The 10-second takeaway
For the quarter ended Dec. 31 (Q2), Extreme Networks met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share shrank to a loss.
Margins dropped across the board.
Extreme Networks booked revenue of $75.6 million. The three analysts polled by S&P Capital IQ wanted to see a top line of $75.9 million on the same basis. GAAP reported sales were 8.8% lower than the prior-year quarter's $82.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.03. The three earnings estimates compiled by S&P Capital IQ predicted $0.03 per share. GAAP EPS were -$0.04 for Q2 versus $0.04 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 53.9%, 200 basis points worse than the prior-year quarter. Operating margin was 1.3%, 410 basis points worse than the prior-year quarter. Net margin was -5.6%, 1,060 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $70.7 million. On the bottom line, the average EPS estimate is $0.02.
Next year's average estimate for revenue is $299.7 million. The average EPS estimate is $0.16.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 112 members out of 119 rating the stock outperform, and seven members rating it underperform. Among 24 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 23 give Extreme Networks a green thumbs-up, and one give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Extreme Networks is outperform, with an average price target of $5.17.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.