Executive Summary
Extreme Networks posted QQ1 2025 revenue of $269.2 million, down 23.8% year-over-year, with a gross margin near 62.97%. The quarter produced an operating loss of $4.72 million and a net loss of $10.50 million, or -3.90% net margin, reflecting ongoing investment and mix shift toward software-enabled solutions. EBITDA was $0.49 million, and free cash flow reached $11.67 million, underscoring meaningful cash generation despite profitability headwinds.
The balance sheet shows prudent liquidity but a leveraged capital structure, with cash of $159.5 million and net debt of $76.6 million. Total liabilities eclipsed $1.02 billion against $1.06 billion in assets, and stockholders’ equity sits at roughly $32.7 million with substantial accumulated deficit. Deferred revenue remains large (current $304.8 million and non-current $272.1 million), signaling substantial future revenue recognition tied to subscription/managed services, even as near-term profitability remains challenged. The company’s operating and liquidity profile suggests resilience in cash generation, but profitability and leverage pose meaningful risk in a competitive, technology-driven market.
Looking ahead, management commentary (not captured in the provided dataset) typically emphasizes cloud-managed networking adoption, product mix shifts toward software and services, and cost discipline. Absent explicit forward guidance in the data, investors should monitor cloud ARR growth, gross margin stabilization, operating expense control, and the evolution of deferred revenue as indicators of medium-term profitability improvement.
Key Performance Indicators
QoQ: 48.54% | YoY:-20.40%
QoQ: 87.89% | YoY:-113.14%
QoQ: 80.62% | YoY:-136.63%
QoQ: 80.93% | YoY:-136.41%
Key Insights
Revenue: $269.204 million in QQ1 2025; YoY change: -23.77%; QoQ change: +4.89%. Gross Profit: $169.507 million; Gross Margin: 62.97%; YoY gross profit decline: -20.40%; QoQ: +48.54%. Operating Income: -$4.717 million; Operating Margin: -1.75% (approx -0.0175). Net Income: -$10.504 million; Net Margin: -3.90% (approx -0.0390). EBITDA: $0.485 million; EBITDA Margin: ~0.18%. EPS (diluted): -$0.080; DPS: N/A. Cash Flow: Operating cash flow $18.585 million; Capex $6.916 million; Free cash flow $11.66...
Financial Highlights
Revenue: $269.204 million in QQ1 2025; YoY change: -23.77%; QoQ change: +4.89%. Gross Profit: $169.507 million; Gross Margin: 62.97%; YoY gross profit decline: -20.40%; QoQ: +48.54%. Operating Income: -$4.717 million; Operating Margin: -1.75% (approx -0.0175). Net Income: -$10.504 million; Net Margin: -3.90% (approx -0.0390). EBITDA: $0.485 million; EBITDA Margin: ~0.18%. EPS (diluted): -$0.080; DPS: N/A. Cash Flow: Operating cash flow $18.585 million; Capex $6.916 million; Free cash flow $11.669 million. Balance Sheet Highlights: Cash & equivalents $159.546 million; Total assets $1.0565 billion; Total liabilities $1.0238 billion; Total stockholders’ equity $32.7 million; Deferred revenue (current) $304.785 million; Deferred revenue (non-current) $272.092 million; Net debt $76.556 million. Liquidity: Current ratio 0.906; Quick ratio 0.633; Cash ratio 0.303. Leverage: Debt to capitalization ~0.857; Long-term debt to capitalization ~0.842; Interest coverage negative. Key efficiency: DSO 32.5 days; Inventory days 128.9; Payables days 59.1; CCC ~161 days. Valuation Multiples (as of QQ1 2025): P/S 7.33; P/B 60.33; P/FCF 143.78; EV/EBITDA 338.83; P/E negative. Note: Peer comparison data not provided in the dataset.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
269.20M |
-23.77% |
4.89% |
| Gross Profit |
169.51M |
-20.40% |
48.54% |
| Operating Income |
-4.72M |
-113.14% |
87.89% |
| Net Income |
-10.50M |
-136.63% |
80.62% |
| EPS |
-0.08 |
-136.41% |
80.93% |
Key Financial Ratios
operatingProfitMargin
-1.28%
operatingCashFlowPerShare
$0.16
freeCashFlowPerShare
$0.11
priceEarningsRatio
-46.99
Management Commentary
No earnings call transcript data provided for QQ1 2025 in the supplied dataset. Consequently, no management quotes or thematic highlights from the call can be drawn from the available information.
No transcript quotes available in the provided dataset.
— N/A
No transcript quotes available in the provided dataset.
— N/A
Forward Guidance
Explicit management guidance for QQ1 2025 is not included in the provided data. Given the mixed signal of stable gross margins amid a YoY revenue decline and ongoing investments in software-defined networking and cloud management, the near-term outlook will likely hinge on: (1) monetization of ExtremeCloud IQ and related software/services, (2) stabilization or growth in software and subscription revenue mix, (3) disciplined operating expense management to improve operating margins, and (4) the trajectory of deferred revenue recognition to reflect durable customer relationships. Investors should monitor quarterly ARR and renewal rates, gross margin progression as software contributes more meaningfully, and the pace of capital expenditure versus cash generation. Risk factors include competitive intensity, price pressure from larger players, and macro headwinds affecting IT spending cycles.