Extreme Networks Inc【EXTR】株式ニュース

Extreme Networks Reports Third Quarter Fiscal Year 2026 Financial ResultsApril 29, 2026 7:05 AM
Business Wire
Revenue up 11% and SaaS ARR Growth Accelerates to 29% YoY on Extreme Platform ONE Growth

Secured Forward Supply Chain to Meet Demand and Stabilize Gross Margins

Extreme Networks, Inc. (“Extreme”) (Nasdaq: EXTR) today released financial results for its third quarter of fiscal 2026 ended March 31, 2026.

“Our fifth straight quarter of double-digit growth highlights strong momentum, fueled by disciplined execution, differentiated technology, and rising demand for our AI-powered platform. We’ve fully addressed our current and longer-term supply chain needs, including memory, through targeted sourcing strategies, product redesign, and strategic purchase commitments. These actions position us for continued share gains and growth. This quarter’s results reflect not just our performance today, but the strength and scalability of our strategy going forward,” said Ed Meyercord, President and CEO of Extreme.

“SaaS ARR growth accelerated, reflecting rising adoption and deeper customer engagement with Extreme Platform ONE. This momentum underscores the power of our platform approach and the shift toward a more predictable, recurring revenue model. It’s a clear signal that customers are standardizing on our platform to drive automation, boost productivity, and scale their operations,” said Meyercord.

Kevin Rhodes, Executive Vice President and Chief Financial Officer, noted, “The third quarter marked our eighth consecutive quarter of sequential product revenue growth, reflecting continued execution and share gains. Enterprise networking demand remains resilient, and the targeted pricing actions we implemented are successfully offsetting the incremental supply chain costs we have incurred. Together, these actions underpin our gross margin results and outlook. In addition, we returned $50 million to shareholders through an accelerated share repurchase, underscoring our confidence in the durability of our operating model and cash flow generation.”

Fiscal Third Quarter Results:

Revenue $316.9 million, up 11% year-over-year and relatively flat quarter-over-quarter

SaaS ARR $236.4 million, up 28.6% year-over-year and 4.2% quarter-over-quarter

GAAP diluted EPS $0.08, compared to $0.03 last year and $0.06 last quarter

Non-GAAP diluted EPS $0.26, compared to $0.21 last year and $0.26 last quarter

GAAP gross margin 61.7%, compared to 61.7% last year and 61.4% last quarter

Non-GAAP gross margin 62.3%, compared to 62.3% last year and 62.0% last quarter

GAAP operating margin 5.5%, compared to 3.6% last year and 4.1% last quarter

Non-GAAP operating margin 15.2%, compared to 14.1% last year and 15.0% last quarter

Share repurchases of $50.0 million during the quarter

Liquidity:

Q3 ending cash balance was $210.1 million, a decrease of $9.7 million from the end of Q2 2026 and an increase of $24.6 million from the end of Q3 in the prior year.

Q3 net cash was $11.3 million, as compared to net cash of $47.3 million at the end of Q2 2026 and net cash of $3.0 million at the end of Q3 in the prior year.

Recent Key Highlights:

Extreme supported Lucas Oil Stadium in Indianapolis for the NCAA Men’s Final Four and rapidly modernized connectivity by removing legacy access points and deploying temporary infrastructure to ensure the venue was fully game-ready on an accelerated timeline. With Wi-Fi 7 from Extreme coming in time for the upcoming Indianapolis Colts season, this upgrade will enhance stadium operations through faster, more reliable network performance for ticketing, security, and concessions, while elevating the fan experience with seamless high-speed connectivity for streaming and mobile engagement.

Extreme secured several new Extreme Platform ONE wins during the quarter, including Asiana Airlines, Atlantic Food Distributors, Bridgeport Public Schools, City of Prescott (AZ), Johnstone Supply, Nissha Medical Technologies, and the University of Buckingham. These customers are leveraging AI-powered automation to reduce manual tasks, streamline operations, minimize network complexity, and enable faster execution at lower cost.

Extreme continues to gain share within the UK National Health Service, with a new win at South London and Maudsley NHS Foundation Trust, where Extreme displaced a larger Chinese competitor. Fabric played a key role by delivering secure segmentation to protect patient data and devices. NHS selected Extreme’s one-license, one-device model for its simplicity and predictable cost.

London Business School is deploying a full-stack Extreme solution to modernize networking across a complex urban campus spanning historic and modern academic buildings. The solution includes Extreme Platform ONE and wired and wireless platforms. Using Extreme Fabric, the school is automating and unifying the network across dorms, labs, and academic buildings, simplifying deployment while ensuring consistent security policies. Extreme Platform ONE provides unified management and security, while high-performance Wi-Fi 7 enables secure, seamless connectivity for students, faculty, and staff across campus.

Extreme is enhancing the fan experience for the Carolina Hurricanes at the Lenovo Center with a full Wi-Fi 7 upgrade, replacing legacy Wi-Fi 5 to deliver faster, more reliable connectivity throughout the arena.

Fiscal Q3 2026 Financial Results:

(in millions, except percentages and per share information)

GAAP Results

Three Months Ended

March 31, 2026

March 31, 2025

Change

Product

$

199.4

$

178.1

$

21.3

Subscription and support

117.5

106.4

11.1

Total net revenue

$

316.9

$

284.5

$

32.4

Gross margin

61.7

%

61.7

%

0.0

%

Operating margin

5.5

%

3.6

%

1.9

%

Net income

$

10.6

$

3.5

$

7.1

Net income per diluted share

$

0.08

$

0.03

$

0.05

Non-GAAP Results

Three Months Ended

March 31, 2026

March 31, 2025

Change

Product

$

199.4

$

178.1

$

21.3

Subscription and support

117.5

106.4

11.1

Total net revenue

$

316.9

$

284.5

$

32.4

Gross margin

62.3

%

62.3

%

0.0

%

Operating margin

15.2

%

14.1

%

1.1

%

Net income

$

34.8

$

28.0

$

6.8

Net income per diluted share

$

0.26

$

0.21

$

0.05

Extreme uses the non-GAAP free cash flow metric as a measure of operating performance. Free cash flow represents GAAP net cash provided by operating activities, less purchases of property, equipment and capitalized software development costs. Extreme considers free cash flow to be useful information for management and investors regarding the amount of cash generated by the business after the purchases of property, equipment and capitalized software development costs, which can then be used to, among other things, invest in Extreme’s business, make strategic acquisitions, and strengthen the balance sheet. A limitation of the utility of this non-GAAP free cash flow metric as a measure of financial performance is that it does not represent the total increase or decrease in the Company’s cash balance for the period. The following table shows the non-GAAP free cash flow calculation (in millions):

Free Cash Flow

Three Months Ended

March 31, 2026

March 31, 2025

Cash flow provided by operations

$

14.2

$

30.0

Less: Capital expenditures for property, equipment and capitalized software development costs

(6.4

)

(5.8

)

Total free cash flow

$

7.8

$

24.2

SaaS ARR: SaaS annual recurring revenue (“SaaS ARR”) represents the annualized value of our subscription offerings and the renewable, term-based license portion of software license arrangements. SaaS ARR excludes perpetual licenses, upfront license fees, variable or non-recurring revenue, professional services revenue, support revenue from maintenance contracts, and other non-subscription revenue. SaaS ARR reflects the annual recurring revenue associated with Extreme Platform ONE (which includes embedded support), ExtremeCloud IQ, and other subscription revenue, based on the annualized value of quarterly subscription revenue and the trailing twelve months of term-based license revenue. Management uses SaaS ARR to evaluate the scale and trajectory of the Company’s subscription-based offerings and progress against customer adoption initiatives. We believe this metric is useful to investors for the same reasons, as it provides insight into our ability to acquire new customers and to maintain and expand our existing customer relationships. SaaS ARR is an operating metric and should be considered independently of revenue or deferred revenue determined in accordance with U.S. GAAP. SaaS ARR does not have a standardized meaning and therefore may not be comparable to similarly titled measures presented by other companies. SaaS ARR is not intended to be a replacement for, or a forecast of, revenue.

Gross debt: Gross debt is defined as long-term debt and the current portion of long-term debt as shown on the balance sheet plus unamortized debt issuance costs, if any.

Net cash: is defined as cash and cash equivalents minus gross debt, as shown in the table below (in millions):

Cash and cash equivalents

Gross debt

Net cash

$

210.1

$

198.8

$

11.3

Business Outlook:

Extreme’s business outlook is based on current expectations. The following statements are forward-looking, and actual results could differ materially based on various factors, including market conditions and the factors set forth under “Forward-Looking Statements” below.

For its fourth quarter fiscal 2026, ending June 30, 2026, the Company is targeting:

(in millions, except percentages and per share information)

Low-End

High-End

FQ4'26 Guidance – GAAP

Total net revenue

$

330.0

$

335.0

Gross margin

61.2

%

61.6

%

Operating margin

6.1

%

7.1

%

Earnings per share

$

0.12

$

0.15

Diluted shares outstanding used in calculating GAAP EPS

131.8

131.8

FQ4'26 Guidance – Non-GAAP

Total net revenue

$

330.0

$

335.0

Gross margin

61.8

%

62.2

%

Operating margin

15.2

%

16.1

%

Earnings per share

$

0.28

$

0.30

Diluted shares outstanding used in calculating non-GAAP EPS

131.8

131.8

The following table shows the GAAP to non-GAAP reconciliation for Q4 FY'26 guidance:

FQ4'26

Gross Margin

Operating Margin

Earnings per Share

GAAP

61.2% - 61.6%

6.1% - 7.1%

$0.12 - $0.15

Estimated adjustments for:

Share-based compensation

0.5%

7.0% - 7.1%

0.18

Amortization of product intangibles

0.1%

0.1%

0.00

Amortization of non-product intangibles

—

0.1%

0.00

Litigation charges

—

0.9%

0.02

System transition costs

—

0.9%

0.02

Tax adjustment

—

—

(0.07) - (0.06)

Non-GAAP

61.8% - 62.2%

15.2% - 16.1%

$0.28 - $0.30

The total percentage rate changes may not equal the total change in all cases due to rounding.

For the full year fiscal 2026, ending June 30, 2026, the Company is targeting:

(in millions, except percentages and per share information)

Low-End

High-End

FY'26 Guidance

Total net revenue

$

1,275.0

$

1,280.0

Gross margin

61.2

%

61.3

%

Operating margin

4.8

%

5.1

%

Earnings per share

$

0.30

$

0.33

Diluted shares outstanding used in calculating GAAP EPS

133.9

133.9

FY'26 Guidance – Non-GAAP

Total net revenue

$

1,275.0

$

1,280.0

Gross margin

61.8

%

61.9

%

Operating margin

14.7

%

14.9

%

Earnings per share

$

1.02

$

1.04

Diluted shares outstanding used in calculating non-GAAP EPS

133.9

133.9

The following table shows the GAAP to non-GAAP reconciliation for FY'26 guidance:

FY'26

Gross Margin

Operating Margin

Earnings per Share

GAAP

61.2% - 61.3%

4.8% - 5.1%

$0.30 - $0.33

Estimated adjustments for:

Share-based compensation

0.5%

7.1% - 7.2%

0.67

Amortization of product intangibles

0.1%

0.1%

0.01

Amortization of non-product intangibles

—

0.1%

0.01

Other non-recurring costs

—

0.3%

0.03

Litigation charges

—

0.5%

0.05

System transition costs

—

1.7%

0.16

Tax adjustment

—

—

(0.22) - (0.21)

Non-GAAP

61.8% - 61.9%

14.7% - 14.9%

$1.02 - $1.04

The total percentage rate changes may not equal the total change in all cases due to rounding.

Conference Call:

Extreme will host a conference call at 8:00 a.m. Eastern (5:00 a.m. Pacific) today to review the third quarter results of fiscal 2026 as well as the business outlook for the fourth quarter of fiscal 2026 and the full year fiscal 2026, ending June 30, 2026, including significant factors and assumptions underlying the targets noted above. The conference call will be available to the public through a live audio web broadcast via the internet at http://investor.extremenetworks.com and a replay of the call will be available on the website for at least 7 days following the call. To access the call, please go to this link (Registration Link) and you will be provided with dial in details. If you would like to participate in the Q&A, please register here: Q&A Registration Link. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time.

About Extreme:

Extreme Networks, Inc. (EXTR) is a leader in AI-powered cloud networking, focused on delivering simple and secure solutions that help businesses address challenges and enable connections among devices, applications, and users. We push the boundaries of technology, leveraging the powers of artificial intelligence, analytics, and automation. Tens of thousands of customers globally trust our AI-driven cloud networking solutions and industry-leading support to enable businesses to drive value, foster innovation, and overcome extreme challenges. For more information, visit Extreme’s website at https://www.extremenetworks.com/ or LinkedIn, YouTube, X (Formerly Twitter), Facebook or Instagram.

Extreme Networks, ExtremeCloud, Extreme Platform ONE, and the Extreme Networks logo, are trademarks of Extreme Networks, Inc. or its subsidiaries in the United States and/or other countries. Other trademarks shown herein are the property of their respective owners.

Non-GAAP Financial Measures:

Extreme provides all financial information required in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company is providing with this press release non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating margin, non-GAAP operating income, non-GAAP net income, non-GAAP net income per diluted share, adjusted EBITDA, net cash and free cash flow. In preparing non-GAAP information, the Company has excluded, where applicable, the impact of share-based compensation, amortization of intangibles, restructuring and related charges, system transition costs, litigation charges, other non-recurring costs, debt refinancing charges and the tax effect of non-GAAP adjustments. The Company believes that excluding these items provides both management and investors with additional insight into its current operations, the trends affecting the Company, the Company’s marketplace performance, and the Company’s ability to generate cash from operations. Please note the Company’s non-GAAP measures may be different than those used by other companies. The additional non-GAAP financial information the Company presents should be considered in conjunction with, and not as a substitute for, the Company’s GAAP financial information.

The Company has provided a non-GAAP reconciliation of the results for the periods presented in this release, which are adjusted to exclude certain items as indicated. These measures should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures for comparable financial information and understanding of the Company’s ongoing performance as a business. Extreme uses both GAAP and non-GAAP measures to evaluate and manage its operations.

Forward-Looking Statements:

This press release contains ‘forward-looking statements’ within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding our outlook, targets, and guidance; our expectations regarding demand, product adoption, competitive dynamics, revenues, margins, cash flow and other operating or financial results; and our plans, objectives and assumptions. These forward-looking statements speak only as of the date of this release. There are several important factors that could cause actual results and other future events to differ materially from those suggested or indicated by such forward-looking statements. These include, among others, risks related to global macroeconomic, industry and business trends; variability in demand, sales cycles and pipeline conversion; the Company’s failure to achieve targeted financial metrics; a highly competitive business environment for network switching equipment and cloud management of network devices; supply chain challenges and component shortages; the Company’s effectiveness in controlling expenses; the possibility that the Company might experience delays in the development or introduction of new technology and products; customer response to the Company’s new technology and products; risks related to pending or future litigation; political and geopolitical factors, including the possible impact of tariffs and changes to U.S. tax regulations; and a dependency on third parties for certain components and for the manufacturing of the Company’s products.

For more information about factors that could cause actual results and other future events to differ materially from those suggested or indicated by such forward-looking statements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” included in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other documents of the Company on file with the Securities and Exchange Commission (available at www.sec.gov). As a result of these risks and others, actual results could vary significantly from those anticipated in this press release, and the Company’s financial condition and results of operations could be materially adversely affected. Except as required under the U.S. federal securities laws and the rules and regulations of the Securities and Exchange Commission, Extreme disclaims any obligation to update any forward-looking statements after the date of this release, whether as a result of new information, future events, developments, changes in assumptions or otherwise.

EXTREME NETWORKS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(Unaudited)

March 31, 2026

June 30, 2025

ASSETS

Current assets:

Cash and cash equivalents

$

210,113

$

231,745

Accounts receivable, net

162,710

126,708

Inventories

76,634

102,578

Prepaid expenses and other current assets

92,345

74,265

Total current assets

541,802

535,296

Property and equipment, net

53,544

44,366

Operating lease right-of-use assets, net

32,508

38,655

Goodwill

398,211

399,574

Intangible assets, net

3,840

6,541

Other assets

140,155

128,786

Total assets

$

1,170,060

$

1,153,218

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

81,157

$

63,939

Accrued compensation and benefits

48,669

62,895

Accrued warranty

10,139

9,684

Current portion of deferred revenue

334,598

325,078

Current portion of long-term debt, net of unamortized debt issuance costs of $679 and $729, respectively

48,071

14,271

Current portion of operating lease liabilities

12,275

11,456

Other accrued liabilities

58,356

100,552

Total current liabilities

593,265

587,875

Deferred revenue, less current portion

312,515

292,415

Long-term debt, less current portion, net of unamortized debt issuance costs of $777 and $1,276, respectively

149,223

163,724

Operating lease liabilities, less current portion

26,170

33,991

Deferred income taxes

7,343

7,033

Other long-term liabilities

2,579

2,596

Commitments and contingencies

Stockholders’ equity:

Convertible preferred stock, $0.001 par value, issuable in series, 2,000 shares authorized; none issued

—

—

Common stock, $0.001 par value, 750,000 shares authorized; 156,657 and 152,673 shares issued, respectively; 132,513 and 132,064 shares outstanding, respectively

157

153

Additional paid-in capital

1,350,759

1,298,791

Accumulated other comprehensive loss

(15,684

)

(8,137

)

Accumulated deficit

(925,352

)

(949,429

)

Treasury stock at cost, 24,144 shares and 20,609 shares, respectively

(330,915

)

(275,794

)

Total stockholders’ equity

78,965

65,584

Total liabilities and stockholders’ equity

$

1,170,060

$

1,153,218

EXTREME NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended

Nine Months Ended

March 31,

2026

March 31,

2025

March 31,

2026

March 31,

2025

Net revenues:

Product

$

199,345

$

178,060

$

591,151

$

512,605

Subscription and support

117,529

106,445

353,893

320,459

Total net revenues

316,874

284,505

945,044

833,064

Cost of revenues:

Product

86,206

76,059

259,334

218,065

Subscription and support

35,124

33,037

107,057

94,960

Total cost of revenues

121,330

109,096

366,391

313,025

Gross profit:

Product

113,139

102,001

331,817

294,540

Subscription and support

82,405

73,408

246,836

225,499

Total gross profit

195,544

175,409

578,653

520,039

Operating expenses:

Research and development

59,184

55,656

174,459

164,990

Sales and marketing

88,979

79,773

267,295

241,123

General and administrative

29,634

29,537

93,420

92,202

Restructuring and related charges (benefit)

—

(441

)

538

1,871

Amortization of intangible assets

407

507

1,314

1,528

Total operating expenses

178,204

165,032

537,026

501,714

Operating income

17,340

10,377

41,627

18,325

Interest income

983

972

3,312

2,657

Interest expense

(3,249

)

(3,797

)

(10,262

)

(12,398

)

Other expense, net

(263

)

(385

)

(1,110

)

(445

)

Income before income taxes

14,811

7,167

33,567

8,139

Provision for income taxes

4,221

3,709

9,490

7,803

Net income

$

10,590

$

3,458

$

24,077

$

336

Basic and diluted income per share:

Net income per share – basic

$

0.08

$

0.03

$

0.18

$

0.00

Net income per share – diluted

$

0.08

$

0.03

$

0.18

$

0.00

Shares used in per share calculation – basic

132,931

132,979

133,275

132,173

Shares used in per share calculation – diluted

133,591

134,590

134,917

133,770

EXTREME NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Nine Months Ended

March 31, 2026

March 31, 2025

Cash flows from operating activities:

Net income

$

24,077

$

336

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

11,600

11,261

Amortization of intangible assets

2,631

3,356

Amortization of cloud computing implementation costs

2,848

—

Reduction in carrying amount of right-of-use asset

7,710

7,386

Provision for credit losses

430

85

Share-based compensation

66,447

61,573

Deferred income taxes

658

(879

)

Provision for excess and obsolete inventory

4,639

1,616

Non-cash interest expense

907

902

Other

1,393

703

Changes in operating assets and liabilities:

Accounts receivable, net

(36,432

)

(10,113

)

Inventories

19,012

14,445

Prepaid expenses and other assets

(38,488

)

(20,331

)

Accounts payable

16,388

(3,982

)

Accrued compensation and benefits

(15,927

)

1,302

Operating lease liabilities

(8,532

)

(8,060

)

Deferred revenue

33,299

17,746

Other current and long-term liabilities

(42,327

)

(7,254

)

Net cash provided by operating activities

50,333

70,092

Cash flows from investing activities:

Capital expenditures for property, equipment and capitalized software development costs

(20,364

)

(18,067

)

Net cash used in investing activities

(20,364

)

(18,067

)

Cash flows from financing activities:

Borrowings under revolving facility

55,000

—

Payments on revolving facility

(25,000

)

—

Payments on debt obligations

(11,250

)

(7,500

)

Payments on debt financing costs

—

(695

)

Repurchase of common stock including accelerated share repurchases

(62,000

)

(13,000

)

Payments for tax withholdings, net of proceeds from issuance of common stock

(7,596

)

(1,907

)

Net cash used in financing activities

(50,846

)

(23,102

)

Foreign currency effect on cash and cash equivalents

(755

)

(142

)

Net increase (decrease) in cash and cash equivalents

(21,632

)

28,781

Cash and cash equivalents at beginning of period

231,745

156,699

Cash and cash equivalents at end of period

$

210,113

$

185,480

Extreme Networks, Inc.

Non-GAAP Measures of Financial Performance

To supplement the Company’s consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (“GAAP”), Extreme uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating margin, non-GAAP operating income, non-GAAP net income, non-GAAP net income per diluted share, adjusted EBITDA (calculated as GAAP net income excluding interest, income taxes, depreciation and amortization as well as costs or benefits that are not reflective of the Company’s ongoing or expected future operational performance as noted below), net cash and free cash flow.

Reconciliation to the nearest GAAP measure of all historical non-GAAP measures included in this press release can be found in the tables included with this press release.

Non-GAAP measures presented in this press release are not in accordance with or alternative measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Extreme’s results of operations as determined in accordance with GAAP. These non-GAAP measures should only be used to evaluate Extreme’s results of operations in conjunction with the corresponding GAAP measures.

Extreme believes these non-GAAP measures, when shown in conjunction with the corresponding GAAP measures, enhance investors’ and management’s overall understanding of the Company’s current financial performance and the Company’s prospects for the future, including cash flows available to pursue opportunities to enhance stockholder value. In addition, because Extreme has historically reported certain non-GAAP results to investors, the Company believes the inclusion of non-GAAP measures provides consistency in the Company’s financial reporting.

For its internal planning process, and as discussed further below, Extreme’s management uses financial statements that do not include share-based compensation expense, amortization of intangibles, restructuring and related charges, system transition costs, litigation charges, other non-recurring costs, debt refinancing charges, and the tax effect of non-GAAP adjustments. Extreme’s management also uses non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the Company’s financial results.

As described above, Extreme excludes the following items from one or more of its non-GAAP measures when applicable.

Share-based compensation. Share-based compensation consists of associated expenses for stock options, restricted stock awards and the Company’s Employee Stock Purchase Plan. Extreme excludes share-based compensation expenses from its non-GAAP measures primarily because they are non-cash expenses that the Company does not believe are reflective of ongoing cash requirement related to its operating results. Extreme expects to incur share-based compensation expenses in future periods.

Amortization of intangibles. Amortization of intangibles includes the monthly amortization expense of intangible assets such as developed technology, customer relationships and trademarks. The amortization of the developed technology are recorded in cost of goods sold, while the amortization for the other intangibles are recorded in operating expenses. Extreme excludes these expenses since they result from an intangible asset and for which the period expense does not impact the operations of the business and are non-cash in nature.

Restructuring and related charges. Restructuring and related charges consist of severance costs for employees, asset disposal costs and other charges related to excess facilities that do not provide economic benefit to our future operations. Extreme excludes restructuring expenses since they result from events that occur outside of the ordinary course of continuing operations.

System transition costs. System transition costs consist of costs related to direct and incremental costs incurred in connection with our multi-phase transition of our customer relationship management solution, our configure, price, quote solution and our enterprise resource planning tools that were not capitalizable. Extreme excludes these costs because we believe that these costs do not reflect future operating expenses and will be inconsistent in amount and frequency, making it difficult to contribute to a meaningful evaluation of our operating performance.

Litigation charges. Litigation charges consist of estimated settlement and related legal expenses for non-recurring litigations offset by any proceeds received or expected to be received from insurance.

Debt refinancing charges. Debt refinancing charges consist of costs that were not capitalizable and are included in other expense, net, that occurred in conjunction with the amendments related to our outstanding credit facility.

Other non-recurring costs. Other non-recurring costs consist of certain external advisory and professional fees incurred for various non-recurring transactions and activities that occur outside of the normal course of business. Extreme excludes these costs because we believe that these costs do not reflect future operating expenses and will be inconsistent in amount and frequency, making it difficult to contribute to a meaningful evaluation of our operating performance.

Tax effect of non-GAAP adjustments. We calculate our non-GAAP provision for income taxes in accordance with the SEC guidance on non-GAAP Financial Measures Compliance and Disclosure Interpretation. We have assumed our U.S. federal and state net operating losses would have been fully consumed by the historical non-GAAP financial adjustments, eliminating the need for a full valuation allowance against our U.S. deferred tax assets which, consequently, enables our use of research and development tax credits. The non-GAAP tax provision consists of current and deferred income tax expense commensurate with the non-GAAP measure of profitability using our blended U.S. statutory tax rate of 24.6%.

The non-GAAP provision for income taxes has typically been and is currently higher than the GAAP provision given the Company has a valuation allowance against its US and a portion of its Irish deferred tax assets due to historical losses. Once these valuation allowances are released, the non-GAAP and the GAAP provision for income taxes will be more closely aligned.

Over the next year, our cash taxes will be driven by US federal and state taxes and the tax expense of our foreign subsidiaries, which amounts have not historically been significant, with the exception of the Company’s Canadian, German and Indian subsidiaries which perform research and development and sales and marketing activities for the Company, as well as the Company’s Irish trading subsidiaries.

EXTREME NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

GAAP TO NON-GAAP RECONCILIATION

(In thousands, except percentages and per share amounts)

(Unaudited)

Revenues

Three Months Ended

Nine Months Ended

March 31,

2026

March 31,

2025

March 31,

2026

March 31,

2025

Revenues – GAAP

$

316,874

$

284,505

$

945,044

$

833,064

Non-GAAP Gross Margin

Three Months Ended

Nine Months Ended

March 31,

2026

March 31,

2025

March 31,

2026

March 31,

2025

Gross profit – GAAP

$

195,544

$

175,409

$

578,653

$

520,039

Gross margin – GAAP percentage

61.7

%

61.7

%

61.2

%

62.4

%

Adjustments:

Share-based compensation expense, Product

755

663

2,303

1,961

Share-based compensation expense, Subscription and support

723

706

2,209

2,193

Amortization of intangibles, Product

336

580

1,264

1,775

Total adjustments to GAAP gross profit

$

1,814

$

1,949

$

5,776

$

5,929

Gross profit – non-GAAP

$

197,358

$

177,358

$

584,429

$

525,968

Gross margin – non-GAAP percentage

62.3

%

62.3

%

61.8

%

63.1

%

Non-GAAP Operating Margin

Three Months Ended

Nine Months Ended

March 31,

2026

March 31,

2025

March 31,

2026

March 31,

2025

GAAP operating income

$

17,340

$

10,377

$

41,627

$

18,325

GAAP operating margin

5.5

%

3.6

%

4.4

%

2.2

%

Adjustments:

Share-based compensation expense, cost of revenues

1,478

1,369

4,512

4,154

Share-based compensation expense, R&D

4,267

4,178

13,353

12,858

Share-based compensation expense, S&M

7,564

6,963

23,086

21,441

Share-based compensation expense, G&A

8,459

7,844

25,496

23,120

Restructuring and related charges (benefit)

—

(441

)

538

1,871

Litigation charges

376

1,123

3,135

12,716

System transition costs

7,556

7,548

18,948

16,919

Amortization of intangibles

743

1,087

2,578

3,303

Other non-recurring costs

231

—

3,879

—

Total adjustments to GAAP operating income

$

30,674

$

29,671

$

95,525

$

96,382

Non-GAAP operating income

$

48,014

$

40,048

$

137,152

$

114,707

Non-GAAP operating margin

15.2

%

14.1

%

14.5

%

13.8

%

Non-GAAP Net Income

Three Months Ended

Nine Months Ended

March 31,

2026

March 31,

2025

March 31,

2026

March 31,

2025

GAAP net income

$

10,590

$

3,458

$

24,077

$

336

Adjustments:

Share-based compensation expense

21,768

20,354

66,447

61,573

Restructuring and related charges (benefit)

—

(441

)

538

1,871

Litigation charges

376

1,123

3,135

12,716

System transition costs

7,556

7,548

18,948

16,919

Amortization of intangibles

743

1,087

2,578

3,303

Other non-recurring costs

231

—

3,879

—

Debt refinancing charges

—

—

—

79

Tax effect of non-GAAP adjustments

(6,419

)

(5,171

)

(19,888

)

(17,866

)

Total non-GAAP adjustments to GAAP net income

$

24,255

$

24,500

$

75,637

$

78,595

Non-GAAP net income

$

34,845

$

27,958

$

99,714

$

78,931

Earnings per share

GAAP net income per share – diluted

$

0.08

$

0.03

$

0.18

$

0.00

Non-GAAP net income per share – diluted

$

0.26

$

0.21

$

0.74

$

0.59

Shares used in net income per share – diluted:

GAAP shares used in per share calculation – basic

132,931

132,979

133,275

132,173

Potentially dilutive equity awards

660

1,611

1,642

1,597

GAAP and Non-GAAP shares used in per share calculation – diluted

133,591

134,590

134,917

133,770

Adjusted EBITDA

Three Months Ended

Nine Months Ended

March 31,

2026

March 31,

2025

March 31,

2026

March 31,

2025

GAAP net income

$

10,590

$

3,458

$

24,077

$

336

Adjustments:

Depreciation expense

3,807

3,456

11,600

11,261

Amortization expense

2,584

1,105

5,479

3,356

Share-based compensation expense

21,768

20,354

66,447

61,573

Restructuring and related charges (benefit)

—

(441

)

538

1,871

Litigation charges

376

1,123

3,135

12,716

System transition costs

7,556

7,548

18,948

16,919

Other non-recurring costs

231

—

3,879

—

Debt refinancing charges

—

—

—

79

Interest income

(983

)

(972

)

(3,312

)

(2,657

)

Interest expense

3,249

3,797

10,262

12,398

Provision for income taxes

4,221

3,709

9,490

7,803

Total adjustments to GAAP net income

42,809

39,679

126,466

125,319

Adjusted EBITDA

$

53,399

$

43,137

$

150,543

$

125,655

View source version on businesswire.com: https://www.businesswire.com/news/home/20260429485275/en/
Investor Relations

Stan Kovler

919/595-4196

Investor_relations@extremenetworks.com
Media Contact

Amy Aylward

603/952-5138

pr@extremenetworks.com

Original: Extreme Networks Reports Third Quarter Fiscal Year 2026 Financial Results

Extreme Networks Reports Second Quarter Fiscal Year 2026 Financial ResultsJanuary 28, 2026 12:05 PM
Business Wire
Revenue up 14% year-over-year, seventh consecutive quarter of sequential growth

SaaS ARR up 25% YoY

Extreme Networks, Inc. (“Extreme”) (Nasdaq: EXTR) today released financial results for its second quarter of fiscal 2026 ended December 31, 2025.

“Extreme is taking share from the largest players in enterprise networking, which is reflected in seven consecutive quarters of sequential revenue growth,” said Ed Meyercord, President and CEO of Extreme. “Extreme Platform ONE bookings in the quarter were twice our plan, highlighting our customers’ need for a platform that simplifies operations, automates complex networking tasks, and delivers faster, more resilient experiences through advanced AI.”

Meyercord continued, “With the ever-changing supply chain conditions, we remain confident in our ability to deliver networking solutions that our customers demand. The combination of our talented team, strong supplier relationships, operational agility, and experience navigating changing market conditions, positions Extreme for continued growth.”

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 growth by 10 percentage points. We’re executing well on our strategy, while navigating the current supply chain environment. We are raising our revenue outlook for fiscal '26 and continue to focus on increasing profitability.”

Fiscal Second Quarter Results:

Revenue $317.9 million, up 14% year-over-year and up 2.5% quarter-over-quarter

SaaS ARR $226.8 million, up 25.2% year-over-year and 4.9% quarter-over-quarter

GAAP diluted EPS $0.06, compared to $0.06 last year and $0.04 last quarter

Non-GAAP diluted EPS $0.26, compared to $0.21 last year and $0.22 last quarter

GAAP gross margin 61.4%, compared to 62.7% last year and 60.6% last quarter

Non-GAAP gross margin 62.0%, compared to 63.4% last year and 61.3% last quarter

GAAP operating margin 4.1%, compared to 4.5% last year and 3.6% last quarter

Non-GAAP operating margin 15.0%, compared to 14.7% last year and 13.3% last quarter

Liquidity:

Q2 ending cash balance was $219.8 million, an increase of $10.8 million from the end of Q1 2026 and an increase of $49.5 million from the end of Q2 in the prior year.

Q2 net cash was $47.3 million, as compared to net cash of $7.8 million at the end of Q1 2026 and net debt of $14.7 million at the end of Q2 in the prior year.

Recent Key Highlights:

Extreme was named as a Leader in the IDC MarketScape: Worldwide Enterprise Wireless LAN 2025 Vendor Assessment (Doc #US52978225, October 2025), with IDC noting strengths including Extreme Platform ONE, strong reviews from customers for responsive support services, expertise in high-density environments, and highly flexible deployment and management options for customers through its Universal Hardware.

During the quarter, Extreme hosted both an Investor Day and its inaugural AI Summit in New York City. Investor Day centered on our long-term vision, financial outlook, and the key drivers of growth, while the AI Summit brought together industry leaders and CxOs for a forward-looking discussion on the future of AI and its impact on how enterprises build and operate networks.

Organizations including Baylor University, Barnsley College, Henry Ford Health, University Hospital Birmingham NHS Foundation Trust, Six Flags, and multiple NFL teams including the Pittsburgh Steelers, chose Extreme’s Wi-Fi 7 solutions to deliver faster, more reliable connectivity and drive more efficient operations.

TJ Regional Health selected Extreme to modernize its network across 15 facilities with a resilient, fabric-based architecture delivering reliability for clinical systems, EHR access, and high-density Wi-Fi 7 connectivity. By deploying Extreme Platform ONE with Fabric and advanced wired and wireless solutions, TJ Regional gains simplified operations and future-ready performance for clinical workflows.

Groupe Jolimont, one of Belgium’s leading healthcare systems, has modernized its network with Extreme to support reliable, high-quality patient care across its seven hospital sites. By deploying Extreme Platform ONE, Jolimont can leverage AI-driven insights and automation to manage its switching and Wi-Fi environment faster, smarter, and more efficiently. The upgraded network will help power critical use cases such as electronic health records access, connected medical devices, real-time clinical collaboration, and enhanced digital experiences for both staff and patients.

Sunis Hotels, a Turkish hospitality brand with a growing portfolio of coastal resorts along the Mediterranean and Aegean is modernizing its network with Extreme to enhance guest experience and support core systems, IoT, and security at scale. Extreme beat a larger competitor by demonstrating a stronger grasp of hospitality’s need for always-on, high-performance connectivity, delivering an integrated Wi-Fi, switching, and Fabric experience through ExtremeCloud.

Extreme expanded its relationship with the world’s largest theme park operator by adding Six Flags Great Adventure in New Jersey. The deployment marks the twelfth Six Flags property to standardize on Extreme and includes Wi-Fi 6E and Wi-Fi 7, universal switching, and fabric, delivering high-performance connectivity for guests while supporting critical park operations.

SK bioscience, a leading South Korean biotech company, is deploying Extreme Platform ONE to support rapid growth across its expanded offices and new R&D center. The platform simplifies network operations while delivering the reliability and performance needed to support data-intensive research, connected labs, and collaboration between scientists. This ensures researchers stay focused on innovation, not IT complexity, as SK bioscience scales its critical R&D initiatives.

Fiscal Q2 2026 Financial Results:

(in millions, except percentages and per share information)

GAAP Results

Three Months Ended

December 31, 2025

December 31, 2024

Change

Product

$

197.8

$

172.3

$

25.5

Subscription and support

120.1

107.1

13.0

Total net revenue

$

317.9

$

279.4

$

38.5

Gross margin

61.4

%

62.7

%

(1.3

)%

Operating margin

4.1

%

4.5

%

(0.4

)%

Net income

$

7.9

$

7.4

$

0.5

Net income per diluted share

$

0.06

$

0.06

$

-

Non-GAAP Results

Three Months Ended

December 31, 2025

December 31, 2024

Change

Product

$

197.8

$

172.3

$

25.5

Subscription and support

120.1

107.1

13.0

Total net revenue

$

317.9

$

279.4

$

38.5

Gross margin

62.0

%

63.4

%

(1.4

)%

Operating margin

15.0

%

14.7

%

0.3

%

Net income

$

34.7

$

28.6

$

6.1

Net income per diluted share

$

0.26

$

0.21

$

0.05

Extreme uses the non-GAAP free cash flow metric as a measure of operating performance. Free cash flow represents GAAP net cash provided by (used in) operating activities, less purchases of property, equipment and capitalized software development costs. Extreme considers free cash flow to be useful information for management and investors regarding the amount of cash generated by the business after the purchases of property, equipment and capitalized software development costs, which can then be used to, among other things, invest in Extreme’s business, make strategic acquisitions, and strengthen the balance sheet. A limitation of the utility of this non-GAAP free cash flow metric as a measure of financial performance is that it does not represent the total increase or decrease in the Company's cash balance for the period. The following table shows the non-GAAP free cash flow calculation (in millions):

Free Cash Flow

Three Months Ended

December 31, 2025

December 31, 2024

Cash flow provided by operations

$

50.1

$

21.5

Less: Capital expenditures for property, equipment and capitalized software development costs

(7.1

)

(5.4

)

Total free cash flow

$

43.0

$

16.1

SaaS ARR: Extreme uses SaaS annual recurring revenue (“SaaS ARR”) to identify the annual recurring revenue of Extreme Platform ONE, ExtremeCloud IQ and other subscription revenue, based on the annualized value of quarterly subscription revenue and term-based licenses. We believe that SaaS ARR is an important metric because it is driven by our ability to acquire new customers and to maintain and expand our relationships with existing customers. SaaS ARR should be viewed independently of revenue or deferred revenue that are accounted for under U.S. GAAP. SaaS ARR does not have a standardized meaning and therefore may not be comparable to similarly titled measures presented by other companies. SaaS ARR is not intended to be a replacement for forecasts of revenue.

Gross debt: Gross debt is defined as long-term debt and the current portion of long-term debt as shown on the balance sheet plus unamortized debt issuance costs, if any.

Net cash: is defined as cash and cash equivalents minus gross debt, as shown in the table below (in millions):

Cash and cash equivalents

Gross debt

Net cash

$

219.8

$

172.5

$

47.3

Business Outlook:

Extreme’s business outlook is based on current expectations. The following statements are forward-looking, and actual results could differ materially based on various factors, including market conditions and the factors set forth under “Forward-Looking Statements” below.

For its third quarter fiscal 2026, ending March 31, 2026, the Company is targeting:

(in millions, except percentages and per share information)

Low-End

High-End

FQ3'26 Guidance – GAAP

Total net revenue

$

309.1

$

314.1

Gross margin

60.4

%

60.8

%

Operating margin

2.8

%

4.1

%

Earnings per share

$

0.03

$

0.06

Diluted Shares outstanding used in calculating GAAP EPS

135.8

135.8

FQ3'26 Guidance – Non-GAAP

Total net revenue

$

309.1

$

314.1

Gross margin

61.0

%

61.4

%

Operating margin

13.6

%

14.8

%

Earnings per share

$

0.23

$

0.25

Diluted Shares outstanding used in calculating non-GAAP EPS

135.8

135.8

The following table shows the GAAP to non-GAAP reconciliation for Q3 FY'26 guidance:

FQ3'26

Gross Margin

Operating Margin

Earnings per Share

GAAP

60.4% - 60.8%

2.8% - 4.1%

$0.03 - $0.06

Estimated adjustments for:

Share-based compensation

0.5%

7.3% - 7.4%

0.17

Amortization of product intangibles

0.1%

0.1%

0.00

Amortization of non-product intangibles

—

0.1%

0.00

Other non-recurring costs

—

0.8%

0.02

Litigation charges

—

0.7%

0.02

System transition costs

—

1.7%

0.04

Tax adjustment

—

—

(0.06) - (0.05)

Non-GAAP

61.0% - 61.4%

13.6% - 14.8%

$0.23 - $0.25

The total percentage rate changes may not equal the total change in all cases due to rounding.

For the full year fiscal 2026, ending June 30, 2026, the Company is targeting:

(in millions, except percentages and per share information)

Low-End

High-End

FY'26 Guidance

Total net revenue

$

1,262.0

$

1,270.0

Gross margin

60.5

%

61.1

%

Operating margin

4.1

%

4.6

%

Earnings per share

$

0.24

$

0.29

Diluted Shares outstanding used in calculating GAAP EPS

135.4

135.4

FY'26 Guidance – Non-GAAP

Total net revenue

$

1,262.0

$

1,270.0

Gross margin

61.1

%

61.7

%

Operating margin

14.3

%

14.8

%

Earnings per share

$

0.98

$

1.02

Diluted Shares outstanding used in calculating non-GAAP EPS

135.4

135.4

The following table shows the GAAP to non-GAAP reconciliation for FY'26 guidance:

FY'26

Gross Margin

Operating Margin

Earnings per Share

GAAP

60.5% - 61.1%

4.1% - 4.6%

$0.24 - $0.29

Estimated adjustments for:

Share-based compensation

0.5%

7.2%

0.67

Amortization of product intangibles

0.1%

0.1%

0.01

Amortization of non-product intangibles

—

0.1%

0.01

Other non-recurring costs

—

0.5%

0.05

Litigation charges

—

0.6%

0.06

System transition costs

—

1.7%

0.15

Tax adjustment

—

—

(0.22) - (0.21)

Non-GAAP

61.1% - 61.7%

14.3% - 14.8%

$0.98 - $1.02

The total percentage rate changes may not equal the total change in all cases due to rounding.

Conference Call:

Extreme will host a conference call at 8:00 a.m. Eastern (5:00 a.m. Pacific) today to review the second quarter results of fiscal 2026 as well as the business outlook for the third quarter of fiscal 2026 ending March 31, 2026 and the full year fiscal 2026, ending June 30, 2026, including significant factors and assumptions underlying the targets noted above. The conference call will be available to the public through a live audio web broadcast via the internet at http://investor.extremenetworks.com and a replay of the call will be available on the website for at least 7 days following the call. To access the call, please go to this link (Registration Link) and you will be provided with dial in details. If you would like to participate in the Q&A, please register here: Q&A Registration Link. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time.

About Extreme:

Extreme Networks, Inc. (EXTR) is a leader in AI-driven cloud networking, focused on delivering simple and secure solutions that help businesses address challenges and enable connections among devices, applications, and users. We push the boundaries of technology, leveraging the powers of artificial intelligence, analytics, and automation. Tens of thousands of customers globally trust our AI-driven cloud networking solutions and industry-leading support to enable businesses to drive value, foster innovation, and overcome extreme challenges. For more information, visit Extreme's website at https://www.extremenetworks.com/ or LinkedIn, YouTube, X (Formerly Twitter), Facebook or Instagram

Extreme Networks, ExtremeCloud, Extreme Platform ONE, and the Extreme Networks logo, are trademarks of Extreme Networks, Inc. or its subsidiaries in the United States and/or other countries. Other trademarks shown herein are the property of their respective owners.

Non-GAAP Financial Measures:

Extreme provides all financial information required in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company is providing with this press release non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating margin, non-GAAP operating income, non-GAAP net income, non-GAAP net income per diluted share, Adjusted EBITDA, net cash (debt) and free cash flow. In preparing non-GAAP information, the Company has excluded, where applicable, the impact of share-based compensation, amortization of intangibles, restructuring and related charges, system transition costs, litigation charges, other non-recurring costs, debt refinancing charges and the tax effect of non-GAAP adjustments. The Company believes that excluding these items provides both management and investors with additional insight into its current operations, the trends affecting the Company, the Company's marketplace performance, and the Company's ability to generate cash from operations. Please note the Company’s non-GAAP measures may be different than those used by other companies. The additional non-GAAP financial information the Company presents should be considered in conjunction with, and not as a substitute for, the Company’s GAAP financial information.

The Company has provided a non-GAAP reconciliation of the results for the periods presented in this release, which are adjusted to exclude certain items as indicated. These measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures for comparable financial information and understanding of the Company’s ongoing performance as a business. Extreme uses both GAAP and non-GAAP measures to evaluate and manage its operations.

Forward-Looking Statements:

This press release contains ‘forward-looking statements’ within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding our outlook, targets, and guidance; our expectations regarding demand, product adoption, competitive dynamics, revenues, margins, cash flow and other operating or financial results; and our plans, objectives and assumptions. These forward-looking statements speak only as of the date of this release. There are several important factors that could cause actual results and other future events to differ materially from those suggested or indicated by such forward-looking statements. These include, among others, risks related to global macroeconomic, industry and business trends; variability in demand, sales cycles and pipeline conversion; the Company’s failure to achieve targeted financial metrics; a highly competitive business environment for network switching equipment and cloud management of network devices; the Company’s effectiveness in controlling expenses; the possibility that the Company might experience delays in the development or introduction of new technology and products; customer response to the Company’s new technology and products; risks related to pending or future litigation; political and geopolitical factors, including the possible impact of tariffs and changes to U.S. tax regulations; and a dependency on third parties for certain components and for the manufacturing of the Company’s products.

For more information about factors that could cause actual results and other future events to differ materially from those suggested or indicated by such forward-looking statements, see “Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” included in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other documents of the Company on file with the Securities and Exchange Commission (available at www.sec.gov). As a result of these risks and others, actual results could vary significantly from those anticipated in this press release, and the Company’s financial condition and results of operations could be materially adversely affected. Except as required under the U.S. federal securities laws and the rules and regulations of the Securities and Exchange Commission, Extreme disclaims any obligation to update any forward-looking statements after the date of this release, whether as a result of new information, future events, developments, changes in assumptions or otherwise.

EXTREME NETWORKS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(Unaudited)

December 31, 2025

June 30, 2025

ASSETS

Current assets:

Cash and cash equivalents

$

219,791

$

231,745

Accounts receivable, net

152,427

126,708

Inventories

83,593

102,578

Prepaid expenses and other current assets

79,917

74,265

Total current assets

535,728

535,296

Property and equipment, net

50,228

44,366

Operating lease right-of-use assets, net

34,925

38,655

Goodwill

399,850

399,574

Intangible assets, net

4,682

6,541

Other assets

143,253

128,786

Total assets

$

1,168,666

$

1,153,218

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

64,814

$

63,939

Accrued compensation and benefits

66,527

62,895

Accrued warranty

9,628

9,684

Current portion of deferred revenue

328,164

325,078

Current portion of long-term debt, net of unamortized debt issuance costs of $698 and $729, respectively

16,802

14,271

Current portion, operating lease liabilities

12,233

11,456

Other accrued liabilities

66,974

100,552

Total current liabilities

565,142

587,875

Deferred revenue, less current portion

314,728

292,415

Long-term debt, less current portion, net of unamortized debt issuance costs of $937 and $1,276, respectively

154,063

163,724

Operating lease liabilities, less current portion

29,025

33,991

Deferred income taxes

7,196

7,033

Other long-term liabilities

2,600

2,596

Commitments and contingencies

Stockholders’ equity:

Convertible preferred stock, $0.001 par value, issuable in series, 2,000 shares authorized; none issued

—

—

Common stock, $0.001 par value, 750,000 shares authorized; 155,339 and 152,673 shares issued, respectively; 134,153 and 132,064 shares outstanding, respectively

155

153

Additional paid-in-capital

1,328,970

1,298,791

Accumulated other comprehensive loss

(9,477

)

(8,137

)

Accumulated deficit

(935,942

)

(949,429

)

Treasury stock at cost, 21,186 shares and 20,609 shares, respectively

(287,794

)

(275,794

)

Total stockholders’ equity

95,912

65,584

Total liabilities and stockholders’ equity

$

1,168,666

$

1,153,218

EXTREME NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended

Six Months Ended

December 31, 2025

December 31, 2024

December 31, 2025

December 31, 2024

Net revenues:

Product

$

197,765

$

172,261

$

391,806

$

334,545

Subscription and support

120,160

107,094

236,364

214,014

Total net revenues

317,925

279,355

628,170

548,559

Cost of revenues:

Product

87,000

72,604

173,128

142,006

Subscription and support

35,845

31,628

71,933

61,923

Total cost of revenues

122,845

104,232

245,061

203,929

Gross profit:

Product

110,765

99,657

218,678

192,539

Subscription and support

84,315

75,466

164,431

152,091

Total gross profit

195,080

175,123

383,109

344,630

Operating expenses:

Research and development

57,522

54,883

115,275

109,334

Sales and marketing

89,393

79,967

178,316

161,350

General and administrative

30,951

26,064

60,138

62,665

Restructuring and related charges

167

1,035

538

2,312

Amortization of intangible assets

407

509

907

1,021

Total operating expenses

182,088

162,458

358,822

336,682

Operating income

12,992

12,665

24,287

7,948

Interest income

1,132

839

2,329

1,685

Interest expense

(3,360

)

(4,179

)

(7,013

)

(8,601

)

Other income (expense), net

(360

)

661

(847

)

(60

)

Income before income taxes

10,404

9,986

18,756

972

Provision for income taxes

2,528

2,604

5,269

4,094

Net income (loss)

$

7,876

$

7,382

$

13,487

$

(3,122

)

Basic and diluted income (loss) per share:

Net income (loss) per share – basic

$

0.06

$

0.06

$

0.10

$

(0.02

)

Net income (loss) per share – diluted

$

0.06

$

0.06

$

0.10

$

(0.02

)

Shares used in per share calculation – basic

133,914

132,381

133,443

131,778

Shares used in per share calculation – diluted

135,166

134,107

135,379

131,778

EXTREME NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Six Months Ended

December 31, 2025

December 31, 2024

Cash flows from operating activities:

Net income (loss)

$

13,487

$

(3,122

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation

7,793

7,804

Amortization of intangible assets

1,870

2,251

Amortization of cloud computing implementation costs

1,025

—

Reduction in carrying amount of right-of-use asset

5,104

4,894

Provision for credit losses

320

27

Share-based compensation

44,679

41,219

Deferred income taxes

414

(987

)

Provision for (benefit from) excess and obsolete inventory

1,270

(271

)

Non-cash interest expense

609

594

Other

951

(801

)

Changes in operating assets and liabilities:

Accounts receivable, net

(26,039

)

(28,083

)

Inventories

15,821

411

Prepaid expenses and other assets

(25,724

)

(9,969

)

Accounts payable

766

1,177

Accrued compensation and benefits

3,342

16,995

Operating lease liabilities

(5,554

)

(5,375

)

Deferred revenue

27,920

17,421

Other current and long-term liabilities

(31,914

)

(4,067

)

Net cash provided by operating activities

36,140

40,118

Cash flows from investing activities:

Capital expenditures for property, equipment and capitalized software development costs

(13,922

)

(12,325

)

Net cash used in investing activities

(13,922

)

(12,325

)

Cash flows from financing activities:

Borrowings under revolving facility

25,000

—

Payments on revolving facility

(25,000

)

—

Payments on debt obligations

(7,500

)

(5,000

)

Payments on debt financing costs

—

(695

)

Repurchase of common stock

(12,000

)

—

Payments for tax withholdings, net of proceeds from issuance of common stock

(14,498

)

(8,300

)

Net cash used in financing activities

(33,998

)

(13,995

)

Foreign currency effect on cash and cash equivalents

(174

)

(175

)

Net increase (decrease) in cash and cash equivalents

(11,954

)

13,623

Cash and cash equivalents at beginning of period

231,745

156,699

Cash and cash equivalents at end of period

$

219,791

$

170,322

Extreme Networks, Inc.

Non-GAAP Measures of Financial Performance

To supplement the Company's consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (“GAAP”), Extreme uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating margin, non-GAAP operating income, non-GAAP net income, non-GAAP net income per diluted share, Adjusted EBITDA (calculated as GAAP net income excluding interest, income taxes, depreciation and amortization as well as costs or benefits that are not reflective of the Company's ongoing or expected future operational performance as noted below), net cash (debt) and free cash flow.

Reconciliation to the nearest GAAP measure of all historical non-GAAP measures included in this press release can be found in the tables included with this press release.

Non-GAAP measures presented in this press release are not in accordance with or alternative measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Extreme’s results of operations as determined in accordance with GAAP. These non-GAAP measures should only be used to evaluate Extreme’s results of operations in conjunction with the corresponding GAAP measures.

Extreme believes these non-GAAP measures, when shown in conjunction with the corresponding GAAP measures, enhance investors' and management's overall understanding of the Company's current financial performance and the Company's prospects for the future, including cash flows available to pursue opportunities to enhance stockholder value. In addition, because Extreme has historically reported certain non-GAAP results to investors, the Company believes the inclusion of non-GAAP measures provides consistency in the Company's financial reporting.

For its internal planning process, and as discussed further below, Extreme's management uses financial statements that do not include share-based compensation expense, amortization of intangibles, restructuring and related charges, system transition costs, litigation charges, other non-recurring costs, debt refinancing charges, and the tax effect of non-GAAP adjustments. Extreme’s management also uses non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the Company's financial results.

As described above, Extreme excludes the following items from one or more of its non-GAAP measures when applicable.

Share-based compensation. Share-based compensation consists of associated expenses for stock options, restricted stock awards and the Company’s Employee Stock Purchase Plan. Extreme excludes share-based compensation expenses from its non-GAAP measures primarily because they are non-cash expenses that the Company does not believe are reflective of ongoing cash requirement related to its operating results. Extreme expects to incur share-based compensation expenses in future periods.

Amortization of intangibles. Amortization of intangibles includes the monthly amortization expense of intangible assets such as developed technology, customer relationships and trademarks. The amortization of the developed technology are recorded in cost of goods sold, while the amortization for the other intangibles are recorded in operating expenses. Extreme excludes these expenses since they result from an intangible asset and for which the period expense does not impact the operations of the business and are non-cash in nature.

Restructuring and related charges. Restructuring and related charges consist of severance costs for employees, asset disposal costs and other charges related to excess facilities that do not provide economic benefit to our future operations. Extreme excludes restructuring expenses since they result from events that occur outside of the ordinary course of continuing operations.

System transition costs. System transition costs consist of costs related to direct and incremental costs incurred in connection with our multi-phase transition of our customer relationship management solution, our configure, price, quote solution and our enterprise resource planning tools that were not capitalizable. Extreme excludes these costs because we believe that these costs do not reflect future operating expenses and will be inconsistent in amount and frequency, making it difficult to contribute to a meaningful evaluation of our operating performance.

Litigation charges. Litigation charges consist of estimated settlement and related legal expenses for non-recurring litigations offset by any proceeds received or expected to be received from insurance.

Debt refinancing charges. Debt refinancing charges consist of costs that were not capitalizable and are included in other expense, net, that occurred in conjunction with the amendments related to our outstanding credit facility.

Other non-recurring costs. Other non-recurring costs consist of certain external advisory and professional fees incurred for various non-recurring transactions and activities that occur outside of the normal course of business. Extreme excludes these costs because we believe that these costs do not reflect future operating expenses and will be inconsistent in amount and frequency, making it difficult to contribute to a meaningful evaluation of our operating performance.

Tax effect of non-GAAP adjustments. We calculate our non-GAAP provision for income taxes in accordance with the SEC guidance on non-GAAP Financial Measures Compliance and Disclosure Interpretation. We have assumed our U.S. federal and state net operating losses would have been fully consumed by the historical non-GAAP financial adjustments, eliminating the need for a full valuation allowance against our U.S. deferred tax assets which, consequently, enables our use of research and development tax credits. The non-GAAP tax provision consists of current and deferred income tax expense commensurate with the non-GAAP measure of profitability using our blended U.S. statutory tax rate of 24.6%.

The non-GAAP provision for income taxes has typically been and is currently higher than the GAAP provision given the Company has a valuation allowance against its US and a portion of its Irish deferred tax assets due to historical losses. Once these valuation allowances are released, the non-GAAP and the GAAP provision for income taxes will be more closely aligned.

Over the next year, our cash taxes will be driven by US federal and state taxes and the tax expense of our foreign subsidiaries, which amounts have not historically been significant, with the exception of the Company’s Canadian, German and Indian subsidiaries which perform research and development and sales and marketing activities for the Company, as well as the Company’s Irish trading subsidiaries.

EXTREME NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

GAAP TO NON-GAAP RECONCILIATION

(In thousands, except percentages and per share amounts)

(Unaudited)

Revenues

Three Months Ended

Six Months Ended

December 31,

2025

December 31,

2024

December 31,

2025

December 31,

2024

Revenues – GAAP

$

317,925

$

279,355

$

628,170

$

548,559

Non-GAAP Gross Margin

Three Months Ended

Six Months Ended

December 31,

2025

December 31,

2024

December 31,

2025

December 31,

2024

Gross profit – GAAP

$

195,080

$

175,123

$

383,109

$

344,630

Gross margin – GAAP percentage

61.4

%

62.7

%

61.0

%

62.8

%

Adjustments:

Share-based compensation expense, Product

796

680

1,548

1,298

Share-based compensation expense, Subscription and support

759

798

1,486

1,487

Amortization of intangibles, Product

334

589

927

1,195

Total adjustments to GAAP gross profit

$

1,889

$

2,067

$

3,961

$

3,980

Gross profit – non-GAAP

$

196,969

$

177,190

$

387,070

$

348,610

Gross margin – non-GAAP percentage

62.0

%

63.4

%

61.6

%

63.6

%

Non-GAAP Operating Margin

Three Months Ended

Six Months Ended

December 31,

2025

December 31,

2024

December 31,

2025

December 31,

2024

GAAP operating income

$

12,992

$

12,665

$

24,287

$

7,948

GAAP operating margin

4.1

%

4.5

%

3.9

%

1.4

%

Adjustments:

Share-based compensation expense, cost of revenues

1,555

1,478

3,034

2,785

Share-based compensation expense, R&D

4,639

4,467

9,086

8,680

Share-based compensation expense, S&M

8,009

7,596

15,522

14,478

Share-based compensation expense, G&A

8,696

7,911

17,037

15,276

Restructuring and related charges

167

1,035

538

2,312

Litigation charges

822

877

2,759

11,593

System transition costs

6,467

4,026

11,392

9,371

Amortization of intangibles

741

1,098

1,834

2,216

Other non-recurring costs

3,648

—

3,648

—

Total adjustments to GAAP operating income

$

34,744

$

28,488

$

64,850

$

66,711

Non-GAAP operating income

$

47,736

$

41,153

$

89,137

$

74,659

Non-GAAP operating margin

15.0

%

14.7

%

14.2

%

13.6

%

Non-GAAP Net Income

Three Months Ended

Six Months Ended

December 31,

2025

December 31,

2024

December 31,

2025

December 31,

2024

GAAP net income (loss)

$

7,876

$

7,382

$

13,487

$

(3,122

)

Adjustments:

Share-based compensation expense

22,899

21,452

44,679

41,219

Restructuring and related charges

167

1,035

538

2,312

Litigation charges

822

877

2,759

11,593

System transition costs

6,467

4,026

11,392

9,371

Amortization of intangibles

741

1,098

1,834

2,216

Other non-recurring costs

3,648

—

3,648

—

Debt refinancing charges

—

—

—

79

Tax effect of non-GAAP adjustments

(7,895

)

(7,297

)

(13,468

)

(12,695

)

Total non-GAAP adjustments to GAAP net income (loss)

$

26,849

$

21,191

$

51,382

$

54,095

Non-GAAP net income

$

34,725

$

28,573

$

64,869

$

50,973

Earnings (loss) per share

GAAP net income (loss) per share – diluted

$

0.06

$

0.06

$

0.10

$

(0.02

)

Non-GAAP net income per share – diluted

$

0.26

$

0.21

$

0.48

$

0.38

Shares used in net income (loss) per share – diluted:

GAAP shares used in per share calculation – basic

133,914

132,381

133,443

131,778

Potentially dilutive equity awards

1,252

1,726

1,936

1,462

GAAP and Non-GAAP shares used in per share calculation – diluted

135,166

134,107

135,379

133,240

Adjusted EBITDA

Three Months Ended

Six Months Ended

December 31, 2025

December 31, 2024

December 31, 2025

December 31, 2024

GAAP net income (loss)

$

7,876

$

7,382

$

13,487

$

(3,122

)

Adjustments:

Depreciation expense

3,994

3,863

7,793

7,804

Amortization expense

1,784

1,116

2,895

2,251

Share-based compensation expense

22,899

21,452

44,679

41,219

Restructuring and related charges

167

1,035

538

2,312

Litigation charges

822

877

2,759

11,593

System transition costs

6,467

4,026

11,392

9,371

Other non-recurring costs

3,648

—

3,648

—

Debt refinancing charges

—

—

—

79

Interest income

(1,132

)

(839

)

(2,329

)

(1,685

)

Interest expense

3,360

4,179

7,013

8,601

Provision for income taxes

2,528

2,604

5,269

4,094

Total adjustments to GAAP net income (loss)

44,537

38,313

83,657

85,639

Adjusted EBITDA

$

52,413

$

45,695

$

97,144

$

82,517

View source version on businesswire.com: https://www.businesswire.com/news/home/20260128898195/en/
For more information, contact:

Investor Relations

Stan Kovler

919/595-4196

Investor_relations@extremenetworks.com

Media Contact

Amy Aylward

603/952-5138

pr@extremenetworks.com

Original: Extreme Networks Reports Second Quarter Fiscal Year 2026 Financial Results