Extreme Networks Inc

Latest Results (07.08.2024):

Revenue Decline

Extreme Networks Inc. reported revenue of $256.7 million for the fiscal fourth quarter of 2024, which represents a 29% decrease year-over-year but a 22% increase quarter-over-quarter. For the full fiscal year 2024, the company generated $1,117.2 million in revenue, down 15% from the previous year.

Net Income and Loss

In the fiscal fourth quarter of 2024, Extreme Networks Inc. posted a GAAP net loss of $54.2 million, translating to a loss per share of $0.42. This is a significant decline compared to the GAAP diluted EPS of $0.19 in the same quarter of the prior year. For the full fiscal year 2024, the company reported a GAAP net loss of $86.0 million, or $0.65 per diluted share, compared to a net income of $78.1 million, or $0.58 per diluted share, in the previous year.

Gross Margin

Extreme Networks Inc.'s GAAP gross margin for the fiscal fourth quarter of 2024 was 44.7%, down from 58.9% in the same quarter of the prior year. For the full fiscal year 2024, the GAAP gross margin was 56.5%, a slight decrease from 57.5% in the previous year. On a non-GAAP basis, the gross margin for the fourth quarter was 45.4%, compared to 60.2% in the prior year quarter.

Operating Margin

The GAAP operating loss margin for Extreme Networks Inc. in the fiscal fourth quarter of 2024 was 19.1%, a sharp decline from the GAAP operating profit margin of 10.4% in the same quarter of the previous year. For the full fiscal year 2024, the GAAP operating loss margin was 5.8%, compared to a GAAP operating profit margin of 8.3% in the prior year. On a non-GAAP basis, the operating loss margin for the fourth quarter was 4.6%, down from a non-GAAP operating profit margin of 17.4% in the prior year quarter.

Inventory Provision

Extreme Networks Inc. recorded an additional provision for excess and obsolete inventory of $46.5 million in the fiscal fourth quarter of 2024 and $64.5 million for the full fiscal year 2024. This provision was taken for certain older products scheduled to go end of sale during fiscal year 2025, aligning inventory levels with demand forecasts. This action is expected to position the company’s new products for growth in fiscal 2025.