Key Highlights

  • EXTR shares are indicated up 5.87% at $25.25 in premarket, against a prior close of $23.85.
  • Q1 revenue of $341.1 million rose 10%, and non-GAAP EPS of $0.33 beat the $0.28 consensus.
  • Fiscal 2027 revenue guidance was raised to $1.402 billion to $1.412 billion.
  • Fiscal 2027 EPS guidance rose to $1.35 to $1.39 from $1.28 to $1.33.
  • Platform ONE now accounts for over half of subscription bookings.

Extreme Networks (NASDAQ:EXTR) shares are indicated up 5.87% at $25.25 in premarket after a fiscal first-quarter beat and a higher full-year outlook. Revenue of $341.1 million rose 10%, above the $336.8 million estimate and above the high end of guidance, and non-GAAP EPS of $0.33 topped the $0.28 consensus. Shares closed Tuesday at $23.85, up 5.07%.

Extreme, headquartered in Morrisville, North Carolina, designs AI-powered, cloud-managed wired and wireless networking infrastructure, including ExtremeCloud IQ, Extreme Platform ONE, Wi-Fi 7 access points, switching, security, analytics and SD-WAN. It sells to enterprise and service provider customers in healthcare, education, government, manufacturing, retail and hospitality, and is led by CEO Edward Meyercord.

Margins Widen and Cash Turns Positive

Product revenue rose 12% to $218 million, and recurring revenue rose 7% to $119 million, the seventh consecutive quarter of double-digit growth in revenue and product revenue. Non-GAAP EPS was up 50% from a year earlier. Gross margin was 62.6%, up 130 basis points, and operating margin was 17.4%, up 410 basis points. Adjusted EBITDA was $66 million, a 19.2% margin.

Free cash flow was $39 million, and cash ended at $245 million with $45 million of net cash. The company repurchased $25 million of shares.

Higher Outlook for the Year

Management raised fiscal 2027 revenue guidance to $1.402 billion to $1.412 billion and adjusted EPS guidance to $1.35 to $1.39. Second-quarter revenue is guided to $345.8 million to $350.8 million. Growth of about 10% is expected for both the second quarter and the full year, and SaaS ARR growth is expected to exceed 20% for the rest of the year.

SaaS ARR rose 22% to about $265 million. Management expects recurring revenue to re-accelerate sharply in fiscal 2028 after fiscal 2027 serves as the transition year for legacy support contracts moving to Platform ONE.

Platform ONE and AI Momentum

Platform ONE now accounts for over half of subscription bookings, and 44 customers booked over $1 million, up from 36 a year ago. The company cited competitor disruption, Wi-Fi refresh cycles and secured component supply through 2027 as growth drivers, and said it is planning the Agent ONE Operator mode and Extreme Exchange Zones for 2027. Its managed service provider program grew to 85 active MSPs.

The company also disclosed a non-prosecution settlement of about $976,000 with the Department of Justice, a small amount. Analyst consensus is Moderate Buy, and the 52-week range runs from $13.48 to $33.73. The tech sector ETF is up about 0.6% in premarket.