Core Insights - The 2025 Product Leader Awards highlight the importance of combining creativity with discipline in product leadership, emphasizing measurable impact and team empowerment [1][5][6] - The awards recognize top product leaders from various companies, including Walmart and Extreme Networks, who have completed the Strategic PM Certification program and demonstrated significant contributions [2][4][5] Company Highlights - Walmart International has a special category for product leaders who have excelled in the Strategic PM Certification program, showcasing their role as mentors and key contributors [1][4] - Extreme Networks also features a special category for its product leaders, emphasizing the importance of strategic product management within the organization [2] Industry Trends - The winners of this year's awards exemplify a new era of product leadership characterized by creativity, innovation, and a strong connection to measurable business outcomes such as growth and market expansion [5][6] - The Product Leader Awards serve as a benchmark for excellence in the AI era, inspiring product executives to adapt and evolve alongside technological advancements [6] Community and Network - Products That Count is a significant nonprofit community with over 500,000 product managers and Chief Product Officers, aiming to empower individuals to create impactful products [7] - The organization collaborates with major corporations like Walmart, Ford, and Cisco, providing a platform for product leaders to share best practices and drive innovation [7]

Momentum investing revolves around the idea of following a stock's recent trend in either direction. In "long context," investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.While many investors like to look for momentum i ...

When I last wrote about Extreme Networks (NASDAQ: EXTR ) in July, I said the cloud transition was intact and execution was what mattered next. There’s been a fair bit of optimism since then: the stock’sI’m Emmanuel Onwusah—a financial analyst, writer, and recovering engineer. I hold FMVA® and BIDA® certifications from the Corporate Finance Institute, and I spend most of my time creating pitch decks, building models, analyzing companies, and trying to make sense of where value meets narrative. My background ...

Core Insights - The article discusses the ongoing optimism surrounding Extreme Networks, particularly in relation to its cloud transition and execution strategies [1]. Company Analysis - Extreme Networks has shown positive stock performance since the last analysis in July, indicating a successful cloud transition [1]. - The focus on execution is highlighted as a critical factor for the company's future growth and market performance [1]. Industry Context - The article emphasizes the importance of strong fundamentals and potential for growth in the technology, infrastructure, and internet services sectors [1].

Company Performance - Extreme Networks (EXTR) has shown a year-to-date performance increase of approximately 27.7%, significantly outperforming the Computer and Technology sector, which has returned an average of 12.9% [4] - The Zacks Consensus Estimate for EXTR's full-year earnings has increased by 6% over the past quarter, indicating improved analyst sentiment and a stronger earnings outlook [4] - Extreme Networks holds a Zacks Rank of 2 (Buy), suggesting it has favorable characteristics for outperforming the market in the near term [3] Industry Context - Extreme Networks is part of the Computer - Networking industry, which has seen an average gain of 16.6% this year, indicating that EXTR is performing better than its immediate industry peers [6] - The Computer and Technology group, which includes 605 companies, ranks 5 in the Zacks Sector Rank, reflecting the overall strength of this sector [2] - Jabil (JBL), another stock in the Computer and Technology sector, has returned 42.3% year-to-date and has a Zacks Rank of 2 (Buy), showcasing strong performance within the sector [5]

Core Insights - The global market for network access control software generated approximately $XX million in revenue in 2022, with projections to reach $XX million by 2029, reflecting a compound annual growth rate (CAGR) of XX% from 2023 to 2029 [3] - The Chinese market accounted for approximately $XX million in 2022, representing a market share of XX%, while North America and Europe held market shares of XX% and XX%, respectively [3] - The major players in the global network access control software market include Cisco, Google, Micro Focus, Pulse Secure, and Coveo Solutions, with the top four companies holding about XX% of the market share in 2022 [3][4] Market Overview - The report analyzes the historical market size of network access control software from 2018 to 2022, focusing on revenue, pricing, and market share across different regions and major companies [2] - Future forecasts for the network access control software market include revenue predictions for 2029, segmented by global and regional income, product categories, and application areas [2] Regional Insights - The Asia-Pacific region is expected to play a more significant role in the network access control software market, with notable growth in countries such as Japan, South Korea, India, and Southeast Asia [3] - The report provides a detailed analysis of the North American, European, Asia-Pacific, South American, and Middle Eastern and African markets, including revenue forecasts and market dynamics [5] Product and Application Segmentation - Network access control software is categorized into on-premises and cloud-based solutions, with on-premises solutions holding a significant market share of XX% in 2022, projected to increase to XX% by 2029 [3] - The applications of network access control software are segmented into personal, enterprise, and other categories, with personal applications expected to account for approximately XX% of the market share by 2029, growing at a CAGR of XX% [3][4] Competitive Landscape - The competitive landscape includes a comprehensive analysis of major companies, their revenue, market share, and recent developments in the network access control software sector [5] - The report emphasizes the importance of understanding the competitive dynamics among leading firms to identify potential investment opportunities [5]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Extreme Networks (EXTR) - Extreme Networks currently holds a Momentum Style Score of B, indicating a positive momentum outlook [2] - The company has a Zacks Rank of 2 (Buy), suggesting strong potential for outperformance in the market [3] Performance Metrics - Over the past week, EXTR shares increased by 3.43%, while the Zacks Computer - Networking industry remained flat [5] - In the last month, EXTR's price rose by 23.8%, significantly outperforming the industry's 2.95% [5] - Over the past quarter, EXTR shares have risen by 28.56%, and by 35.75% over the last year, compared to the S&P 500's increases of 9.68% and 16.9%, respectively [6] Trading Volume - The average 20-day trading volume for EXTR is 1,559,399 shares, which is a useful indicator of market interest and momentum [7] Earnings Outlook - In the past two months, one earnings estimate for EXTR has increased, while none have decreased, raising the consensus estimate from $1.00 to $1.02 [9] - For the next fiscal year, one estimate has also moved upwards with no downward revisions [9] Conclusion - Given the positive performance metrics and earnings outlook, EXTR is positioned as a 2 (Buy) stock with a Momentum Score of B, making it a strong candidate for near-term investment [11]

Industry Overview - The Zacks Computer - Networking industry is poised for growth driven by advancements in cloud computing, network security, big data, and next-gen connectivity, particularly due to the increasing applications of AI technology [1] - The demand for AI workloads and hyperscale data centers is leading to significant investments in high-speed interconnects, optical networking, and Ethernet switches, with companies aiming to leverage the multi-billion-dollar AI infrastructure opportunity [1] - The rapid deployment of 5G technology is enhancing the Internet of Things (IoT), Advanced Driver Assistance Systems, AR/VR devices, and 5G smartphones, thereby increasing the need for robust networking infrastructure [1] Trends Influencing the Industry - The Wi-Fi 7 upgrade cycle is expected to stimulate demand for innovative networking products, benefiting major players like Cisco Systems, Extreme Networks, and RADCOM [2] - The industry is experiencing heightened uncertainty due to global macroeconomic conditions and volatile supply-chain dynamics, with some telecom operators reducing or delaying capital expenditures [2][7] - The growing popularity of smart home products and IoT devices is driving innovation in networking technologies, including network virtualization and Software-Defined Networking [4] Performance Metrics - The Zacks Computer - Networking industry has outperformed the S&P 500 Composite and the broader Zacks Computer and Technology sector, gaining 31.3% over the past year compared to the sector's 18.3% and the S&P 500's 13.9% [11] - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 20.27X, which is lower than the S&P 500's 22.52X and the sector's 27.18X [14] Company Highlights - **Extreme Networks**: The company reported a 20% year-over-year revenue growth in the last quarter, driven by strong demand for its AI-driven cloud networking solutions. Its SaaS annual recurring revenues rose 24.4% year-over-year to $207.6 million [18][19] - **Cisco Systems**: Cisco is enhancing its AI capabilities across its security and collaboration platforms, with notable developments including the launch of AI-driven solutions and partnerships with NVIDIA to create AI-ready data center networks [23][24] - **RADCOM**: The company focuses on cloud-native, automated service assurance for 5G networks and aims for a revenue growth target of 15%-18% for the full year, translating to a midpoint projection of $71.1 million [28][31]

[Forward Looking Statements](index=4&type=section&id=Forward%20Looking%20Statements) This section outlines potential future events and their associated risks, emphasizing that actual results may differ materially from projections [Summary of Material Risks Associated with Our Business](index=4&type=section&id=Summary%20of%20Material%20Risks%20Associated%20with%20Our%20Business) This section provides a high-level overview of the principal risks and uncertainties that could materially affect the company's business, financial condition, operating results, and future growth prospects - Principal risks include geopolitical changes, intense competition, supply chain issues, system security risks, failure to anticipate technological shifts, dependence on international sales, inventory management, and inability to attract and retain key employees[14](index=14&type=chunk) - The company's stock price has been volatile in the past and may significantly fluctuate in the future[14](index=14&type=chunk) [PART I](index=5&type=section&id=PART%20I) This part details the company's business operations, risk factors, unresolved staff comments, cybersecurity measures, properties, and legal proceedings [Item 1. Business](index=5&type=section&id=Item%201.%20Business) This item provides a detailed description of Extreme Networks, Inc.'s business, including its overview, industry background, strategic approach, product offerings, sales and marketing channels, customer profiles, manufacturing processes, research and development efforts, intellectual property, competitive landscape, restructuring activities, and human capital management [Overview](index=5&type=section&id=Overview) Extreme Networks, Inc. is a leader in AI-powered cloud networking, providing simple and secure solutions for businesses. The company designs, develops, and manufactures wired, wireless, and SD-WAN infrastructure equipment, with its new Extreme Platform ONE™ integrating networking, security, and AI solutions - Extreme Networks is a leader in AI-powered cloud networking, delivering simple and secure solutions[15](index=15&type=chunk) - The Extreme Platform ONE™ solution, generally available in July 2025, integrates networking, security, and AI solutions into a single platform[15](index=15&type=chunk) - Revenues are derived from the sale of networking equipment, software subscriptions, and related maintenance contracts[16](index=16&type=chunk) [Industry Background](index=5&type=section&id=Industry%20Background) The networking industry is undergoing significant transformation driven by digital initiatives, cloud migration, AI adoption, and distributed workforces, leading to increased network complexity and demand for integrated AI networking and security solutions - Enterprises are adopting new IT delivery models and applications requiring fundamental network alterations due to digital transformation, cloud migration, multimodal/agentic AI, and distributed workforces[18](index=18&type=chunk) - AI for networking is an emerging category defined by innovation in generative, multimodal, and agentic AI technology to manage network complexities[18](index=18&type=chunk) Total Addressable Market (TAM) for Networking Solutions | Metric | Calendar Year 2024 | Projected by 2029 | | :-------------------------------- | :----------------- | :------------------ | | TAM | >$42 billion | $59 billion | | 5-year CAGR (overall) | | ~7% | | Cloud-managed networking CAGR | | ~15% | | AI Networking for Campus CAGR | | ~72% | [The Extreme Strategy](index=6&type=section&id=The%20Extreme%20Strategy) Extreme's strategy centers on empowering organizations with simple, secure, and intelligent technology through its Extreme Platform ONE, which integrates AI, networking, and security with simplified licensing - Extreme Platform ONE is designed to reduce complexity by seamlessly integrating networking, security, and AI solutions, including conversational, interactive, and autonomous AI agents[27](index=27&type=chunk) - Key strategic elements include AI-Driven Insight and Automation, End-to-End Network Visibility, a Unified Operations Dashboard, and an Integrated Experience for NetOps, SecOps, and business teams[28](index=28&type=chunk) - The company offers a differentiated end-to-end cloud networking architecture with Cloud Platform, Cloud Choice (AWS, GCP, Azure), ExtremeCloud IQ certifications (ISO/IEC 27001, 27017, 27701, CSA STAR), Cloud Continuum (public, private, on-premises), and Consumption Flexibility with portable licenses[29](index=29&type=chunk) [Products](index=9&type=section&id=Products) Extreme Networks offers a comprehensive product portfolio including its Cloud Networking Platform (ExtremeCloud IQ and Extreme Platform ONE), end-to-end solutions covering wired switching, wireless access points, and software applications for automation, analytics, and security. The company also provides SD-WAN, cloud-native platforms for service providers, and Universal ZTNA for secure access - Cloud Networking Platform: ExtremeCloud IQ is an ML/AI-powered wired and wireless cloud network management solution, with Extreme Platform ONE introduced in fiscal year 2025 to redefine cloud networking[30](index=30&type=chunk) - End-to-End Portfolio includes wired switching, wireless access points, WLAN controllers, routers, and software applications for AI-enhanced access control, network/application analytics, and management[31](index=31&type=chunk) - The company offers SD-WAN as an all-inclusive subscription, cloud-native platforms for service providers (e.g., 9000 series switches), and ExtremeCloud Universal ZTNA for secure, identity-based zero trust network access[40](index=40&type=chunk) [Sales, Marketing and Distribution](index=13&type=section&id=Sales,%20Marketing%20and%20Distribution) Extreme Networks conducts worldwide sales and marketing through a channel ecosystem of distributors, resellers, and strategic partners, supported by a field sales force. The company focuses on specific vertical markets like healthcare, education, retail, manufacturing, government, sports, and entertainment - As of June 30, 2025, the worldwide sales and marketing organization consisted of **865 employees** with offices in **four U.S. states** and **29 international countries**[39](index=39&type=chunk) - Distribution channels include Original Equipment Manufacturers (OEMs) and strategic relationships (e.g., Barco NV, Ericsson, Lenovo), leading distributors (Westcon Group Inc., TD Synnex Corporation, Jenne Inc.), and a global network of resellers[45](index=45&type=chunk) - The company focuses on specific vertical markets including healthcare, education, retail, manufacturing, government, sports, and entertainment venues[43](index=43&type=chunk) [Customer Profiles](index=15&type=section&id=Customer%20Profiles) Extreme Networks serves mid-market, enterprise, and service provider customers facing complex IT challenges, digital transformation, and resource constraints. These customers require robust, secure, and intuitive networking solutions, including data center fabric automation, cloud/hybrid network management, and SD-WAN, with decision-makers prioritizing cost reduction, security, and operational excellence Customer Segments and Estimated TAM (2025) | Customer Group | Employee Size | Scope | IT Complexity | Estimated TAM (2025) | | :--------------- | :------------ | :---- | :------------ | :------------------- | | Mid-market | 500-999 | Regional/National | Moderate | $10 billion | | Enterprise | 1,000+ | Global | Advanced | $22 billion | | Service providers | Varies | Varies | Varies | $2 billion | - Typical decision-makers include CIOs, VPs of IT, Directors of Infrastructure, Network Architects, CISOs, CFOs, and IT procurement specialists[49](index=49&type=chunk) - Customer priorities revolve around reducing cost, risk, and complexity, achieving operational excellence, improving security posture, ensuring uptime, and maintaining compliance[49](index=49&type=chunk) [International Sales](index=17&type=section&id=International%20Sales) International sales represent a significant portion of Extreme Networks' revenue, accounting for 52% in fiscal 2025, primarily through foreign-based distributors and resellers in Europe, Asia, Canada, Mexico, Central, and South America International Sales as Percentage of Consolidated Net Revenues | Fiscal Year | Percentage | | :---------- | :--------- | | 2025 | 52% | | 2024 | 48% | | 2023 | 56% | - Sales are conducted primarily through foreign-based distributors and resellers, with direct sales to end-user customers in Europe, Asia, Canada, Mexico, Central America, and South America[51](index=51&type=chunk) [Marketing](index=17&type=section&id=Marketing) Extreme Networks employs various marketing programs to support sales, including industry tradeshows, conferences, publications, social media, website updates, promotions, web-based training, advertising, and analyst relations, and participates in industry analyst recognitions - Marketing efforts include participation in industry tradeshows, conferences, technical articles, social media, website updates, promotions, web-based training courses, advertising, analyst relations, and public relations[52](index=52&type=chunk) - Extreme participates in numerous industry analyst recognitions and placements, including Gartner Magic Quadrants, Gartner Critical Capabilities, Forrester Waves, and IDC MarketScapes[52](index=52&type=chunk) [Backlog](index=17&type=section&id=Backlog) Extreme Networks' product backlog, representing confirmed orders, was $72.3 million at June 30, 2025, an increase from $64.0 million at June 30, 2024. However, backlog is not necessarily indicative of future revenues due to potential rescheduling or cancellations Product Backlog (in millions) | Date | Amount | | :----------- | :----- | | June 30, 2025 | $72.3 | | June 30, 2024 | $64.0 | - Backlog is subject to possible rescheduling and cancellations by customers, and therefore not necessarily indicative of actual revenues for any future period[53](index=53&type=chunk) [Seasonality](index=17&type=section&id=Seasonality) Extreme Networks historically experiences seasonal fluctuations in customer spending, typically impacting its first and third fiscal quarters adversely, though this pattern can vary - The company historically experiences seasonal fluctuations in customer spending patterns, generally adversely affecting its first and third fiscal quarters[55](index=55&type=chunk) [Manufacturing](index=17&type=section&id=Manufacturing) Extreme Networks employs a global sourcing strategy, relying on ODMs like Alpha Networks and Quanta Computer for manufacturing. The company manages supply chain risks through diversified sourcing, digital transformation, and collaborative partnerships, while ensuring product quality and security - The company utilizes a global sourcing strategy, relying on Original Design Manufacturers (ODMs) such as Alpha Networks, Lite-On Technology, Quanta Computer, Senao Networks, Sercomm Corporation, and Wistron Neweb Corporation[57](index=57&type=chunk) - Supply chain strategy faces challenges from global disruptions, trade policy changes, and tariff uncertainties, impacting cost, availability, and delivery timelines[56](index=56&type=chunk) - Risks are mitigated through diversified sourcing, digital transformation for better inventory visibility, and collaborative partnerships with ODMs and key component suppliers[58](index=58&type=chunk) [Research and Development](index=20&type=section&id=Research%20and%20Development) Extreme Networks' R&D focuses on developing new and enhanced AI-powered cloud-driven networking products for enterprise campus edge and core, emphasizing scalability, reliability, usability, and security. Key areas include cloud-native technologies, generative AI, network security, and autonomous networking - As of June 30, 2025, the research and development organization consisted of **1,045 employees**[63](index=63&type=chunk) - R&D activities focus on providing a unified wired, wireless, and SD-WAN cloud-driven network, with ongoing research in cloud native technologies, generative AI, agentic AI, network security, and self-healing autonomous networking[61](index=61&type=chunk) - R&D efforts are conducted in multiple locations including Morrisville, North Carolina; San Jose, California; Salem, New Hampshire; Toronto, Canada; Hangzhou, China; and Bangalore and Chennai, India[63](index=63&type=chunk) [Intellectual Property](index=20&type=section&id=Intellectual%20Property) Extreme Networks protects its intellectual property through patents, copyrights, trademarks, and trade secrets. As of June 30, 2025, the company held 644 U.S. patents and 411 international patents, along with 41 U.S. and 326 international registered trademarks Intellectual Property as of June 30, 2025 | Category | United States | Outside United States | | :--------------- | :------------ | :-------------------- | | Issued Patents | 644 | 411 | | Registered Trademarks | 41 | 326 | - The company relies on a combination of patent, copyright, trademark, and trade secret laws, as well as confidentiality agreements, to protect its intellectual property rights[64](index=64&type=chunk)[65](index=65&type=chunk) [Competition](index=20&type=section&id=Competition) The networking equipment market is highly competitive, dominated by large companies like Cisco, HPE, and Huawei. Extreme Networks competes on factors such as AI-driven cloud solutions, product performance, and customer service, but faces challenges from competitors' greater resources and industry consolidation - The market for network switches, routers, and software is extremely competitive, characterized by rapid technological progress and frequent new product introductions[66](index=66&type=chunk) - Key competitors include Cisco Systems, Inc., Hewlett-Packard Enterprise Company, Huawei Technologies Co. Ltd., and to a lesser extent, Arista Networks Inc., CommScope Holding Company, Inc., Fortinet, Inc., and Ubiquiti Inc[67](index=67&type=chunk) - The company expects increased competition from traditional networking solutions companies and cloud platform companies (e.g., Amazon, Microsoft, Google) offering Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS)[68](index=68&type=chunk) [Restructuring and Impairment](index=22&type=section&id=Restructuring%20and%20Impairment) Extreme Networks has undertaken restructuring plans in fiscal years 2023, 2024, and 2025 to reorganize its workforce, improve efficiency, reduce operating expenses, and optimize its facilities footprint, including moving engineering labs - During fiscal 2025, the company continued to execute restructuring plans initiated in prior years[70](index=70&type=chunk) - In fiscal 2024, the company initiated 'Q1 2024', 'Q2 2024', and 'Q3 2024' Plans to reorganize and rebalance the workforce for greater efficiency and improved execution, focusing on high-growth opportunities[71](index=71&type=chunk) - In fiscal 2023, a restructuring plan was initiated to transform business infrastructure and reduce facilities footprint, including moving engineering labs from San Jose, California, to Salem, New Hampshire[72](index=72&type=chunk) [Human Capital](index=23&type=section&id=Human%20Capital) Extreme Networks manages its human capital based on core values of Candor, Transparency, Curiosity, Teamwork, Ownership, and Inclusion, focusing on talent acquisition, development, competitive compensation and benefits, and fostering an inclusive and engaged workforce - As of June 30, 2025, the company employed **2,811 people** worldwide[77](index=77&type=chunk) Employee Distribution (as of June 30, 2025) | Function | Percentage | | :-------------------- | :--------- | | Sales and marketing | 30.8% | | Research and development | 37.1% | | Operations | 5.2% | | Customer support and services | 15.2% | | Finance and administration | 11.7% | - The company focuses on talent acquisition and development through programs like New Hire Academy, role-specific training, career development tools, and mentorship, and fosters an inclusive environment through employee-led resource groups[79](index=79&type=chunk)[81](index=81&type=chunk) [Organization](index=23&type=section&id=Organization) Extreme Networks was incorporated in California in 1996 and reincorporated in Delaware in 1999, with its corporate headquarters in Morrisville, North Carolina. The company files SEC reports electronically and provides corporate governance information on its investor website - Extreme Networks was incorporated in California in May 1996 and reincorporated in Delaware in March 1999[82](index=82&type=chunk) - Corporate headquarters are located at 2121 RDU Center Drive, Suite 300, Morrisville, NC 27560[82](index=82&type=chunk) - SEC disclosure reports and corporate governance guidelines are available on www.sec.gov and investor.extremenetworks.com[82](index=82&type=chunk)[83](index=83&type=chunk) [Item 1A. Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) This item details various risks and uncertainties that could materially and adversely affect Extreme Networks' business, operations, financial condition, and future performance, categorized into business, financial, regulatory, tax, legal, and general risks [Risks Related to Our Business, Operations, and Industry](index=24&type=section&id=Risks%20Related%20to%20Our%20Business,%20Operations,%20and%20Industry) This section outlines risks stemming from external factors like geopolitical changes, intense market competition, supply chain vulnerabilities, and internal operational challenges such as cybersecurity threats, failure to innovate, dependence on international sales, inventory management issues, and the ability to attract and retain key employees - Geopolitical changes, including U.S. economic policies, tariffs, and broader tensions, create uncertainty and may adversely impact business, financial condition, and operating results[85](index=85&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - Intense competition and consolidation in the networking equipment market, dominated by large companies, could prevent revenue growth and increase pricing pressure[91](index=91&type=chunk)[95](index=95&type=chunk) - Supply chain issues, such as concentration of suppliers, disruptions, shipping delays, and material shortages, could harm business, financial condition, and operating results[97](index=97&type=chunk)[98](index=98&type=chunk) - System security risks, data breaches, and cyberattacks (including those assisted by AI) could compromise proprietary information, disrupt operations, and harm public perception[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) - Failure to anticipate technological shifts, market needs, or develop timely product enhancements could impede competitiveness and revenue generation[110](index=110&type=chunk)[113](index=113&type=chunk) - Dependence on international sales (**52% of FY2025 revenues**) exposes the company to risks from currency fluctuations, tariffs, trade compliance, and geopolitical events[114](index=114&type=chunk)[115](index=115&type=chunk) - Inability to effectively forecast demand or manage inventory could lead to write-downs for excess/obsolete inventory or lost sales opportunities[117](index=117&type=chunk)[118](index=118&type=chunk) - Failure to attract, retain, train, motivate, develop, and promote key employees, particularly in specialized technical skills like AI, can harm the business[121](index=121&type=chunk) - Reliance on third-party cloud providers (AWS, GCP, Azure) for solutions and internal operations poses risks of service outages, performance problems, and data breaches[123](index=123&type=chunk)[125](index=125&type=chunk)[127](index=127&type=chunk) - The adoption, use, and development of AI products may result in reputational harm or liability due to challenges like algorithmic bias, 'hallucinations,' and rapidly evolving regulatory frameworks[128](index=128&type=chunk)[129](index=129&type=chunk) - Military actions and other geopolitical tensions could adversely affect business, financial condition, and operating results by disrupting supply chains and creating market instability[132](index=132&type=chunk)[134](index=134&type=chunk) - If products do not effectively interoperate with customer networks, it could lead to cancellations, delays, and harm business[136](index=136&type=chunk) - Undetected errors in products can result in significant unexpected expenses, diverted engineering resources, and loss of sales[137](index=137&type=chunk) - Failure to develop and increase the productivity of indirect distribution channels could lead to decreased sales and negatively impact operating results[139](index=139&type=chunk) - The long sales cycle for products (typically **3 months to over a year**) can lead to substantial non-recoverable expenses if anticipated sales do not occur[141](index=141&type=chunk)[143](index=143&type=chunk) [Risks Related to Financial Matters](index=38&type=section&id=Risks%20Related%20to%20Financial%20Matters) This section addresses financial risks including inconsistent profitability, stock price volatility, challenges in managing financial systems, reliance on public funding for educational institutions, restrictions imposed by credit facilities, potential need for additional financing, interest rate exposure, credit risk of channel partners, and the impact of long-term investments - The company has not been consistently profitable, and financial results may fluctuate significantly due to factors such as order timing, product pricing, distribution channel mix, and supply chain issues[144](index=144&type=chunk)[145](index=145&type=chunk) - The company's stock price has been volatile in the past and may significantly fluctuate in the future due to new product announcements, competitive results, industry conditions, and economic changes[149](index=149&type=chunk) - Failure to adequately manage and evolve financial reporting and managerial systems and processes could harm the company's ability to manage and grow its business[152](index=152&type=chunk) - Revenues may decline as a result of changes in public funding of educational institutions, particularly the E-Rate program[153](index=153&type=chunk) - Credit facilities (2023 Credit Agreement) impose financial and operating restrictions, and failure to meet payment or other obligations could lead to foreclosure on substantially all assets[154](index=154&type=chunk)[156](index=156&type=chunk) - Cash requirements may necessitate additional debt or equity financing, which may not be obtainable on favorable terms or at all[157](index=157&type=chunk) - Indebtedness exposes the company to interest rate risk due to variable rate debt, which could materially adversely impact interest expense, operating results, and cash flows[158](index=158&type=chunk) - Exposure to the credit risk of channel partners and direct customers could result in material losses, especially with macroeconomic factors like rising interest rates and inflation[159](index=159&type=chunk)[161](index=161&type=chunk) - Delays or inability to attain expected benefits from long-term investments in engineering, sales, services, marketing, and manufacturing may result in unfavorable operating results[162](index=162&type=chunk) - Failure to effectively evaluate internal control over financial reporting or remediate material weaknesses could lead to loss of investor confidence, significant expenses, and adverse effects on stock price[163](index=163&type=chunk)[166](index=166&type=chunk) - The company may not fully realize the anticipated positive impacts to future financial results from its restructuring efforts due to estimates and assumptions being incorrect or unforeseen events[167](index=167&type=chunk) - Anticipated benefits of past or future acquisitions, divestitures, and strategic investments may not be realized, and integration could negatively impact business, financial condition, or dilute stockholder ownership[168](index=168&type=chunk)[170](index=170&type=chunk) [Regulatory, Tax and Legal Risks](index=46&type=section&id=Regulatory,%20Tax%20and%20Legal%20Risks) This section covers risks related to compliance with complex regulations, including tariffs, export controls, economic sanctions, and privacy laws. It also addresses potential employee misconduct, legal proceedings, intellectual property infringement claims, reliance on third-party licenses, and the impact of tax policy changes - Failure to comply with complex tariff regulations, export control laws, and economic sanctions could result in penalties, restrictions on product exports, and material adverse effects on business[173](index=173&type=chunk) - Employee misconduct or improper activities, including noncompliance with regulatory standards (e.g., FCPA, export controls), could lead to financial reporting problems, fines, and civil or criminal penalties[174](index=174&type=chunk)[175](index=175&type=chunk) - Legal proceedings, including intellectual property infringement claims, can be expensive, lengthy, disruptive, and lead to substantial costs, damages, or restrictions on product sales[176](index=176&type=chunk)[179](index=179&type=chunk)[181](index=181&type=chunk) - Reliance on the availability of third-party licenses, including open-source software, carries risks if necessary licenses are not available on acceptable terms or if license terms are violated[182](index=182&type=chunk) - Failure to protect intellectual property rights, including potential data leakage through GenAI tools, could adversely affect the business[183](index=183&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) - The provision for income taxes and overall cash tax costs are affected by business reorganizations, jurisdictional revenue mix, and changes in tax regulations or policy (e.g., OBBBA, OECD Pillar Two framework)[187](index=187&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) - Any actual or perceived failure to comply with new or existing laws, regulations, and other requirements relating to the privacy, security, and processing of personal information (e.g., EU GDPR) could adversely affect business and financial condition[192](index=192&type=chunk)[195](index=195&type=chunk) - Failure of products to comply with evolving industry standards, certifications, and complex government regulations may adversely impact business by limiting market access[196](index=196&type=chunk)[199](index=199&type=chunk) - Provisions in charter documents and Delaware law may delay or prevent an acquisition of Extreme, which could decrease the value of common stock[200](index=200&type=chunk) - Compliance with laws, rules, and regulations relating to corporate governance and public disclosure may result in additional expenses[203](index=203&type=chunk) [General](index=54&type=section&id=General) This section addresses broad external risks such as natural or man-made disasters, climate change, acts of war or terrorism, pandemics, and technological disruptions, which could severely impact operations, supply chains, demand, and financial results - Natural or man-made disasters, climate change, acts of war or terrorism, pandemics, or technological disruptions could disrupt operations, supply chains, and harm business, financial condition, and operating results[204](index=204&type=chunk)[206](index=206&type=chunk) - Regulations related to climate change and/or greenhouse gas emissions could impact the supply chain, business operations, and regulatory compliance requirements[205](index=205&type=chunk) [Item 1B. Unresolved Staff Comments](index=54&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC - There are no unresolved staff comments[207](index=207&type=chunk) [Item 1C. Cybersecurity](index=54&type=section&id=Item%201C.%20Cybersecurity) This item describes Extreme Networks' cybersecurity risk management program, which is based on the NIST CSF and integrated into its overall enterprise risk management. It also details the governance structure, including Board and Audit Committee oversight, and the management team's responsibilities [Cybersecurity Risk Management and Strategy](index=54&type=section&id=Cybersecurity%20Risk%20Management%20and%20Strategy) Extreme Networks has a cybersecurity risk management program based on the NIST CSF, integrated into its enterprise risk management. Key elements include risk assessments, a dedicated security team, external service providers, employee training, an incident response plan, and third-party risk management - The cybersecurity risk management program is designed and assessed based on the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF)[209](index=209&type=chunk) - Key elements include risk assessments, a security team, use of external service providers, cybersecurity awareness training for employees, an incident response plan, and a third-party risk management process[215](index=215&type=chunk) - The company has not identified risks from known cybersecurity threats that have materially affected or are reasonably likely to materially affect its operations, business strategy, results of operations, or financial condition[210](index=210&type=chunk) [Cybersecurity Governance](index=56&type=section&id=Cybersecurity%20Governance) The Board of Directors oversees cybersecurity risk, delegating specific oversight to the Audit Committee. The Audit Committee receives regular reports from the CISO, and the CICO and CISO periodically report to the full Board, ensuring ongoing education and management of cyber risks - The Board of Directors considers cybersecurity risk as part of its risk oversight function and delegates oversight to the Audit Committee[211](index=211&type=chunk) - The Audit Committee receives regular reports from the Chief Information Security Officer (CISO), and the Chief Information and Customer Officer (CICO) and CISO periodically report to the full Board[212](index=212&type=chunk) - The management team, including the CICO and CISO, is responsible for assessing and managing material cybersecurity risks, supported by a cross-functional Information Security Steering Committee[213](index=213&type=chunk) [Item 2. Properties](index=57&type=section&id=Item%202.%20Properties) Extreme Networks leases approximately 0.5 million square feet of office and R&D space globally, with its corporate headquarters in Morrisville, North Carolina. The company continuously evaluates its leased locations based on key metrics - Corporate headquarters are located in Morrisville, North Carolina, leasing approximately **54,530 square feet** until fiscal year 2031[216](index=216&type=chunk) - The company leases an aggregate of approximately **0.5 million square feet** globally, with various expiration dates between fiscal year 2025 and 2033[218](index=218&type=chunk) - Leased facilities are located in the United States (Salem, San Jose) and international locations (Americas, EMEA, APAC, including Bangalore, Chennai, Markham, Reading, Shannon)[217](index=217&type=chunk) [Item 3. Legal Proceedings](index=57&type=section&id=Item%203.%20Legal%20Proceedings) This item refers to Note 9 of the Consolidated Financial Statements for details on legal proceedings - Information regarding legal proceedings is incorporated by reference from Note 9, Commitments and Contingencies, in the Notes to Consolidated Financial Statements[219](index=219&type=chunk) [Item 4. Mine Safety Disclosures](index=57&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Extreme Networks - This item is not applicable[220](index=220&type=chunk) [PART II](index=58&type=section&id=PART%20II) This part covers the market for the registrant's common equity, financial condition, results of operations, market risk disclosures, and financial statements [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=58&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This item provides information on Extreme Networks' common stock trading on Nasdaq, shareholder count, dividend policy, and details of its share repurchase programs [Common Stock Market and Dividends](index=58&type=section&id=Common%20Stock%20Market%20and%20Dividends) Extreme Networks' common stock trades on the Nasdaq Global Select Market under the symbol 'EXTR.' As of August 8, 2025, there were 146 stockholders of record. The company has never declared or paid cash dividends and does not anticipate doing so in the foreseeable future - Common stock trades on the Nasdaq Global Select Market under the symbol 'EXTR'[222](index=222&type=chunk) - As of August 8, 2025, there were **146 stockholders of record**[223](index=223&type=chunk) - The company has never declared or paid cash dividends and does not anticipate paying any in the foreseeable future[223](index=223&type=chunk) [Issuer Purchases of Equity Securities](index=58&type=section&id=Issuer%20Purchases%20of%20Equity%20Securities) Extreme Networks repurchased 1.537 million shares of common stock for $16.26 average price in Q4 fiscal 2025 under the 2022 Repurchase Program, which expired June 30, 2025. A new $200.0 million repurchase program commenced July 1, 2025 Stock Repurchase Activity (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :----------------------- | :----------------------------- | :--------------------------- | | May 1, 2025 - May 31, 2025 | 798 | $15.65 | | June 1, 2025 - June 30, 2025 | 739 | $16.93 | | **Total** | **1,537** | **$16.26** | - The 2022 Repurchase Program, authorizing up to **$200.0 million** in common stock repurchases over three years, ended on June 30, 2025[225](index=225&type=chunk) - A new **$200.0 million** share repurchase program was authorized by the Board on February 18, 2025, commencing July 1, 2025, for a three-year period[226](index=226&type=chunk) [Stock Price Performance Graph](index=59&type=section&id=Stock%20Price%20Performance%20Graph) This section presents a graph comparing the five-year cumulative total returns of Extreme Networks' common stock against the NASDAQ US Benchmark TR index and the NASDAQ US Benchmark Computer Hardware TR Index from July 1, 2020, to June 30, 2025 - The performance graph compares the annual percentage change in cumulative total return on common stock with the NASDAQ US Benchmark TR index and the NASDAQ US Benchmark Computer Hardware TR Index[230](index=230&type=chunk) - The comparisons are based on historical data and are not intended to forecast future performance[230](index=230&type=chunk) [Item 6. [Reserved]](index=59&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information - This item is reserved[235](index=235&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=60&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This item provides management's perspective on Extreme Networks' financial condition and results of operations, including a business overview, detailed analysis of revenues, costs, operating expenses, and other financial metrics, critical accounting policies, and liquidity and capital resources [Business Overview](index=60&type=section&id=Business%20Overview) Extreme Networks is a leading provider of AI-powered cloud networking solutions, offering simple and secure wired, wireless, and SD-WAN infrastructure. Its Extreme Platform ONE integrates networking, security, and AI, serving diverse verticals globally. Revenues are derived from equipment sales, software subscriptions, and maintenance contracts - Extreme Networks is a leading provider of AI-powered cloud networking solutions, delivering simple and secure connections[238](index=238&type=chunk) - The Extreme Platform ONE solution integrates networking, security, and AI solutions into a single platform, with AI-powered automation[238](index=238&type=chunk) - The company derives all revenues from the sale of networking equipment, software subscriptions, and related maintenance contracts across various verticals globally[239](index=239&type=chunk) [Results of Operations](index=61&type=section&id=Results%20of%20Operations) Extreme Networks reported total net revenues of $1,140.1 million in fiscal 2025, a 2.0% increase from fiscal 2024. Product revenues increased by 0.7% to $704.5 million, and subscription and support revenues increased by 4.2% to $435.6 million. The company achieved a total gross margin of 62.2% and operating income of $35.9 million, resulting in a net loss of $7.5 million Key Financial Highlights (Fiscal Year Ended June 30, 2025) | Metric | FY2025 (in millions) | Change from FY2024 | | :-------------------------- | :------------------- | :----------------- | | Net revenues | $1,140.1 | +2.0% | | Product revenues | $704.5 | +0.7% | | Subscription and support revenues | $435.6 | +4.2% | | Total gross margin | 62.2% | +5.7 percentage points | | Operating income | $35.9 | From $(65.2) million loss | | Net loss | $(7.5) | From $(86.0) million loss | | Cash flow from operating activities | $152.0 | +$96.5 million | | Cash and cash equivalents | $231.7 | +$75.0 million | [Net Revenues](index=61&type=section&id=Net%20Revenues) Total net revenues for fiscal 2025 increased by 2.0% to $1,140.1 million, driven by a 0.7% increase in product revenues and a 4.2% increase in subscription and support revenues. The Americas region saw a decrease, while EMEA and APAC experienced increases Net Revenues by Type (in thousands, except percentages) | Category | FY2025 | FY2024 | $ Change (FY25 vs FY24) | % Change (FY25 vs FY24) | FY2023 | $ Change (FY24 vs FY23) | % Change (FY24 vs FY23) | | :--------------------- | :------- | :------- | :----------------------- | :----------------------- | :------- | :----------------------- | :----------------------- | | Product | $704,462 | $699,257 | $5,205 | 0.7 % | $932,454 | $(233,197) | (25.0)% | | Percentage of net revenues | 61.8% | 62.6% | | | 71.0% | | | | Subscription and support | 435,605 | 417,946 | 17,659 | 4.2 % | 380,000 | 37,946 | 10.0 % | | Percentage of net revenues | 38.2% | 37.4% | | | 29.0% | | | | **Total net revenues** | **$1,140,067** | **$1,117,203** | **$22,864** | **2.0 %** | **$1,312,454** | **$(195,251)** | **(14.9)%** | - Product revenues increased in fiscal 2025 primarily due to higher bookings and shipments in the second half of the fiscal year[242](index=242&type=chunk) Net Revenues by Geographic Region (in thousands, except percentages) | Region | FY2025 | FY2024 | $ Change (FY25 vs FY24) | % Change (FY25 vs FY24) | FY2023 | $ Change (FY24 vs FY23) | % Change (FY24 vs FY23) | | :------------- | :------- | :------- | :----------------------- | :----------------------- | :------- | :----------------------- | :----------------------- | | Americas | $596,705 | $627,719 | $(31,014) | (4.9)% | $657,035 | $(29,316) | (4.5)% | | Percentage of net revenues | 52.3% | 56.2% | | | 50.1% | | | | EMEA | 451,649 | $421,966 | 29,683 | 7.0 % | 559,669 | (137,703) | (24.6)% | | Percentage of net revenues | 39.6% | 37.8% | | | 42.6% | | | | APAC | 91,713 | $67,518 | 24,195 | 35.8 % | 95,750 | (28,232) | (29.5)% | | Percentage of net revenues | 8.1% | 6.0% | | | 7.3% | | | | **Total net revenues** | **$1,140,067** | **$1,117,203** | **$22,864** | **2.0 %** | **$1,312,454** | **$(195,251)** | **(14.9)%** | [Cost of Revenues and Gross Profit](index=62&type=section&id=Cost%20of%20Revenues%20and%20Gross%20Profit) Total gross profit increased by 12.4% to $709.1 million in fiscal 2025, with the gross margin improving to 62.2% from 56.5% in fiscal 2024. Product gross profit rose significantly due to higher revenues and lower inventory provisions, while subscription and support gross profit also increased due to higher revenues Gross Profit (in thousands, except percentages) | Category | FY2025 | FY2024 | $ Change (FY25 vs FY24) | % Change (FY25 vs FY24) | FY2023 | $ Change (FY24 vs FY23) | % Change (FY24 vs FY23) | | :-------------------------------- | :------- | :------- | :----------------------- | :----------------------- | :------- | :----------------------- | :----------------------- | | Product Gross Profit | $403,631 | $333,498 | $70,133 | 21.0 % | $506,159 | $(172,661) | (34.1)% | | Percentage of product revenues | 57.3% | 47.7% | | | 54.3% | | | | Subscription and Support Gross Profit | 305,496 | 297,333 | 8,163 | 2.7 % | 248,561 | 48,772 | 19.6 % | | Percentage of subscription and support revenues | 70.1% | 71.1% | | | 65.4% | | | | **Total Gross Profit** | **$709,127** | **$630,831** | **$78,296** | **12.4 %** | **$754,720** | **$(123,889)** | **(16.4)%** | | **Percentage of net revenues** | **62.2%** | **56.5%** | | | **57.5%** | | | - Product gross profit increased in fiscal 2025 due to higher product revenues, lower provisions for excess and obsolete inventory, and lower warranty costs[248](index=248&type=chunk) - Subscription and support gross profit increased in fiscal 2025 due to higher subscription revenues, partially offset by higher personnel costs and increased cloud service costs[251](index=251&type=chunk) [Operating Expenses](index=64&type=section&id=Operating%20Expenses) Total operating expenses decreased by 0.6% to $692.2 million in fiscal 2025. Sales and marketing expenses decreased, while research and development and general and administrative expenses increased. Restructuring charges significantly decreased compared to fiscal 2024 Operating Expenses (in thousands, except percentages) | Category | FY2025 | FY2024 | $ Change (FY25 vs FY24) | % Change (FY25 vs FY24) | FY2023 | $ Change (FY24 vs FY23) | % Change (FY24 vs FY23) | | :----------------------------- | :------- | :------- | :----------------------- | :----------------------- | :------- | :----------------------- | :----------------------- | | Research and development | $221,459 | $211,931 | $9,528 | 4.5 % | $214,270 | $(2,339) | (1.1)% | | Sales and marketing | 327,563 | 345,802 | (18,239) | (5.3)% | 336,906 | 8,896 | 2.6 % | | General and administrative | 139,621 | 99,938 | 39,683 | 39.7 % | 89,934 | 10,004 | 11.1 % | | Restructuring and related charges | 1,492 | 36,321 | (34,829) | (95.9)% | 2,860 | 33,461 | 1170.0 % | | Amortization of intangible assets | 2,043 | 2,041 | 2 | 0.1 % | 2,047 | (6) | (0.3)% | | **Total operating expenses** | **$692,178** | **$696,033** | **$(3,855)** | **(0.6)%** | **$646,407** | **$49,626** | **7.7 %** | - Research and development expenses increased by **$9.5 million (4.5%)** in fiscal 2025, primarily due to higher personnel costs, software costs, professional service fees, and IT costs[255](index=255&type=chunk) - Sales and marketing expenses decreased by **$18.2 million (5.3%)** in fiscal 2025, mainly due to lower headcount, reduced contractor costs, professional fees, and IT/facilities costs[258](index=258&type=chunk) - General and administrative expenses increased by **$39.7 million (39.7%)** in fiscal 2025, driven by higher system transition costs, personnel costs, and legal costs related to litigation[261](index=261&type=chunk) [Interest Income](index=66&type=section&id=Interest%20Income) Interest income decreased to $4.3 million in fiscal 2025 from $4.6 million in fiscal 2024, primarily due to lower interest earned on cash deposits Interest Income (in thousands) | Fiscal Year | Amount | | :---------- | :----- | | 2025 | $4,313 | | 2024 | $4,556 | | 2023 | $3,155 | - The decrease in interest income in fiscal 2025 was primarily driven by lower interest earned on cash deposits[268](index=268&type=chunk) [Interest Expense](index=66&type=section&id=Interest%20Expense) Interest expense decreased to $15.9 million in fiscal 2025 from $17.0 million in fiscal 2024, mainly due to lower interest rates on reduced outstanding balances under the 2023 Credit Agreement Interest Expense (in thousands) | Fiscal Year | Amount | | :---------- | :----- | | 2025 | $15,928 | | 2024 | $16,986 | | 2023 | $17,385 | - The decrease in interest expense in fiscal 2025 was primarily driven by lower interest rates on lower outstanding balances under the 2023 Credit Agreement[269](index=269&type=chunk) [Other Income (Expense), net](index=66&type=section&id=Other%20Income%20(Expense),%20net) The company reported other expense, net of $1.1 million in fiscal 2025, compared to other income, net of less than $0.1 million in fiscal 2024, primarily due to foreign exchange gains or losses Other Income (Expense), net (in thousands) | Fiscal Year | Amount | | :---------- | :----- | | 2025 | $(1,061) | | 2024 | $133 | | 2023 | $23 | - The other income (expense), net, was primarily due to foreign exchange gains or losses from the revaluation of certain assets and liabilities denominated in foreign currencies[270](index=270&type=chunk) [Provision for Income Taxes](index=68&type=section&id=Provision%20for%20Income%20Taxes) The provision for income taxes increased to $11.7 million in fiscal 2025 from $8.5 million in fiscal 2024. The effective tax rate differs from the U.S. federal statutory rate due to GILTI, valuation allowances, foreign income taxes, and U.S. state taxes Provision for Income Taxes (in thousands) | Fiscal Year | Amount | | :---------- | :----- | | 2025 | $11,740 | | 2024 | $8,465 | | 2023 | $16,032 | - The effective tax rate differs from the U.S. federal statutory rate of **21%** primarily due to Global Intangible Low-Taxed Income (GILTI), valuation of deferred tax assets, foreign income taxes, and U.S. state taxes[271](index=271&type=chunk) - The tax provision is primarily related to taxes on foreign operations, U.S. federal taxes from U.S. operations, deferred tax liability for amortizable goodwill, and state taxes[272](index=272&type=chunk) [Critical Accounting Policies and Estimates](index=68&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights Extreme Networks' critical accounting policies and estimates, including revenue recognition, business combinations, inventory valuation and purchase commitments, and new accounting pronouncements, which require significant management judgment and can impact reported financial amounts [Revenue Recognition](index=68&type=section&id=Revenue%20Recognition) Extreme Networks recognizes revenue from networking equipment sales (point in time) and subscription/support services (over time). Revenue is allocated to distinct performance obligations based on standalone selling prices, with variable consideration (rebates, stock rotation rights) estimated based on historical data - Revenue is primarily derived from networking equipment sales and subscription/support offerings (SaaS, maintenance, professional services, training)[275](index=275&type=chunk) - Product sales revenues are recognized at a point in time (typically shipment), while subscription and support revenues are recognized over time (contractual service period, generally **1-5 years**)[280](index=280&type=chunk) - Variable consideration, such as rebates and limited stock rotation rights for stocking distributors, is estimated based on historical claims and return rates[278](index=278&type=chunk)[390](index=390&type=chunk) [Business Combinations](index=69&type=section&id=Business%20Combinations) The company applies the acquisition method for business combinations, recording acquired assets and assumed liabilities at fair value. This process involves significant judgment and estimates, with any excess purchase price recognized as goodwill - The company applies the acquisition method of accounting for business combinations, recording all tangible and intangible assets acquired and liabilities assumed at their respective fair values at the acquisition date[282](index=282&type=chunk) - Determining fair value requires significant management judgment and often involves estimates and assumptions regarding future cash flows, discount rates, and asset lives[282](index=282&type=chunk) - Any excess of the purchase price over the fair value of the net assets acquired is recognized as goodwill[282](index=282&type=chunk) [Inventory Valuation and Purchase Commitments](index=69&type=section&id=Inventory%20Valuation%20and%20Purchase%20Commitments) Extreme Networks values inventory at the lower of cost or net realizable value and records write-downs for estimated excess and obsolete inventory based on demand forecasts and market conditions. The company also has non-cancelable purchase commitments for long lead-time components - Inventory is valued at the lower of cost or net realizable value, with cost computed using standard cost on a first-in, first-out basis[361](index=361&type=chunk) - Write-downs for estimated excess and obsolete inventory are recorded based on forecasts of future product demand, product transition cycles, and market conditions[283](index=283&type=chunk) - The company has non-cancelable commitments to purchase long lead-time component inventory from contract manufacturers[119](index=119&type=chunk)[306](index=306&type=chunk) [New Accounting Pronouncements](index=69&type=section&id=New%20Accounting%20Pronouncements) The company adopted ASU 2023-07 (Segment Reporting) in fiscal 2025 retrospectively and is currently evaluating the impact of ASU 2024-03 and ASU 2025-01 (Income Statement—Expense Disaggregation) and ASU 2023-09 (Income Taxes) for future fiscal years - The company adopted ASU 2023-07, Segment Reporting, for fiscal year 2025 annual consolidated financial statements and applied it retrospectively[384](index=384&type=chunk) - The company is currently evaluating the impact of adopting ASU 2024-03 and ASU 2025-01 (Expense Disaggregation Disclosures) and ASU 2023-09 (Improvements to Income Tax Disclosures) for future fiscal years[385](index=385&type=chunk)[386](index=386&type=chunk) [Liquidity and Capital Resources](index=69&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, Extreme Networks had $231.7 million in cash and cash equivalents, $126.7 million in net accounts receivable, and $135.8 million available under its revolving credit facility. The company expects these resources to fund operations for at least the next 12 months, with primary uses including inventory purchases, payroll, share repurchases, and debt payments Cash and Cash Equivalents (in thousands) | Date | Amount | | :----------- | :------- | | June 30, 2025 | $231,745 | | June 30, 2024 | $156,699 | - Principal sources of liquidity include cash and cash equivalents (**$231.7 million**), accounts receivable, net (**$126.7 million**), and available borrowings under the 2023 Revolving Facility (**$135.8 million**)[285](index=285&type=chunk) Net Cash Flows (in thousands) | Category | FY2025 | FY2024 | FY2023 | | :------------------------------------ | :------- | :------- | :------- | | Net cash provided by operating activities | $152,031 | $55,486 | $249,212 | | Net cash used in investing activities | (24,713) | (18,121) | (13,800) | | Net cash used in financing activities | (52,586) | (114,978) | (194,783) | | Foreign currency effect on cash and cash equivalents | 314 | (514) | (325) | | **Net increase (decrease) in cash and cash equivalents** | **$75,046** | **$(78,127)** | **$40,304** | | Cash and cash equivalents at end of period | $231,745 | $156,699 | $234,826 | - A new **$200.0 million** share repurchase program commenced July 1, 2025[286](index=286&type=chunk) - The 2023 Credit Agreement, amended on August 14, 2024, provides a **$200.0 million** first lien term loan facility and a **$150.0 million** five-year revolving credit facility[288](index=288&type=chunk)[291](index=291&type=chunk) [Contractual Obligations](index=75&type=section&id=Contractual%20Obligations) As of June 30, 2025, Extreme Networks had $180.0 million in debt obligations, $45.4 million in non-cancelable inventory purchase commitments, $53.2 million in operating lease obligations, and $17.2 million in other contractual commitments - Debt obligations totaled **$180.0 million** as of June 30, 2025, payable in quarterly installments through fiscal year 2028[305](index=305&type=chunk) - Non-cancelable commitments to purchase inventory amounted to **$45.4 million** as of June 30, 2025, expected to be received and consumed during fiscal 2026[306](index=306&type=chunk) - Operating lease obligations totaled **$53.2 million** as of June 30, 2025, with various expiration dates through fiscal year 2033[307](index=307&type=chunk) - Contractual commitments with suppliers for future services amounted to **$17.2 million** as of June 30, 2025, due through fiscal year 2027[308](index=308&type=chunk) [Off-Balance Sheet Arrangements](index=75&type=section&id=Off-Balance%20Sheet%20Arrangements) Extreme Networks reported no off-balance sheet arrangements as of June 30, 2025 - The company did not have any off-balance sheet arrangements as of June 30, 2025[309](index=309&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=76&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item discusses Extreme Networks' exposure to market risks, primarily related to interest rate fluctuations on its variable-rate debt and foreign currency exchange rates, and the strategies used to manage these risks [Interest Rate Sensitivity](index=76&type=section&id=Interest%20Rate%20Sensitivity) Extreme Networks is exposed to interest rate fluctuations primarily from its variable-rate debt under the Amended Credit Agreement. As of June 30, 2025, $180.0 million of debt was outstanding. The company has not entered into derivative instruments to hedge this risk - The company's exposure to market risk for changes in interest rates relates primarily to its variable rate borrowings from the Amended Credit Agreement[312](index=312&type=chunk) - As of June 30, 2025, the company had **$180.0 million** of debt outstanding, all from the Amended Credit Agreement[312](index=312&type=chunk) Hypothetical Changes in Interest Expense (Year Ended June 30, 2025) | Description | Change in interest rate of -100 bps | Change in interest rate of -50 bps | Average outstanding as of June 30, 2025 | Change in interest rate of +100 bps | Change in interest rate of +50 bps | | :---------- | :-------------------------------- | :------------------------------- | :------------------------------------ | :-------------------------------- | :------------------------------- | | Debt | $(1,927) | $(964) | $192,706 | $1,927 | $964 | [Exchange Rate Sensitivity](index=76&type=section&id=Exchange%20Rate%20Sensitivity) While most sales and expenses are U.S. Dollar-denominated, Extreme Networks conducts some transactions in foreign currencies. The company uses foreign exchange forward contracts to mitigate the effect of foreign currency gains and losses, recognizing net gains of $1.0 million from these contracts in fiscal 2025 - A majority of sales and expenses are denominated in U.S. Dollars, but certain operating expenses are incurred in foreign currencies[314](index=314&type=chunk) - The company enters into foreign exchange forward contracts to mitigate the effect of gains and losses generated by foreign currency forecast transactions, not designated as hedging instruments[315](index=315&type=chunk) Net Gains/Losses from Foreign Exchange Forward Contracts (in millions) | Fiscal Year | Net Gains (Losses) | | :---------- | :----------------- | | 2025 | $1.0 | | 2024 | $(0.3) | | 2023 | $(0.4) | [Item 8. Financial Statements and Supplementary Data](index=77&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This item presents the audited consolidated financial statements of Extreme Networks, Inc. for the fiscal years ended June 30, 2025, 2024, and 2023, including balance sheets, statements of operations, comprehensive income (loss), stockholders' equity, cash flows, and accompanying notes [Reports of Independent Registered Public Accounting Firms](index=78&type=section&id=Reports%20of%20Independent%20Registered%20Public%20Accounting%20Firms) Grant Thornton LLP issued an unqualified opinion on Extreme Networks' consolidated financial statements as of June 30, 2025 and 2024, and on the effectiveness of its internal control over financial reporting as of June 30, 2025. The critical audit matter identified was revenue recognition related to customer rebates - Grant Thornton LLP issued an unqualified opinion on the consolidated financial statements for the years ended June 30, 2025 and 2024[320](index=320&type=chunk) - An unqualified opinion was also issued on the effectiveness of the company's internal control over financial reporting as of June 30, 2025[321](index=321&type=chunk)[330](index=330&type=chunk) - The critical audit matter identified was 'Revenue Recognition – Customer Rebates Determined to be Variable Consideration' due to significant judgments in estimates[325](index=325&type=chunk)[326](index=326&type=chunk) [Consolidated Balance Sheets](index=82&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets show Extreme Networks' financial position as of June 30, 2025, and 2024, detailing assets, liabilities, and stockholders' equity. Total assets increased to $1,153.2 million in 2025 from $1,042.6 million in 2024 Consolidated Balance Sheets (in thousands) | ASSETS | June 30, 2025 | June 30, 2024 | | :------------------------------------ | :------------ | :------------ | | Cash and cash equivalents | $231,745 | $156,699 | | Accounts receivable, net | 126,708 | 89,518 | | Inventories | 102,578 | 141,032 | | Prepaid expenses and other current assets | 74,265 | 79,677 | | Total current assets | 535,296 | 466,926 | | Property and equipment, net | 44,366 | 43,744 | | Operating lease right-of-use assets, net | 38,655 | 44,145 | | Goodwill | 399,574 | 393,709 | | Intangible assets, net | 6,541 | 10,613 | | Other assets | 128,786 | 83,457 | | **Total assets** | **$1,153,218** | **$1,042,594** | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Current liabilities: | | | | Accounts payable | $63,939 | $51,423 | | Accrued compensation and benefits | 62,895 | 42,064 | | Accrued warranty | 9,684 | 10,942 | | Current portion of deferred revenue | 325,078 | 306,114 | | Current portion of long-term debt, net | 14,271 | 9,326 | | Current portion of operating lease liabilities | 11,456 | 10,547 | | Other accrued liabilities | 100,552 | 87,172 | | Total current liabilities | 587,875 | 517,588 | | Deferred revenue, less current portion | 292,415 | 268,909 | | Long-term debt, less current portion, net | 163,724 | 178,265 | | Operating lease liabilities, less current portion | 33,991 | 41,466 | | Deferred income taxes | 7,033 | 7,978 | | Other long-term liabilities | 2,596 | 3,106 | | Total stockholders' equity | 65,584 | 25,282 | | **Total liabilities and stockholders' equity** | **$1,153,218** | **$1,042,594** | [Consolidated Statements of Operations](index=83&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations show a net loss of $7.5 million in fiscal 2025, an improvement from a net loss of $86.0 million in fiscal 2024. Total net revenues increased to $1,140.1 million, and operating income was $16.9 million Consolidated Statements of Operations (in thousands, except per share amounts) | Category | FY2025 | FY2024 | FY2023 | | :----------------------------- | :------- | :------- | :------- | | Product net revenues | $704,462 | $699,257 | $932,454 | | Subscription and support net revenues | 435,605 | 417,946 | 380,000 | | **Total net revenues** | **$1,140,067** | **$1,117,203** | **$1,312,454** | | Total cost of revenues | 430,940 | 486,372 | 557,734 | | Total gross profit | 709,127 | 630,831 | 754,720 | | Research and development expenses | 221,459 | 211,931 | 214,270 | | Sales and marketing expenses | 327,563 | 345,802 | 336,906 | | General and administrative expenses | 139,621 | 99,938 | 89,934 | | Restructuring and related charges | 1,492 | 36,321 | 2,860 | | Amortization of intangible assets | 2,043 | 2,041 | 2,047 | | **Total operating expenses** | **692,178** | **696,033** | **646,407** | | Operating income (loss) | 16,949 | (65,202) | 108,313 | | Interest income | 4,313 | 4,556 | 3,155 | | Interest expense | (15,928) | (16,986) | (17,385) | | Other income (expense), net | (1,061) | 133 | 23 | | Income (loss) before income taxes | 4,273 | (77,499) | 94,106 | | Provision for income taxes | 11,740 | 8,465 | 16,032 | | **Net income (loss)** | **$(7,467)** | **$(85,964)** | **$78,074** | | Net income (loss) per share – basic | $(0.06) | $(0.66) | $0.60 | | Net income (loss) per share – diluted | $(0.06) | $(0.66) | $0.58 | [Consolidated Statements of Comprehensive Income (Loss)](index=84&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The consolidated statements of comprehensive income (loss) show a total comprehensive loss of $0.121 million in fiscal 2025, a significant improvement from a loss of $88.255 million in fiscal 2024. This includes net loss and changes in foreign currency translation adjustments Consolidated Statements of Comprehensive Income (Loss) (in thousands) | Category | FY2025 | FY2024 | FY2023 | | :------------------------------------ | :------- | :------- | :------- | | Net income (loss) | $(7,467) | $(85,964) | $78,074 | | Net change in foreign currency translation adjustments | 7,346 | (2,291) | (8,823) | | **Total comprehensive income (loss)** | **$(121)** | **$(88,255)** | **$67,937** | [Consolidated Statements of Stockholders' Equity](index=85&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) The consolidated statements of stockholders' equity detail changes in common stock, additional paid-in capital, accumulated other comprehensive loss, accumulated deficit, and treasury stock. Total stockholders' equity increased to $65.6 million in fiscal 2025 from $25.3 million in fiscal 2024 Total Stockholders' Equity (in thousands) | Date | Amount | | :----------- | :------- | | June 30, 2025 | $65,584 | | June 30, 2024 | $25,282 | | June 30, 2023 | $116,752 | - Share-based compensation expense recognized was **$82.3 million** in fiscal 2025, **$76.8 million** in fiscal 2024, and **$63.5 million** in fiscal 2023[345](index=345&type=chunk) - Repurchase of stock amounted to **$38.0 million** in fiscal 2025, **$49.9 million** in fiscal 2024, and **$99.9 million** in fiscal 2023[345](index=345&type=chunk) [Consolidated Statements of Cash Flows](index=86&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows show a net increase in cash and cash equivalents of $75.0 million in fiscal 2025, reaching $231.7 million. This was primarily driven by $152.0 million in cash provided by operating activities, offset by cash used in investing and financing activities Consolidated Statements of Cash Flows (in thousands) | Category | FY2025 | FY2024 | FY2023 | | :------------------------------------ | :------- | :------- | :------- | | Net cash provided by operating activities | $152,031 | $55,486 | $249,212 | | Net cash used in investing activities | (24,713) | (18,121) | (13,800) | | Net cash used in financing activities | (52,586) | (114,978) | (194,783) | | Foreign currency effect on cash and cash equivalents | 314 | (514) | (325) | | **Net increase (decrease) in cash and cash equivalents** | **$75,046** | **$(78,127)** | **$40,304** | | Cash and cash equivalents at end of period | $231,745 | $156,699 | $234,826 | - Cash provided by operating activities increased to **$152.0 million** in fiscal 2025, up from **$55.5 million** in fiscal 2024[295](index=295&type=chunk) - Cash used in financing activities decreased to **$52.6 million** in fiscal 2025, primarily due to lower share repurchases and debt repayments compared to prior years[299](index=299&type=chunk) [Notes to Consolidated Financial Statements](index=87&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes to the consolidated financial statements, offering further explanation and breakd

Group 1 - Unity Software Inc. is a notable stock within the Computer and Technology sector, which consists of 605 companies and currently ranks 4 in the Zacks Sector Rank [2] - Unity Software Inc. has a Zacks Rank of 2 (Buy), indicating a positive outlook based on earnings estimates and revisions [3] - Over the past 90 days, the Zacks Consensus Estimate for Unity's full-year earnings has increased by 97.1%, reflecting improved analyst sentiment and a stronger earnings outlook [4] Group 2 - Year-to-date, Unity Software Inc. has returned 71%, significantly outperforming the average gain of 14.1% for the Computer and Technology sector [4] - Unity is part of the Internet - Software industry, which includes 173 companies and currently ranks 69 in the Zacks Industry Rank, with an average gain of 22.2% this year [6] - In comparison, Extreme Networks, another stock in the Computer and Technology sector, has a year-to-date return of 18% and belongs to the Computer - Networking industry, which has gained 16.7% this year [5][6]