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Extreme Networks (EXTR)
NASDAQ:EXTR
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Extreme Networks
(NASDAQ:EXTR)
Rating:65Neutral
Price Target:
$20.00
▲(10.31%Upside)
Positive Factors
Market Enthusiasm
Both customer and channel enthusiasm for Platform One was surprisingly strong with all features resonating in support of important use cases.
Product Innovation
Platform One software unifies network, security, policy, asset, and subscription management views on a unified 'source of truth' built on an AI-native stack.
Negative Factors
Market Conditions
An improving macro (including Germany) is driving a robust pipeline and share gains, but challenges remain in the Americas.
Seasonal Impact
Americas was impacted by seasonally soft K-12 spending.
Extreme Networks (EXTR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.44B
Dividend YieldN/A
Average Volume (3M)1.12M
Price to Earnings (P/E)―
Beta (1Y)1.29
Revenue Growth-11.00%
EPS Growth-792.47%
CountryUS
Employees2,656
SectorTechnology
Sector Strength89
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.21
Shares Outstanding133,167,700
10 Day Avg. Volume1,212,152
30 Day Avg. Volume1,120,345
Financial Highlights & Ratios
PEG Ratio-0.76
Price to Book (P/B)30.83
Price to Sales (P/S)0.00
P/FCF Ratio35.13
Enterprise Value/Market Cap0.85
Enterprise Value/Revenue0.49
Enterprise Value/Gross Profit3.29
Enterprise Value/Ebitda-13.02
Forecast
1Y Price Target
$18.33Price Target Upside1.10% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Extreme Networks Business Overview & Revenue Model
Company DescriptionExtreme Networks, Inc. is a technology company specializing in designing, developing, and manufacturing network infrastructure equipment. It operates in the telecommunications and networking sectors, providing solutions that include wired and wireless network infrastructure, as well as network management software. Extreme Networks serves a wide range of industries including healthcare, education, government, and enterprise sectors by delivering high-performance, reliable, and secure network solutions.
How the Company Makes MoneyExtreme Networks generates revenue through the sale of its network infrastructure products and related services. The company offers a variety of hardware products such as switches, routers, and access points, which are integral to building robust network environments. Additionally, it provides software solutions that enable network management, analytics, and security. A significant portion of its income is derived from recurring revenue streams, including maintenance contracts, subscription-based software services, and support services. Extreme Networks also forms strategic partnerships with technology providers and distributors to expand its market reach and enhance its product offerings, contributing to its overall revenue growth.
Extreme Networks Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q3-2025)
| % Change Since: 36.11%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant revenue growth, competitive wins, and innovation with Extreme Platform ONE, indicating strong business performance. However, concerns about potential tariff impacts and some regional revenue stagnation were mentioned. Overall, the positive aspects outweigh the negative, suggesting a strong position moving forward.Q3-2025 Updates
Positive Updates
Significant Revenue Growth
Revenue reached $284.5 million, representing a 35% increase year-over-year, with strong performance in EMEA (81% YoY growth) and Americas (19% YoY growth).
Record Product Bookings
Achieved the best quarter of product bookings in six quarters, with 40 customers generating over $1 million in bookings, up from 36 last quarter.
Strong Competitive Wins
Significant wins against major players like Cisco, HP, and Juniper in key accounts such as City of Everett, West London NHS Hospital, and the United Soccer League.
New Partner Additions
Added 11 new partners to the MSP program, bringing the total to 48, with the industry's first consumption-based billing model.
Innovation with Extreme Platform ONE
Early indications show Extreme Platform ONE will be a game changer with holistic AI for networking, gaining momentum in the market.
Strong Financial Performance
Achieved non-GAAP operating income of $40 million with a 14.1% operating margin and generated $30 million in operating cash flow.
Negative Updates
Tariff Impact Concerns
Potential tariff impacts estimated at $1.5 million per quarter, with uncertainty around future tariff negotiations.
Flat APAC Revenue
APAC revenue was flat year-over-year, although bookings were up double digits.
Gross Margin Pressure
Gross margin decreased by 110 basis points sequentially, impacted by higher product revenue mix and potential tariff costs.
Company Guidance
During the Extreme Networks Q3 FY 2025 earnings call, the company reported a revenue of $284.5 million, marking a 35% increase year-over-year, with strong performances in both EMEA and the Americas, particularly a 21% sequential growth in the latter. CEO Ed Meyercord highlighted robust demand for both wired and wireless network solutions, with 40 customers generating over $1 million in bookings, up from 36 last quarter, indicating success in larger enterprise deals. Competitive wins against major players like Cisco, HP, and Juniper were attributed to their Campus Fabric solution, leading to higher win rates across various verticals. The company also saw strong momentum in their subscription business, with SaaS annual recurring revenue reaching $184 million, a 13.4% year-over-year increase. CFO Kevin Rhodes noted that they achieved an earnings per share of $0.21, aligning with the prior quarter and exceeding the high end of their guidance range. For Q4, the revenue guidance was set between $295 million and $305 million, with gross margins expected to be in the range of 61.8% to 62.8%. The full fiscal year 2025 revenue is projected to be between $1.128 billion and $1.138 billion.Extreme Networks Financial Statement Overview
Summary
Extreme Networks faces a challenging financial landscape with recent operational losses impacting profitability. However, improvements in cash flow generation and leverage are positive signs for long-term stability.Income Statement
Extreme Networks has experienced fluctuating revenue with recent declines. The TTM data shows a negative net profit margin of -4.94%, indicating net losses. The gross profit margin remains decent at 58.19%, suggesting efficient cost management despite lower revenue. However, negative EBIT and EBITDA margins indicate operational challenges.47
Neutral
Balance Sheet
The debt-to-equity ratio has improved with a decrease in total debt and an increase in stockholders' equity, reflecting stronger leverage management. The equity ratio remains low at 6.68%, indicating potential risks in financial stability. Positive stockholders' equity is a positive sign for financial health.55
Neutral
Cash Flow
Operating cash flow has shown improvement, with a TTM operating cash flow to net income ratio of -1.59, suggesting better cash generation relative to net losses. Free cash flow growth is positive, supporting investment and operational needs despite net losses.62
Positive
| Breakdown | TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.09B | 1.12B | 1.31B | 1.11B | 1.01B | 948.02M |
| Gross Profit | 634.15M | 630.83M | 754.72M | 629.94M | 585.12M | 517.84M |
| EBITDA | -10.95M | -19.61M | 158.62M | 120.07M | 110.09M | -36.39M |
| Net Income | -53.87M | -85.96M | 78.07M | 44.27M | 1.94M | -126.84M |
Balance Sheet | ||||||
| Total Assets | 1.07B | 1.04B | 1.14B | 1.07B | 1.01B | 979.09M |
| Cash, Cash Equivalents and Short-Term Investments | 185.48M | 156.70M | 234.83M | 194.52M | 246.89M | 193.87M |
| Total Debt | 60.02M | 239.60M | 264.61M | 351.13M | 390.84M | 480.54M |
| Total Liabilities | 1.00B | 1.02B | 1.02B | 978.17M | 955.63M | 973.69M |
| Stockholders Equity | 71.70M | 25.28M | 116.75M | 90.34M | 54.47M | 5.40M |
Cash Flow | ||||||
| Free Cash Flow | 63.02M | 37.37M | 235.41M | 112.74M | 127.36M | 20.62M |
| Operating Cash Flow | 85.58M | 55.49M | 249.21M | 128.18M | 144.53M | 35.88M |
| Investing Cash Flow | -22.56M | -18.12M | -13.80M | -84.95M | -17.18M | -189.48M |
| Financing Cash Flow | -28.16M | -114.98M | -194.78M | -94.66M | -74.78M | 178.49M |
Extreme Networks Technical Analysis
Positive
18.13
Price Trends
16.23
Positive
15.03
Positive
15.60
Positive
Market Momentum
0.67
Negative
63.67
Neutral
61.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EXTR, the sentiment is Positive. The current price of 18.13 is above the 20-day moving average (MA) of 17.49, above the 50-day MA of 16.23, and above the 200-day MA of 15.60, indicating a bullish trend. The MACD of 0.67 indicates Negative momentum. The RSI at 63.67 is Neutral, neither overbought nor oversold. The STOCH value of 61.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EXTR.
Extreme Networks Risk Analysis
Extreme Networks disclosed 41 risk factors in its most recent earnings report. Extreme Networks reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Extreme Networks Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $24.55B | 44.73 | 237.68% | 0.59% | 21.43% | 56.87% | |
73 Outperform | $11.12B | 110.50 | 3.71% | ― | 2.86% | -29.92% | |
69 Neutral | $27.44B | 21.60 | 6.39% | 2.50% | 11.63% | -24.41% | |
65 Neutral | $2.44B | ― | -78.83% | ― | -11.00% | -792.47% | |
64 Neutral | $6.34B | ― | -42.79% | ― | 3.58% | -22.74% | |
63 Neutral | $33.87B | 5.80 | -11.87% | 1.82% | 5.31% | -18.50% |
* Technology Sector Average
Performance Comparison
EXTR
Extreme Networks
18.13
4.90
37.04%
CIEN
Ciena
79.33
31.99
67.57%
UI
Ubiquiti Networks
403.01
252.69
168.10%
LITE
Lumentum Holdings
90.44
34.18
60.75%
HPE
Hewlett Packard Enterprise
20.80
0.06
0.29%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.