US Market News
2月前
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
US Market News
5月前
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
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