Executive Summary
Extreme Networks reported a challenging Q4 2024 with a revenue decline versus the prior year and a net loss, but continued to show profitability resilience in gross margin and positive free cash flow. Key figures show: revenue of $256.653 million, down 29.5% year-over-year, but up 21.6% quarter-over-quarter to the strongest sequential level in the quarter; gross profit of $114.114 million yielding a gross margin of 44.46%. The company posted an operating loss of $38.939 million and a net loss of $54.203 million, reflecting a continued stretch of elevated operating expenses (R&D and SG&A) and one-off items baked into the current period. EBITDA declined to negative $34.472 million (EBITDA margin of -13.43%), while net income per share was negative $0.42. Importantly, Extreme generated $15.489 million in operating cash flow and $11.0 million of free cash flow, ending the period with $156.699 million in cash and cash equivalents. Total debt stood at $239.604 million with net debt of $82.905 million; liquidity remained tight with a current ratio of 0.902 and a cash ratio of 0.303. While the gross margin remains robust for a hardware/software hybrid model, the earnings quality remains pressured by ongoing operating losses and levered balance sheet dynamics. Sequential improvements in revenue suggest demand stabilization at the margin, but material progress toward sustained profitability will hinge on further top-line growth in cloud-enabled offerings and meaningful cost discipline. Management commentary in the provided data set is not included, limiting the ability to quote direct strategic intent or forward targets.
Key Performance Indicators
QoQ: 21.62% | YoY:-29.47%
QoQ: -2.12% | YoY:-46.78%
QoQ: 18.96% | YoY:-202.74%
QoQ: 15.87% | YoY:-313.17%
QoQ: 16.00% | YoY:-310.00%
Key Insights
Revenue performance: Q4 2024 revenue of $256.653 million, down 29.47% year over year and up 21.62% quarter over quarter (QoQ) versus Q3 2024 revenue of $211.036 million. Gross profit: $114.114 million; gross margin 44.46% (vs. prior-year margin of ~58.92% in Q4 2023). Profitability: operating income -$38.939 million; operating margin -15.17%; EBITDA -$34.472 million; EBITDA margin -13.43%; net income -$54.203 million; net margin -21.12%; earnings per share (EPS) -$0.42 (diluted). Cash flow: net ...
Financial Highlights
Revenue performance: Q4 2024 revenue of $256.653 million, down 29.47% year over year and up 21.62% quarter over quarter (QoQ) versus Q3 2024 revenue of $211.036 million. Gross profit: $114.114 million; gross margin 44.46% (vs. prior-year margin of ~58.92% in Q4 2023). Profitability: operating income -$38.939 million; operating margin -15.17%; EBITDA -$34.472 million; EBITDA margin -13.43%; net income -$54.203 million; net margin -21.12%; earnings per share (EPS) -$0.42 (diluted). Cash flow: net cash provided by operating activities $15.489 million; capital expenditures $4.489 million; free cash flow $11.0 million. Balance sheet and liquidity: cash and cash equivalents $156.699 million; total debt $239.604 million; net debt $82.905 million; total assets $1,042.594 million; total liabilities $1,017.312 million; total stockholders’ equity $25.282 million. Liquidity ratios: current ratio 0.902; quick ratio 0.630; cash ratio 0.303. Efficiency metrics show receivables turnover 2.87x, payables turnover 2.77x, inventory turnover 1.011x; asset turnover 0.246; fixed asset turnover 2.92. Valuation context: price-to-sales 6.66x; price-to-book 67.56x; price-to-earnings negative; enterprise value multiple -51.96x; dividend yield 0%.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
256.65M |
-29.47% |
21.62% |
| Gross Profit |
114.11M |
-46.78% |
-2.12% |
| Operating Income |
-38.94M |
-202.74% |
18.96% |
| Net Income |
-54.20M |
-313.17% |
15.87% |
| EPS |
-0.42 |
-310.00% |
16.00% |
Key Financial Ratios
operatingProfitMargin
-15.2%
operatingCashFlowPerShare
$0.12
freeCashFlowPerShare
$0.08
Management Commentary
Management transcripts were not provided in the data set. Consequently, there are no verbatim management quotes or theme-based highlights to summarize. If transcripts are supplied, a follow-up can include quotes grouped by themes such as strategy, operations, and market conditions with context and significance.
Forward Guidance
No explicit management guidance was disclosed in the provided QQ4 2024 data. In the absence of formal targets, the forward outlook must be inferred from the quantitative results and general market context. Near-term drivers to monitor include: (1) Cloud and software services adoption via ExtremeCloud IQ and related products to shift mix toward higher-margin software and recurring revenue; (2) cost discipline, particularly in SG&A and R&D, to improve operating leverage; (3) working capital efficiency and continued free cash flow generation; (4) progress in reducing leverage or extending maturities to improve financial flexibility. Industry dynamics in the technology and networking equipment space, including competitive intensity and macro demand for enterprise networking deployments, will be key determinants of sustained profitability and cash flow normalization.