MORRISVILLE, N.C. - Extreme Networks , Inc. (NASDAQ:EXTR), a company specializing in cloud networking, has revised its revenue expectations for the second quarter ended December 31, 2023, forecasting revenues to be between $294 million and $297 million. This updated projection falls short of the previously anticipated $312 to $327 million. Despite this adjustment, the company reported a substantial 41% year-over-year growth in subscription revenue, a notable increase from the 32% growth observed in the first quarter.
The company, which is set to release its full second fiscal quarter earnings on January 31, 2024, also estimates that its annualized subscription and support revenue will reach approximately $430 million. Recurring revenue is expected to represent 33% of the total revenue for the quarter. Gross margin is projected to be at the higher end of the previous guidance range.
Extreme Networks ended the quarter with a cash balance of $221.4 million, after accounting for share repurchases totaling $25 million during the period.
Ed Meyercord, President and CEO of Extreme Networks, acknowledged the lower revenue outlook, attributing it to "industry headwinds of channel digestion and elongated sales cycles." He also mentioned that several large deals were deferred to future quarters towards the end of Q2. However, Meyercord expressed confidence in the company's long-term strategy, which he believes will support double-digit revenue and earnings per share (EPS) growth. He also highlighted progress in strategic initiatives, including the launch of a managed services commercial platform and a unique subscription offering aimed at large service providers.
This report is based on a press release statement from Extreme Networks, Inc.
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