Preliminary F4Q21 Results: 29% YoY Revenue Growth Drives Top & Bottom Line Beats - Replica

  • Extreme Networks President and CEO Ed Meyercord highlighted the record year for the company as it passed the billion-dollar revenue mark. The F4Q21 revenue was up 29% YoY, which followed the 21% YoY growth in F3Q21. The company said it is “in the strongest competitive position it's ever been in.”
  • F4Q21 revenue of $278 million was $15 million above consensus, better than last quarter’s revenue beat of $8 million. Non-GAAP EPS was $0.19, which was also above the consensus of $0.17. Non-GAAP gross margin came in at 60.5% (up 90 basis points YoY), and a non-GAAP operating margin of 13.4% (up 780 basis points YoY).
  • Positive trends include positive demand outlooks for six of the seven industries Extreme serves, with Retail & Logistics/Transport demand holding flat. Supply constraints related to chip shortages led to higher component and freight costs entering 1FQ22. The company expects to grind down the record backlog in 2FQ22.
  • Guidance for 1FQ22 for $250-263 million in revenue, and non-GAAP EPS guidance is $0.13-0.20. The company noted that “demand is outstripping supply for certain products,” which is slightly different than last quarter’s supply commentary when the company said it believes it is in a “favorable” supply chain situation versus its competitors.
  • The stock moved up to the $11 level after the report and is trading at a forward P/S of 1.218, slightly below its two-year high P/S of 1.40x back in May. On a P/E basis, the stock is above its five-year average of 10.1x, trading at 11.9x.
  • See our initiation and other reports and management interview videos on Extreme Networks on our website.

Headquartered in San Jose, CA, with 2,800 employees, Extreme Networks provides software-driven networking services for enterprise customers. Its products include wired and wireless network infrastructure equipment and software for network management, policy, analytics, and access controls. It offers high-density Wi-Fi, centralized management, cloud-based network management, and application analytics capabilities. The company serves several end-markets including Government & Education (>35% of sales), Healthcare (>10%), Manufacturing (~10%), Retail Logistics / Transportation (~10%), Telco / Service Provider (<10%), and Sports / Entertainment & Hospitality (<5%). Roughly half of the firm's revenue is generated in the Americas, with the rest coming from Europe, the Middle East, Africa, and Asia-Pacific.

Extreme Networks President and CEO Ed Meyercord highlighted the record year for the company as it passed the billion-dollar revenue mark.


Water Tower Research (“WTR”) is a professional publisher of investment research reports on public companies and, to a lesser extent, private firms (“the Companies”). WTR provides investor-focused content and digital distribution strategies designed to help companies communicate with investors.

WTR is not a registered investment adviser or a broker/dealer nor does WTR provide investment banking services. WTR operates as an exempt investment adviser under the so called “publishers’ exemption” from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940. WTR does not provide investment ratings / recommendations or price targets on the companies it reports on. Readers are advised that the research reports are published and provided solely for informational purposes and should not be construed as an offer to sell or the solicitation of an offer to buy securities or the rendering of investment advice. The information p...