EXTREME NETWORKS INC Q3 FY2025 earnings call

• Revenue grew 35% year-over-year, with strong performance in Americas and EMEA. - Had four consecutive quarters of sequential revenue growth and achieved the best product bookings quarter in six quarters. - Notable wins against major players in various verticals including government, transportation, manufacturing, etc. - Extreme Platform ONE with holistic AI for networking driving automation and gaining momentum. - Added 11 new partners to the MSP program, offering consumption-based billing and Platform One for MSPs. - Q3 funnel generation and pipeline growth indicate sustained customer demand.

Revenue in the quarter reached $284.5 million, representing a 35% year-over-year increase. Product revenue was $178.1 million, up 3% quarter over quarter and 67% year-over-year. Wireless solutions showed particular strength, growing 12% sequentially. Subscription and support revenue was $106.4 million. The Americas region grew 19% year-over-year, EMEA revenue grew 81% year-over-year, while APAC revenue was flat but bookings were up double digits. This was the best bookings quarter in the past six quarters, with product bookings growing high single digits similar to long-term range.

• Improved full-year guidance for fiscal 2025 with revenue range of $1.128 billion to $1.138 billion. - Fourth quarter revenue expected to be in the range of $295 million to $305 million, gross margin 61.8% to 62.8%, operating margin 13.3% to 15.3%, and EPS $0.21 to $0.25. - Board authorized an additional $200 million of share buybacks for the next three years starting in fiscal 2026.

• Tariff situation is dynamic with potential impact on costs and demand. - Competitive landscape with changes in competitors like HPE and Juniper affecting market share.

Q: David Vogt asked about tariff impact and feedback from customers.

A: Ed Meyercord said tariffs are dynamic, with minimal impact so far, potential early buying, and waiting for July finality. Kevin Rhodes added about baking tariff impact into guidance and levers to offset.

Q: Michael Genovese asked about competitive trends.

A: Ed Meyercord mentioned HPE struggling, Juniper aggressive in pricing, Cisco focused on other areas, and changes in partner programs benefiting Extreme.

Q: Christian Schwab asked about competitive advantage and Wi-Fi 7.

A: Ed Meyercord talked about Fabric technology as a key differentiator, and Wi-Fi 7 adoption progressing as planned.

Q: Ryan Koontz asked about regional and Platform ONE traction.

A: Ed Meyercord discussed regional trends like Germany's resurgence and Platform ONE early traction across geos.

Q: Dave Kang asked about tariffs, manufacturing, and federal business.

A: Kevin Rhodes addressed tariff impact, manufacturing without US facilities, and federal business as a growth opportunity with certifications.

Q: Eric Martinuzzi asked about inventory and OpEx.

A: Ed Meyercord talked about inventory normalization and Kevin Rhodes explained OpEx increase due to events and commissions.

Q: Tim Horan asked about data center business and productivity.

A: Ed Meyercord and Kevin Rhodes discussed data center business range and productivity gains from larger deals and partner programs.