Extreme Networks reported first‑quarter fiscal 2026 revenue of $310.2 million, up 15.2% from $269.2 million in the same quarter of fiscal 2025. Net income rose to $5.6 million from a loss of $10.5 million in Q1 fiscal 2025, giving earnings per share of $0.04 versus a loss per share of $0.08.
Product revenue increased to $194.0 million, while subscription and support revenue grew to $116.2 million, reflecting a 24.2% year‑over‑year rise in SaaS annual recurring revenue. Gross margin was 60.6% GAAP and 61.3% non‑GAAP, a slight decline from 63.0% and 63.7% in the prior year quarter, attributed to higher inventory and distribution costs.
Operating margin improved to 3.6% GAAP and 13.3% non‑GAAP, supported by disciplined expense management and higher product revenue. Management noted that inventory and distribution costs increased due to supply‑chain adjustments, but price increases and cost controls are expected to restore margin strength later in the fiscal year.
The company ended the quarter with $209.0 million in cash and repurchased $12.0 million of shares, underscoring its commitment to shareholder returns.
For fiscal 2026 Q2, Extreme Networks projects revenue of $309.0 million to $315.0 million, GAAP gross margin of 60.8% to 61.4% and operating margin of 2.6% to 4.0%. Non‑GAAP guidance projects revenue of $309.0 million to $315.0 million, gross margin of 61.4% to 62.0% and operating margin of 13.4% to 14.6%, with earnings per share of $0.23 to $0.25.
The guidance exceeds the consensus estimate of $301.6 million for Q1 and aligns with the company’s focus on expanding its AI‑powered ExtremeCloud IQ platform and the newly launched Extreme Platform ONE, positioning it to capture growing demand for AI‑driven networking solutions.
Extreme Networks operates in a competitive networking solutions market. The company’s focus on AI‑driven solutions, particularly its ExtremeCloud IQ platform and the recently launched Extreme Platform ONE, positions it to capitalize on the growing demand for AI in networking. Management highlighted that competitors are experiencing portfolio rationalization and integration challenges, creating opportunities for Extreme to capture market share.
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