Extreme Networks(EXTR) - 2024 Q4 - Annual Results

Financial Performance - Fiscal Q4 2024 revenue was $256.7 million, down 29% year-over-year but up 22% quarter-over-quarter[4] - GAAP loss per share for Q4 was $0.42, compared to a profit of $0.19 in the prior year quarter[4] - Fiscal Year 2024 revenue totaled $1,117.2 million, a decrease of 15% year-over-year[5] - Total net revenues for the three months ended June 30, 2024, were $256.7 million, a decrease of 29.5% compared to $363.9 million for the same period in 2023[27] - The company reported a net loss of $54.2 million for the three months ended June 30, 2024, compared to a net income of $25.4 million in the same period last year[27] - GAAP net loss for the quarter ended June 30, 2024, was $(85.96) million, compared to a net income of $78.07 million for the same period last year[28] - Non-GAAP net loss for the three months ended June 30, 2024, was $(9,863) million, compared to a profit of $43,891 million for the same period in 2023[41] - Non-GAAP net income for the year ended June 30, 2024, was $43,355 million, a decrease from $146,305 million in the previous year[41] Revenue Breakdown - SaaS ARR reached $167.0 million, reflecting a 29% year-over-year growth[4] - Product revenues decreased to $152.7 million from $261.7 million year-over-year, representing a decline of 41.7%[27] - Subscription and support revenues increased slightly to $103.9 million, up 1.7% from $102.2 million in the prior year[27] Margins and Expenses - Non-GAAP gross margin for Q4 was 45.4%, down from 60.2% in the prior year quarter[5] - Total gross profit for the three months ended June 30, 2024, was $114.6 million, down 46.6% from $214.4 million in the same quarter of 2023[27] - Operating expenses totaled $163.6 million, a decrease of 7.3% compared to $176.5 million in the prior year[27] - Non-GAAP operating loss for the quarter was $(11.84) million, with a non-GAAP operating margin of (4.6)%, compared to 17.4% in the previous year[40] Cash Flow and Liquidity - The Q4 ending cash balance was $156.7 million, a decrease of $78.1 million from the end of Q4 in the prior year[8] - Total free cash flow for the three months ended June 30, 2024, was $10.9 million, a significant decrease from $75.5 million in the same period last year[15] - Cash and cash equivalents decreased to $156.7 million from $234.8 million year-over-year, a decline of 33.2%[26] - Total current assets decreased to $466.9 million, down 19.0% from $576.2 million in the previous year[26] Future Outlook - For the first quarter of fiscal 2025, the company is targeting total net revenue between $255.0 million and $265.0 million, with a gross margin of 61.2% to 63.2%[16] - The company expects an operating margin for FQ1'25 to range from (5.3%) to (2.3%) and earnings per share to be between ($0.14) and ($0.09)[17] - For the full fiscal year 2025, the company is projecting total net revenue between $1,110.0 million and $1,135.0 million[18] Strategic Initiatives - Extreme formed a co-innovation alliance with Intel to enhance AI capabilities within its AI Expert solution[9] - The company completed the rollout of a high-speed Wi-Fi network at Liverpool Football Club's Anfield Stadium[10] - The City of Prescott, Arizona, selected Extreme to modernize its public infrastructure with a new networking model[11] Risks and Considerations - The company acknowledges potential risks that could impact future results, including market conditions and competition in the network switching equipment sector[23] - The company has provided a non-GAAP reconciliation to offer additional insights into its operations, excluding certain costs such as share-based compensation and restructuring charges[21] Shareholder Value - Extreme Networks is focusing on enhancing stockholder value through cash flows available for future opportunities, as indicated by its use of non-GAAP measures[31]