Extreme Networks at Oppenheimer Conference: Strategic Growth and Innovations

On Monday, 11 August 2025, Extreme Networks (NASDAQ:EXTR) presented at the Oppenheimer 28th Annual Technology, Internet & Communications Conference. The discussion, led by Stan Kobler, highlighted the company’s strategic focus on simplifying networking challenges through automation and innovation. While the company reported strong financial performance and market expansion, challenges remain in capitalizing on market disruptions and infrastructure upgrades.

Key Takeaways

• Extreme Networks reported a 24% year-over-year growth in SaaS ARR, reaching $208 million.
• The company launched Extreme Platform One, an AI-enabled platform to enhance productivity.
• Wi-Fi 7 adoption is strong, with 30% of the wireless business coming from it.
• Extreme Networks is targeting a $35 billion market with a "land and expand" strategy.
• The company is generating significant cash flow, enabling share buybacks and investments.

Financial Results

• SaaS ARR grew by 24% year-over-year, totaling $208 million.
• Recurring revenue constitutes 36% of the company’s total revenue.
• FY26 guidance forecasts approximately 8% total growth, with SaaS ARR expected to grow by about 20%.
• The company is generating substantial cash flow with an EBITDA run rate of around $100 million exiting Q4.
• Share buybacks are actively pursued to offset dilution and enhance shareholder value.

Operational Updates

• Extreme Networks aims to simplify networking challenges with a focus on automation, reliability, and innovation.
• The company’s fabric technology enables logical network separation on a single physical infrastructure.
• Strong presence in public sectors, sports venues like MetLife Stadium, retail (Kroger), and education.
• Momentum is seen in the US, with international growth in Asia and a resurgence in Europe.

Platform One and AI Integration

• Platform One is a new AI-enabled offering that includes AI-based subscription services and support.
• Customers adopting Platform One can expect a 10-20% price uplift.
• The platform offers a conversational interface for quick network issue diagnosis and remediation.
• It aims to reduce the mean time to resolution for network issues from hours to minutes or seconds.

Wi-Fi 7 and Market Opportunities

• Wi-Fi 7 adoption is strong, with 30% of Extreme Networks’ wireless business attributed to it.
• Wi-Fi 7 offers increased capacity, lower latency, and improved density.
• Competitors are still working through their Wi-Fi 6 inventory, providing Extreme Networks with a tactical advantage.
• Opportunities are seen in stadiums, airports, and venues due to the growing demand for AI-driven applications.

Market Share and Competitive Landscape

• Extreme Networks targets a $35 billion market with a "land and expand" strategy.
• Capitalizing on refresh cycles of larger competitors like Cisco.
• The HP and Juniper merger and changes in Cisco’s partner program present opportunities for new channel partnerships.
• Expansion with managed service providers is underway.

Future Outlook

• Double-digit revenue growth is possible but not yet forecasted for FY26.
• Strong growth is anticipated in subscription and support revenues.
• The company aims for 20% or higher EBITDA margins in the long term.
• An investor day is scheduled for November 10 at the Nasdaq market site to discuss growth strategy and margin profile.

Q&A Highlights

• The company is currently exempt from tariffs but may need to raise prices if this changes.
• Growth in the manufacturing sector is driven by the expansion of the semi cap sector and AI power requirements.
• Success in government opportunities, particularly in Japan, is attributed to the security and simplicity of their fabric technology.

For a detailed analysis and further information, please refer to the full transcript below.

Full transcript - Oppenheimer 28th Annual Technology, Internet & Communications Conference:

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: Good morning, everybody. Tim Horan. I am the digital infrastructure and communications analyst here at Oppenheimer. Massive changes in in the market thanks to, AI and and new technologies. Wi Fi seven, the cloud is really transforming how we do networking both on a public and a a private basis.

Stan Kobler used to do my job, so he knows it really, really well. He is VP finance and corporate development at Extreme Networks. Extreme is one of the leaders in private networking, both wireless and wired switching basis. But they have relatively low market share, and they’re going to gain lots and lots of market share. Right, Stan?

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: That’s right, Tim. You got it.

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: But, we’re gonna go through all the different products and services and how they’re gonna gain share, but we think they’re, really, really well, well positioned. So I guess that, you know, with Stan, how do you describe the company and the company’s strategy and, you know, what your core competencies are and and and competitive advantages? And and I guess, we can touch on it at the same time and maybe touch on it first. How do you kinda measure the TAM and what you think the TAM can grow at and Yeah. What share you can gain within that TAM?

I know that’s like an hour long question, but can you start with,

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: like I’ll package it. Yeah. I’ll I’ll try to package it up for you so we can have a good conversation. You know, what I would say is, Tim, we are trying to solve complex networking problems inclusive of various security threats and just make it super simple for customers, to do networking. Right?

So it’s just like, if you were to distill what we do and how we do it is that we’re trying to bring an element of simplicity, reliability, value, and, a lot of innovation. And and a lot of that innovation was historically packaged in capabilities that we had in networking related to our fabric technology. And what that means is that we have a unique way to automate network connectivity, create different groups of customers where you can have, you know, divisions of a company or a city infrastructure that work differently. You know, for example, you know, my stopping ground in New Jersey, sometimes you have this building of a municipality that houses both the city government, and they have some, finance people that collect our, property taxes and whatnot or the water bill. And then the other side of the building is your police department.

So, well, with our type of network, you can create one network for those different environments, and you have logical separations where people feel like they have their own network, but it’s actually running on the same physical infrastructure. And so that’s how you really bring value to the industry and to our customers instead of having discrete networks for all these different functions. And we could do that at the corporate level. We could do that at the local government level. We do it for schools, and, that that some of who our, major customers are.

And, we do really well in public sector environments, because of this posture that we have. They’re value oriented, highly automated solutions. A lot of customers don’t have massive IT departments in these, fields of work, and they really appreciate the solutions that we bring to table. We also have some high end, capabilities as well, where if you needed to fill a stadium or venue like MetLife Stadium, which we have now we won the the Wi Fi of MetLife Stadium. We used to have just the wired part of the network, and we do this for many of the NFL teams.

We can do it for NASCAR, NHL. We do it for Major League Baseball, football, or soccer teams in The US and also in Europe as well, like Liverpool, Manchester. We can give you super high performance WiFi for a sixty, ninety thousand person stadium that is really high quality and also gives you a lot of analytics capabilities. So you can see exactly what you’re doing while you’re at the game. Someone could be ordering a hot dog or or a beer at the game, and someone else could be sending, you know, uploads of what they’re doing, at the game to their friends and family or social media.

And so this is really what we excel at is is giving we talked about private networks. We give the owners or the operators of the private network. It’s really the local area network An incredible amount of power visibility and, our solutions are both cloud driven, meaning you can log in to a cloud instance, like a website, and see everything that’s happening on your network. And that was very powerful in in the form of a productivity game that you would be able to achieve. For customers, for example, another vertical that we do well in is, like, retail, multiple stores.

Kroger has thousands of stores that we service in The US, and we do the Wi Fi there. And they can manage a lot of them from a centralized location. You don’t have to send your IT folks to individual stores when things are not working well. Now what we’re doing is we’re taking all of these things that we have, our fabric, our cloud driven capabilities, and we’ve added the power of AI, specifically AI agents. And we we now have a solution called Extreme Platform One.

It takes all of this goodness that we’ve had before and created a AI enabled core, Progynetic AI, where you can have a conversational interface with the AI. You could just tell the AI what you’d like it to do on your network. And I know that’s something that you wanna get into is that this new innovation that that we’ve come out with that just on the cusp, it just GA last month, and we’re very excited about it. So we had really good results coming out of f y twenty five and q four on the business. It’s not even related to platform one, and we’re excited to bring the next generation of networking to market with this, capability.

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: Sorry, Dan. I was confused for a second. The platform one was generally available last month. There were but there was something else that was driving results that you mentioned Yeah.

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: Would say for for q in in q four, we had a lot of success and momentum from just all the business that we’re generating based on what I discussed before Okay. Which was, you know, the power of our cloud driven and fabric solutions. And we saw a lot of momentum not just in The US, but in our international business. We’re winning business in Asia, and Europe is coming back for us. From a product standpoint, we’re seeing for a couple of quarters in a row now, the wireless business coming back.

And we have two components, from a revenue standpoint of our business. We have a product sale that we do. Attached to that product sale is, various services that you that we offer, support services or maintenance services, if you wanna call into tech support, or next business day replacements type of services where a product, let’s say, breaks down. We support the customer. We send them a replacement within a day or, you know, some cases hours, and customers pay for that element in the service and subscription part of our revenue.

From a management perspective, so we do these massive networks for customers. You have to be able to manage them. And we offer software for management. Some of that can run on premise on a server. That’s a site engine.

And some of it works, in a cloud instance, like hosted on a local, data center instance of Azure or AWS or even the private cloud of a customer. And for that software, we charge as a service. So a customer subscribed to a three year subscription for that software. And what that gives us is, in addition to the product sale, we have about 36% of our revenue that’s recurring based on these software and subscriptions that we’re selling. That’s the part of our business that really, reaccelerated in q four is we measure our SaaS business in the form of SaaS ARR, and Uh-huh.

We have 208,000,000 in revenue in our SaaS ARR. That grew 24% year over year. So it’s a a nice 20% plus growth rate. And we talked about for f y twenty six that, if you look at the midpoint of our guidance, it’s about 8% total growth. But that SaaS ARR, we talked about on the call that that will has legs to grow somewhere in that 20% range for, this fiscal year.

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: Got it. Now I I think you’ve changed some of your SaaS licensing, agreements. I I think now most of your new equipment sales have to come with a SaaS license. Is that is that correct?

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: And Yes. So, starting in f y twenty six, we are requiring customers to buy our new for new customers. When you buy products from Extreme, we are promoting this new product that we have, which is a combination of the AI based subscription services and also the support that’s bundled into one license that we call platform one. And this is where you can purchase that AgenTik AI capability, to help you run your networks and and drive productivity.

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: And are you charge so now everyone’s gonna have to take this. I think previously only about 70% of people took the, the support.

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: That’s right. So support, gets a boost in that sense, as well. And part of the reason for it, I think, you know, we we’ve talked a little bit about this before. But if you think about support, you can do support from the classic tech support model, which is you call in physically and speak to a human and they help you troubleshoot your network. With platform one and with AI, those capabilities are fundamentally built into the platform.

They’re built into the conversational interface. If you have an issue with your network, the first thing that you will do with this technology is you will go into your bar, the chat bar, which is similar to any AI, like ChatGPT, and and customers can type in to diagnose what the network problem is. So Tim might be having an issue with his phone. It’s not working well, or you your IT administrator might call in and say, we can’t process a payment. There’s something wrong with, payment processing.

And you could write that into the conversational interface, give it a little bit of and understand what is happening with your network. And it gives you an answer in a matter of seconds. So the remediation of your network issues goes from hours to minutes, to some cases seconds, because the the power of the AI and all the data that you’re feeding into this model is producing these results and giving you that answer. And so what will happen is that over time, your level of service and satisfaction will grow, but the calls into our tech support will drop. So we have, you know, 9.5 rating in our customer CSAT.

We have the best tech in the industry. People love it. But you still have to spend the time calling in. And so one of these ancillary benefits of using AI as a productivity gain is that the mean time to resolution gets cut to a minuscule amount of time.

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: Right. Good. Great. Great point. And the customers, they probably oftentimes could use a they have a few network people working in house, so I’m assuming your average customer would probably have four or five.

I don’t know. Maybe larger, much more amount of people. But I’m assuming they if this works well, they can cut that number down. It’s some amount, 30%, 50%, 70% down if it’s more automated. Is that a a way to save them money also?

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: It is. And I think the other way is that, let’s say that you have a person that leaves or retires or just a load on your organization grows. When you fill in your next staff to replace or add a a new person, you can add a person who is arguably less experienced and then use the power of AI to fill in that knowledge gap. So as your network engineers leave or or age out or just run out of human capacity because your networking needs are growing, that next person that you’re adding, you know, will will be potentially a lower cost resource because you can do more with less with the power of the software.

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: And so, how much more will Platform One cost than than fabric fabric cost historically? Or, you know, is there a step up in in in price for customers also?

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: Yeah. We’re expecting, that over time, we’re trying to achieve, you know, a 10 to 20% uplift in, the price for customers. And part of it is, also to finance a lot of the additional AI, that costs us money, to run. So when you do queries on on the AI, that, runs additional cycles on the, environment that we’re running back in in Azure or AWS. And so essentially have to pay for those cycles, and and that’s why the the cost is going up for the customers.

We’re giving them that capability. But as we all know, you know, these data centers are very expensive to build. They charge us and other, service providers money for that, and so we have to recoup some of our costs, using this AI technology. What we did was from a pricing standpoint to ease, customer adoption is, number one, there’s backwards compatibility to the older system to ExtremeCloud IQ. So when you upgrade, you can test things out, and it’s it’s a gradual upgrade cycle.

And some of our customers are reporting that the upgrade was a forty five minute cycle to upgrade from ExtremeCloud IQ to platform one. So it’s relatively quick for

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: a large

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: organization. And then the other thing that we’re doing is from a pricing standpoint, we’ve split up our customer base into various cohorts. So you might have taken you might have been a a wired customer, but you may not have been a subscriber to cloud management. You you were just a support customer. And so that’s one type of customer that will now migrate as their support contract runs out.

We can offer them, hey, you know, why don’t you go into platform one? This is a new capability that we have. Or it could be when you buy new equipment. So you you’re renewing your hardware, and then that’s an opportunity for us to uplift the customer into platform one. So we’re gonna be very strategic because the idea is to bring everyone into this new paradigm.

And so we don’t necessarily have to, get everyone you know, it’s not gonna be a 20% uplift on day one. Right. We’re trying to get people to that level over a certain amount of time, you know, maybe three year cycle, and gradually step up, so that we can pay for all these additional capabilities.

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: And is there ability would platform want to add more AI, more security, more services, or, you know, over time? Like yeah.

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: Absolutely. One of the things that we’ve already added into it is, we have, capabilities that we launched a year ago, which are universal ZTNA, and that’s not something that we had before. We had network access control. Universal ZTNA is something that we added as a security feature. And over time, we can add additional capabilities, such as security features, more automation capabilities that, you know, really improve management, maybe add additional devices like non extreme devices to manage in this platform.

So that there once we have this capability and once we’re ingesting a lot of that data from a network, we can tie into a lot of different other systems. We can also look into other systems that are, you know, know, maybe like the the supervisory systems for an organization, like a ServiceNow environment we plug into that type of environment to feed data into those other systems.

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: And just the overall demand, I mean, it’s pretty amazing what’s going on with these arenas. I mean, I think pretty soon, hopefully, they’re gonna have facial recognition. I know some places have, but it’ll be ubiquitous. And they’ll have them grab and and go shopping so you don’t have to wait an hour to get a hot dog and a beer. But, you know, I’m sure there’s dozens of other applications.

But where are we you know, you see all the stadiums. Where are they in adopting, like, facial recognition to get in and and grab and go and yeah. Other stuff.

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: Starting it roll out. I mean, I think that, you know, the grab and go is what we see at the Gillette Stadium at the Patriots. They’ve got grab and grow grab and go. Med Stadium has some facial recognition, I think. I’m not sure if Yankee has it, but we’re seeing that adoption as well.

So you need a very strong network. You need a lot of security. And the other thing is that just the proliferation of usage where you have video cameras all over, and you are going not just to basic video surveillance, like ten eighty p, but there could be two k, four k cameras that get really specific. And this is also true at airports, and we’re seeing a lot of upgrades not just in venues, but we’re seeing airports make upgrades to their network infrastructure as well for those physical security needs. And it’s a big driver, I would say.

Video in general is one of the bigger drivers from a bandwidth perspective and from a use case perspective of why people need a modern network infrastructure.

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: Yeah. I would I would greatly think so. So I got dozens and dozens of more questions for you, and I gotta focus them down. So, you know, I’ve been a big proponent of Wi Fi seven upgrade cycle. You you guys, I think, are very early in that product, and I think right now have much more flow share than your peers for Wi Fi seven.

But can you just step back and what are you seeing in Wi Fi seven in terms of improved quality and and capacity and latency?

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: Yeah. Great question. Wi Fi seven, and I would say Wi Fi six before that, there’s a significant shift in the capabilities that you can offer on on these technologies because traditionally, we’ve operated Wi Fi on two bands. We’ve had two and a half gigahertz and five gigahertz bands of wireless. Now with six e and seven, we’ve added the six gigahertz band.

And, you know, you’re expanding the information highway to another lane, and you can do a lot of things on that lane where it could be sensors, it could be internal systems, security systems, or it could be just load balancing where you send certain users on that six band. So that’s one of the benefits that you get on upgrading to this technology, and it’s the future proof investment. From how the technology actually works, from how these access points and how the data gets streamed from a user or between devices, it’s become a lot more deterministic and more reliable. And the reliability of the increased reliability of Wi Fi puts it into an interesting position because before Wi Fi seven, there was this notion that private five g could gain share in wireless LAN environments. And I I think with Wi Fi six and Wi Fi seven, that that story gets kicked down the road a little bit, kicked the can down the road because the increased reliability is one of the use cases of five g.

The other additional benefit was the just how far the technology can reach. And if you have a lot of distance, then five g is something that you might wanna use. For shorter distances, Wi Fi is the preferred technology because you have bit more bandwidth, and you can cover more users. And and that’s the third benefit is that in addition to the normal speeds and feeds, like the four x faster that you can achieve on seven, The deterministic nature of that technology really improves density, and that means that you can support more devices in a particular location. You you can support more density.

And we’re all carrying more and more devices with us. You you talk about more and more devices at stadiums and other venues. It happens, everywhere you go. Office buildings, schools, airports, manufacturing facilities, hospitality. Anywhere you go, there are more and more devices.

So there’s just that natural need of density and being able to support density. Where we are in in Wi Fi seven is that, you know, we talked about a a 30% of our wireless business coming from Wi Fi seven now. That’s a lot faster than you would expect from the broader industry. When you look at the industry analyst forecasts, the industry analyst expected about half the market to be on Wi Fi seven next year. So that’s next fiscal twenty six for us.

And we’re at 30% now, so I think you’re seeing the adoption. And the other advantage that we have is at the end of f y twenty four, a year ago at this point, we wrote down our Wi Fi six e and older technology hardware for Wi Fi. And one of the reasons was we we didn’t wanna offer our customers older technology as as they move forward and make these forward investments. There was a lot of over ordering during the supply chain crunch of when, you know, we the entire industry just got way too much supply of components. Because first, we went into a supply chain shortage three years ago, and then, know, a year or two ago, that shortage alleviated in a very rapid fashion.

And many of our competitors still have Wi Fi six Wi Fi six inventory. What we’re seeing is that in some cases, we will go up against a competitor who will offer older technology like Wi Fi six, and then we can come in with six e n seven, and the customer would like to future proof their network. So we have a natural advantage right now. I would call it a tactical advantage, but being able to offer more freely, having that flexibility to offer six e n seven, whereas a lot of our competitors are still trying to work down their Wi Fi six inventory, that’s also giving us a tactical advantage in the marketplace.

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: A lot to digest there. Do you think we’re entering another I mean, it’s obviously incredibly cyclical. Is there a chance we enter a period of of of shortage of Wi Fi seven again?

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: No. I don’t I don’t think there’s a shortage of Wi Fi seven. You know? As we as we look at, the availability of supply, I mean, there’s chipsets being built for this technology now. I don’t think there’s a shortage coming up of this technology.

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: So all this stuff is the chicken and the egg. It sounds like this is doubling, tripling the capacity. Latency is a little bit lower with a lot more devices. So it enables all those good use cases that we touched on some of them. And a lot of those use cases are really AI driven.

I mean, if you’re looking at, you know, a lot of it’s facial recognition and image recognition, right, which is all AI. But are there, you know, other, AI driven, new applications or demands on the networks?

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: Yeah. So I think from a productivity standpoint, that’s the biggest demand on on AI. And AI also helps you for network planning. If you have an event coming up or if you have growth or an expansion plan coming up, then a lot of this network network planning tools, you can add into AI. And what we’re seeing in various industries is as companies build out for AI, for example, the physical infrastructure required to support AI, the the data center infrastructure.

You obviously need a lot of planning for that, and we’re seeing a lot of our customers really develop new capabilities. In the manufacturing sector, you’ve got, an expansion of the semi cap sector that’s driving growth. You’ve got the power sector also trying to support the, power requirements of AI. That’s also adding growth. And and as you plan for these new applications, new plans, greenfield expansion, then AI is a great tool for understanding what the networking needs are.

There’s a typically, when you deploy a new network, you do a survey. And you go around and you understand, like, what the parameters are, requirements, and what you’re operating are. Where from a WiFi standpoint, where are you going to position the access points physically? Mapping becomes very important. And so this these tools of mapping, understanding where to position the the tech, and running various simulations, AI is great for that, so you understand how your network will will run-in that simulated way before you actually deploy a live network.

So you can do that scenario planning with AI, and then, reporting as well. You can come in and and you can prepare a custom report that runs every day, and it repeats itself. Every day, come to the office and AI reports to you exactly how your network is running, if you had any outages overnight, any upgrades that happened overnight that may have affected you. So it just automates your work a lot and gives you that additional productivity that you need so that your IT staff becomes more strategic, and they can focus on planning or or project based work instead of maintenance and just plugging holes.

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: So, Seth, switching gears a little bit now to, you know, maybe your competitive advantage. There’s been some consolidation in the industry. You know, I I guess, what do you think the overall industry is growing at, and how do you gain share in the industry at this point? And, you know, we’ve been trying to gain share for a long time, but you’re still relatively small. I know it’s hard to do in this industry given a lot of issues.

But, yeah. I I ask, how do you gain share now? And, well, what what’s the overall market growing at? And what how do you what do do to gain share?

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: The overall market, I would say, you take, all of enterprise networking into account, it’s probably still growing mid single digits. And our ability to gain share, it really is on, land and expand. Part of that is with our product differentiation that you mentioned. And a great example of that is, let’s say, with our recent example was the government of Japan. It’s it’s been a long time coming.

We’ve we’ve developed a sovereign opportunity over several years. We started with one ministry with the Japanese government two years ago, and we’ve had to switch channel partners over time. So we’ve built a relationship with channel partners in Japan that allow us to tap into the sale into the government ministries of Japan. And working alongside the the CIO over there, we’ve really expanded into the judiciary, urology, like various sectors of of the Japanese government with those capabilities. And what they like is the security and simplicity of what Fabric brings.

This is what they really like, and we’re being installed in lieu of the largest competitor that we have in the industry that’s being displaced with this customer. So that that’s been a real nice growth opportunity for us. And since developing that over the past two years, we see additional growth factors. There are many other ministries or or parts of the IT infrastructure in Japan that we can go get. And when we really partner and become strategic to these customers, this is when we have an opportunity to gain meaningful share, you know, in in sizable chunks.

And I would say that we have developed this upmarket strategy, and moving upmarket allows us to take those meaningful chunks of share. Because the market, we talked about TAM earlier, we’re playing in a market that is probably $35,000,000,000 in size. And we, as a $1,100,000,000 company last year, you know, on on a run rate, I would say q four, q one, if you look at the guidance, the run rate is about $1,200,000,000. At that run rate, we really need to take meaningful share out of that $3,536,000,000,000 dollar market to show up in more than ten, twenty basis points of share gain at a time. You know, 10% share, we would we would, more than double the size of the company.

In fact, we essentially triple the size of the company, to to be a 10% market share company. So that, speaks to how much growth potential there is, but also that we really need to become more strategic to our customers in order to take these larger chunks of of market share out there. And I think we’re seeing a lot of greenfield a lot of interesting greenfield investments in the hospitality sector. On the call, we talked about opportunities in The Middle East where there’s expansion in the hospitality sector. We we had some wins in the energy sector.

Manufacturing, we mentioned, as being a strong cycle and second derivative effect of AI is providing growth opportunities there. Our strength in education is, very prevalent. And specifically now, we’ve had two years of share gain in the higher ed space. Our success in k through 12 is well documented, and and where we’re adding share in education is that university sector. That second that’s the second leg of growth there.

So this is this is what we’re trying to do in moving up market is to gain these larger customers, gain the trust of larger customers.

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: So, you’ve done real well historically, education, sports, retail. Now you’re entering manufacturing. It sounds like you think you’re on the cusp of gaining share in most of these industries.

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: We are. And what’s interesting is that the biggest opportunity that we have to gain share is when there’s market disruption and or our customers are in a position where they’re upgrading their infrastructure. One of our largest competitors talked about $43,000,000,000 coming up for refresh over the next five years in their installed base, and we view that as our opportunity as well. Typically, customers just run their networks, and if there’s no issue or no major issue in the network, they it you’ll be hard pressed to, upgrade your network until your equipment is fully depreciated or you’re up for a renewal, on your service and subscription. And with this, refresh cycle of our large customer, many of those customers will start to look elsewhere.

Some always are perennial customers of, you know, the largest player in the industry, but there’s a good enough, opportunity for us to go after the other customers who are open to doing business with us or other networking providers, and we’re in a very strong competitive position to win that, those new opportunities. And there’s also disruption from the HP and Juniper merger as those companies come together and figure out their product portfolio. There’s a lot of disruption coming from their personnel, consolidation, and cost cutting efforts as they try to create synergies. And from both, you know, this opportunity and also from Cisco changing its partner program, we think there are opportunities that are opening up with new channel partners that would like to do business with Extreme. And, you know, we have a nice story for them in terms of a product sale, and we have very flexible commercial models that we’ve introduced over the past several years where if a customer wants to buy in a traditional manner, they can.

If the customers wanna buy as a service, they can do that. And we’re also growing our business with managed source providers if customers outsource their IT. I think there are a lot of opportunities for both customers and partners to get access to this technology. So the technical advantages matter, but how this is consumed is also important.

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: Yeah. We didn’t really discuss your go to market now. You have a few new products there. Anything you wanna you know, the channel, anything you you wanna elaborate on the channel? I know you have the automated managed services platform also.

You know, how’s that going? Yeah.

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: The managed service, program is going really well. We doubled the size of the program in terms of partners that are signed up. About half of them are transacting. Decent contribution to our SaaS ARR, if you look at a year over year contribution. And that’s really, benefited us in in that line item of our, financials.

And the other thing that’s helping us, our SaaS ARR, is that, talking talking about about the the manufacturing sector or, marquee win there about a year ago was, in a disaggregated model, where customers that meet a lot a threshold of, potential purchases can go directly to our ODMs and buy extreme compatible equipment. We then license the operating system. We provide subscription management and support capabilities on top of that hardware. And as those deployments by this customer have grown, so have our ability to recognize that, ratable, service and support that we’re providing them. That also factors into the SaaS ARR growth.

And when we talked about Wi Fi seven and wireless coming back, we’ve had two quarters in a row of growth in, SaaS and in in wireless. Those are some of the factors that are helping our SaaS ARR. In general, we we also have some customers that, purchase from us on a as a service model. There’s some hospitality or casino customers that just like to match their cash flows of what they’re, buying from Extreme and and how they’re generating revenue from their clients, from from their, patrons. So, there’s an opportunity there, but all of these factors are driving the recovery and resurgent growth in SAS error.

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: Good stuff. Anything else, Stan, that we should really we only have three minutes left that I didn’t ask or that you really wanna convey yet.

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: Yeah. I mean, I think the other thing is we’re obviously, with these models in place, and we saw it in q four, we’re generating a lot of cash flow. So on a run rate basis, our our EBITDA exiting q four was about $100,000,000 in in EBITDA, and that gives us a lot of flexibility. We continue to buy back shares. We’ve done that for a number of quarters now and just adding a lot of value to shareholders from that standpoint, trying to offset dilution.

And we have a lot of flexibility in terms of our balance sheet of how we add value and, you know, how we deploy our cash.

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: So so, Dan, I mean, do you do you think you can grow revenues, you know, double digit with everything we’ve kinda talked about? And and and how should we think about where EBITDA margins could be five years from now or longer term?

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: Yeah. Next question. So when I think about double digit growth, it it’s certainly, possible for us to achieve total company double digit growth. It it’s certainly within the realm of our our opportunity. We haven’t forecasted that for the market.

We haven’t guided that in f y twenty six. It’s still early days. It’s it’s still q one. So we have a lot of opportunity, but, obviously, there’s still the macro environment to take into account. We didn’t really talk a lot about tariffs.

Right now, we’re exempt from tariffs. That could always change, and so that would require us to react to that market dynamic, and our remedy for that would be to raise price. And that, you know, also factors into our outlook. Now the part of our business that we feel really good about double digit growth is subscription and support. We feel good about double digit growth over time there and certainly strong growth prospects within subscription.

If you look at the business longer term, you know, there’s no reason why we shouldn’t have a a a 20% operating or or 20% plus EBITDA margin. That’s something that we talked about several years ago when we had our investor day. We’ve got another investor day coming up this November. And so we’ll be able to talk to investors about how the business is positioned for growth and what kind of margin profile we should expect going forward off

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: of that. And, Stan, have have we locked down the date on that? Is it in person or virtual?

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: It is. Yeah. It’s up on our website. We’re welcoming people to Nasdaq marketplace, November 10, about noon time. So November 10, which is a Monday.

We’ll see you and investors that want to attend in person at the Nasdaq market site.

Tim Horan, Digital Infrastructure and Communications Analyst, Oppenheimer: Great. Well, with that, I think we’ll end it, and thanks everybody for joining. Dan, thanks so much for the education. I really appreciate it. We’ll talk soon.

Stan Kobler, VP Finance and Corporate Development, Extreme Networks: Thank you, Tim. Thanks for having us.

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