Loading...
•
Sep 30
Extreme Networks Q1 2026 Earnings Report
Extreme Networks reported its first quarter fiscal year 2026 financial results, demonstrating continued revenue growth and strong SaaS ARR performance.
Key Takeaways
Extreme Networks delivered strong first-quarter fiscal year 2026 results, with revenue up 15.2% year-over-year to $310.2 million, marking its sixth consecutive quarter of sequential growth. SaaS ARR increased by 24.2% year-over-year to $216.2 million, highlighting momentum in its subscription model. The company achieved GAAP diluted EPS of $0.04 and non-GAAP diluted EPS of $0.22, exceeding expectations due to improved execution and prudent expense management.
Total net revenue reached $310.2 million, an increase of 15.2% year-over-year, marking the sixth consecutive quarter of sequential growth.
SaaS ARR grew by 24.2% year-over-year to $216.2 million, indicating strong adoption of its subscription model.
GAAP diluted EPS was $0.04, a significant improvement from a loss of $0.08 in the prior year, while non-GAAP diluted EPS was $0.22.
The company reported a GAAP gross margin of 60.6% and a non-GAAP gross margin of 61.3%, with non-GAAP operating margin at 13.3%.
Extreme Networks
Extreme Networks
Extreme Networks Revenue by Segment
Revenue by Segment
Product Revenue
CapyFin.comSubscription and Support Revenue
CapyFin.com Forward Guidance
For the second quarter of fiscal year 2026, Extreme Networks anticipates total net revenue between $309.0 million and $315.0 million. GAAP EPS is projected to be between $0.03 and $0.06, while non-GAAP EPS is expected to range from $0.23 to $0.25. The company also provided full-year fiscal 2026 revenue guidance of $1,247.0 million to $1,264.0 million.
Positive Outlook
- Projected re-acceleration of overall revenue growth to 10% at the midpoint for the full fiscal year 2026.
- Expected higher earnings and cash flow than initial forecasts for the full year.
- Non-GAAP EPS guidance for Q2 2026 ($0.23 - $0.25) indicates continued profitability.
- Non-GAAP operating margin for Q2 2026 is expected to be strong, ranging from 13.4% to 14.6%.
- Continued momentum with the subscription model, as indicated by strong SaaS ARR growth.
Challenges Ahead
- GAAP EPS guidance for Q2 2026 ($0.03 - $0.06) is lower than non-GAAP, reflecting ongoing adjustments.
- GAAP operating margin guidance for Q2 2026 (2.6% - 4.0%) remains significantly lower than non-GAAP.
- The company's free cash flow for Q1 2026 was a deficit of $20.9 million.
- Net cash decreased by $22.7 million from the end of Q4 2025.
- The company continues to incur significant non-GAAP adjustments, including share-based compensation, amortization of intangibles, and system transition costs.
Revenue & Expenses
Visualization of income flow from segment revenue to net income