Earnings release
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הו Extreme® networks NEWS RELEASE Extreme Networks Reports Fourth Quarter and Fiscal Year 2026 Financial Results 2026-08-05 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 .-- ( 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 Al 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 , Al- 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 1
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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 o setting the incremental supply chain costs the industry is facing and provide increased con dence 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 pro t margin 6.2%, compared to GAAP operating loss margin 0.4% last year and GAAP operating pro t 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 2
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$51.7 million at the end of Q4 in the prior year. Strengthened nancial exibility 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 rst 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 Paci c 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 rst-ever Wi-Fi 7 network in a collegiate stadium at Ben Hill Gri n Stadium. Beyond enhancing the fan experience, Extreme Wi ‑ Fi 7 supports more reliable sta 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 3
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seamlessly transition services while maintaining uninterrupted patient care. Nottingham City Council selected Extreme to replace a major competitor with a uni ed Fabric, SD-WAN, and cloud-managed networking solution spanning 74 sites. The win highlights the competitive di erentiation 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) GAAP Results Three Months EndedYear Ended June30,2026 June 30,2025ChangeJune 30,2026June 30,2025 Change Product $218.5$ 191.9$ 26.6$ 809.6$ 704.5$ 105.1Subscription and support120.1 115.1 5.0 474.0 435.6 38.4 Total net revenue$338.6$ 307.0$ 31.6$ 1,283.6$ 1,140.1$ 143.5Gross margin 62.2% 61.6% 0.6% 61.5% 62.2% (0.7)%Operating margin 6.2% (0.4)% 6.6% 4.9% 1.5% 3.4%Net income (loss)$18.0$ (7.8) $ 25.8$ 42.1$ (7.5) $ 49.6Net income (loss) per diluted share$0.13$ (0.06) $ 0.19$ 0.31$ (0.06) $ 0.37 Non-GAAP Results Three Months EndedYear Ended June 30,2026June 30,2025ChangeJune 30,2026June 30,2025 Change Product $ 218.5$ 191.9$ 26.6$ 809.6$ 704.5$ 105.1Subscription and support120.1 115.1 5.0 474.0 435.6 38.4 Total net revenue$ 338.6$ 307.0$ 31.6$ 1,283.6$ 1,140.1$ 143.5Gross margin 62.7% 62.3% 0.4% 62.1% 62.9% (0.8)%Operating margin15.7% 15.2% 0.5% 14.8% 14.2% 0.6%Net income $ 43.4$ 33.5$ 9.9 $ 143.1$ 112.4$ 30.7Net income per diluted share$ 0.32$ 0.25$ 0.07$ 1.06$ 0.84$ 0.22 Extreme uses the non-GAAP free cash ow metric as a measure of operating performance. Free cash ow represents GAAP net cash provided by operating activities, less purchases of property, equipment and capitalized software development costs. Extreme considers free cash ow 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 ow metric as a measure of nancial 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 ow calculation (in millions): 4
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Free Cash Flow Three MonthsEndedYear Ended June 30,2026 June30,2025 June30,2026 June30,2025 Cash ow provided by operations $ 72.9$81.9$123.2$152.0 Less: Capital expenditures for property, equipment and capitalized software development costs(7.6) (6.6) (27.9) (24.7) Total free cash ow $ 65.3$75.3$95.3$127.3 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 di erently 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 a ect reported SaaS ARR or related growth rates. For those software solutions that include embedded support as part of a bundled o ering, including Extreme Platform ONE and term-based license arrangements, the quarterly revenue recognized in the period with respect to the support portion of the o ering 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 o erings 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, 5
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does not have a standardized meaning, and is not a substitute for, or a forecast of, revenue. Gross debt: Gross debt is de ned 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 de ned as cash and cash equivalents minus gross debt, as shown in the table below (in millions): June 30, 2026 Cash and cash equivalentsGross debt Net cash $ 211.8 $ 165.0 $ 46.8 Business Outlook: Extreme’s business outlook is based on current expectations. The following statements are forward-looking, and actual results could di er materially based on various factors, including market conditions and the factors set forth under “Forward-Looking Statements” below. For its rst quarter of scal 2027, ending September 30, 2026, the Company is targeting: (in millions, except percentages and per share information)Low-EndHigh-EndFQ1'27 Guidance – GAAP Total net revenue $ 334.0$ 339.0Gross margin 61.6% 62.1%Operating margin 1.6% 2.4%Earnings per share $ 0.00$ 0.02 FQ1'27 Guidance – Non-GAAP Total net revenue $ 334.0$ 339.0Gross margin 62.2% 62.7%Operating margin 14.7% 15.3%Earnings per share $ 0.27$ 0.29 The following table shows the GAAP to non-GAAP reconciliation for Q1 FY'27 guidance: FQ1'27 Gross MarginOperating MarginEarnings per Share GAAP 61.6% - 62.1%1.6% - 2.4% $0.00 - $0.02Estimated adjustments for:Share-based compensation0.5% 7.4% - 7.5% 0.19Amortization of intangibles0.1% 0.1% 0.00Restructuring and related charges— 1.5% 0.04Litigation charges — 3.4% - 3.5% 0.08System transition costs — 0.5% 0.01Debt re nancing charges— — 0.01T dj (006) 6
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Tax adjustment — — (0.06)Non-GAAP 62.2% - 62.7%14.7% - 15.3%$0.27 - $0.29 The total percentage rate changes may not equal the total change in all cases due to rounding. For the full year scal 2027, ending June 30, 2027, the Company is targeting: (in millions, except percentages and per share information)Low-EndHigh-EndFY'27 Guidance – GAAP Total net revenue $ 1,380.0$ 1,400.0Gross margin 61.6% 62.1%Operating margin 8.4% 8.9%Earnings per share $ 0.68$ 0.74 FY'27 Guidance – Non-GAAP Total net revenue $ 1,380.0$ 1,400.0Gross margin 62.2% 62.7%Operating margin 16.7% 17.1%Earnings per share $ 1.28$ 1.33 The following table shows the GAAP to non-GAAP reconciliation for FY'27 guidance: FY'27 Gross MarginOperating MarginEarnings per Share GAAP 61.6% - 62.1%8.4% - 8.9% $0.68 - $0.74Estimated adjustments for:Share-based compensation0.5% 7.6% - 7.7% 0.79Amortization of intangibles0.1% 0.1% 0.01Restructuring and related charges— 0.5% 0.05Litigation bene t, net — (0.3)% (0.03)System transition costs — 0.3% 0.03Debt re nancing charges— — 0.01Tax adjustment — — (0.27) - (0.26)Non-GAAP 62.2% - 62.7%16.7% - 17.1%$1.28 - $1.33 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. Paci c) today to review the fourth quarter and full year results of scal 2026 as well as the business outlook for the rst quarter of scal 2027 and the full year scal 2027, ending June 30, 2027, including signi cant 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 fteen minutes ahead of the scheduled start time. 7
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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 arti cial 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 nancial information required in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company is providing with this press release non-GAAP gross pro t, 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 bene ts that are not re ective of the Company’s ongoing or expected future operational performance as noted below), net cash and free cash ow. In preparing non-GAAP information, the Company has excluded, where applicable, the impact of share-based compensation, amortization of intangibles, restructuring and related charges (bene t), system transition costs, litigation charges, other non-recurring costs, debt re nancing charges and the tax e ect 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 a ecting 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 di erent than those used by other companies. The additional non-GAAP nancial information the Company presents should be considered in conjunction with, and not as a substitute for, the Company’s GAAP nancial 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 nancial 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. 8
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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 ow and other operating or nancial 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 di er 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 nancial 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 e ectiveness 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 tari s 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 di er 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 le with the Securities and Exchange Commission (available at www.sec.gov). As a result of these risks and others, actual results could vary signi cantly from those anticipated in this press release, and the Company’s nancial condition and results of operations could be materially adversely a ected. Except as required under the U.S. federal securities laws and the rules and regulations of the Securities and Exchange Commission, Extreme disclaims any obligation to update any forward-looking statements after the date of this release, whether as a result of new information, future events, developments, changes in assumptions or otherwise. EXTREME NETWORKS, INC.CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts)(Unaudited) June 30,2026June 30,2025ASSETS Current assets:Cash and cash equivalents $211,758$231,745Accounts receivable, net 164,593126,708I i 69950102578 9
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Inventories 69,950102,578Prepaid expenses and other current assets 103,49574,265 Total current assets 549,796535,296Property and equipment, net 58,09544,366Operating lease right-of-use assets, net 25,70038,655Goodwill 397,769399,574Intangible assets, net 3,0666,541Other assets 143,395128,786 Total assets $1,177,821$1,153,218 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities:Accounts payable $ 89,389$ 63,939Accrued compensation and bene ts 69,82762,895Accrued warranty 10,9539,684Current portion of deferred revenue 329,713325,078Current portion of long-term debt, net of unamortized debt issuance costs of $659 and $729, respectively19,34114,271Current portion of operating lease liabilities 11,34111,456Other accrued liabilities 62,109100,552 Total current liabilities 592,673587,875Deferred revenue, less current portion 323,077292,415Long-term debt, less current portion, net of unamortized debt issuance costs of $618 and $1,276, respectively144,382163,724Operating lease liabilities, less current portion 19,50233,991Deferred income taxes 7,4047,033Other long-term liabilities 2,1932,596Commitments and contingenciesStockholders’ equity:Convertible preferred stock, $0.001 par value, issuable in series, 2,000 shares authorized; none issued— —Common stock, $0.001 par value, 750,000 shares authorized; 157,203 and 152,673 shares issued, respectively;131,216 and 132,064 shares outstanding, respectively157 153Additional paid-in capital 1,373,6891,298,791Accumulated other comprehensive loss (16,011) (8,137)Accumulated de cit (907,310) (949,429)Treasury stock at cost, 25,987 shares and 20,609 shares, respectively(361,935) (275,794) Total stockholders’ equity 88,59065,584 Total liabilities and stockholders’ equity $1,177,821$1,153,218 EXTREME NETWORKS, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts)(Unaudited) Three Months EndedYear Ended June 30,2026June 30,2025 June 30,2026 June 30,2025 Net revenues:Product $ 218,473$ 191,857$ 809,624$ 704,462Subscription and support 120,076115,146 473,969 435,605 Total net revenues 338,549307,0031,283,5931,140,067 Cost of revenues:Product 92,316 82,766 351,650 300,831Subscription and support 35,745 35,149 142,802 130,109 Total cost of revenues 128,061117,915 494,452 430,940 Gross pro t:Product 126,157109,091 457,974 403,631Subscription and support 84,331 79,997 331,167 305,496 Total gross pro t 210,488189,088 789,141 709,127 Operating expenses:Research and development59,419 56,469 233,878 221,459Sales and marketing 97,010 86,440 364,305 327,563General and administrative31,857 47,419 125,277 139,621Restructuring and related charges (bene t)727 (379) 1,265 1,492Amortization of intangible assets407 515 1,721 2,043 Total operating expenses 189,420190,464 726,446 692,178 Operating income (loss) 21,068 (1,376) 62,695 16,949Interest income 841 1,656 4,153 4,313Interest expense (3,518) (3,530) (13,780) (15,928)Other expense, net (484) (616) (1,594) (1,061) Income (loss) before income taxes17,907 (3,866) 51,474 4,273Provision for (bene t from) income taxes(135) 3,937 9,355 11,740 10
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Net income (loss) $ 18,042$ (7,803) $ 42,119$ (7,467) Basic and diluted income (loss) per share:Net income (loss) per share – basic$ 0.14$ (0.06) $ 0.32$ (0.06)Net income (loss) per share – diluted$ 0.13$ (0.06) $ 0.31$ (0.06)Shares used in per share calculation – basic131,179132,808 132,752 132,331Shares used in per share calculation – diluted133,672132,808 134,970 132,331 EXTREME NETWORKS, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)(Unaudited) Year Ended June 30,2026June 30,2025Cash ows from operating activities: Net income (loss) $ 42,119$ (7,467)Adjustments to reconcile net income (loss) to net cash provided by operating activities:Depreciation 15,809 14,704Amortization of intangible assets 3,390 4,514Amortization of cloud computing implementation costs5,212 —Reduction in carrying amount of right-of-use asset10,325 9,887Provision for credit losses 565 157Share-based compensation 88,261 82,314Deferred income taxes (2,074) (820)Provision for excess and obsolete inventory4,160 2,618Non-cash interest expense 1,206 1,214Other 2,659 3,532Changes in operating assets and liabilities:Accounts receivable, net (38,450) (37,347)Inventories 24,313 27,181Prepaid expenses and other assets (53,648) (23,118)Accounts payable 24,607 12,709Accrued compensation and bene ts 3,962 18,685Operating lease liabilities (11,929) (11,056)Deferred revenue 40,094 37,722Other current and long-term liabilities (37,399) 16,602 Net cash provided by operating activities 123,182152,031 Cash ows from investing activities: Capital expenditures for property, equipment and capitalized software development costs(27,941) (24,713) Net cash used in investing activities (27,941) (24,713) Cash ows from nancing activities: Borrowings under revolving facility 55,000 —Payments on revolving facility (55,000) —Payments on debt obligations (15,000) (10,000)Payments on debt nancing costs — (695)Repurchase of common stock including accelerated share repurchases(87,000) (37,993)Payments for tax withholdings, net of proceeds from issuance of common stock(12,500) (3,898) Net cash used in nancing activities (114,500) (52,586) Foreign currency e ect on cash and cash equivalents(728) 314 Net increase (decrease) in cash and cash equivalents(19,987) 75,046 Cash and cash equivalents at beginning of period231,745156,699 Cash and cash equivalents at end of period$ 211,758$ 231,745 Extreme Networks, Inc. Non-GAAP Measures of Financial Performance To supplement the Company’s consolidated nancial statements presented in accordance with U.S. generally accepted accounting principles (“GAAP”), Extreme uses non-GAAP measures of certain components of nancial performance. These non-GAAP measures include non-GAAP gross pro t, non-GAAP gross margin, non-GAAP 11
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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 bene ts that are not re ective of the Company’s ongoing or expected future operational performance as noted below), net cash and free cash ow. 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 di erent 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 re ect 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 nancial performance and the Company’s prospects for the future, including cash ows 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 nancial reporting. For its internal planning process, and as discussed further below, Extreme’s management uses nancial statements that do not include share-based compensation expense, amortization of intangibles, restructuring and related charges (bene t), system transition costs, litigation charges, other non-recurring costs, debt re nancing charges, and the tax e ect of non-GAAP adjustments. Extreme’s management also uses non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the Company’s nancial 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 re ective 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 12
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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 (bene t). Restructuring and related charges (bene t) consist of severance costs for employees, asset disposal costs and other charges related to excess facilities that do not provide economic bene t 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 con gure, 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 re ect future operating expenses and will be inconsistent in amount and frequency, making it di cult 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 o set by any proceeds received or expected to be received from insurance. Debt re nancing charges. Debt re nancing charges consist of costs that were not capitalizable and are included in other expense, net, incurred in connection with amendments to, re nancings of, or terminations of the Company’s current and prior credit facilities. Extreme excludes these amounts because they are incurred in connection with discrete nancing 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 re ect future operating expenses and will be inconsistent in amount and frequency, making it di cult to contribute to a meaningful evaluation of our operating performance. Tax e ect 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 nancial 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 13
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consists of current and deferred income tax expense commensurate with the non-GAAP measure of pro tability 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 signi cant, with the exception of the Company’s Canadian, German and Indian subsidiaries which perform research and development and sales and marketing activities for the Company, as well as the Company’s Irish trading subsidiaries. EXTREME NETWORKS, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSGAAP TO NON-GAAP RECONCILIATION (In thousands, except percentages and per share amounts)(Unaudited) Revenues Three Months EndedYear Ended June 30,2026June 30,2025June 30, 2026June 30,2025 Revenues – GAAP $ 338,549$ 307,003$ 1,283,593$ 1,140,067 Non-GAAP Gross MarginThree Months EndedYear Ended June 30,2026June 30,2025June 30,2026June 30,2025 Gross pro t – GAAP $ 210,488$ 189,088$ 789,141$ 709,127Gross margin – GAAP percentage62.2% 61.6% 61.5% 62.2%Adjustments:Share-based compensation expense, Product722 700 3,025 2,661Share-based compensation expense, Subscription andsupport 691 719 2,900 2,912 Amortization of intangibles, Product334 625 1,598 2,400 Total adjustments to GAAP gross pro t$ 1,747$ 2,044$ 7,523$ 7,973 Gross pro t – non-GAAP$ 212,235$ 191,132$ 796,664$ 717,100Gross margin – non-GAAP percentage62.7% 62.3% 62.1% 62.9% Non-GAAP Operating MarginThree Months EndedYear Ended June 30,2026June 30,2025June 30,2026June 30,2025 GAAP operating income (loss)$ 21,068$ (1,376) $ 62,695$ 16,949GAAP operating margin 6.2% (0.4)% 4.9% 1.5%Adjustments:Shb d i f 1413 1419 5925 5573 14
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Share-based compensation expense, cost of revenues1,413 1,419 5,925 5,573Share-based compensation expense, R&D4,112 4,296 17,46517,154Share-based compensation expense, S&M7,966 6,952 31,05228,393Share-based compensation expense, G&A8,323 8,074 33,81931,194Restructuring and related charges (bene t)727 (379) 1,265 1,492Litigation charges 5,715 22,006 8,849 34,722System transition costs 3,432 4,631 22,38021,550Amortization of intangibles741 1,140 3,319 4,443 Other non-recurring costs (bene t)(231) — 3,648 — Total adjustments to GAAP operating income$ 32,198$ 48,139$ 127,722$ 144,521 Non-GAAP operating income$ 53,266$ 46,763$ 190,417$ 161,470Non-GAAP operating margin15.7% 15.2% 14.8% 14.2% Non-GAAP Net IncomeThree Months EndedYear Ended June 30,2026June 30,2025June 30,2026June 30,2025 GAAP net income (loss) $ 18,042$ (7,803) $ 42,119$ (7,467)Adjustments:Share-based compensation expense21,814 20,741 88,261 82,314Restructuring and related charges (bene t)727 (379) 1,265 1,492Litigation charges 5,715 22,006 8,849 34,722System transition costs 3,432 4,631 22,380 21,550Amortization of intangibles 741 1,140 3,319 4,443Other non-recurring costs (bene t)(231) — 3,648 —Debt re nancing charges — — — 79 Tax e ect of non-GAAP adjustments(6,832) (6,843) (26,719) (24,709) Total non-GAAP adjustments to GAAP net income$ 25,366$ 41,296$ 101,003$ 119,891 Non-GAAP net income $ 43,408$ 33,493$ 143,122$ 112,424Earnings per shareGAAP net income (loss) per share – diluted$ 0.13$ (0.06) $ 0.31$ (0.06)Non-GAAP net income per share – diluted$ 0.32$ 0.25$ 1.06$ 0.84Shares used in net income (loss) per share – diluted:Shares used in per share calculation – basic131,179132,808132,752132,331 Potentially dilutive equity awards2,493 1,492 2,218 1,676 Shares used in per share calculation – diluted133,672134,300134,970134,007 Adjusted EBITDA Three Months EndedYear Ended June 30,2026June 30,2025June 30,2026 June 30,2025 GAAP net income (loss) $ 18,042$ (7,803) $ 42,119$ (7,467)Adjustments:Depreciation expense 4,024 3,443 15,624 14,704Amortization expense 3,123 1,158 8,602 4,514Share-based compensation expense21,814 20,741 88,261 82,314Restructuring and related charges (bene t)727 (379) 1,265 1,492Litigation charges 5,715 22,006 8,849 34,722System transition costs 3,432 4,631 22,380 21,550Other non-recurring costs (bene t)(231) — 3,648 —Debt re nancing charges — — — 79Interest income (841) (1,656) (4,153) (4,313)Interest expense 3,518 3,530 13,780 15,928 Provision for (bene t from) income taxes(135) 3,937 9,355 11,740 Total adjustments to GAAP net income41,146 57,411 167,611182,730 Adjusted EBITDA $ 59,188$ 49,608$ 209,730$ 175,263 Investor Relations Stan Kovler 919/595-4196 Investor_relations@extremenetworks.com 15
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Media Contact Amy Aylward 603/952-5138 pr@extremenetworks.com Source: Extreme Networks, Inc. 16