Extreme Networks, Inc. · NASDAQ:EXTR
Extreme Networks — Q3 FY2020 Earnings Presentation
21 slides from Extreme Networks's earnings presentation, May 11, 2020
Slide 1: Extreme Networks FQ3'20 Financial Results
Extreme Networks FQ3’20 Financial Results May 11, 2020
Slide 2: Cautionary Statement on Financial Measures
Cautionary Statement on Financial Measures Non-GAAP Measures: In preparing the accompanying information Extreme Networks Inc. (the “Company”) has excluded, where applicable, the impact of certain Non-GAAP costs as listed at the end of this presentation. The Company believes these Non-GAAP measures p
Slide 3: FQ3'20 Financial Results
FQ3’20 Financial Results 3 CONFIDENTIAL. ©EXTREME NETWORKS, INC. ALL RIGHTS RESERVED.
Slide 4: Financial Highlights – Financial Operations
Financial Highlights – Financial Operations (In $M’s except percentages and EPS) Quarter Quarter FQ3'19 FQ2'20 FQ3'20 FQ3'19 FQ2'20 FQ3'20 1 GAAP Non GAAP Product Revenue $190.8 $190.5 $136.5 Product Revenue $190.8 $190.5 $136.5 Services Revenue $60.1 $77.0 $73.0 Services Revenue $60.1 $77.0 $73.0 T
Slide 5: Quarterly Results of Operations
Quarterly Results of Operations (In $M’s except percentages and EPS) 5 CONFIDENTIAL. ©EXTREME NETWORKS, INC. ALL RIGHTS RESERVED.
Slide 6: Quarterly Results of Operations
Quarterly Results of Operations (In $M except percentages and EPS) 6 CONFIDENTIAL. ©EXTREME NETWORKS, INC. ALL RIGHTS RESERVED.
Slide 7: Historical Revenue by Geography
Historical Revenue by Geography (In $M’s except percentages) YoY % QoQ % FQ3'19 FQ2'20 FQ3'20 Change Change Product Revenune Americas $ 100.4 $ 86.0 $ 57.6 (42.6%) (33.0%) EMEA 67.0 86.9 62.5 (6.7%) (28.1%) APAC 23.4 17.6 16.4 (30.0%) (6.8%) Total Product $ 190.8 $ 190.5 $ 136.5 (28.5%) (28.3%) Serv
Slide 8: Revenue by Type and by Geography
Revenue by Type and by Geography (In $M’s except percentages) 8 CONFIDENTIAL. ©EXTREME NETWORKS, INC. ALL RIGHTS RESERVED.
Slide 9: Revenue by Type and by Geography
Revenue by Type and by Geography (In $M’s except percentages) 9 CONFIDENTIAL. ©EXTREME NETWORKS, INC. ALL RIGHTS RESERVED.
Slide 10: Financial Highlights – Balance Sheet
Financial Highlights – Balance Sheet (GAAP, BS in $M’s except days) Balance Sheet Highlights FQ3'19 FQ2'20 FQ3'20 Cash and Short Term Investments $156.8 $140.4 $196.4 AR $141.5 $159.8 $96.2 Inventories $57.6 $79.7 $66.2 Accounts Payables $49.1 $66.0 $53.0 Gross Debt Payable $182.9 $375.3 $425.5 Cash
Slide 11: Non-GAAP Free Cash Flow
Non-GAAP Free Cash Flow Extreme uses the non-GAAP free cash flow metric as a measure of operating performance. Free cash flow represents GAAP net cash provided by operating activities, less purchases of property, plant and equipment. Extreme considers free cash flow as useful information for managem
Slide 12: Key Performance Metrics
Key Performance Metrics Financial Metrics FQ2’20 FQ3’20 Cloud Metrics FQ2’20 FQ3’20 Large Customers 22 22 Average Daily Traffic ~4PB ~6PB (Over $1M in bookings for the Quarter) Per Day Recurring Revenue* $ $75.5M $72.1M Managed Devices 1.01M 1.05M 2 sections: Total Dollar Amount for the Quarter Recu
Slide 13: Vertical Trends
Vertical Trends Extreme Exposure Demand Outlook Tailwinds Headwinds Large contracts flowing in EDU, Timing of deals somewhat 30-35% expansion of international & stable dependent on expected occupancy Government Gov’t for business continuity and Gov’t Budgets & Education Growth due to differentiation
Slide 14: Appendices- GAAP to Non-GAAP Reconciliations
Appendices- GAAP to Non-GAAP Reconciliations 14 CONFIDENTIAL. ©EXTREME NETWORKS, INC. ALL RIGHTS RESERVED.
Slide 15: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Revenue & Gross Margin (M’s except percentages) Quarter FQ3'19 FQ2'20 FQ3'20 Product Revenue $ 190.8 $ 190.5 $ 136.5 Service Revenue 60.1 77.0 73.0 Total Revenue - GAAP Basis $ 250.9 $ 267.5 $ 209.5 Gross Margin - GAAP Basis 138.9 148.7 111.3 Gross Margin % - GAAP Ba
Slide 16: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Operating Income (Loss) (In M’s except percentages) Quarter FQ3'19 FQ2'20 FQ3'20 Operating Loss - GAAP Basis $ (2.3) $ (15.2) $ (38.4) Operating Margin- GAAP Basis (0.9%) (5.7%) (18.3%) Adjustment to Acquired Inventories - 3.4 - Integration Costs in COGS - 1.7 0.2 Am
Slide 17: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Net Income (Loss) (In $M’s except EPS) Quarter FQ3'19 FQ2'20 FQ3'20 Net Loss - GAAP Basis $ (6.9) $ (23.5) $ (44.4) Shares - GAAP Basis 117.9 119.6 119.2 EPS - GAAP Basis $ (0.06) $ (0.20) $ (0.37) Adjustment to Acquired Inventories - 3.4 Integration Costs in COGS -
Slide 18: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations EBITDA ($M’s) Quarter FQ3'19 FQ2'20 FQ3'20 Net Loss - GAAP Basis $ (6.9) $ (23.5) $ (44.4) Interest 2.4 5.8 5.8 Taxes 1.9 1.8 1.6 Depreciation/Amortization 12.7 16.5 16.2 EBITDA - GAAP 10.1 0.5 (20.9) Net Non GAAP Adjustments 16.2 39.3 27.8 Amortization included in N
Slide 19: FQ4'20 Financial Guidance
FQ4’20 Financial Guidance 19 CONFIDENTIAL. ©EXTREME NETWORKS, INC. ALL RIGHTS RESERVED.
Slide 20: FQ4'20 Guidance
FQ4’20 Guidance Given the current fluid market environment we are temporarily suspending our Q4 2020 outlook. We will reassess providing quarterly guidance based on the clarity of macroeconomic recovery at the end of the fourth fiscal quarter. 20 CONFIDENTIAL. ©EXTREME NETWORKS, INC. ALL RIGHTS RESE
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