Extreme Networks (EXTR) 1 Nov 232024 Q1 Earnings call transcript

Good day, and thank you for standing by, and welcome to the Extreme Networks First Quarter Fiscal Year 2024 Financial Results Conference Call. [Operator Instructions] After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Stan Kovler, Vice President of Corporate Strategy and Investor Relations. ahead. go Please

me Good We First Abigail. the Networks' Kovler, and to and and X-K Relations. welcome President CEO; an President Thank Ed filed distributed and XXXX morning, results a Earnings financial quarter. Networks Meyercord; With Investor and Quarter Corporate Kevin Stan Extreme are Conference Extreme for stream's of and Rhodes. you CFO, Strategy everyone, today just Call. detailing Vice release I'm press

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

the questions. over prepared And our Ed now turn Extreme's the take I will -- Meyercord. to President I will CEO, take will and call we Following remarks,

of for growth joining XX%. morning. XX% and you thank Extreme growth revenue with us EPS of another strong Thanks, quarter Stan, this and all delivered

remained XX% We continue metrics and million value ARR on strong growth to of to and grew market We deferred the SaaS Cloud to to year-over-year. expect million in customers' grow XX% in for our quarter over the a dollar deals year-over-year move overall upmarket $X continued solutions. adoption our revenue outpaced our preference continued fiscal quarter-over-quarter. remain retention industry-leading $XXX growth share core Customer and loyalty in high, 'XX business. testament gains and

APAC managed a Our to initiatives new in government, certifications regulated private service go-to-market new with This and the a enterprise like and as the through industries subscription offer. service white across providers includes disruptive space quarter providers new large seven outperformed of well. state the federal opportunity expansion and addition sell

and to revolving greater addition, our In our we beyond management value Extreme network a capabilities deliver all we flexibility license have Cloud devices simplicity, SaaS will this create cloud business. even the today offer to for and -- stickiness platform plan connected more

expect. of QX near-term the Our out the markets posture, larger machine strategic trends have top higher average like cycles felt and fiscal of our in Germany, some sales the line lowered initiatives we user. industry for The economic macro than end and of larger would challenges AI and rate outlook pushed drive in our are environment ARR of our interest orders QX, and end-of-quarter amount license impact per environment growth. a normally revenue growth around to differentiated expected trust capabilities expanded At expansion, we learning in zero

to quickly slowing current and a focusing large an Our channel down we call ramp resources as of for and network drive to our took immediate to partners of are the pocket rate would decision-making, business don't profitability. as air to demand deployment, And action we digesting year, outlook realign on what result, leading volume revised we ordering. release higher of their light productivity expect backlog In growth as a anticipated. and run

high result, a allow us That fiscal in by margin to will we grow during 'XX. expect teens over operating continue year. XX% to the As our EPS

continues opportunities competitive and position basis underlying year-over-year double digits grow a funnel our as to up Our on remains of business strong.

long outcomes. choose on for we of term, margin. to high associated line power modern Over business here's networking tire and flexible services a models and view we larger combination technology, to return companies. tell the and Customers mid-teens especially why. the expect Extreme scale risk, a and a of and impactful set mid-XXs complexity, old asset from the to primary and their cybersecurity the networking business risk.Our with Customers network innovative and extreme flexibility as for outlook customers operations, costs because growth networking their They operating new top bar And the and reasons. driving focus with licensing strategic choose simplicity a X reduce a deployment us enhance

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unmatched edge managed We that hybrid through offer and interface. offer choice, cloud private, can we cloud public, be deployments flexibility. single a Second,

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technology have pool over XX more of $X see increasing each to large, the over continue than grow quarter. million high-profile In deals and we is Our why our differentiation we QX, value of deals $X million. customers

specific our continue balance to order healthy have order clear backlog the a request year. through of visibility with customer to We fiscal customer with dates

lead product strengths. down from and working to continue product allowing our backlog normalize, quarter, This us times

of 'XX. expect to to in backlog continue $XXX fiscal sell our to million million QX range $XX a We end of the by

for portfolio Day, both our and commercial offer share our Investor recently certification brand excited our And flexibility our the a accelerants compliance share and services call and these to to at elevation providers, as as of to gains, technology the modern very differentiation highly service driving the we're and managed subscription dive well the driving launched We'll high-profile also week are enterprise into with more targeted turn our our like security, why channel entire MAX on wins. these opportunities about new large share to customers. Kevin. private so why as opportunity platform, driving in the of subscription in I'd we'll are And with we're licensing. our more core to and that, business. Next elevating over provide will All factors gains specifics wins insights simplicity, brings that customer

Thanks, as demand. encouraged and be but to quarter, by we first action and shifts Ed. our in take experience the I'm also only prudent not ability performance decisive our market

again to demonstrated the then outlook. our financial strong and first about operational Let we In I'll the me talk and quarter, quarter performance. first move results,

that also We in of future. to continuing level the committed remain we show that performance

numbers. get Let into the me

This subscription up revenue million up revenue sequentially million We our year-over-year, renewals, million, the the XX% supply story by in First grew up revenue achieved XX% of of grew Total $XXX was Extreme. our campus revenue XX% high by Total year-over-year $XXX revenue ARR $XX.X for continues ago growth deferred of quarter support at the was growth year-over-year Driven strength XX% grew up exceeding Product year-over-year, of million, quarter. $XX subscription year-over-year. continued double-digit in XX% from improvement SaaS recurring of quarter. a expectations million strong million. revenue. million end which largely grew Recurring driven revenue subscription well. the in entering to our environment. revenue, of cloud accounting year $XXX XX% grew be $XXX.X switching, chain the and to X% reflecting $XXX.X strength was positive year-over-year to overall year-over-year. year-over-year, as XX% of

for approximately products our year-over-year. to ship for tailwind revenue million, from revenue The and it XX% $XXX expect recurring drove the on growth. deferred will XX% up growth total revenue to a of current subscriptions we outlook, be backlog, we SaaS fiscal as XXXX. cloud our Additionally, Based of our support be

margin gross XX.X% up That's basis greater XX year quarter. to Our quarter excellent basis again, XX.X% our high-margin and year-over-year. chain a revenue. as ago mix We sequentially lower attribute points gross XX.X% our the supply overall up the subscription in team, fourth to points and once distribution improvements XXX achieving margin compared increased and the by work in costs of

expenses increased the Our the and sales were up increase operating $XXX R&D ago marketing fourth quarter first million, in plans. and year $XXX higher support and million $XXX million in down revenue expenses from year-over-year growth The from quarter. investment quarter reflects our to

growth, of $XXX above our million repurchased quarters another revenue are first earnings $X.XX, contributed increase of over first strong XX.X%, the in of our quarter. quarter. with operating $XX in cash operating was our $XXX million stock and quarter ago margin year up to commitment shares management finished gross after end, Our dilution prior expansion awards. of million offset share from that and high XX.X% $XX the quarter of at in on repurchasing the per shares. and executing and up worth guidance the We expense from end the We've entering cash from range now cash another quarter the our XX.X% to To X equivalents net million last and margin,

rest relatively of we the million XX% represents And generated remain the cash in our adjusted We million The $XX a EBITDA. this $XX model. high year. free of our we to count cash flow end long-term flow free that of expect share generated flat also above for margin

about optimistic and the to turning networking our spending to environment take share. Now enterprise remain We guidance. ability

that outlook buying at XXXX, taking and do fiscal opposed patterns ahead and revenue a year. to the believe air our of lighten we the looking balance our conditions, are as the an of spending this more macroeconomic issue within customer current environment. and are cautious target is systemic However, a tempering We more for changing the Based tone balance we pocket markets. this quarter on

to of $X.XX range a be count million For to in the operating the range expected we XX.X% a implies near-term high fiscal gross -- revenue diluted a we of to above of quarter, XX.X% be to of and in be in revenue range Despite to second growth, $XXX continue. industry gains per lower of million shares. expectations for in mid- on expect margin and believe market be $X.XX XX.X% to share is of to XX.X%, a XXX and a share we $XX to million expect margin to million; $XXX revenue earnings and single share year digits will our conditions 'XX, full growth estimates which range

We have ensure expect current revenue the taken cost recent also actions of align to our with achieve. we to we growth level that structure

recurring long-term as from year, growth session. we Ed to growth, As to and deliver forward opportunity for to back are tremendous improve laying of long-term during with look contribution we of result, believe remain margins double-digit see to and XX% week. fiscal committed operator subscription Day turn improved margins noted, next new to we I'll the that, strong the generate positioned our the begin cash approximately accelerate call support to plans--our in a I operating -- and and plans XXXX. EPS flow. Q&A business, And at the well revenue Investor our Extreme out now profitability our our grow some we I We to and our and long-term expect

At [Operator first session. this conduct One question. time, the we'll moment Instructions]. our for question-and-answer

question comes Vogt Our David first UBS. with from

some well. sort time of I issues been this actually ask you've the as at it for David. certainly, Andrew had to the has for is industry big backlog, you, This now on looking wanted one elevated of

a been help slower entirely the sort and sending us you So wondering Can that is, your industry sort us understand pull versus the what you the it? is mixed backlog outlook much to help how us apart better I'm maybe of that can driving little of entire signals understand bit has macro? of for

you Andrew, the course up, just not release you I'll the whole when backlog And very about jump high it's -- we extreme, Yes. can follow into in. a several -- and about the and There's over think the channel. quarters, think backlog it's industry. then Kevin, I think you happened can been level -- and Andrew, of there's the what's last of

a And so channel. lot how you of might product digestion, current into the terms we it's of say demand, affecting in effectively, but put

I and and and networking of purchasing gear, say channel And product they that others, and lot an so with are channel. moving they're of on really deploying a active networks. some a their some in of they're busy drawdown deployment partners the mode very our receiving there's focus right and paused from And now. receiving unusually would And product of with amount forward, -- deploying high the

demand that's So current affecting--that's this how you think the equation. demand -- how I should the affecting that's about think

we an As it this pocket, pass. said, calling we're will air

networking of of demand deploy the want for in going do to to kind they add course normal back with As course their networks, kind get consistent that Kevin, to that? to you ordering anything normal will be they're industry.

hit it. I think you

you the think all hit I points.

my QX. down, follow-up it to you on you've got just, normalize now expect working just that then obviously, And in is backlog

very revenue the half You've difficult half. 'XX in is the your you're to back got to see gives in a What that it some you targets? back fiscal that revenue going confidence the hit reacceleration comps

we Well, see funnel. Andrew, our what it's about in really

next opportunities the of and of picture and to them. volume all confidence the funnel have time it's a kind have clear the very the to that opportunities We call. a us quantity of quality gives line make our and those And

the of more people quarter QX, the some As at their our mentioned didn't And of sales normally lot These with about opportunities. those second Kevin lot we end the cautious see year. of slowdown half became bookings that the into the call with in call the happen. landed would here. that a A became we cautious turn more cycle, teams are of opportunities high-quality the of

interval. a Kevin, what's you that's in the well. say shot driving give as to And would so that confidence jump I I'll

year toughest QX the not obviously, as going mean, growth the to throughout think year that million mean guidance XXXX... year full revenue we the calling rest the with year, the think But I is I for accelerating we have full full about for compared and of Yes. that quarterly comp our We top we're to $XXX the year. of over we're about hit for the last mid-teens that. the

Our Henderson next with Alex from question Needham. comes

Great.

Just a quick guide. clarification the on

assume is we of So and of assessment product increase that if the the lagging that services growth I quarter, X, the were over I of quarter-to-quarter upcoming majority growth that... next the for at to a guide swing services for of X would in to that and suggest the course year, sales software plus the Is the normal product strength the vast overall continue gradually the quarters. off sales fair look

it's all product on Right now, sales.

part, the attach I right, rate, I most subscription support, with it's mean, For products. -- and mean, with the associated that's obviously, the

of longer come make in we're cycles where we And taking market So this feel air see relates bit there revenue is the some But in you as the people the it back. issue, of that's full will the reduction being to and and will, when would moderation on for absorption the within support lengthening. we market and are if pocket with macroeconomic, just a the And digestion it. decisions side. we in think like you'll period, product product of The for are revenue subscription year the of little come decision literally anticipation out the the question just to lower. macro be majority

think with companies the seeing this many sector. across I we're

therefore, X the last course to XX increase it's years' driven kind should a is growth be flattish very the the of clear, of the if even of worth just trajectory. at services to over sales, period, product continue So generally it off quarter-to-quarter in

So product it's almost in all sales.

be expectation. would That our

Okay.

So be year, December the versus literally that's that's in surface is between hit and given excluding accurate the if to the printed what case, the the drawdown as that the just sounds quarter. flat sell-through. to sales case, at read? And underneath it the for down like also an full the the in mechanics channel quarter inventory if product guidance order your have your essentially Is your

were So X-tier the from look customer if of look perspective what to sell-through distribution it the is the opposed as you at perspective. like rate to channel

right is of quarter that combination a away the quarter. fourth all, expected now. dates the look pipeline, for in of first backlog fourth we've mean, at the a got customer -- long way I just is We request

So we overall have customers, and some we'll build for logos, and know Naturally, of some we relates QX to that information. pipeline pipeline, the new got of We've existing it's pipeline. that more assessed that we QX. QX, between pipeline

so up, we machine, that mid- that for look I Yes, comp but all up quarter, would -- in we're got as that I to full we the that the at we say it's we've to for but the the mid- what tough achieve high And it to basis, through flattish year there, be single-to-high for and year a a fourth QX. full on single digits year, think up. year and it's the still is could mentioned, as going relates full throw

between opposed sell-through down to your the channel as what And question the underlying The really what's X-tier of difference of growth the distribution buying inventory in in work to from terms i.e., your product is rate customer was, customers? channel.

yes, percentage distribution. product flat surface you sales, that underlying out revenues what is here, X-tier the sell-through were of look of but your coming underneath the to there's reflective of if of So

of channel demand. weakness is how is destocking? this much So And how of much distribution the a this underlying in inventory

an that. now, own We too we've say. healthy inventory into tease own going demand in as you've they don't more to in like cetera. at challenges end they've normalized is our say et our hard pocket this much healthy wars apart, of what that it's air more perfect got it's of program, Like fully got -- our we X-tier We mean would distribution customer have. that X pull warehouse. that mean and the I healthy distribution customer And demand. got right A. is on looking all that don't have level. would and have have now, reseller visibility on relatively I amount I necessarily naturally right cetera, end levels I we're that et now

sluggish, European it's APAC. area really, So particularly in Germany, would commented I being -- causing just We're I'll U.S. that... there's slowdown the we area area. well say, any strong. continues we're still doing if But seeing of that's be area that's to Europe mostly is this the in The the call any more it, in

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

to FY to first for X% high clarification So just a 'XX, that X%. digits, we are single talking the guide mid- on to

I would, guess you yes.

it for ago, as demand only 'XX. can for shifting to FY like -- Okay. the environment, about rate, 'XX, but were pretty And back weeks mid-teens once? FY the X event or about then not I Was guess, at confidently of point still particular guys you in change up all maybe that we kind the a to seems until any talking there market growth

you that? do Ed, cover Yes, to want

really Eric, Yes. happens. it

business at deals this across that back but were We've decided it's is by across the industries, field it this push And caught orders where have of coming that, And huge no If from come we when was the the because it, X pipeline guard you of of sellers weeks and the high quarter. us about deals it's committed I messaging saw way that we heard started the flows there happened. literally, of coming most an from towards -- entire unusually geographies verticals month the our deals, wave in, where push look last an -- the quarter a decision the standpoint, that would last of then the they -- hey, in of slip the across really our and and and buildup say, there's coming. going our really off ordering end that -- business level. alarm a quarter to industry, going one and to the at

still started still And don't the good. around, more the next a end and we teams of decision-making their more going purchasing were you at our it shipments to so more projects more moved there we projects at quarter the business. happen. The where ship. turn really come orders just into your in with because -- more turn close what those process. situation is happened the we issue are of point come is the that end a A the lost with as there's when was the we process. right. where And seeing lot And the of And we getting for literally there's would now our in are to where normal don't Maybe the quarter. cautious of in quarter, be quarter, a forward, over your last that opportunities scrutiny happens revenue and quarter. they orders the at different weeks affect the end the situation the are a environment. of the book budgets, the place. things what backlog we're And more people what X quarter of that what given orders you're then look We out types, down. in, lot come getting were slipping the we're in quarter. call that to of involved financial not just just hearing prioritization The They -- a purchasing, takes slowed a players into But lot And we are in got kind

of the the end teams to be at was cautious it caused and that at they the of so to the very heels end their our be quarter calls. on more should conservative. that And with at And us of happened cautious QX field felt softness the what quarter look more

things -- kind of of So those that's X the combination that happened. really it's

Ed, we also comment XX, buying were the the revenue assess today. us that And beyond seeing what to pattern in up September that caused last look days XX to like still QX even would same October, would I some issues like leading our to of even

Oppenheimer. from comes next Our question with Timothy Horan

you these when asked X of the from know few I bit networks slowdown longer. just you've this in talking but hotter channel, times, maybe mean, periods to little run XX been can I last Ed, a studied guide And you just for just months a mixed maybe at past a know of it's give demand of but from I color... bit to rough kind what little more channel hard working inventory lower versus just the guestimate very of end-user hearing the signals. just a comes percentage us the down quantify, months,

Yes, and thanks question. for example. you it quantify, hard an is to give I'll Tim, the

-- business product been on us. largest I'll of is gotten our really and with They've I'll partners partner behalf. an healthy year. They consumed. a And they're amazing of Some on are they I'll and strategic their pick active with year-over-year These way example and having you use backlog, released and super all and this solely EMEA -- pick customers fantastic off are a specifically, our Germany from in of that's deploying focused customers. networks they're see on fully for business their are

now However, equipment. all focus right deploying their that on is

They is off. return. business business fully their so to And expect

and I And calling a we there's deploy. outlook, I near with back. -- to as channel pocket Kevin, say that's if on I'd just term put our know half you we process, can a if decision-making, to versus more people pushing decision-making finger the in I guess jump digestion. into much half. I could had look channel -- it why so It's slowdown at for constraints, to make and a it's the it number If just to an would like, budgetary up and coming But the give place had coming in. probably allocate we're air how it a

digestion I but... was XX thinking XX macro

starting And that to Tim, has And run back, rate knew And we business. is encouraging been run run to other the that come is there is a is business insignificant. rate Yes. not rate which piece historically us.

We Our think is run on there think I run -- of that's of And that this throughout anticipation the channel. what's a also and step is function byproduct year. the would in going rate slowly. happening it's fiscal be that rate more course a

color. great That's Yes.

So full distribution any maybe is mean, handle this point, basically at they half... is I capacity out can't our more

side, need And then themselves our then they're project. ship next partners because in there the me distribution okay, product distributors the yet There's that project to take delivery I'll channel this busy for and don't distribution okay, and they're inventory. saying, finish I and

as -- that for we but what flows they're channel So buying partners their and down draw POS, they're distributor inventory. call waiting on our for to down because waiting well

is We've calling X will it's before. before. we're bit, -- revised of pass. factored quarter I will phenomenon, the just quarter we've this backed for happen kind pass. here it it's but pass. It for So digestion, into which quarter. all And We why gotten our been a It's but will up little it the think and year this a seen it outlook

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

I may have missed that... product color any up Or or orders on it, down? but were

for from So Dave, we one quarter dollar orders amount really quoted another. haven't any to

a done cetera. second because We sequentially, of orders had quarter, the it discussed order what our obviously think orders. as and pushes that And first QX. about out, it you're tended have quarter just up to sequentially out say about get we pushing or in not softer of some down et you may had it, been quarter that we shipping of those In a

a than we I our guidance. had QX So expected. softer QX reflective in in quarter And would that's yes, we say, orders

they're think quarter? trends do do expect fiscal going you similar to in rebound? And second Or you

visibility not I was from is the yet. quarter -- quarter an say in right done it the than the quarter were stronger our now, first But second we're orders perspective. into with We -- we would

had the at with And so same I that don't in have September of we'll pushing we whether orders phenomenon end the again. the year, know

that's right are is from That's macroeconomic continue the that will, the visibility now can't ship to sales a if it where continue going are the the to challenge, perspective, to we elongate you phenomenon... going So have push these to cycles in you quarter. things

and we bottom impact the that being -- revenue, come with slightly. in in revenue the environment jump feel end I'll and like quarter quarter into will say at quarter. get from Kevin, product up Again, shipping a perspective, lot March But now wind of up Orders shipped that Yes, the being up in hit in orders the in the on those the of we our usually following spill don't a quarter. orders December

So Yes. Dave? answer your that Does question,

don't been Yes, you yes. more run end and you recent into Arista Arista your their Juniper the And previously, and markets? seems my regarding like business enterprise in has follow-up you Are seeing competitors, said your Kinneper quarters. nicely is typically growing

we see Their market. different We see enterprise very -- is than our never enterprise market Arista.

business with for customers. maybe larger their But think in market, an some very I the us be data the other financials Arista. an to large extension, would extension larger center of and unusual it our of cloud that's see

enterprise As play. I it to we more relates Juniper, more think, frequently where heavily is them and the see investing market, the in Juniper we in verticals

of lot still tea that if on revenue read demand single-digit leaves I think in perspective, a the perspective the are a term. said, unloading the you calling what I From Juniper think high same we growth backlog. a they're they're near from

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

Great.

kind So that is the versus driving on it time. level conversation material a pipeline almost safe to since precoded a Is of period the a previous backlog growth talking is assume backlog a for to of fair? back material that probably conversations is about returning conversation funnel normalized and somewhat to

They're had like to all with want say upfront very has a there They think equipment -- deploying of give I to time still it's normalized, Christian, don't as that's an the and They backlog once. I stores. necessarily Kroger. but have We deployment. we that relates backlog their example distribution all fair with of can their -- a win fair to the out our customer want amount that Kroger. large it at

of dates, have is very that request our the the see of request one -- this of backlog specific customer we one said QX we year. customer And is That what example dates. of of end the be fiscal we've continues normalization many. to at So what case and -- fiscal

channel talking were quarter about on end. just the at that pushouts? that follow-up And that distribution Or direct a Is right. unanticipated That's that, is you -- customer was that pushouts? pushouts

Those... Those are customers...

That's right.

like then products. with top line strong your It growth in to seems for return recurring. XX% my And question, last revenue Great. Okay. rate a XX% of really growth 'XX

to guys' assumptions gains back what trying or market attain So figure growth out share I'm growth growth is industry versus objective... into you for to that

Well, right, long-range at a couple next of investor through model our go things. I mean, Tuesday, the conference. one, we'll

not can more Right So now, little XX we we're bit XX%. talk about a for that. guiding

that will biggest the revenue is think recurring I point continue to grow.

seeing You're now. right grow subscriptions XX%

And we think think over so this We next the we several keeps mentioned is an that's earlier. as years. the pocket, gift giving that air on

back still like And coming should year talked will about so XXXX. have we think normalize. there pipeline. good a pipeline. we demand the of so that be a this have we that building towards into end And we And --

period gives this we into and that then a within And least so will and right should this a of a time year macroeconomic have hopefully visibility as here more -- be normalized well the spend us spending is that's year. normal XX% issue now confidence for XXXX. abate that At

opportunities. we of from double-digit in point I'd a lot year-over-year funnel, the of out that Christian, we -- mentioned funnel our have And and terms growth comes confidence we

the And so a will addition are in new lot to of come that demand. out fruition getting to pushed opportunities

When also combination point and So have of calling, we relative for low And growth and just out, a business proxy we've of terms invested we're business. single share a in taking digit. Cisco much other in we is the compliance market how we mentioned our share -- of if that's where rolled the XX% of of people have in of where interest our well play. U.S. about that MSP. lot targeted platform. more we're in us in in market lot There's to have as a certifications opportunities really talked global And seeing of We're MSP. for We some are as we a abroad. managed investments a the strategic interesting terms security apply spaces of white stage And because in it's that over a is opportunities turn function there's services core I take kind ramping Extreme they're our market early share the share, of is other what some core size.

commercial as at more just taking played heavy and go-to-market. of more look require don't about for new haven't we core market, but stages and are ramp. these and investment, space relationship white we it's early are models. look new at share And the they're the where they investments They before, at So of us, we components and then

So because that lot week those detail. point than that is market. rates line would is conference make the participation the will in subscription higher going growth And much And would be last we're our a to to it at get Kevin's growing XX%. of I next I into point, encourage investor at

understood I the just game what math, saying. No, wanted you Right. which think math. that understand I you're I market share directionally

question question next our next Greg our for moment Mason with comes -- One Capital. Westpark from

Can at you geographic distribution... hear Looking your me?

got you. Yes, We we can.

Okay.

standpoint? kind Pac macro maybe reasons, just of I still yet. Looking geographic a channel for global what didn't it to quarter. a understandable your Asia for more shifting the about slide. distribution, been home opportunities last and focus at where offset I from was EMEA I had the of do haven't are XX% your that to strong to you to given sales and chance EMEA area forward, this going resources markets see the kind it soft think back has marketing But to see a foresee you was market domestic your

Yes, still Greg, is XX%. EMEA hovering around

Pacific. growth looking opportunities pockets. in point in where also made talked were if for I commented we success example, the as realized was We're we're we then Asia demand, we yes, driving a higher us There's And We go-to-market. to Pacific be for out. manage And a are sales other a and and way we're very going we're markets where business, growth our we resources significant when time we realigning managing pointed short we're we -- looking overall. we make productivity that in whole can your lot to resources near-term on. resources of at And those the what have of in investments, a the on where see drive Yes, because resources we growth because mean spot decisions And think here of of quick off, targeted within some about with at around the decisions will year-over-year realigning And lot Asia is in on business. our resources the move we and is productivity. investment it at answer investment was yes. quickly. But look are behind those actively size drive we realigning And have very unfortunately, in field. XX%-ish. our we the the realign of sure to federal,

a And through you very I I my you very you. an is, that discussions Ed, Got in, briefly color wireless was opportunity currently some solution Could carriers. offering mentioned thought with follow-on you on that? interesting are what give a enterprise more guess, about little carriers

Yes.

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next For question. [Operator Instructions]. our

Securities. from comes Rosenblatt Mike next with Genovese Our question

sort about your confidence of go-to-market back. my initiatives of lot asked questions been new come A will already. and questions have orders that

just pretty again.And of ask to us still second those EPS could if you're So now I'll Despite kind growth. good which for want just comments I'll the then question, you summarize revenue margins. is talk cut, about looking my for

bit little margins a of those sort more, we just dynamics should please? what go for of expect So through

Sure.

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has of a specifically. a we're couple talking and large It players massive to have We one pipeline opportunities. backlog of

excited we're that. about So

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open resources that we've opportunities growth industry that new pursuing, that we're uncovered have normal We up that hired specific higher have targeted much some than opportunities there. very

where Pacific, Asia have mentioned that also We we rebuilding been team.

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with the players some large really We have some of opportunities there. large

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cloud subscription Extreme at well... management in a platform build So an about and or we'll but Investor we out tool, as a see the Day as cloud our as Extreme just platform accelerated that management service Cloud, orchestrator, we talk not growth

margins, a lot than the here the And just then line grows talk a bottom the top... more of about was color. That lot how Great. faster on

one. You to me cover want that

Go for it.

the market fixed look Mike can changing. act levers pull environment I see planning our annual need our and think, great of that in can And what need quarter quickly, at we like was back, understand us evolving kind pull and business of that pull, if which to we kind process, to spend. back they to hiring. our develop planning discretionary are the on back for we we When we right? the environment. -- able we rooted so spend we in if this and is on We process, spend pull We to were discretionary

So as us rest for that's quarter still EPS an second obviously the year the perspective to of good and enabling from have well. a helps us

feel this So there time hey, your of in been is I we is single in high say, and revenue companies years. where still achieve not growth would growth if for profitability levels high delivering ability can our growth, out and profitability, teens to top year. we've say confident several some that quite you're to XX% you There's for EPS many XX% line delivering even

air company element that profitable realize this And at deliver so good, this And we'll to pocket turn to year. that into that company next and shareholders we growth think that, an and strong year, back important is then is this well. still get deliver going look mid-teens through growth a for more as margin

So that's the goal.

one Could comments The talk the of have you little is focus just just more I on come -- the gross seem there. to as bit me Can quick versus well? margin. sort expenses margin follow-up to operating margin gross a operating

Mike. to of for going to we we're at sure, how mean margin continue continue ways our I to can gross look expand Yes.

can XX know to That's improve sequentially to gross are year. year. the don't the year. every continue that. off continue see originally We're that the throughout improvement that be XX% be our throughout basis but going to We quarter, points said it are I if in the we think margins think for will expecting expecting full I not help... we we that to to somewhere going it's we range we backing single

year XX% range. XX% Mike, implied And in the what's Yes. a we obviously, more a of that and is gross end margin over

to we it as dynamics out relates the and here to gross as to see relates stepping come see supply So subscription, of of some we as chain we continue mix gross etcetera. margins, margins it

closing Meyercord time, question-and-answer it turn concludes would like I At session. back to That for remarks. the this to Ed

partners a first as that well. participating employees and shout joined customers to Well, and call. your on in Okay. We We out. all, I of get thanks, everybody, want the of for interest lot appreciate Extreme.

want customers and and all So relationship to the for business our to the work partners employees thank Extreme. I for the and hard commitment

far core lot market, have lot detail as is a as I As looks here, a of going everyone we concerned to as like the invite around kind in from of of to everyone opportunities, this we what Day. Investor we're opportunities go into financial and a to the well growth perspective. tune help

everyone short-term the what invite Thanks, there. to and we this leverage everybody, we bottom operating And see as see a that on and line. phenomenon, committed there. delivering in obviously, And term to remain top we line. to reiterate, participate with I'll So the a great day. hope you have to double-digit growth we means long

today's Thank program. your conclude This in you participation for does conference. the

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