What happened
Shares of Extreme Networks Inc. (EXTR 0.54%) jumped 11.4% on Friday, after the software-driven networking specialist announced strong fiscal first-quarter 2019 results.
More specifically, Extreme Networks' quarterly revenue grew 13% year over year to $239.9 million, translating to adjusted (non-GAAP) net income of $9.4 million, or $0.08 per share. Most analysts would have settled for adjusted earnings of $0.03 per share on revenue of $233.4 million.
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So what
Extreme Networks' top-line growth was driven by an 8% increase in Product revenue to $177.7 million, and 33% growth in service segment revenue to $62.2 million.
"We made considerable progress to consolidate our distributors, and we stabilized our data center business," stated Extreme Networks CEO Ed Meyercord. "With new products on the horizon and new hires focused on key verticals such as Service Provider and Federal, we are improving our execution and go to market activities."
Now what
If that wasn't enough, Extreme Networks' board authorized a new $60 million share repurchase program -- a move that Meyercord added demonstrates their focus "on driving shareholder value and fiscal responsibility to offset dilution from our equity incentive compensation programs."
Finally, for the current second quarter of fiscal 2019, Extreme Networks expects revenue in the range of $239 million to $249 million, with adjusted net income per share of $0.06 to $0.13. The midpoints of both ranges are roughly in line with Wall Street's consensus estimates.
Of course, Extreme Networks could certainly extend its habit of under-promising and over-delivering three months from now. But with shares having fallen more than 50% year to date leading up to this report, and given its relative outperformance in the meantime, the stock is understandably rebounding in response.
