EXTR - Earnings call transcript Q2 2025

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Operator

Good day. Thank you for standing by. And welcome to the Extreme Networks' Second Quarter Fiscal Year 2025 Financial Results Call. [Operator Instructions] Please note that today's conference is being recorded. I would now hand the conference over to your speaker host, Stan Kovler. ahead. go Please

Stan Kovler

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

of copy and call a along expectations financial business, convenience, expectations press available release, the certain GAAP your results, For earnings operational section and and extremenetworks.com, our includes the may current include about website forward-looking non-GAAP in Extreme's presentation. Today's strategies. which discussion with and growth our at is statements future reconciliations, our our of based Investor Relations our on

analysis press of to or the law. by our of June this presentation. as the anticipated plans XX, found the our except made XXXX stated undue be Our statements. this today differ reconciliation statements, the forward-looking SEC. Any on no otherwise. We on the those risks XX-Q filed and actual them, our materially can results in can have financial and from These duty you to for these forward-looking cause a XXXX, unless XX-K reliance ended as in not non-GAAP risk caution period financial XX, call be described to put in period and as and uncertainties are they non-GAAP factors these reflect the A basis, call with report for we risks that by will disclosures involve report on ended on September update release statements results required made

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

Edward Meyercord

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

networking market. and a achieved revenues bookings for sequentially and We a second the the our recovery were grew in highlighted product third product broad-based the quarter in in results by by quarter revenue quarters. best quarter continued Our led row, X in of

improve, up Our enterprise last $X Extreme, verticals, XX care, larger the especially seeing quarter. with competitive with a over quarter, continue creating promising across higher ed. million We're rates of customers which XX In health from variety with spent customers, share meaningful recovery win customers. to including manufacturing and is gains larger a

EMEA area simplicity cloud. in was only year-over-year. we wide enterprise the execution Our enterprise our our grew the of Americas, seasonality strong from believe from In the business we our vertical. impacted and in the can by From the the K-XX love deliver growth campus edge customers sequentially feature to sequential networking and Americas the significantly We're continued we what both the vertical. across networking cloud end-to-end platform. solutions that center player differentiation data one and network see,

and minimizes winning resilience industry-leading cyber addition, network. blast on our or fabric convergence, eliminating the with lateral the continues in campus of zero-touch potential offers sub-second significantly In downtime attacks provides provisioning, be significant deals new factor because a most to it minimizing radius enterprise the

Our competitors features with match fabrics designed data for their simply cannot IP these centers.

reliability its the high-demand MÃ¼nchen International such operations environments. Temple, in ability Philadelphia uninterrupted Klinik, for ensuring across rapid Extreme largest City hospital in Munich, the Fabric deliver and as invested their to customers quarter, network Airport, Texas, connectivity, recovery, This of seamless

of agreements customers integrates the major our XX providers. currently with Trust ease recurring own firm their X,XXX we newer enhance commercial a licensing targeted our have at ExtremeCloud Last love with sticky Pittsburgh Steelers with at operations. Network largest opportunities. overhead themselves large application our the our We the our for customers our Our This service drive use flexibility win and of to XX We're MSPs IQ allows industry-leading with traction our in control private untangle have These variety competitive partners. MSP their margin verticals. it their of their UZTNA premier solution mature momentum. billing that models. new ExtremeCloud Zero structure also simplify operational Extreme SaaS employees secured for quarter-over-quarter, the our and point-of-sale for large by makes displacements we high offer a This offices, We're and lowers Taylor also funnel pace. of span expanding secured quarter, of coming of to to program competitor because consumption-based services. early optimize from chose access dollar retail EMEA of is encouraged in and their scale subscription efficiency. experience fan global greater remote Wessing, the upsell complex multimillion own scalability network Access, Bookings law stadium-wide access. systems a the the logo MSP wanted for Trust They long-term revenue doubled with will with and program quarters. Extreme Pilot recently Zero wins large several gaining Universal to

or The remote minutes. and desired impactful combine and overwhelmingly access and were or advances the the with commercial into products hottest new platform customer for days named This support savings Extreme Platform drive infrastructure of changing and deployment launch system will IT and by we wired response to upgrade. network their platform AI the Platform models cloud security. unifying a technology significant years automation unified we without network our announced for the portfolio. in and by change highlighted management and for OS wireless vision the innovative first of with gradually quarter, after both AI our in aerospace an and reducing enhanced of platform design, They points experience. announce for security the industry by for upgraded networking single includes their allows ONE to the case the Four a and increases December, the with hours switches time teams previewed and all power for wireless of value our ago, wired We management single gains experience They and that positive. adopted the UZTNA CRN teams We experience hardware by workers. networking a expert. on-site a our customers their powered policy simplifies customers, that next-generation December, to use adopt partners and in to all ONE, access their integrates XX flexibility several core interface. and In tasks Platform management Extreme's was technologies customers integrated of AI platform of our into unified by X a Extreme having and new our everything the networking and will engine solutions application significant that a would complex with platform deployment, drive management productivity single applications of ONE, hours Magazine to Shortly from operations XXXX. universal

for further a in lot taking and capabilities, our a it market full-year which May in ONE upon growth our We fiscal and anticipate of have conference our expand QX. in at place plans to exciting we'll quarter. Paris the share gains better-than-seasonal Connect, before revenue We user goes Platform GA demonstrate third annual story and

our and flow us to like expect guidance. with Kevin to And cash for that, turn the We I'd call full-year. growth Rhodes, the results this increased by over to to the and through margins CFO, be accompanied walk

Kevin Rhodes

Thank Ed. you,

strong demonstrated Our quarter and the margin gross customers. previous second and range. operating XX% quarter earnings third per achieved large just and trends Customer control quarter improve our performance share particularly sequential the the marked high-end gradually, growth, $X.XX, expense of our row We in of of continue operating with the above a from in model. our strong leverage up to demand guidance

quarters. contracts. quarter Second million Professional $XXX.X attached in On based of product gains to down backlog subscription the grew this sales sequentially X best the grew levels in EMEA and quarter of the a the and on growth was X again year-over-year. bookings last first We than and and Americas line higher were of first basis, difficult revenue X% and slightly and deals grew with data a enterprise our sequentially X% was in Americas once and the improve grow in prior were quarter. with APAC Total and business services quarters subscription sell-in. On geographic quarter, expect based sequential our our strength X% that the was Trends quarter. was product consistent and quarter, to owing share we inventory year-over-year region double-digit sequentially. is $XXX.X million, do declined verticals. revenue the wireless. pre-pandemic expected diversifying basis, support to Overall, on continued sequentially, earlier quarter-over-quarter bookings third in sell-out revenue ahead business growth product in with center expected the in during Channel within our closed comparisons revenue our range. to than support to significant

Our cloud driven our higher XX% business. revenue product and strength stream recurring growth revenue. for recurring of predictable has by a on subscription been our the revenue revenue was Total revenue

revenue to $XXX deferred revenue up and subscription million, was was Our XX% X.X% our year-over-year up year-over-year. million, $XXX total deferred

was support second it largely XX sequentially, second support product comparisons XX.X% XXXX. due difficult product margin and down growth relatively points versus up of improvement the half revenue subscription the to experienced fiscal standard to and subscription year-over-year in product half stable, the year. and revenue in grow basis combination points sequential of sequentially the in the to results. costs. the This mix, but expect we reflects XX We on subscription of higher low The basis Gross of was drove

in second owing fiscal gross We margin in our expect XXXX, XX% XX% the range mix. the to of also to to of half be

and from million, down million down ago quarter. million operating Second $X were expenses quarter sequentially $X the year $XXX

focus for and on in improvement higher to continue driving profitability operating the margin We year.

updated of $XXX in consistently operating of slightly to productivity positive up better quarter. second for a our previous of quarter our revenue models million and is XX.X% revenue better half range despite our the the expectations from $XXX million to to a margin, $XX.X expect new second or million than efficiency the the was $XX.X from or Sales year, outlook. Operating profit driving expenses prior We in this outlook. increase commercial XX.X% million

$XX Second million. all range. guidance net quarter debt per $X.XX ended and last and $X.XX quarter above cash of in our from was quarter, million $XXX.X with earnings We grew the share

we reflects also million and in on inventory and year-end. the solid improved quarter sequentially, million hand an $XXX to Our balance by inventory in cash to target free revenue closer flow $XX position higher million by continue $XX profitability.

We of XXXX continued in as and profitability. second fiscal we flow cash in recovery grow improve a revenue half the expect

to Now turning guidance.

and of of encouraged the growth us bode well should which the seeing, heading the in are are second level We year. customer we by half for the engagement funnel into

our increasing next a year are As we revenue quarter. range guidance and narrower full for providing our a the result of improved visibility, slightly

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

diluted The share million improving fully achieving allow and cash be generation restart is to this shares. XXX.X count Our compensation. expected practice dilution are from us to of around offsetting stock-based year we our will profitability

` full And back session. I'll range of billion the to $X.XXX be expect the to we revenue call fiscal For the billion. now the turn to operator in year the to XXXX, that, begin question-and-answer with $X.XXX

Operator

line Instructions] Our first Ryan Koontz [Operator the from comes with question of Needham.

Ryan Koontz

quarter, guys. Nice

EMEA being those up. trends in particular there? U.S. you the to verticals expand can point and the then you that being attribute geographies? With to maybe K-XX you'd Any down, on And

Edward Meyercord

come K-XX the K-XX in Kevin, I'll while kids jump in, usually then cycle impacted and schools, just classes can they want is building to are by Ryan, and you where behind. don't revenue, E-Rate and then build session. general

by it's think normal government Europe. a we to that are a and it. I relates however, still recovery, say, negatively We broader will of being still so felt as we I did seasonality K-XX that's lack it and and a And would are Germany. impacted we in highlight, see in E-Rate, where I

while lot we business government As government are large of have lot those of business lot contracts people hold those our frame of aware, a A is a concentrated a on of out. percentage the and be EMEA in German customers itself sorts And may many the there. market.

we expect from that release happens, demand that when to So market. pent-up

but U.S., EMEA, So come yes, right the see step it there's to in an encouraging it's you'll overall in that there. relates then as to I back as think more direction recovery in K-XX well. And the

Ryan Koontz

Got it.

U.K. better. may a the I that be read little And sorry, getting

Edward Meyercord

right. That's Yes.

Ryan Koontz

FX, of us? remind hedge? terms impacts Got FX, you it. And any in Can from you guys

Kevin Rhodes

is fluctuations, keep we're FX-adjusted we We to do to and even. do minor quarter pretty pretty do hedge, Ryan. We any anything it another. from And report hedge offset one basis because on to adjustments don't an really currency just just what solid, trying we

Ryan Koontz

just in thoughts there? approval about latest regulatory And and it. closing Got any Juniper the gyrations up, HP in

Edward Meyercord

We was transaction. both heard it deal And making got potential I cautious deal. a in going proceed. There's expectation frankly, delays that somewhat. could December. And close enterprise want that create think a there's a want think we is that if like the space, how would We was exactly mean, Juniper happen. would a look, to risk. looks doesn't we fee around I term and administration a going our our would risk close news to the more Ryan, deal companies partner a it not sure of quite throwing pay, And of in We're HP and customer in doubt the hefty you've we Delays us. think a that we see. to also heard those there HP change the we'll buying you're to net probably view, you're beneficiary to March. decision affect about And or now us coming pretty round long know just fresh had on be breakup together. out X Previously, be the help in be had the

Operator

Capital. of question coming Craig-Hallum Christian with line the next from Schwab Our

Christian Schwab

has think quarter, question you with meaningful guys. have to to positive Fantastic on My an your a has you us the Wi-Fi update that give Can do when opportunity business? impact X. Great. more

Edward Meyercord

thanks the let and Well, then to let for about chime than we're what starting is specifics ramp. Kevin, and X in Christian, and I'll us Wi-Fi me in, saying. for more question, jump talk you

particular, of may Wi-Fi Wi-Fi of not for reliability performance mission-critical aware a applications fact enhanced the feeling bandwidth. well that X there's the of are and given I you're customers think, it's brings more and who in more comfortable enterprise Christian, of certain In thought now that faster, terms applications lot today benefits Wi-Fi have it's lot and about a X. about

out products. Kevin, of Wi-Fi want adoption Or also X, was portfolio of of we So Extreme any Wi-Fi to X. is you we there continued want with ramp are add as first expecting anything we specifics? expect strong a Wi-Fi the and market to build one you to our would more say? X do

Kevin Rhodes

Wi-Fi Ed, the selling our in think Gartner of I the right that in says half is X, seeing only thing here to nearly being the that sold at we're we're XX% I then adoption access And expected XXXX some would Wi-Fi right? of category. now about APs add, are are X that be points

Operator

next Our [Operator line Oppenheimer. of Instructions] comes question the Timothy Horan from with

Timothy Horan

do color you Just little elaborate differentiated you market? more how going previously? what in your How And versus you share think think you the business know model? TAM about a or contract to I what do gains? long what think start margins? drive Do for this for average how just you means question. Platform had it you're much a but can on little bit more know ONE? size I is do that's to elaborate is event, will improvement to ultimately, an the and better just Maybe of maybe customer at it a it the

Edward Meyercord

our of of Site run now. We which work with Tim, top we Engine, wireless have on and okay, people. a a about gears. amount vision it's for Platform in going our business, of there's developing multi-domain that December the huge and competitor Extreme gives think for manage mind everything lot out and from our right really ONE, inside It's came capability to called But applications the ONE. Platform something and us supporting wired, if we you of

have SD-WAN. We

UZTNA. have We

all package access can you're but you into XIQ the solutions, application. a if So them cloud, through different you Extreme effectively, of going through

that we interface single being that's applications Workspace. here undertaken user all unifying the call consolidating big that a we and into task so is And the are

to you're And been to fact from it's game our the have our none is of visibility think to the And is technology big and for our be huge hottest and able going going fabric, so changer for I that ask our the from manage competitors there it platform differentiated and cloud. so for observe orchestrate fabric the for a because the in and field partners, field the from be standpoint, campus, partners. a that's our which our

common services, common with So common for data. And the solution we're building commercials. addition, interfaces, there'll user be also unified in ultimately capability in this

et same from you'll platform manage service, to cetera. licensing the able, So be and

is it's truly just a and that in broader it's so comprehensive management. than unique network platform And networking,

for all configuration inside are do some going the thing in for be into important is starting these going for mention basic lot platform client the looking with core SLAs, ONE you're from of other to And and network with going be if and AI that interface to interface information, to been so easier we Platform to everything a that. built before. looking really it meeting our with make that or of way off to performance you're able the a hasn't that functions, you're the The both we you're querying, to platform it's to of done it's able

build automation As idea we into to automation is move along, the this. add and

mitigation time, you So as time, we that issues can happen over we function. find can just network certain all a that recommend and the automate

into the the change the are are are these we with we're people so platform feel building interfacing some things to that And network. how of that going fundamentally

that years signing up would We this expect and So base in we new quarter and migrate our onto all over fiscal about all then the and would be the availability -- will platform. customers we talked this limited this joining Platform X Extreme next QX. that of our is happening ONE GA

If we from what a it going both what make will take there's ultimately, subscription Platform as everyone and we want would fundamentally cloud the make take get which are greater combination ONE, And for have we of go management who's and is expect of you want than terms you to at people our that their that grow very Extreme then And new is if well is journey as to look in want of experience. move. value, do revenue to you platform, the renewal that to cloud end rates with popular, we at see where you At Kevin, you our in to value. service this today, for add on and license. day, the change to anything? subscription our rate incredibly networking simple higher to greater

Kevin Rhodes

seen. also happening enables very the well. them think and to is mean, in I it this marketplace it leapfrogs just that the lot customers to within bring really to well. with kind a I you are network -- combines right, to level better today. covered all AIOps, the us, we're not us another like activity to jump of what but AI the platform their Ed, that's of into it then and and going said, a we it's see as It's eager all it seeing that on haven't very is security you And network,

of is what I So all above you said. the think

Timothy Horan

the from And adding revenue platform? more kind products will more more already Or them and in comes customers increase it this will and them services on more -- that's is of the cost initially?

Edward Meyercord

Yes.

to value up the is the the new capabilities the trade for more of people going getting value. wanting and from to think come platform and value I

XIQ include step, it's today. would incremental but the combined the -- from a offering we Platform we big So compared would revenue and license not service to service standard of which ONE, expect

Operator

Riley. with coming from line the our Kang Dave is question And of next B.

Dave Kang

can about get First we if service opportunities there? providers question an is you just update Verizon wondering with your like talk can and

Edward Meyercord

talked was that Workspace, we're Yes. to designed opportunity with leverage is Verizon, in MSP on. service be Dave, customers. more you is Extreme platform our models like will about offer know, MSP that MSP which as we something largest an and a commercial is with to What opportunities are building. the new or call platform the capacity the them very being we have and provider platform platform These work subscription private built we've targeted ultimately with The we're built in that that on Ericsson. building

these new offer. businesses of the some have providers unlock with we them larger to an that profitable. profitability -- And are think meaningful a service with with that see they are our and so opportunity to believe are the pick enough we want networking our expand can And in we providers private relationships economics to off move. new We the relationships not commercial with to get platform and model subscription very

So it's process. much longer-term sales a

that's the latest. mentioned middle the would -- fiscal productive Kevin? into our you'll fiscal them We come close and we are had feather to will we 'XX. results wins and that into some out Anything But in of conversations. turn that the our having large else, into, 'XX that start We've that's say I see as

Kevin Rhodes

Yes. Ed. hit No, it, I think you

Dave Kang

thoughts kind can more should of mean, maybe see if Any the year? the there? towards of year not like year, you how we trajectory of make next we maybe think about a like can but calendar the like fiscal I calendar that this wondering end XX% or projection, revenue? Just

Kevin Rhodes

we into Yes, revenue obviously get will opportunities like. our Dave, coming year-end. beyond at closer 'XX around think get little we beyond give on what a what guidance and bit mixes once in we It's look to this to as 'XX at projection like that updated look a or through, we wouldn't And I want pipeline. point in looks for can

Dave Kang

more it mentioned this my driving center you a And is, hyper-scalers? what's center. Or operators? data is you question it? And with trend? second it. How data big smaller of working any Are is Got

Edward Meyercord

supports their wireless have cases and specific use Well, players. platform Dave, we very Ericsson for that

office we're then like So case of And a an as and think customer. their services almost their as the back Verizon, OEM direct well relationship. about that in supporting platform as

we're focused. that's very specific are So use where cases, and those

with market. hyperscale solutions. well know, margins in view after The squeezed, have going have that center been active been getting of them are lot favorably the of for and some smaller idea -- made, and We that can as of workloads that's larger use have a recently affordable. early these something this that AI are it's investing these it's cases going to customers think And enterprise innings encouraging some that applied be and is we segment because do with obviously, in that way in a had built we as that extent begun us, our looking after our the that we aggressively customers come AI white you but players the announcements in already players box here, at more how been suitable there's As workloads do data we of on-prem not to are solution. some back these that support to that be

on innings early it's So that.

but that the a about later, more it's question. to hear response You'll broader

Operator

coming the from with of Our David next line question UBS. Vogt

David Vogt

revenue municipalities how get think about just Kevin, we for a the about least million of should upfront. we rate product first the your at the a has might recurring services on you're how the should forward Is if both you services, product of that kind of little kind about your next U.S. the it's Or Ed, it about for federal business, type complicated And of when think forward? business. Maybe, one the more grow about around to to and for should one the adjust Kevin, how couple and over about, think sort about and thinking maybe might way exposure a side, be professional think going is for maybe sort of for algorithm local government government How what the that of federal going attach Can on the -- subscription mean to sense if $XXX as you. quarters, we filtering been that? funding states or that from I continue kind business that business an then do the of forward? growth it? particularly than you into we and good we going going give I'll bit side, there talk speak

Kevin Rhodes

Yes, I'll let question. the answer Ed first

Edward Meyercord

Yes.

most K-XX side game, domain is stage most So of the early domain. education David, innings, on but the impact as schools, our to and spend it and in we're that and higher-ed and well budgets state -- the really-- this local we're the not terms aware building And the state also we're of networking local our it government government not in any schools of in customers. the of of is at supporting as for

have or federal well-established Our very projects are stage, again, are at don't that on here, impact we customers spend any the our anticipating we're expect entities. And this not government we underway that in funnel.

Kevin Rhodes

QX and kind that. revenue really And and are X outlook to we There's I year. those sales. where product into right, to QX that, with to One, against answer for your -- Remember, and subscription the had second year lower regard part indicator we've question call a increase support help product product of of right? of just recovered, just subscription last lagging coming from and the as it sales is factors this in that support really going

attach rate the coming behind the get you got growth you've that. product, and the sell You then

to us, little a of little here. feeling still the we're we're side, of a right so It's bit going So expecting from still year in growth help lag be kind the growth we're there's and of bit QX on we in rate a little It's what the in nevertheless, experienced. now, lower in last bit but year. product is to the a which But platform, higher kind second calling growth mid-teens of of the than XX%. half what and pain QX subscription

support attach. add higher It's going features also Platform at the and customers. second with including we'll get only of with to ONE ONE all we'll to to these the time in the The to of and that and enterprise that renew it, of and get agreements we'll get Platform ASP, but more part to little we're more XIQ, other but not ONE, would that, renew the same Platform be customers also bit a

associated well. service and get again, as well. companies. for new subscription And And just closes an Fortune MSPs, MSP. private providers, believe more every XXX that we've revenue the continues that Three, within earlier be to going subscription that which last more that. one we XXX% talked with offer, service really with these about And that's to and do providers we we So will is Extreme got driving attach deal then MSP. the which, That

we a on ESPO it's attach more as have it's rate, rate so of MSP the better sales, motions side both XXX% the and well these new side. combination it's And go-to-market a attach product that but and that have

David Vogt

Helpful. more say Is better I products, of And of talk be heard QX networking kind just this Ed, Just markets, of one it what's improvement going what sense think can I about maybe the a what's year. get slip general on backdrop? kind what driving I in in, you that? seasonality Can there. would you

Edward Meyercord

Yes, right. that's

normally, is nice calling a quarter. then is have would quarter we what here what in seasonality step in trends And and March and then a June So dip you the we're what in a June. flat in see is -- March patterns our nice and step a

is funnel and have in downtick So a and opportunities the the our we're calling the that what we and seeing normally, quarter. that in confident you would strength we're in market flat outlook our see a and

stronger we March momentum. We market. recovery. and Extreme. happens, our be we're us Europe, particular adding favor seasonally in a And lack spend us. yes, models normally to of to And to that we're create the when our have are impacted competitive continues specific to it's it's think commercial like expecting we will dip and a to and in that expecting why tailwind I in like in as that that's unlocked, spending will be get. And government, new in continue will It's that think because by a broader gaining some for our continue expecting not market have be markets negatively And budgets. mentioned, So quarter Germany, of for are positioning we a we opportunities would the that and that

Operator

Street Markets. And Lake line our of Martinuzzi Capital from the with question coming next Eric

Eric Martinuzzi

months with XX last, overall But action own the been get or just for trying I'm see growth industry and because it, puts rate, product landscape, the is for a growth competitive a mid-single Yes. hard got year from your we've channel an kind feel get It's rate. then growth to issues this industry of so. ago. high to a a launches given feel takes single-digits the you rates, the industry that and over your the call own digits

Edward Meyercord

trending that Yes, a about to Eric, we you is you the a here. mid-single-digit open about And door position. double-digit think are share term, and you gain territory. when view high that think Kevin, Extreme for of industry it's in I the think the single-digits I'll Extreme in long our grower

Kevin Rhodes

that's No, right, Cisco that's think I I And think a expectation. say. even from Yes. you're Ed. networking might long-range what in larger But digits. companies like mean would low-single their ourselves exactly a positioning what actually, the we're business I we have for

Eric Martinuzzi

QX. Okay. for deeper And go layer down the margin to then versus outlook I a slight step QX the on just wanted in gross

gross for margin non-GAAP QX, at for out half on XX.X% XX.X%. actually the finished for might midpoint and the is the QX back You

I that on pulling mix that in based what So down? that down pulling margin product but or mix, understand is particular, it's

Kevin Rhodes

the to Yes. product margin the It's on half actual just going product side. and the so right? gross be a And subscription the here second margin, lower primarily of year the see coming we in back of support gross than growth function that is is

have the that bit the also reset And There's here we're in so shift owing the we day. taxes end margin of to that's the lower a of slightly little mix being at -- January.

be so reset. expenses some being got as affected well expenses And will the limits COGS by that operating we've as

a here a gross well. terms XX% kind higher range of that's But of the the drive comfortable, of XX% for mix being of so say to and the it half to certainly XX% drag as with as little what to would long-term I quarter. the Eric, And I overachieve in margins a product revenue XX% say, the feel would continue for that margin. gross we'll We in and just on we obviously, it's still It's bit And that's try primarily in year of third -- range. fourth general second is.

Operator

this for Ed remarks. call Meyercord closing to you. there now I in the over at time. the back Thank queue no Mr. any turn are will questions And further

Edward Meyercord

today. we're to Thanks, Certainly, appreciate at you Okay. user Olivia, employees, showcasing ahead. much. to our things to and day. we've for about Connect. to conference forward you Extreme. the opportunities with customers, thank thank and also our have our great and new where We your this quarter call we investors lot that everybody, the head and opened in. technology, going of look as have very for I to we exciting through Paris seeing on we partners joining who everybody, want Thanks, the a know are to come support, go excited dialed a May door there. lie We're I

Kevin Rhodes

Thank you.

Operator

and Thank disconnect. today's conference. for concludes you now participation, your may you This

Extreme Networks (EXTR) 29 Jan 252025 Q2 Earnings call transcript