Core Insights - Extreme Networks reported strong financial results for Q1 of fiscal 2026, beating analyst expectations for both revenue and earnings, yet the stock fell approximately 16% [1][2] Financial Performance - Revenue increased by 15% year over year to $310.2 million, driven by product sales, while adjusted earnings per share (EPS) rose 29% to $0.22, surpassing average analyst estimates [2] - Software-as-a-service (SaaS) annual recurring revenue reached $216.2 million, reflecting a 24.2% increase from the previous year [2] Margins and Outlook - Adjusted gross margin decreased to 61.3% from 63.7% in the prior-year period, indicating some weakness in profitability [5] - The company anticipates revenue growth to slow to approximately 12% in Q2 and 10% for the full fiscal year, which may be causing concern among investors [5][7] Strategic Developments - Extreme Networks secured significant customer wins in Q2, including a large government client in the Asia-Pacific region, and noted strong bookings for the Extreme Platform ONE [4] - The introduction of a new service agent is expected to enhance network management and support, potentially driving future growth and market share expansion [4] Valuation Considerations - The stock is trading at around 18 times forward adjusted earnings, which does not appear overly expensive, but the company's growth challenges are noteworthy [6]

Company Performance - Extreme Networks reported quarterly earnings of $0.22 per share, matching the Zacks Consensus Estimate, and an increase from $0.17 per share a year ago [1] - The company posted revenues of $310.25 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 4.90%, compared to $269.2 million in the same quarter last year [2] - Over the last four quarters, Extreme Networks has surpassed consensus EPS estimates three times and topped revenue estimates four times [2] Stock Movement and Outlook - Extreme Networks shares have increased approximately 27.1% since the beginning of the year, outperforming the S&P 500's gain of 17.2% [3] - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $0.25 for the coming quarter and $1.02 for the current fiscal year [4][7] - The estimate revisions trend for Extreme Networks was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Computer - Networking industry, to which Extreme Networks belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, which may impact stock performance [8] - Cisco Systems, a competitor in the same industry, is expected to report quarterly earnings of $0.98 per share, reflecting a year-over-year change of +7.7%, with revenues projected at $14.78 billion, up 6.8% from the previous year [9]

Financial Data and Key Metrics Changes - Revenue reached $310 million, up 15% year-over-year, marking the sixth consecutive quarter of revenue growth and the third straight quarter of double-digit year-over-year increases [4][12] - Earnings per share (EPS) was $0.22, up 29% from $0.17 in the prior year [12] - SaaS Annual Recurring Revenue (ARR) grew 24% year-over-year to $216 million [4][12] - Total bookings increased by 21% year-over-year, reflecting strong customer demand [13] Business Line Data and Key Metrics Changes - Product revenue was $194 million, growing 20% year-over-year and achieving six sequential quarters of product revenue growth [13] - Subscription and support revenue totaled $116 million, up 9% year-over-year, with total recurring revenue growing 8% year-over-year [14] - Non-GAAP gross margin was 61.3%, impacted by industry-wide increases in component costs [15] Market Data and Key Metrics Changes - Strong performance was noted in Asia-Pacific and EMEA regions, with significant new customer wins [14] - 36 customers spent over $1 million with the company in the quarter, up from 34 last quarter and 27 in the prior year [14] Company Strategy and Development Direction - The company is focused on expanding its footprint in government sectors and enhancing its technology offerings, particularly with Extreme Fabric and Extreme Platform One [6][9] - The introduction of Extreme Platform One is expected to drive future growth, with positive customer feedback noted [5][10] - The company aims to achieve a revenue growth rate of 10% for the full fiscal year 2026, with a focus on large opportunities and increasing market share [11][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in recovering gross margins through price increases and operational efficiencies [15][20] - The company anticipates continued growth in SaaS ARR and recurring revenue, with a target of 35% of total revenue from recurring sources in fiscal 2026 [17] - Management highlighted the competitive landscape, noting opportunities arising from disruptions among larger competitors [27][29] Other Important Information - The company has been recognized for its corporate responsibility efforts, reducing emissions by 34% since 2021 [11] - The company plans to host an AI Summit to discuss future innovations and strategies [10] Q&A Session Summary Question: Can you talk more about component price increases impacting gross margins? - Management acknowledged rising prices in memory and optics, indicating plans for price increases to recover costs [20][21] Question: What is the impact of the federal government shutdown on your business? - Management stated that the shutdown has had little to no impact, with opportunities opening up in the federal market due to recent certifications [24][25] Question: How is the competitive environment with Cisco and Juniper? - Management noted confusion in the market due to acquisitions and changes in partner programs, presenting opportunities for the company [27][29] Question: Can you provide metrics on Extreme Platform One's commercial introduction? - Management indicated that it is early for metrics but noted high adoption and excitement about the platform [36][38] Question: What are the long-term gross margin targets? - Management maintained a long-term target of 64% to 66% gross margins, with expectations for recovery from current levels [62][65]

Financial Data and Key Metrics Changes - Revenue reached $310 million, up 15% year-over-year, marking the sixth consecutive quarter of revenue growth and the third straight quarter of double-digit year-over-year increases [4][12] - Earnings per share (EPS) was $0.22, up 29% from $0.17 in the prior year [12] - SaaS Annual Recurring Revenue (ARR) grew 24% year-over-year to $216 million [4][12] - Total bookings increased by 21% year-over-year, reflecting strong customer demand [13] Business Line Data and Key Metrics Changes - Product revenue was $194 million, growing 20% year-over-year and achieving six consecutive quarters of product revenue growth [13] - Subscription and support revenue totaled $116 million, up 9% year-over-year, with total recurring revenue growing 8% year-over-year, representing 36% of total revenue [14] - Non-GAAP gross margin was 61.3%, impacted by industry-wide increases in component costs [15] Market Data and Key Metrics Changes - Strong performance was noted in Asia-Pacific and EMEA regions, with significant new customer wins contributing to growth [14] - 36 customers spent over $1 million with the company in the quarter, up from 34 last quarter and 27 in the prior year [14] Company Strategy and Development Direction - The company is focused on expanding its market share through innovative technology solutions, including Extreme Fabric and Extreme Platform ONE, which leverage AI for enhanced networking capabilities [4][5] - The company aims to achieve a revenue growth target of 10% for the fiscal year 2026, with a strong emphasis on SaaS ARR growth in the low 20% range [11][17] - The company is positioning itself as a strategic alternative to incumbents, particularly in the public sector and hospitality markets [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to recover gross margins through price increases and operational efficiencies [15][20] - The company anticipates continued growth in large opportunities and believes fiscal 2026 will mark an inflection point in its growth trajectory [11] - Management highlighted the competitive landscape, noting confusion among competitors as an opportunity for the company to gain market share [28][70] Other Important Information - The company has been recognized as a leader in the 2025 MarketScape by IDC, highlighting its unique technology and deployment flexibility [5] - The company is committed to corporate responsibility, having reduced emissions by 34% since 2021 and aiming for 50% renewable electricity sourcing [11] Q&A Session Summary Question: Can you talk more about component price increases impacting gross margins? - Management acknowledged rising prices in memory and optics, implementing price increases to recover costs, with expectations to improve gross margins over time [20][21] Question: What is the impact of the federal government shutdown on your business? - Management indicated that the shutdown had little to no impact, with opportunities opening up in the federal market due to recent certifications [25] Question: How is the competitive environment with Cisco and Juniper? - Management noted confusion in the market due to HPE's acquisition of Juniper and Cisco's partner program overhaul, creating opportunities for the company [27][29] Question: What metrics do you have for Extreme Platform ONE's commercial introduction? - Management stated that it is early to present metrics but noted high adoption and excitement about the capabilities of Platform ONE [38][39] Question: What are the long-term gross margin targets? - Management maintained a long-term gross margin target of 64%-66%, with expectations for recovery in the near term [63][66]

Financial Data and Key Metrics Changes - Revenue reached $310 million, up 15% year-over-year, marking the sixth consecutive quarter of revenue growth and the third straight quarter of double-digit year-over-year increases [4][13] - Earnings per share (EPS) was $0.22, up 29% from $0.17 in the prior year [13] - SaaS Annual Recurring Revenue (ARR) grew 24% year-over-year to $216 million [4][14] - Total bookings increased by 21% year-over-year, reflecting strong customer demand [15] Business Line Data and Key Metrics Changes - Product revenue was $194 million, growing 20% year-over-year and achieving six sequential quarters of product revenue growth [15][16] - Total subscription and support revenue was $116 million, up 9% year-over-year [16] - Recurring revenue grew 8% year-over-year, representing 36% of total revenue [16] Market Data and Key Metrics Changes - Strong performance was noted in Asia-Pacific and EMEA regions, with significant new customer wins [16] - 36 customers spent over $1 million with the company in the quarter, up from 34 last quarter and 27 in the prior year [16] Company Strategy and Development Direction - The company is focusing on technology innovation, with strong interest in the new Extreme Platform One and Wi-Fi 7 solutions [5][10] - The company aims to expand its footprint in government sectors and enhance its offerings with new sovereign cloud capabilities [6][7] - The company is positioning itself as a strategic alternative to incumbents, particularly in public sector and hospitality markets [16] Management's Comments on Operating Environment and Future Outlook - Management expects revenue growth to accelerate to 10% for the remainder of fiscal 2026, driven by large opportunities and increasing win rates [12] - The company is optimistic about its growth trajectory, with expectations of continued strong performance in SaaS ARR and new commercial models [12][39] Other Important Information - Non-GAAP gross margin was 61.3%, impacted by industry-wide increases in component costs, but expected to recover over time [17] - The company has implemented price increases to mitigate higher costs and drive margin recovery [17][22] Q&A Session Summary Question: Can you talk more about component price increases affecting gross margins? - Management acknowledged rising prices in memory and optics and mentioned plans for a mid-single-digit price increase to recover costs [21][22] Question: What is the impact of the federal government shutdown on the business? - Management indicated that the shutdown had little to no impact on their business, with opportunities opening up in the federal market due to recent certifications [24][25] Question: How is the competitive environment with Cisco and Juniper? - Management noted confusion in the market due to HPE's acquisition of Juniper and Cisco's partner program overhaul, creating opportunities for the company [26][27] Question: What is the status of Extreme Platform One's commercial introduction? - Management reported high adoption and excitement about the capabilities of Extreme Platform One, with metrics expected to be shared in future updates [32][34] Question: What are the long-term gross margin targets? - Management maintained a long-term gross margin target of 64% to 66%, with expectations of recovery from current tactical challenges [50][52]

1Q26 Financial Results October 29, 2025 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, Gr ...

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Exhibit 99.1 For more information, contact: Investor Relations Media Contact Stan Kovler Amy Aylward 919/595-4196 603/952-5138 Investor_relations@extremenetworks.com pr@extremenetworks.com Extreme Networks Reports First Quarter Fiscal Year 2026 Financial Results Q1 revenue up 15% year-over-year, marking sixth consecutive quarter of sequential growth SaaS ARR up 24% YoY Morrisville, NC, October 29, 2025 -- Extreme Networks, Inc. ("Extreme") (Nasdaq: EXTR) today released financial results for its first quarte ...

Core Insights - Extreme Networks reported a 15% year-over-year increase in revenue for Q1 fiscal 2026, marking the sixth consecutive quarter of sequential growth [1][4] - The company's SaaS Annual Recurring Revenue (ARR) rose by 24% year-over-year, indicating strong momentum in its subscription model [1][4] - The CEO highlighted improved execution, increasing customer demand, and interest in AI-powered networking solutions as key drivers of growth [2][4] Financial Performance - Total revenue for Q1 2026 was $310.2 million, up from $269.2 million in Q1 2025, reflecting a $41 million increase [4][6] - GAAP diluted EPS improved to $0.04, compared to a loss of $0.08 in the previous year [4][8] - Non-GAAP diluted EPS was $0.22, up from $0.17 year-over-year [4][8] Margins and Profitability - GAAP gross margin was 60.6%, down from 63.0% in the prior year [4][6] - Non-GAAP gross margin decreased to 61.3% from 63.7% year-over-year [4][8] - The company achieved a GAAP operating profit margin of 3.6%, compared to a loss margin of 1.8% in the previous year [4][8] Cash Flow and Liquidity - The ending cash balance was $209.0 million, a decrease of $22.7 million from the previous quarter but an increase of $49.5 million year-over-year [7][9] - Net cash for Q1 was $7.8 million, down from $51.7 million at the end of Q4 2025 [7][9] Business Outlook - For Q2 fiscal 2026, the company targets total net revenue between $309.0 million and $315.0 million [11][12] - The full-year fiscal 2026 revenue guidance is set between $1,247.0 million and $1,264.0 million [13] Recent Key Highlights - Significant wins include a major government contract in APAC and partnerships with various organizations to enhance their networking capabilities [7][8] - The deployment of Extreme's solutions in notable venues like the T-Mobile Center and Hyatt Regency Samarafushi Maldives showcases the company's expanding market presence [7][8]

Core Insights - Extreme Networks is set to release its quarterly earnings on October 29, 2025, with an estimated EPS of $0.22 and projected revenue of approximately $295.7 million [1][5] - The company has scheduled an Investor Day on November 10, 2025, which may significantly influence investor sentiment and stock performance [2][5] Financial Metrics - The price-to-sales ratio is approximately 2.47, indicating how the market values the company's sales [3][5] - The enterprise value to sales ratio is also about 2.47, providing further insight into market valuation [3][5] - The enterprise value to operating cash flow ratio stands at 17.25, suggesting market expectations for future cash flow growth [3] - The debt-to-equity ratio is 3.41, indicating a significant amount of debt compared to equity, which may raise concerns about financial leverage [4][5] - The current ratio is 0.91, below 1, suggesting potential liquidity concerns as the company may struggle to cover short-term liabilities with current assets [4]