Extreme Networks (EXTR) 27 Oct 222023 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the Extreme Networks Q1 FY '23 Financial Results Conference Call. [Operator Instructions] I would now like to turn the call over to your host, Stan Kovler, you may begin.

Thank you, Kevin. Welcome to Extreme Networks first quarter in 2023 earnings conference call. I'm Stan Kovler, Vice President of Corporate Strategy and Investor Relations. Extreme Thomas. and are and Ed today Rémi CFO, me Networks' CEO, President Meyercord; With distributed press quarter. just Networks' We a financial detailing an results Extreme X-K for the release and filed

press strategies. For a XX, during reflect remind to reconciliations extremenetworks.com. of forward-looking risks XXXX, available your have results otherwise. results, All about statements Extreme's is or as you filed cause that business, growth them forward-looking I on call duty today's expectations for anticipated XX-K operational involve be and the [indiscernible] and section includes basis, and the Relations website you copy disclosures the that non-GAAP include as by a in to Investor convenience, in from may analysis our discussion of put as no those law. our our ended these of our this we will uncertainties to these financial materially risk plans financial required June release forward-looking update future actual this of We on non-GAAP would statements GAAP Any today and our which call, as not our at on made report to period statements except as by described required on like as can differ with unless the in SEC. statements factors caution they call stated

Now, to Executive I President will the Meyercord. Officer, turn call over Ed Chief Extreme’s and

for of led QX. backlog from our of double-digit EPS continued are been demand $XXX now and to in for by revenue growth improvement margins and million. QX, The continued We we $X.XX revenue gains at for Extreme us and morning. our achieved as in in a sequential thank $X.XX model evident up growth, increase had in record all operating and sits you you, networking revenue which never share quarter record stronger. Solutions has and joining Stan Thank Again, cloud-driven this

our earning We Extreme. cloud expect line these are solutions bottom of significant for trends continue. driving The fabric and combination to differentiation

fabric the for partners stole a have sales Extreme, and cloud CoPilot hosted focus the cloud of and have sellers oversubscribed AIOps leveraging and fabric didn't across of deployments X,XXX Our automation, finding area delivers ease solutions local and connected CoPilot devices area finding visibility the show unique our over outcomes, security in event advanced security. changers. complete hyper-segmentation features provides use our are the network at in our area and X,XXX across globally tools solution. networks. solutions existed ExtremeCloud networks in our such of most and of calendar the campus our the fabric and Highlighting Today, I At we in technology wireless for technologies. twin wide network our in new campus to simplicity channel available deliver problems know tool. bringing the clients game core where intelligence is SD-WAN saying, with QX, customers network fabric our and new value direct that Both customers and August. for solution, extending customers the deployed one Boston enhanced network I'm The the and I on In from digital without kickoff readily fabric people bring wide as I didn't ways With that have edge. we're local management and CoPilot now to enterprise, better network, end-to-end automation throughout IQ, entire have to our unmatched and in license, we our record we over our

Extreme. customers the XX with spent than more During $X million quarter,

as such top wired site wireless cruise third that where showcase solution, up our and our of deploying largest along names our hotel Vegas our we be beat in CloudIQ going X,XXX-room the include fabric household fabric incumbent a line will the we'll out engine. Some CloudIQ wins with large the and for world, Las in a quarter luxury

Korea largest a Third sensitive energy solutions based and X,XXX than deploying access is our smart information points added more technology world's protect bank in and are switching ensure third data CloudIQ. in leader in operations. customer South And the to fabric switching center and that uninterrupted grid company Europe, Extreme largest global

productivity Extreme. over of of better run rightsizing book-to-bill never only release at this salesperson never gains a our line, position increase to on backlog. a share us historically will continues the impact There high has the levels and years next networking large in sales fastest-growing have large a the been industry, stronger. to be Our the given such small top and competitive company. few been has a Extreme's And time In making

for analysts, have service. our solutions by and accolades awards industry partner Third-party demonstrated and press and taken community notice

organic of million today innovative sustainable. demand for subscription growth Strong a close year of QX. $XXX cloud this to in growth Gartner's annualized Choice access was solutions Wireless Wired sales and peer fifth we're on through we For We is seeing the level example, pulling that the our XX% believe insights. row is achieved bookings based SaaS exiting for and subscription product Extreme is land of and named also bookings infrastructure cloud

pull-through chain and LAN improvement subscription. wireless supply In quarter strong our a this the ability addition, products, to of deliver notably software supported in most

execution side, to we continue supply to the our On tactical be meet needs. customers' on laser-focused chain

us dates of Extreme. for source is give distributors and a logos industry demand in rank Our become has customer and our commit partners this new the networking on driving highest the for and delivering

suppliers we our XX an This shortages. quarter and part alone, reduced qualified component additional

growth an fiscal build products have in the actions of past will or in bookings for book-to-bill helped has ramp deliveries. over shipments with also backlog improvement accelerated the the constraints. of to the neutral quarters. a strong of product product anticipate of Based unlock revenue success in over year. in reengineering gradual begins confidence expect and our the we to all visibility we wave Our Once taken on 'XX. of supply, supply and fiscal now backlog multiple QX better We With growth release, the year, our outlook our chain release end through and ease it we've backlog

have We visibility backlog, majority into our current product comprised complete the is request with vast orders of which dates. of delivery

products hospitals half our for of backlog is facilities. environments and Our essential at part services. orders why manufacturing consists college customer and This About of universal are pull cancellations through subscription the of and designed a remain projects been of as carefully have IT that such campuses, X%. stadiums, negligible planned that fraction latest-generation

backlog unleash revenue. and also our will it maintenance when So shifts, services subscription

be Our later recently with XE this throughput such higher introduced as year. Universal SwitchXXXX, designed to Wi-Fi points, support we'll our access products launching data

universal new our nearly wireless building also on our bookings in now first-to-market XX% status universal products. for launched outdoor wired We continues on with transition and of Wi-Fi XE. APs, The products platforms to

to margin our come. and quarters earnings poised that trends XX cash CFO, over and increases Our This been favorable to turn in growing top has the unprecedented with larger networking our cloud-driven networking simplicity from strength unique our the AI and industry, accelerated Thomas. share, never forecast our industry, combination outlook months. in growth is highest market this will sales Extreme next funnel, of quality impactful. Fabric the has future We're taking more the a and and tools healthy cloud-based of position field competitors, resiliency growth with the point bookings cloud that, Extreme security been share and more for for competitive with Rémi our environment. all in combined line and market flow to gains of never I'll excited drive in years call networking And the our I'm about important of the

QX strength supply of go-to-market our Thanks, highlight results the Ed. of execution teams. chain and

achieved sellers direct bookings record cloud and and subscriptions. Our products channel partners for both near

that shipments Our generate milestone reaching time, global operations and At to we margin SaaS revenue continued our we're record for cash sequentially new team and resulted strong same in flow. delivered the ARR. improved strong

of fueled in quarter-over-quarter XX% and for of accelerating rate has loosening and prior to by access points product now the due our growth business X% the revenue revenue bookings quarter's services. for our from quarters grew the in the full sharply high expectations was revenue attach of book-to-bill have recovery a by year-over-year LAN sequential $XXX.X quarter. the X year-over-year again our grew end revenue million X.X to we prior With XX% quarter. quarter, entering product above Wireless quarter from million high $XX quarter. of SaaS We ratio wireless accounts first backlog. which which extremely of of was QX, supply Our the once This the basis grew and of quarter-over-quarter an backlog in a XX%. cloud subscription nearly XX% LAN added in on of now We product the rate

$X.XX demand. is indicator up shipments a compared and revenue by geographic a prior earnings between the end the of in reflected was of the million, a has highest QX the is year EMEA SaaS XX% on X% growth long-term considering the Revenue to grew distributors. of XX% good basis Americas $XXX was year-over-year solid quarter. Our in last up growth over an million, $XXX at mind, that point, Americas performance the our and by XX% and $XXX share ARR to representation Bookings APAC versus year-over-year. of guidance We subscription SaaS the in performance which up confident product the better been X% quarter-over-quarter. quarter-over-quarter. EMEA from deferred XX%. With growth our that mid-single per geography high had remain end-user that a XX% is difference of million not to To year-over-year over digits outlook rate our QX year. timing entering EMEA in impacted a revenue of growth to year-over-year grew XX% for demand.

also overall APAC growth with XX% care year-over-year. including year, in logistics $XX.X making was revenue by year's health total, for XX%, standpoint, XX% also at XX% currency last the year-over-year. million This Total and Product considering was XX% of of From by bookings cloud bookings. quarter devaluations during cloud retail, are digits, XX% and growth a the wireless up grew Services growth which good recurring wired dollar-denominated product the from mid- The service vertical revenue, subscriptions, from government the high our previous and was of grew products total performance digits quarter. revenue similar the the XX%; manufacturing APAC on bookings change the for QX $XX.X X% also growth QX mix drove roughly revenue. campus meaningfully region, up and impacted at driven expensive sequentially. and in our services about of of did quarter total XX%. switching up The particularly in more deferred ago subscription of the single products, outpaced bookings accounting $XXX company Finally, and also education not a at product transportation the or our performance and strength Japan. year mid-single to about maintenance, in managed region subscription largely revenue million to subscription and strength million, was at of about strength renewals with

of came points and down quarter million, XX.X%, percentage supply fell costs Our mix reflecting QX 'XX, quarter expenses by growth. X.X to improvement in quarter, product our reintroduction in in Total in percentage all, sequentially, we in is $XX down decline from services. percentage basis and our capital, freight points X.X as Services XX.X%, services resulting ago in year slight On gross to revenue margin. driven the subscription and up and and at higher to events the sequentially but driven expenses sales an by relates was as a XX higher million strong year margin points increase the strong margin collections. in-person and dropped year as $XXX to QX. support year-over-year a the by QX expenses of most working reduced sequential XX.X% slightly in of from ago mix improvement higher changes the from ago in $XXX year-over-year marketing operating gross products in chain margin of in operating from The basis, the overall sequentially increase up were revenue and the and by and and revenue X.X from higher grew gross margin by year a offset R&D million spend lower reduction 'XX. operating on points from attributed All percentage hosted driven maintenance. from XX.X%. corporate professional gross subscription increase to million debt in the X.X% in $XXX XX.X% sales the operating in QX million, for in ago well quarter and in part EBITDA $XX.X of up Net marketing was

by sequentially days. and conversion cycle X XX at cash dropped now Our days sits

by the million X% our we quarter, loan current X ratio our principal a month the to less and carrying interest to leverage approximately rate X. Loan on rate This turn, reduced covenant to us of $XX our basis Term XX than annual made repayment in A, At the interest to X.XX November reduce effective points. LIBOR carrying be debt will X.X% on rate, the enabling

turning guidance. Now to

confidence in is QX. worth million Our by further exiting our solidified product outlook $XXX backlog of

we in million. to earnings range to million in QX, million million $X.XX to or to revenue $XXX be QX expected margin are share. is expenses QX $XX in $XX range gross of to be XX.X% per to million XX.X%. to $XXX of the of anticipated diluted to of be range the to For the $XXX operating million. in $XXX anticipated expect are be range QX $X.XX the

margin to reduction fiscal fees, We expedite in to progressive will and the lead that shipping gross 'XX. recovery year throughout a combined continue in actions the recent impact our expect of pricing full with

to year, growth. for XX% expect the we So XX% revenue

operating to we the an to and threshold question-and-answer session. now operator the mid-teens. margin expect margin gross that, the half, cross over the will XX% it For turn in With second begin to I the achieve

with [Operator Alex from Our first comes Instructions] question Henderson Needham.

is Your open. line

straightforward. obviously I’m moving some Can some Thanks. the X.XX there? us things are because getting lot I’m some interest you which did bit was I since pretty the that when X.X, a line book-to-bill a of clarification to in give little just have break on say on wanted you I to the numbers calculate going guide it. get And of around you

a to X.X, little looks at Alex. Product be

X.X%, It okay. was

Yes, it was X.X%.

average So higher. is slightly the

interest the And see. I see, I line?

rate. X-month on, up. LIBOR with bring It me let that just Hold keeps moving

You quarter. $X about should a assume million

you The LIBOR rate or guys did? points basis up ECB going XX morning this impacted

on reset We do the a monthly basis.

not rate XXX plus have. have XXX be LIBOR month it may today's be would XXX that So that be we we'll the X one X. currently, November But the reset if use necessarily after [ph] last we would

I could ask a couple questions. If of Okay.

technical details. -- just Just were those

end. of you the getting expect one you And to the you of know pricing. from first where know industry. like? you clarification, The from you by I didn’t quarter in is, the the guys [ph]? your do price. mean the the terms has fiscal Can wanted increase as thought mention other this one backlog pricing talk mean would I hear said about well I increased Or And in up look you you start you any year the year? to -- numbers where are you gone Do increase in pricing as actually have price XXX increase of

Alex, each Rémi, I'll here. then, increase back our can up fiscal jump in year. to and backlog me we quarter you the remainder of expect throughout Alex,

March So June. and we're expecting December, in increases

Perfect.

effective modest very a had we pricing, and October to targeted relates it X. As price increase

much last muted On see we than side, did year. some was we what had it more bookings but pull-ins the

comparable. you a of over that able referenced as and of If had October grow kind XX% it top -- EMEA XX% see bookings organically in were last in bookings. that X excited product year, drove we price increase which on Rémi growth significant of that to is were we that, we really to recall

position. we increases. like we've Cisco their We are we our general, a feel under then in has So umbrella. suit. other we're remain in price follow And -- competitors in a seen strong announced

of where we are the numbers. in seeing like increase terms we price So in

a if and want Rémi, you the I larger increase, to a the anything to impact following in that. impact know price this see You'll don't quarter add then quarter. small most recent

just I exceptions price holding devaluations impacted country going our that to where our certain add the for meet customers ability with was currency of to increase budget, edge. have our are their

selling company. So discounts overall the the the improvement increase we're offset raise into really of having in to they not an net translated to so price and price

year? clear, be fourth was price you the or digits just expect the benefit what to quarter, So low and single to be by quarter fiscal the it in

quarter there on was -- mean, increase we an X. impact was the I price made There April that this of

September price not of was impact felt the October quarter. the However, the X increase in

my is price in the quarter? to increases point your But was impact digit revenue low Clearly. it -- of the my growth other number? what or question real contribution single Was some

single low Yes, correct. price digit coming increases, from prior

talk for you expect the building it the are year your of X%, and And expectations you the X%, that the by through when will June end like? quarter the What be X%? backlog X%, about realization of

change, trends to it don't [Indiscernible] be would digits. low mid-single discount

you. Thank digits. mid-single to Low

Alex. Thanks,

moment for our next question. One

Martinuzzi Eric from Capital. comes Lake question with next Our Street

is open. Your line

I’m It’s Street Lake from Capital Eric to going me. Markets. to assume that

Just follow-up geographic on that the commentary wanted to gave. you

the against of bookings being about ‘XX, for geo for think and given up the for we Where mid-single XX%. talked bookings see FY should to guide by You APAC XX% XX% that growth then ‘XX? geographies EMEA tough How comp. digits year a you Americas do revenue the across with and about fiscal

products, and be digit. Total bookings geographies single in growth across services is expected high all and to the subscription

Okay. what's coming of And then the off revenue number backlog, we to business. with that's combined the how get

Okay.

year. grow say, we're would Eric, during we're the -- expecting expecting to I not backlog

want terms in expectation growth, to growing that. our is how not get that we clarify backlog year of reducing are to backlog. fiscal but the we we're I So just

Yes.

you’ve the Okay. -- room But suppliers, margins, the to fee. of gross component release we the gross expansion the as we’re you’ve more far And expedite bit as got for then margin what’s relief, seeing it’s contributor breathing the I’m go looking really biggest little what’s the qualified in a quarter-by-quarter. on -- as

paid is the of elevated reduction well as our today as China Taiwan suppliers in what shipped of the semiconductors key expedite fees which is freight cost because most directly are El reduction to the products of we main be still that hub. components of to our by out produced which are air would and Eric, that and Paso on based

reduction gross drive the currently margin improvement So that of are going time. over hurting these to the is really two what's

taking Thanks my it. Got for questions.

One moment question. next for our

Paul question Silverstein from comes with Our next Cowen.

Your line open. is

seeing Thanks, guys. the ask. I’ve had Two very X from other FX but I got we particular and overseas, the not overseas. case, budget FXs in in day to In numbers questions, messages. macro, etcetera? delays, if in light scrutiny, FX different -- doesn’t especially sure was commentary cancellations, of increased about Europe, on it with you of energy prices in downsizing your may. in Last Are Juniper that, One, there especially any sounded

Paul, -- it's we're we keep something not a seeing obviously, is something we close that it. eye on. that very And

different in that at, We that look the have -- have opportunities scrubbing of are those we're we look regularly. variables a that we specifically and forward, we as we lot look at funnel

aware, feedback that we our have and as And of and We an direct on rolling sellers that comes Salesforce call. AI have from up they're top you're field with up in what calling. tool sits a

So resiliency kind here. not of One network. way that seeing X you improvements today, transformation of inflation legs is glue the what's digital it. technology everything and outlook -- we kind the the our projects to we're play in productivity to networking. just see that of have are to and There's and are things X all offset in productivity and is is driving One the

not in we're complicated of backlog, not systems, commodity seeing seeing we our seeing products, books. -- deprioritized. a initiatives And being have that we're the And fact networking so the backlog networking we're not not

because And it's is. of so X% truly a say that's we fraction why it

networking. budget networking. seeing back having we're if in customers items the seeing of are cut to prioritize in enterprise not cut being We're So them other spend, front

thing. one that's So

is against we're of is taking are size other matter relative The larger and we The taking thing we share that much the our fact players. share. mentioned

us happening share gains So cloud these can what be the larger in small may for market.

in which ability still -- So bookings in like challenged gains. that for and our these we or healthy resiliency market to is mentioned, in market to networking mind bookings the APAC, in enterprise customers. projects markets see even become to to our strategic drive is I the continue the is, And just share growth challenged these more other EMEA in from some of currency going markets of as be the

And sales pushed not you’re I seeing just elongated thought cycles. through, even you just

back actually position are not. we early it's If can they I so No, anything times goes to lead as supply would anticipating this the Paul, anything, that we're may say seeing. to their supply establish chain. ordering and that we're and it if see chain, relates opposite, people

we're asking all seeing given the not this expectation. and it. We're that's on world in over the it. news, we're case, there's So everything And Obviously, going in questions. the our

sensitive it. What to it. we're I we're not is So seeing would -- very just say we're

is constraints in you communication argue I chain That pegs to and no weakness the assume the -- keeping that yet there assume you seen supply been that has relative but any or when… line others answer why would be question. are anything and I may haven’t that Do for view the customers any Again, macro.

Paul, factor. that could fair that, be I it's a think

customers So initiatives productivity our sort which digital we're their of and transformation how in significance deprioritized. driving enterprise their just the we're all of all they're that -- -- for of it's get and not Extreme, and overall so about case business seeing underlie of the there's networking

you supply There's also an element think a chain I element. there that mentioned. is

enterprise the our today. and Extreme fabric recognition our with together marketplace getting hangs and story is end-to-end with that with our solution cloud, Our the in

to -- seeing to We cloud, view our how we're think a a your more of these single in the network disjointed in technology, our creating are how enterprise, one services cleanest future combine of resonating. competitors story with And larger technology. leverage opportunities. some elements have you of it's today cloud, the vision orchestration of from of And marketplace glass, your when this that end-to-end have the all are getting pane of with because proof fabric I opportunities across investment we the and out latest the single

more looks. some some in market and out of -- beneficiary we we're so our And with of have and of the we're that taking of issues is we're larger I the some share a competitors. And the do different getting think story

me incumbent Cisco was downturns, their were environment from level. downturns, I behavior away whoever and have with I’m right? vendors. environments customer better correct Do question willing when switch Ed, was last more stay significant increment on not to in One this. only to typical It when they wrong. Historically, been there especially by the HP, had if the were in that that

sure not for not validate I'm you, I'm -- Paul. can sure I that

in think cohesive we're are And is creating environment I for this Their have a then especially the very there's what opposite. that of chain some strategies our customers seeing a the them. pursued of players us, customers. maybe larger where in supply lack opportunities, solution as I expensive mentioned, for enterprise for it's

vendors So a a market. for larger creating cloud. with the them the to downturn as that's of of some it's less. in it type different in And scenario traditional stay to strategy, or something more the lack end-to-end relates rather recessionary more the risky what especially than of legacy because cohesive expensive almost sense that's a more for you saw than that opportunities us And be maybe may in

our moment question. One next for

Our next comes Genovese Securities. Rosenblatt from with Mike question

line is open. Your

Thanks. Great.

where going for, looking mean, the for will year? in that good report. we ground than a was were the see of mix don’t function like gross shift the of that’s more that in So, sequentially, question is less great wireless? Or up fees? Do from we guide half expedite back to the look while? And your to quarters, my think not what of slightly a the and I guys, is, really expect quarter guess shift I margins future guess, mix gross function particularly just chain the And were do in margin a supply we and very building more for. a is the Or anything here away that wireless? the of I I except

the that entering And our the reported costs I wireless amount and with were in start the because would we and expedite we more the were really XX fees of the between at [ph] paid say freight difference of expectations. The than quarter. getting what the we quarter expected was the that's that to for [ph] that drive XX.X in we that pronounced shift the quarter. latter the the line

do Or will is change? a I this the think mix And quarter that happened think we too. last --

So of this the kind two quarter… is

supply the high The to that, next combined very level means backlog few wireless quarters. chain for XX% is going historical XX% the that the of loosening wired products of with wireless stay XX%-XX%, for

However, introductory that the we in as we comments of now to we fees gross the that feel cross freight margin have XX% the mark our confident can reduction is visibility and costs. mentioned reason we expedite

of better although going of see and fees that that a higher fixed to expedite we reduction lead when not goods cost we drive second progressive do in mix margin, expected So costs the will that is half in our change, a volumes sold. that to of freight gross absorption especially shipments the higher costs are in

and commitment is what they've us to the direct if the confidence today these the also we of secondary have and don't the delivering have ago, can relationships go here you regularly and component tertiary say are did delivering year they're in not they're markets secondary meet other do, not have commitment Rémi, on the have When we recall we we variable a going to we're we we shipments, direct which given one add deliver. to And with out they what And in ramp. because find they I vendors. product. getting

that when in prices also so and secondary leads out increased buy components we're the market. having to go to And

the reliance tertiary secondary reduce see Rémi our component also we is secondary expedite step where as well have in freight this up, it from is and vendors same us the up, the on the and commit about as we components. as markets confidence time, paying will we're the what's giving So fees forecast. talking that the the At

are answer guess, a clear on macro you Europe, guys Okay. you particularly very weakness. not macro, Great. thought seeing Perfect. I the on direct, I back gave around

though, did guess, Pacific. currency-related in prepared remarks Asia the about You mention some, I weakness in

willingness is to if So mean, -- the any of those you change? solution what And Or think to of of seeing? gets will that repricing your the effect any macro pay? this Just the the issues, worse? please. I guess, backlog that the customers’ thought I on is. you’re is there thoughts that do expectations currency Or Is it

I that important and I new reiterate Mike, It's with would projects. of less backlog. more an would Yes. an on a say, issue issue these say I mean, of it's I'll bookings issue timing with not team underpinning in important the a really alternative our projects market, there's another I them significantly. we say other timing are And networking have that for will decision. upgraded than initiatives. And really

that and have, in relationships new market. We other in market we markets the than channel are have the excited more any we that there team about smallest world

share, So small example, the they've in devaluation in take of of seen opportunity share bites certain help little where particularly offset XX%. for market Japan, us the a can currency reticence buyers, that to

at add that's to Rémi, level. So the to -- if I you know anything don't that. high want

to No, want we it. I us leave the that go for do be to strategic is deals deem just of ahead budget, and for that want to if question say we their a grab deal basically to meet the struggling or that customer devaluation, given it's currency

the to to meet to so deal slightly deals us, willing aggressive certain be up requirements we're street. the that more customers' budget specific the and in take And are strategic

But could flat to below that still XX% know I’m backlog view book-to-bill I to would of expect much still XX% asked. orders X the can looking, question. Last the think first revenue to we’re everybody growth. if want we’re guess guess, that think I down? have I because to do fiscal that versus the acceleration be ‘XX to confirm, guess, this for you be same, orders, you I we of looking going year releasing sequentially you just numbers ask they’ll they But ‘XX, Fantastic. see But in Okay. I far kind we do I all, early that out. can up? you don’t If Or be year-over-year, ‘XX on that? this but so know any where

I'll Mike, first jump out Well, here.

the geo. directors we very have the to focus the look our was details do We I down it on mentioning our bottoms-up at and in regional by strong opportunities. As we and account regional before, directors the a do of We by level. it are each executive funnel

with partner part We of reviews as quarterly separate also have partners. business our our a forecast

way together and seeing the That's we And look healthy demand we our see XX XX for based on what bookings at year-over-year next we demand, the all very that organic this feeds the in So months next this we're the opportunities comes months. funnel. all really that see it. for

So we currently. back don't pulling [indiscernible] see continuing. this We it see

not we demand we year. of fiscal as growth contemplate of would you our because our So mind, backlog we're showing building bookings expect -- and Keep all releveling continued book-to-bill. see in still to the rolling then are this we're revenue 'XX, and expecting in into

release is So backlog that just we're have to will going but current the which of the then grow. and benefit releveling quarters to backlog of the today book-to-bill we think the levels of demand of worth X

you're what going our that's so And guess into to fiscal That's going 'XX. see today. best

driver revenue that of And drop expectation be we growth. book-to-bill going a be significant but would would see a our so to that's X below

Mike, XX% assumption, and grow next working between XX% that is current top line year. And our will

congratulations the the and the results momentum Well, work. Great. on keep and great up

Thank you.

our moment One question. for next

Kang with Riley. comes B. from Dave next Our question

Your open. line is

Good you. morning. Thank yes. Hi,

Just -- wired versus to mix can backlog wanted repeat, the you Rémi, between wireless?

have a the was I Dave. backlog made, and comment give quarter. XX%-XX%. ago revenue We The just wired between this wireless, XX%-XX% to you an And the split year for was not it idea,

but that a basis, of backlog split. ratio. give shift a the I wired in to we're But year-over-year amount wireless there's been wireless a a on dramatic percentage. revenue there's the I did communicating not significant didn't for So mention

Got are and turning somewhat of plus over or or it. the regarding those it’s whether plus you presentation no Can noticed there kind what equal that and I key a negative? verticals, minus go And you’re seeing then in your signs. verticals,

seen that that's shift. haven't seen comments made and made why -- of is bookings any total the haven't dramatic split we a I Yes, I the we about percentage as

then sensitive bookings The behaved quite trends. -- which digits. government has quarter in remains macro and But came a see in in see macro we bookings a not of be because any healthy. that a are to in very environment words, low also healthy. in in top manufacturing the And Manufacturing, could education, you double major sports did the logistics we well. year-over-year would trend. health account sequential had environment in in saw education our segments retail, you'd government, still the The where recovery that funding enjoying manufacturing, large, of So increase a actually improvement really QX, remains transportation, fact was see percentage significant Healthcare the care, slowdown retail, in X so business to same change healthy roughly logistics the entertainment seeing we're off point. is of other expect and and that transportation, the also which We for pretty signs there.

talk Got may it last then was you quarter missed have about impact about did your quarter? but I bps. was margins? it it. I supply on think the this XXX What chain And then this

the quarter are comparing 'XX. reflect the breaking that you it us mentioned. comment it quarter. elevated They're price expedite but comparing per with out the about have really I was the an expedite about million. just which adding costs to made variance fiscal as secondary fees really XXX fees, market, I and we to that which million $XX by indication, amount Ed bps going back purchase purchase $XX to not really was and So of price those is to down reached And variance an We're pay I give freight

So there. there's $X a improvement million

freight in QX. As improve costs far million expected roughly as by are they QX are just to versus concerned, $X

in that percentage this seeing peak time. million a by point of overall get quarter a as $XXX.X of then the it's feel the one the improvement improvement margin we we're that revenue million reached we're think to you if seeing in $X can million that about for at gross the today, $X of that versus revenue. divide So And you

on think growth second about quarter it. in sequential and in quarter second Got in you seasonally I I the question guiding X% sequentially seasonality. my quarter. versus you’re typically last about first mean, is fiscal to X% only grew yet And is quarter first and past, weak the

that how of is that wondering much Just else we conservatism missing? versus is are something there

don't deferred and driven we're chain coming can on my we conservative. you chain. as this that sequential get the these from that's as We subscription X there largely they're particularly to revenue, sitting weekly that's growth from a to services sheet based accurate as able and off And purely revenue is teams feel possible. imagine, We The X% supply factors. is supply what as been And balance quarter. ship by we've try like guiding that for to be reads

you. Thank it. Got

for our One next question. moment

with from Schwab Our Christian Craig-Hallum. comes next question

line open. Your is

the on results. congrats Hey, great

backlog, about different components think the normalize? certain is going we that there Or I know there’s know as to Rémi, when So ones and of in we are thousands switch.

When when oversupply back not. do more is, backlog you up, So of what have opening be to going still going much I’m business a others asking really that’s that, levels? because Or full are we or -- believe historical is -- is Are what to to run not bigger access I components backlog guess with semiconductor might of -- it one go we does area do silicon to normalize? until likely. you that war

of that other their at large we goes the also anywhere but will capacity heavy well the to industry makers in being some be segments topic in competed before between now to added factors because in see while when at 'XX fully consumers us normal. go we're The tell us of let obviously demand. these close Ed plans, are industry backlog demand the I'll time, see revising same we'd dropping on semiconductor it back things but as a to going Christian, back that our normal. chipsets what we be to to new with see expect and $XX really combination fiscal slower and based of semiconductor chime very $XXX million X But it's believe going point be million both that with we time. it's to in And the to

on think And maybe the fiscal -- left delivery to 'XX, I $XXX fiscal 'XX, plans, we at it's our That's below scenario. 'XX. it fiscal of drop takes based fiscal year what's million. fiscal back -- we So our really X is 'XX, current mean, then start it

Thank questions. other you. No Fantastic.

for question. One our moment next

next Alex with from Needham. Our question follow-up the is Henderson

Your line is open.

Thanks. Great.

improvements and margins the between those we allocate third, quarter the gross So of; little your the on to can through that, to the in the off factors, are getting bit expedite looking about of mix has assumptions and the margins your bit think versus you’re process? fourth that Universal about talk of with And fees mix impact quite costs associated How do historical impact a and the I procurement. at the thinking the fall you margins? the margins, products, one, in of better. Two, kind improvement redesign gross various where then what a

percentage together an roughly do in services QX fiscal And QX X factors QX of then versus mentioned improvement by we're QX. same related to driving get detail. looking of in because factors professional X.X go X we're that the not combination of subscription did back I'm with subscription impact the should drove QX also by versus we not looking level versus to QX, of the QX it then classic of which 'XX. into percentage you professional want -- XX.X% XX.X% margin point. say Again, I combined that in about But to I products and for about I'd maintenance services those these to mix classic not our see X because gross And mean, improvement mentioned, sure in would the quarter will to We margin services. at services QX at are X versus the in One have the and points. to service, margin margin points that be an deployment. that sequentially gross our drive Alex, percentage versus you factor and MLB XX.X% were services QX expect gross essentially way gross down

ask. actually So that was second to question wanted I the

at looking services ‘XX. guidance rate some drive of you’re working product adoption clearly, larger for sales subscriptions. Can growth So as of the and FY I’m revenue that -- these does you

assumption? break you little the out bit line product growth can in So the versus line services in a between that the implied guidance

Yes.

grew that single closer and digits. -- in in both be actually services in And which bucket to we'll as to growth XX%. but really And be than close then I'm than the step and then a delivery see to you at function growth XX%. we products subscription supply subscribe services both one the then on product, expect subscription for chain. based be will will And expect in plans, XX% strong services higher higher product. to and growth a higher to into QX, when growth in around very be and services our I So whereas -- we you're to combining be going is in subscription would see QX current services grew would improvement a will high saw, mid- we and see expect QX our

getting That’s move as very helpful. you’re And then that would to much supply fact in ‘XX, based so the improvement of be I we higher guess continue availability. meaningful into in -- Is the right off that the logic? out product

the quarters. anywhere of subscription and then to between That's and a steady correct. X% depending continues services rate at And grow on XX%

in of that delay? up increases show What in some do frame. Broadcom are think How price quarter? increases? their up that you we I’ve terms to Or that does in with factoring about Does price pricing increase time show heard that going the January in, they’re

We're in placing current today a year with orders in order for us to pricing. advance basically Broadcom the secure

Okay.

time of a -- So you Yes. amount procurement. of would then procurement considerable be advanced protected that because for

have that. expected That’s interesting. wouldn’t Okay. I really

other question… The

And increases, happen is The and and other list this to in of things relationship to with thing of addition some Broadcom there them. are our price that fees. price to with that with expedite see one mention do the we has

mitigated be fees. in the will by of price Some reduction a increases expedite

right. Right,

decommits point? you the happening. accurate? other have stopped decommits comments on still basically like declining are I but the that sounded this is at Or decommits had Is it The question made,

our this, gets each would and of it. it are consistency from -- there's every just no right around business. These around are one, part can is be the tell the a I lot us. now of And to because scrutiny normal decommits And a there Alex, scrutiny decommit, extent one-offs. of you

it's be give use budget. can't would it get a the year, or government the So has by the of They that example I supply agency might end lose it.

another they to reprioritize spend. So want

the based following that or So supply guess are they and these could you more really are the but that maybe cancel not things these an one-offs. related But chain. that say year I comes order might on chain supply budget into are dynamic. that for

we're not fraction And of really remain change at seeing so in the they X%. a a and one-offs

Alex, question on or related was suppliers? your decommits to customers

His line the left queue. actually --

Okay.

move follow-up to last on as a going moment. we're to question our So from, one

So a Cowen. follow-up question from Paul Silverstein with

is line Your open.

an if and I revenue give to product? update future you’re what it current with outlook apologize but Arsen I us missed on respect can Rémi, And you [ph] and revenue the seeing contribution relationship from that

let actually on will Ed that. comment I

with excellent a is an life XG is the C&IS and have just are carriers rollouts addition we Stockholm. senior to own carriers met each cycle. them. stage function which relationship in of kind we And from in Paul, leadership We of I of in account. very at with position of their really -- that a good with

we're couple carriers of move concept of larger proof the seeing seeing we're modes. into a from deployment So

other we that to with we're application out have The nature. X-plus the that term at are -- we're source would expect vendor that opportunities that's opportunities So years. longer I sole -- looking because we growth account. are roll next over excited Ericsson the new we which say within for in But

current carrier. potential specific XG products revenue and in because directly believe the the another going What’s relationship that previously forward? I on general, a won from rate run Ed, what’s you’ve with referenced the

have sell call significant as that bucket. office going have we we've into account, we've less X customer provider and -- XG sell-to XG opportunity, well with service strategic around nonetheless but rely back we customers that on I enterprise to. I the provider that -- their I'm what service the I then provider don't and in Rémi, for communicated Paul, direct you're and would significant other service would And disclosed. service as the see a relationships, fall terms we And We just you referencing. other what carpeted to know very disclosed what say are provider. of supporting or see not

we've their now retire account. growth sell have we get which to and their them and commission with our are teams enterprise for partner But that also with vector quota, Extreme, actively sell just that a sellers them. stadium deployments sellers on with approved is we new side with We in been paid working

side, well the see growth from new opportunities the So opportunities the U.S. SP company with new as Swedish carrier in large as we the inside

annual bookings. combination XX dollars tens haven't of that million really mention in we bookings. of $XXX is did were X I these we and of Ed, between several annual say And that can them both in the communicated but million

Thanks, Okay. guys.

Thank, Paul.

to I'd Ed over any the And back for closing turn to like call remarks.

for appreciate call call. Great with us the you. a Yes. who people in at Well, and quarter It strong on analysts Extreme. thank are participation We obviously the and engagement the was participating questions. the

been across We’re community. and of of effort of as got our our momentum. execution all the as cross-functional -- board really proud it’s board caliber We’ve the teams the of a lot a have across the at of Extreme with channel we well partnership

As function as share. a and of that we’ve the releasing chain said, we step today taking supply through us visibility year. we’ve better we’re it’s really And to got

confidence more our I’d go and in more as we say we forward. outlook have So

to true investor at it’s for Needham, So people encourage everybody upcoming I and this, never we employees, Extreme that been for be our have true that’s We to Raymond investors. James, and with encourage we a time customers and also Cowen. as participate. better think know partners, We say conferences. Oppenheimer there’s I

live So, and Thanks, opportunity a more to great share and have to any we day. being forward look detail. have you story everybody in the with

presentation. conclude this today's and does Ladies gentlemen,

disconnect You have may now day. and a wonderful