Extreme Networks, Inc. · NASDAQ:EXTR

Extreme Networks — 13th Annual Southwest IDEAS Investor Conference (November 2021)

27 slides from Extreme Networks's conference presentation, Nov 18, 2021

  1. Slide 1: Leading The Infinite Enterprise

    EXTREME NETWORKS EXTREME NETWORKS Leading The Infinite Enterprise November 2021

  2. Slide 2: Cautionary Statement on Financial Measures

    Cautionary Statement on Financial Measures Non-GAAP Measures: Forward-Looking Statements: In preparing the accompanying information Extreme Networks This presentation contains forward-looking statements Inc. (the “Company”) has excluded, where applicable, the including, but not limited to: the expec

  3. Slide 3: Investing for Growth in the Infinite Enterprise Era

    Investing for Growth in the Infinite Enterprise Era SDN Solutions Fabric Networking Cloud Networking Simplified Investment Investment Investment Universal Hardware 2013 2017 2019 2021 EFFORTLESS SECURE FABRIC CLOUD CLOUD-DRIVEN NETWORKING NETWORKING NETWORKING NETWORKING SCALE CLOUDIFY INNOVATE ACCE

  4. Slide 4: Leaders In Targeted Verticals Rely on Extreme

    Leaders In Targeted Verticals Rely on Extreme Revenue Enterprise Vertical Recent Trends Key Customers Contribution* Government / Education ~40% Enterprise and Other >20% Manufacturing ~10% Healthcare ~10% Retail / T&L >10% Sports /Entertainment ~5% & Hospitality ©2021 EXTREME NETWORKS, INC. ALL RIGH

  5. Slide 5: Unique Opportunity to Create Shareholder Value

    Unique Opportunity to Create Shareholder Value Growth in Cloud Significant New Taking Share of Networking Opportunities in 5G Network Investments Cloud Adoption Drives Significant Operating Strong Execution and Y/Y Above-Market Product Leverage from Growth in Cash Flow Demand Revenue Growth ©2021 EX

  6. Slide 6: Market Convergence – Network, Security, and Cloud

    Market Convergence – Network, Security, and Cloud CLOUD Distributed Cloud SDWAN SASE NETWORKING SECURITY ©2021 EXTREME NETWORKS, INC. ALL RIGHTS RESERVED. 6

  7. Slide 7: Leveraged to Large and Growing Addressable Market

    Leveraged to Large and Growing Addressable Market $26 Billion $3 Billion Enterprise Networking TAM Service Provider Networking SAM $16 Billion Enterprise Extreme SAM $50-100 Million Annual Target (Service Obtainable Market) Source: 650 Group, Gartner, IDC, Omdia, Company Reports ©2021 EXTREME NETWOR

  8. Slide 8: Strong SaaS Growth

    Strong SaaS Growth SaaS ARR & SaaS Deferred Ending Revenue (In $M’s except percentages) Ending SaaS ARR1 SaaS Ending Deferred Revenue2 $78 $122 $68 $112 $61 $99 $55 $91 $51 $85 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2022 Q1 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2022 Q1 1 SaaS Annual Recurring Revenue (ARR) is th

  9. Slide 9: Strong Growth Outlook for Cloud Subscriptions

    Strong Growth Outlook for Cloud Subscriptions Bookings Revenue $86M $56M Q2'21 Annualized Run Rate L-T Target Q2'21 Annualized Run Rate L-T Target ©2021 EXTREME NETWORKS, INC. ALL RIGHTS RESERVED. 9

  10. Slide 10: ExtremeCloud IQ: Unparalleled Cloud Differentiation

    ExtremeCloud IQ: Unparalleled Cloud Differentiation XIQ Essentials CoPilot 99.9% False alarm free “Explainable AI” Automated comparative analytics and ExtremeAirDefense ExtremeLocation ExtremeGuest ExtremeIoT observability Unlimited Data API 2.0 Data enables us to power ExtremeCloud™ IQ Enhanced log

  11. Slide 11: Ipanema SD-WAN Acquisition Expands Infinite Enterprise Opportunity

    Ipanema SD-WAN Acquisition Expands Infinite Enterprise Opportunity Accelerates of Infinite Enterprise to the WAN Edge & Provides Building Blocks of SASE Infinite Enterprise SASE Ecosystem Extreme Infinite Enterprise Infinitely Consumer Distributed Centric SD- FWaaS SWG CASB ZTNA Cloud-Driven WAN Eco

  12. Slide 12: Our Winning Position in 5G Rollouts

    Our Winning Position in 5G Rollouts Cloud Native Infrastructure Solutions (CNIS) Network Packet Broker ● Rapid growth based on 5G market adoption ● Transitioning to 9920 from MLXe – improves performance, density, and power consumption ● Targets for 5G Core and containerized apps ● Upgrading infrastr

  13. Slide 13: FQ1'22 Financial Highlights

    FQ1’22 Financial Highlights ©2021 EXTREME NETWORKS, INC. ALL RIGHTS RESERVED. 13

  14. Slide 14: Q1 2022 Results Summary

    Q1 2022 Results Summary Double-Digit Growth Fueled by Strong Demand and Execution Continued Strong Growth Cloud SaaS Subscriptions Robust Profitability and Free Cash Flow • Sustained Double-Digit Y/Y • Total Subscription Bookings Bookings Growth of 45% with Growth of 71% Y/Y • Record GAAP and Non-GA

  15. Slide 15: FQ1'22 Highlights

    FQ1’22 Highlights CLOUD ADOPTION DRIVING GROWTH PROFITABILITY & CASH FLOW SaaS ARR2 $78M Non-GAAP Gross Margin %1 60.3 % Backlog >$200M Recurring $122M Non-GAAP Operating Non- GAAP Revenue 29% Total Revenue SaaS Deferred Growth (Y/Y %) 13.5% Margin %1 EPS ($) 1 Revenue2 10.9% 13.8% $0.21 Product Rev

  16. Slide 16: Appendices

    EXTREME NETWORKS Appendices - GAAP to Non-GAAP Reconciliations Note: The totals for some periods may not foot due to rounding. Please see press release for full reconciliation.

  17. Slide 17: Quarterly Results Trends

    Quarterly Results Trends (In M’s except percentages and EPS) Total Revenue EPS - GAAP vs Non-GAAP $300M $0.40 $0.30 $250M $0.20 $200M $0.10 $150M $0.00 -$0.10 $100M -$0.20 $50M -$0.30 $0M -$0.40 2021 Q 1 2021 Q 2 2021 Q 3 2021 Q 4 2022 Q 1 2021 Q 1 2021 Q 2 2021 Q 3 2021 Q 4 2022 Q 1 Product Revenue

  18. Slide 18: Quarterly Results of Operations

    Quarterly Results of Operations (In M’s except percentages and EPS) Gross Profit - GAAP vs Non-GAAP Operating Expenses - GAAP vs Non-GAAP $180M 66% $140M 75% $160M 64% 70% $120M $140M 62% 65% $100M $120M 60% 60% $80M $100M 58% 55% $80M 56% $60M 50% $60M 54% $40M 45% $40M 52% $20M 40% $20M 50% $0M 48

  19. Slide 19: Q1 FY22 Non-GAAP Financial Highlights – Financial Operations

    Q1 FY22 Non-GAAP Financial Highlights – Financial Operations (In M’s except percentages and EPS) Quarter FQ1'21 FQ4'21 FQ1'22 1 Non-GAAP Product Revenue $161.4 $195.8 $185.2 Services Revenue $74.4 $82.3 $82.5 Total Revenue $235.8 $278.1 $267.7 Total GM % 60.3% 60.5% 60.3% Operating Income $ $19.7 $3

  20. Slide 20: Non-GAAP Free Cash Flow

    Non-GAAP Free Cash Flow (In $M’s) Extreme uses the non-GAAP free cash flow metric as a measure of things, invest in Extreme’s business, make strategic acquisitions, operating performance. Free cash flow represents GAAP net cash and strengthen the balance sheet. A limitation of the utility of the pro

  21. Slide 21: Financial Highlights – Balance Sheet

    Financial Highlights – Balance Sheet (In M’s except percentages and EPS) Balance Sheet Highlights FQ1'21 FQ4'21 FQ1'22 Cash $193.1 $246.9 $191.3 Accounts Receivable $123.6 $156.5 $129.6 Inventories $55.8 $32.9 $32.4 Accounts Payables $59.4 $60.1 $63.4 Gross Debt* $396.0 $346.8 $330.0 Net Debt** $202

  22. Slide 22: GAAP Financial Highlights – Financial Operations

    GAAP Financial Highlights – Financial Operations (In M’s except percentages and EPS) Quarter FQ1'21 FQ4'21 FQ1'22 GAAP Product Revenue $161.4 $195.8 $185.2 Services Revenue $74.4 $82.3 $82.5 Total Revenue $235.8 $278.1 $267.7 Total GM % 57.3% 57.9% 58.1% Operating Income (Loss) $ ($0.1) $17.6 $18.3

  23. Slide 23: GAAP to Non-GAAP Reconciliations

    GAAP to Non-GAAP Reconciliations Revenue & Gross Margin (In M’s except percentages) Quarter FQ1'21 FQ4'21 FQ1'22 Product Revenue $ 161.4 $ 195.8 $ 185.2 Service Revenue 74.4 82.3 82.5 Total Revenue - GAAP $ 235.8 $ 278.1 $ 267.7 Gross Margin - GAAP 135.0 161.1 155.6 Gross Margin % - GAAP 57.3% 57.9%

  24. Slide 24: GAAP to Non-GAAP Reconciliations

    GAAP to Non-GAAP Reconciliations Operating Income (Loss) (In M’s except percentages) Quarter FQ1'21 FQ4'21 FQ1'22 Operating Income (Loss) - GAAP $ (0.1) $ 17.6 $ 18.3 Operating Margin- GAAP (0.0%) 6.3% 6.9% Amortization of Product Intangibles 6.6 6.4 5.2 Total Share-Based Compensation 8.3 11.5 10.4

  25. Slide 25: GAAP to Non-GAAP Reconciliations

    GAAP to Non-GAAP Reconciliations Net Income (Loss) (In $M’s except EPS) Quarter FQ1'21 FQ4'21 FQ1'22 Net Income (Loss) - GAAP $ (8.8) $ 10.3 $ 12.7 Shares - GAAP 121.7 132.4 133.2 EPS - GAAP (Dilluted ) $ (0.07) $ 0.08 $ 0.10 Amortization of Product Intangibles 6.6 6.4 5.2 Total Share-Based Compensa

  26. Slide 26: GAAP to Non-GAAP Reconciliations

    GAAP to Non-GAAP Reconciliations EBITDA (In $M’s) Quarter FQ1'21 FQ4'21 FQ1'22 Net Income (Loss) - GAAP $ (8.8) $ 10.3 $ 12.7 Interest 6.5 $ 4.5 $ 3.8 Provision for Income Taxes 1.3 $ 2.7 $ 2.1 Depreciation/Amortization 15.2 $ 13.0 $ 11.6 EBITDA - GAAP 14.3 30.5 30.2 Net Non-GAAP Adjustments 19.8 14

  27. Slide 27: ©2021 EXTREME NETWORKS, INC. ALL RIGHTS RESERVED.

    ©2021 EXTREME NETWORKS, INC. ALL RIGHTS RESERVED. 27

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