Loading...
01/09 22:53
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights strong financial performance, with improved cash flow and cash conversion cycle. Despite component price increases, the company is implementing strategies to improve gross margins. The Q&A session reveals positive market opportunities, particularly from disruptions at competitors, and strong growth prospects driven by Platform ONE and federal market opportunities. While there are some uncertainties regarding specific metrics, the overall sentiment is optimistic, with strategic initiatives expected to drive growth. The market cap suggests a moderate reaction, leading to a positive stock price prediction.
Revenue $310 million, up 15% year-over-year, driven by competitive wins with large customers across all verticals.
Product Revenue $194 million, grew 20% year-over-year and was up 1% sequentially in a traditionally seasonal slower quarter. Driven by strong demand for Extreme solutions, we continue to move upmarket and grab market share.
SaaS ARR $216 million, up 24% year-over-year, driven by sustained growth in cloud subscription and adoption of new Platform ONE.
Earnings Per Share (EPS) $0.22, up 29% from $0.17 per share in the year-ago period, exceeding the midpoint of guidance range and consensus of $0.21 per share.
Bookings Grew 21% year-over-year, reflecting strong customer demand across the portfolio and success of new commercial models.
Total Subscription and Support Revenue $116 million, up 9% year-over-year.
Total Recurring Revenue Grew 8% year-over-year, representing 36% of total revenue.
SaaS Deferred Revenue $327 million, jumped 16% year-over-year, driven by growth in SaaS ARR.
Total Deferred Revenue $618 million, driven by recurring revenue growth.
Non-GAAP Gross Margin 61.3%, impacted by industry-wide increases in component costs such as memory, metals, and semiconductors. Margins expected to recover over time with price increases and stable discount trends.
Operating Margin 13.3%, up from 12.4% in the prior year quarter, driven by higher one-time sales commission expenses due to accelerators for large deals.
EBITDA $45 million, up 21% year-over-year, reflecting profitability ahead of revenue growth.
Free Cash Flow Usage of $21 million, largely due to one-time payments associated with finalizing certain legal matters.
Cash Position $209 million, with a positive net cash position.
Cash Conversion Cycle Improved to 60 days from 81 days in the previous quarter, driven by lower inventory balances.
Extreme Platform ONE: Uses agentic conversational and multimodal AI to transform networking, cutting routine tasks from hours to minutes. Positive customer feedback for AI-powered automation that improves efficiency and accelerates issue resolution.
WiFi 7 solutions: Boosts network efficiency, minimizes downtime, and supports modern business applications. Deployed in healthcare and other sectors for enhanced connectivity.
Extreme Fabric: Designed for enterprise campus environments, offering unmatched automation, unique security benefits, and greater resiliency.
Geographic Expansion: Strong growth in the Americas, EMEA, and Asia Pacific. Expanded footprint in Asia Pacific with a major government project displacing a competitor.
Commercial Models: MSP program partners and bookings nearly doubled year-over-year. Consumption-based billing and poolable licensing support scalable growth.
Revenue Growth: Achieved $310 million in revenue, up 15% year-over-year. Sixth consecutive quarter of revenue growth.
SaaS ARR: Grew 24% year-over-year to $216 million, driven by cloud subscription growth and adoption of new commercial models.
Bookings Growth: Bookings grew 21% year-over-year, reflecting strong customer demand.
Sustainability Goals: Reduced emissions by 34% since 2021, cut office footprint in half, and aim to source 50% of electricity from renewables.
NFL Partnership: Extended relationship with the NFL through 2028, enhancing stadium operations and fan experiences.
Component Cost Increases: Non-GAAP gross margin was impacted by industry-wide increases in component costs, such as memory, metals (including copper and aluminum), and other semiconductor parts. This could affect profitability and pricing strategies.
Supply Chain Challenges: Higher component costs and the need for price increases to mitigate these costs suggest potential supply chain disruptions or inefficiencies.
Legal Matters: Onetime payments associated with finalizing certain legal matters impacted free cash flow, indicating potential risks from legal or compliance issues.
Market Competition: The company is positioning itself as a strategic alternative to incumbents, particularly in the public sector and hospitality, which implies competitive pressures in these markets.
Economic Uncertainties: The need for price increases and the impact of higher component costs may also reflect broader economic uncertainties affecting the industry.
Revenue Growth: For fiscal year 2026, revenue is expected to grow by 10% year-over-year, with a range of $1.247 billion to $1.264 billion. Sequential growth is anticipated in Q4 after normal seasonality in Q3.
SaaS ARR Growth: SaaS ARR is projected to grow in the low 20% range year-over-year for fiscal 2026.
Recurring Revenue: Recurring revenue is expected to represent approximately 35% of total revenue in fiscal 2026.
Gross Margin: Gross margin is expected to recover over fiscal 2026, with an increase of 100 to 200 basis points from current levels by year-end.
Operating Margin: Operating margin is projected to be in the range of 13.4% to 14.6% for Q2 fiscal 2026, with continued operating leverage expected throughout the fiscal year.
Earnings Per Share (EPS): For Q2 fiscal 2026, EPS is expected to range between $0.23 and $0.25.
Cash Flow: Cash flow is expected to recover during the remainder of fiscal 2026 as revenue grows and profitability improves.
Share Repurchase: During the first quarter, we repurchased 577,000 shares for a total of $12 million.
The earnings call highlights strong financial performance, with improved cash flow and cash conversion cycle. Despite component price increases, the company is implementing strategies to improve gross margins. The Q&A session reveals positive market opportunities, particularly from disruptions at competitors, and strong growth prospects driven by Platform ONE and federal market opportunities. While there are some uncertainties regarding specific metrics, the overall sentiment is optimistic, with strategic initiatives expected to drive growth. The market cap suggests a moderate reaction, leading to a positive stock price prediction.
The earnings call reveals strong financial performance with a 35% revenue increase, a 32% EPS rise, and robust cash flow. Product and subscription revenues are growing, and guidance remains optimistic. The Q&A highlights sustainable growth in key regions and opportunities in the Fortune 500 market. Although Platform One's impact is limited, future contributions are expected. The company's differentiation in technology and anticipated margin improvements further support a positive outlook. With a market cap of approximately $1.7 billion, the stock is likely to see a positive reaction, potentially in the 2% to 8% range.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
