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Extreme Networks Reports Fourth Quarter and Fiscal Year 2016 Financial Results
Posted: Thu Aug 04, 2016 10:22:12 AM
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SAN JOSE, Calif., Aug. 3, 2016 /PRNewswire/ -- Extreme Networks, Inc. (Nasdaq: EXTR) today released financial results for its fiscal fourth quarter ended June 30, 2016. Fourth quarter GAAP revenue was $139.6 million and non-GAAP revenue was $140.0 million. GAAP net loss for the fourth fiscal quarter was $2.3 million, or $0.02 per basic share, and non-GAAP net income was $10.2 million, or $0.10 per diluted share. For the full fiscal year 2016, Extreme Networks reported GAAP revenue of $528.4 million, compared to $552.9 million for fiscal 2015. Fiscal year 2016 non-GAAP revenue was $529.9 million compared to $556.0 million in fiscal 2015. GAAP net loss was $31.9 million, or $0.31 per share, for fiscal 2016, compared to GAAP net loss of $71.6 million, or $0.72 per share, for fiscal 2015. On a non-GAAP basis, net income for fiscal 2016 was $29.4 million, or $0.28 per diluted share, compared to $5.9 million, or $0.06 per diluted share, for fiscal 2015.

"Our results reflect solid execution and significant earnings growth compared to the prior year period. Success in delivering software-driven networking solutions to our enterprise customers, combined with prudent expense controls, produced a significant annual improvement of 400% to our bottom line on a non-GAAP basis and a healthy balance sheet," stated Ed Meyercord, President and CEO of Extreme Networks.

"The line-up of new technology solutions like our enhanced wireless cloud management platform released last week is generating excitement with our field sales teams, partners and customers alike. With a strict focus on our enterprise campus vertical markets, our tailored portfolio of wired and wireless products, custom software solutions and superior in-sourced technical support, we believe we are in a strong position heading into fiscal 2017. We have the most competitive solutions for managing the enterprise campus from access edge to the private cloud."

Recent Key Events:

  • Strengthened the Executive Leadership Team. We announced the appointment of Drew Davies to Executive Vice President and Chief Financial Officer effective June 1st.
  • Unveiled Cloud-Managed Networking Platform. During the quarter, we introduced ExtremeCloud™, a cloud-managed networking platform, designed for zero-touch provisioning, management simplicity and partner enablement through white labeling of the offering.
  • Strategic Relationship with the Buffalo Sabres. To implement an arena-wide Wi-Fi solution for the 2016 NHL Draft and upcoming hockey season, the Buffalo Sabres partnered with Extreme to deliver pervasive and secure high-density Wi-Fi in the First Niagara Center. Extreme Networks and partner Carousel Industries have now implemented two large scale venue Wi-Fi deployments in Buffalo, N.Y. at Ralph Wilson Stadium and First Niagara Center.
  • Highlighted Our Customer Success with Concurrency. To support BYOD and improve network security and performance among its three locations, Concurrency, an IT consulting agency, selected Extreme's software-driven wired and wireless solutions.
  • Key Customer Wins in Focus Markets. Extreme Networks continued to showcase customer momentum across the global education, healthcare, manufacturing, hospitality and government markets. Customers continue to note Extreme's software and services as value added differentiators for choosing our solutions. Notable customer wins in key vertical markets include the University of Wisconsin, Charleston Area Medical Center, Leder & Schuh AG, SJM Casino, and the State of North Dakota.

Business Outlook:

Extreme Networks' Business Outlook is based on current expectations. The following statements are forward-looking, and actual results could differ materially based on market conditions and the factors set forth under "Forward-Looking Statements" below.

On an annual basis for fiscal year 2017 we are targeting revenue growth of 2% to 4%. For its first quarter of fiscal 2017 ending September 30, 2016, the Company is targeting GAAP revenue in a range of $120.6 million to $130.6 million with non-GAAP revenue in a range of $121.0 million to $131.0 million. GAAP gross margin is targeted between 53.5% and 55.0% and non-GAAP gross margin is targeted between 56.7% and 58.1%. Operating expenses are targeted to be between $70.0 million and $72.5 million on a GAAP basis and $63.5 million to $66.0 million on a non-GAAP basis. GAAP earnings are targeted to be between a net loss of $1.5 million to $6.2 million, or a loss of $0.01 to $0.06 per share. Non-GAAP earnings are targeted in a range of net income of $4.3 million to $9.0 million, or $0.04 to $0.09 per diluted share. The GAAP and non-GAAP net income (loss) targets are based on an estimated 106 million and 108 million average outstanding shares, respectively.

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