Core Viewpoint - Actelis Networks has received a follow-on order of approximately $150,000 from a major European natural gas transmission operator, validating its technology and demonstrating growing adoption in the energy sector, particularly for critical infrastructure monitoring and cyber-hardened connectivity [1][4]. Group 1: Company Overview - Actelis Networks, Inc. is a market leader in hybrid fiber, cyber-hardened networking solutions, focusing on rapid deployment for wide-area IoT applications across various sectors including government, military, and utilities [5]. - The company's solutions provide fiber-grade performance while maintaining cost-efficiency through hybrid fiber-copper networks, enabling quick modernization of legacy infrastructure [5]. Group 2: Industry Context - The energy sector is increasingly recognized as a critical component of national and homeland security, with operators facing pressure to modernize monitoring systems and implement high levels of cyber protection [2]. - Actelis' solutions offer advanced end-to-end encryption protocols to protect against cyber threats, including hacking and denial of service attacks, which are particularly relevant given the heightened cyber threats targeting critical infrastructure in recent years [3]. Group 3: Customer Engagement - The follow-on order reflects customer satisfaction and confidence in Actelis' technology, as the operator aims to maintain and upgrade security standards for essential infrastructure [1][4]. - The deployment is being executed in collaboration with denk-stein:net GmbH, a long-standing partner of Actelis, serving customers across Germany, Austria, Hungary, and Switzerland [4].

Market Overview - The broader equity markets have remained resilient despite President Trump's tariff threats, trading in record territory, primarily driven by a tech rally [1] - Blue-chip tech firms have shown solid gains due to a positive start to the earnings season and advancements in AI monetization [1] - The Federal Reserve's decision to maintain interest rates in the range of 3.5% to 3.75% has also supported the uptrend, reflecting economic strength and stable job market conditions [1] Investment Opportunities - Investors are advised to focus on "cash cow" stocks that provide higher returns, with an emphasis on identifying stocks with high return on equity (ROE) [2] - High ROE indicates that companies are effectively reinvesting cash at a high rate of return, making them attractive investment options [3][4] - Stocks identified with high ROE include Arista Networks, Corning, Banco Bilbao Vizcaya Argentaria, The TJX Companies, and TE Connectivity, all of which have strong fundamentals and consistent earnings surprises [2][8] Screening Parameters - The primary screening parameters for identifying cash-rich stocks include cash flow greater than $1 billion and ROE exceeding the industry average [5] - Additional metrics used for screening include price/cash flow ratio lower than the industry average and return on assets (ROA) greater than the industry average [6] - A five-year EPS historical growth greater than the industry average and a Zacks Rank of 1 or 2 are also considered to ensure strong performance [7] Company Profiles - **Arista Networks**: Engaged in cloud networking solutions with a long-term earnings growth expectation of 20.1% and a trailing four-quarter earnings surprise of 10.2% [9][10] - **Corning**: Focuses on advanced glass technologies with a long-term earnings growth expectation of 18.8% and a trailing four-quarter earnings surprise of 4.4% [11] - **Banco Bilbao**: Provides a range of banking services with a long-term earnings growth expectation of 12% and a trailing four-quarter earnings surprise of 5.7% [12] - **The TJX Companies**: A leading off-price retailer with a long-term earnings growth expectation of 10.2% and a trailing four-quarter earnings surprise of 5.5% [13][14] - **TE Connectivity**: Designs connectivity solutions with a long-term earnings growth expectation of 12% and a trailing four-quarter earnings surprise of 7.5% [15][16]

Core Viewpoint - Cisco Systems (CSCO) has experienced a significant 6-day winning streak, resulting in a cumulative gain of 7.6% and an increase in market capitalization by approximately $22 billion, bringing its total valuation to $312 billion [2][3]. Group 1: Stock Performance - The stock has a year-to-date (YTD) return of 3%, outperforming the S&P 500, which has a return of 1.9%, prompting a reassessment of its valuation [3]. - Cisco's stock has shown a bullish momentum, with a daily RSI momentum indicator indicating a breakout, and the share price moving above its 20-day and 50-day moving averages [8]. Group 2: Analyst Insights - An upgrade from Evercore ISI analysts has contributed to the stock's rally, with the rating elevated from 'In-Line' to 'Outperform' and the price target raised from $80 to $100 [4][8]. - The announcement of the rating upgrade led to a 3.2% increase in stock price on the announcement day, boosting investor confidence and trading volume [8]. Group 3: Market Context - Currently, there are 55 S&P constituents that have recorded 3 or more consecutive days of gains, while 80 constituents have shown 3 or more consecutive days of losses, indicating a mixed market environment [7]. - The Trefis High Quality Portfolio, which includes a selection of 30 stocks, has a history of outperforming its benchmark indices, suggesting a more stable investment experience compared to individual stocks like CSCO [9].

Market Overview - Major U.S. stock indexes experienced choppy trading, ending the day mixed with the S&P 500 down 0.57 points to 6,978.03, the Dow up 12.19 points to 49,015.60, and the Nasdaq rising 40.35 points to 23,857.45 [1] - The Federal Reserve announced its decision to keep interest rates unchanged at a target range of 3.50 to 3.75 percent after three consecutive quarter-point cuts [2] - The decision to maintain rates was not unanimous, with two Fed Governors advocating for a further quarter-point cut [2][4] Economic Outlook - The Fed's decision was influenced by elevated uncertainty regarding the economic outlook, emphasizing the dual mandate of maximum employment and maintaining inflation at 2 percent over the long term [3] - A majority of the Federal Open Market Committee (FOMC) appears to favor a pause in rate cuts unless the job market weakens further, with inflation remaining a concern [4] Sector Performance - Gold stocks surged, with the NYSE Arca Gold Bugs Index increasing by 2.7 percent to a new record closing high, driven by rising gold prices [5] - The NYSE Arca Computer Hardware Index rose by 2.6 percent, also reaching a new record closing high, largely due to a 19.1 percent increase in Seagate Technology's shares following better-than-expected fiscal second-quarter results [6] - Semiconductor and networking stocks showed considerable strength, while oil service, pharmaceutical, and biotechnology stocks experienced significant declines [7] International Markets - In the Asia-Pacific region, stock markets mostly moved higher, with Japan's Nikkei 225 Index up 0.1 percent, South Korea's Kospi up 1.7 percent, and Hong Kong's Hang Seng Index up 2.6 percent [7] - Conversely, major European markets declined, with the French CAC 40 Index down 1.1 percent, the U.K.'s FTSE 100 Index down 0.5 percent, and the German DAX Index down 0.3 percent [8] Bond Market - Treasuries saw a decline in prices following the Fed announcement, leading to a rise in the yield on the benchmark ten-year note by 2.8 basis points to 4.251 percent [9] Upcoming Events - Trading on Thursday may be influenced by earnings reports from major tech companies including Microsoft, Meta Platforms, and Tesla [9]

Core Insights - Extreme Networks reported its seventh consecutive quarter of revenue growth, driven by demand for its AI-powered networking platform and competitive wins [4] - The company raised its full-year revenue guidance, expecting profit growth to outpace revenue growth for fiscal 2026 [4][19] Financial Performance - For Q2, Extreme reported revenue of $318 million, a 14% increase year over year, and non-GAAP EPS of $0.26, up 24% from the prior year [3][6] - Non-GAAP gross margin was 62%, up 70 basis points sequentially, with an operating margin of 16%, an increase from 13.3% in the previous quarter [2][4] - Adjusted EBITDA was $52.4 million, representing a 16.5% margin [2] Recurring Revenue and SaaS Growth - Subscription and support revenue reached $120 million, up 12% year over year, while SaaS annual recurring revenue (ARR) grew 25% year over year to $227 million [1][6] - SaaS deferred revenue rose to $334 million, a 15% increase year over year, contributing to overall deferred recurring revenue of $628 million, up 9% year over year [1] Competitive Positioning and Market Strategy - The company achieved 34 deals over $1 million, indicating strong competitive wins across various verticals [7][10] - CEO emphasized the unique capabilities of Extreme Platform One, which features an "agentic AI core" for autonomous issue diagnosis and resolution [8] Customer and Partner Developments - Extreme's managed service provider partners nearly doubled, with billings increasing more than three times year over year [11] - The company launched the Extreme Partner First program to enhance deal registration and improve partner experience [11] Supply Chain and Pricing Strategy - Extreme implemented a 7% price increase, which management described as a "non-issue" for customer reactions, indicating low demand elasticity for critical networking solutions [13] - The company is qualifying alternative components to ensure supply chain resiliency and has the flexibility to increase prices if component costs rise [14] Guidance and Future Outlook - For Q3 fiscal 2026, revenue guidance is set between $309 million and $314 million, with gross margin expectations of 61% to 61.4% [17] - Full-year fiscal 2026 revenue guidance was raised to a range of $1.262 billion to $1.270 billion, implying approximately 11% year-over-year growth [18]

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]

Market Overview - Major U.S. index futures indicate a higher open, with stocks expected to continue the upward trend from the previous sessions [1] - Semiconductor stocks are leading the gains, with ASML shares surging 5% after strong Q4 results and positive 2026 guidance [1] Semiconductor Industry - SK Hynix shares spiked after reporting better-than-expected Q4 results and a record full-year profit for 2025 [2] - China has approved Alibaba, ByteDance, and Tencent to purchase over 400,000 Nvidia H200 AI chips, contributing to a 1.6% increase in Nvidia shares [3][2] Technology Sector - Major tech companies like Microsoft, Meta Platforms, and Tesla are set to report quarterly results, with Microsoft shares rising 2.2% and Apple shares increasing by 1.1% [4][6] - The Nasdaq index reached a nearly three-month closing high, driven by strong performances in the tech sector [5][10] Economic Indicators - The Conference Board reported a significant drop in consumer confidence, with the index falling to 84.5 in January from 94.2 in December, marking the lowest level since May 2014 [9][8] Oil and Commodity Markets - Crude oil futures increased by $0.62 to $63.01 per barrel, following a previous surge [12] - Gold prices rose to $5,277.70 per ounce, up $195.10 from the previous session [12] European Market Reaction - European stocks mostly declined ahead of the U.S. Federal Reserve's policy decision, with the French CAC 40 Index down by 1.5% and the German DAX Index down by 0.6% [22][23] - ASML Holding saw a significant rise in shares due to exceeding analysts' expectations for Q4 orders [23]

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 Data and Key Metrics Changes - The company reported a 7% revenue growth in Q1 FY 2026, totaling $822 million, with product revenue growing by 11% and services revenue growing by 4% year-over-year [19][20] - Systems revenue reached $218 million, up 37% year-over-year, driven by strong demand related to hybrid multi-cloud adoption and AI [20] - GAAP net income for the quarter was $180 million, or $3.10 per share, while non-GAAP net income was $259 million, or $4.45 per share, reflecting a 16% EPS growth from the previous year [22] Business Line Data and Key Metrics Changes - Product revenue accounted for 50% of total revenue, with systems revenue showing significant growth at 37% [19][20] - Software revenue was $192 million, down 8% year-over-year, attributed to a strong comparison from the previous year [20] - Subscription-based software revenue totaled $164 million, up 1% year-over-year, while perpetual licensed software revenue was $27 million, down year-over-year [20] Market Data and Key Metrics Changes - Revenue from the Americas grew 2% year-over-year, representing 53% of total revenue, while EMEA delivered exceptional growth of 24%, accounting for 31% of revenue [21] - APAC region saw a decline of 1%, representing 16% of total revenue [21] - Enterprise customers represented 64% of Q1's product bookings, with government customers at 23% and service providers at 13% [21] Company Strategy and Development Direction - The company is focused on three key areas: investing in security operations, enhancing product security, and supporting the broader security community [5] - The strategy emphasizes hybrid multi-cloud adoption, enterprise AI, and the need for converged platforms, which are seen as significant growth drivers [6][18] - The company aims to lead in hybrid multi-cloud solutions, leveraging its capabilities to provide complete delivery and security for applications [8][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of demand driven by hybrid multi-cloud adoption and AI investments, despite uncertainties from a recent security incident [4][18] - The outlook for FY 2026 has been raised, expecting revenue growth of 5%-6%, up from a prior outlook of 0%-4% [23] - Management highlighted the importance of regulatory drivers and the acceleration of AI as catalysts for future growth [46][47] Other Important Information - The company generated $159 million in cash flow from operations in Q1, with cash and investments totaling approximately $1.22 billion at quarter end [22][23] - Deferred revenue increased to $2.1 billion, up 6% from the previous year [23] - The company repurchased $300 million worth of shares in Q1, with plans to continue share repurchases at least 50% of free cash flow for the year [23] Q&A Session Summary Question: AI adoption trends among enterprise customers - Management noted that the company is early in the AI adoption cycle, with a significant shift from training to production of AI applications, leading to increased demand for infrastructure [30][31] Question: Software and hardware performance outlook - Management acknowledged tough year-over-year comparisons for software but expressed confidence in mid-single-digit growth for the software business moving forward [41][42] Question: Impact of security incident on customer relationships - Management confirmed no evidence of customer breaches due to the security incident and reported minimal disruption in demand, with a successful response to customer needs [63][64]

Market Performance - Major U.S. stock indexes showed mixed results, with the Nasdaq and S&P 500 rising while the Dow experienced a pullback [1][2] - The Nasdaq increased by 215.74 points (0.9%) to close at 23,817.10, and the S&P 500 rose by 28.37 points (0.4%) to a record high of 6,978.60 [1] - The Dow closed down by 408.99 points (0.8%) at 49,003.41, despite recovering from its worst levels during the session [2] Company Earnings - Positive sentiment was bolstered by strong earnings reports from companies like General Motors and UPS [3] - Microsoft shares surged by 2.2%, Apple shares increased by 1.1%, and Meta shares saw slight gains ahead of their earnings announcements [2] - UnitedHealth shares fell sharply by 19.6% after reporting better-than-expected fourth-quarter earnings but disappointing revenue guidance [3] Economic Indicators - The Conference Board reported a significant drop in consumer confidence, with the index falling to 84.5 in January from a revised 94.2 in December, marking the lowest level since May 2014 [4][5] - Economists had anticipated a slight increase in the consumer confidence index to 90.0 [5] Sector Performance - Semiconductor stocks saw a notable increase, with the Philadelphia Semiconductor Index rising by 2.4% to a record closing high [6] - Computer hardware and networking stocks also contributed to the gains in the tech-heavy Nasdaq [6] - Oil service stocks advanced alongside rising crude oil prices, with the Philadelphia Oil Service Index up by 2.0% [6] - Conversely, healthcare, airline, and housing stocks faced significant selling pressure [7] International Markets - Stock markets in the Asia-Pacific region mostly rose, with Japan's Nikkei 225 Index up by 0.9%, Hong Kong's Hang Seng Index up by 1.4%, and South Korea's Kospi surging by 2.7% [8] - Most European stocks also experienced gains, with the U.K.'s FTSE 100 Index climbing by 0.6% and France's CAC 40 Index rising by 0.3%, while Germany's DAX Index dipped by 0.2% [9] Bond Market - U.S. treasuries moved modestly lower, leading to a slight increase in the yield on the benchmark ten-year note, which rose by 1.0 basis points to 4.223% [9]