On August 7, 2024, Extreme Networks Inc (EXTR, Financial) released its 8-K filing detailing the financial results for its fourth quarter and fiscal year ended June 30, 2024. Extreme Networks Inc provides software-driven networking services for enterprise customers, including wired and wireless network infrastructure equipment and software for network management, policy, analytics, and access controls.
Performance and Challenges
Extreme Networks Inc (EXTR, Financial) reported Q4 revenue of $256.7 million, surpassing the analyst estimate of $253.21 million. However, the company posted a GAAP loss per share of $0.42, significantly missing the estimated earnings per share of $0.03. The revenue for the fiscal year 2024 was $1,117.2 million, slightly above the annual estimate of $1,113.75 million, but the company reported a GAAP loss per share of $0.65, compared to the estimated annual loss of $0.22 per share.
Financial Achievements
Despite the challenges, Extreme Networks Inc (EXTR, Financial) achieved a 29% year-over-year growth in SaaS ARR, reaching $167.0 million. This growth is significant as it highlights the company's successful transition towards a subscription-based revenue model, which is crucial for long-term stability and growth in the hardware industry.
Income Statement Highlights
| Metric | Q4 2024 | Q4 2023 | Change |
|---|---|---|---|
| Revenue | $256.7 million | $363.9 million | -29% |
| GAAP Gross Margin | 44.7% | 58.9% | -14.2% |
| Non-GAAP Gross Margin | 45.4% | 60.2% | -14.8% |
| GAAP Operating Margin | -19.1% | 10.4% | -29.5% |
| Non-GAAP Operating Margin | -4.6% | 17.4% | -22.0% |
| GAAP Loss Per Share | -$0.42 | $0.19 | -$0.61 |
| Non-GAAP Loss Per Share | -$0.08 | $0.33 | -$0.41 |
Balance Sheet and Cash Flow
Extreme Networks Inc (EXTR, Financial) ended Q4 with a cash balance of $156.7 million, an increase of $5.7 million from Q3 2024. The company recorded a net debt of $33.3 million, a decrease from $41.5 million in Q3 2024. Free cash flow for Q4 was $10.9 million, down from $75.5 million in the same quarter last year.
Commentary and Analysis
We’re pleased to see strengthening global demand and to have moved past the historic challenges of the multi-year supply chain constraints. We successfully completed our initiatives to eliminate channel and inventory headwinds," said Ed Meyercord, President and Chief Executive Officer.
We took action in the fourth quarter to reserve end of sale inventory and position our new products for growth in fiscal 2025. As a result, we recorded an additional provision for excess and obsolete inventory to align these plans and outlook with our expectations," stated Kevin Rhodes, Executive Vice President and Chief Financial Officer.
Recent Key Highlights
Extreme Networks Inc (EXTR, Financial) formed a co-innovation alliance with Intel to enhance AI capabilities within its AI Expert solution. Additionally, the company completed the rollout of a new high-speed Wi-Fi network at Liverpool Football Club’s Anfield Stadium and secured a deployment with the Amman Stock Exchange in Jordan.
For a detailed breakdown of Extreme Networks Inc (EXTR, Financial)'s financial performance, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Extreme Networks Inc for further details.
