NASDAQ$EXTR

Extreme Networks Inc · Q2 2021 earnings

Q2 2021 earnings · · Investor relations

Briefing

Achieved record non-GAAP gross margin and double-digit operating profit.

Extreme Networks reported Q2 fiscal year 2021 financial results with a revenue of $242.1 million, a GAAP EPS of $(0.02), and a non-GAAP EPS of $0.13. The company achieved record non-GAAP gross margins and double-digit operating margin two quarters ahead of prior expectations.

  • Revenue $242.1 million, down 9% year-over-year and up 3% quarter-over-quarter
  • GAAP EPS $(0.02), up from ($0.20) in Q2 last year
  • Non-GAAP EPS $0.13, up from $0.11 in Q2 last year
  • Non-GAAP operating margin 10.2%, compared to 9.0% in Q2 last year

Headline financials

Total Revenue

$242M

Previous: $267M-9.5%
EPS (adj)

$0.13

Previous: $0.13+0.0%
GAAP Gross Margin

57.9%

Previous: 55.6%+4.1%
Non-GAAP Gross Margin

61.0%

Previous: 60.0%+1.7%
GAAP Operating Margin

2.4%

Previous: -5.7%+142.1%
Non-GAAP Operating Margin

10.2%

Previous: 9.0%+13.3%
Capital Expenditures

-$8.04M

Previous: -$9.44M+14.8%
Free Cash Flow

-$11.1M

Previous: -$33M+66.4%
Net Income

-$3.05M

Previous: -$23.5M+87.0%
Operating Income

$5.71M

Previous: -$15.2M+137.5%
Gross Profit

$140M

Previous: $149M-5.7%
Cash & Equivalents

$184M

Previous: $140M+31.0%
Total Assets

$946M

Previous: $1.01B-6.8%
Stock-Based Comp

$10.1M

Previous: $11M-7.9%

Revenue & EPS history

Extreme Networks · Revenue · Quarterly

$242M

Q2 2021-9.5%vs Q2 2020
Beat estimate in 12 of 16 quarters(75%)
ActualEstimate

Revenue by segment

Extreme Networks · $166M total across 1 segment · Q2 2021

  • Product
    $166M-12.9%

Forward guidance

Extreme reiterates the Q3 business outlook initially provided on January 27, 2021.

Tailwinds

  • Total Net Revenue between $240.0 and $250.0 million (GAAP and Non-GAAP)
  • GAAP Gross Margin between 58.4% and 59.5%
  • Non-GAAP Gross Margin between 61.5% and 62.5%
  • GAAP Operating Margin between 1.1% and 3.7%
  • Non-GAAP Operating Margin between 9.0% and 11.3%

Headwinds

  • GAAP Operating Expenses between $137.6 and $139.6 million
  • Non-GAAP Operating Expenses between $126.0 and $128.0 million
  • GAAP Net Income (loss) between $(5.5) and $1.1 million
  • GAAP Net Income (loss) per diluted share between $(0.04) and $0.01
  • Shares outstanding used in calculating GAAP EPS : 124.7 - 126.6 million

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2021

Historical avgQ2 2021

+0.2%

Avg return

Earnings day

-0.7%

Avg return

5 days after

+3.9%

Avg return

30 days after

61%

39 / 64 earnings

Positive

+28.2%

Q3 2026

Best reaction

-30.4%

Q4 2018

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q3 2026+28.2%+33.9%+55.5%
Q2 2026+2.4%-0.9%-6.9%
Q1 2026-15.4%-11.7%-17.7%
Q3 2025+4.9%+7.8%+19.1%
Q2 2025-3.0%-6.3%-4.9%
Q1 2025+5.0%+6.9%+16.7%
Q4 2024+3.6%+2.7%+5.8%
Q3 2024+2.0%-2.1%-0.4%
Q2 2024-20.6%-25.9%-25.1%
Q1 2024-17.1%-17.6%-20.6%
Q4 2023+6.6%+9.6%-2.5%
Q3 2023+8.4%+10.8%+19.4%
Q2 2023-9.0%-9.4%-2.4%
Q1 2023+13.8%+16.4%+29.4%
Q4 2022+17.4%+16.7%+28.6%
Q3 2022-13.0%-12.1%-10.9%
Q2 2022-1.9%+1.5%-2.5%
Q1 2022+15.5%+11.5%+30.6%
Q4 2021+14.7%+13.5%+12.6%
Q3 2021+16.8%+10.3%+11.3%
Q2 2021+1.7%-3.6%-6.6%
Q1 2021-5.1%-16.3%+22.0%
Q4 2020+4.6%+1.3%-14.5%
Q3 2020-1.5%-13.9%+36.8%
Q2 2020-15.8%-19.3%-30.7%
Q1 2020-14.9%-13.6%-7.1%
Q4 2019+13.7%+10.2%-9.2%
Q3 2019-20.1%-17.0%-29.6%
Q2 2019+9.0%+7.7%+21.1%
Q1 2019+14.7%+11.6%+12.1%
Q4 2018-30.4%-29.1%-33.1%
Q3 2018-23.5%-26.7%-24.3%
Q2 2018-13.5%-21.8%-8.1%
Q1 2018+0.6%-4.7%+10.1%
Q4 2017+20.4%+23.8%+30.7%
Q3 2017+11.1%+19.7%+33.2%
Q2 2017+0.0%+0.9%+11.2%
Q1 2017+2.9%+2.4%+1.9%
Q4 2016+0.8%+4.2%+1.3%
Q3 2016+5.7%
Q2 2016-29.6%
Q1 2016+1.4%
Q4 2015+21.5%
Q3 2015-0.8%
Q2 2015+12.6%
Q1 2015+15.2%
Q4 2014-0.8%
Q3 2014-29.0%
Q2 2014-16.3%
Q1 2014+12.0%
Q4 2013-4.8%
Q3 2013-4.6%
Q2 2013+0.8%
Q1 2013+8.0%
Q4 2012+0.3%
Q3 2011-0.8%
Q3 2012+0.3%
Q2 2011+2.2%
Q2 2012+0.9%
Q1 2012+2.4%
Q1 2011+2.4%
Q4 2011+2.4%
Q4 2010-2.3%
Q3 2010+0.3%

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