Extreme Networks, Inc. · NASDAQ:EXTR
Extreme Networks — JMP Small Cap Tech Forum Conference (Virtual) 2020
27 slides from Extreme Networks's conference presentation, Nov 10, 2020
Slide 1: Extreme Networks Investor Overview
THE CLOUD-DRIVEN END-TO-END ENTERPRISE NETWORK EXTREME NETWORKS INVESTOR OVERVIEW November 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
Slide 3: Extreme Networks: The Challenger in Networking Market
Extreme Networks: The Challenger in Networking Market Who We Are What We Do Who We Serve Founded 1996 20+ years of ~50,000 Customers FY20 Revs: ~$950m networking innovation 9,000+ Partners 2,500+ employees Cloud-Driven End-to- 1.4 million cloud- NASDAQ: EXTR End Networking managed
Slide 4: Inflection to Cloud Management Fuels Extreme's Growth
Inflection to Cloud Management Fuels Extreme’s Growth Extreme is the Second largest Cloud Management Networking Provider Globally by Revenue* 13% BY 2024 9x TRADITIONAL $7B+ BY 2023 $20B+ Share of Cloud- Cloud Networking Market vs Large Service Managed Growth Rate $2.6B Today Addressable Market Netw
Slide 5: More Opportunities Today Than Ever Before
More Opportunities Today Than Every Before FY 20 FY 21 FY 22 Tier 1 Launches • Tiered Sales Motions • Managed Service • Aerohive Integration Analytics Acceleration of & SLED Providers • Product Refresh • Enterprises Adapting Measure / Mid-Market(RGO) • Acceleration of • Growth in eRate Network-as-a-
Slide 6: Recognized Industry Leadership
Recognized Industry Leadership 2020 LAN/WLAN Magic Quadrant In both Wired & WLAN Access Infrastructure and Data Center Networking Top Three in Data Center Critical Capabilities *Source: Gartner
Slide 7: Trusted by Over 50,000+ Customers for Critical Infrastructure
Trusted by Over 50,000+ Customers for Critical Infrastructure HEALTHCARE GOVERNMENT EDUCATION LARGE PUBLIC MANUFACTURING TRANSPORTATION RETAIL VENUES AND LOGISTICS
Slide 8: Enabling Effortless Experiences for Our Customers
Enabling Effortless Experiences for Our Customers We Remove Complexity So Customers Can Move Faster and More Efficiently SIMPLE INTUITIVE CONSISTENT Easy to Deploy, Maintain Self-driving Using Seamless Experience & Support Real-Time Data Across Your Platform, Software & Services 8 CONFIDENTIAL. ©EXT
Slide 9: Extreme Effortless Advantage
Extreme Effortless Advantage We’re The First To Bring One Cloud & One Fabric Together ExtremeCloud™ Extreme Fabric Consumption Flexibility Provider, Deployment End to End Flexible Licensing & Device Agnostic Industry Leading Finance, Lease or Unlimited Data Footprint Subscription Options
Slide 10: One Enterprise, One Network, One Cloud
One Enterprise, One Network, One Cloud Bringing Your Users, Devices and Applications Together ANY APP WIPS NAC ANALYTICS IoT LOCATION GUEST ISO 27001 Air Defense SegmentedEmbedded CLOUD NETWORKING ANY CLOUD AWS | AZURE | GCP SECURITY XIQ XMC XCA/SITE ENGINE ANY WAY NETWORK MANAGMENT FABRIC ANYWHERE
Slide 11: Universal Hardware Drives Simple, Intuitive, Consistent Networking
Universal Hardware Drives Simple, Intuitive, Consistent Networking STREAMLINED SUPPLY CHAIN ACCELERATED CLOUD SIMPLIFY ADOPTION & SUBSCRIPTION Single Hardware SKU GROWTH Single Software License SKU Single Warranty across all SKUs HIGHER GROSS MARGIN CONTRIBUTION CLOUDIFY XIQ Cloud Management Customi
Slide 12: Service Providers Drive New Growth Opportunities
Service Providers Drive New Growth Opportunities 4G LTE MPLS NO MPLS Legacy NO installed base in 4G LTE 5G Leveraged to 5G Rollouts Differentiated Products Significant L-T Growth 12 Opportunities
Slide 13: Two Ways to Participate in 5G Rollouts
Two Ways to Participate in 5G Rollouts Network Function Virtualization Infrastructure Network Packet Broker (NFVi) SLX 9240 Extreme 9920 Tools CNIS NFVI Packet Broker Packet Broker Core Cloud Native Network Functions Aggregation Infrastructure Virtualization Solution Infrastructure Extreme Visibilit
Slide 14: Financial Highlights
Financial Highlights
Slide 15: Subscriptions Growing Recurring Revenue
Subscriptions Growing Recurring Revenue 15
Slide 16: Key Performance Metrics
Key Performance Metrics Financial Metrics FQ4’20 FQ1’21 Cloud Metrics FQ4’20 FQ1’21 Large Customers 23 22 Average Daily Traffic ~3PB ~5PB (Over $1M in bookings for the Quarter) Per Day Recurring Revenue* $ $73.5M $72.9M Managed Devices 1.14M 1.36M 2 sections: Total Dollar Amount for the Quarter Recu
Slide 17: Vertical Trends FQ1'21
Vertical Trends FQ1’21 Extreme Exposure Demand Outlook Tailwinds Headwinds Strong continued trends in K-12, Demand in state / local government ~40% Higher Ed; Solid State / Local and Fed dependent on future government Government spending globally budgets and funding & Education Stable spending activ
Slide 18: Non-GAAP Financial Highlights – Financial Operations
Non-GAAP Financial Highlights – Financial Operations (In $M’s except percentages and EPS) Quarter FQ1'20 FQ4'20 FQ1'21 1,2 Non-GAAP Product Revenue $185.1 $141.5 $161.4 Services Revenue $70.4 $74.0 $74.4 Total Revenue $255.5 $215.5 $235.8 Total GM % 59.9% 59.4% 60.3% Operating Income $ $15.9 $11.2 $
Slide 19: Strengthening Financial Position
Strengthening Financial Position (GAAP, BS in $M’s except days) Balance Sheet Highlights FQ1'20 FQ4'20 FQ1'21 Cash and Cash Equivalents $161.1 $193.9 $193.1 Accounts Receivable $152.3 $122.7 $123.6 Inventories $82.4 $62.6 $55.8 Accounts Payables $63.5 $48.4 $59.4 Gross Debt* $380.0 $420.8 $396.0 Net
Slide 20: Target Non-GAAP Operating Model
Target Non-GAAP Operating Model* FY17 FY18 FY19 FY20 FY21 Long- $ in millions, except per share amounts Actual* Actual Actual Actual YTD Term Revenue $598 $983 $996 $948 $236 Non-GAAP Gross Profit $341 $569 $580 % of Revenue 57.0% 57.9% 58.2% 59.1% 60.3% >60% Total Non-GAAP Opex $282 $475 $519 $520
Slide 21: Reconciliations
Reconciliations
Slide 22: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Revenue & Gross Margin (In M’s except percentages) Quarter FQ1'20 FQ4'20 FQ1'21 Product Revenue $ 185.1 $ 141.5 $ 161.4 Service Revenue 70.4 74.0 74.4 Total Revenue - GAAP $ 255.5 $ 215.5 $ 235.8 Gross Margin - GAAP 137.2 120.6 135.0 Gross Margin % - GAAP 53.7% 56.0%
Slide 23: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Operating Income (Loss) (In M’s except percentages) Quarter FQ1'20 FQ4'20 FQ1'21 Operating Loss - GAAP $ (32.2) $ (13.1) $ (0.1) Operating Margin- GAAP (12.6%) (6.1%) (0.0%) Adjustment to Acquired Inventories 3.9 - - Integration Costs in COGS 0.2 0.1 - Amortization o
Slide 24: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Net Income (Loss) (In $M’s except EPS) Quarter Full Year Quarter FQ1'20 FQ2'20 FQ3'20 FQ4'20 FY20 FQ1'21 Net Loss - GAAP $ (37.7) $ (23.5) $ (44.4) $ (21.2) $ (126.8) $ (8.8) Shares - GAAP 120.2 119.6 119.2 120.3 119.8 121.7 EPS - GAAP $ (0.31) $ (0.20) $ (0.37) $ (0
Slide 25: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations EBITDA (In $M’s) Quarter Full Year Quarter FQ1'20 FQ2'20 FQ3'20 FQ4'20 FY20 FQ1'21 Net Loss - GAAP $ (37.7) $ (23.5) $ (44.4) $ (21.2) $ (126.8) $ (8.8) Interest 4.5 5.8 5.8 6.3 22.3 6.5 Provision for Income Taxes 1.6 1.8 1.6 1.4 6.4 1.3 Depreciation/Amortization 15.
Slide 26: GAAP Operating Results
GAAP Operating Results (In millions except EPS and percentages) FY17 FY18 FY19 FY20 FY21 Actual* Actual Actual Actual YTD Revenue $607 $983 $996 $948 $236 GAAP Gross Profit $331 $535 $551 $518 $135 % of Revenue 54.5% 54.4% 55.4% 54.6% 57.3% Total GAAP Opex $325 $573 $566 $617 $135 GAAP Operating Inc
Slide 27: www.extremenetworks.com
f= Extreme networks WWW.EXTREMENETWORKS.COM
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