Shares in Extreme Networks Inc. rose today after the networking company reported beats in earnings and revenue in its fiscal third quarter and upped its outlook.
For the quarter that ended March 31, Extreme Networks reported earnings before costs such as stock compensation of 29 cents per share, up from 21 cents in the same quarter of last and 27 cents in the previous quarter. Revenue rose 16% from a year ago, to $332.5 billion. Analysts had expected adjusted earnings of 26 cents per share on revenue of $320.08 million.
Extreme Networks saw strong growth across the board, with product revenue growing 22% year-over-year, to $241.1 million, and service and subscription revenue up 5%, to $91.4 million. The company’s software-as-a-service annual recurring revenue rose 22%, to $117 million.
Adjusted net income in the quarter came in at $38.8 million, with free cash flow of $45.8 million. Extreme Networks also repurchased 1.35 million shares in the quarter, costing $25 million.
Highlights in the quarter included the company integrating its network fabric capabilities into the ExtremeCloud SD-WAN in February, allowing customers to extend the network fabric securely across the end-to-end network, including data centers, campus network and branch locations. The extended service is claimed to help customers lower operating costs, automate information technology workflows for efficiency and improve application performance across their organizations.
New customers and deployments in the quarter included SK IE Technology Co. Ltd., Kingston University, Catawba College, Cedar Fair Entertainment Company, Dr. Sulaiman Al Habib Medical Services Group and Oracle Park, the home of the San Francisco Giants sports team.
“The combination of our enterprise cloud and fabric networking solutions delivers a simplified experience for customers and provides our team a competitive advantage in the field,” Ed Meyercord, president and chief executive officer of Extreme Networks, said in the earnings release. “Our funnel of opportunities is up double digits and we expect higher sequential bookings growth as we head into Q4.”
In the quarter ahead, Extreme Networks said it expects adjusted earnings of 28 to 34 cents per share on revenue of $340 million to $350 million.
Investors liked the figures, and Extreme Networks stock rose almost 4% in regular trading to close the day at $16.32 per share.
Photo: Extreme Networks
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