Market Growth and Trends - The total addressable market (TAM) for networking solutions exceeded $42 billion in 2024, projected to grow at a CAGR of approximately 7%, reaching $59 billion by 2029[143]. - Cloud-managed networking solutions are expected to grow at a CAGR of approximately 15% through 2029, with AI Networking for the Campus forecasted to grow at a 72% CAGR over the next five years[143]. - Extreme's cloud networking segment is estimated to be a $15 billion market, growing at 15% annually over the next five years[146]. - The company aims to expand its technology foothold in the cloud networking segment, anticipating that cloud networking's compound annual growth rate will outpace that of on-premises managed networking[149]. Product and Service Innovations - Extreme Platform ONE, launched in July 2025, integrates networking, security, and AI solutions to reduce complexity for enterprises[134]. - The company aims to deliver significant productivity gains for IT teams by streamlining network design, deployment, management, and operations through AI capabilities[139]. - AI-driven insights and automation are key features of Extreme Platform ONE, allowing real-time adaptation to bandwidth spikes and security threats[146]. - The company offers a hybrid approach to cloud solutions, providing customers with options for public, private, or on-premises deployments[146]. - ExtremeCloud IQ conforms to ISO/IEC standards for data privacy and protection, ensuring compliance and security for customers[146]. - The company emphasizes a frictionless experience for secure hybrid work, integrating network, application, and device security into a single solution[146]. Financial Performance - Net revenues for Q2 fiscal 2026 reached $317.9 million, a 13.8% increase from $279.4 million in Q2 fiscal 2025[152]. - Product revenues increased by $25.5 million or 14.8% for the three months ended December 31, 2025, compared to the same period in fiscal 2025[150]. - Subscription and support revenues rose by $13.1 million or 12.2% for the three months ended December 31, 2025, compared to the same period in fiscal 2025[151]. - Total gross margin was 61.4% of net revenues, down from 62.7% in Q2 fiscal 2025[152]. - Operating income for Q2 fiscal 2026 was $13.0 million, slightly up from $12.7 million in Q2 fiscal 2025[152]. - Cash flows from operating activities were $36.1 million for the six months ended December 31, 2025, down from $40.1 million in the same period of the previous year[152]. Expenses and Cost Management - Research and development expenses increased by $2.6 million or 4.8% for the three months ended December 31, 2025, primarily due to higher personnel costs[157]. - Sales and marketing expenses rose by $9.4 million or 11.8% for the three months ended December 31, 2025, reflecting increased promotional activities[155]. - General and administrative expenses increased by $8.5 million or 32.7% for the three months ended December 31, 2025 compared to the same period in fiscal 2025[164]. Cash Flow and Financing - Cash and cash equivalents as of December 31, 2025 were $219.8 million, down from $231.7 million as of June 30, 2025[179]. - Net cash provided by operating activities for the six months ended December 31, 2025 was $36.1 million, compared to $40.1 million for the same period in 2024[186]. - Cash flows used in investing activities for the six months ended December 31, 2025 were $13.9 million, compared to $12.3 million for the same period in 2024[189]. - Cash flows used in financing activities for the six months ended December 31, 2025, were $34.0 million, primarily due to share repurchases of $12.0 million and tax payments of $14.5 million[190]. - The company repurchased 577,281 shares of common stock at a total cost of $12.0 million during the six months ended December 31, 2025[180]. Debt and Commitments - As of December 31, 2025, the company had $172.5 million of debt outstanding, with an average daily outstanding amount of $177.6 million during the quarter[194][199]. - The company had non-cancelable commitments to purchase $52.2 million of inventory as of December 31, 2025[195]. - Contractual commitments to suppliers amounted to $12.9 million due through fiscal year 2027[196]. - The company recognized foreign currency transaction net gains of $1.0 million for the six months ended December 31, 2025, compared to $1.4 million for the same period in 2024[206]. Interest and Currency Effects - Interest income for the three months ended December 31, 2025 was $1.1 million, an increase from $0.8 million in the same period of 2024[169]. - Interest expense decreased to $3.4 million for the three months ended December 31, 2025 from $4.2 million in the same period of 2024[171]. - The average interest rate on outstanding borrowings was 5.92% as of December 31, 2025[200]. - The company experienced a decrease in foreign currency effect on cash and cash equivalents due to changes in exchange rates[192]. - As of December 31, 2025, the company had foreign exchange forward contracts with a total notional principal amount of $68.4 million[202]. - Zero-cost collar contracts designated as cash flow hedges had a total notional principal amount of $55.1 million as of December 31, 2025[205].

Core Viewpoint - Top Wall Street analysts have revised their outlook on several prominent companies, indicating potential investment opportunities and shifts in market sentiment [1] Company Analysis - Analysts are considering buying META stock, suggesting a positive outlook for the company [1]

分组1 - Extreme Networks reported quarterly earnings of $0.26 per share, exceeding the Zacks Consensus Estimate of $0.24 per share, and showing an increase from $0.21 per share a year ago, resulting in an earnings surprise of +6.86% [1] - The company achieved revenues of $317.93 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 2.08%, and up from $279.36 million in the same quarter last year [2] - Over the last four quarters, Extreme Networks has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] 分组2 - The stock has underperformed, losing about 11.7% since the beginning of the year, while the S&P 500 has gained 1.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.25 on revenues of $308.2 million, and for the current fiscal year, it is $1.00 on revenues of $1.25 billion [7] - The Zacks Industry Rank for Computer - Networking is currently in the bottom 18% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Data and Key Metrics Changes - Total revenue for Q2 Fiscal Year 2026 was $318 million, representing a 14% year-over-year increase and exceeding guidance [15][23] - Earnings per share (EPS) was $0.26, up from $0.21 in the prior year quarter, marking a 24% year-over-year improvement [15][21] - SaaS ARR grew by 25% year-over-year, reaching $227 million, driven by strong demand for Platform One subscriptions [5][15] - Non-GAAP gross margin increased to 62%, up 70 basis points from the previous quarter [17][21] Business Line Data and Key Metrics Changes - Product revenue increased double digits year-over-year for the fourth consecutive quarter, indicating strong demand across all verticals [5][15] - Subscription and support revenue reached $120 million, up 12% year-over-year [16] - Platform One bookings were significantly ahead of targets, contributing to accelerating year-over-year performance in subscription bookings [15][21] Market Data and Key Metrics Changes - The company has seen strong revenue growth across all regions, indicating improved alignment between go-to-market teams and robust demand for IT infrastructure [16] - The company closed 34 deals over $1 million, showcasing confidence in its technology and ability to win competitive situations [7][9] - The company is experiencing strong momentum in the EMEA region, with expectations for government spending to return, which could serve as a tailwind for future growth [56] Company Strategy and Development Direction - The company is focused on leveraging its AI-powered platform to drive growth and market share, with a unique agentic AI core that differentiates it from competitors [8][34] - The company aims to capitalize on the ongoing innovation in networking technology, particularly with the introduction of Wi-Fi 7 and cloud choice solutions [9][12] - The company is enhancing its partner program to simplify deal registration and improve profitability for partners, which is expected to drive further growth [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand environment, citing low elasticity of demand for networking infrastructure, which allows for price flexibility [13] - The company anticipates continued revenue growth, with expectations of profitability growth around 20% on double-digit revenue growth for the year [14][21] - Management highlighted the importance of operational agility in navigating supply chain challenges and maintaining customer demand [13][18] Other Important Information - The company has implemented a price increase of 7%, which has not significantly impacted customer demand, indicating resilience in pricing [44][46] - The company is actively seeking alternative sources for components to mitigate supply chain issues, demonstrating a proactive approach to operational challenges [47] Q&A Session Summary Question: Evidence of Share Gain - Management uses third-party analysts to track market share and has seen growth at three times the rate of competitors, indicating strong performance in the enterprise networking space [26][27] Question: AI's Importance - AI remains a top priority for customers, and the company is positioned to leverage its unique AI platform to drive better business outcomes [32][34] Question: Competitive Displacement - The company is often replacing both Wi-Fi and switching components in competitive displacements, showcasing its unique solutions [40] Question: Customer Reaction to Price Increases - Customers have shown resilience to price increases, with networking being a non-negotiable need for organizations [44][46] Question: EMEA Sales Strength - The company has not yet fully benefited from regulatory changes regarding data sovereignty but anticipates positive impacts in the future [55][56] Question: Professional Services Margins - Professional services have lower margins compared to subscription services, impacting overall margin profiles in the short term [78][80] Question: Future Pricing Impact - Management expects pricing adjustments to positively impact margins in the future, particularly as product margins improve [88][90]

Financial Data and Key Metrics Changes - Total revenue for Q2 fiscal year 2026 was $318 million, representing a 14% year-over-year increase and exceeding guidance [15][23] - Earnings per share (EPS) was $0.26, up from $0.21 in the prior year quarter, marking a 24% year-over-year improvement [15][21] - SaaS ARR grew 25% year-over-year, reaching $227 million, driven by strong demand for Platform ONE [5][15] - Non-GAAP gross margin increased to 62%, up 70 basis points from the previous quarter [17][21] Business Line Data and Key Metrics Changes - Product revenue increased double digits year-over-year for the fourth consecutive quarter [5] - Subscription and support revenue reached $120 million, up 12% year-over-year [16] - Deferred recurring revenue climbed to $628 million, a 9% year-over-year improvement [17] Market Data and Key Metrics Changes - The company experienced strong revenue growth across all regions, indicating improved alignment between go-to-market teams and robust demand for IT infrastructure [16] - The company noted a return of government spending in Europe and expansion in APAC, contributing to positive market dynamics [12] Company Strategy and Development Direction - The company is focused on leveraging its AI-powered platform to drive growth and market share, with a strong emphasis on innovation and technology differentiation [5][9] - The introduction of the Extreme Partner First program aims to enhance partner profitability and streamline the sales process [10][11] - The company anticipates significant growth opportunities due to competitive displacements and a major end-of-life refresh cycle in the industry [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand environment, citing low elasticity of demand for networking infrastructure, which allows for price flexibility [13] - The company expects to grow profit faster than revenue, with anticipated profitability growth of around 20% on double-digit revenue growth for the year [14] - Management highlighted the importance of AI in customer discussions and the unique advantages of their agentic AI platform [32][34] Other Important Information - The company has successfully navigated supply chain challenges by implementing a replacement strategy and qualifying alternative sources for components [13][47] - The company is set to deliver several multimillion-dollar deployments in Q3 and Q4, which may impact gross margins due to lower-margin professional services [19][21] Q&A Session Summary Question: Evidence of Share Gain - Management uses third-party analysts to track share gains, noting that they are growing three times faster than competitors in the enterprise networking space [26][27] Question: AI Importance - AI is a top priority for customers, and the company is positioned to leverage its unique agentic AI platform to drive better business outcomes [32][34] Question: Competitive Displacement - The company often replaces both Wi-Fi and switching components in projects, with unique solutions that competitors cannot replicate [40][41] Question: Customer Reaction to Price Increases - Customers have shown resilience to price increases, with demand for networking infrastructure remaining strong despite rising costs [44][46] Question: EMEA Sales Strength - The company has seen strong sales in EMEA, with expectations for continued growth driven by data sovereignty requirements and government spending [55][56] Question: Professional Services Margins - Professional services have lower margins compared to subscription services, impacting overall margin profiles during large installations [77][80]

Financial Data and Key Metrics Changes - Total revenue for Q2 2026 was $318 million, representing a 14% year-over-year increase and exceeding guidance [14] - Earnings per share (EPS) rose to $0.26, a 24% improvement from $0.21 in the prior year quarter [14] - Non-GAAP gross margin increased to 62%, up 70 basis points from the previous quarter [16] - Adjusted EBITDA was $52.4 million, with an adjusted EBITDA margin of 16.5% [19] Business Line Data and Key Metrics Changes - Product revenue increased double digits year-over-year for the fourth consecutive quarter [4] - SaaS ARR grew by 25% year-over-year, reaching $227 million [4] - Subscription and support revenue reached $120 million, up 12% year-over-year [15] Market Data and Key Metrics Changes - The company experienced strong revenue growth across all regions, indicating robust demand for critical IT infrastructure [15] - The company closed 34 deals over $1 million, showcasing its ability to win large enterprise projects [5] - The company noted strong momentum in the EMEA region, with record sales attributed to regulatory requirements around data sovereignty [52] Company Strategy and Development Direction - The company aims to accelerate its leadership position in the market, driven by innovation and competitive differentiation [7] - The introduction of the Extreme Partner First program aims to enhance partner profitability and streamline deal registration [9] - The company is focused on moving upmarket and winning larger enterprise networking projects, leveraging its unique technology [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand environment, citing low elasticity of demand for networking infrastructure [11] - The company anticipates continued growth in profit faster than revenue, with expected profitability growth of around 20% [12] - Management highlighted the importance of AI in customer conversations and the company's unique agentic AI platform as a competitive advantage [30] Other Important Information - The company is actively managing supply chain challenges and has implemented a replacement strategy for components [11] - The company expects to see a significant multi-year growth opportunity due to competitive displacements in the market [10] Q&A Session Summary Question: Evidence of share gain and impact of restructuring - Management uses third-party analysts to track share gains and has confidence in their booking outlook due to recent restructuring efforts [24][26] Question: Importance of AI in offerings - AI is a top priority for customers, and the company believes its agentic AI platform provides a competitive edge [30][32] Question: Competitive displacements and project scope - Projects vary in scope, with some starting in one area and expanding to others, leveraging unique solutions like data sovereignty [36][38] Question: Customer reaction to price increases - Customers have shown resilience to price increases, and the company plans to evaluate further price adjustments as needed [42][44] Question: Impact of professional services on margins - Professional services have lower margins compared to subscription services, affecting overall margin mix in the short term [75][78] Question: Long-term growth expectations - Management is optimistic about continued double-digit growth in 2027, driven by market share gains and improved solutions [66][70]

2Q26 Financial Results January 28, 2026 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), Non - GAAP Net Income (Loss), Non - GAAP Operating Expense, Gross Debt ...

Financial Performance - Revenue for Q2 FY2026 was $317.9 million, representing a 14% year-over-year increase and a 2.5% quarter-over-quarter increase[3] - SaaS ARR reached $226.8 million, up 25.2% year-over-year and 4.9% quarter-over-quarter[3] - GAAP diluted EPS was $0.06, consistent with the previous year and up from $0.04 in the last quarter[3] - Non-GAAP diluted EPS increased to $0.26, compared to $0.21 last year and $0.22 last quarter[3] - Total net revenues for the three months ended December 31, 2025, were $317.9 million, a 13.8% increase from $279.4 million in the same period of 2024[23] - Gross profit for the same period was $195.1 million, representing a gross margin of approximately 61.4%[23] - Operating income for the three months ended December 31, 2025, was $13.0 million, compared to $12.7 million in the prior year, indicating a slight increase[23] - Net income for the three months ended December 31, 2025, was $7.9 million, compared to $7.4 million in the same period of 2024, reflecting a year-over-year growth[23] - The company reported a basic and diluted net income per share of $0.06 for the three months ended December 31, 2025, consistent with the prior year[23] - GAAP revenues for the six months ended December 31, 2025, increased to $628,170,000, up from $548,559,000 in 2024, representing a growth of 14.5%[43] - Non-GAAP gross profit for the six months ended December 31, 2025, was $387,070,000, compared to $348,610,000 in 2024, reflecting a year-over-year increase of 11.0%[43] - Non-GAAP operating income for the six months ended December 31, 2025, reached $89,137,000, up from $74,659,000 in 2024, indicating a growth of 19.4%[43] - GAAP net income for Q4 2025 was $7,876 million, compared to $7,382 million in Q4 2024, representing a 6.7% increase[44] - Non-GAAP net income for Q4 2025 reached $34,725 million, up from $28,573 million in Q4 2024, reflecting a 21.5% growth[44] - Adjusted EBITDA for Q4 2025 was $52,413 million, compared to $45,695 million in Q4 2024, indicating a 14.9% increase[44] - The diluted non-GAAP net income per share for Q4 2025 was $0.26, up from $0.21 in Q4 2024, representing a 23.8% increase[44] - The company reported a GAAP net income of $13,487 million for the first half of 2025, a significant recovery from a loss of $3,122 million in the first half of 2024[44] Cash and Assets - The company ended Q2 with a cash balance of $219.8 million, an increase of $10.8 million from Q1 2026[5] - Net cash for Q2 was $47.3 million, compared to net cash of $7.8 million at the end of Q1 2026[5] - Cash and cash equivalents as of December 31, 2025, were $219.8 million, a decrease from $231.7 million as of June 30, 2025[21] - Total assets increased to $1.17 billion as of December 31, 2025, compared to $1.15 billion as of June 30, 2025[21] - Total current liabilities decreased to $565.1 million as of December 31, 2025, from $587.9 million as of June 30, 2025[21] - Cash flows from operating activities for the six months ended December 31, 2025, totaled $36,140,000, a decrease from $40,118,000 in 2024[25] - Cash and cash equivalents at the end of the period were $219,791,000, down from $170,322,000 at the end of December 31, 2024[25] Company Strategy and Market Position - The company is focused on AI-driven cloud networking solutions, aiming to leverage technology to enhance business operations and customer connections[13] - Forward-looking statements indicate expectations for continued demand and product adoption, with potential risks related to competitive dynamics and macroeconomic factors[17] - The company expects to continue investing in new product development and market expansion strategies to enhance future growth[30] - Extreme was recognized as a Leader in the IDC MarketScape for Worldwide Enterprise Wireless LAN 2025 Vendor Assessment, highlighting strengths in customer support and deployment options[5] Expenses and Adjustments - The company incurred share-based compensation expenses of $44,679,000 for the six months ended December 31, 2025, compared to $41,219,000 in 2024[25] - Litigation charges for Q4 2025 were $822 million, slightly lower than $877 million in Q4 2024, indicating a 6.3% decrease[44] - System transition costs for Q4 2025 were $6,467 million, compared to $4,026 million in Q4 2024, reflecting a 60.7% increase[44] - Total adjustments to GAAP operating income for the six months ended December 31, 2025, amounted to $64,850,000, compared to $66,711,000 in 2024[43] - Total adjustments to GAAP net income for the first half of 2025 were $83,657 million, compared to $85,639 million in the first half of 2024, a decrease of 2.3%[44]

MORRISVILLE, N.C.--(BUSINESS WIRE)--Extreme Networks, Inc. ("Extreme†) (Nasdaq: EXTR) today released financial results for its second quarter of fiscal 2026 ended December 31, 2025. Extreme FY26 Results - Seven Consecutive Quarters of Revenue Growth Share Kevin Rhodes, Executive Vice President and Chief Financial Officer stated, "Second quarter results exceeded our expectations for revenue and profitability. Our results highlight the leverage in our business model, where earnings growth exceeds revenue gr ...

Core Insights - Extreme Networks, Inc. has launched a new partner program called Extreme Partner First, aimed at simplifying partner engagement and enhancing collaboration through a unified rebate structure and AI tools [1][4] Group 1: Program Features - The Extreme Partner First program eliminates confusion and delays typical in traditional partner programs, offering quicker deal approvals and clearer pricing [1][2] - It simplifies deal registration and provides transparent pricing, comprehensive training, and certifications to improve time to revenue and profitability [2][6] - The program includes a global, SKU- and volume-based rebate model, enhancing margin predictability for partners [6] Group 2: Partner Benefits - Reseller partners benefit from a unified global deal framework that allows for frictionless international deal registration and protection [6] - The program features an AI Sales Assistant that helps partners access critical sales information quickly, facilitating faster deal closures [6] - Role-based experiences and automation provide personalized dashboards, real-time deal visibility, and accelerated access to rewards [6] Group 3: Commitment to Partners - The program reflects Extreme Networks' commitment to building long-term partnerships focused on mutual success and customer satisfaction [4] - The company emphasizes the importance of removing friction in partner programs to adapt to accelerating technology shifts and rising customer expectations [4]