAAP gross profit for the three months ended March 31, 2025, was $177,358 thousand, with a non-GAAP gross margin of 62.3%, up from 57.6% in the same period of 2024[43] Cash Flow and Assets - The company generated net cash flow from operations of $30 million and had free cash flow of $24.2 million in Q3[8] - Cash and cash equivalents increased to $185.5 million as of March 31, 2025, up from $156.7 million at the end of June 2024[22] - The company reported a net cash provided by operating activities of $70.1 million for the nine months ended March 31, 2025, compared to $40.0 million for the same period last year[26] - The company has a total of $1.07 billion in assets as of March 31, 2025, compared to $1.04 billion as of June 30, 2024[22] Future Guidance - For Q4 2025, the company targets total net revenue between $295 million and $305 million[12] - The full year fiscal 2025 revenue guidance is set between $1,128 million and $1,138 million[13] Market Position and Risks - Extreme Platform ONE has nearly 100 pre-orders and is gaining traction with managed service providers[3] - Future outlook includes potential risks related to global macroeconomic trends and competition in the network switching equipment market[18] Non-GAAP Measures - Non-GAAP operating income for the three months ended March 31, 2025, was $40,048 thousand, with a non-GAAP operating margin of 14.1%, compared to a loss margin of 12.2% in the same period of 2024[43] - Non-GAAP net income for the three months ended March 31, 2025, was $27,958 thousand, compared to a loss of $24,797 thousand in the same period of 2024[44] - Non-GAAP net income per diluted share for the three months ended March 31, 2025, was $0.21, compared to a loss of $0.19 per diluted share in the same period of 2024[44] - Total adjustments to GAAP net income for the three months ended March 31, 2025, amounted to $24,500 thousand, primarily due to share-based compensation and restructuring charges[44] - The company expects to continue incurring share-based compensation expenses in future periods, which are excluded from non-GAAP measures[34] - The non-GAAP provision for income taxes is calculated using a blended U.S. statutory tax rate of 24.6%[39]