Extreme Networks, Inc. · NASDAQ:EXTR

Extreme Networks — Q2 2025 Earnings Presentation

30 slides from Extreme Networks's earnings presentation, Jan 29, 2025

  1. Slide 1: 2Q25 Financial Results

    2Q25 Financial Results January 29, 2025

  2. Slide 2: Disclaimer

    DISCLAIMER Non-GAAP Financial Measures Forward-Looking Statements This presentation includes certain financial measures that are not presented in accordance with This presentation contains forward-looking statements including, but generally accepted accounting principles in the United States (“GAAP)

  3. Slide 3: 2Q25 Financial Results

    2Q25 FINANCIAL RESULTS © EXTREME NETWORKS, INC. ALL RIGHTS RESERVED. 3

  4. Slide 4: 2Q25 Results Summary

    2Q25 RESULTS SUMMARY • Sequential Growth in Revenue led by growth in EMEA Bookings and • Sequential Growth in Product Revenue Revenue Trends • Recurring Revenue 2 of $103M, Up 2% Y/Y • SaaS ARR 1 of $181M, Up 14% Y/Y Cloud SaaS • Continued Growth in New Subscription Bookings Subscriptions • SaaS Def

  5. Slide 5: 2Q25 Highlights

    2Q25 HIGHLIGHTS Total Revenue Non-GAAP Gross Profit 1 Non-GAAP EPS 1 $ Free Cash Flow 5 $279M $177M $0.21 $16M $181M 63.4% 14.7% $15M SaaS ARR 2 Non-GAAP Gross Margin 1 % Non-GAAP Operating Margin 1 % Net Debt 4 14% 36 37 SaaS ARR 2 37% Large $1M+ Customers Total Managed Recurring Revenue 3 (Over $1

  6. Slide 6: Financial Highlights

    FINANCIAL HIGHLIGHTS (IN $M’S EXCEPT PERCENTAGES AND EPS) GAAP Non-GAAP1 2Q24 1Q25 2Q25 2Q24 1Q25 2Q25 Product Revenue $186.6 $162.3 $172.3 $186.6 $162.3 $172.3 Subscription & Support Revenue $109.8 $106.9 $107.1 $109.8 $106.9 $107.1 Total Revenue $296.4 $269.2 $279.4 $296.4 $269.2 $279.4 Total GM %

  7. Slide 7: Quarterly Revenue Results

    QUARTERLY REVENUE RESULTS (IN $M’S EXCEPT PERCENTAGES ) Total Revenue $364 $353 $333 28% $296 28% $279 27% $269 $257 37% $211 38% 40% 40% 50% 72% 72% 73% 63% 62% 60% 60% 50% 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 Product Revenue Subscription & Support Revenue © EXTREME NETWORKS, INC. ALL RIGHTS RES

  8. Slide 8: Quarterly Gross Profit and Margin

    QUARTERLY GROSS PROFIT AND MARGIN (IN $M’S EXCEPT PERCENTAGES) Gross Profit - GAAP Gross Profit - Non-GAAP 1 $250 100.0% $250 100.0% $214 $213 $219 $216 $192 90.0% $196 90.0% $200 $183 $200 $185 $170 $175 $177 $171 80.0% 80.0% $150 $150 $120 $115 $122 70.0% $116 70.0% $100 $100 63.0% 62.7% 60.0% 60.

  9. Slide 9: Quarterly Operating Expense and Margin

    QUARTERLY OPERATING EXPENSE AND MARGIN (IN $M’S EXCEPT PERCENTAGES) Operating Expenses - GAAP Operating Expenses - Non-GAAP 1 $200 $180 $182 $177 $177 $173 $174 140.0% 140.0% $180 $156 $153 $162 $164 $162 $160 $144 $147 120.0% $141 $138 120.0% $160 $136 $140 $128 100.0% 100.0% $140 $120 80.0% 80.0%

  10. Slide 10: Quarterly EPS

    QUARTERLY EPS EPS - GAAP EPS - Non-GAAP 1 $0.40 $0.40 $0.33 $0.35 $0.30 $0.29 $0.30 $0.24 $0.21 $0.21 $0.20 $0.17 $0.19 $0.20 $0.17 $0.10 $0.06 $0.10 $0.03 $- $- $(0.10) $(0.10) $(0.08) $(0.08) $(0.20) $(0.20) $(0.19) $(0.30) $(0.30) $(0.40) $(0.40) $(0.50) $(0.42) $(0.50) $(0.50) $(0.60) $(0.60) 3Q

  11. Slide 11: 2Q25 Revenue by Geography

    2Q25 REVENUE BY GEOGRAPHY (IN $M’S EXCEPT PERCENTAGES) AMERICAS EMEA APAC $131M $128M $20M 47% of Revenue 46% of Revenue 7% of Revenue © EXTREME NETWORKS, INC. ALL RIGHTS RESERVED. 11

  12. Slide 12: Financial Highlights – Balance Sheet

    FINANCIAL HIGHLIGHTS – BALANCE SHEET (IN $M’S ) Balance Sheet Highlights 2Q24 1Q25 2Q25 Cash and Cash Equivalents $221.4 $159.5 $170.3 Accounts Receivable $112.0 $97.2 $117.6 Inventories $152.5 $143.6 $132.3 Accounts Payable $87.8 $65.8 $52.4 Gross Debt* $195.0 $187.5 $185.0 Net Cash (Debt)** $26.4

  13. Slide 13: Free Cash Flow

    FREE CASH FLOW (IN $M’S) Extreme uses the free cash flow metric as a measure of operating performance. Free cash flow represents GAAP net cash provided by (used in) operating activities, less capital expenditures for purchases of property and equipment and capitalized software development costs. Ext

  14. Slide 14: SaaS ARR Continues to Grow

    SaaS ARR CONTINUES TO GROW (IN $M’S) SaaS ARR 1 $181 $174 $167 $158 $162 $141 $129 $117 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 1 Extreme uses SaaS annual recurring revenue (“SaaS ARR”) to identify the annual recurring revenue of ExtremeCloud IQ (XIQ) and other subscription revenue, based on the ann

  15. Slide 15: SaaS Deferred Revenue Rising

    SaaS DEFERRED REVENUE RISING (IN $M’S) SaaS Deferred Revenue 1 $290 $282 $267 $258 $246 $236 $217 $199 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 1 SaaS Ending Deferred Revenue refers to the ending quarterly balance of advance payments received for SaaS goods or services that are to be delivered or per

  16. Slide 16: Stable Recurring Revenue

    STABLE RECURRING REVENUE (IN $M’S) Recurring Revenue 1 $105 100% $103 $103 $101 $101 90% $100 $100 80% $95 70% $95 $93 60% $90 47% 50% $87 39% 38% 37% 40% 34% $85 26% 26% 27% 30% 20% $80 10% $75 0% 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 Recurring Revenue as % of Total Revenue 1 Recurring Revenue is

  17. Slide 17: 3Q25 & FY25 Financial Guidance

    3Q25 & FY25 FINANCIAL GUIDANCE © EXTREME NETWORKS, INC. ALL RIGHTS RESERVED. 17

  18. Slide 18: 3Q25 Guidance

    3Q25 GUIDANCE (IN $M’S EXCEPT PERCENTAGES AND EPS) Non-GAAP 1 GAAP Non-GAAP 1 2Q25 3Q25 3Q25 Revenue ($M) $279.4 $276.0 – $284.0 $276.0 – $284.0 Gross Margin % 63.4% 61.2% – 62.2% 62.0% – 63.0% Operating Margin % 14.7% 0.0% – 2.1% 12.0% – 13.7% EPS $0.21 ($0.04) – $0.00 $0.16 – $0.20 1See slides 25-

  19. Slide 19: FY25 Guidance

    FY25 GUIDANCE (IN $M’S) FY24 FY25 Revenue ($M) $1,117 $1,120 – $1,138 © EXTREME NETWORKS, INC. ALL RIGHTS RESERVED. 19

  20. Slide 20: Appendices: GAAP to Non-GAAP Reconciliations and Operating Metrics

    APPENDICES GAAP to Non-GAAP Reconciliations and Operating Metrics Note: The totals for some periods may not foot due to rounding. Please see press release for full reconciliation. © EXTREME NETWORKS, INC. ALL RIGHTS RESERVED. 20

  21. Slide 21: Supplemental Information: GAAP to Adjusted Results

    SUPPLEMENTAL INFORMATION: GAAP TO ADJUSTED RESULTS (IN $M’S EXCEPT PERCENTAGES AND EPS) We recorded an additional provision for excess and obsolete (“E&O”) inventory and loss on our supplier commitments of $64.5 million during fiscal 2024. The quarterly split was as follows: 1Q24: $10.5m, 3Q24: $7.5

  22. Slide 22: Adjusted Quarterly Results of Operations

    ADJUSTED QUARTERLY RESULTS OF OPERATIONS (IN $M’S EXCEPT PERCENTAGES) Gross Profit - Adjusted Results 1 $250 100.0% $226 90.0% $200 $185 $171 $177 $163 80.0% $150 $129 70.0% 64.1% 63.5% 63.7% 63.4% 62.5% $100 61.2% 60.0% $50 50.0% - 40.0% 2 2 2 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 Product Gross Profit Subs

  23. Slide 23: Adjusted Quarterly Results of Operations

    ADJUSTED QUARTERLY RESULTS OF OPERATIONS (IN $M’S EXCEPT PERCENTAGES) Operating Expenses - Adjusted Results 1 $180 140.0% $160 $153 $147 $141 $138 120.0% $136 $140 $128 100.0% $120 80.0% $100 60.0% $80 40.0% 20.7% $60 14.8% 13.5% 12.4% 14.7% 20.0% $40 (8.6%) 0.0% $20 (20.0%) - (40.0%) 2 2 2 1Q24 2Q2

  24. Slide 24: Adjusted Quarterly Results of Operations

    ADJUSTED QUARTERLY RESULTS OF OPERATIONS EPS - Adjusted Results 1 $0.60 $0.41 $0.40 $0.24 $0.21 $0.19 $0.17 $0.20 $- $(0.20) $(0.14) $(0.40) $(0.60) 2 2 2 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 1 Adjusted Results exclude the Non-GAAP adjustments and the additional provision for E&O inventory. Adjustments wer

  25. Slide 25: GAAP to Non-GAAP Reconciliations – Gross Margin

    GAAP TO NON-GAAP RECONCILIATIONS – GROSS MARGIN (IN $M’S EXCEPT PERCENTAGES) 2Q24 1Q25 2Q25 Product Revenue $186.6 $162.3 $172.3 Subscription & Support Revenue 109.8 106.9 107.1 Total Revenue - GAAP $296.4 $269.2 $279.4 Gross Margin - GAAP 183.4 169.5 175.1 Gross Margin % - GAAP 61.9% 63.0% 62.7% Am

  26. Slide 26: GAAP to Non-GAAP Reconciliations – Operating Income (Loss)

    GAAP TO NON-GAAP RECONCILIATIONS – OPERATING INCOME (LOSS) (IN $M’S EXCEPT PERCENTAGES) 2Q24 1Q25 2Q25 Operating Income (Loss) - GAAP $10.3 ($4.7) $12.7 Operating Margin - GAAP 3.5% (1.8%) 4.5% Amortization of Intangibles, COGS 0.5 0.6 0.6 Share-Based Compensation, Total 21.0 19.8 21.5 Restructuring

  27. Slide 27: GAAP to Non-GAAP Reconciliations – Net Income (Loss)

    GAAP TO NON-GAAP RECONCILIATIONS – NET INCOME (LOSS) (IN $M’S EXCEPT EPS) 2Q24 1Q25 2Q25 Net Income (Loss) - GAAP $4.0 ($10.5) $7.4 Shares - GAAP 131.5 131.2 134.1 EPS - GAAP (Diluted) $0.03 ($0.08) $0.06 Amortization of Intangibles, COGS 0.5 0.6 0.6 Share-Based Compensation, Total 21.0 19.8 21.5 Re

  28. Slide 28: Adjusted EBITDA Reconciliation

    ADJUSTED EBITDA RECONCILIATION (IN $M’S) 2Q24 1Q25 2Q25 Net Income (Loss) - GAAP $4.0 ($10.5) $7.4 Interest 2.8 3.6 3.3 Provision for (Benefit from) Income Taxes 3.1 1.5 2.6 Depreciation/Amortization 5.7 5.1 5.0 EBITDA $15.6 ($0.3) $18.3 Net Non-GAAP Adjustments 27.5 32.9 21.2 Tax Effect included in

  29. Slide 29: GAAP to Non-GAAP Reconciliations – 3Q25 Guidance

    GAAP TO NON-GAAP RECONCILIATIONS – 3Q25 GUIDANCE Gross Margin Operating Margin Earnings Rate Rate per Share GAAP 61.2% – 62.2% 0.0% – 2.1% ($0.04) – $0.00 Estimated Adjustments for: Share-Based Compensation 0.6% 7.4% – 7.8% 0.16 Amortization of Product Intangibles 0.2% 0.2% 0.01 Amortization of Non-

  30. Slide 30: © EXTREME NETWORKS, INC. ALL RIGHTS RESERVED.

    © EXTREME NETWORKS, INC. ALL RIGHTS RESERVED. 30

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