Extreme reveal decline in profits

Extreme Networks has announced a nine percent drop in year on year revenues.

The network provider has released financial results for its fiscal fourth quarter ended June 30, 2019, finishing the year with $252.4 million of revenue, a one percent decline on the quarter too.

Earnings per share fell by $0.09 year on year and $0.08 on the quarter however gross margins grew to 55.1 per cent compared t 54 per cent in Q4 last year.

The net cash provided by operating activities ended on $25.4 million and free Cash Flow stood at $18.9 million.

Ed Meyercord, President and CEO of Extreme Networks said “We reported revenue above the high-end of our guidance range, reflecting strength in our Americas business and early signs of demand for new products in our Smart OmniEdge switching portfolio.

“Our year-over-year and sequential improvement in gross margin put us towards the high-end of our guidance range, and close to our 60% target. Our gross margin performance was a function of several factors: lower standard costs, partly related to the improved profitability of our new products; higher mix of Services revenue; and mix shift owing to stronger demand in North America in Q4.

“We closed fiscal year 2019 at $1B in revenue and look forward to bringing exciting new solutions to our partners and customers once we have successfully closed the Aerohive acquisition.

“Looking ahead, we are expecting fiscal year 2020 organic revenue growth to be in the low single-digit range. Our outlook for Q1 reflects the normal seasonality of our business, ongoing economic challenges in EMEA, and conservatism around our wireless business as customers consider the alternative Smart OmniEdge solutions that will be available following the close of our Aerohive acquisition. With the cost savings actions we took at the end of Q4, we are on plan to achieve our goal of a 15% operating margin toward year-end fiscal year 2020, and to improve our cash flow generation throughout the year.”

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David Dungay

Editor - Comms Business Magazine