What happened

Extreme Networks (NASDAQ:EXTR) reported fourth-quarter results on Monday night, blowing Wall Street's estimates out of the water. In response, the enterprise networking expert's shares jumped as much as 14.7% higher in Tuesday's early trading before settling down to a 10.1% gain at 11:15 a.m. EDT.

So what

Sales rose 28% year over year, landing at $179 million. Adjusted earnings per share more than doubled from $0.07 to $0.17. Analysts would have settled for earnings of $0.07 per share on sales near $172 million.

A bar graph, a line chart, and a charting arrow, all in warm red and orange colors and headed upward.

Image source: Getty Images.

Now what

Extreme Networks' strong fourth-quarter sales rested on solid organic growth in the company's core switching equipment sales. Gross margins expanded thanks to "disciplined" pricing policies. Together, these trends added up to a stellar bottom-line performance.

Looking ahead, Extreme just closed one large acquisition and is preparing for the final John Hancocks on another one. Already the third-largest network company in the equipment sector, Extreme is building its economies of scale via a combination of plug-in buyouts and solid execution in the core business.

Share prices have more than doubled year to date, including today's sudden surge. Extreme Networks is on a roll, and investors are bidding up its stock prices for all the right reasons.

Anders Bylund has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.