Extreme Networks ((EXTR)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Extreme Networks’ latest earnings call painted a picture of robust growth and strategic achievements, underscored by a positive sentiment. The company reported strong revenue growth and significant wins in key regions, alongside the successful launch of an innovative AI platform. Despite facing some regional revenue challenges and the need for margin improvement, the overall momentum and positive financial results suggest a favorable outlook for the company.
Record Revenue Growth
Extreme Networks reported its fifth consecutive quarter of sequential revenue growth, achieving $307 million, which marks a 20% increase year-over-year. This consistent growth trajectory underscores the company’s ability to capitalize on market opportunities and drive financial success.
SaaS ARR and Large Deals Momentum
The company saw its SaaS ARR revenue accelerate to $208 million, representing a 24% increase year-over-year. Additionally, product bookings reached an eight-quarter high, reflecting strong momentum in securing large deals and expanding its market presence.
Significant Wins in APAC and EMEA
Extreme Networks achieved major victories in the APAC and EMEA regions, including a landmark project for the Japanese judiciary and an unprecedented 8-digit win in APAC, marking the largest deal in the company’s history.
Launch of Extreme Platform One
The introduction of Extreme Platform One, the first conversational multimodal, agentic AI-powered networking platform in the industry, received positive early feedback, showcasing the company’s commitment to innovation and technological advancement.
Strong Financial Performance
The company reported an earnings per share of $0.25, a 32% increase from the prior year, with an operating margin of 15.2% and $75 million in free cash flow, highlighting its strong financial health and operational efficiency.
Growth in Wireless and MSP Expansion
Wi-Fi 7 adoption fueled growth in the wireless business, while the MSP program expanded significantly, doubling to 53 partners year-over-year, indicating a successful strategy in expanding its service offerings.
Flat Revenue Growth in Americas
While other regions experienced robust growth, the Americas saw only a 4% year-over-year revenue increase, indicating a need for strategic adjustments to boost performance in this region.
Challenges in Gross Margin Improvement
Despite stable product gross margins, the company acknowledged the need for significant improvements to reach its target range of 58% to 60%, highlighting a key area for future focus.
Forward-Looking Guidance
Looking ahead, Extreme Networks provided optimistic guidance for fiscal 2026, with expected revenue between $1.228 billion and $1.238 billion. The company anticipates growth in both revenue and earnings, driven by a strong pipeline and continued customer demand. The first quarter of fiscal 2026 is projected to see revenue between $292 million and $300 million, with an operating margin of 12.7% to 14.5%, and earnings per share expected to be between $0.20 and $0.23.
In conclusion, Extreme Networks’ earnings call highlighted a period of strong growth and strategic wins, with a positive outlook for the future. The company’s innovative initiatives and robust financial performance position it well for continued success, despite some regional challenges and margin improvement needs.