Extreme Networks, Inc. · NASDAQ:EXTR
Extreme Networks — Investor Presentation (February 2011)
27 slides from Extreme Networks's investor presentation, Feb 10, 2011
Slide 1: Extreme Networks Analyst Briefing
Extreme Networks Analyst Briefing Feb 2014
Slide 2: Risk on Forward-Looking Statements
Risk on Forward-Looking Statements This presentation contains forward-looking statements that involve risks and uncertainties, including statements regarding the Company's financial performance, acceptance of the Company's newer products in the market and its expectations regarding its products. Act
Slide 3: Extreme Networks
Extreme Networks nights reserved. Vv wv Vv wv Vv wv Vv wv Progressive strategy for growth markets Disruptive solutions and technologies Breaking price/perf boundaries Sales & Support with worldwide reach Serving 4 of the top 6 mobile NEPs Award winning technology since inception Established two-tier
Slide 4: Transformation to a Market driven company
Transformation to a Market driven company... Change in Focus froma Technology Driven Company to a Market Driven Company Market focus drives market segment selection for specific high growth vertical markets Market Focus Technology Focus Commoniality in Vertical Attack Naturally Re-enforces Company P
Slide 5: Strategic focus
Strategic focus Perens 4 Local Area Data Centers The Cloud A Seamless User Experience c > Deliver a network that is optimized for the new mobile world of people and machines, providing pervasive access, awareness and control, from the converged edge to the cloud.
Slide 6: Strategic focus: Phase 1
Strategic focus ee Local Area Data Centers The Cloud Phase 1 - Aworld of different and discrete networks - Wireless, wired, data center & cloud acting alone - Separate and distinct, without user differentiation foe
Slide 7: Strategic focus: Phase 2
Strategic focus ee Local Area Data Centers The Cloud - Convergence of the wired & wireless edge Phase 2 - The virtualized Ethernet data center - Identity management for people, physical & virtual machines ‘CE reserved.
Slide 8: Strategic focus: Phase 3
Strategic focus Petrone Local Area Data Centers The Cloud + Quality of experience based on user & machine identity - Virtual machine & application awareness & control Phase 3 - IT differentiation of users from converged edge to IT data center ii reserved.
Slide 9: Strategic focus
Strategic focus ee Local Area Data Centers The Cloud - Seamless user experience from Enterprise and 3G/4G edge to cloud Integrity of identity from DC and the cloud 2 3 - Differentiated user services offered by managed cloud providers and mobile operators reserved.
Slide 10: Differentiation through Software
Differentiation through Software ant Embedded Identity and Security Role-based (e.g. DoS, IP Go Poe) fp Networking Wireless Convergence Device Management Epicenter Management Platform RADIUS ExtremeXOS Identity Reporting Partner Solutions 3rd party Interface (XML, SNMP) Role Based Network Management
Slide 11: Extreme Differentiation
Extreme Differentiation went | = 1s a Price / Performance }| Sustainable Solutions Affordable Rocket Science. Greener by design. Innovation is in our DNA Greener through automation e~ = Customer Care ' Data Center Migration 4 Global/ Local fa Physical to Virtual to Cloud I Personalized & Responsive
Slide 12: Competitive Landscape
Competitive Landscape Pettremc 4 |G | JunIPer = ¢!sco- NETWORKS BROCADE FORCE@)
Slide 13: Financial Review
Extreme Networks Financial Review Feb 2011
Slide 14: Investment Thesis
Investment Thesis Pestrem< = Multibillion dollar markets; Campus, Data Center and Service Provider markets = Focused Vertical Market Approach = Managed Hosting, Mobile Backhaul, Education Positioning = Innovative Products = Accelerating Time to Markets [> " Direct Sales and Channel Ecosystem = Strat
Slide 15: October 2009 Actions
October 2009 Actions Petters 4 > Reorganized into functional areas, eliminating complex business unit structure > Reduced headcount by 70 heads or 9% of total > Reduced annual operating costs by $12M ($3M/quarter) > Breakeven lowered to ~$70M level vs. $78M pre action > Actions allowed for projects
Slide 16: Improved Operating Results Q2 FY10-Q2 FY11
Improved Operating Results Q2 FY10-Q2 FY11 Petrem= 4 > Met guidance 5 quarters ina row > Operating income in the 5-7% range vs. 2-3% pre- action > Gross Margin % records in both Q2 and Q3 FY10 > EBITDA ,Operating Income, and Operating Cash flow growth past 5 quarters > Best results in over 3 years i
Slide 17: January 2011 Actions
January 2011 Actions Petters 4 > Reduced headcount by 35 heads or 5% of total > Reduced overlay heads in the US Sales Organization and eliminated heads in Service, Operations, and G&A to drive efficiencies > “In housed” back office functions to low cost areas vs. out sourced in the US > Reduced annu
Slide 18: EBITDA Trends FY09-11
EBITDA Trends FY09-11 Petremc 2 om 8.0 6.0 4.0 2.0 $M 0.0 + 2.0 4.0 109 Q209 9309 409 qQi10 210 310 410 tit ait EBITDA) 2.7 4.2 23 47 -3.0 5.6 6.1 6.9 6.1 6.9
Slide 19: Estimated Quarterly Revenue Breakeven ($M)
sv } $70 Estimated Quarterly Revenue Breakeven ($M)... -Merit increases -Non exec bonus -401k reinstated -HC reduction -Simple org -HC reduction* -Managed attrition -Program efficiencies aaso e210 an oan *Assumes all efficiency programs fully implemented
Slide 20: Q2 FY11 Balance Sheet Metrics
Q2 FY11 Balance Sheet Metrics Pretrem 4 Strong Balance Sheet with no long-term debt Cash & Investments ($M) 138.1 130.8 135.4 135.7 141.7 Cash Flow from Operations ($M) 6.0 (7.0)* 6.3 1.2 7.3% Accts Receivable ($M) 40.6 36.6 42.1 39.7 46.8 DSO 47 43 45 43 50 Inventory ($M) 16.6 23.6 21.8 20.5 24.2 E
Slide 21: Financial Model
Financial Model Petters 4 Gross Margin of 57%-59% Research & Development of 13%-14% Sales & Marketing of 25%-26% General & Administrative of 7%-8% Operating Income of ~11% VV VV Vv
Slide 22: Investment Thesis
Investment Thesis Pestrem< = Multibillion dollar markets; Campus, Data Center and Service Provider markets = Focused Vertical Market Approach = Managed Hosting, Mobile Backhaul, Higher Education Positioning = Innovative Products = Accelerating Time to Markets [> " Direct Sales and Channel Ecosystem
Slide 23: Extreme Networks Analyst Briefing
Extreme Networks Analyst Briefing Feb 2014
Slide 24: Supporting Detail
Supporting Detail
Slide 25: Pro Forma Financial Highlights
Pro Forma Financial Highlights Pestreme 4 Product 64.5 63.2 70.6 69.2 70.3 Service 14.9 15.0 14.9 14.6 14.8 Total Revenue ($M) 79.4 78.2 85.5 83.8 85.1 Gross Margin (%) 58.0% 58.3% | 57.4% | 56.3% | 56.4% Research & Development ($M) 11.8 10.9 11.7 12.2 12.1 Sales & Marketing ($M) 23.9 24.2 25.3 24.3
Slide 26: Revenue Trends
Revenue Trends Perens Revenue ($M) 90.0 80.0 + 70.0 - 60.0 + 50.0 + 40.0 + Total Revenue ™ Product m™ Service a410 quit aii0 Q210 Q310 Q2i1 Fiscal Quarter
Slide 27: Investment Alignment to Verticals
Investment Alignment to Verticals — Drives Reuse, -.-=7=~ d ‘ 3 a z = Vertical £ g Boe I g ‘ ra 33 1 Practices § 3 ba 1 BE a Sa 5 @ ea 2u zo 525 to8 az 52 ose 1c£z 2a se ree 1:2 Investment Areas i - Aware Network | ! ! Data Center Solutions I aaa meee ° Enhanced Ethernet I ! g = € 9 a Top of Rack (4
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