Extreme Networks Reports Revenue Decline but Increases Operating Income in Q2 Fiscal 2025

Extreme Networks, Inc. reported a decline in financial performance for the second quarter of fiscal 2025, with total net revenues of $279.4 million, down 5.7% from $296.4 million in the same period last year. Product revenues decreased by 7.7% to $172.3 million, while subscription and support revenues fell by 2.4% to $107.1 million. The company attributed the drop in product revenues primarily to higher shipments in the previous year due to the easing of supply chain constraints. For the first half of fiscal 2025, total net revenues were $548.6 million, a decrease of 15.5% compared to $649.5 million in the prior year.

Despite the revenue decline, Extreme Networks achieved an operating income of $12.7 million, an increase from $10.3 million in the prior year. Net income for the quarter was $7.4 million, compared to $4.0 million in the same quarter last year. The company’s gross margin improved to 62.7%, up from 61.9% in the previous year, reflecting better cost management despite lower revenues. Operating expenses decreased by 6.1% to $162.5 million, driven by reduced sales and marketing costs and lower restructuring charges.

In terms of strategic developments, Extreme Networks launched its new technology platform, Extreme Platform ONE, in December 2024, which integrates networking, security, and AI solutions. This platform aims to simplify operations for enterprises and enhance productivity through AI-powered automation. The company continues to focus on expanding its market presence, particularly in the cloud networking segment, which is projected to grow significantly in the coming years.

Operationally, Extreme Networks reported a cash and cash equivalents balance of $170.3 million as of December 31, 2024, an increase from $156.7 million at the end of the previous fiscal year. The company generated $40.1 million in cash from operating activities during the first half of fiscal 2025, a decrease from $109.9 million in the same period last year. The decline in cash flow was primarily due to a net loss of $3.1 million, compared to a net income of $32.7 million in the prior year.

Looking ahead, Extreme Networks remains optimistic about its growth prospects, particularly with the anticipated demand for cloud networking solutions and the integration of AI into its offerings. The company expects to leverage its new platform to enhance customer engagement and streamline operations, positioning itself to capture a larger share of the growing market for enterprise networking solutions.