- Extreme Networks ( NASDAQ: EXTR ) stock gains 5% on Thursday after the company reported beat on both top and bottom line in its first quarter earnings.
- Revenue of $297.7M (+11% Y/Y) beats by $14.81M. It included product revenue of $206.28M (+11% Y/Y) and cloud service and subscription revenue of $91.41M (+11% Y/Y).
- SaaS annual recurring revenue ((SaaS ARR)) was $111M, up 41% year-over-year, and up 8% sequentially.
- Non-GAAP gross margin 57.6% compared to 57% in a year-ago quarter.
- GAAP operating margin was 5.8%; Non-GAAP operating margin was 12.1% accounting in the adjustments of share-based compensations.
- GAAP EPS was $0.09; Non-GAAP EPS of $0.20 beats by $0.03.
- The company's net cash provided by operating activities stood at $49.7M. Free cash flow was $46.6M.
- "Our subscription business revenue grew approximately 40% year-over-year driven by the adoption of our cloud solutions. Given another quarter of strong free cash flow, we retired $37 million of our debt, which will be accretive to earnings," commented Extreme's CFO Remi Thomas.
- Extreme Networks told the company's backlog continues to grow which now sits at $555M.
- Reiterates Q2 2023 Guidance: Revenue is forecasted to range between $299-$309M (+10% to 15% growth year-over-year), vs. consensus of $300.95M.
- Gross margins expected within the range of 56% to 58%.
- GAAP Operating margin between 5.9% to 7.8%; Non-GAAP operating margin estimated between 13% to 14.9%.
- GAAP EPS of $0.09-$0.14; Non-GAAP EPS of $0.21 - $0.26 vs. consensus of $0.23.
- Earlier: Extreme Networks learns of product supplied to sanctioned Russian company
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Extreme Networks gains after double-digit cloud business growth leads earnings beat