EXTR - Earnings call transcript Q4 2024

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to Extreme Networks Fourth Quarter and Full Year 2024 Financial Results. [Operator Instructions] Please be advised that today's conference is being recorded. I would like now to turn the conference over to Stan Kovler, Vice President of Corporate Development and Investor Relations. Please go ahead.

Stan Kovler

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

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

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

Edward Meyercord

and for joining us Thank you thank Stan, you, morning. all this

results strengthen impacted provision Our to quarter the excess fourth on comprehensive This on an analysis obsolete were our and extraordinary was position. in inventory. have for focus competitive by products our a to decision next-generation our sellers and based

now and confident enter fiscal and inventory we've eliminated have challenges behind of that the chain us. supply direct both the As put 'XX, our we we're the cycle channel headwinds from constraint

Excluding in cloud. The we ensure flexibility, elimination and we of improvement in and out their outlook, in remained return all the to migration of Both relative we infrastructure the the unique analysts year-over-year, and subscriptions of for reserve software our as the in from demand in line partners aided conditions million simplicity with and ahead our top most supply of growth a premier of of strong, XX% industry indicators macro rapidly the networking approach customers cloud to proposition $X positive for devices networking largest are been recognized modern were unmatched derisk the offer enterprise managed that excess in business and result growing that customers Extreme. we've order customer investment to We enterprise to get player E&O by geos. competitors. ARR the second services our the offer value run mark as by is solutions persisted market XXXX. up our our demand slightly volume rate quarter, the across and

classes. efficient, our our chose able college's locations of XXX the enterprise for they deploy most while a their to allows in-person our still could unmatched flexibility It and of value supporting Fabric a and the Specifically, them the are Fabric gear world's long-time transition the capabilities. Davidson platform secure environment and without flex make manufacturer they leading an it's and competitors pace in to Fabric advanced with because third-party cyberattacks, support old the great micro moves, looking manage more provide end-to-end segmentation and which a CapEx, simple, project motors. and the without management precision without to scalable out They're combination wanted future with wanted Extreme customer Cisco to hybrid it the campus disruption. A Carolina capability stores. a The cloud seamlessly and in service. of flexible, both was performance that these have them changes model, were is scalable to this Customers secure ebm-papst We Asda, simple upgrade hardware, radius of the Cloud zero-touch powerful complete. the modernize sites. Cisco online By they to to flexibility decided Fabric North industrial and blast Extreme help one a of remote leveraging operations, modern resiliency and visibility College at was while dramatically creating of to U.K.'s for all a minimizes Extreme management quarter Fabric, across across to and manage the because disrupting allowing network taking the and network provisioning. them the to improving from example industry's its operations. platform also and seamless adds largest deploy until this of Extreme embracing offers lateral reducing that migrate offer we modern solution network of truly it When recently and to fans combination. makes to the customers integration retailers provides learning and allowed None security network Germany, migrate with Extreme to network

our to well. No We to the as Our consumption-based level equation this economic allowing flexibility offers are grew new benefits go-to-market to us partner billing MSP industry in share these the model quarter. unique simplicity. our licensing during or attracted to beginning to poolable XX one and licensing. of add initiatives and else base gain are of the the Partners commercial growth

control buzz in capability quarter, traditional bookings of network direct we doubled functions, partners Extreme environment. There users published technology explore event, modern and sessions, Live, core main on our our seeing their security aligned demos, sellers and vision with training security security, partners of infectious traction as customers no in to that what week, of combines month, among sequentially network energy a also across Universal with its our that MSP we showcased stage solutions is driving network how which The the access cover positive the immersive good map access control, have Last training networking, longer emerging where network we're partners highly engaging fourth and access a generative control hands-on Last AI. Our and layered was demanding for hosted offerings cloud with excitement are and the location enterprise it globally. Customers paper Fabric. at particular convergence sellers we're XXX% Academy and are the said ZTNA and this future. road generated urging Gartner ZTNA with needs, in ZTNA. networking and clients along any securing

lowers engine no single delivers cost else Academy we ZTNA, policy of Extreme total a We can offer. At our in AI one productivity, also advancements cloud-based industry Live, for NAC that AI to improve which networking Expert, a simple. insights that and and previewed makes generative Extreme our ownership have solution

coming within device Extreme to most through co-innovation a combination While modern connectivity a all the alliance Intel's from week PCs preview we're together, solution these building networks networking we'll in industry's Labs, unique and analytics tech which of data we and in Intel data With platform. resilient. GenAI the is and smarter, more last with faster network make currently announced leverage pieces

Given expensive to from activity benefiting integrate largest and causing disruption from to enterprise is the customers away largest solutions. and is very and This time-consuming. stitch technologies substantial we're it our makes investing partners. them together, networking with the with channel acquired player with complicated The no intent M&A industry's players,

Vikings, customer in the and Bank U.S., U.K., and Minnesota at numerous Hospital a major the in of Indonesia, manufacturing Fortune XXX a schools we major universities. NHS of During including several the Health displaced Prescott, Vandalia quarter, company Cisco sites, City U.S.-based

Texas Portfolio Carolina, derisk in few. The University, second to distracted including have and become increasingly a to creates rationalization also difficult partners networking, looking make investments far displaced Germany, technology, number HP their a alternative. customers. we largest install players sites, are Extreme our better third abandon which combination. Automotive makes name business to of VOSS will in in of integration risk. customers and and of and by thousands University Juniper North across Recently, They'll to their tens decisions of a space Today, their Tech

we expect revenue year. cash flow. forward, during growth quarters first the This to will and Going sequential and margins be continue and growth full by the year-over-year for second increased accompanied growth

of call in is opportunities Gartner The 'XX. With and to as support our a commitment new has like their investments Extreme results the of in the as generation. MQ, solutions, for long-term innovation, Our networking turn confidence of the guidance. well in growth CFO, through our the competitors' combination funnel the I'd unique with products to uncertainty Rhodes, over outlook to this that, Kevin volume in quality in walk our fiscal created to of leadership in opportunity based on position strong and to funnel promising the to return and momentum mixed current us

Kevin Rhodes

results outlook Operationally, our were slightly ahead of quarter. for Ed. our Thanks, the

our entering expected has normalized. now we fully As inventory channel the quarter, position

that as for are sell-in to the a us improve rates we saw to in and balanced, return position normalized and demands as this We confident growth are sell-through quarter. continue will customer trends and

inventory supply networking we said several levels the elevated resulted past this we've chain in -- As unlocking the rest the industry the through. of channel have of constraints of for and that unlocking working year been quarters,

conditions related increase steadfast for engines with new products. inventory innovation investments for fiscal in XXXX, on relative a generation inventory of to products fiscal going to fiscal decision issues, of inventory year while to high in sale level of $XX.X remain the those unabated. At XXXX managing products growth, older of outlook During found by our of our prior areas reserves and a in our XXXX, enter believe end drove loss in commitments. On our and we these end on ourselves our supplier hand we These million, held includes discussing non-GAAP which in and the our our increase in our I reserve the of to results. outlook. the comparisons is rearview we in are our cycle that XXXX mirror. for note, impact non-GAAP fiscal some adjusted With through in feeling our confident to a E&O are reporting positive the better mind, will that The challenges extraordinary our also reflected results, normal reserves and our excluding be GAAP we and allow

Solutions most our again partners, expected and share fourth some of region strong third Product million that revenue Let by revenue customer were attracting sharp revenue transacting and ago in in number growth in the basis, by within reflecting geographic spend channel reflects million of rebound also gaining of of in Fourth with from in into $XXX $X the quarter. wireless XX% we than as the recovery better in sequentially Overall revenue XX year demand. range. end customers me customers had rather numbers. rebound the conditions backlog a accounts improvement a quarter. over encouraged campus channel during sharp quarter. grew I'm percentage based on an versus discussed time. again sequentially, EMEA our higher million The sell-through Extreme a and sharp for of and product some revenue from sequential the once on $XXX transactions growth alignment Extreme XX% have with the of improvement the a grew recovery quarter sales our during in bookings a product switching. Product indicators quarter new in is On get other the quarter. We once quarter. recovery quarter above this notably, reflects transacting was in bookings

show had strength Subscription our XXXX, deferred spent line who to year and to driven $XXX activations was growth up products. continued we fiscal shipped year-over-year top by For of prior XX% from strong SaaS XXX customers year-over-year, XXX the in at revenue previously over renewals $X million, customers XX% of growth the up year. million. ARR

was revenue support $XXX subscription Our and million.

Our XXXX percentage of driven fourth strength recurring revenue been fiscal cloud to revenue. Total recurring largely XX% and of growth has revenue. subscription points grew quarter revenue revenue the by XX% year-over-year X of

product a The overall expect combination in drove the trends. up penetration cloud subscriptions revenue, currently XX% throughout up better Our rates, revenue particularly from the points despite of overhead and gross Americas. the prior The achieved in continue and new We margin revenue to year-over-year. business XX.X%, of maintenance remained ago. to achieved million, solid fluctuations deferred up services the a high growth product We in premier improvement to fixed service new year-over-year total basis $XXX services XXX the year improve costs maintenance revenue to drove XXX compared results. cover points fiscal basis quarter of margin watermark and XXXX. sequential to higher Gross

in drive from margin sequential prior revenue operating expenses operating the loss EPS increased fourth the was share profit and but along in, in million, adjusted up to a controls a per from year for ago $XX year All $X.XX the $X.XX into fourth down is quarter stringent from do the a quarter. in margin higher margin This in of expect in from the XX.X% quarter. of X.X% down EPS and quarter, 'XX, million Heading third a loss inventory in down recovery fiscal of $X.XX, up of helped third to from quarter the of a with in the and incentive free profitability with quarter was debt reflection increase million $XX prior reflects commitments cost down. and quarter compensation. Operating in with were cash to year compensation. our XX.X%, in million down from quarter. $XXX cash of quarter. fourth our of business due $XX profitability flow We higher ago the adjusted sharp as along $XX and ended operating quarter a revenue The our decline Our improvement net return we and million. the expenses the reduction and of drove This quarter the a $XXX wound purchases incentive sequentially million

fiscal recovery grow out XXXX sell cash in profitability have the in hand. revenue, flow a on expect and We as inventory we improve we

During -- now to guidance. turn let's

remains should the into opportunities are for activity new of heading and are of logo seeing, customer funnel the improving that bode we healthy, year. Our well we level and us encouraged by new which

expecting Looking ahead funnel growth verticals. to revenue the sequential are first quarter, our based our we many across improved of on

range of $XXX to to be to to to be For to follows: $XXX in be be in quarter, the range gross of first we to in a to XX% as $X.XX. XX%; margin of range a of million; expect guidance revenue margin million a XX.X%; operating in $X.XX share range a X.X% earnings per

diluted Our fully to shares. about be is count expected million XXX

For of billion we in expect $X.XXX to billion. revenue a be full year $X.XXX fiscal XXXX, to range the

operator products. And growth to are the in Q&A margins gross come and turn turnover our call year our the over to to newer grow tied inventory and operating We flow. expect and improve the for to Further improvements cash begin now customer expected demand session. I throughout to will with to organically the that, and

Operator

Street with Instructions] question Markets. the first will Martinuzzi Eric And Capital Lake from come [Operator

Eric Martinuzzi

FY Curious built let's 'XX, assumptions Are versus when? for recovery? not do in, if it of have macro we sort so, And a kind basis, the on of a second anticipating what half on take first guidance but maybe half. quarter-by-quarter you

Edward Meyercord

this Yes, for Ed. Thanks the is question. I'll it. Eric, cover

accelerate expecting that's with a in have on funnel. expecting in gradual are visibility opportunities and based that the we recovery QX, quarter, to then first we're in our it the We and current

-- through and to calendar that into we it's expect then So see 'XX. would carry

I modest... would So a say

Eric Martinuzzi

you accelerate QX, did talking QX? were said calendar -- you about When you

Edward Meyercord

Yes.

it's and to for our an And QX So expecting highly visible. we're see calendar us, QX, acceleration.

Eric Martinuzzi

of on and orders? or based The -- when visible, channel, orders highly channel Got just it's kind say you users from end is you. that

Edward Meyercord

that as Orders from users our both coming end from channel as are well direct.

Eric Martinuzzi

displacements a Okay. And why the you number but are congratulations these X to capabilities reasons, I for is then different on know X as displacements. there the point happening? competitive would -- or to of you win product that

Edward Meyercord

of called I elements I different out. called that some are There that X Yes. out.

is manage equipment. The that technology first that a us have we to allows competitor

to of enterprise so there's modern to kind moving a are networking customers most moving And involved. migration cloud, end-to-end contemplating as platforms,

it so seamless a still competitor gear migrate. to mentioned, we're equipment, with can And I can transition, while manage Cisco we as able means because manage and ebm-papst, where provide migration they we

installing easiest risky in of industry, gear deploying to least the you're for our we -- while it's to So player basic have the and we're upgrading and management player visibility your the Extreme. network all the infrastructure competitor capability because for and modern provide

unique. that's So

Our competitors don't have that.

The second Fabric. is our

cetera. it not as ease networks turning We our and have Fabric. et Fabric. you the determined up We networks, that of it's to And capabilities and It's that enterprise up unique add provisioning, on a based comes the X have. talk a something provisioning do it relates are in sites, touch where provisioned policies very have we automatically competitors device deploying about automatically network modern and

is then because buy with can create the its Exhibition they talk single paid migrated the network in and exhibition of segmentation an literally IT a The this micro thousands a own own hall physical is within create Cisco with team to to can each people. networks other Extreme networks exhibitor Dubai where of thing of sponsored SLA the and ability for or network Center where example doing have great about like they're and the Fabric X thousands its for have network. We actually we you X has

of take room from have. they so something standpoint, addresses, Penn competitors Philadelphia, see And ability on that don't Medical a network I'll hacker this any other gets security network. our So just the each And through if our million own Center, Fabric. here, XX is brand-new value to is a that square medical that you other IP go one has a to segment simply run they operating the foot they can't can't a X.X of its anywhere. device, Philadelphia, facility, downtown there's segmentation rooms, operating

security the that it minimized to blast wherever becomes it's the hacked, from So a perspective, radius network. of from segment hack is a

also resilient. It's has reason one no we University. It's why very So another else won Washington that.

a typical and you mentioned, Fabric have things And and as take the to So a network and that adds down. the down, hot changes, while bring moves, running, network to don't can I make would you don't is bring down. it network,

And in extended switching mean, edge to the the makes these We've comparable a SD-WAN else now across and extend are off and center. Fabric you and out solution has wide that. area So characteristics. network. started literally out out can what that core is policies this aggregation through No competitive our enterprise to one so layers data I all out. Fabric wireless, the it that because those

cloud cloud your ease just we're and We to cloud provide that of to really by use cloud non-Extreme in that see recently the security terms options interesting is about in of in, we network built which the the cloud it's the out our models, and of then at our capabilities, terms terms terms in come and in flexible just with looking through platform mapping and and of the out cloud. cloud our ability Finally, deployment with simplicity application most the mapping and you through managing And of finally, we public other our want in have soon then be capabilities. far into environment. equipment coming very

other and that in customers have Kroger, so that elements. can map this every literally an of evolution likes just are where connected network the imagine about have can not see excited where so world you You we IoT one device, you many and

have of environment. and people have that but -- for is going a are Extreme. survive. in out And important are And #X in on uncertainty unique everything players the and at these network. the to infrastructure, are idea decisions unique as addition, truly We #X obviously a there's of And looking So things modernizing distinct few networking the lot we upgrading their which bring and no derisking contemplating, if are what's really we there, as that you're runs differentiating capabilities. you because the

Operator

Dave Kang our [Operator comes Riley. question with next And from B. Instructions]

Dave Kang

technology, you're of talking their really some Yes. Ed, functionality. up have competitors about at while your it, your been AI talking

it go can Just you of up competitors? up against wondering if functionality against kind and your some the -- of they AI over how stacks how stack your

Edward Meyercord

learning is you're is in kind The around together the better really and Sure. this a the the network. leader driving And in outcomes science industry AIOps. data is about that for here. AI hearing -- of Extreme this And networking is incorporating machine

Mist why were leadership way is in of Mist CoPilot integration in terms position. first-generation and sort that's They and in our so I tickets. application. for ServiceNow think creating that kind of trouble outlook we that it's another all terms go-forward HP so between of underinvesting would -- have of reason what also kind and We I I a fell because with their This Extreme their their think and of is Mist, have AI famous bought from networking trouble those the really they in HP portfolio. behind say

generative we play, this AI. Expert. AI about As next is is talked move and of the forward, We coming AI generation into

and we're likes are and fundamentally of platform building on there to out in, or that ecosystem network. alliance in out the you mentioned Cameras investing networking Zebra ability where Appliances Intel are Verkada how from data focused will partners sources also interface pull partners, and with we our And change are there. the We our that other it a very

about your et Knowledge what's queries intelligence What cetera, network. exciting think be configurations, around most you Here, to is -- of this in where the I you reporting. the is platform queries. overall of our going is where becomes overall on truly form -- -- a have platform an us about the talk platform it's developing part cloud into about going queries about management through products,

biomed connecting. the medical piece health because equipment to the they're you If and in and about not care is of complaining comes you're network

it then and your give can happens. its just hours. And that report me XX on network, ready ask client it's the behavior and over fingertips a last You to the

is hour in going or to happening what take weeks literally minutes So environment of within can that instead troubleshooting an today. something that like be

where it value to way you that investing. the is this and This there's platform other start data if going fundamental So into sources shift. broader especially provide more change have And intelligence and insights we you pulling networking, more -- a is fundamentally of we're network. have yes, the the in strategic

Dave Kang

you we when the AI should to next-generation available? generative -- expect think do that be when And

Edward Meyercord

Yes. And to are our opened we event. sellers. just of -- we Live have had up this our we labs And Extreme in AI all Academy our

are is to So in AI going be to to of really continue really us our sellers help sort there, can evolve. because of helpful how this which we now is And develop next now which it. works our teams train is sales technology, our going this as generation

this We early then roll and a to then gradually October see And calendar round a part of next 'XX it you'll in which to earnest. of year, looking we're in November. open partner have schedule out first the up at partners, in to

start we So path people over will of where cloud be migration platform of platform. the fundamental be capability into the which -- then a will a there moving management obviously and our part

So here. teams inclusive. working. We're we're lot investing We're platform and into We're a product. hard. are bringing very working The the the

The use for perspective, agents that different we that have other We're mention cases partnered an Microsoft we enablement. with sales and and AI thing have would developed. over XX from is we've I CoPilot,

will, across it you Extreme. guess, the if assistant of sales and is far many company, in non-product, is, functions service a have I We we're being of more use the cases our as incorporating We're which very incorporating this function helpful for at AI that self-help. as

Dave Kang

what growth? mean, it's And that of accelerate end do at at I year-over-year. does bottom your at mean, XX% the I already guess, growing -- it I could I the to revenue assume recurring day, the ARR?

Edward Meyercord

say think XX% I we've sustaining XX%, allow that do, maintain do a I for us to to period I this is kind difficult. this us going allow over long growth. accelerated to going is But to of that growth. would to mean, called Dave, what rate this is what is think what growth is potential I time of And

GA If untethered offering at have our that evolving, be and to. in you where fall. is we example, hardware we're to for will mentioned doesn't look in that's or that Extreme security, adding It subscription first That UZTNA which I go devices. product the a require Extreme expecting

a and to to opportunity. And alliance intelligence partners there's data going we then from ecosystem their pulling and partners a what we're in security as our we to and platform, move continue devices. evolve So with more call

early into And to it's the still us growth how and to devices. sell this tethered rate. to of including we devices, anything in and subscriptions But to going more network all attach the terms devices, innings so non-Extreme more more translate then and long-term just is allow this those more

So that's the long-term strategy.

Operator

next the And question with Craig-Hallum. from will Schwab Christian come

Christian Schwab

QX. we last COVID of long-term and up do levels. because Great. cleaning line to as channel had into we move continuing top now the overbuying growth steps excess that made this and post now see inventory the of fiscal objective? as Ed, into year about accelerating the you end, and But talked digest growth you've enough What your time kind of

Edward Meyercord

you question. know picked an And thanks I on Christian, call, the Well, inventory issue. that up the on or Yes. for someone last being who and the

historical, forecast at revenue us. for look tough -- in September We had a last you quarter in a that large of September anticipation of comp anticipation If did is a year materialize. bookings

As going much when year, guide to the us, the higher. it's for with, be we to going provided. call just second at come looking look half growth you term, as compare year-over-year, of rate a mid-single-digit go you're you we it, obviously, -- that at Longer a if up result, the

change have the know to the out the best and it's we some will all case. as ourselves cause and saying an to at this in the nothing the stage And is environment. term. It's so -- going to see that's channel, be absolutely play really going market, going customers. that are still and And long we are of impact as competitive dislocation evolves, There's grower #X a not see the alternative. it's going we double-digit going things to out on enterprise in as interesting how it to to game, And be with #X

calling. Investor XX% So materializes, could depending XX%, 'XX. we've Day, I on think affect we're in how called that into what is what that we're confident at shift share But going double-digit

Christian Schwab

share just you in dislocation think greatest question. market the the then is my geographically for And potential? opportunity Where Great. competitive last do you the given channel

Edward Meyercord

into I'd slice Christian. pieces, X it

in I And big think in the you'll that that. opportunity, I dislocation I I think lot we're where and U.S., on of think a poised a think execute there's to Europe. feel that's here

U.S. have more more Europe, we We less smaller. U.S., channel, the becoming a many the and network, we're well-established have the and in focused but tend be different they partners drive and we're challenges and In in more channel to in to the focused channel

So up we're EMEA partners. market to in larger moving

distinct here we're a also here a in going broader do going to have We're for then We the out in the the to base thing U.S. U.S. and that. strategy build same

is a in So their networking Cisco channel the away for will movement dislocation, this area, given focus and around these competitive are of create as from opportunities. taking a lot action opportunities out us.

provider. opportunity. we and going open say coming up And models years, that we're open We to that lot over focused, well a both will that doors are of out -- new The service would maybe commercial with a different other approach penetrated I are commercial purely way private of pursuing them. We've about relationship traditionally the next a that up with also with is we've coming models. give and of subscription to that markets channel us talked much these larger not think kind the

Operator

with our Timothy comes Horan next Oppenheimer. question And from

Timothy Horan

else there I it it? And -- congratulations the first know customers maybe you don't you envision have overlay what's does invested for And out SaaS just I this do kind kind rolling manage ROIC of And on but call guess, what ultimately? rolling a describe exactly return can of there, there? enterprise's what's call anyone this you product? I know new an on the this will capital just your customers? out is all product that for when product out Ed, platform out of So network. what you having full do

Edward Meyercord

platform. cloud up standing where information the that through But and What in we Tim. of tethered happening partners network, the our like networking position can ], management talk a for in platform. from and and those an is we from those then devices that's like elements have on of ingest we and based we of cloud terms idea word. everything a Thanks, today, about is our And becomes what capabilities data can of our create what's a not to services alliance more We element then [ have we -- information to management strangle our platform devices. provide the we we platformitization kind now, with then are idea

sources a standing up on that's together where be we'll got about. will platforms. with we other notice say that a can early that create supply data Alto it innings. different it's all we Palo I know what lot platform. The was are integrate I'd and that creating platform We're be make aiming platform. other but that to what our company very platforms, we're is of that they then -- will to talking that So a put followed pure-play will easy to or it's competitors of do into out see talked And doing, about data And solutions working networking model for platform a the for

like should that. you about think think it I

Timothy Horan

basically to enterprise it be legacy will And ultimately? manage or hardware most all able

Edward Meyercord

that try In that we're we sell, technology of our hardware going networking to to attach, not and case, forward. we're looking forward our what decade we percent gear old to find will where developing Yes. it moving, we're universal looking go today XX-plus XXX%. platforms And can back the so we're that's it's move a

to networking we more away from data about mentioned equipment. attaches Intel that grab ecosystem able to other our from it cloud. becomes partners, sources and And of being the then All

devices we is user devices, we we thousands in Technologies have et of the another Zebra the network. can and Zebra an cetera, with where integration find to where one about their we thousands have can of those connectivity, the of a devices, have devices, the feed where these Zebra location So back that where intelligence performance they

Timothy Horan

it's and for talk sure customers? for going really, early, probably So customers what I of and how know will but improvement really not the -- -- know sorry, But your payback you're -- to it. and can charge I kind about period experience lastly, you're it's you

Edward Meyercord

simplicity ask to talk literally the network. that the network CIO or query about the you a the that's network to Tim, around which me long can mentioned payback, And just talked a of network the here that's to reports troubleshooting for for and I ease for and all you soon are who too health that us figure It's contained to that's and a obvious but care. in taken lot to information have sudden, spoke historically device now are the then connectivity reporting, access in of about to fights things the constant out. I the benefits Biomed tethered one. have And a with time in big

the you savings, transformation to some efficiencies Traditional old be efficiencies to time of happen massive and there that's savings. networks, -- old strategic. productive because time no longer the going cost to repurpose network you're is going and more networking value-add. and strategic, equates can more a can to need skills of more but engineers there's now savings So And the

Operator

Our with Instructions] David comes from [Operator Vogt question UBS. next

David Vogt

help thinking inventory of run products you've sort the goods a And still when historical what at Great, guys. inventory. even been you're looks levels transpired Can were, what of Kevin may, a elevated charge, all I [ can it. inventory. If you revenue bit us it's appreciate the Ed to perspective. the I of with from ] color XX% how sort kind little relative I and in And charge your obsolescence understand a quarter on bit the like team, finished rate about the because in on product dig the about of the

how it I And of So a think to and understand there then about going you can follow-up. us help going kind have what's forward? on

Edward Meyercord

take Kevin, one? you want to that

Kevin Rhodes

Yes, I'm to. happy

say, would every David, quarter, throughout we single inventory I evaluating So the were do and levels our sort. that just year, looking at, and we like

that our that looking year, funnel of more as as we at we that sellers going of really want our incentivized doing this around end at were if generations, would and our we into realized a to pushing and that sell and we opportunity, in XXXX quarter, would what inventories expect of evaluate the nor be out good this kind lot As our opportunities cetera, at got value and next us activity, sure brought created that fourth inventory planning next hardware, for whole we were we we older realizable you year. saw realizing in do is a in it not are to this strategy more that realized of technologies, looking XXXX. When will, net we had universal them basically and what to is newer we life be to making for us we to that looked the had et some our

combination Some of of raw materials. was a it

not going into not was finished created older to then you're have technologies. we these some there to So were materials. Well, years fact, finished our had we even ODMs buy and getting moving raw have put those ago, to had Remember, we we buy were you're the if, you orders in them raw yet and new probably not goods. Those goods X create demand. of components those when elevated year, materials,

That's just that And we was to a describe took the all conclusion in it. this the the to way and look the so best quarter. do thing right of that came fourth at to

David Vogt

on of And when run seems balance bit I to rate at back of million product relative go you're to $XXX [ fiscal which on the kind 'XX ], still the if a side. elevated revenue this then --

Just going want to there. on sense what's get a

Kevin Rhodes

is, normal news forward. now We the go of all of is historical of and $XX million million confident to the is ] be between fresh about good the We're be we that kind [ clean ability out. And based and inventory level that million that's very feel $XX new that that that numbers. new $XXX that's universal sold our to that on a will in going product our level range we kind have So in on hardware. think that

let's And finished going cash million $XXX inventory this based flow to from in so cash million $XX million call of on selling goods flow still next $XX that year free ] down, [ that generate it, we'll out.

David Vogt

about in March. a we easy seems I'm 'XX of in fiscal think I of early in I about 'XX, the thinking you I of to can into the one but mid-teens guess And gives comp for bit sort growth drivers bit aligned, talked your XXXX? in think you know 'XX, confidence I you in improvement sequential obviously, about year-over-year to kind revenue a the little that When What the demand grow slip in be an December, think against can or obviously seems you of more maybe the sort terms visibility be half color light environment any great. longer is as March, us. calendar you talked turn in Great. channel a the of term maybe back environment. part demand compare little there of still easy but the about Kevin Ed. that more When normalization and in would in just

Edward Meyercord

differentiation changes rigor have have I lot funnel made momentum -- which currently we've we technology organization And what we've clarity mean, of confidence. in I lot us generation, new and funnel this have and our we into, around very going reporting creating more are marketing our sales we've on us to then it's visibility, we're give -- and it's have a to -- the opportunities reporting that on And why generation. attracted overall, would our two, of gives is we them. really confidence funnel around say one, It's and what's very David, the Yes. our as we And overhauled And today talent. organization, strong. is a funnel good. the and

stage take executing the it our in And the industry for within we customers customers. doing that think in a a kind greater continues evolution, a that of just macro is like finally, favorable. opportunity there's terms and will Juniper, complexity -- move direction and There's the lot with networking getting of to feels to a have we're I to of then there's last conditions that attractive they getting of and a intend what of HP of. the out go. they they which creates we cycle Cisco HP we're platform volume there's challenges then end-user be what channel together. just most of become creates go And how and those that game, to Juniper into modern as terms between work risk company. lot which fully have at And And least both on. There's one advantage of and and put with So somewhat where is market, in we And place the and to. to do going to this go think, risky do

Operator

no back now turn the queue at for closing show to remarks. Ed would time. in the to I call Meyercord questions like further I this

Edward Meyercord

Michelle. Thanks,

appreciate you to We our Let analysts, say it. everyone appreciate you questions. call. We the thank me joined thank and who's just investors for the we

being of have lot our more call thank we've and also are the to of us, I us, got want -- looking partners ahead to a we I on you and a day. Have a joined on and come. employees appreciate we and tremendous to course, you things great opportunity the and, in Here, of forward we're work them updating who for with

Operator

participating. for This call. today's Thank conference does conclude you

disconnect. You now may

Extreme Networks (EXTR) 7 Aug 242024 Q4 Earnings call transcript