Q4 2024 Extreme Networks Inc Earnings Call Transcript
Key Points
- ARR from software subscriptions increased by 29% year over year, indicating strong demand for Extreme Networks Inc (EXTR)'s software solutions.
- The company has been recognized as the second largest player in cloud networking, rapidly approaching the 3 million mark for devices managed in their cloud.
- Gross margin achieved a high watermark of 63.5%, up 230 basis points from the prior quarter and up 330 basis points compared to a year ago.
- Extreme Networks Inc (EXTR) displaced several major competitors, including Cisco, HP, and Juniper, at significant customer sites.
- The company is investing in generative AI solutions, which are expected to improve productivity, lower total cost of ownership, and simplify networking.
- The fourth quarter results were impacted by an extraordinary provision for excess and obsolete inventory, amounting to $46.5 million.
- Operating expenses for the fourth quarter were $128 million, reflecting stringent cost controls but also indicating potential future increases due to higher incentive compensation.
- Despite the positive outlook, the company still faces challenges related to the normalization of channel inventory and supply chain constraints.
- The company’s operating margin for the fourth quarter was 13.5%, down from a profit margin of 17.4% in the prior year quarter.
- The company’s guidance for the first quarter of fiscal 2025 indicates a cautious outlook with expected revenue in the range of $255 million to $265 million, reflecting ongoing market uncertainties.
Ladies and gentlemen, thank you for standing by, and welcome to Extreme Network's fourth-quarter full year 2024 financial results. (Operator Instructions) Again, please be advised that today's conference is being recorded.
I would like now to turn the conference over to Stan Kovler, Vice President of Corporate Development and Investor Relations. Please go ahead.
Thank you, operator. Good morning, everyone and welcome to the Extreme Network's fourth quarter fiscal 2024 earnings conference call. I'm Stan Kovler, Vice President of Corporate Strategy and Investor Relations. With me today are Extreme Networks' President and CEO, Ed Meyercord; and EVP and CFO, Kevin Rhodes.
We just distributed a press release and filed an 8-K detailing Extreme Networks' financial results for the quarter. For your convenience, a copy of the press release, which includes our GAAP to non-GAAP reconciliations, is available in the Investor Relations section of our website at
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