Extreme Networks Ups the Ante With Updated Guidance for Q1
Extreme Networks preliminary first-quarter results provided a boost for its shares early Friday.
The Extreme Networks Inc. (NASDAQ: EXTR) update on where it currently stands in terms of its first-quarter financial results shares provided a boost to shares early Friday. The actual results for the quarter ended in September are due on October 28.
Management now expects to see earnings in the range of $0.05 to $0.08 per share and revenue between $233 million and $236 million for the first quarter. These forecasts come as the company saw better-than-expected results across its geographies and major market segments.
Currently, analysts are calling for earnings of $0.02 per share and $223.6 million in revenue for the quarter. This also compares to last year’s numbers of $0.08 per share and $255.5 million, respectively.
The company also said that it expects GAAP and non-GAAP gross margin to be slightly better than original guidance, while GAAP and non-GAAP operating expenses will be in line with the prior guidance.
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Extreme Networks said it has repaid $20 million of the $55 million previously drawn from its revolving credit facility on March 24, 2020. The company also maintains a $361 million term loan that matures in 2024, along with the remaining revolver balance of $35 million.
As it stands now, the company has cash and cash equivalents of $193 million, with a net debt of $203 million.
Management noted that its fiscal first-quarter outlook improved across a number of financial metrics. The better than expected performance is a result of strong bookings and customer response to its “effortless” strategy. The simplicity of the ExtremeCloud IQ platform, edge switching and Wi-Fi applications, and the end-to-end fabric technology are also creating differentiation in the market during a challenging business environment.
Extreme Networks stock traded up about 14% early Thursday at $4.69, in a 52-week range of $1.43 to $8.00. The consensus price target is $6.80.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
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