Extreme Networks Targets 10% Revenue Growth in Second Quarter and Fiscal 2027
Key Facts
Extreme Networks is targeting 10% revenue growth in the second quarter and the remainder of fiscal 2027, according to guidance announced by the company on October 28 after it posted similar growth in the first quarter. The company said its outlook is based on the strength of its business, clear demand for its solutions, growth in its sales pipeline, market-share gains and accelerating adoption of the Platform ONE platform. It set second-quarter revenue at between $345.8 million and $350.8 million, with the quarter ending on December 31, 2026. It also raised its full-year fiscal 2027 revenue target to $1,402.3–$1,412.3 million, with the fiscal year ending on June 30, 2027. The company said, "Based on the strength of our business and clear demand for our solutions, we are confident in targeting 10% growth in the coming quarter and the remainder of the year."
The guidance followed first-quarter fiscal 2027 revenue of about $341.1 million, up 10% year over year, according to the company's results. Annual recurring revenue from software-as-a-service services rose to $264.7 million, up 22% from the year-earlier period. Non-GAAP diluted earnings per share were $0.33, up 50% year over year. Non-GAAP operating margin also climbed to 17.4%, compared with 13.3% in the first quarter of fiscal 2026. These metrics put the new guidance in the context of revenue growth, improved operating profitability and expansion in recurring business, while annual recurring revenue growth remains a separate operating metric from the revenue outlook.
The chief executive said the company recorded 44 customers with bookings exceeding $1 million in the first quarter, compared with 36 a year earlier. He attributed much of the increase to technology differentiation, according to The Motley Fool's account of the earnings call. The comparison shows an expanding base of customers with large bookings, without equating the number of customers with the number of individual orders or bookings. On subscriptions, Platform ONE bookings accounted for more than half of total subscription bookings in the quarter and were five times higher than a year earlier, the company said. The performance links the platform's growth to the subscription mix, alongside the increase in annual recurring revenue from software-as-a-service services.
Extreme says it has secured components through the end of calendar 2027, while competitors face extended lead times. The chief executive said, "Our components are secured through the end of calendar 2027, while our competitors are reporting extended lead times." The statement puts component availability among the factors the company says support its ability to meet demand, but remains its description of supply conditions and its competitors' position. The company recorded revenue of $1,283.6 million in fiscal 2026, up 12.6% from the previous year. When it reported those results, the company said the fourth quarter was its sixth consecutive quarter of double-digit growth and that 187 customers ordered solutions worth more than $1 million during the year.
As the platform grew, the company said Platform ONE exceeded 30% of subscription bookings in its first year, and its bookings doubled quarter over quarter in the fourth quarter of fiscal 2026. Its share then rose to more than half of subscription bookings in the first quarter of fiscal 2027, according to the company's disclosure. The sequence points to the platform's growing weight in bookings, while the full-year financial outlook remains tied to the revenue the company is targeting through June 30, 2027. After the results were announced on October 28, the company's shares rose 8.09% in premarket trading to $25.78, compared with a previous close of $23.85. On November 11, the shares closed at $26.67, the session price cited in the short version of the news, and not a reaction to the guidance news published on November 12.