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Extreme Networks Q1 Tops Forecasts

November 12, 2021

Extreme Networks released financial results for its first fiscal quarter ended September 30, 2021.

The firm delivered a Q1 sales pop of 14% year over year, coming in at $268 million. Earnings grew from $0.09 to $0.21 per diluted share. Wall Street was only expecting earnings of $0.16 per share on revenue of $257 million.

The networker had order bookings growth of 45% which was up from 36%. Extreme is looking for Q2 revenues in the range of $265 million to $280 million, while net income is expected to dip to $11.9 million on the high end.

"It was a very strong first quarter, characterized by unprecedented bookings. We strengthened our number two position in cloud networking, the fastest growing segment of the industry. Customer interest in our solutions resulted in a doubling of our backlog to over $200 million. We exceeded our quarterly revenue outlook despite significant supply chain challenges that our industry is facing," stated Ed Meyercord, President and CEO of Extreme.

"Our SaaS subscription bookings grew 71% during the quarter. This is a testament to the demand for our highly differentiated cloud-driven networking solutions. Our continued success is directly linked to delivering on our Infinite Enterprise vision to reduce the complexity of running increasingly distributed networks at scale. The recently acquired Ipanema business brings game-changing SD-WAN capabilities to our portfolio, and further expands on this vision while strengthening our competitive position," concluded Meyercord.

"Extreme enjoyed another quarter of strong financial performance. On a year-over-year basis, we achieved double-digit revenue growth for the third consecutive quarter, improved our non-GAAP operating margin by more than 5-percentage points to 13.8%, the highest level in the company's history, and increased our free cash flow by 70%. In Q2, we expect expedite fees and freight costs to peak, partially offset by the benefits of our recent list price increases. We plan to manage through the current environment and start reducing our backlog currently at historical levels in the second half of fiscal year 2022. We are confident we can deliver double-digit organic revenue growth in FY22, above our previous guidance of 5% to 9%, with 10 to 15% non-GAAP operating margins," concluded Remi Thomas, Chief Financial Officer.

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