These Analysts Slash Their Forecasts On Extreme Networks After Q2 Results

Benzinga - by Avi Kapoor, Benzinga Staff Writer.

Extreme Networks, Inc. (NASDAQ: EXTR) reported mixed second-quarter financial results on Wednesday.

The company reported a second-quarter FY24 revenue decline of 6.9% year over year to $296.37 million, beating the consensus of $295.61 million. Adjusted EPS of 24 cents missed the consensus estimate of 25 cents, according to data from Benzinga Pro.

Product revenue slumped 16.5% to $186.6 million. Subscription and support revenue grew 15.7% Y/Y to $109.8 million. SaaS ARR was $158.0 million, up 37.4% year-over-year.

Extreme Networks said it expects third-quarter total net revenue of $200 million-$210 million (estimate: $321.305 million). The company sees third-quarter adjusted EPS of $(0.22)-$(0.17) versus the street view of $0.28. The company expects fourth-quarter revenue of $265 million-$275 million (estimate: $355.32 million).

“The networking industry, like much of IT, is exiting the final stage of the COVID-induced era of supply chain constraints, which is still impacting our business. As a result, our distributors and partners have lowered inventory purchases, which we expect to accelerate in the third quarter. We expect to emerge in the fourth quarter at a more normalized level of revenue and earnings,” said Ed Meyercord, President and Chief Executive Officer.

Extreme Networks shares fell 18.8% to close at $13.51 on Wednesday.

These analysts made changes to their price targets on Extreme Networks after the company reported quarterly results.

• UBS cut the price target on Extreme Networks from $22 to $14. UBS analyst David Vogt downgraded the stock from Buy to Neutral.
• Needham slashed Extreme Networks price target from $23 to $16.5. Needham analyst Alex Henderson maintained a Buy rating.

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