Extreme Networks Reports Third Quarter 2015 Financial Results 

Extreme Networks, Inc. today released financial results for the third quarter of fiscal year 2015, ended March 31, 2015.  GAAP revenue was $119.6 million and non-GAAP revenue was $120.4 million.  GAAP net loss for the third fiscal quarter was $23.5 million, or $0.24 per share, and non-GAAP net loss was $7.9 million, or $0.08 per share.

“Our third fiscal quarter was clearly disappointing as we saw weakness from certain higher education and venue customers as well as deferred sales in Europe due to the strong U.S. dollar,” stated Ed Meyercord, president and CEO of Extreme Networks.  “Although we see normal seasonality in fiscal Q4, the prevailing headwinds are hindering a quick rebound.  As we look out to fiscal 2016, we are encouraged by the E-Rate filings numbers, however until the schools and districts receive final approval and schedule installation, it is difficult to quantify the timing and impact to our business,” Meyercord continued.  “That said, our intention is to adopt a focused strategy that builds on our strengths and competitive position in growth sectors of our industry and is closely aligned with our structure.”

Recent Key Events

• Extreme Networks appoints Board Chairman Ed Meyercord as its President and Chief Executive Officer effective April 19, 2015.
• Extreme extends strategic leadership and experience to R&D with the promotion of Eric Broockman to CTO and executive vice president of engineering adding to his current responsibility as CTO, a role he has served the past 14 months. Broockman holds numerous U.S. patents, is an active inventor, and was a National Science Foundation Fellow.
• Extreme strengthens management team with three new executive appointments, announcing the promotions of Bob Gault as executive vice president worldwide sales, channel and services, Eileen Brooker as executive vice president of global alliances and strategic accounts, and Norman Rice as executive vice president of global marketing and corporate development. These executives have demonstrated an unwavering commitment to customers and a passion for the highest levels of service in the networking industry throughout their careers.
• Extreme Networks wins Network Computing’s new product of the year award for Purview Application Analytics. Readers voted Extreme Networks’ Purview as the best new-to-market product, highlighting its differentiated capabilities that help transform the network into a strategic business asset. Purview has been deployed by a wide variety of organizations including large universities, government agencies, healthcare organizations, and stadiums.
• Extreme Networks announces No Compromise Wi-Fi package for Aruba and HP customers delivering unprecedented value and a strong and stable alternative with proven and long-standing wired and wireless integration, application analytics, advanced policy administration and over the air security that is managed from a single interface.
• Extreme Networks awarded 5-star rating in CRN’s 2015 Partner Program Guide. This annual directory is the definitive listing of technology vendors that solution providers rely on to deliver products through the IT channel. The 5-Star Partner Program rating recognizes an elite subset of companies that offer solution providers the best partnering elements in their channel programs.
• Extreme Networks’ Bob Gault honored as 2015 Channel Chief and as one of CRN’s 50 Most Influential Leaders. Mr. Gault has been named to the prestigious list of the 2015 CRN Channel Chiefs as well as earning the distinction as one of the 50 Most Influential Leaders. The two honors recognize top channel executives who have demonstrated leadership and accomplishments on behalf of their partners.

Business Outlook

For its fourth quarter of fiscal 2015 ending June 30, 2015, the Company is targeting GAAP revenue in a range of $124.2 million to $134.2 million with non-GAAP revenue in a range of $125 million to $135 million. GAAP gross margin is targeted between 49.0% and 50.5% and non-GAAP gross margin targeted between 53.5% and 54.5%. Operating expenses are targeted to be between $77.5 million and $80.5 million on a GAAP basis and $69.0 million to $72.0 million on a non-GAAP basis. GAAP net loss is targeted to be between $14.5 million to $18.5 million, or $0.15 to $0.19 per share.  Non-GAAP earnings are targeted in a range of a net loss of $4.0 million to break even, or a loss of $0.04 to net income of $0.00 per share. The GAAP and non-GAAP net (loss) income targets are based on an estimated 100 million average outstanding shares. Targeted non-GAAP earnings exclude expenses related to stock-based compensation expense, the amortization of acquired intangibles, acquisition and integration related expenses, restructuring expenses and the purchase accounting adjustment related to deferred service revenue.