EXTR

Voya Investment Management, an investment management company, released its second-quarter 2026 investor letter for its “Voya MI Dynamic Small Cap Fund.” A copy of the letter can be downloaded here. US Equity markets rebounded strongly in the second quarter of 2026, recovering from geopolitical tensions that nearly pushed the S&P 500 Index into correction territory. Technology dominated the landscape, powered by increasing AI adoption, while industrials benefited from strong capital expenditure. Small-cap and growth stocks outperformed; investors grew selective amid concerns about returns, competition, and regulation. The Fund outperformed the Index, benefitting from stock selection in energy, consumer discretionary, and health care sectors. Overall market performance could become more volatile due to rising costs and increased supply from IPOs and secondary issuances. Additionally, reviewing the Fund’s top five holdings could help identify its best picks for 2026. In its Q2 2026 investor letter, Voya MI Dynamic Small Cap Fund highlighted Extreme Networks, Inc. (NASDAQ:EXTR), a cloud‑driven enterprise networking company that develops and markets network infrastructure equipment and related software. Representing 1.10% of the portfolio, Extreme Networks, Inc. (NASDAQ:EXTR) contributed positively to the Fund’s performance during the quarter. On August 14, 2026, Extreme Networks, Inc. (NASDAQ:EXTR) closed at $24.41 per share, reflecting a market capitalization of $3.20 billion. Extreme Networks, Inc. (NASDAQ:EXTR) posted a one-month return of -19.39%, while its shares gained 22.85% over the past 52 weeks. Voya MI Dynamic Small Cap Fund stated the following regarding Extreme Networks, Inc. (NASDAQ:EXTR) in its Q2 2026 investor letter: Extreme Networks, Inc. (NASDAQ:EXTR) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 41 hedge fund portfolios held Extreme Networks, Inc. (NASDAQ:EXTR) at the end of the first quarter, up from 37 in the previous quarter. While we acknowledge the potential of Extreme Networks, Inc. (NASDAQ:EXTR) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. In another article, we covered Extreme Networks, Inc. (NASDAQ:EXTR) and shared SouthernSun Small Cap Strategy’s insight on the company. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors. READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years. Disclosure: None. This article is originally published at Insider Monkey.

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. Extreme Networks (EXTR) has just reported quarterly and full year results that move the company from a loss to net income, alongside fresh guidance and an ongoing share repurchase programme. See our latest analysis for Extreme Networks. Extreme Networks' recent earnings, new guidance and updated credit facility come after a sharp 7 day share price return decline of 26.1% and a 30 day share price return decline of 29.1%. However, the year to date share price return of 44.5% and 5 year total shareholder return of 126.33% indicate that longer term holders have still seen meaningful gains. If this kind of earnings driven move has your attention, it is a good time to broaden your watchlist and check out 57 AI infrastructure stocks After that sharp pullback, Extreme Networks is trading at a very different entry point from just a month ago. Does it make more sense to commit capital now or wait for an even cheaper price before stepping in? The most followed valuation narrative for Extreme Networks pegs fair value at $32.19 compared with the last close at $23.90. That gap rests on some punchy long term assumptions about growth, margins and future pricing. Read the complete narrative. Read the complete narrative. Want to see what sits behind that premium fair value for Extreme Networks? The narrative leans heavily on stronger recurring revenue, slimmer margins and a future earnings multiple that assumes investors keep paying up. Curious how those moving parts line up into a single price target. Result: Fair Value of $32.19 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Extreme Networks' reliance on large government contracts and intense competition from much bigger networking companies could quickly challenge the current AI-driven growth narrative. Find out about the key risks to this Extreme Networks narrative. The SWS DCF model sees Extreme Networks as undervalued at $23.90 compared with an estimated future cash flow value of $35.21. Yet the stock trades on a P/E of 74.5x, while the fair ratio is 26.1x and the US Communications industry sits at 34.8x. That leaves a very rich earnings multiple on a company flagged as undervalued, which raises the question of whether the opportunity is in the cash flows, the current price, or both. To see how this cash flow view is built and stress test the inputs against your own assumptions, take a closer look at the SWS DCF model for Extreme Networks Look into how the SWS DCF model arrives at its fair value. With sentiment on Extreme Networks clearly mixed, this is a moment to move quickly and weigh the evidence for yourself, including 4 key rewards and 1 important warning sign. If Extreme Networks has sharpened your focus on opportunities, do not stop here. Broaden your watchlist now so you are not late to the next move. Target potential mispricing by scanning companies that combine quality fundamentals with attractive valuations through the 49 high quality undervalued stocks. Strengthen your income stream by focusing on businesses that aim to deliver solid payouts using the 8 dividend fortresses. Reduce surprises in your portfolio by focusing on resilient companies with steadier risk profiles through the 85 resilient stocks with low risk scores. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include EXTR. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Wednesday, Aug. 5, 2026 at 8:00 a.m. ET Senior Vice President, Finance and Corporate Development - Stan Kovler President and Chief Executive Officer - Edward Meyercord Executive Vice President and Chief Financial Officer - Kevin Rhodes Need a quote from a Motley Fool analyst? Email [email protected] Operator: Hello, everyone. Thank you for joining us, and welcome to Extreme Networks' Fourth Quarter Fiscal Year 2026 Financial Results Conference Call. [Operator Instructions] I will now hand the conference over to Stan Kovler, Senior Vice President, Finance and Corporate Development. Please go ahead. Stan Kovler: Thank you, Jay. Good morning, and welcome to Extreme Networks' fourth quarter and fiscal year 2026 earnings conference call. I'm Stan Kovler, Senior Vice President of Finance and Corporate Development. With me today are Extreme Networks' President and CEO, Ed Meyercord; and Executive Vice President and CFO, Kevin Rhodes. We just distributed a press release and filed an 8-K detailing Extreme Networks' financial results for the fourth quarter and full fiscal year 2026. A copy of the press release, which includes our GAAP to non-GAAP reconciliations in our earnings presentation is available in the IR section at extremenetworks.com. Today's call and Q&A may include certain forward-looking statements based on current expectations about Extreme's future financial and operational results, growth expectations, new product introductions, supply chain dynamics and management strategies. All financial disclosures made on this call will be on a non-GAAP basis, unless stated otherwise. We caution you not to put undue reliance on these forward-looking statements as they involve risks and uncertainties that could cause actual results to differ materially from those anticipated by these statements. These risks are described in our risk factors in our 10-K and 10-Q filings. Any forward-looking statements made on this call reflect our analysis as of today, and we have no plans to update them, except as required by law. Following our prepared remarks, we will take questions. And now I will turn the call over to Extreme's President and CEO, Ed Meyercord. Edward Meyercord: Thank you, Stan, and thank you all for joining us this morning. In fiscal '26, we delivered 13% year-over-year revenue growth and 26% EPS growth, highlighting competitive strength and the operating leverage in our model. During the year, we took share and accelerated our move upmarket by winning more sophisticated networking projects with larger customers. And Q4 was our sixth consecutive quarter of double-digit growth. Our performance was driven by the convergence of 3 factors: First, our highly differentiated portfolio, including Platform ONE, enterprise Fabric, Wi-Fi 7 and the industry's first Multi-Beam Wireless solution. Our innovation is driving competitive wins and opening doors to new customers. Second, we're well positioned in a market that's rapidly moving away from point solutions toward integrated platforms. Our go-to-market teams are tightly aligned and capitalizing on the opportunity to take share here. And third, operating excellence and disciplined execution, highlighted by our supply chain team eliminating product constraints and by allowing us to meet customer demand into fiscal '28 and beyond. Enterprise networking is in an extended growth cycle, fueled by new demands on network created by AI, security and the modernization of enterprise [ edge ]. At the same time, competitor refresh cycles are creating a significant multiyear window for us to take share, win new customers and deepen existing relationships. Fiscal '26 highlighted a significant move upmarket with 187 customers booking more than $1 million in business with Extreme. Our average deal size grew by 1/3, and our enterprise competitive win rate improved significantly. We just completed 9 consecutive quarters of product growth driven by innovation. Our unique enterprise Fabric remains one of our strongest differentiators. One customer recently told us they've gone 11 years without a single network outage since deploying Fabric. By automating operations, strengthening security and simplifying management, Fabric delivers results customers can see, and when they experience it in a proof of concept, our win rate goes way up. And now our Fabric with enhanced capabilities is built into Platform ONE. Extreme Platform ONE accounted for 30% of subscription bookings in the first year of general availability and nearly half of subscription bookings in the fourth quarter, underscoring the rapid pace of customer adoption for unified AI-powered networking platform. Customers and partners are interested in Extreme. They want the most advanced networking platforms that leverage modern Agentic AI technology. The release of our Extreme Agent ONE Coworker this quarter is highly anticipated. And deployment flexibility. No competitor matches Extreme's cloud flexibility, whether it's public, private or on-prem. We offer seamless alternatives without compromising performance, control or compliance. That differentiation brings unique data sovereignty protection, driving strong public sector demand. And during the quarter, Platform ONE achieved Germany's C5 certification, one of Europe's rigorous cloud security standards. In the quarter, we extended our innovation leadership with the industry's first Multi-Beam Wireless solution with Wi-Fi 7. This is a result of an exclusive partnership with MatSing. By delivering significantly better economics, greater coverage and capacity with dramatically less infrastructure, the solution helped us win the massive and highly contested Tennessee Titans' new Nissan Stadium project. It demonstrates how differentiated innovation continues to drive competitive wins. Platform ONE continues to accelerate with customers across all geos and all industry verticals, including a top 10 global retailer based in Europe, University of Technology Sydney, a new logo and our largest deal in the ANZ region in company history, Vandalia Health, the largest healthcare provider in West Virginia, the U.K. Health Security Agency, Assumption University, Penn State Athletics and many more. We also signed our first multimillion-dollar multiyear enterprise agreement for Platform ONE with one of the Middle East's largest healthcare providers. In other competitive wins, Extreme displaced Cisco at Nottingham City Council, the U.K. government authority that delivers a broad range of public services to more than 320,000 residents. The new network will include a unified Fabric, SD-WAN and our cloud managed networking solution spanning 74 sites. Elisabeth-TweeSteden, one of the largest hospitals in Netherlands, expanded its partnership with Extreme, selecting Platform ONE and wired and wireless solutions to support a major modernization initiative. Extreme Fabric was a key differentiator, helping us displace Cisco with the simplicity and resiliency required for a 24/7 healthcare environment. Brunel University in London, with over 16,000 students, was another new logo win. We displaced a 20-year incumbent by combining the differentiated value of our campus Fabric with Platform ONE. And lastly, University of Florida selected Extreme to deploy the first Wi-Fi 7 network in a collegiate athletic venue with the iconic Ben Hill Griffin Stadium, better known as The Swamp. Our MSP program continued to gain traction, closing the year with 74 active MSPs, up from 70 last quarter. Billings grew 16% quarter-over-quarter and 112% year-over-year. All MSPs are now running Platform ONE for MSP Workspace with upgrades now a key focus on our differentiated multi-tenant architecture. The strength of our business momentum has carried into the new fiscal year. Market trends are favorable for Extreme, and we intend to continue outpacing market growth by taking share, migrating new and existing customers on to Platform ONE. Our component supply is secured into fiscal '28 and beyond, allowing us to meet customer demand while maintaining solid gross margins. Our channel partners continue to report the competitors' lead times are extending due to ongoing supply constraints, creating tailwinds for us. With the next generation of Platform ONE and the upcoming release of both Agent ONE in coworker mode this quarter and in operator mode next quarter, we will bring Agentic AI across the entire network life cycle from design to orchestration, troubleshooting and remediation across our entire product portfolio, while delivering complete observability, auditability and autonomy with built-in governance. None of our competitors will be able to say this or have this capability for some time, and it will be on display at our AI Summit in Amsterdam in October. Finally, the benefits of our continued growth will show up in our operating leverage as we expect our earnings to grow in the 20% plus, more than doubling our top line growth as we go forward. Now let me turn the call over to Kevin to discuss financial results and guidance. Kevin Rhodes: Thanks, Ed. In the fourth quarter, total revenue of $339 million exceeded consensus and the high end of our guidance range, representing 10% year-over-year and 7% sequential growth. This is our ninth consecutive quarter of sequential product revenue growth, and demand remains strong, resulting in 14% year-over-year and 10% sequential growth. Our recurring revenue of $116 million grew 6% year-over-year. We were pleased with the continued increase in our gross margins to 62.7%, which exceeded consensus and was above the high end of our guidance range. This was a result of timely pricing actions and effective cost management of our supply chain components, which led to a 40 basis point improvement in product margins. Earnings per share of $0.32 was up 28% year-over-year and 23% sequentially and exceeded consensus and the high end of our guidance range with some tax favorability included. I'm pleased to report that we have secured our supply chain for the long term, including into fiscal 2028, and our broad product availability enables us to meet the needs of prospects and our customers at a time when product lead times are a concern for many of our competitors. SaaS ARR climbed to $244 million in the quarter, growing 18% year-over-year. Investors may recall last year, in the fourth quarter, we grew 24% year-over-year due to winning large customers such as John Deere and the Japanese government. We expect SaaS ARR growth to reaccelerate towards the mid-20% range by the end of this fiscal year. Wi-Fi 7 continues to drive our wireless product revenue. Over half of our wireless bookings and revenue now comes from Wi-Fi 7. The upgrade cycle is also creating a positive mix shift in average selling prices and further supports our gross margin outlook. Geographically, our bookings and revenue tend to fluctuate based on the seasonality of our business. This quarter, the Americas region exhibited strong performance, driven by continued bookings growth over the past 2 quarters. We also generated major competitive wins in EMEA and APAC, including some of the largest universities, hospitals and retailers in their respective geographies. We expect all regions to grow in fiscal 2027. Operating margin in the fourth quarter was 15.7%, up 50 basis points from 15.2% in the prior year quarter. We had a really strong finish to the year, winning large deals and exceeding our goals for Platform ONE, which drove higher incentive compensation expense. We also achieved our highest EBITDA on a dollar and margin basis in the last 11 quarters -- in the past 11 quarters, generating $59 million of EBITDA at a 17.5% EBITDA margin. In addition to strong EBITDA, we generated $65 million of cash flow and ended the quarter with a healthy $47 million of net cash. In addition, we've repurchased $25 million worth of shares at a favorable average cost of $16.66 per share. Our cash conversion cycle improved to 25 days from 41 days last quarter, driven primarily by a reduction in days inventory outstanding. Lastly, just last week, we strengthened our financial flexibility and reduced interest expenses with a $500 million revolving credit facility, which provides additional working capital to fuel our growth. We also simplified our terms and covenants and improved our rate structure. For the full fiscal year 2026, we continue to translate revenue growth into accelerated earnings growth, demonstrating the leverage and scalability of our operating model. On a vertical basis, we experienced broad-based strength with particular standout bookings growth in manufacturing, healthcare, retail and sports and entertainment. Revenue of $1.28 billion grew 13% year-over-year, with non-GAAP earnings per share of $1.06, up 26% from $0.84 in the prior year. And product revenue growth accelerated to 15% year-over-year. We achieved significant operating leverage as our operating margin expanded 60 basis points to 14.8%, up from 14.2% in the prior year. EBITDA for the full year was $210 million, up 20% year-over-year. In fiscal '26, we stepped up our buybacks to $87 million for the year, up from $38 million in the prior year, and we continue to prioritize the use of cash flow to repurchase shares. As we enter fiscal 2027, we believe the business is operating from a position of increasing strength based on our growth drivers and disciplined cost and expense management. This gives us confidence in our expectations for double-digit product revenue growth, visibility into our margin outlook and more than 20% EPS growth in fiscal '27. By the end of fiscal '27, we expect half of our installed base to be on Platform ONE, which in turn drives accelerated growth in our high-margin recurring revenue. For the first quarter of fiscal '27, we expect revenue to be in a range of $334 million to $339 million, gross margin to be in a range of 62.2% to 62.7%, operating margin to be in a range of 14.7% to 15.3% and earnings per share to be in a range of $0.27 to $0.29. For the full fiscal year '27, we expect revenue to be in a range of $1.38 billion to $1.4 billion, gross margin to be in a range of 62.2% to 62.7%, operating margin to be in a range of 16.7% to 17.1% and earnings per share to be in a range of $1.28 to $1.33 per share. We expect our fiscal '27 non-GAAP tax rate to be 23% for the year. And with that, I'll now turn the call over to the operator to begin the question-and-answer session. Operator: [Operator Instructions] Your first question comes from the line of Ryan Koontz from Needham. Jeffrey Hopson: This is Jeff Hopson on for Ryan. Just wanted to get an idea of customer buying behavior right now. You called out some great competitive wins. Just was wondering, are they interested -- is it still a technological decision? Are you winning on being able to get supply and allocation with the memory or the consistent pricing that you guys are giving out? Just trying to understand what customers are doing out there right now. Edward Meyercord: Yes. Good question, Jeff. We haven't really seen the benefit in our results yet of the product availability that we're able to support. I mentioned in my comments that we hear from our distributors and we hear from partners that they're getting notice from all of our competitors in different geos around the world with different product sets that they're elongating and stretching lead times. And that has created, and we have a few examples, I would say, of smaller deals and bookings that came in during the quarter. But we feel like that, that pressure is building momentum and the opportunity we think will show up in greater force this quarter and the next couple of quarters where the supply chain pinch is really going to hit people. So I think our teams have done a good job communicating. We have a special program around deal registration with a price guarantee where customers that want to move to Extreme can guarantee a price and guarantee supply. And in today's environment, what we are hearing from distribution partners is that's going to create new business for us. We see it in the funnel, and we're expecting to see that funnel convert. In terms of demand right now, what we're seeing is this long-term network upgrade cycle by enterprise customers. Cisco announced a refresh. We have the same thing with HPE, Juniper. So enterprise customers are contemplating an upgrade to their network. Obviously, everyone is talking about AI. Security is very important. So having the most modern networking infrastructure is critical to support business needs. HPE and Juniper combined, enterprise customers want to talk to 3 vendors. When they look at the enterprise and the enterprise campus, Cisco is always a default. Now you have HPE and Extreme is more and more being included in that conversation. And I'll tell you that enterprise customers are kind of blown away when they see our technology. They're blown away by our Fabric. They're blown away by the integration now of Fabric into Platform ONE, what Platform ONE can do. And then as we come out with coworker and new tools, think about a network assistant by your side, and then in October, we're coming out with operator mode where you can actually unleash AI for autonomous functions and tasks. Obviously, there's always a human in the loop that's at your control, there's governance. There's all the capabilities in there, but Extreme is a great alternative and the best choice today for customers that want to leverage the new technology. So today, we're highlighting the innovation that we're bringing to market from a tech perspective. Our teams have embraced this. They're getting more at-bats, higher winning rate. And then we do expect tailwinds to come from the fact that we have full supply and normal lead times. Jeffrey Hopson: And maybe just a follow-up. It looks like Platform ONE is going well with nearly 50% of the subscription bookings in the quarter. I guess -- but the SaaS ARR was probably a little bit lower than some were expecting. Where are we with the feature parity kind of road map? And what kind of gives you that confidence that we can return to the mid-20% growth in the year coming up? Edward Meyercord: Yes. Well, yes, you have to keep in mind that last year, the bar was high for us as it relates to growth in Q4 because of big wins that we had previously with John Deere, wins that we have with the Japanese government and a spike in that ARR a year ago. And we talked about the fact that, that set off a trend. And as we work through those comparables, you'll see us return to those 20% plus growth rates. But the -- 2 points to make. One, our feature development for the second half of the year, which in each 6 months, we're calling them waves and Wave 2, we have a huge amount of feature enhancement to Platform ONE, specifically adding in our Fabric customers and Fabric capability and enhancements. So at this point, we have different cohorts of customers in all of our -- each of those cohorts, A, B, C, depending on size and complexity of customer, are now eligible to move into Platform ONE. So that's important. The May and June releases were huge. So we'll see that pick up momentum. The other thing is if we look at bookings, we had a very aggressive target -- and that target of 3, 5, 10, 20 with a very steep ramp of Platform ONE bookings, we exceeded. And so we exceeded the effective, call it, $40 million target by hitting over $50 million of bookings. So the adoption is real, the features are there. And so as we go forward, after the high bump for this quarter, we will expect after a few quarters as we move through the comparables to see that rate go back up. Kevin, I don't know if you want to add. Kevin Rhodes: No, I agree. It was just an elevated benchmark from Q4 that we'll be right back there. Yes, 20%. Operator: Your next question comes from the line of Tomer Zilberman from Bank of America. Tomer Zilberman: I wanted to ask a question maybe along the same vein of the previous question. If I look at the growth trajectory this quarter and what you set out for next year, you went from 11% to 15% growth for the last few quarters to about 10% this quarter and guiding to about 8% to 8.5% next year. Can you just take us through the components of the growth trajectory, especially in respect to your long-term growth framework of 10%? Is it mostly about what you described earlier in terms of tough comps and extended lead times as the supply chain kind of remains tight? Is there a risk that you saw pull-forward in the last few quarters and there's a reversion period before growth reaccelerates? Edward Meyercord: Yes. I can take the first part of this, Kevin, and I'll let you jump in. Tomer, we're still calling 10% double-digit product growth. And then as you know, we're migrating customers off of traditional service break-fix maintenance plans and combining them with Platform ONE. And so you're seeing sort of that traditional service line go down and offsetting growth on the subscription side. But as I mentioned earlier, we're very pleased that we're exceeding our metrics for adoption for Platform ONE. So we're going through a transition. We have to work through the transition on that migration, at which point we'll hit an inflection point. And then you'll see that recurring revenue growth kick back up after we work through the integration and the combination with absorbing the traditional service contracts that will be declining. In terms of pull-forward, no, there's no unusual pull-forward activity in the quarter from that standpoint. In fact, we built up backlog year-over-year, if you look at the comparisons, we've added backlog and we're off to a very healthy start from a bookings perspective in Q1. In this environment, we felt like a 10% product growth call was a solid call and that we're working through that transition as it relates to the services offset with the growth of Platform ONE. Kevin, do you want to add anything to that? Kevin Rhodes: No, I think you're right, Ed. I would say it's early in the year, right? This last year, we did well to overachieve our original guidance. And at the end of the day, from our perspective, this is the visibility we have right now, and it is 10% product revenue growth, and we'll see how the year plays out. Edward Meyercord: Tomer, one thing that we did that was unique in the marketplace is we put something called -- it's a deal registration price guarantee. Basically, our partners can come in and they can register a deal with us. So we basically protect them that it's their project and their deal, and we protected the price out to the end of October. So there was really no incentive or need for customers to pull in their orders into the quarter, given the fact that they're price-protected out into our fiscal Q2. It's been very popular. It's been very well received, and we have a really nice funnel of opportunities that are building there. Tomer Zilberman: Got it. Maybe as one more follow-up. I think when we last spoke, you disclosed you had 2 price increases versus some of your larger competitors that had up to 4, if not more price increases. Can you just remind us, have the 2 already flowed through? And how do you view the opportunity to maybe catch up to some of your peers in terms of adding more price increases and offering another form of growth leverage? Edward Meyercord: Yes. I'll take this, and Kevin, you can fill in. Yes, we had 2 price increases. And as you mentioned, many of our competitors have had more than that. And we typically price under Cisco, their umbrella, and bring a price advantage into the market for our customers. And we will continue to look at that. And so I think this is an environment of price increases, and we will look at that going forward. On the services side of the business, we have an annual increase. And then on the product side, we're opportunistic in terms of how we look at that. But you should expect to see us continue to raise price on the product side, but it's just not as reprogrammed as the services side of the business. Kevin, do you want to add anything? Kevin Rhodes: The only thing I think I'd add, Ed, is that at this point, all of our quotes have the full impact of both November and the March price increases in them. So I think the answer to your question is absolutely. We do have that included at this point. And then it's a balance of being able to retain some of that price increase with discounting. And as you can see from our margin perspective, we're actually doing a good job on that with rising margins. So I feel like we're doing a good job kind of balancing price increases in a market that's fairly price sensitive on networking equipment, but yet also our ability to provide available networking equipment pretty much across the entire portfolio is helping us with opportunities. Operator: Your next question comes from the line of Dave Kang from B. Riley. Dave Kang: First question, just wondering if you can go over health of your key verticals, starting with government and education. Kevin Rhodes: Sure, Dave. You just want to understand the health of them. When you say the health, are you referring to the bookings growth that we're experiencing there? Dave Kang: Yes. Kevin Rhodes: Okay. Dave Kang: Bookings, visibility. Kevin Rhodes: Yes. I'll go ahead and let you take it. Edward Meyercord: Yes. Well, we mentioned -- and Dave, you see it in the customer examples. When we're giving customer examples, we're trying to give you a flavor of the kinds of customers that we're winning across our geos. So we mentioned a big university win in Sydney, Australia. This is the largest deal that we've ever done in ANZ and driven by Platform ONE and Fabric combined. But there, you have healthcare, we also mentioned healthcare wins throughout EMEA, our enterprise agreement with the largest healthcare provider in the Middle East, healthcare in the U.S. and U.K. and really around the world. Government customers that if you look at our customer mix by vertical, Dave, it's not really -- it's pretty remarkably consistent. And so that really hasn't changed. And I talked about some of the advantages that we're bringing -- getting the C5 certification in Germany was a big deal. That's important for us to take share and continue to expand on the government side in Germany, which is our biggest market in EMEA. That's a big one. We have really across all of our verticals, our technology development in terms of the Fabric and Platform ONE, in terms of the Wi-Fi innovations that we talked about, all of this is playing well into each of our verticals across all of our geos and it's supporting our move upmarket when you look at the kinds of customers that we're winning and the kinds of projects that we win. So I'm just going to say solid demand, no change to vertical mix to note with us moving upmarket across our geos. Dave Kang: So it sounds like there's really no vertical that we should be worried about? Edward Meyercord: No. Not in our case. I mean, our forecast is very consistent on the vertical front. Dave Kang: Got it. And just the Americas, it was very strong. Just wondering how sustainable that will be? Edward Meyercord: Yes. Kevin -- I'll let Kevin talk about some of the mechanics and how we report revenue versus booking and trying to gauge true demand. If you look at the 30% plus growth numbers, it's overstating the revenue growth in Americas and understating revenue growth in EMEA and Asia Pacific. Americas as a geo is definitely our fastest-growing market in fiscal '26, followed by EMEA, followed by Asia Pacific. If you recall, the prior year, we won the Japanese government in a massive project that created a tough comp for Asia Pacific. But as we transition into fiscal '27, you'll see Asia Pacific high up on the list from a growth perspective and then higher growth rates in EMEA than kind of what you would see in Americas. But as I said before, each of our geos, we have strong double-digit growth forecast from a booking standpoint. Kevin, do you want to add to that? Kevin Rhodes: I would just add -- yes, I would just... Edward Meyercord: Differentiation between revenue and bookings. Kevin Rhodes: Yes. I'd just add there is some timing differences between bookings and revenue, especially with busy buying cycles also playing kind of a role here in different parts and regions of the world. We have some seasonality, for instance, in the fourth quarter as well within the Americas with the E-Rate buying cycle. And so that plays out in the fourth quarter, but then we see other parts of the world kind of have other stronger quarters. So -- but I would say, in general, the demand across all of our different regions of the world was still from a bookings perspective, still very strong. And we expect, again, all 3 of our regions to grow in fiscal '27 year-over-year. Dave Kang: Got it. And my last question is regarding margins. In the last couple of quarters, you talked about a number of professional installations, how that's going to pressure margins. Just wondering what happened in the fiscal fourth quarter and what should our expectation be for going forward? Edward Meyercord: Kevin, I'll start off and then have you jump in. Kevin Rhodes: Sure. Edward Meyercord: Dave, as you know, we were guiding at a 62.3% margin for this quarter, and we had some -- we had favorability. Some of that does have to do with professional services mix. We also had strength in our product margins. And we have confidence to take that up to 62.5% as a guide going into Q4 and for the rest of the year. In this environment, we don't think it makes sense to be too aggressive in trying to -- in how we call that number. But you'll notice that we're just -- we've gradually been taking that up in a very challenging environment. And yes, we have to -- as we forecast the business, we have to look at mix as it relates to both services and obviously, wired and wireless portfolio. Kevin, do you want to add to that? Kevin Rhodes: Yes, I think you're right, Ed. I mean, at the end of the day, we didn't quite have as much professional services as we originally anticipated in the quarter to drag down margins. And you saw the product margin improvements, which is really emblematic of the supply chain kind of management that we had, the good supply chain management we had. Operator: Your next question comes from the line of David Vogt from UBS. David Vogt: Maybe, Kevin and Ed, this is just more of a longer-term philosophical question. Obviously, the networking market continues to be incredibly strong. You guys are doing exceptionally well. But the component environment and the supply chain environment is obviously a constraining factor, and I think everyone can acknowledge leading to maybe elevated costs and long lead times. How do we think about that mix in terms of what this means longer term for your profitability? Because I think, Kevin, in the past, you've talked about long-term targeting getting to 64% to 66%. And to Ed's just recent comment, obviously, we want to be prudent and not get out ahead of our skis. But just how do we think about the environment today maybe vis-a-vis what the environment looked like 6 months ago or 12 months ago? And how do you think about that in the context of a longer-term perspective on your business? Edward Meyercord: Thanks, David. And Kevin, again, I'll jump in and then let you take it up. But obviously, David, we have to look at it from 2 sides, right? We were talking about pricing. That question came up. We have to balance how much we raise price and how does it impact demand from customers. So that's something that we look at. We are not the industry leader. And so we have a -- we're priced below the larger competitors in the marketplace, which gives us an advantage. So from a pricing standpoint, that is a lever that we're able to kind of push and pull, if you will. And we do that. And we're very -- and I'd say we're very good at that, and we expect to capture the price increases we put in place. The other thing that we've done, which is exceptional in the industry is we've solved for the supply chain constraints. So I can tell you, we don't have supply chain constraints at Extreme, which is highly unusual. It has to do with many factors. We were early in recognizing the supply issues. We have literally 12 different initiatives underway at Extreme in terms of sourcing new vendors. Broadcom has been an amazing partner for us in introducing us important relationships for us. We're turning up new sources of supply. They've also been very helpful for us in CEO-level connections, board-level connections. At Micron, our traditional vendor, we've gotten in on Micron now, and we're now part of their supply mix, and we're on their radar going direct with them. In the open market broker markets, we've done a great job. Samsung is a large customer of Extreme. Samsung's global headquarters runs on Extreme. And our sales leadership in that country has excellent relationships, and we've unlocked supply from Samsung at amazing prices. So I'm just giving you some examples of here you have a country manager in sales unlocking supply, you have cross-functional team members getting very creative about how we solve for this. So the net-net for us is we have clear visibility for supply. As we mentioned in our comments, into '28 and beyond. We have new suppliers coming online, and I'm confident saying that supply just isn't an issue. And then it's a question of pricing. Even in the case of Micron, where they shifted their production to these higher-margin products, if you will. At the same time, to support customers like Extreme, they're still building more fabs for the older technology, if you will. So that's -- we see increasing supply coming from older vendors that we've dealt with. And then we have new sources of supply, and we're confident that margin goal will come back. And then the real shift in the margin goal will be the evolution of Platform ONE and as we pivot into '28, where we'll have real confidence in seeing that margin move. Kevin, do you want to add... David Vogt: And maybe just one -- sorry, go ahead, Kevin. Kevin Rhodes: I mean the only thing I would add, Ed, as well, Dave, if you think about the 1 stat we had in the quarter, we had 187 customers over $1 million. And that's up pretty heavily from last year, and we had 47 customers in particular in Q4 with over $1 million. And so we're going upmarket. When we go upmarket, there are larger deals. When you get larger deals, that -- and as we continue to move with the AI leadership position that we have and going upmarket to these larger customers and then attracting new resellers with that larger kind of capacity to be able to find larger customers, that's going to help us from a demand perspective and growth perspective in future years. So that's the strategy that we have, and I think it's playing out well with Platform ONE, with going upmarket. And I think we've got a long cycle here of continued growth. David Vogt: Great. And just a follow-up, and I appreciate all that color. That was incredibly helpful. Just maybe -- I know this is maybe a difficult question, but when you think about all those vectors and the different sort of matrices, whether it's demand, price, discounting, are you trying to solve for gross margin rate or gross profit dollars right now given the environment that we're in? I'm just trying to get a sense for how you're thinking about all of the moving pieces. Kevin Rhodes: I don't think we're -- I mean, so I don't think we're trying to solve for one or the other, to be honest with you, Dave. I mean we -- first and foremost, we're a growth company. And so we're focusing on growth and being able to take as much share as we possibly can in this market. I think second, we want to do it profitably. And as Ed and I talked about even at the Analyst Day, we want to grow more than 10% in the business, and we want to double that amount from a profit perspective. That's what we just landed on in 2026 and hopeful we can continue to be that way in 2027. And so as we think about just what we're trying to do here is grow the company and grow it with scale and leverage to continue to provide stronger EPS, which is going to underpin a growing stock price. Edward Meyercord: Yes, I think, I mean -- David I think -- yes, Kevin, good answer. Now, we're doing both, and we think we can do both. So again, we're pointing to growth numbers for this year. And then we're also pointing to expanding gross margins. And I know, again, 62.3% target in Q4, 62.5% target in Q1. And over the long term, as you -- in our long-range plan, as you look at the migration of customers over to Platform ONE, you see a real gross margin benefit. Operator: [Operator Instructions] Your next question comes from the line of Eric Martinuzzi from Lake Street Capital Markets. Eric Martinuzzi: Yes. Kevin, I wanted to follow up on your comment there about the 187 customers that ordered with over $1 million in bookings. How does that compare? What was the number in FY '25? And then I have a follow-up. Kevin Rhodes: Yes. We had 168 in '25 there. Sorry, 168. Yes, 168. Eric Martinuzzi: Okay. And then for FY '27, is there an expectation about an assumption of growth? Is there something in the sales plan where we are targeting where we've got -- based on the pipeline that we have now, is there an expectation for that number to grow? Or is it just kind of taking it as it comes? Edward Meyercord: Kevin, let me take that and you can -- the answer is we have great visibility, Eric, into the funnel. And in terms of our funnel metrics, the number of opportunities that we have that are over $1 million. If you look at the funnel as where we sit today versus where we were a year ago, that funnel in terms of the number of opportunities is up, call it, in the mid-teens. And then if you look at the size of those opportunities, that is up as well into the mid-teens. So if you look at -- again, it goes back to the funnel creation, and I talked about the alignment of our go-to-market teams. We have 19 pods between marketing, direct sales, channel sales. They're doing a great job. They have very specific funnel creation targets and funnel conversion targets. And within all of these, we're incentivizing our teams to go after bigger deals. So it's nice to see it when you have a strategy, you're executing on the strategy and it shows up in your numbers. And our funnel, we -- that's what gives us a lot of confidence in what we're calling here because we're definitely moving upmarket as we look forward based on the metrics and the analysis of the opportunities in our funnel. Eric Martinuzzi: And your channel that you currently have is supporting that. It's not like we need to develop new reseller relationships... Edward Meyercord: And that's the other thing that's going on, Eric. So we have opened up the doors to larger customers and larger partners. And that channel is going to be critical for us. I can talk about some of the largest channel partners that Extreme has never had relation. A year ago, we could say we were ground zero with some of these bigger partners, and we've made tremendous progress. These are partners that talk about doing hundreds of millions of dollars with Extreme, not tens of millions of dollars with Extreme. And so it's a longer lead time, if you will, to nurture and develop these relationships. But we've done that in the U.S. with some key partners that we're very excited about. We're doing that in Europe. As you may recall, we have a new sales leader who is running Europe for us who came from Juniper, who is coming and he strengthened some of these larger partner relationships. And in our funnel, that's contributing to the larger deals that we're seeing in our funnel. And this is where there's the combination of these larger partners training up on our technology and being surprised and impressed and excited by the technology differentiation that they didn't realize, one. Two, the commercial terms, the kinds of things that we're doing, the availability of supply and the relationships. And so this is how this is -- it's all a combination of channel and it's a combination of our sales teams being able to manage these kinds of projects that are larger, more complicated, the operational support that we provide and our marketing teams and how we're targeting and the kinds of events that we're doing. All these things are coming together. And as I mentioned before, we have 19 specific strategies based on how we go to market, leveraging best practices from across the company. And we're executing, and we see it because if we're looking at funnel creation, funnel conversion, and obviously, that ties into our bookings forecast. And yes, you can tell just listen, we're excited about how all that's coming together. Operator: At this time, there are no further questions. I will now turn the call back to Ed Meyercord, President and CEO, for closing remarks. Edward Meyercord: Jay, thank you. And for all the investors on the call, we appreciate your time and attention and work on Extreme. I also want to -- we have employees and partners, suppliers, people that tuned into the call, and thank you for the partnership and the hard work, delivering the results. One thing I will say, we are very excited about the release of Agent ONE Coworker scheduled to come at the end of this month as well as our operator mode, which we are unveiling in Amsterdam on October 20th. Investors, you're welcome to join if you want to make the trek over there to see the technology. And as I mentioned before, we are going to be demonstrating and showing technology that will become GA this year that is well in front of our much larger competitors. And if you want to get a flavor for that, please come over and we'll welcome you and make space for you in that event. So again, thanks to all of you for the participation, and have a great day. Operator: This concludes today's call. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Extreme Networks (EXTR) Q4 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Revenue: Total revenue of $339 million in Q4, up 10% year-over-year and 7% sequentially; full fiscal year 2026 revenue of $1.28 billion, up 13% year-over-year. Earnings per Share (EPS): Q4 non-GAAP EPS of $0.32, up 28% year-over-year and 23% sequentially; full fiscal year 2026 non-GAAP EPS of $1.06, up 26% from $0.84 in the prior year. Gross Margin: Q4 gross margin of 62.7%, above the high end of guidance; full fiscal year 2026 gross margin expanded 60 basis points to 14.8% operating margin. Operating Margin: Q4 operating margin of 15.7%, up 50 basis points from 15.2% in the prior year quarter; full fiscal year 2026 operating margin of 14.8%, up from 14.2%. Recurring Revenue: Q4 recurring revenue of $116 million, up 6% year-over-year. SaaS ARR: Climbed to $244 million in Q4, growing 18% year-over-year. EBITDA: Q4 EBITDA of $59 million at a 17.5% margin; full fiscal year 2026 EBITDA of $210 million, up 20% year-over-year. Cash Flow: Generated $65 million of cash flow in Q4; cash conversion cycle improved to 25 days from 41 days last quarter. Share Repurchases: Repurchased $25 million worth of shares in Q4 at an average cost of $16.66 per share; full fiscal year 2026 buybacks totaled $87 million, up from $38 million in the prior year. Product Revenue Growth: Product revenue grew 14% year-over-year and 10% sequentially in Q4; full fiscal year 2026 product revenue growth accelerated to 15% year-over-year. Wi-Fi 7: Over half of wireless bookings and revenue now comes from Wi-Fi 7. Platform One: Accounted for 30% of subscription bookings in the first year of general availability and nearly half of subscription bookings in Q4. MSP Program: Closed the year with 74 active MSPs, up from 70 last quarter; billings grew 16% quarter-over-quarter and 112% year-over-year. Guidance: Q1 fiscal 2027 revenue expected in range of $334 million to $339 million; full fiscal year 2027 revenue expected in range of $1.38 billion to $1.4 billion. Warning! GuruFocus has detected 8 Warning Signs with ACTG. Is EXTR fairly valued? Test your thesis with our free DCF calculator. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Extreme Networks Inc (NASDAQ:EXTR) delivered 13% year-over-year revenue growth and 26% EPS growth in fiscal 2026, with Q4 marking the sixth consecutive quarter of double-digit growth. The company's differentiated portfolio, including Platform One, Enterprise Fabric, and Wi-Fi 7, drove competitive wins and a significant move upmarket, with 187 customers booking over $1 million in business. Supply chain security into fiscal 2028 and beyond provides a competitive advantage, as competitors face extended lead times, enabling Extreme Networks Inc (NASDAQ:EXTR) to meet customer demand and maintain solid gross margins. Platform One adoption is accelerating, accounting for nearly 50% of subscription bookings in Q4, with SaaS ARR growing 18% year-over-year and expected to reaccelerate to mid-20% growth. The company's financial position strengthened with $47 million net cash, a new $500 million revolving credit facility, and improved cash conversion cycle to 25 days, supporting continued growth and share repurchases. SaaS ARR growth slowed to 18% in Q4, down from 24% in the prior year, due to tough comparables from large wins like John Deere and the Japanese government, with reacceleration expected only later in fiscal 2027. Revenue growth guidance for fiscal 2027 is approximately 8-8.5%, a deceleration from the 13% growth in fiscal 2026, reflecting a transition as traditional services decline and are offset by Platform One growth. The company faces margin pressure from professional services mix and the need to balance price increases with demand, though gross margins improved to 62.7% in Q4. Geographic revenue growth is uneven, with Americas overstating growth while EMEA and APAC understate it, and APAC faces a tough comp from the Japanese government win in the prior year. The transition to Platform One involves migrating customers from traditional break-fix maintenance plans, which temporarily offsets recurring revenue growth and creates a period of slower growth before an inflection point. Q: Can you take us through the components of the growth trajectory, especially in respect to your long-term growth framework of 10%? Is it mostly about tough comps and extended lead times of the supply chain? Is there risk that you saw pull forward in the last few quarters and there's a reversion period before growth reaccelerates? A: Ed Meyercord (President and CEO): We're still calling 10% double-digit product growth. As we migrate customers off of traditional break-fix maintenance plans and combine them with Platform One, you're seeing the traditional service line go down and offsetting growth on the subscription side. We're exceeding our metrics for adoption for Platform One, so we're going through a transition that we have to work through before hitting an inflection point where recurring revenue growth kicks back up. There's no unusual pull forward activity in the quarter; in fact, we built up backlog year over year. We also implemented a deal registration price guarantee that protects partner prices out to the end of October, so there was no incentive for customers to pull orders into the quarter. Q: Platform One is going well with nearly 50% of subscription bookings in the quarter, but SaaS ARR is probably a little bit lower than some were expecting. Where are we with feature parity and what gives you confidence that we can return to mid-20% growth? A: Ed Meyercord (President and CEO): Last year's Q4 bar was high due to big wins with John Deere and the Japanese government. As we work through those comparables, you'll see us return to 20% plus growth rates. Our feature development in the second half of the year was huge, specifically adding Fabric customers and capability enhancements, making all customer cohorts eligible to move into Platform One. We exceeded our aggressive $40 million Platform One bookings target by hitting over $50 million, so adoption is real and features are there. Kevin Rhodes (CFO) added that it was just an elevated benchmark from Q4, but they'll be right back there. Q: Just wanted to get an idea of customer buying behavior right now. Are they interested? Is it still a technological decision? Are you winning on being able to get supply and allocation with the memory or the consistent pricing? A: Ed Meyercord (President and CEO): We haven't yet seen the full benefit of our product availability. We hear from distributors and partners that competitors are elongating and stretching lead times, which is building momentum for us. We have a special program around deal registration with a price guarantee where customers can guarantee price and supply. Enterprise customers are contemplating upgrades to their network, and with HPE and Juniper combined, they want to talk to three vendors. When they see our technology, they're blown away by our fabric and the integration into Platform One. We expect tailwinds from having full supply and normal lead times. Q: When we last spoke, you disclosed you had two price increases versus some larger competitors that had up to four. Can you remind us how you view the opportunity to catch up in terms of adding more price increases? A: Ed Meyercord (President and CEO): We had two price increases while many competitors had more. We typically price under Cisco's umbrella and bring a price advantage to customers. We'll continue to look at that, and you should expect to see us continue to raise price on the product side, though it's not as preprogrammed as the services side. Kevin Rhodes (CFO) added that all quotes now have the full impact of both November and March price increases, and they're doing a good job balancing price increases with rising margins. Q: Can you go over the health of your key verticals starting with government and education? A: Ed Meyercord (President and CEO): We're winning across all geos and verticals, including a big university win in Sydney (our largest deal ever in ANZ), healthcare wins throughout EMEA, an enterprise agreement with the largest healthcare provider in the Middle East, and government customers worldwide. Our customer mix by vertical is remarkably consistent. The C5 certification in Germany is important for taking share on the government side in our biggest EMEA market. There's solid demand with no change to vertical mix, and we're moving up market across all geos. Q: The Americas region was very strong. Just wondering how sustainable that will be. A: Ed Meyercord (President and CEO): The 30% plus growth numbers overstate revenue growth in Americas and understate it in EMEA and APAC. Americas is definitely our fastest growing market in fiscal '26, followed by EMEA, then APAC. As we transition into fiscal '27, you'll see APAC high on the list from a growth perspective, with higher growth rates in EMEA than Americas. Each geo has strong double-digit growth forecasts from a booking standpoint. Kevin Rhodes (CFO) added there are timing differences between bookings and revenue, especially with DISPI buying cycles and seasonality like the E-rate buying cycle in the Americas. Q: In the last couple of quarters, you talked about professional installations pressuring margins. What happened in the fiscal fourth quarter and what should our expectation be going forward? A: Ed Meyercord (President and CEO): We guided at a 62.3% margin for the quarter and had favorability, some of which has to do with professional services mix. We also had strength in product margins and have confidence to take that up to 62.5% as a guide going into Q4 and for the rest of the year. We don't think it makes sense to be too aggressive in how we call that number, but we've gradually been taking it up in a challenging environment. Kevin Rhodes (CFO) added they didn't have quite as much professional services as anticipated to drag down margins, and product margin improvements reflect good supply chain management. Q: How do we think about the component and supply chain environment in terms of what this means longer-term for your profitability? How do you think about the environment today versus six or 12 months ago? A: Ed Meyercord (President and CEO): We have to balance how much we raise price and how it impacts demand. We're priced below larger competitors, which gives us an advantage. We've solved for supply chain constraints with 12 different initiatives, including sourcing new vendors. Broadcom has been an amazing partner, and we've gotten direct access to Micron. We've unlocked suppliers from Samsung at amazing prices. We have clear visibility for supply into fiscal '28 and beyond. The real shift in margin goal will be the evolution of Platform One as we pivot into '28, where we'll have real For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Extreme Networks (EXTR) came out with quarterly earnings of $0.32 per share, beating the Zacks Consensus Estimate of $0.29 per share. This compares to earnings of $0.25 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +10.35%. A quarter ago, it was expected that this maker of network infrastructure equipment would post earnings of $0.24 per share when it actually produced earnings of $0.26, delivering a surprise of +8.33%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Extreme Networks, which belongs to the Zacks Computer - Networking industry, posted revenues of $338.55 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.48%. This compares to year-ago revenues of $307 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Extreme Networks shares have added about 94.2% since the beginning of the year versus the S&P 500's gain of 13%. While Extreme Networks has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Extreme Networks was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.29 on $329 million in revenues for the coming quarter and $1.33 on $1.4 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Computer - Networking is currently in the bottom 14% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Lantronix, Inc. (LTRX), has yet to report results for the quarter ended June 2026. This company is expected to post quarterly earnings of $0.04 per share in its upcoming report, which represents a year-over-year change of +300%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Lantronix, Inc.'s revenues are expected to be $31 million, up 7.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Extreme Networks, Inc. (EXTR) : Free Stock Analysis Report Lantronix, Inc. (LTRX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved 13% revenue growth in fiscal 2026 by successfully winning sophisticated networking projects with larger enterprise customers. Transitioned toward an integrated platform model with Platform ONE, which accounted for nearly half of subscription bookings in the fourth quarter. Differentiated the portfolio through the industry's first Multi-Beam Wireless solution and unique enterprise Fabric, which significantly improves win rates during proof-of-concept stages. Capitalized on competitor refresh cycles and supply constraints to take market share, particularly as lead times for peers began to extend. Executed a move upmarket evidenced by 187 customers booking over $1 million in business and a one-third increase in average deal size. Maintained operational excellence by eliminating product constraints through strategic sourcing and partnerships with vendors like Broadcom and Samsung. Leveraged cloud flexibility across public, private, and on-prem environments to drive strong demand in the public sector and highly regulated industries. Expects fiscal 2027 revenue between $1.38 billion and $1.4 billion, supported by double-digit product revenue growth and market share gains. Anticipates earnings to grow at a 20% plus rate, more than doubling top-line growth through significant operating leverage. Projects half of the total installed base will migrate to Platform ONE by the end of fiscal 2027, accelerating high-margin recurring revenue. Assumes a reacceleration of SaaS ARR growth toward the mid-20% range as the company laps difficult year-over-year comparisons from large prior-year wins. Plans to launch Agentic AI capabilities, including Agent ONE in coworker and operator modes, to automate the entire network life cycle from design to remediation. Secured component supply through fiscal 2028, providing a competitive advantage in availability while maintaining solid gross margins. Implemented a deal registration price guarantee program to protect partner pricing through October, mitigating the need for artificial customer pull-forward. Achieved Germany's C5 certification for Platform ONE, a critical requirement for expanding market share within European government sectors. Strengthened financial flexibility via a new $500 million revolving credit facility with improved rate structures and simplified covenants. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted that while product availability hasn't fully reflected in results yet, the pressure on competitors' lead times is building momentum for Extreme. Customers are increasingly including Extreme in 'three-vendor' conversations alongside Cisco and HPE/Juniper due to technology differentiation in AI and Fabric. The lower SaaS ARR growth rate this quarter was attributed to a high baseline from massive prior-year wins with John Deere and the Japanese government. Confidence in returning to mid-20% growth is driven by 'Wave 2' feature releases that make larger, more complex customer cohorts eligible for migration. Extreme continues to price under the 'Cisco umbrella' to maintain a competitive advantage while successfully implementing two price increases. Margins are benefiting from a positive mix shift toward Wi-Fi 7 and effective supply chain cost management, despite some pressure from professional services. The funnel for opportunities over $1 million is up in the mid-teens in terms of both quantity and average deal size compared to last year. New relationships with larger channel partners are expected to shift the scale of partner business from tens of millions to hundreds of millions of dollars.

Interested in Extreme Networks, Inc.? Here are five stocks we like better. Strong Q4 performance: Extreme Networks reported fiscal Q4 revenue of $339 million, up 10% year over year, with non-GAAP EPS rising 28% to $0.32. Gross margin reached 62.7%, supported by pricing actions and supply-chain cost management. Platform and deal momentum: Extreme Platform ONE accounted for nearly half of subscription bookings in Q4, while customers with more than $1 million in annual bookings increased to 187. The company also cited growing Wi-Fi 7 demand, larger projects and expanding managed-service-provider activity. Positive fiscal 2027 outlook: Management projects full-year revenue of $1.38 billion to $1.40 billion and non-GAAP EPS of $1.28 to $1.33, alongside operating-margin expansion. Extreme expects earnings growth above 20% as it pursues market-share gains and broader Platform ONE adoption. Ciena Stock: Powering the AI Boom - A Network Infrastructure Play Extreme Networks (NASDAQ:EXTR) reported fourth-quarter fiscal 2026 revenue of $339 million, up 10% from a year earlier and 7% sequentially, as the networking company cited continued product demand, higher gross margins and growing adoption of its Extreme Platform ONE platform. For the full fiscal year, revenue rose 13% to $1.28 billion, while non-GAAP earnings per share increased 26% to $1.06. President and CEO Ed Meyercord said the company’s performance reflected competitive wins, larger customer projects and operating leverage. The fourth quarter marked Extreme’s sixth consecutive quarter of double-digit growth, according to Meyercord. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Arista Networks Advances the Era of AI and Microperimeters Executive Vice President and CFO Kevin Rhodes said fourth-quarter product demand increased 14% year over year and 10% sequentially. The company reported its ninth consecutive quarter of sequential product-revenue growth. Recurring revenue was $116 million, up 6% from the prior-year quarter, while SaaS annual recurring revenue reached $244 million, an 18% year-over-year increase. Non-GAAP gross margin was 62.7%, exceeding the company’s guidance range. Rhodes attributed the result to pricing actions and supply-chain cost management, which contributed to a 40-basis-point improvement in product margins. Non-GAAP earnings per share were $0.32, up 28% year over year and 23% sequentially; Rhodes noted that the figure included some tax favorability. → 3 Drone Stocks That Should Soar After the Summer Slump Extreme Networks Snags an Upgrade on Inventory Normalization Fourth-quarter operating margin was 15.7%, compared with 15.2% a year earlier. The company generated $59 million in EBITDA, representing a 17.5% margin, and produced $65 million in cash flow during the quarter. Extreme ended the period with $47 million in net cash. Full-year non-GAAP operating margin expanded 60 basis points to 14.8%. Full-year EBITDA rose 20% to $210 million. The company repurchased $25 million of shares in the fourth quarter at an average price of $16.66 per share, bringing fiscal-year buybacks to $87 million. Extreme said its cash conversion cycle improved to 25 days from 41 days in the prior quarter, primarily because of lower inventory days outstanding. Meyercord said Extreme Platform ONE represented 30% of subscription bookings in its first year of general availability and nearly half of subscription bookings in the fourth quarter. The platform combines Extreme’s networking capabilities with AI-powered functions, including its Extreme Fabric technology. → The Bitcoin Comeback May Already Be Underway—2 ETFs for Exposure The company said it expects half of its installed base to be on Extreme Platform ONE by the end of fiscal 2027. Management said the migration includes customers moving from traditional service and maintenance arrangements into subscriptions that combine those services with the platform, a transition that has affected recurring-revenue growth comparisons. Extreme reported 187 customers with more than $1 million in bookings during fiscal 2026, compared with 168 in fiscal 2025. Meyercord said average deal size grew by one-third during the year and that the company’s pipeline of opportunities above $1 million was up in both volume and value by the mid-teens from a year earlier. The company highlighted customer wins across regions and verticals, including a multiyear, multimillion-dollar Extreme Platform ONE agreement with a large Middle Eastern healthcare provider. Other cited deployments included Nottingham City Council in the U.K., Elisabeth-TweeSteden hospital in the Netherlands, Brunel University London, University of Technology Sydney and the University of Florida’s Ben Hill Griffin Stadium. Extreme also said it won the Tennessee Titans’ new Nissan Stadium project with a Wi-Fi 7 multi-beam wireless solution developed through an exclusive partnership with MatSing. More than half of the company’s wireless bookings and revenue now come from Wi-Fi 7 products, Rhodes said. Management said Extreme has secured component supply into fiscal 2028 and beyond. Meyercord said the company has not yet seen the full benefit in its reported results from having product availability while some competitors experience longer lead times, but he expects that advantage to become more evident over the coming quarters. The company has introduced a deal-registration program that provides partners with price and supply guarantees for registered opportunities. Meyercord said channel partners have reported supply constraints and extended lead times from competitors in different regions and product categories. Extreme said it has taken two product price increases, with the November and March increases now reflected in all quotes. Rhodes said management is seeking to retain the benefits of those increases while balancing discounts in what he characterized as a price-sensitive networking-equipment market. The company’s managed service provider program ended the year with 74 active MSPs, up from 70 in the preceding quarter. MSP billings increased 16% sequentially and 112% year over year, and management said all participating MSPs are operating Extreme Platform ONE for MSP Workspace. For the first quarter of fiscal 2027, Extreme forecast revenue of $334 million to $339 million, non-GAAP gross margin of 62.2% to 62.7%, operating margin of 14.7% to 15.3%, and earnings per share of $0.27 to $0.29. For the full year, the company projected revenue of $1.38 billion to $1.40 billion, implying continued growth supported by double-digit product-revenue growth. Extreme forecast gross margin of 62.2% to 62.7%, operating margin of 16.7% to 17.1%, and non-GAAP earnings per share of $1.28 to $1.33. The company expects a 23% non-GAAP tax rate for fiscal 2027. Meyercord said Extreme expects earnings growth above 20% as the company pursues share gains and expands its platform adoption. He also said the company plans to release Agent ONE in “Coworker” mode by the end of the month and introduce an “Operator” mode at an AI summit in Amsterdam in October. Extreme Networks, Inc (NASDAQ: EXTR) is a global provider of end-to-end networking solutions designed to support enterprise, data center, and service provider environments. The company's product portfolio encompasses high-performance wired and wireless access switches, routers, network security appliances, and software-defined networking (SDN) tools. Driven by a cloud-native management architecture, Extreme's Intelligent Edge Platform integrates network analytics, automation and orchestration capabilities to help organizations optimize performance, reduce operational complexity and strengthen security. Since its founding in the mid-1990s and subsequent public listing in 1999, Extreme Networks has expanded its technology footprint through targeted acquisitions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Extreme Networks Q4 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

FY26 Revenue Up 13%, SaaS ARR Up 18%, and Strong Platform ONE Bookings Demand and Supply Chain Management Drive Double-Digit Product Revenue Growth Outlook for FY27 MORRISVILLE, N.C., August 05, 2026--(BUSINESS WIRE)--Extreme Networks, Inc. ("Extreme") (Nasdaq: EXTR) today released financial results for its fourth quarter and fiscal year ended June 30, 2026. "We closed Fiscal 2026 delivering 13% year-over-year revenue growth, and the fourth quarter marked our sixth consecutive quarter of double-digit growth. These results are fueled by accelerating demand for our AI platform, a differentiated portfolio, strong execution, and broad product availability. This quarter further validates the competitive advantages we’ve created through our innovation, nimbleness, and supply chain leadership. We’re winning more competitive deals, expanding with larger enterprises, and gaining share across our target markets. In Fiscal 2026, 187 customers ordered over one million dollars of Extreme solutions," said Ed Meyercord, President and CEO of Extreme. "Extreme Platform ONE™ reached over 30% of our subscription bookings in its first year of availability and doubled quarter-over-quarter in the fourth quarter. Each quarter, we’re adding new features like advanced security, AI-powered automation, and support for third-party solutions. And we’re winning competitive opportunities because customers recognize we’re building the platform they’ll standardize on now and well into the future," said Meyercord. Kevin Rhodes, Executive Vice President and Chief Financial Officer, noted, "The fourth quarter marked our ninth consecutive quarter of sequential product revenue growth and our third consecutive quarter of gross margin improvement, translating into operating leverage. With our supply secured into Fiscal 2028, we have broad product availability to meet growing demand. The targeted pricing actions we implemented are successfully offsetting the incremental supply chain costs the industry is facing and provide increased confidence and visibility into our margin outlook. Looking ahead at Fiscal 2027, we continue to expect double-digit product revenue growth and continued solid gross margin driving strong EPS growth." Fiscal Fourth Quarter Results: Revenue $338.6 million, up 10.3% year-over-year and up 6.8% quarter-over-quarter SaaS ARR $244.3 million, up 17.7% year-over-year and 3.4% quarter-over-quarter GAAP diluted EPS $0.13, compared to GAAP diluted loss per share $0.06 last year and GAAP diluted EPS $0.08 last quarter Non-GAAP diluted EPS $0.32, compared to $0.25 last year and $0.26 last quarter GAAP gross margin 62.2%, compared to 61.6% last year and 61.7% last quarter Non-GAAP gross margin 62.7%, compared to 62.3% last year and 62.3% last quarter GAAP operating profit margin 6.2%, compared to GAAP operating loss margin 0.4% last year and GAAP operating profit margin 5.5% last quarter Non-GAAP operating margin 15.7%, compared to 15.2% last year and 15.2% last quarter Share repurchases of $25.0 million during the quarter with 1.5 million shares at an average price of $16.66 per share Fiscal Year 2026 Results: Revenue $1,283.6 million, up 12.6% year-over-year GAAP diluted EPS $0.31, compared to GAAP diluted loss per share $0.06 last year Non-GAAP diluted EPS $1.06, compared to Non-GAAP diluted EPS $0.84 last year GAAP gross margin 61.5%, compared to GAAP gross margin 62.2% last year Non-GAAP gross margin 62.1%, compared to Non-GAAP gross margin 62.9% last year GAAP operating margin 4.9%, compared to GAAP operating margin 1.5% last year Non-GAAP operating margin 14.8%, compared to Non-GAAP operating margin 14.2% last year Liquidity: Q4 ending cash balance was $211.8 million, an increase of $1.7 million from the end of Q3 2026 and a decrease of $20.0 million from the end of Q4 in the prior year. Q4 net cash was $46.8 million, as compared to net cash of $11.3 million at the end of Q3 2026 and net cash of $51.7 million at the end of Q4 in the prior year. Strengthened financial flexibility with a $500.0 million revolving credit facility entered into on July 29, 2026, which provides additional working capital to fuel growth with improved terms and rate structure. The company subsequently repaid its existing term loan and credit facility. Recent Key Highlights: At Extreme Connect in May, we demonstrated the pace of innovation that sets Extreme apart, unveiling major new capabilities to nearly 800 customers and partners. We expanded Extreme Platform ONE with capabilities that simplify operations, strengthen security, and make adoption easier, while introducing Agent ONE to move customers from AI-assisted networking to AI-driven and autonomous operations. Extreme expanded its portfolio of Wi-Fi 7 Access Points introducing the AP5060, AP5022, AP3020, and AP3060, all engineered to power seamless connectivity for critical applications including real-time AI workloads, AR/VR experiences, smart manufacturing, telehealth, and high-density venues. The Tennessee Titans selected Extreme to power the new Nissan Stadium with Wi-Fi 7 and the industry’s first Multi-Beam Wireless technology. Enabled by Extreme’s strategic partnership with MatSing, the solution delivers unprecedented coverage and capacity with dramatically less infrastructure, creating a next-generation fan and operational experience. Extreme secured the largest win in Australia in company history as the University of Technology Sydney selected Extreme’s AI-powered wired and wireless networking, managed through Extreme Platform ONE, to build a smarter, more secure, and resilient campus. Extreme worked with Nexon Asia Pacific on the deal and the deployment will simplify operations, strengthen security, support uninterrupted teaching and collaboration, and scale for future growth. A top 10 global retailer headquartered in Europe selected Extreme Platform ONE to bring AI-driven automation to one of the world’s largest retail networks. By leveraging AI to proactively identify issues, automate routine operations, and accelerate troubleshooting, the company can reduce operational complexity, improve network resilience, and free IT teams to focus on higher-value initiatives that enhance the customer and associate experience. The University of Florida will deploy the first-ever Wi-Fi 7 network in a collegiate stadium at Ben Hill Griffin Stadium. Beyond enhancing the fan experience, Extreme Wi‑Fi 7 supports more reliable staff communications, faster point-of-sale transactions, enhanced security through HD video and AI-driven monitoring, and seamless integration of IoT technologies such as smart sensors, digital signage, and automated systems. Elisabeth-TweeSteden Hospital (ETZ), one of the largest hospitals in the Netherlands, expanded its investment in Extreme to power the network behind a major hospital transformation. As ETZ modernizes its campus, Extreme Platform ONE and Extreme Fabric will deliver the resilient, automated connectivity needed to seamlessly transition services while maintaining uninterrupted patient care. Nottingham City Council selected Extreme to replace a major competitor with a unified Fabric, SD-WAN, and cloud-managed networking solution spanning 74 sites. The win highlights the competitive differentiation of Extreme’s end-to-end networking portfolio and reinforces the company’s momentum in the strategic government sector while delivering customers a simpler, more resilient, and easier-to-manage network. Fiscal Q4 2026 and Full Year 2026 Financial Results: (in millions, except percentages and per share information) 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): SaaS ARR: SaaS ARR is an operating metric used by management to measure the annualized value of customer arrangements for our software solutions, which are delivered via cloud-based subscription (such as Extreme Platform ONE, generally available July 2025 and ExtremeCloud IQ) or term-based software deployed on-premises by the customer. We include term-based license arrangements in SaaS ARR because they provide time-bound access to our software solutions and are operationally and economically similar to our cloud-based subscriptions, even though they are accounted for differently under U.S. GAAP. SaaS ARR is calculated using the annualized value of quarterly subscription revenue plus the trailing twelve months of the software license portion of term-based license arrangements, which includes revenue recognized during the applicable period with respect to multi-year term-based license arrangements. The Company has not adjusted SaaS ARR to allocate revenue from these multi-year term-based license arrangements over their contractual term because they have historically been immaterial to SaaS ARR and doing so would not be expected to materially affect reported SaaS ARR or related growth rates. For those software solutions that include embedded support as part of a bundled offering, including Extreme Platform ONE and term-based license arrangements, the quarterly revenue recognized in the period with respect to the support portion of the offering is annualized and included in SaaS ARR. SaaS ARR excludes perpetual licenses, professional services revenue, support revenue associated with hardware or standalone maintenance contracts, and other non-recurring or non-subscription revenue streams. Management evaluates and manages support revenues from maintenance contracts primarily through analysis of the related GAAP revenue trends, renewal activity, and customer support operations, together with broader business performance indicators, rather than through a single standalone metric, in part due to the Company’s go-to-market model in which many customers transact through distributors and resellers, limiting consistent visibility into end-customer usage and renewals. 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 should be considered independently of revenue or deferred revenue under U.S. GAAP, does not have a standardized meaning, and is not a substitute 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): 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 first quarter of fiscal 2027, ending September 30, 2026, the Company is targeting: The following table shows the GAAP to non-GAAP reconciliation for Q1 FY'27 guidance: The total percentage rate changes may not equal the total change in all cases due to rounding. For the full year fiscal 2027, ending June 30, 2027, the Company is targeting: The following table shows the GAAP to non-GAAP reconciliation for FY'27 guidance: 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 fourth quarter and full year results of fiscal 2026 as well as the business outlook for the first quarter of fiscal 2027 and the full year fiscal 2027, ending June 30, 2027, 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 (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. In preparing non-GAAP information, the Company has excluded, where applicable, the impact of share-based compensation, amortization of intangibles, restructuring and related charges (benefit), 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. 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 (benefit), 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 is recorded in cost of goods sold, while the amortization for the other intangibles is 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 (benefit). Restructuring and related charges (benefit) 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 enterprise-wide business systems (e.g., our customer relationship management solution, our configure, price, quote solution, and our enterprise resource planning and human capital management solutions) 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, incurred in connection with amendments to, refinancings of, or terminations of the Company’s current and prior credit facilities. Extreme excludes these amounts because they are incurred in connection with discrete financing transactions rather than the ongoing operation of the Company’s business. 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 deferred tax assets due to historical losses. Once this valuation allowance is 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 income 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20260805792723/en/ Contacts Investor RelationsStan Kovler919/[email protected] Media ContactAmy Aylward603/[email protected]

SouthernSun Asset Management, LLC, an investment management firm, released its “SouthernSun Small Cap Strategy” second-quarter 2026 investor letter. A copy of the letter can be downloaded here. The second quarter of 2026 was driven by the AI boom and the Iran War, affecting interest rates, oil, commodities, and consumer sentiment. The riskiest market segments performed robustly in the quarter, primarily driven by technology and industrial firms linked to the AI arms race. Some portfolio companies linked to high-value consumer purchases faced pressure but still aligned with positive earnings and trends. The Small Cap Composite returned +10.79% on a gross basis +10.58% net) in the second quarter versus the Russell 2000®, which returned 21.49%, and the Russell 2000® Value, which returned 17.19%, over the same period. The composite returned 27.10% on a gross basis (26.13% net) versus 40.78% and 43.01% for the indexes. The fund underperformed the index due to the underweight position in speculative growth. In addition, please check the Strategy’s top five holdings to know its best picks in 2026. In its Q2 2026 investor letter, SouthernSun Small Cap Strategy highlighted Extreme Networks, Inc. (NASDAQ:EXTR) as a notable conrtibutor. Extreme Networks, Inc. (NASDAQ:EXTR) is a cloud-driven enterprise networking company that develops and markets network infrastructure equipment and related software.  On July 23, 2026, Extreme Networks, Inc. (NASDAQ:EXTR) closed at $29.73 per share, reflecting a market capitalization of $3.89 billion. Extreme Networks, Inc. (NASDAQ:EXTR) posted a one-month return of -6.33%, while its shares gained 66.55% over the past 52 weeks. SouthernSun Small Cap Strategy stated the following regarding Extreme Networks, Inc. (NASDAQ:EXTR) in its Q2 2026 investor update: Extreme Networks, Inc. (NASDAQ:EXTR) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 41 hedge fund portfolios held Extreme Networks, Inc. (NASDAQ:EXTR) at the end of the first quarter, up from 37 in the previous quarter. While we acknowledge the potential of Extreme Networks, Inc. (NASDAQ:EXTR) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. In another article, we covered Extreme Networks, Inc. (NASDAQ:EXTR) and shared Madison Small Cap Fund's insights on the company. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors. READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years. Disclosure: None. This article is originally published at Insider Monkey.