Extreme Networks (NASDAQ:EXTR) reported second-quarter fiscal 2026 results that management said marked its seventh consecutive quarter of revenue growth, supported by demand for its AI-powered networking platform and continued competitive displacement wins. Executives also raised full-year revenue guidance at the midpoint and said they expect profit to grow faster than revenue for the balance of fiscal 2026, though they flagged a near-term gross margin headwind tied to large professional services-led deployments in the second half of the year.
Quarterly results topped guidance as subscription metrics accelerated
For the second quarter, Extreme reported revenue of $318 million, up 14% year over year and above the high end of its guidance range. Non-GAAP earnings per share were $0.26, also above the high end of guidance and up from $0.21 in the prior-year quarter, a 24% improvement, according to CFO Kevin Rhodes.
Extreme also highlighted growth in recurring revenue and cloud metrics. Subscription and support revenue was $120 million, up 12% year over year and up 3% sequentially. SaaS annual recurring revenue (ARR) grew 25% year over year to $227 million, which management attributed to Platform One subscriptions. Deferred revenue metrics increased as well, with SaaS deferred revenue rising to $334 million (up 15% year over year) and overall deferred recurring revenue reaching $628 million (up 9% year over year).
Management points to competitive wins, share gains, and “agentic AI” differentiation
CEO Ed Meyercord said the quarter included “continued competitive wins with large customers across all verticals,” including 34 deals over $1 million. He attributed Extreme’s momentum to technology differentiation—particularly its end-to-end “Campus Fabric,” which he said offers capabilities such as zero-touch provisioning, sub-second convergence, and “hyper-segmented networks” designed to limit the spread of lateral cyber attacks by hiding IP addresses.
Meyercord also emphasized Extreme Platform One, describing it as unique for having a “true agentic AI core,” with AI agents that can autonomously diagnose issues, guide resolution, and provide actionable insights. In the Q&A, he said Extreme had “doubled” its internal forecast for Platform One subscription bookings, and Rhodes said Platform One bookings were “well ahead” of targets, contributing to accelerating subscription booking performance.
When asked about evidence of market share gains, Meyercord said the company uses third-party analyst firms, including 650 Group and Dell’Oro, to assess share in enterprise networking markets where Extreme competes. He also pointed to hands-on competitive win-rate information from head-to-head engagements against Cisco and HPE/Juniper.
Customer wins, partner momentum, and go-to-market changes
Extreme cited a number of customer examples discussed during the call, including a “multimillion-dollar” Platform One sale to a large retail customer to manage networks across 3,000 stores. Meyercord also highlighted deployments of Wi-Fi 7 solutions at Baylor University, Henry Ford Health, University Hospitals Birmingham NHS Foundation Trust, and the Pittsburgh Steelers. Additional examples included healthcare network modernizations using Extreme Fabric and a U.S. school district selecting Extreme over Juniper in a “multimillion-dollar” full network refresh spanning wired, wireless, SD-WAN, and AI platforms.
On the commercial side, management said its managed service provider (MSP) partners “nearly doubled,” with billings up “more than three times” year over year. The company also launched a new partner program, Extreme Partner First, which management said is intended to simplify deal registration, improve pricing and rebate transparency, and embed AI into the partner experience.
Meyercord said the company has increased discipline in sales forecasting and accountability under sales leader Norman Rice, and described a “pods” go-to-market approach with 19 targeted localized groups that track funnel creation and conversion.
Supply chain, pricing actions, and margin outlook
Executives discussed component costs—particularly memory—and said the company has both pricing and sourcing levers available. Meyercord said Extreme implemented a 7% price increase that he characterized as a “non-issue” from a customer reaction standpoint, attributing this to what he described as low demand elasticity for mission-critical networking. Rhodes said the price increases had minimal impact in the second quarter but are expected to flow through more in the third and fourth quarters.
On supply chain resiliency, management described efforts to qualify alternative components, including identifying a new source of DDR4 memory chips that Broadcom has qualified, and said the company has the flexibility to further increase prices if component costs rise.
Rhodes also flagged a near-term margin mix headwind. He said several multimillion-dollar venue deployments will be delivered in the third and fourth quarters, and that these customers have asked Extreme to run installations through its professional services team. He said installation services have a “much lower margin profile,” and indicated professional services margins can be in the 15%–20% range versus subscription and support margins that he said tend to be much higher. As a result, third-quarter gross margin guidance is lower than the second quarter.
Despite the mix impact, Rhodes said the company remains confident in its long-term non-GAAP gross margin goal of 64%–66%, and said product gross margin is expected to improve in the third quarter and carry forward for the remainder of the fiscal year.
Guidance updated; management avoids specific FY2027 targets
For the third quarter of fiscal 2026, Extreme guided revenue to $309 million to $314 million, with gross margin of 61% to 61.4%, operating margin of 13.6% to 14.8%, and EPS of $0.23 to $0.25. The company expects a fully diluted share count of approximately 136 million.
For the full fiscal year 2026, the company raised revenue guidance at the midpoint by $10 million to a range of $1.262 billion to $1.270 billion, which management said implies about 11% year-over-year growth at the midpoint. Full-year EPS guidance was set at $0.98 to $1.02.
When asked about expectations for fiscal 2027 growth, management said it is not guiding that far out, though executives said they feel positive about the company’s competitive position and go-to-market improvements. In prepared remarks, Meyercord said the company expects to grow profit faster than revenue in fiscal 2026, with expected profitability growth of “around 20%” on double-digit revenue growth for the year, and said Extreme exited the quarter with “well over $200 million of annualized EBITDA” and a “healthy net cash position.”
About Extreme Networks (NASDAQ:EXTR)
Extreme Networks, Inc (NASDAQ: EXTR) is a global provider of end-to-end networking solutions designed to support enterprise, data center, and service provider environments. The company’s product portfolio encompasses high-performance wired and wireless access switches, routers, network security appliances, and software-defined networking (SDN) tools. Driven by a cloud-native management architecture, Extreme’s Intelligent Edge Platform integrates network analytics, automation and orchestration capabilities to help organizations optimize performance, reduce operational complexity and strengthen security.
Since its founding in the mid-1990s and subsequent public listing in 1999, Extreme Networks has expanded its technology footprint through targeted acquisitions.
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