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1. Company Snapshot

1.a. Company Description

Extreme Networks, Inc.provides software-driven networking solutions worldwide.It designs, develops, and manufactures wired and wireless network infrastructure equipment; and develops software for network management, policy, analytics, security, and access controls.


The company offers ExtremeCloud IQ, an ML/AI powered, wired, and wireless cloud network management solution that offers advanced visibility and control over users, devices, and applications; ExtremeCloud IQ – Site Engine that provides task automation, access control, granular visibility with real-time analytics and multi-vendor device management; and ExtremeCloud IQ Essentials offers WIPS, location services, IoT, and guest management services.It also provides wireless access point products; ExtremeSwitching portfolio that includes access edge products that offer physical presentations along with options to deliver Ethernet or convergence-friendly Power-over-Ethernet (POE), including high-power universal POE; aggregation/core switches designed to address aggregation, top-of-rack, and campus core environments; and data center switches and routers.In addition, the company offers cloud native platforms and applications for service providers; and customer support and services.


It markets and sells its products through distributors, resellers, and field sales organizations to healthcare, education, government, manufacturing, retail, and hospitality markets.Extreme Networks, Inc.was incorporated in 1996 and is headquartered in Morrisville, North Carolina.

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1.b. Last Insights on EXTR

Negative drivers behind Extreme Networks' recent performance include ongoing legal investigations by Bronstein, Gewirtz & Grossman, LLC, which may have created uncertainty and weighed on investor sentiment. The investigations, which began in December 2024, are focused on potential claims on behalf of purchasers of Extreme Networks securities prior to July 27, 2022. Additionally, the company's Q2 earnings, while beating estimates, showed a year-over-year decline in earnings per share from $0.24 to $0.21, which may have contributed to the negative sentiment.

1.c. Company Highlights

2. Extreme Networks' Q1 FY2026 Earnings: A Strong Start to the Year

Extreme Networks reported a robust first quarter, with revenue reaching $310 million, up 15% year-over-year, driven by competitive wins with large customers across all verticals. The company's product revenue increased double digits year-over-year for the third consecutive quarter, while SaaS ARR grew 24% year-over-year to $216 million. Earnings per share (EPS) came in at $0.22, in line with estimates, representing a 29% increase from the year-ago period. Non-GAAP gross margin was 61.3%, impacted by industry-wide increases in component costs.

Publication Date: Nov -12

📋 Highlights
  • Revenue Growth:: Q1 revenue reached $310 million, up 15% year-over-year, exceeding the high end of guidance.
  • SaaS ARR Expansion:: SaaS Annual Recurring Revenue (ARR) grew 24% YoY to $216 million, driving recurring revenue transformation.
  • Full-Year Guidance:: Revenue expected in the range of $1.247 billion to $1.264 billion, reflecting 10% YoY growth and exceeding market TAM estimates.
  • Gross Margin Impact:: Non-GAAP gross margin at 61.3%, with plans to recover to 64–66% long-term via price increases and cost management.
  • Competitive Wins:: Secured largest SD-WAN deal in company history, plus major contracts in federal, healthcare, and APAC markets, displacing top competitors.

Financial Performance

The company's financial results were driven by strong execution and competitive wins, with revenue exceeding the high end of guidance. The company's gross margin has been impacted by component price increases, but it expects to recover margins over time with price increases and other initiatives. For the second quarter, Extreme expects revenue to be in the range of $309 million to $315 million, with gross margin guidance of 61.4% to 62%.

Growth Drivers

The company's growth is being driven by its competitive markets, which are currently "frothy." This has led to a strong quarter, with the largest SD-WAN win ever for the company. The win also spawned other opportunities, and the company has turned up certifications to play in the federal markets. The company's subscription line is also seeing strong growth, with ARR growing 24% year-over-year, driving the company's transformational journey to create more recurring revenue.

Valuation

With a P/E Ratio of 245.02 and an EV/EBITDA of 30.27, the company's valuation multiples suggest that the market is pricing in significant growth expectations. The company's P/S Ratio is 1.97, which is relatively low compared to its peers. Analysts estimate next year's revenue growth at 10.9%, which may not be sufficient to justify the current valuation multiples. The company's ROE is 14.81%, indicating a relatively strong return on equity.

Outlook

The company is expecting significant disruption in the market, particularly with Cisco's new plans that will favor top partners, creating an opportunity for the company. The company is also benefiting from the disruption caused by the largest players in the market, with its fabric technology being a key differentiator. With a strong start to the year, Extreme Networks is well-positioned to continue its growth momentum.

3. NewsRoom

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Extreme Networks: Margin Expansion And SaaS Acceleration, Undervalued Alpha In AI Networking

Dec -06

Source: seekingalpha.com

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Edgestream Partners L.P. Cuts Position in Extreme Networks, Inc. $EXTR

Dec -06

Source: defenseworld.net

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Here Are Wednesday's Top Wall Street Analyst Research Calls: DoorDash, Freeport-McMoRan, GitLab, Home Depot, Medtronic, Molson-Coors, and More

Nov -19

Source: 247wallst.com

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We do AI integration better than the big guys, says Extreme Networks CEO Ed Meyercord

Nov -10

Source: youtube.com

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Extreme Networks (EXTR) Upgraded to Buy: What Does It Mean for the Stock?

Nov -04

Source: zacks.com

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72,422 Shares in Extreme Networks, Inc. $EXTR Bought by Y Intercept Hong Kong Ltd

Nov -03

Source: defenseworld.net

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Extreme Networks, Inc. (NASDAQ:EXTR) Receives Consensus Recommendation of “Moderate Buy” from Brokerages

Oct -30

Source: defenseworld.net

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Extreme Networks, Inc. (EXTR) Q1 2026 Earnings Call Transcript

Oct -29

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.16%)

6. Segments

Network Infrastructure Equipment

Expected Growth: 8%

The 8% growth of Network Infrastructure Equipment from Extreme Networks, Inc. is driven by increasing demand for cloud-based services, IoT adoption, and digital transformation. Additionally, the need for high-speed networks, cybersecurity concerns, and the growing importance of edge computing are contributing to this growth.

Service and Subscription

Expected Growth: 12%

Extreme Networks' 12% growth in Service and Subscription is driven by increasing demand for cloud-based networking solutions, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on software-driven networking and subscription-based models has led to recurring revenue growth, while its strong partnerships and customer relationships have driven upselling and cross-selling opportunities.

7. Detailed Products

ExtremeSwitching

A portfolio of Ethernet switches that provide high-performance, scalability, and reliability for data center, campus, and branch networks.

ExtremeRouting

A family of routers that provide high-performance, scalable, and secure routing for service providers, enterprises, and government agencies.

ExtremeWireless

A portfolio of Wi-Fi access points, controllers, and management software that provide high-performance, secure, and reliable wireless connectivity.

ExtremeAnalytics

A network analytics platform that provides real-time visibility, insights, and automation for network performance, security, and IoT devices.

ExtremeManagement

A network management platform that provides centralized management, monitoring, and automation for network infrastructure and services.

ExtremeSecurity

A portfolio of security solutions that provide threat detection, prevention, and response for network infrastructure and IoT devices.

8. Extreme Networks, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Extreme Networks, Inc. is medium due to the presence of alternative networking solutions from competitors such as Cisco Systems, Hewlett Packard Enterprise, and Juniper Networks.

Bargaining Power Of Customers

The bargaining power of customers for Extreme Networks, Inc. is low due to the company's strong brand reputation and the complexity of its products, making it difficult for customers to switch to alternative solutions.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Extreme Networks, Inc. is medium due to the company's dependence on a few key suppliers for components and the potential for supply chain disruptions.

Threat Of New Entrants

The threat of new entrants for Extreme Networks, Inc. is low due to the high barriers to entry in the networking industry, including the need for significant investments in research and development and the complexity of the technology.

Intensity Of Rivalry

The intensity of rivalry for Extreme Networks, Inc. is high due to the competitive nature of the networking industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 69.39%
Debt Cost 7.92%
Equity Weight 30.61%
Equity Cost 13.39%
WACC 9.59%
Leverage 226.64%

11. Quality Control: Extreme Networks, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
NETGEAR

A-Score: 4.8/10

Value: 8.0

Growth: 4.2

Quality: 3.1

Yield: 0.0

Momentum: 9.0

Volatility: 4.3

1-Year Total Return ->

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Franklin Wireless

A-Score: 4.5/10

Value: 7.8

Growth: 3.8

Quality: 3.5

Yield: 0.0

Momentum: 6.5

Volatility: 5.3

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Extreme Networks

A-Score: 4.2/10

Value: 1.8

Growth: 5.1

Quality: 5.6

Yield: 0.0

Momentum: 8.5

Volatility: 4.0

1-Year Total Return ->

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ADTRAN Holdings

A-Score: 4.1/10

Value: 5.7

Growth: 3.4

Quality: 2.4

Yield: 1.0

Momentum: 9.0

Volatility: 3.0

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Inseego

A-Score: 3.6/10

Value: 5.7

Growth: 5.7

Quality: 6.0

Yield: 0.0

Momentum: 3.0

Volatility: 1.3

1-Year Total Return ->

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AmpliTech

A-Score: 2.9/10

Value: 7.4

Growth: 1.7

Quality: 3.2

Yield: 0.0

Momentum: 5.0

Volatility: 0.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

18.15$

Current Price

18.15$

Potential

-0.00%

Expected Cash-Flows