Shares of Extreme Networks (NASDAQ:EXTR) have tanked today, down by 10% as of noon EST, after the company reported fiscal second-quarter earnings results. The enterprise networking specialist also said that Chief Revenue and Services Officer Robert Gault would be departing.
Revenue in the fiscal second quarter increased 6% to $267.5 million, which was shy of the $273.2 million in sales analysts were modeling for. That all translated into adjusted earnings per share of $0.13, which was right on target with the consensus estimate.
The tech company is also overhauling its sales organization. Extreme Networks had restructured its sales team last summer, which "created disruption that impacted near-term results," CEO Edward Meyercord said on the conference call with analysts. Gault's departure is related to leadership changes around the company's salesforce, and Extreme Networks has now "consolidated leadership under Pete Doolittle."
Gault will remain with Extreme Networks for about another month to assist with the transition and release all claims against the company as part of his separation agreement, receiving over $450,000 in cash payments in the process. Extreme Networks also tweaked its guidance and hopes to improve its adjusted operating margin.
"With our revised guidance we now expect to achieve Non-GAAP operating income margins in the 12-13% range by the end of fiscal year 2020," Meyercord said in a statement. "We expect to attain organic growth and our 15% Non-GAAP long term operating margin target in the second half of calendar year 2020."
Revenue in the fiscal third quarter is expected to be $255 million to $265 million. Wall Street was projecting $275.3 million in sales.