Executive Summary
Extreme Networks delivered a strong QQ1 2026 showing sustained top-line momentum and early-stage execution of several strategic initiatives designed to lift longer-term revenue quality and margins. Revenue rose 15% YoY to $310.25 million, marking the sixth straight quarter of growth and the third consecutive quarter with double-digit YoY gains. Product revenue grew 20% YoY to $194 million, while recurring revenue reached $116 million (up 9% YoY), reflecting a diversified mix with SaaS ARR up 24% YoY to $216 million. Management highlighted the rapid adoption and market reception of Platform ONE, now GA, including an AI-enabled service agent and cloud-native capabilities that are expected to drive higher attach rates and recurring revenue. Management guided for the second quarter of FY26 to generate $309–$315 million in revenue with gross margin of approximately 61.4–62%, and operating margin of 13.4–14.6%, implying a continued path to margin recovery alongside price actions and mix shift toward higher-margin software and services. The full-year revenue guide was revised to a midpoint around $1.255 billion (roughly 10% YoY growth) with SaaS ARR growth targeted in the low-20% range and recurring revenue at about 35% of total revenue. Balance sheet remains cash-generative with a net cash position, cash of $209 million and clean back-half cash flow expectations as the company scales Platform ONE, MSPs, and government deployments. These dynamics, together with large enterprise wins and a robust bookings trajectory (21% YoY in QQ1), position Extreme to meaningfully accelerate growth into fiscal 2026 and beyond, though margins face near-term headwinds from higher component costs that the company intends to offset via price increases and supply-chain actions.
Key Performance Indicators
QoQ: 62.26% | YoY:110.35%
QoQ: 1 279.31% | YoY:109.52%
Key Insights
Revenue: $310.245M (+15% YoY) | Gross profit: $188.029M (gross margin 60.61% GAAP) | Non-GAAP gross margin: 61.3% | Operating income: $11.295M (GAAP) | Operating margin: 3.64% | EBITDA (non-GAAP): $45M | Net income: $5.611M | EPS: $0.04 | Weighted avg diluted shares: 135.071M | SaaS ARR: $216M (+24% YoY) | Total recurring revenue: $116M (+9% YoY) | Deferred revenue: SaaS $327M; total deferred revenue $618M | Bookings: +21% YoY | Platform ONE GA: first-quarter availability; MSP count: 61; >$1M...
Financial Highlights
Revenue: $310.245M (+15% YoY) | Gross profit: $188.029M (gross margin 60.61% GAAP) | Non-GAAP gross margin: 61.3% | Operating income: $11.295M (GAAP) | Operating margin: 3.64% | EBITDA (non-GAAP): $45M | Net income: $5.611M | EPS: $0.04 | Weighted avg diluted shares: 135.071M | SaaS ARR: $216M (+24% YoY) | Total recurring revenue: $116M (+9% YoY) | Deferred revenue: SaaS $327M; total deferred revenue $618M | Bookings: +21% YoY | Platform ONE GA: first-quarter availability; MSP count: 61; >$1M customers: 36 | Cash: $209M; net cash position; Cash conversion cycle: 60 days (from 81 days)
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
310.25M |
20.88% |
9.05% |
| Gross Profit |
188.03M |
64.77% |
7.19% |
| Operating Income |
11.30M |
129.01% |
8.85% |
| Net Income |
5.61M |
110.35% |
62.26% |
| EPS |
0.04 |
109.52% |
1 279.31% |
Management Commentary
- Strategy: Platform ONE is GA and early adoption exceeded expectations; AI-driven automation with the service agent is designed to cut routine tasks from hours to minutes and enable multi-vendor visibility via a single interface. Ed Meyercord emphasized: “Extreme Platform ONE, which became generally available in the first quarter, is earning positive customer feedback for AI-powered automation that cuts routine IT tasks from hours to minutes.”
- Operations/Execution: The quarter marked Extreme’s sixth consecutive revenue-growth quarter with 21% YoY bookings growth, driven by large enterprise and government wins, plus a ramp in the MSP channel. Kevin Rhodes noted: “Bookings in the quarter grew 21% year-over-year, reflecting strong customer demand across our portfolio.”
- Market Conditions/Competitive Positioning: Management cited channel disruption among large incumbents (Cisco, HPE/Juniper) as creating opportunities for Extreme, especially with cloud-flexible deployments and sovereignty considerations. Ed highlighted: “There’s a lot of disruption right now with the largest players that have 75% of the market that are causing people to take a look at Extreme.”
- Financial Flexibility/Capital Deployment: The company deployed $12M to repurchase 577k shares during the quarter and ended with a strong cash position, while improving the cash conversion cycle to 60 days. Ed reiterated the strategic focus on disciplined margin recovery and higher-margin software/services mix through Platform ONE.
"Revenue reached $310 million, up 15% year-over-year, driven by competitive wins with large customers across all verticals."
— Edward Meyercord
"Bookings in the quarter grew 21% year-over-year, reflecting strong customer demand across our portfolio."
— Kevin Rhodes
Forward Guidance
Near-term guidance reflects continued margin normalization alongside sustainable revenue growth. For Q2 FY26, Extreme guides revenue of $309–$315 million, non-GAAP gross margin of 61.4–62%, and operating margin of 13.4–14.6%, with fully diluted shares around 136 million and EPS of $0.23–$0.25. For the full year FY26, management projects $1.247–$1.264 billion in revenue, implying ~10% YoY growth, with SaaS ARR growth targeted in the low-20% range and recurring revenue around 35% of total revenue. The plan hinges on continued Platform ONE adoption, MSP-related revenue, and government/enterprise wins, balanced against commodity-cost-driven gross-margin pressures. Key factors investors should monitor include: (1) Platform ONE adoption metrics and migration to the new platform, (2) the progression of MSP partnerships and renewals, (3) the pace of price increases to offset higher component costs, (4) government and international opportunities in APAC/EMEA, and (5) the trajectory of gross margins back toward the 64–66% long-term target as Platform ONE-related services scale.