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- **Revenue Growth Acceleration**: Q1 FY26 revenue up 15% YoY to $310M, driven by 20% YoY product revenue growth and 24% SaaS ARR expansion.
- **AI-Driven Differentiation**: Extreme Platform ONE adoption ahead of expectations, with service agent reducing IT task resolution time by 90%. WiFi 7 solutions win healthcare and government contracts.
- **Financial Resilience**: GAAP EPS $0.22 (29% YoY growth), EBITDA $45M (21% YoY). Price increases offset 100bps component cost impact, with gross margin recovery to 63%+ by FY26 end.
- **Market Expansion**: 21% YoY bookings growth, 36+ customers >$1M spend (29% YoY). MSP partnerships at 61, contributing 14% of new subscriptions.
- **Competitive Edge**: Extreme Fabric's subsecond convergence and cloud flexibility outperform Cisco/HPE, with 30%+ win rate in large deals.

**【CEO Summary Section】**
- **Revenue Growth**: Q1 FY26 revenue reached $310 million, up 15% YoY, driven by product revenue growth (20% YoY) and SaaS ARR expansion (24% YoY to $216 million). 
- **AI Innovation**: Extreme Platform ONE achieved early adoption, with service agent automation reducing IT task resolution time from hours to minutes. WiFi 7 solutions gained traction in healthcare, government, and venues.
- **Market Expansion**: Won major deals in Asia Pacific (government-wide network) and EMEA, with bookings up 21% YoY. MSP partnerships grew to 61, contributing 14% of new subscription bookings.
- **Competitive Position**: Differentiated by Extreme Fabric's subsecond convergence, cloud flexibility, and AI-driven networking. Secured 36+ customers spending >$1M, up 29% YoY.

**【CFO Financial Commentary】**
- **Financial Highlights**: GAAP EPS $0.22 (29% YoY growth), Non-GAAP EPS exceeded expectations. Gross margin 61.3% (impacted by 100bps from component costs). EBITDA $45M (21% YoY growth). Free cash flow usage $21M due to one-time legal expenses.
- **Guidance**: Q2 FY26 revenue $309-315M, FY26 revenue $1.247-1.264B (10% YoY growth). SaaS ARR target low-20% YoY. Price increases (mid-single digits) to offset component costs, with gross margin recovery to 63%+ by end of FY26.
- **Liquidity**: $209M cash, positive net cash position. Shares repurchased $12M (577K shares).

**【Q&A Key Highlights】**
- **Gross Margin Challenges**: Component costs (memory, optics) up 100bps, mitigated by price increases. Gross margin expected to improve 100-200bps YoY. Platform ONE ASPs up 10-15%.
- **Competitive Dynamics**: Benefiting from Cisco partner program disruption and HPE-Juniper integration delays. Extreme's cloud flexibility and AI/automation outperform competitors.
- **Federal Impact**: Minimal impact from government shutdown; certifications open federal opportunities. MSP model growth driven by consumption-based billing.
- **AI Strategy**: AI Summit in NYC to showcase Agentic AI capabilities. Platform ONE bookings ahead of expectations, with full migration to platform by end of calendar year.

Extreme Networks, Inc. (EXTR) Q1 2026 Earnings Call Transcript

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EXTR

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