Executive Summary
Extreme Networks reported QQ1 2026 revenue of $310.245 million, delivering a solid gross margin of 60.61% and a positive operating income of $11.3 million. Net income rose to $5.61 million with basic earnings per share of $0.04, underscoring continued profitability in a software-enabled networking environment. The quarter also highlighted a favorable YoY growth trajectory (revenue up 15.25% YoY) and a QoQ acceleration in operating metrics (QoQ revenue up 1.06%, EBITDA margin ~5.45%). Despite these top-line and margin signals, the company generated negative free cash flow of approximately $14.0 million driven by working capital movements and sizable stock-based compensation, with cash at period end of $209.0 million and a net cash position (net debt) of about -$125.5 million. Balance sheet remains asset-light with meaningful goodwill and a lean equity base, signaling a strong liquidity runway but potential impairment and capitalization considerations if operating momentum falters.
Key Performance Indicators
QoQ: 920.86% | YoY:339.45%
QoQ: 171.91% | YoY:153.42%
QoQ: 168.03% | YoY:149.94%
Key Insights
Revenue: $310.245M, YoY +15.25%, QoQ +1.06%; Gross Profit: $188.029M, gross margin 60.61%, YoY +10.93%, QoQ -0.56%; Operating Income: $11.295M, margin 3.64%, YoY +339.45%, QoQ +920.86%; Net Income: $5.611M, margin 1.81%, YoY +153.42%, QoQ +171.91%; EPS: $0.04, YoY +149.94%, QoQ +168.03%; EBITDA: $16.915M, EBITDA margin 5.45%; Cash Flow: Net cash from operating activities -$13.999M; Free Cash Flow -$13.999M; Cash at end of period: $209.003M; Total debt: $83.49M; Net debt: -$125.513M; Current rati...
Financial Highlights
Revenue: $310.245M, YoY +15.25%, QoQ +1.06%; Gross Profit: $188.029M, gross margin 60.61%, YoY +10.93%, QoQ -0.56%; Operating Income: $11.295M, margin 3.64%, YoY +339.45%, QoQ +920.86%; Net Income: $5.611M, margin 1.81%, YoY +153.42%, QoQ +171.91%; EPS: $0.04, YoY +149.94%, QoQ +168.03%; EBITDA: $16.915M, EBITDA margin 5.45%; Cash Flow: Net cash from operating activities -$13.999M; Free Cash Flow -$13.999M; Cash at end of period: $209.003M; Total debt: $83.49M; Net debt: -$125.513M; Current ratio: ~0.91; Quick ratio: ~0.75; Total assets: $1.153B; Total liabilities: $1.084B; Total stockholders’ equity: $68.563M; Goodwill: $399.63M; Retained earnings: -$943.818M.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
310.25M |
15.25% |
1.06% |
| Gross Profit |
188.03M |
10.93% |
-0.56% |
| Operating Income |
11.30M |
339.45% |
920.86% |
| Net Income |
5.61M |
153.42% |
171.91% |
| EPS |
0.04 |
149.94% |
168.03% |
Management Commentary
No earnings-call transcript was provided in the data set. Consequently, management quotes and thematic highlights from the call are not available. The analysis relies on the disclosed financials and the implied strategic positioning in Extreme’s software-driven networking strategy.
Forward Guidance
Forward guidance is not explicitly provided in the QQ1 2026 results package. Based on the mix of top-line growth, stable gross margins, and investment in software-enabled networking (notably ExtremeCloud IQ), the outlook hinges on: (1) continued monetization of cloud-based management solutions and recurring software revenues, (2) resilience of enterprise and service-provider demand for wired/wireless infrastructure, and (3) the pace of operating-expense discipline to drive margin expansion. Risks include intensified competition, hardware cycle sensitivity, and the potential for goodwill impairment given the large goodwill balance relative to equity. Investors should monitor: software revenue growth and mix, customer win-rate in core markets (education, healthcare, manufacturing, government), operating expense trajectory (R&D and SG&A), and the company’s ability to convert gross profit into sustainable free cash flow.