10q10k10q10k.net

What changed in EXTREME NETWORKS INC's 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of EXTREME NETWORKS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+367 added−386 removedSource: 10-K (2025-08-18) vs 10-K (2024-08-16)

Top changes in EXTREME NETWORKS INC's 2025 10-K

367 paragraphs added · 386 removed · 284 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

76 edited+32 added−47 removed75 unchanged
Biggest changeKey characteristics of our cloud architecture include: o A robust cloud management platform that delivers visibility, intelligence, and assurance from the IoT edge to the network core. o Cloud Choice for customers: Our cloud networking solution is available on all major cloud providers (Amazon Web Services (“AWS”), Google Cloud Platform (“GCP”) and Microsoft Azure). o Consumption Flexibility: Offer a range of financing and network purchase options.
Biggest changeExtreme offers: o Cloud Platform: A robust cloud management platform that delivers visibility, intelligence, and assurance from the network edge to the core. o Cloud Choice for Customers: Our cloud networking solution is available on all major cloud providers (Amazon Web Services (“AWS”), Google Cloud Platform (“GCP”) and Microsoft Azure. o ExtremeCloud IQ: Our ExtremeCloud IQ offering conforms to ISO/IEC 27001, ISO/IEC 27017 and ISO/IEC 27701 standards for data privacy and protection as set forth by the International Standards Organization (“ISO”), and is CSA STAR certified. o Cloud Continuum: We provide hosting flexibility across a range of options including public, private, and on-premises edge cloud options. o Consumption Flexibility: We offer a range of financing and network purchase options.
We expect the broadening of our security offering to drive significant traction for our business with growth opportunities. o Extreme’s unique and highly differentiated fabric makes it simple to orchestrate applications and policy across the entire campus, from the core to the wireless edge, and across the wide area network.
We expect the broadening of our security offering to drive significant traction for our business with growth opportunities. o Extreme’s unique and highly differentiated network fabric makes it simple to orchestrate applications and policy across the entire campus, from the core to the wireless edge, and across the wide area network.
We have established strategic relationships with a number of industry-leading vendors to both provide increased and enhanced routes to market, and collaboratively develop unique solutions.
We have established strategic relationships with a number of industry-leading vendors to provide both increased and enhanced routes to market, to collaboratively develop unique solutions.
Products Our products and services categories include: • Cloud Networking Platform: Core to our product portfolio and providing the end-to-end visibility and control from the access edge to the data center is our industry-leading cloud platform and cloud management application, ExtremeCloud IQ.
Products Our products and services categories include: • Cloud Networking Platform: Core to our product portfolio and providing end-to-end visibility and control from the access edge to the data center is our industry-leading cloud platform and cloud management application, ExtremeCloud IQ.
We believe the principal competitive factors in this market are: • expertise and familiarity with network protocols, network switching/routing/wireless and network management; • robust, cloud-driven options that reduce the cost of acquisition, provisioning, and ongoing management of network management; • expertise and familiarity with application analytics software; • expertise with network operations and management software; • expertise in machine learning and artificial intelligence; • product performance, features, functionality and reliability; • price/performance characteristics; • timeliness of new product introductions; • adoption of emerging industry standards; • customer service and support; • size and scope of distribution network; • brand name; • breadth of product offering; • access to customers; and • size of installed customer base.
We believe the principal competitive factors in this market are: • expertise and familiarity with network protocols, network switching/routing/wireless and network management; • robust, cloud-driven options that reduce the cost of acquisition, provisioning, and ongoing management of network management; • expertise and familiarity with application analytics software; • expertise with network operations and management software; • expertise in machine learning and artificial intelligence; • product performance, features, functionality and reliability; • price/performance characteristics; • timeliness of new product introductions; • adoption of emerging industry standards; • customer service and support; • size and scope of distribution network; 12 • brand name; • breadth of product offering; • access to customers; and • size of installed customer base.
Included also are security options such as a built-in zone-based firewall, EdgeSentry (in partnership with Check Point) for cloud-based firewall as a service and other advanced security capabilities, and integration with Secure Web Gateway partners such as Palo Alto Networks, Zscaler, and Symantec. 8 • Cloud Native Platforms and Applications for Service Providers: 5G is the first generation of cellular technologies built on cloud-native principles, and most traditional network visibility tools cannot be easily adapted for future use cases like autonomous vehicles or industrial IoT.
Included also are security options such as a built-in zone-based firewall, EdgeSentry (in partnership with Check Point) for cloud-based firewall as a service and other advanced security capabilities, and integration with Secure Web Gateway partners such as Palo Alto Networks, Zscaler, and Symantec. • Cloud Native Platforms and Applications for Service Providers: 5G is the first generation of cellular technologies built on cloud-native principles, and most traditional network visibility tools cannot be easily adapted for future use cases like autonomous vehicles or industrial IoT.
Additionally, we have launched new product features such as Secure Boot, which are being designed to provide additional integrity assurance of the firmware and software running on our hardware platform by establishing an encrypted key-based chain-of-trust relationship in the boot process. The manufacturing processes and procedures are generally certified to International 11 Organization for Standardization (“ISO”) 9001 standards.
Additionally, we have launched new product features such as Secure Boot, which are being designed to provide additional integrity assurance of the firmware and software running on our hardware platform by establishing an encrypted key-based chain-of-trust relationship in the boot process. The manufacturing processes and procedures are generally certified to International Organization for Standardization (“ISO”) 9001 standards.
Our architecture delivers tens of millions of flows for deep visibility and control over users, services, and applications to meet the analytic and policy demands of today’s business applications. • SD-WAN: ExtremeCloud SD-WAN is a software-defined wide area networks solution offered as an all-inclusive subscription, which includes hardware, the cloud-based SD-WAN service, support and maintenance, and customer success support.
Our architecture delivers tens of millions of flows for deep visibility and control over users, services, and applications to meet the analytic and policy demands of today’s business applications. 7 • SD-WAN: ExtremeCloud SD-WAN is a software-defined wide area networks solution offered as an all-inclusive subscription, which includes hardware, the cloud-based SD-WAN service, support and maintenance, and customer success support.
We rely upon original design manufacturers (“ODM”), such as Alpha Networks, Inc., Lite-On Technology Corporation, Quanta Computer Inc., Senao Networks, Inc., Sercomm Corporation and Wistron Neweb Corporation to manufacture, support and ship our products, and therefore are exposed to risks associated with their businesses, financial condition, and geopolitical conflict in geographies in which they operate.
We rely upon original design manufacturers (“ODM”), such as Alpha 10 Networks, Inc., Lite-On Technology Corporation, Quanta Computer Inc., Senao Networks, Inc., Sercomm Corporation and Wistron Neweb Corporation to manufacture, support and ship our products, and therefore are exposed to risks associated with their businesses, financial condition, and geopolitical conflict in geographies in which they operate.
ExtremeCloud IQ is available in three deployment options (public, private, on-premises) that support one goal – to provide customers with maximum flexibility, continuous innovation and consistent user experience. It can be deployed in any major data center environment such as AWS, GCP and Azure, or local private cloud options.
ExtremeCloud IQ is available in public, private, or on-premises deployment options that support one goal – to provide customers with maximum flexibility, continuous innovation and consistent user experience. It can be deployed in any major data center environment such as AWS, GCP and Azure, or local private cloud options.
These efforts also include process optimization initiatives, such as vendor managed inventory, and other operational models and strategies designed to drive improved efficiencies in our sourcing, production, logistics and fulfillment. Research and Development The success of our products to date is due in large part to our focus on research and development.
These efforts also include process optimization initiatives, such as vendor managed inventory, and other operational models and strategies designed to drive improved efficiencies in our sourcing, production, logistics and fulfillment. 11 Research and Development The success of our products to date is due in large part to our focus on research and development.
To date, our compliance efforts with various United States and foreign regulations related to the environment have not had a material effect on our operating results. Human Capital At Extreme, we manage our human capital guided by our core values of Candor, Transparency, Curiosity, Teamwork, Ownership, and Inclusion.
To date, our compliance efforts with various United States and foreign regulations related to the environment have not had a material effect on our operating results. 13 Human Capital At Extreme, we manage our human capital guided by our core values of Candor, Transparency, Curiosity, Teamwork, Ownership, and Inclusion.
We utilize our field sales organization to support our channel partners and to sell directly to certain end-user customers, including some large enterprise and service provider global accounts. 9 The details of our sales and distribution channels are as follows: • Original Equipment Manufacturers (“OEM”) and Strategic Relationships .
We utilize our field sales organization to support our channel partners and to sell directly to certain end-user customers, including some large enterprise and service provider global accounts. The details of our sales and distribution channels are as follows: • Original Equipment Manufacturers (“OEM”) and Strategic Relationships .
Our ongoing research activities cover a broad range of areas, including cloud native technologies and solutions, generative AI, network security, identity management, wired and wireless networking, switching, and routing, open standards interfaces, software defined networks, campus, and data center fabrics.
Our ongoing research activities cover a broad range of areas, including cloud native technologies and solutions, generative AI, agentic AI, network security, identity management, wired and wireless networking, switching, and routing, open standards interfaces, software defined networks, campus, and data center fabrics.
This includes a wide range of standard support programs to the level of service our customers require, from standard business hours to global 24-hour-a-day, 365-days-a-year real-time responsive support. 6 • Extend switching and routing technology leadership.
This includes a wide range of standard support programs to the level of service our customers require, from standard business hours to global 24-hour-a-day, 365-days-a-year real-time responsive support. • Extend switching and routing technology leadership.
As networks become more complex and more distributed in nature, we believe IT teams in every industry will need more control and better insights than ever before to ensure secure, distributed connectivity and comprehensive centralized visibility. Networking is mission critical and touches all elements of how services are delivered to customers, employees, students, and patients.
As networks become more complex and more distributed in nature, we believe IT teams in every industry will need more control and better insights than ever before to deliver secure, distributed connectivity and comprehensive centralized visibility. Networking is mission critical and touches all elements of how services are delivered to customers, employees, students, and patients.
In addition to powering large venues and stadiums, our Extreme APs also deliver flexible and scalable options for highly distributed environments for major companies globally. Our APs allow our customers to purchase unified hardware, starting with our Wi-Fi 7 AP portfolio, and choose the software mode option for the optimal deployment architecture in their environments.
In addition to powering large venues and stadiums, our Extreme APs also deliver flexible and scalable options for highly distributed environments for major companies globally. Our APs allow our customers to purchase universal hardware, starting with our Wi-Fi 7 AP portfolio, and choose the software mode option for the optimal deployment architecture in their environments.
This continued expansion creates issues such as a higher risk of cyberattacks and a need for more bandwidth as a result of an increase in applications running across the network. Network complexity manifests itself in the form of more endpoints to manage, more applications to monitor, and more services that rely on the network for service delivery and enablement.
This continued expansion creates issues such as a higher risk of cyberattacks and a need for more bandwidth due to an increase in applications running across the network. Network complexity manifests itself in the form of more endpoints to manage, more applications to monitor, and more services that rely on the network for service delivery and enablement.
In order to accomplish this, they are adopting new Information Technology (“IT”) delivery models and applications that require fundamental network alterations and enhancements spanning from the access edge to the data center.
To accomplish this, they are adopting new Information Technology (“IT”) delivery models and applications that require fundamental network alterations and enhancements spanning from the access edge to the data center.
In either case, the network infrastructure must adapt to this new dynamic environment. Intelligence and automation are key if enterprises are to derive maximum benefit from their cloud deployments.
In either case, the network infrastructure must adapt to this new dynamic environment. AI and automation are key if enterprises are to derive maximum benefit from their cloud deployments.
ExtremeCloud IQ Essentials provides three key applications - WIPS, location services, and guest management - for ExtremeCloud IQ Pilot license customers at no added cost, enabling organizations to take advantage of an all-in-one platform for wired and wireless management, business insights, location tracking, wireless security, seamless IoT onboarding and guest access, and guest access through a single user interface. 7 • Wireless LAN AP: One of the industry’s broadest and most comprehensive, Extreme’s wireless AP portfolio includes both indoor and outdoor Wi-Fi 7 and prior generation APs.
ExtremeCloud IQ Essentials provides three key applications - Wireless Intrusion Prevention System (“WIPS”), location services, and guest management - for ExtremeCloud IQ Pilot license customers at no added cost, enabling organizations to take advantage of an all-in-one platform for wired and wireless management, business insights, location tracking, wireless security, seamless IoT onboarding and guest access, and guest access through a single user interface. • Wireless LAN AP: One of the industry’s broadest and most comprehensive, Extreme’s wireless AP portfolio includes both indoor and outdoor Wi-Fi 7 and prior generation APs.
Cloud networking is estimated to be a $11 billion segment of the networking market comprising cloud-managed services and cloud-managed products, which are largely WLAN access points and ethernet switches, growing at 31% annually over the next five years, according to data from the 650 Group, Gartner, IDC and Dell’Oro. Cloud management technology has evolved significantly over the past decade.
Cloud networking is estimated to be a $15 billion segment of the networking market comprising cloud-managed services and cloud-managed products, which are largely WLAN access points and ethernet switches, growing at 15% annually over the next five years, according to data from the 650 4 Group, Gartner, IDC and Dell'Oro. Cloud management technology has evolved significantly over the past decade.
All can be managed, assessed, and controlled from a single pane of glass on premises or from the cloud. • Provide high-quality in-house customer service and support. We seek to enhance customer satisfaction and build customer loyalty through high-quality service and support.
All can be managed, assessed, and controlled from a single pane of glass on premises or from the cloud. • Provide high-quality insourced customer service and support. We seek to enhance customer satisfaction and build customer loyalty through high-quality service and support.
We believe we compete with our competitors with respect to many of the foregoing factors. However, the market for network switching solutions is dominated by a few large companies, particularly Cisco Systems, Inc., Hewlett-Packard Enterprise Co., Huawei Technologies Co. Ltd., and Juniper Networks Inc.
We believe we compete with our competitors with respect to many of the foregoing factors. However, the market for network switching solutions is dominated by a few large companies, particularly Cisco Systems, Inc., Hewlett-Packard Enterprise Company, Huawei Technologies Co. Ltd., and prior to the recent merger with Hewlett-Packard Enterprise Company, Juniper Networks Inc.
Therefore, we do not believe our backlog, as of any particular date is necessarily indicative of actual revenues for any future period. Our product backlog at June 30, 2024, net of anticipated back-end rebates for distributor sales, was $64.0 million, compared to $267.3 million at June 30, 2023.
Therefore, we do not believe our backlog, as of any particular date is necessarily indicative of actual revenues for any future period. Our product backlog at June 30, 2025, net of anticipated back-end rebates for distributor sales, was $72.3 million, compared to $64.0 million at June 30, 2024.
To foster an inclusive environment, we support several employee resource groups, including Women in Networking, Black @ Extreme (Black/African American), LaRaza (Hispanic), Maitri (employees in India), Pride Alliance (LGBTQ+), Global Veterans Council, API (Asian Pacific Islanders), APEX (Aspiring Professionals @ Extreme) and Abilities Alliance (employees with disabilities).
To foster an inclusive environment, we support several employee-led employee resource groups, including Abilities Alliance (employees with disabilities), API (Asian Pacific Islanders), APEX (Aspiring Professionals @ Extreme), Black @ Extreme (Black/African American), LaRaza (Hispanic), Maitri (employees in India), Parents at Extreme Networks, Pride Alliance (LGBTQ+), Veterans Council, and Women in Networking.
Our corporate governance guidelines, the charters of our Audit Committee, our Compensation Committee, our Nominating, Governance, Environmental & Social Responsibility Committee and our Code of Business Conduct and Ethics policy (including code of ethics provisions that apply to our principal executive officer, principal financial officer, controller and senior financial officers) are available on the Investors section of our website at investor.extremenetworks.com under “Corporate Governance.” These items are also available to any stockholder who requests them by calling (408) 579-2800. 15
Our corporate governance guidelines, the charters of our Audit Committee, our Compensation Committee, our Nominating and Corporate Governance Committee and our Code of Business Conduct and Ethics policy (including code of ethics provisions that apply to our principal executive officer, principal financial officer, controller and senior financial officers) are available on the Investors section of our website at investor.extremenetworks.com under “Governance.” These items are also available to any stockholder who requests them by calling (408) 579-2800. 14
Extreme offers universal platforms which support multiple deployment use cases, providing flexibility and investment protection. o Universal switches (7720/5720/5520/5420/5320) support fabric or traditional networking with a choice of cloud or on-premises (air-gapped or cloud connected) management. 5 o Universal Wi-Fi 6/6E APs (300/400, 4000, and 5000 series) support campus or distributed deployments with a choice of cloud or on-premises (air-gapped or cloud connected) management. o Universal licensing with one portable management license for any device and for any type of management.
We offer universal platforms which support multiple deployment use cases, providing flexibility and investment protection. o Universal switches (7720/5720/5520/5420/5320/4220/4120) support fabric or traditional networking with a choice of cloud or on-premises (air-gapped or cloud connected) management. o Universal Wi-Fi 6/6E/7 APs (300/400, 4000 and 5000 series) support campus or distributed deployments with a choice of cloud or on-premises (air-gapped or cloud-connected) management. o Universal licensing with one portable management license for any device and for any type of management.
Our technological leadership is based on innovative switching, routing and wireless products, the depth and focus of our market experience and our operating systems - the software that runs on all of our networking products.
Our technological leadership is achieved by the development of innovative switching, routing and wireless products, the depth and focus of our market experience and our operating systems - the software that runs on all of our networking products.
As the VPN market transitions to ZTNA, the proliferation of individual applications, each with their own policy and dashboard, is adding complexity and expense for enterprise customers.
As the virtual private network (“VPN”) market transitions to ZTNA, the proliferation of individual applications, each with their own policy and dashboard, is adding complexity and expense for enterprise customers.
These employees were located worldwide, with 42.8% located in the United States, 8.6% in other locations in the Americas, 29.2% in the Asia Pacific region (“APAC”), which includes India and 19.4% in the regions of Europe, Middle East and Africa (“EMEA”). None of our U.S. employees are subject to a collective bargaining agreement.
These employees were located worldwide, with 43.1% located in the United States, 8.9% in other locations in the Americas, 31.6% in the Asia Pacific region (“APAC”), which includes India, and 16.4% in the regions of Europe, Middle East and Africa (“EMEA”). None of our U.S. employees are subject to a collective bargaining agreement.
By combining Cloud Network Access Control ("NAC") and Zero Trust Network Authentication ("ZTNA") into a single, easy-to-use SaaS offering, we help customers ensure unified observability, frictionless user experiences and a consistent security policy for applications and devices and supports secure hybrid work use cases for customers.
By combining Cloud Network Access Control (“NAC”) and Zero Trust Network Authentication (“ZTNA”) into a single, easy-to-use SaaS offering, we help customers ensure unified observability, frictionless user experiences and a consistent security policy for applications and devices as well as support secure hybrid work use cases for customers.
Industry Background Enterprises across every industry are going through unprecedented changes, such as leading digital initiatives, migrating their workloads to cloud-based environments, modernizing applications, finding new ways to leverage generative AI ("GenAI") technology, and adopting to a distributed workforce.
Industry Background Enterprises across every industry are going through unprecedented changes, such as digital transformation initiatives, migrating their workloads to cloud-based environments, modernizing applications, finding new ways to leverage multimodal and agentic AI technology, and adapting to a distributed workforce.
Within the ExtremeSwitching portfolio are Access Edge products offering connection speeds ranging from 100 Megabytes per second (“Mbps”) to 25 Gigabytes per second (“Gbps”) – including edge multi-rate 2.5Gbps and 5Gbps capabilities.
Within the Extreme Switching portfolio are Access Edge products offering connection speeds ranging from 100 Megabits per second (“Mbps”) to 25 Gigabits per second (“Gbps”) – including edge multi-rate 2.5Gbps and 5Gbps capabilities.
The manufacturing process and material supply chains are flexible enough to be moved to steer away from geopolitical conflicts that impact cost and delivery. We use a collaborative sales and operations planning forecast of expected demand based upon historical trends and analyses from our Sales and Product Management functions as adjusted for overall market conditions.
The manufacturing process and material supply chains are flexible enough to allow us to mitigate, at least in part, risks arising from geopolitical conflicts that impact cost and delivery. We use a collaborative sales and operations planning forecast of expected demand based upon historical trends and analyses from our Sales and Product Management functions as adjusted for overall market conditions.
In addition, we have direct sales to end-user customers, including large global accounts. The primary markets for sales outside of the United States are countries in Europe and Asia, as well as Canada, Mexico, Central America and South America. We operate in one segment, the development and marketing of network infrastructure equipment and related software.
The primary markets for sales outside of the United States are countries in Europe and Asia, as well as Canada, Mexico, Central America and South America. We operate in one segment, the development and marketing of network infrastructure equipment and related software.
We are at a technology inflection point with the pending migration from Wi-Fi 6 solutions to 6 GHz Wi-Fi (Wi-Fi 6E and Wi-Fi 7), focused on providing more efficient access to the broad array of connected devices.
We are at a technology inflection point with the pending migration from Wi-Fi 6 solutions to 6 GHz Wi-Fi (Wi-Fi 6E and Wi-Fi 7), focused on providing more efficient access to the broad array of connected devices. We believe we have the industry’s broadest 6 GHz indoor and outdoor wireless portfolio. • Offer actionable insights.
We sell our products primarily through an ecosystem of channel partners who combine our infinite enterprise vision and product portfolio consisting of cloud-driven applications, wired, wireless, management and analytics software products with their vertical specific offerings to create compelling information technology solutions for end-user customers.
We have domestic sales offices located in four states within the United States and international sales offices located in 29 countries. 8 We sell our products primarily through an ecosystem of channel partners who combine our infinite enterprise vision and product portfolio consisting of cloud-driven applications, wired, wireless, management and analytics software products with their vertical specific offerings to create compelling information technology solutions for end-user customers.
Our global footprint provides service to over 50,000 customers including some of the world’s leading names in business, hospitality, retail, transportation and logistics, education, government, healthcare, manufacturing, and service providers. We derive all our revenues from the sale of our networking equipment, software subscriptions, and related maintenance contracts.
Our global footprint provides service to some of the world’s leading names in business across verticals such as large sports and entertainment venues, hospitality, retail, transportation and logistics, education, government, healthcare, manufacturing and service providers. We derive all our revenues from the sale of our networking equipment, software subscriptions, and related maintenance contracts.
The Company expects to complete the 2023 Plan during fiscal year 2025. Environmental Matters We are subject to various environmental and other regulations governing product safety, materials usage, packaging and other environmental impacts in the United States and in various countries where our products are manufactured and sold.
We are subject to various environmental and other regulations governing product safety, materials usage, packaging and other environmental impacts in the United States and in various countries where our products are manufactured and sold.
Although we compete in many vertical markets, we have focused on the specific verticals of healthcare, education, retail, manufacturing, government, sports, and entertainment venues. Years of experience and a track record of success in the verticals we serve enable us to address industry-specific problems.
Although we compete in many vertical markets, we have focused on the specific verticals of healthcare, education, retail, manufacturing, government, sports, and entertainment venues. Years of experience and a track record of success in the verticals we serve enable us to address industry-specific problems. Customer Profiles Extreme’s customers are organizations facing complex IT challenges and/or undergoing digital transformation.
Our layered security approach is managed from one cloud and secure by design. We offer tightly integrated security with network fabric and infrastructure. o We launched ExtremeCloud Universal ZTNA, the first network security offering to integrate network, application, and device security within a single solution.
We offer tightly integrated security with network fabric and infrastructure. o ExtremeCloud Universal ZTNA, is the first network security offering to integrate network, application, and device security within a single solution.
Collaborative partnerships with our ODMs and diversified sourcing strategies also emerged, fostering greater flexibility and risk mitigation. Our product development efforts also depend upon continued collaboration with our key suppliers, including our merchant silicon vendors such as Broadcom.
In this case, new systems and processes have given us better visibility and control over inventory. Collaborative partnerships with our ODMs and diversified sourcing strategies have also emerged, fostering greater flexibility and risk mitigation. Our product development efforts also depend upon continued collaboration with our key suppliers, including our merchant silicon vendors such as Broadcom.
International sales International sales are an important portion of our business. In fiscal 2024, sales to customers outside of the United States accounted for 48% of our consolidated net revenues, compared to 56% in fiscal 2023, and 55% in fiscal 2022. These sales are conducted primarily through foreign-based distributors and resellers managed by our worldwide sales organization.
In fiscal 2025, sales to customers outside of the United States accounted for 52% of our consolidated net revenues, compared to 48% in fiscal 2024, and 56% in fiscal 2023. These sales are conducted primarily through foreign-based distributors and resellers managed by our worldwide sales organization. In addition, we have direct sales to end-user customers, including large global accounts.
Although we have patent applications pending, there can be no assurance that patents will be issued from pending applications or that claims allowed on any future patents will be sufficiently broad to protect our technology. As of June 30, 2024, we had 31 registered trademarks in the United States and 341 registered trademarks outside of the United States.
The expiration dates of our issued patents in the United States range from calendar years 2025 to 2043. Although we have patent applications pending, there can be no assurance that patents will be issued from pending applications or that claims allowed on any future patents will be sufficiently broad to protect our technology.
We apply these principles to talent acquisition and management, compensation and benefits, and diversity and inclusion. As of June 30, 2024, we employed 2,656 people. Of these, 32.8% work in sales and marketing, 34.9% in research and development, 5.4% in operations, 16.0% in customer support and services and 10.9% in finance and administration.
We apply these principles to talent acquisition and management, compensation and benefits, and inclusion and engagement. As of June 30, 2025, we employed 2,811 people. Of these, 30.8% work in sales and marketing, 37.1% in research and development, 5.2% in operations, 15.2% in customer support and services and 11.7% in finance and administration.
Our customers can understand what is going on across their network and applications in real time – who, when, and what is connected to the network, which is critical for bring your own device (“BYOD”) and IoT usage. • Highest value of cloud management subscriptions.
Our customers can understand what is going on across their network and applications in real time – who, when, and what is connected to the network, which is critical for bring your own device (“BYOD”) and Internet of Things (“IoT”) usage. • Offers universal platforms for enterprise class switching and wireless infrastructure.
We believe Extreme is uniquely positioned to address its overarching vision of the future, the Infinite Enterprise, with its bet on industry-leading cloud solutions, automation and AI.
We believe Extreme is uniquely positioned to address its overarching vision of the future, the Infinite Enterprise, with its bet on industry-leading cloud solutions, automation and AI. Although we believe that our solutions and strategy will improve our ability to meet the needs of our current and potential customers, we cannot guarantee future success.
When performance suffers, and the tug on internal systems and IT staff becomes more intense, technology is often being overworked. Resolving network problems expeditiously and identifying their root cause, can improve organizational productivity and result in higher performance of operations. We believe that the network has never been more vital than it is today.
When performance suffers, and the tug on internal systems and IT staff becomes more intense, technology is often being overworked. Resolving network problems expeditiously and identifying their root cause, can improve organizational productivity and result in higher performance of operations. AI for networking is needed to improve an IT team’s agility and responsiveness to address these challenges.
As enterprises continue to migrate increasing numbers of applications and services to either private clouds or public clouds offered by third parties and to adopt new IT delivery models and applications, they are required to make fundamental network alterations and enhancements spanning from device access points (“APs”) to the network core.
We expect Extreme Platform ONE to deliver significant productivity gains for IT teams by streamlining network design, deployment, management, and commercial operations through its generative, multimodal, and agentic AI capabilities. 3 As enterprises continue to migrate increasing numbers of applications and services to either private clouds or public clouds offered by third parties and to adopt new IT delivery models and applications, they are required to make fundamental network alterations and enhancements spanning from wireless access points (“APs”) to the network core.
We on-board new employees through the New Hire Academy and encourage skill development throughout the employee journey utilizing various role-specific training programs, career development tools, manager training, coaching, and mentorship. We continue to develop our employees with regular performance management reviews. Compensation and Benefits.
We strive to attract and retain the most qualified employees for each role within the Company. We on-board new employees through the New Hire Academy and encourage skill development throughout the employee journey utilizing various role-specific training programs, career development tools, manager training, coaching, and mentorship.
Our corporate headquarters are located at 2121 RDU Center Drive, Suite 300, Morrisville, NC 27560 and our telephone number is (408) 579-2800. We electronically file our Securities Exchange Commission (“SEC”) disclosure reports with the SEC and they are available free of charge at both www.sec.gov and www.extremenetworks.com.
We electronically file our Securities and Exchange Commission (“SEC”) disclosure reports with the SEC and they are available free of charge at both www.sec.gov and www.extremenetworks.com.
With automation applications becoming increasingly critical in manufacturing, warehousing, logistics, healthcare and other key industries, we believe this will continue to create demand for networking technology to serve as a foundation to run these services. 3 Service providers are investing in network enhancements with platforms and applications that deliver data insights, provide flexibility, and can quickly respond to new user demands and 5G use cases.
With automation applications becoming increasingly critical in manufacturing, warehousing, logistics, healthcare and other key industries, we believe this will continue to create demand for networking technology to serve as a foundation to run these services.
We estimate the total addressable market for our Enterprise Networking solutions consisting of cloud networking, wireless local area networks (“WLAN”), data center networking, ethernet switching, campus local area networks (“LAN”), SD-WAN solutions and management, automation, and elements of the Secure Access Services Edge (“SASE”) market to be over $47 billion, and growing at approximately 13% annually over the next five years.
We estimate the total addressable market (“TAM”) for our networking solutions, consisting of cloud networking, wireless local area networks (“WLAN”), campus local area networks (“LAN”), Ethernet switching, data center networking, SD-WAN solutions, and elements of the Secure Access Service Edge (“SASE”), exceeded $42 billion in calendar year 2024.
Our value-based subscription tiers provide customers with flexibility to grow, as well as offer pool-able and portable licenses that can be transferred between products ( e . g . access points and switches) at one fixed price. o “No 9s” reliability and resiliency to ensure business continuity for our customers. o Extreme Cloud IQ ("XIQ") cloud platform conforms to ISO/ IEC 27017 and is certified by DQS to ISO/IEC 27001 and ISO/IEC 27701 by the International Standards Organization (“ISO”) and CSA STAR certified. • Offer customers choice: public or private cloud, or on-premises.
Our value-based subscription tiers provide customers with flexibility to grow, as well as offer pool-able and portable licenses that can be transferred between products ( e . g ., access points and switches) at one fixed price. • Offer customers choice: public or private cloud, or on-premises.
We enter into confidentiality, inventions assignment or license agreements with our employees, consultants and other third parties with whom we do business, and control access to, and distribution of, our software, documentation and other proprietary information. In addition, we provide our software products to end-user customers primarily under “clickwrap” license agreements.
As of June 30, 2025, we had 41 registered trademarks in the United States and 326 registered trademarks outside of the United States. We enter into confidentiality, inventions assignment or license agreements with our employees, consultants and other third parties with whom we do business, and control access to, and distribution of, our software, documentation and other proprietary information.
These agreements are not negotiated with or signed by the licensee, and thus these agreements may not be enforceable in some jurisdictions.
In addition, we provide our software products to end-user customers primarily under “clickwrap” license agreements. These agreements are not negotiated with or signed by the licensee, and thus these agreements may not be enforceable in some jurisdictions.
ExtremeCloud IQ is an ML/AI powered, wired and wireless cloud network management solution that offers advanced visibility and control over users, devices, and applications. ExtremeCloud IQ is designed to allow customers to keep operational costs low, adjusts to customer demand, and delivers robust functionality for provisioning, management, troubleshooting and guaranteed data durability to assure access with 100% uptime.
ExtremeCloud IQ is designed to allow customers to keep operational costs low, adjust to customer demand, and deliver robust functionality for provisioning, management, troubleshooting and provide guaranteed data durability to assure access with 100% uptime.
Often tasked to manage the network with a limited IT staff, our customers appreciate the excellent service and support we strive to provide. 10 Customers with 10% of net revenues or greater See Note 3, Revenues , in the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for more information regarding our customers with 10% of net revenues or greater.
Customers with 10% of net revenues or greater See Note 3, Revenues , in the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for more information regarding our customers providing 10% or more of our net revenues. International sales International sales are an important portion of our business.
As administrators grapple with more data, coming from more places, more connected devices, and more Software-as-a-service (“SaaS”) based applications, the cloud is fundamental to managing and maintaining a modern network. Traditional network offerings are not well-suited to fulfill enterprise expectations for rapid delivery of new services, more flexible business models, real-time response, and massive scalability.
Traditional network offerings are not well-suited to fulfill enterprise expectations for rapid delivery of new services, more flexible business models, real-time response, and massive scalability.
This enables customers to migrate to new cloud managed switching, Wi-Fi, and SD-WAN, agnostic of the existing switching or wireless equipment they already have installed. In the end, we expect these customers to see lower operating and capital expenditures, lower subscription costs, lower overall cost of ownership and more flexibility along with a more resilient network.
In the end, we expect these customers to see lower operating and capital expenditures, lower subscription costs, lower overall cost of ownership and more flexibility along with a more resilient network, powered by Extreme Platform ONE.
As of June 30, 2024, our research and development organization consisted of 926 employees.
As of June 30, 2025, our worldwide sales and marketing organization consisted of 865 employees.
Fiscal year 2023 During fiscal 2023, the Company initiated a restructuring plan to transform our business infrastructure and reduce our facilities footprint and the facilities related charges (the “2023 Plan”). As part of this project the Company is moving engineering labs from its San Jose, California location to its Salem, New Hampshire location.
The Q1 2024 Plan was completed in fiscal year 2024. Fiscal year 2023 During fiscal year 2023, the Company initiated a restructuring plan to transform our business infrastructure and reduce our facilities footprint and the facilities related charges (the “2023 Plan”).
Our short-term bonus plan is designed to motivate employees to meet half-year goals, and our employee stock purchase plan and grants of restricted stock units to eligible employees reward longer-term stock price appreciation. 14 Our U.S. benefits plan includes health benefits, life and disability insurance, various voluntary insurances, flexible time off and leave programs, an employee assistance plan, an educational assistance policy, and a 401(k) plan with a competitive employer match.
Our short-term bonus plan is designed to motivate employees to meet half-year goals, and our employee stock purchase plan and grants of restricted stock units to eligible employees reward longer-term stock price appreciation.
Research and development efforts are conducted in several of our locations, including Morrisville, North Carolina; San Jose, California; Salem, New Hampshire; Toronto, Canada; Shannon, Ireland; Hangzhou, China; and Bangalore and Chennai, India. 12 Intellectual Property We rely on a combination of patent, copyright, trademark and trade secret laws and restrictions on disclosure to protect our intellectual property rights.
As of June 30, 2025, our research and development organization consisted of 1,045 employees. Research and development efforts are conducted in several of our locations, including Morrisville, North Carolina; San Jose, California; Salem, New Hampshire; Toronto, Canada; Hangzhou, China; and Bangalore and Chennai, India.
We bring enhanced security, the ability to segment networks and zero touch provisioning, thus eliminating confusion, complexity and the need for additional IT staff.
We bring enhanced security, the ability to segment networks and zero touch provisioning, thus reducing confusion, complexity and the need for additional IT staff. This is in stark contrast to our competitors’ fabric solutions, which were designed for service providers and data center networks and not meant for the campus. 5 • End-to-End Portfolio.
Utilizing technology brought forward from our ongoing Digital Transformation project, which entailed integrating digital technology into all areas of our business, changed how we operate and deliver value to customers. In this case, new systems and processes gave us better visibility and control over inventory.
We continue to learn from the evolving global supply chain and build upon innovative strategies to enhance resilience and agility into our supply chain. Utilizing technology brought forward from our ongoing Digital Transformation project, which has entailed integrating digital technology into all areas of our business, changing how we operate and deliver value to customers.
We believe Extreme will continue to benefit from the use of its technology to manage distributed campus network architecture centrally from the cloud. Extreme has blended a dynamic fabric attach architecture that delivers simplicity for moves and changes at the edge of the network, together with corporate-wide role-based policy.
Extreme has blended a dynamic network fabric architecture that delivers simplicity for moves and changes at the edge of the network, together with corporate-wide role-based policy. This enables customers to migrate to new cloud managed switching, Wi-Fi, and SD-WAN, agnostic of the existing switching or wireless equipment they already have installed.
Fabric technologies virtualize the network infrastructure (decoupling network services from physical connectivity) which enables network services to be turned up faster, with lower likelihood of error. They make the underlying network much easier to design, implement, manage and troubleshoot. • Offer a frictionless experience for secure hybrid work.
They make the underlying network much easier to design, implement, manage, and troubleshoot. • Offer a frictionless experience for secure hybrid work. Our layered security approach is managed from one cloud and secure by design.
Our compensation philosophy is to offer a competitive compensation package designed to reward achievement of the Company’s goals.
We continue to develop our employees, for example, by providing a subscription to LinkedIn Learning for all employees. We provide regular feedback to our employees with performance management reviews. Compensation and Benefits. Our compensation philosophy is to offer a competitive compensation package designed to reward achievement of the Company’s goals.
This pattern should not be relied upon or be considered indicative of our future performance, as it has varied in the past. Manufacturing We utilize a global sourcing strategy that emphasizes procurement of materials and product manufacturing in competitive geographies.
Seasonality Like many of our competitors, we historically have experienced seasonal fluctuations in customer spending patterns, which generally adversely affect our first and third fiscal quarters. This pattern should not be relied upon or be considered indicative of our future performance, as it has varied in the past.
The platform is run from multiple regional data centers, giving customers greater control over the location of their data and adding to the resiliency of the platform. • Automation, Analytics, and Security Applications: Our application portfolio delivers additional analytics, security, access control, and management insights both on-premises and in the cloud.
The ExtremeCloud IQ application already manages over three million devices and is run from multiple regional data centers, giving customers greater control over the location of their data and adding to the resiliency of the platform. In fiscal year 2025, we introduced Extreme Platform ONE, a bold innovation designed to redefine the cloud networking landscape.
Our international benefits plans are competitive locally and generally provide similar benefits. Diversity and Inclusion . We believe that we gain valuable perspective that drives better decision making when we listen to diverse voices.
We believe we gain valuable perspective that drives better decision making when we include all voices.
When ML and GenAI are applied with cloud-driven networking and automation, administrators can quickly scale to provide productivity, availability, accessibility, manageability, security, and speed, regardless of the distribution of the network. As the edge of the network continues to expand, our customers are managing more endpoints which comes with a host of challenges.
This new category is defined by innovation in generative, multimodal and agentic AI technology. As the edge of the network continues to expand, our customers are managing more endpoints which comes with a host of challenges.
As of June 30, 2024, the Q1 2024 Plan is complete. The Q2 2024 and Q3 2024 Plans are expected to be completed by the end of calendar year 2024. Additionally, the Company continued its efforts associated with the “2023 Plan” related to the lab move from San Jose, California to Salem, New Hampshire.
As part of this project the Company moved engineering labs from its San Jose, California location to its Salem, New Hampshire location. This move is expected to help reduce the cost of operating our labs. The Company expects to complete the 2023 Plan by the end of fiscal year 2026.
As of June 30, 2024, we had 681 issued patents in the United States and 451 patents outside of the United States. The expiration dates of our issued patents in the United States range from calendar years 2024 to 2041.
Intellectual Property We rely on a combination of patent, copyright, trademark and trade secret laws and restrictions on disclosure to protect our intellectual property rights. As of June 30, 2025, we had 644 issued patents in the United States and 411 patents outside of the United States.
Removed
Item 1. B usiness Overview Extreme Networks, Inc. (“Extreme” or “Company”) is a leading provider of cloud networking solutions and industry leading services and support. Extreme designs, develops, and manufactures wired, wireless, and software-defined wide area-network (“SD- WAN”) infrastructure equipment, software and cloud-based network management solutions.
Added
Item 1. B usiness Overview Extreme Networks, Inc. (EXTR) (collectively referred to as “Extreme,” “Company,” and as “we,” “us” and “our”) is a leader in AI-powered cloud networking, focused on delivering simple and secure solutions that help businesses address challenges and enable connections among devices, applications, and users.
Removed
The Company's cloud solution is a single platform that offers unified network management of wireless access points, switches, and SD-WAN. It leverages machine learning, Artificial Intelligence for Information Technology Operations (“AIOps”) and analytics to help customers deliver secure connectivity at the edge of the network, speed cloud deployments, and uncover actionable insights to save time, lower costs, and streamline operations.
Added
We push the boundaries of technology, leveraging the powers of artificial intelligence (“AI”), analytics, and automation and have industry leading support services. Tens of thousands of customers globally trust Extreme to drive value, foster innovation, and overcome extreme challenges. Extreme also designs, develops, and manufactures wired, wireless, and software-defined wide area network (“SD-WAN”) infrastructure equipment.

… 75 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

125 edited+35 added−30 removed129 unchanged
Biggest changeThere are a number of risks arising from our international business, including: • difficulties in managing operations across disparate geographic areas; • longer accounts receivable collection cycles; • higher credit risks requiring cash in advance or letters of credit; • potential adverse tax consequences; • increased complexity of accounting rules and financial reporting requirements; 18 • the payment of operating expenses in local currencies, which exposes us to risks of currency fluctuations; • fluctuations in local economies; • difficulties associated with enforcing agreements through foreign legal systems • reduced or limited protection of intellectual property rights, particularly in jurisdictions that have less developed intellectual property regimes, such as China and India; • differing privacy regulations, data localization requirements, and restrictions on cross-border data transfers; • compliance with regulatory requirements of foreign countries, including compliance with rapidly evolving environmental regulations; • import tariffs imposed by the United States and the possibility of reciprocal tariffs by foreign countries; • compliance with trade compliance laws and regulations, including restrictions on trade with embargoed or sanctioned countries or with denied parties, and rules related to the export of encryption technology • compliance with U.S. laws and regulations pertaining to the sale and distribution of products to customers in foreign countries, including anti-corruption laws such as the Foreign Corrupt Practices Act (“FCPA”) and the U.K.
Biggest changeThere are a number of risks arising from our international business, including: • the payment of operating expenses in local currencies, which exposes us to risks of currency fluctuations; • fluctuations in local economies which impact demand; • import tariffs imposed by the United States and the possibility of reciprocal tariffs by foreign countries; • compliance with trade compliance laws and regulations, including restrictions on trade with embargoed or sanctioned countries or with denied parties, and rules related to the export of encryption technology; • differing privacy regulations, data localization requirements, and restrictions on cross-border data transfers; • compliance with U.S. laws and regulations pertaining to the sale and distribution of products to customers in foreign countries, including anti-corruption laws such as the Foreign Corrupt Practices Act (“FCPA”) and the U.K.
Any such breach could compromise our networks, products, or cloud-based services by creating system disruptions, slowdowns or even shutdowns, and exploiting security vulnerabilities of our products or services, and the information stored as part of our operations could be accessed, publicly disclosed, lost or stolen.
Any such breach could compromise our networks, products, or cloud-based services by creating system disruptions, slowdowns or even shutdowns, and exploiting security vulnerabilities of our products, services, and the information stored as part of our operations could be accessed, publicly disclosed, lost or stolen.
We cannot guarantee that any costs and liabilities incurred in relation to an attack or incident will be covered by our existing insurance policies or that applicable insurance will be available 17 to us in the future on economically reasonable terms or at all.
We cannot guarantee that 17 any costs and liabilities incurred in relation to an attack or incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all.
We are a multinational company subject to income tax as well as non-income-based taxes in various jurisdictions including Ireland, where we have an operating company supporting our business in most non-U.S. jurisdictions.
We are a U.S. multinational company subject to income tax as well as non-income-based taxes in various jurisdictions including Ireland, where we have an operating company supporting our business in most non-U.S. jurisdictions.
Accordingly, the product evaluation process frequently results in a lengthy sales cycle, typically ranging from three months to longer than a year, and as a result, our ability to sell products is subject to a number of significant risks, including risks that: • budgetary constraints and internal acceptance reviews by customers will result in the loss of potential sales; • there may be substantial variation in the length of the sales cycle from customer to customer, making decisions on the expenditure of resources difficult to assess; • we may incur substantial sales and marketing expenses and expend significant management time in an attempt to initiate or increase the sale of products to customers, but not succeed; 22 • when a sales forecast from a specific customer for a particular quarter is not achieved in that quarter, we may be unable to compensate for the shortfall, which could harm our operating results; and • downward pricing pressures could occur during the lengthy sales cycle for our products.
Accordingly, the product evaluation process frequently results in a lengthy sales cycle, typically ranging from three months to longer than a year, and as a result, our ability to sell products is subject to a number of significant risks, including risks that: • budgetary constraints and internal acceptance reviews by customers will result in the loss of potential sales; • there may be substantial variation in the length of the sales cycle from customer to customer, making decisions on the expenditure of resources difficult to assess; • we may incur substantial sales and marketing expenses and expend significant management time in an attempt to initiate or increase the sale of products to customers, but not succeed; • when a sales forecast from a specific customer for a particular quarter is not achieved in that quarter, we may be unable to compensate for the shortfall, which could harm our operating results; and • downward pricing pressures could occur during the lengthy sales cycle for our products.
In addition to risks related to revenue, we are subject to risks related to costs, which may be influenced by a number of factors, including, but not limited to, the following: • our ability to achieve and maintain targeted cost reductions; • fluctuations in warranty or other service expenses actually incurred; • increases in the price of the components we purchase; • increases in costs associated with sourcing and shipping components and finished products; • general inflationary pressures, increasing the cost of all inputs; and • rising interest rates, increasing the cost of borrowing.
In addition to risks related to revenue, we are subject to risks related to costs, which may be influenced by a number of factors, including, but not limited to, the following: • our ability to achieve and maintain targeted cost reductions; • fluctuations in warranty or other service expenses actually incurred; • increases in the price of the components we purchase; • increases in costs associated with sourcing and shipping components and finished products, including tariffs; • general inflationary pressures, increasing the cost of all inputs; and • rising interest rates, increasing the cost of borrowing.
These restrictions could affect, and in many respects limit or prohibit, among other items, our ability to: • incur additional indebtedness; • create liens; • make investments; • enter into transactions with affiliates; • sell assets; • guarantee indebtedness; • declare or pay dividends or other distributions to stockholders; • repurchase equity interests; • change the nature of our business; • enter into swap agreements; • issue or sell capital stock of certain of our subsidiaries; and • consolidate, merge, or transfer all or substantially all of our assets and the assets of our subsidiaries on a consolidated basis.
These restrictions could affect, and in many respects limit or prohibit, among other items, our ability to: • incur additional indebtedness; • create liens; • make investments; • enter into transactions with affiliates; • sell assets; • guarantee indebtedness; • declare or pay dividends or other distributions to stockholders; • repurchase equity interests; • change the nature of our business; • enter into swap agreements; 23 • issue or sell capital stock of certain of our subsidiaries; and • consolidate, merge, or transfer all or substantially all of our assets and the assets of our subsidiaries on a consolidated basis.
Our ability to realize the anticipated benefits of any current and future acquisitions, divestitures and investment activities also entail numerous risks, including, but not limited to: • difficulties in the assimilation and successful integration of acquired operations, sales functions, technologies, products, and/or personnel; • unanticipated costs, litigation or other contingent liabilities associated with the acquisition or investment transaction; • incurrence of acquisition- and integration-related costs, goodwill or in-process research and development impairment charges, or amortization costs for acquired intangible assets, that could negatively impact our business, financial condition, and operating results; • the diversion of management's attention from other business concerns; • adverse effects on existing business relationships with suppliers and customers; 26 • risks associated with entering markets in which we have no or limited prior experience; • the potential loss of key employees of acquired organizations and inability to attract or retain other key employees; and • substantial charges for the amortization of certain purchased intangible assets, deferred stock compensation or similar items.
Our ability to realize the anticipated benefits of any current and future acquisitions, divestitures and investment activities also entail numerous risks, including, but not limited to: • difficulties in the assimilation and successful integration of acquired operations, sales functions, technologies, products, and/or personnel; • unanticipated costs, litigation or other contingent liabilities associated with the acquisition or investment transaction; • incurrence of acquisition- and integration-related costs, goodwill or in-process research and development impairment charges, or amortization costs for acquired intangible assets, that could negatively impact our business, financial condition, and operating results; • the diversion of management's attention from other business concerns; • adverse effects on existing business relationships with suppliers and customers; • risks associated with entering markets in which we have no or limited prior experience; • the potential loss of key employees of acquired organizations and inability to attract or retain other key employees; and 25 • substantial charges for the amortization of certain purchased intangible assets, deferred stock compensation or similar items.
Such disruptions could be caused by natural disasters, public health emergencies such as pandemics, business interruption related to financial or operational factors, geopolitical events such as the threat of political or military actions, including between China and Taiwan, energy constraints, regulatory constraints, labor or raw materials shortages, quality issues, transportation or shipping delays, tariffs or other trade restrictions, or other events.
Such disruptions could be caused by natural disasters, public health emergencies such as pandemics, business interruption related to financial or operational factors, cyberattacks, geopolitical events such as the threat of political or military actions, including between China and Taiwan, energy constraints, regulatory constraints, labor or raw materials shortages, quality issues, transportation or shipping delays, tariffs or other trade restrictions, or other events.
Global shipping could be disrupted by such events, which would impede our ability to get product to our customers. Climate change may exacerbate the frequency or severity of some natural disasters. Regulations related to climate change and/or greenhouse gas emissions could have an impact on our supply chain, business operations, and regulatory compliance requirements.
Global shipping could also be disrupted by such events, which would impede our ability to get product to our customers. Climate change may exacerbate the frequency or severity of some natural disasters. Regulations related to climate change and/or greenhouse gas emissions could have an impact on our supply chain, business operations, and regulatory compliance requirements.
Such disruptions to the availability or integrity of utilities, transportation infrastructure, or the internet could have significant macroeconomic impacts, decreasing demand for our products and impacting our ability to get them to market. As a result, our business, financial situation, and operating results could be negatively affected. 31 Item 1B. Unresolve d Staff Comments None.
Such disruptions to the availability or integrity of utilities, transportation infrastructure, or the internet could have significant macroeconomic impacts, decreasing demand for our products and impacting our ability to get them to market. As a result, our business, financial situation, and operating results could be negatively affected. Item 1B. Unresolve d Staff Comments None.
Moreover, the results of complex legal proceedings are difficult to predict. An unfavorable resolution of a lawsuit 27 in which we are a defendant could result in a court order against us or payments to other parties that would have a material adverse effect on our business, financial condition, or operating results.
Moreover, the results of complex legal proceedings are difficult to predict. An unfavorable resolution of a lawsuit in which we are a defendant could result in a court order against us or payments to other parties that would have a material adverse effect on our business, financial condition, or operating results.
Provisions in our charter documents and Delaware law may delay or prevent an acquisition of Extreme, which could decrease the value of our common stock. Our certificate of incorporation and bylaws and Delaware law contain provisions that could make it more difficult for a third party to acquire us without the consent of our Board.
Provisions in our charter documents and Delaware law may delay or prevent an acquisition of Extreme, which could decrease the value of our common stock. Our certificate of incorporation and bylaws and Delaware law contain provisions that could make it more difficult for a third party to acquire us without the consent of our Board of Directors ("Board").
If we are unable to renew these agreements on commercially reasonable terms, or if one of our computing infrastructure service providers is acquired, we may be required to transition to a new provider and we may incur significant costs and possible service interruption in connection with doing so.
If we are unable to renew these agreements on commercially reasonable terms, or if one of our computing infrastructure service providers is 19 acquired, we may be required to transition to a new provider and we may incur significant costs and possible service interruption in connection with doing so.
We may not have adequate insurance coverage to cover all of our litigation costs and liabilities. Claims of infringement by others may increase and the resolution of such claims may materially adversely affect our business, financial condition, and operating results.
We may not have adequate insurance coverage to cover all of our litigation costs and liabilities. 26 Claims of infringement by others may increase and the resolution of such claims may materially adversely affect our business, financial condition, and operating results.
We are therefore subject to certain laws, regulations and other requirements relating to the privacy, security, and handling of Personal Information either directly or where we are processing Personal Information for or on behalf of our customers or another third party.
We are therefore subject to certain laws, regulations and other requirements relating to the privacy, security, and handling of Personal Information either directly 28 or where we are processing Personal Information for or on behalf of our customers or another third party.
With the advent of GenAI, there is a risk that when employees use GenAI tools, data will leak outside the Company that could lead to breach of confidentiality or a disclosure of trade secrets that are being developed.
With the 27 advent of GenAI, there is a risk that when employees use GenAI tools, data will leak outside the Company that could lead to breach of confidentiality or a disclosure of trade secrets that are being developed.
We may not be able to 24 access additional capital resources due to a variety of reasons, including the restrictive covenants in our 2023 Credit Agreement and the lack of available capital due to global economic conditions.
We may not be able to access additional capital resources due to a variety of reasons, including the restrictive covenants in our 2023 Credit Agreement and the lack of available capital due to global economic conditions.
The application and interpretation of such policies and underlying regulations, including taxation of earnings internationally, transfer pricing adjustments related to certain acquisitions, including the license of acquired intangibles under our cost sharing arrangement, Base Erosion and Anti-abuse Tax laws, Global Intangible Low-Tax Income (“GILTI”) laws, and the disallowance of tax deductions for certain expenses, as well as changes that may be enacted in the future could materially impact our tax provision, cash tax liability and effective tax rate.
The application and interpretation of such policy changes and underlying regulations, including taxation of earnings internationally, transfer pricing adjustments related to certain acquisitions, including the license of acquired intangibles under our cost sharing arrangement, Base Erosion and Anti-abuse Tax laws, Global Intangible Low-Tax Income (“GILTI”) laws, and the disallowance of tax deductions for certain expenses, as well as changes that may be enacted in the future, could materially impact our tax provision, cash tax liability and effective tax rate.
Moreover, the inclusion in our products of software or other intellectual property licensed from third parties on a 28 nonexclusive basis could limit our ability to protect our proprietary rights in our products.
Moreover, the inclusion in our products of software or other intellectual property licensed from third parties on a nonexclusive basis could limit our ability to protect our proprietary rights in our products.
General Natural or man-made disasters, climate change, acts of war or terrorism, pandemics, technological disruptions or other events beyond our control could disrupt our operations and harm our business, financial condition and operating results. We have major offices in Morrisville, North Carolina, San Jose, California, Salem, New Hampshire, Bangalore, India, Thornhill, Canada, Shannon, Ireland and Reading, United Kingdom.
General Natural or man-made disasters, climate change, acts of war or terrorism, pandemics, technological disruptions or other events beyond our control could disrupt our operations and harm our business, financial condition and operating results. We have major offices in Morrisville, North Carolina; San Jose, California; Salem, New Hampshire; Bangalore, India; Markham, Canada; Shannon, Ireland; and Reading, United Kingdom.
We may also be required to restate our financial statements from prior periods. Execution of restatements create a significant strain on our internal resources and could cause delays in our filing of quarterly or annual financial results, increase our costs and cause management distraction. Restatements may also significantly affect our stock price in a materially adverse manner.
We may also be required to restate our financial statements from prior periods. Execution of restatements creates a significant strain on our internal resources and could cause delays in our filing of quarterly or annual financial results, increase our costs and cause management distraction. Restatements may also significantly affect our stock price in a materially adverse manner.
Additionally, our operations are materially dependent upon the continued market acceptance and quality of these manufacturers’ products and their ability to continue to manufacture products that are competitive and comply with laws relating to environmental and efficiency standards.
Additionally, our operations are materially dependent upon the continued market acceptance and quality of these manufacturers’ products and their ability to continue to manufacture products that are competitive and comply with laws or our requirements relating to environmental and efficiency standards.
In addition to the risks related to the intellectual property lawsuits described above, we are currently parties to other litigation as described in Note 10, Commitments and Contingencies , in the Notes to Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K. Regardless of the result, litigation can be expensive, lengthy and disruptive to normal business operations.
In addition to the risks related to the intellectual property lawsuits described herein, we are currently parties to other litigation as described in Note 9, Commitments and Contingencies, in the Notes to Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K. Regardless of the result, litigation can be expensive, lengthy and disruptive to normal business operations.
This could continue as we or our competitors announce new products, our results or those of our customers or competition fluctuate, conditions in the networking or 23 semiconductor industry change, conditions in the global economy change, or when investors change their sentiment toward stocks in the networking technology sector.
This could continue as we or our competitors announce new products, our results or those of our customers or competition fluctuate, conditions in the networking or semiconductor industry change, conditions in the U.S. or global economy change, or when investors change their sentiment toward stocks in the networking technology sector.
If the cloud networking solutions market does not develop in the way we anticipate, if our solutions do not offer significant benefits compared to competing legacy network switching products, or if end customers do not recognize the benefits that our solutions provide, then our potential for growth in this cloud networking market could be adversely affected.
If the cloud networking solutions market does not develop in the way we anticipate, if our solutions do not offer significant benefits compared to competing legacy products, or if end customers do not recognize the benefits that our solutions provide, then our potential for growth in this cloud-based network management segment could be adversely affected.
In the ordinary course of business using systems that we own and manage, we provide cloud-based services and store data, including our proprietary business information and that of our customers, suppliers and business partners on our networks and information about customers, employees, business partners and others.
In the ordinary course of business using systems that we own and manage, we provide cloud-based services and store data, including our proprietary business information and that of our customers, suppliers and business partners on our networks.
Any investigation or litigation related to our use of AI could have an adverse impact on our results of operations due to the associated costs and any related fines, and could also have an adverse impact on our customer relationships.
Any investigation or litigation related to our use of AI could have an adverse impact on our results of operations due to the associated costs and any related fines, and could also have an adverse impact on our customer relationships and ability to grow revenue.
A substantial reduction or delay in sales of our products to a significant reseller, distributor or other customer could harm our business, operating results and financial condition because our expense levels are based on our expectations as to future revenues and, to a large extent, are fixed in the short term.
A substantial reduction or delay in sales of our products to a significant reseller, distributor or other customer could harm our business because our expense levels are based on our expectations as to future revenues and, to a large extent, are fixed in the short term.
If we do not comply with existing or evolving industry standards and government regulations, we may not be able to sell our products where these standards or regulations apply. The network equipment industry in which we compete is characterized by rapid changes in technology and customers' requirements and evolving industry standards.
If we do not comply with existing or evolving industry standards, certifications, and government regulations, we may not be able to sell our products where these standards, certifications, or regulations apply. The networking industry in which we compete is characterized by rapid changes in technology and customers' requirements and evolving industry standards.
Because of the potential for courts awarding substantial damages, or internationally prohibiting us from exporting our products, in the case of China, or importing our products, in the case of Germany, the lack of predictability of such awards and the high legal costs associated with the defense of such patent infringement matters that would be expended to prove lack of infringement, it is not uncommon for companies in our industry to settle even potentially unmeritorious claims for very substantial amounts.
Because of the potential for courts awarding substantial damages, or internationally prohibiting us from importing or exporting our products in or out of certain countries, the lack of predictability of such awards and the high legal costs associated with the defense of such patent infringement matters that would be expended to prove lack of infringement, it is not uncommon for companies in our industry to settle even potentially unmeritorious claims for very substantial amounts.
The markets for our products are constantly evolving and characterized by rapid technological change, frequent product introductions, changes in customer requirements, evolving industry standards, and continuous pricing pressures. For example, the cloud networking market is the fastest growing segment of the networking industry.
The markets for our products are constantly evolving and characterized by rapid technological change, frequent product introductions, changes in customer requirements, evolving industry standards, and continuous pricing pressures. For example, cloud-based network management is the fastest growing segment of the networking industry.
Even if we are profitable, our operating results may fall below our expectations and those of our investors, which could cause the price of our stock to fall.
Even if we are profitable, our operating results may fall below guidance we provide and expectations of our investors, which could cause the price of our stock to fall.
Some of our competitors are capable of operating at significant losses for extended periods of time, increasing pricing pressure on our products and services. If we do not maintain competitive pricing, the demand for our products and services, as well as our market share, may decline.
Some of our competitors are capable of operating at significant losses for extended periods of time or otherwise offer competitive products at lower prices, increasing pricing pressure on our products and services. If we do not maintain competitive pricing, the demand for our products and services, as well as our market share, may decline.
Reductions in quantity or quality of finished product could decrease the amount of product for sale and could negatively impact the Company’s reputation, financial condition, and operating results.
Reductions in quantity or quality of finished product could decrease the amount of product for sale and could negatively impact the Company’s operating results.
These laws, rules and regulations and the interpretation of these requirements are evolving, and we are making investments to evaluate current practices and to continue to achieve compliance, which investments may have a material adverse impact on our business, financial condition, and operating results.
These laws, rules and regulations and the interpretation of these requirements are evolving, and we continue to evaluate current practices to maintain compliance, which may require investments that may have a material adverse impact on our business, financial condition, and operating results.
For example, the General Data Protection Regulation, and related laws in other jurisdictions require us to adhere to certain disclosure restrictions and deletion obligations with respect to the Personal Information of their residents, and allow for penalties for violations.
For example, the E.U.’s General Data Protection Regulation, and similar laws in other jurisdictions require us to adhere to certain disclosure restrictions and deletion obligations with respect to the Personal Information of their residents, and allow for penalties for violations.
From time to time, we may lower the prices of our products and services in response to competitive pressure. When this happens, if we are unable to reduce our component costs or improve operating efficiencies, our revenues and gross margins will be adversely affected. One of our key differentiators is the quality of our support and services.
From time to time, we may lower the prices of our products and services in response to competitive pressure. When this happens, if we are unable to reduce our component costs or improve operating efficiencies, our revenues and gross margins will be adversely affected.
As a result, our success depends on: • the timely adoption and market acceptance of industry standards, and timely resolution of conflicting U.S. and international industry standards; and • our ability to influence the development of emerging industry standards and to introduce new and enhanced products that are compatible with such standards.
As a result, our success depends on: • the timely adoption and market acceptance of industry standards, and timely resolution of conflicting U.S. and international industry standards; and • our ability to influence the development of emerging industry standards and to introduce new and enhanced products that are compatible with such standards; • in some cases, on our ability to achieve and maintain certifications.
Historically, each location has been vulnerable to natural disasters and other risks, such as earthquakes, fires, floods, and severe storms, which could disrupt the local or even global economy, create power and communication disruptions, and pose physical risks to property belonging to us or our contract manufacturers.
We have contract manufacturers located in Taiwan, Vietnam, and the Philippines. Historically, each location has been vulnerable to natural disasters and other risks, such as earthquakes, fires, floods, and severe storms, which could disrupt the local or even global economy, create power and communication disruptions, and pose physical risks to property belonging to us or our contract manufacturers.
Given the concentration of our supply chain, particularly with certain sole or limited source providers, any significant disruption to any of the key suppliers or a termination of a relationship could temporarily impact our operations.
Given the concentration of our supply chain, particularly with certain sole or limited source providers, any significant disruption to any of the key suppliers or a termination of a relationship could temporarily impact our operations and our ability to meet customer orders.
There can be no assurance we will achieve the revenues, growth prospects, and synergies expected from any acquisition or that we will achieve such revenues, growth prospects, and synergies in the anticipated time period and our failure to do so could have a material adverse effect on our business, financial condition, and operating results.
There can be no assurance we will achieve the revenues, growth prospects, and synergies expected from any acquisition in the anticipated timeframe, or at all, and our failure to do so could have a material adverse effect on our business, financial condition, and operating results.
If we find errors in the existing software or defects in the hardware used in our customers’ networks, we may need to modify our software networking solutions to fix or overcome these errors so that our products will inter-operate and scale with the existing software and hardware, which could be costly and could negatively affect our business, financial condition, and operating results.
If we find errors in the existing software or defects in the hardware used in our customers’ networks, we may need to modify our software networking solutions to fix or overcome these errors so that our products will inter-operate and scale with the existing software and hardware, which could be costly.
Any or all of the foregoing could materially adversely affect our business, operating results, and financial condition. Supply chain issues such as concentration of suppliers and manufacturing partners, supplier disruptions, shipping delays, material or components shortages, quality control, regulatory impacts, and inability to reduce manufacturing costs could harm our business, financial condition, and operating results.
Supply chain issues such as concentration of suppliers and manufacturing partners, supplier disruptions, shipping delays, material or components shortages, quality control, regulatory impacts, and inability to reduce manufacturing costs could harm our business, financial condition, and operating results.
If we fail to anticipate market requirements or opportunities or fail to develop and introduce new products, product enhancements or business strategies to meet those requirements or opportunities in a timely manner, it could cause us to lose customers, and such failure could substantially decrease or delay market acceptance and sales of our present and future products and services, which would materially adversely affect our business, financial condition, and operating results.
If we fail to anticipate market requirements or opportunities or fail to develop and introduce new products, product enhancements or business strategies to meet those requirements or opportunities in a timely manner, it could cause us to lose customers, and such failure could substantially decrease or delay market acceptance and sales of our present and future products and services.
Distributors may increase or decrease the levels of inventory that they order to meet supply shortages or expected demand. If distributors increase orders to build up stock out of concern for product shortages, or to meet anticipated demand that does not materialize, we may have excess channel inventory, leading to reductions in future period orders from our distributors.
If distributors increase orders to build up stock out of concern for product shortages, or to meet anticipated demand that does not materialize, we may have excess channel inventory, leading to reductions in future period orders from our distributors. If we incorrectly forecast demand, we may build up excess inventory.
A substantial portion of our business depends on the demand for enterprise scale networking and the overall economic health of our current and prospective end-customers.
A substantial portion of our business depends on the demand for enterprise-scale networking, which, in turn, is impacted by the overall economic health of our current and prospective end-customers.
Any of these restrictions could have a material adverse effect on our business, financial conditions, and operating results. Military actions and other geopolitical tensions could adversely affect our business, financial condition and operating results. In recent years, various military actions such as the February 2022 Russian military action in Ukraine or the October 2023 Israel-Hamas military action have occurred.
Military actions and other geopolitical tensions could adversely affect our business, financial condition and operating results. In recent years, various military actions such as the February 2022 Russian military action in Ukraine or the October 2023 Israel-Hamas military action have occurred.
Many countries are also actively considering changes to existing tax laws and rates or have proposed or enacted new laws that could increase our tax obligations in countries where we do business or cause us to change the way we operate the business.
Many countries are also actively considering changes to existing tax laws and rates or have proposed or enacted new laws that could increase our tax obligations in countries where we do business or cause us to change the way we operate the business including taxes on digital services, withholding taxes on royalties and taxes on intercompany service charges.
We have entered into foreign exchange forward contracts to offset the impact of payment of operating expenses in local currencies to some of our operating foreign subsidiaries. However, if we are not successful in managing these foreign currency transactions, we could incur losses from these activities. There are compliance risks associated with complex tariff regulations and trade compliance laws.
We have entered into foreign exchange forward contracts to offset the impact of payment of operating expenses in local currencies to some of our operating foreign subsidiaries. However, if we are not successful in managing these foreign currency transactions, we could incur losses from these activities.
We face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of our IT systems and data including from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as through diverse attack vectors, such as social engineering/phishing, malware (including ransomware), technological error, and as a result of bugs, misconfigurations or exploited vulnerabilities in software or hardware, including vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) IT systems, products or services.
These threats come from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as through diverse attack vectors, such as social engineering/phishing, malware (including ransomware), technological error, and as a result of bugs, misconfigurations or exploited vulnerabilities in software or hardware, including vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) IT systems, products or services.
Such sanctions and other measures, as well as the existing and potential further responses from military actors or allies to such sanctions, tensions, and military actions, could adversely affect the global economy and financial markets and could materially adversely affect our business, financial condition, operating results, and future financial performance.
Such sanctions and other measures, as well as the existing and potential further responses from military actors or allies to such sanctions, tensions, and military actions, could adversely affect the global economy and financial markets and could materially adversely affect our business, financial condition, operating results, and future financial performance. 20 Military or terrorist actions could impact suppliers’ ability to procure raw materials, or to finish or transport goods.
If we are unable to manage our inventory or commitments to suppliers in the future, particularly in light of continuing excess inventory in the channel, we could be required to record additional charges, which would materially adversely affect our business, financial condition, and operating results.
If we are unable to manage our inventory or commitments to suppliers in the future, we could be required to record additional charges. Any or all of the foregoing could materially adversely affect our business, financial condition, and operating results.
The purchase of our products represents a significant strategic decision by a customer regarding its communications infrastructure. The decision by customers to purchase our products is often based on the results of a variety of internal procedures associated with the evaluation, testing, implementation, and acceptance of new technologies.
The decision by customers to purchase our products is often based on the results of a variety of internal procedures associated with the 21 evaluation, testing, implementation, and acceptance of new technologies.
We have assessed the impacts of these new rules in the countries where we currently operate and do not currently anticipate a material impact to our tax liabilities, however, we can provide no assurance that our tax liabilities will not be materially impacted in the future under this initiative.
We have assessed the impacts of these rules in the countries where we currently operate and do not currently anticipate a material impact to our tax liabilities, however, given the lack of statutory guidance and historical precedent, we can provide no assurance that our tax liabilities will not be materially impacted in the future under these or similar initiatives.
We rely on third-party providers for services needed to deliver our cloud solutions and other third-party providers for our internal operations. Any disruption in the services provided by such third-party providers could adversely affect our business and subject us to liability.
We rely on third-party providers for services needed to deliver our cloud solutions and other third-party providers for our internal operations. Any disruption in the services provided by such third-party providers could adversely affect our business and subject us to liability. Our cloud solutions are hosted from and use computing infrastructure provided by third parties, including AWS, GCP, and Azure.
Such additional regulations may impact our ability to develop, use and commercialize AI technologies in the future. Additionally, existing laws and regulations may be interpreted in ways that may affect our use of AI.
Legislation related to AI technologies has been passed in various U.S. states. Such additional regulations may impact our ability to develop, use and commercialize AI technologies in the future. Additionally, existing laws and regulations may be interpreted in ways that may affect our use of AI.
Our bylaws, as amended, provide that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of a fiduciary duty owed by any of our directors, officers, other employees or stockholders to us, any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our certificate of incorporation or our bylaws, any action to interpret, apply, enforce, or determine the validity of our certificate of incorporation or bylaws, or any action asserting a claim against us that is governed by the internal affairs doctrine.
Although we believe these provisions of our certificate of incorporation and bylaws and Delaware law will provide for an opportunity to receive a higher bid by requiring potential acquirers to negotiate with our Board, these provisions apply even if the offer may be considered beneficial by some of our stockholders. 29 Our bylaws, as amended, provide that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of a fiduciary duty owed by any of our directors, officers, other employees or stockholders to us, any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our certificate of incorporation or our bylaws, any action to interpret, apply, enforce, or determine the validity of our certificate of incorporation or bylaws, or any action asserting a claim against us that is governed by the internal affairs doctrine.
Our income taxes are subject to volatility and could be adversely affected by several factors including earnings that are lower than anticipated in countries that have lower tax rates and higher than anticipated in countries that have higher tax rates, expiration of or lapses in the research and development tax credit laws, transfer pricing adjustments with respect to our methods for valuing developed technology or intercompany arrangements in the various jurisdictions we do business, tax effects of nondeductible compensation, including stock-based compensation, changes in accounting principles and imposition of withholding or other taxes on payments by subsidiaries or customers.
Our income taxes are subject to volatility and could be adversely affected by a number of factors including earnings that are lower than anticipated in countries that have lower tax rates and higher than anticipated in countries that have higher tax rates, changes in tax laws and regulations and interpretations of those changes, expiration of or lapses in the research and development tax credit laws, changes in the valuation of our deferred tax assets and liabilities, transfer pricing adjustments related to our methods for valuing developed technology or intercompany arrangements, tax effects of nondeductible compensation, including stock-based compensation, a change in our decision to indefinitely reinvest certain foreign earnings, changes in accounting principles and imposition of withholding or other taxes on payments by subsidiaries or customers.
Complying with new regulations or obtaining certifications can be costly and disruptive to our business. 30 If we do not comply with existing or evolving industry standards or government regulations, we will not be able to sell our products where these standards or regulations apply, which may prevent us from sustaining our net revenues or achieving profitability.
If we do not comply with existing or evolving industry standards or government regulations, or achieve and maintain relevant certifications, we will not be able to sell our products where these standards or regulations apply or where such certifications are required, which may prevent us from sustaining our net revenues or achieving profitability.
If demand for our products is lower than expected, we may be obligated to purchase excess product or raw materials from our suppliers, resulting in an adverse impact on our cash flows, operating expenses, financial condition, and operating results. During fiscal 2024, we recorded significant charges due to excess inventory and such commitments to our suppliers.
These contracts obligate us to purchase commitments for raw materials and finished goods. If demand for our products is lower than expected, we may be obligated to purchase excess product or raw materials from our suppliers, resulting in an adverse impact on our cash flows, operating expenses, financial condition, and operating results.
Most of our sales are on an open credit basis, with standard payment terms of 30 days in the United States and, because of local customs or conditions, longer in some markets outside the U.S.
We are exposed to the credit risk of our channel partners and direct customers, which could result in material losses. Most of our sales are on an open credit basis, with standard payment terms of 30 days in the United States and, because of local customs or conditions, longer in some markets outside the U.S.
A significant portion of our revenues comes from sales to both public and private K-12 educational institutions. Public schools receive funding from local tax revenues, and from state and federal governments through a variety of programs, many of which seek to assist schools located in underprivileged or rural areas.
Public schools receive funding from local tax revenues, and from state and federal governments through a variety of programs, many of which seek to assist schools located in underprivileged or rural areas. The funding for a portion of our sales to U.S.-based educational institutions comes from a federal funding program known as the E-Rate program.
The funding for a portion of our sales to U.S.-based educational institutions comes from a federal funding program known as the E-Rate program. E-Rate is a program of the Federal Communications Commission (the “FCC”) that subsidizes the purchase of approved telecommunications, Internet access, and internal connection costs for eligible public educational institutions.
E-Rate is a program of the Federal Communications Commission (the “FCC”) that subsidizes the purchase of approved telecommunications, Internet access, and internal connection costs for eligible public educational institutions.
We anticipate continuing to incur significant sales and marketing, product development and general and administrative expenses. Any delay in generating or recognizing revenue could result in a loss for a quarter or full year.
Even in years when we reported profits, we may not have been profitable in each quarter during those years. We anticipate continuing to incur significant sales and marketing, product development and general and administrative expenses. Any delay in generating or recognizing revenue could result in a loss for a quarter or full year.
In the past, the trading price of shares of our common stock has fluctuated significantly.
Our stock price has been volatile in the past and may significantly fluctuate in the future. In the past, the trading price of shares of our common stock has fluctuated significantly.
Although we regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes, there is no assurance our assessments are, in fact, adequate.
Finally, we are subject to the examination of our income tax returns by the Internal Revenue Service, Irish Revenue, and other tax authorities globally. Although we regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes, there is no assurance our assessments are, in fact, adequate.
In some circumstances, we must obtain regulatory approvals or certificates of compliance before we can offer or distribute our products in certain jurisdictions or to certain customers.
In some circumstances, we must obtain regulatory approvals or certificates of compliance before we can offer or distribute our products in certain jurisdictions or to certain customers. Complying with new regulations or obtaining certifications can be costly and disruptive to our business.
These fluctuations may adversely affect the trading price or liquidity of our common stock. Some companies, including us, that have had volatile market prices for their securities have had securities class action lawsuits filed against them.
These fluctuations may adversely affect the trading price or liquidity of our common stock. Some companies, including ours, that have had volatile market prices for their securities have had securities class action lawsuits filed against them. Such suits, regardless of the merits or outcome, can result in substantial costs and divert management’s attention and resources.
Our failure to continue to provide high-quality support and services could have materially adversely affect our business, financial condition, operating results, and future growth prospects. Adverse general economic conditions or reduced information technology spending may adversely impact our business.
Our failure to continue to provide high-quality support and services could materially adversely affect our business, financial condition, operating results, and future growth prospects.
Volatility in the global economic market or other global or regional economic uncertainty, limited availability of credit, a reduction in business confidence and activity, deficit-driven austerity measures impacting governments and educational institutions, and other difficulties may affect one or more of the industries to which we sell our products and services.
Volatility in the global economic market or other global or regional economic uncertainty, inflation, interest rate fluctuations, foreign exchange instability, limited availability of credit, a reduction in business confidence and activity, reductions in government spending, and other difficulties may affect one or more of the industries to which we sell our products and services.
If we incorrectly forecast demand, we may build up excess inventory. Higher levels of inventory expose us to a greater risk of carrying excess or obsolete inventory, which may in turn lead to write-downs. We may also record write-downs in connection with the end-of-life for specific products in our inventory.
Higher levels of inventory expose us to a greater risk of carrying excess or obsolete inventory, which may in turn lead to write-downs. We may also record write-downs in connection with the end-of-life for specific products in our inventory, as we did in the fourth quarter of 2024, when we recorded additional reserves due to certain excess and obsolete inventory.
In addition, while we maintain strong relationships with our manufacturing partners and suppliers, our agreements with them are generally of limited duration and pricing, quality, and volume commitments are negotiated on a recurring basis.
Additional factors that may impact costs and availability of product include energy, raw material, and transportation costs. While we maintain strong relationships with our manufacturing partners and suppliers, our agreements with them are generally of limited duration and pricing, quality, and volume commitments are negotiated on a recurring basis.
The occurrence of any such problems would likely have a material adverse effect on our business, operating results, and financial condition. We must continue to develop and increase the productivity of our indirect distribution channels to increase net revenues and improve our operating results. Our distribution strategy focuses primarily on developing and increasing the productivity of our indirect distribution channels.
We must continue to develop and increase the productivity of our indirect distribution channels to increase net revenues and improve our operating results. Our distribution strategy focuses primarily on developing and increasing the productivity of our indirect distribution channels.
The extent and duration of military actions, sanctions and resulting market disruptions could be significant and could potentially have substantial impact on the global economy and our business for an unknown period of time. Any of the abovementioned factors could affect our business, financial condition, and operating results.
We regularly assess the impact of the geopolitical climate on our business, including our business partners and customers. The extent and duration of military actions, sanctions and resulting market disruptions could be significant and could potentially have substantial impact on the global economy and our business for an unknown period of time.
Section 404 of the Sarbanes-Oxley Act of 2002 requires our management to assess the effectiveness of our internal control over financial reporting and to disclose if such controls were unable to provide assurance that a material error would be prevented or detected 25 in a timely manner.
Any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and significant expense to remediate, and ultimately could have an adverse effect on our stock price. 24 Section 404 of the Sarbanes-Oxley Act of 2002 requires our management to assess the effectiveness of our internal control over financial reporting and to disclose if such controls were unable to provide assurance that a material error would be prevented or detected in a timely manner.
We rely on third-party cloud service providers such as Salesforce and Oracle to support internal operations. Disruptions to such services or data breaches related to those services could impact our ability to maintain efficient operations and to provide services to our customers and could materially adversely affect our business, financial condition, operating results, and future growth prospects.
Disruptions to such services or data breaches related to those services could impact our ability to maintain efficient operations and to provide services to our customers, could put our employees’ or customers’ data at risk, and could materially adversely affect our business, financial condition, operating results, and future growth prospects.
In the past, for example, semiconductor chips and other components have been difficult to obtain due to high demand or limited supply. These disruptions could result in sustained lead-times, higher overall costs, extra delivery costs for expedited shipments, and shortages and allocations of certain components, resulting in delays in filling orders or even delayed product introductions.
For example, Samsung has ceased production of certain memory chips to focus on higher end chips. These disruptions could result in sustained lead-times, higher overall costs, extra delivery costs for expedited shipments, and shortages and allocations of certain components, resulting in delays in filling orders or even delayed product introductions.
If we are unsuccessful in attaching cloud services and maintenance services to our hardware product, our ability to grow our subscription revenue could be limited.
If we are unsuccessful in attaching cloud services and maintenance services to our hardware product, our ability to grow our subscription revenue could be limited. If we are unsuccessful in integrating AI into the functionality of our products and achieving customer adoption of our AI-integrated platform, our revenue growth could be limited.
As part of our business strategy, we review acquisition and strategic investment prospects that we believe would complement our current product offerings, augment our market coverage or enhance our technical capabilities, or otherwise offer growth opportunities. For example, on September 14, 2021, we acquired Ipanematech SAS, the SD-WAN division of InfoVista SAS, for EUR 60 million in cash consideration.
As part of our business strategy, we review acquisition and strategic investment prospects that we believe would complement our current product offerings, augment our market coverage or enhance our technical capabilities, or otherwise offer growth opportunities.

… 110 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+0 added−1 removed6 unchanged
Biggest changeThis does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
Biggest changeThis does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. 30 Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Board members periodically receive presentations on cybersecurity topics from our CIO, our CISO, or external experts as part of the Board’s continuing education on topics that impact public companies. Our management team, including our CIO and our CISO, is responsible for assessing and managing our material risks from cybersecurity threats.
Board members periodically receive presentations on cybersecurity topics from our CICO, our CISO, or external experts as part of the Board’s continuing education on topics that impact public companies. Our management team, including our CICO and our CISO, is responsible for assessing and managing our material risks from cybersecurity threats.
The Audit Committee receives regular reports from our Chief Information Security Officer (“CISO”) regarding any significant cybersecurity incidents, as well as any incidents with lesser impact potential. The Chief Information Officer (“CIO”) and CISO periodically report to the full Board regarding cybersecurity risks and our cyber risk management program.
The Audit Committee receives regular reports from our Chief Information Security Officer (“CISO”) regarding any significant cybersecurity incidents, as well as any incidents with lesser impact potential. The Chief Information and Customer Officer (“CICO”) and CISO periodically report to the full Board regarding cybersecurity risks and our cyber risk management program.
Additionally, our CISO holds Certified Information Security Manager and Certified in Risk and Information Systems Control certifications, They are assisted by a cross-functional Information Security Steering Committee.
Additionally, our CISO holds Certified Information Security Manager and Certified in Risk and Information Systems Control certifications. Our CICO and CISO are assisted by a cross-functional Information Security Steering Committee.
Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment. 32
Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybers ecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment. 31
The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our CIO and CISO collectively have over five decades of IT and cybersecurity experience in technology companies, including two decades in senior-level leadership roles.
The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our CICO and CISO collectively have decades of IT and cybersecurity experience in technology companies, including significant experience in senior-level leadership roles.
Removed
Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed4 unchanged
Biggest changeLegal Proceedings The information set forth under the heading “Legal Proceedings” in Note 10, Commitments and Contingencies , in Notes to the Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K is incorporated herein by reference. Item 4. Mine Saf ety Disclosures Not Applicable. 33 PA RT II
Biggest changeLegal Proceedings The information set forth under the heading “Legal Proceedings” in Note 9, Commitments and Contingencies , in Notes to the Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K is incorporated herein by reference. Item 4. Mine Saf ety Disclosures Not Applicable. 32 PA RT II
As of June 30, 2024, we have an aggregate of approximately 0.5 million square feet of leased space with various expiration dates between fiscal year 2025 and fiscal 2033. We are continuously evaluating our leased locations.
As of June 30, 2025, we have an aggregate of approximately 0.5 million square feet of leased space with various expiration dates between fiscal year 2025 and fiscal 2033. We are continuously evaluating our leased locations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+2 added−1 removed2 unchanged
Biggest changeSTOCK PRICE PERFORMANCE GRAPH The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, or otherwise subject to the liabilities under the Securities Act or Exchange Act, each as amended, except to the extent that we specifically incorporate it by reference into such filing.
Biggest change(2) On February 18, 2025, the Company announced that its Board had authorized management to repurchase up to $200.00 million shares of the Company's common stock over a three-year period commencing July 1, 2025. 33 STOCK PRICE PERFORMANCE GRAPH The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, or otherwise subject to the liabilities under the Securities Act or Exchange Act, each as amended, except to the extent that we specifically incorporate it by reference into such filing.
The comparisons in the graph below are based on historical data and are not intended to forecast the possible future performance of our common stock. 34 Comparison of Five-Year Cumulative Total Returns Performance Graph for Extreme Networks, Inc. Index data Copyright NASDAQ OMX, Inc. Used with permission. All rights reserved. Item 6. [RESE RVED] 35
The comparisons in the graph below are based on historical data and are not intended to forecast the possible future performance of our common stock. Comparison of Five-Year Cumulative Total Returns Performance Graph for Extreme Networks, Inc. Index data Copyright NASDAQ OMX, Inc. Used with permission. All rights reserved. Item 6. [RESE RVED] 34
Certain information regarding our equity compensation plan(s) as required by Part II is incorporated by reference from our Definitive Proxy Statement to be filed with the SEC in connection with the solicitation of proxies for our year ended June 30, 2024 Annual Meeting of Stockholders no later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.
Certain information regarding our equity compensation plan(s) as required by Part II is incorporated by reference from our Definitive Proxy Statement to be filed with the SEC in connection with the solicitation of proxies for our year ended June 30, 2025 Annual Meeting of Stockholders no later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.
Set forth below is a stock price performance graph comparing the annual percentage change in the cumulative total return on our common stock with the cumulative total returns of companies comprising the NASDAQ US Benchmark TR index and the NASDAQ US Benchmark Computer Hardware TR Index commencing July 1, 2019 and ending on June 30, 2024.
Set forth below is a stock price performance graph comparing the annual percentage change in the cumulative total return on our common stock with the cumulative total returns of companies comprising the NASDAQ US Benchmark TR index and the NASDAQ US Benchmark Computer Hardware TR Index commencing July 1, 2020 and ending on June 30, 2025.
As of August 9, 2024, there were 155 stockholders of record of our common stock. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
As of August 8, 2025, there were 146 stockholders of record of our common stock. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
Removed
Issuer Purchases of Equity Securities The Company did not repurchase any of its common stock during the three months ended June 30, 2024.
Added
Issuer Purchases of Equity Securities The following table provides stock repurchase activity during the three months ended June 30, 2025 (in thousands, except per share amounts): Approximate Dollar Value Total Average Total Number of Shares of Shares Number of Price Paid Purchased as Part of That May Yet Be Purchased Shares per Share Publicly Announced Under the Plans or Programs Purchased (1) Plans or Programs (1) (2) Beginning amount available to repurchase $ 37,285 April 1, 2025 - April 30, 2025 — $ — — 37,285 May 1, 2025 - May 31, 2025 798 15.65 798 24,793 June 1, 2025 - June 30, 2025 739 16.93 739 12,292 Total 1,537 $ 16.26 1,537 Authorization effective July 1, 2025 (2) $ 200,000 (1) On May 18, 2022, the Company announced that its Board had authorized management to repurchase up to $200.0 million of its common stock over a three-year period commencing on July 1, 2022.
Added
Refer to Note 10, Stockholders’ Equity , in Notes to Consolidated Financial Statements included elsewhere in this Report for further information regarding the 2022 Share Repurchase Program. The 2022 Repurchase Program ended on June 30, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

62 edited+14 added−23 removed46 unchanged
Biggest changeCost of Revenues and Gross Profit The following table presents the gross profit on product and subscription and support revenues and the gross profit percentage of net revenues for the fiscal years ended June 30, 2024, 2023 and 2022 (in thousands, except percentages): Year Ended Year Ended June 30, 2024 June 30, 2023 $ Change % Change June 30, 2023 June 30, 2022 $ Change % Change Gross profit: Product $333,498 $506,159 $(172,661) (34.1)% $506,159 $401,159 $105,000 26.2 % Percentage of product revenues 47.7% 54.3% 54.3% 52.7% Subscription and support 297,333 248,561 48,772 19.6 % 248,561 228,779 19,782 8.6 % Percentage of subscription and support revenues 71.1% 65.4% 65.4% 65.3% Total gross profit $630,831 $754,720 $(123,889) (16.4)% $754,720 $629,938 $124,782 19.8 % Percentage of net revenues 56.5% 57.5% 57.5% 56.6% Cost of product revenues includes costs of materials, amounts paid to third-party contract manufacturers, costs related to warranty obligations, charges for excess and obsolete inventory, scrap, distribution, product certification, amortization of developed technology intangibles, royalties under technology license agreements, and internal costs associated with manufacturing overhead, including management, manufacturing engineering, quality assurance, development of test plans, and document control.
Biggest changeThe following table presents the total net revenues geographically for the fiscal years ended June 30, 2025, 2024 and 2023 (in thousands, except percentages): Year Ended Year Ended Net Revenues June 30, 2025 June 30, 2024 $ Change % Change June 30, 2024 June 30, 2023 $ Change % Change Americas: United States $547,658 $581,141 $(33,483) (5.8)% $581,141 $572,927 $8,214 1.4 % Other 49,047 46,578 2,469 5.3 % 46,578 84,108 (37,530) (44.6)% Total Americas 596,705 627,719 (31,014) (4.9)% 627,719 657,035 (29,316) (4.5)% Percentage of net revenues 52.3% 56.2% 56.2% 50.1% EMEA 451,649 $421,966 29,683 7.0 % 421,966 559,669 (137,703) (24.6)% Percentage of net revenues 39.6% 37.8% 37.8% 42.6% APAC 91,713 $67,518 24,195 35.8 % 67,518 95,750 (28,232) (29.5)% Percentage of net revenues 8.1% 6.0% 6.0% 7.3% Total net revenues $1,140,067 $1,117,203 $22,864 2.0 % $1,117,203 $1,312,454 $(195,251) (14.9)% Cost of Revenues and Gross Profit The following table presents the gross profit on product and subscription and support revenues and the gross profit percentage of net revenues for the fiscal years ended June 30, 2025, 2024 and 2023 (in thousands, except percentages): Year Ended Year Ended June 30, 2025 June 30, 2024 $ Change % Change June 30, 2024 June 30, 2023 $ Change % Change Gross profit: Product $403,631 $333,498 $70,133 21.0 % $333,498 $506,159 $(172,661) (34.1)% Percentage of product revenues 57.3% 47.7% 47.7% 54.3% Subscription and support 305,496 297,333 8,163 2.7 % 297,333 248,561 48,772 19.6 % Percentage of subscription and support revenues 70.1% 71.1% 71.1% 65.4% Total gross profit $709,127 $630,831 $78,296 12.4 % $630,831 $754,720 $(123,889) (16.4)% Percentage of net revenues 62.2% 56.5% 56.5% 57.5% Cost of product revenues includes costs of materials, amounts paid to third-party contract manufacturers, costs related to warranty obligations, charges for excess and obsolete inventory, scrap, distribution, product certification, amortization of developed technology intangibles, royalties under technology license agreements, and internal costs associated with manufacturing overhead, including management, manufacturing engineering, quality assurance, development of test plans, and document control.
Research and development expenses decreased by $2.3 million or 1.1% for the year ended June 30, 2024 as compared to fiscal 2023, primarily due to a $2.8 million decrease in personnel costs due to lower compensation and benefits costs, a $2.9 million decrease in non-recurring engineering project costs, offset by a $3.4 million increase in contractor costs.
Research and development expenses decreased by $2.3 million or 1.1% for the year ended June 30, 2024 as compared to fiscal 2023, primarily due to a $2.8 million decrease in personnel costs due to lower compensation and benefits costs and a $2.9 million decrease in non-recurring engineering project costs, offset by a $3.4 million increase in contractor costs.
Factors contributing to cash provided by operating activities were the net loss of $86.0 million, non-cash expenses of $187.6 million for items such as amortization of intangible assets, stock-based compensation, depreciation, reduction in carrying amount of right-of-use assets, deferred income taxes, provision for excess and obsolete inventory and interest.
Factors contributing to cash provided by operating activities were the net loss of $86.0 million and non-cash expenses of $187.6 million for items such as amortization of intangible assets, stock-based compensation, depreciation, reduction in carrying amount of right-of-use assets, deferred income taxes, provision for excess and obsolete inventory and interest.
We may provide sales incentives and other programs to these customers which are considered to be a form of variable consideration and we maintain estimated accruals and allowances using the historical actuals. 41 Our stocking distributors are allowed certain price adjustments in the form of rebates and limited stock rotation rights.
We may provide sales incentives and other programs to these customers which are considered to be a form of variable consideration and we maintain estimated accruals and allowances using the historical actuals. Our stocking distributors are allowed certain price adjustments in the form of rebates and limited stock rotation rights.
See Note 9, Leases , in the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information regarding our lease obligations. We have contractual commitments with our suppliers which represent commitments for future services.
See Note 8, Leases , in the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information regarding our lease obligations. We have contractual commitments with our suppliers which represent commitments for future services.
Stock rotations are an additional form of variable consideration and are estimated based on an analysis of historical return rates. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.
Stock rotations are an additional form of variable consideration and are estimated based on an analysis of historical return rates. 40 A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.
See Note 8, Debt, in the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information regarding our debt obligations. 44 Our unconditional purchase obligations represent the purchase of long lead-time component inventory that our contract manufacturers procure in accordance with our forecast.
See Note 7, Debt, in the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information regarding our debt obligations. Our unconditional purchase obligations represent the purchase of long lead-time component inventory that our contract manufacturers procure in accordance with our forecast.
For a full reconciliation of our effective tax rate to the U.S. federal statutory rate and for further explanation of our provisions for income taxes, see Note 16, Income Taxes , in Notes to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
For a full reconciliation of our effective tax rate to the U.S. federal statutory rate and for further explanation of our provisions for income taxes, see Note 15, Income Taxes , in Notes to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
For fiscal 2024, 2023 and 2022, our tax provision is primarily related to (i) taxes on our foreign operations, including foreign withholding taxes remitted to foreign tax authorities by customers on our behalf, (ii) tax expense related to the establishment of a U.S. deferred tax liability for amortizable goodwill resulting from the acquisition of Enterasys Networks, Inc., the WLAN Business, the Campus Fabric Business and the Data Center Business and (iii) state taxes in states where we have exhausted available Net Operating Losses or are subject to certain franchise taxes qualifying as income tax under the relevant tax accounting guidance.
For fiscal 2025, 2024 and 2023, our tax provision is primarily related to (i) taxes on our foreign operations, including foreign withholding taxes remitted to foreign tax authorities by customers on our behalf, (ii) US federal taxes resulting from our US operations, (iii) tax expense related to the establishment of a U.S. deferred tax liability for amortizable goodwill resulting from the acquisition of Enterasys Networks, Inc., the WLAN Business, the Campus Fabric Business and the Data Center Business and (iv) state taxes in states where we have exhausted available Net Operating Losses or are subject to certain franchise taxes qualifying as income tax under the relevant tax accounting guidance.
The increase in the provisions for excess and obsolete inventory and loss on supplier commitments during fiscal 2024 was primarily for certain of our older products which are scheduled to go end of sale during the Company’s fiscal year 2025 and for which excess of such inventories is beyond the demand forecast.
The increase in the provisions for excess and obsolete inventory and loss on supplier commitments during fiscal 2024 was primarily for certain of our older products which were scheduled to go end of sale during the Company’s fiscal year 2025 and for which excess of such inventories was beyond the demand forecast.
We anticipate our principal uses of cash and cash equivalents for fiscal 2025 will be purchases of finished goods inventory from our contract manufacturers, payroll, share repurchases, payments under debt obligations and related interest, payments under lease obligations, purchases of property and equipment and other operating expenses related to the development and marketing of our products.
We anticipate our principal uses of cash and cash equivalents for fiscal 2026 will be purchases of finished goods inventory from our contract manufacturers, payroll, share repurchases, payments under debt obligations and related interest, payments under lease obligations, payments for litigation settlement, purchases of property and equipment and other operating expenses related to the development and marketing of our products.
Fiscal year 2024 During fiscal 2024, the Company recorded $36.3 million of restructuring charges which were primarily related to severance and benefits costs and professional services fees associated with the reduction-in-force actions related to the “Q1 2024 Plan”, “Q2 2024 Plan”, and "Q3 2024 Plan", each as described in Note 15, Restructuring and Related Charges, in Notes to the Consolidated Financial Statements included elsewhere in this Report.
Fiscal year 2024 During fiscal 2024, the Company recorded $36.3 million of restructuring charges which were primarily related to severance and benefits costs and professional services fees associated with the reduction-in-force actions related to the “Q1 2024 Plan”, “Q2 2024 Plan”, and “Q3 2024 Plan”, each as described in Note 14, Restructuring and Related Charges, in Notes to the Consolidated Financial Statements included elsewhere in this Report.
Net Cash Used in by Financing Activities Cash used in financing activities during the fiscal year ended June 30, 2024 was $115.0 million due primarily to share repurchases of $49.9 million, payments on the 2023 Revolving Facility of $55.0 million, debt repayments of $10.0 million and a $30.1 million payment for taxes on vested and released stock awards net of proceeds from the issuance of shares of our common stock under our Employee Stock Purchase Plan (“ESPP”).
Cash used in financing activities during the fiscal year ended June 30, 2024 was $115.0 million due primarily to share repurchases of $49.9 million, payments on the 2023 Revolving Facility of $55.0 million, debt repayments of $10.0 million and a $30.1 million payment for taxes on vested and released stock awards net of proceeds from the issuance of shares of our common stock under our ESPP.
The other income, net for fiscal years ended June 30, 2024, 2023 and 2022 was primarily due to foreign exchange gains from the revaluation of certain assets and liabilities denominated in foreign currencies into U.S. Dollars. Provision for Income Taxes We are subject to income taxes in the United States and numerous foreign jurisdictions.
The other income (expense), net for fiscal years ended June 30, 2025, 2024 and 2023 was primarily due to foreign exchange gains or losses from the revaluation of certain assets and liabilities denominated in foreign currencies into U.S. Dollars. 39 Provision for Income Taxes We are subject to income taxes in the United States and numerous foreign jurisdictions.
We outsource substantially all of our manufacturing. We conduct supply chain management, quality assurance, manufacturing, engineering, and document control at our facilities in San Jose, California, Salem, New Hampshire, China, and Taiwan.
We outsource substantially all of our manufacturing. We conduct supply chain management, quality assurance, manufacturing, engineering, and document control at our facilities in San Jose, California, Salem, New Hampshire, Taiwan, Vietnam and the Philippines.
On August 9, 2019, we entered into an Amended and Restated Credit Agreement (the “2019 Credit Agreement”), by and among Extreme, as borrower, several banks and other financial institutions as Lenders, BMO Capital Markets Corp., as an issuing lender and swingline lender, Silicon Valley Bank, as an Issuing Lender, and Bank of Montreal, as administrative agent and collateral agent for the Lenders.
On August 9, 2019, we entered into an Amended and Restated Credit Agreement (the “2019 Credit Agreement”), by and among Extreme, as borrower, several banks and other financial institutions as Lenders, BMO Harris Bank, N.A., as an issuing lender and swingline lender, Silicon Valley Bank, as an Issuing Lender, and Bank of Montreal, as administrative agent and collateral agent for the Lenders.
We expect to honor the inventory purchase commitments within the next 12 months. As of June 30, 2024, we have non-cancelable commitments to purchase $38.2 million of inventory. See Note 10, Commitments and Contingencies, in the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information regarding our purchase obligations.
We expect to honor the inventory purchase commitments within the next 12 months. As of June 30, 2025, we have non-cancelable commitments to purchase $45.4 million of inventory. See Note 9, Commitments and Contingencies, in the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information regarding our purchase obligations.
Other sources of cash for the period included increases in accounts payable and deferred revenue. These amounts were partially offset by increases in accounts receivable, inventories and prepaid expenses and other assets and decreases in accrued compensation, current and long-term liabilities and operating lease liabilities.
Other sources of cash for the period included decrease in account receivable and increases in accounts payable, accrued compensation and deferred revenue. These amounts were partially offset by increases in inventories and prepaid expenses and other assets and decreases in operating lease liabilities.
Restructuring and Related Charges During the fiscal years ended June 30, 2024, 2023 and 2022, we recorded restructuring and related charges of $36.3 million, $2.9 million and $1.7 million, respectively.
Restructuring and Related Charges During the fiscal years ended June 30, 2025, 2024 and 2023, we recorded restructuring and related charges of $1.5 million, $36.3 million and $2.9 million, respectively.
For the fiscal years ended June 30, 2024, 2023 and 2022, we recorded income tax provisions of $8.5 million, $16.0 million, and $7.9 million respectively.
For the fiscal years ended June 30, 2025, 2024 and 2023, we recorded income tax provisions of $11.7 million, $8.5 million, and $16.0 million respectively.
Net Cash Used in Investing Activities Cash used in investing activities during the fiscal year ended June 30, 2024 was $18.1 million for the purchases of property and equipment. Cash used in investing activities during the fiscal year ended June 30, 2023 was $13.8 million for the purchases of property and equipment.
Cash used in investing activities during the fiscal year ended June 30, 2023 was $13.8 million for the purchases of property and equipment.
We consider customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with a customer. For each contract, we consider the promise to transfer products and services, each of which are distinct, to be the identified performance obligations.
Products and services may be sold separately or in bundled packages. We consider customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with a customer. For each contract, we consider the promise to transfer products and services, each of which are distinct, to be the identified performance obligations.
As of June 30, 2024, we have contractual commitments of $25.9 million that are due through our fiscal year 2027. We have immaterial income tax liabilities related to uncertain tax positions and we are unable to reasonably estimate the timing of the settlement of those liabilities.
As of June 30, 2025, we have contractual commitments of $17.2 million that are due through our fiscal year 2027. We have immaterial income tax liabilities related to uncertain tax positions and we are unable to reasonably estimate the timing of the settlement of those liabilities.
On June 22, 2023, we entered into the Second Amended and Restated Credit Agreement (the “2023 Credit Agreement) by and among Extreme, as borrower, BMO Harris Bank, N.A., as an issuing lender and swingline lender, BOFA Securities, Inc.., JPMorgan Chase Bank, N.A., PNC Capital Markets LLC and Wells Fargo Securities, LLC, as issuing lenders, the financial institutions or entities party thereto as lenders, and Bank of Montreal, as administrative agent and collateral agent, which amended and restated the 2019 Credit Agreement.
On June 22, 2023, we entered into the Second Amended and Restated Credit Agreement (the “2023 Credit Agreement) by and among Extreme, as borrower, BMO Harris Bank, N.A., as an issuing lender and swingline lender, Bank of America N.A., JPMorgan Chase Bank, N.A., PNC Bank, National Association and Wells Fargo Bank, National Association as issuing lenders, the financial institutions or entities party thereto as lenders, and Bank of Montreal, as administrative agent and collateral agent, which amended and restated the 2019 Credit Agreement.
Subscription and support revenues increased $37.9 million or 10.0% for the year ended June 30, 2024, compared to fiscal 2023. The increase in subscription and support revenues was primarily due to increased adoption of our cloud network management solutions, higher attachment rates of cloud support services on product sales, and continued growth in our subscription business.
The increase in subscription and support revenues was primarily due to increased adoption of our cloud network management solutions and continued growth in our subscription business. Subscription and support revenues increased $37.9 million or 10.0% for the year ended June 30, 2024, compared to fiscal 2023.
Liquidity and Capital Resources The following summarizes information regarding our cash and cash equivalents (in thousands): June 30, 2024 June 30, 2023 Cash and cash equivalents $ 156,699 $ 234,826 As of June 30, 2024, our principal sources of liquidity consisted of cash and cash equivalents of $156.7 million, accounts receivable, net of $89.5 million and available borrowings under our five-year 2023 Revolving Facility (as defined below) of $135.8 million.
Liquidity and Capital Resources The following summarizes information regarding our cash and cash equivalents (in thousands): June 30, 2025 June 30, 2024 Cash and cash equivalents $ 231,745 $ 156,699 As of June 30, 2025, our principal sources of liquidity consisted of cash and cash equivalents of $231.7 million, accounts receivable, net of $126.7 million and available borrowings under our five-year 2023 Revolving Facility (as defined below) of $135.8 million.
We do not have any material commitments for capital expenditures as of June 30, 2024. Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as of June 30, 2024. 45
We do not have any material commitments for capital expenditures as of June 30, 2025. Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as of June 30, 2025. 44
The repurchase program does not obligate Extreme to acquire any shares of its common stock, may be suspended or terminated at any time without prior notice and will be subject to regulatory considerations.
The 2025 Repurchase Program does not obligate us to acquire any shares of our common stock, and they may be suspended or terminated at any time without prior notice and will be subject to regulatory considerations.
We lease facilities under operating lease arrangements at various locations that expire at various dates through our fiscal year 2033. As of June 30, 2024, the value of our obligations under operating leases was $61.9 million.
We lease facilities under operating lease arrangements at various locations that expire at various dates through our fiscal year 2033. As of June 30, 2025, the value of our obligations under operating leases was $53.2 million.
The product revenues decrease for the year ended June 30, 2024 as compared to fiscal 2023 was primarily driven by lower bookings and shipments as well as elongated sales cycles to end customers and lower channel sell-through caused by easing of supply chain constraints and current macroeconomic conditions.
The product revenues decrease for the year ended June 30, 2024 as compared to fiscal 2023 was primarily driven by lower bookings and shipments as well as elongated sales cycles to end customers and lower channel sell-through caused by easing of supply chain constraints and macroeconomic conditions Subscription and support revenues increased $17.7 million or 4.2% for the year ended June 30, 2025, compared to fiscal 2024.
Amortization of Intangible Assets During the fiscal years ended June 30, 2024, 2023 and 2022, we recorded $2.0 million, $2.0 million and $3.2 million, respectively, of amortization expense in operating expenses primarily for certain intangibles related to the acquisitions of the Ipanema, and Aerohive businesses. There were no acquisitions or impairments of intangible assets during fiscal year 2024.
Amortization of Intangible Assets We recorded $2.0 million of amortization expense for each of the fiscal years ended June 30, 2025, 2024 and 2023 in operating expenses primarily for certain intangibles related to previous acquisitions. There were no acquisitions or impairments of intangible assets during fiscal years 2025, 2024 or 2023.
We are not currently aware 42 of any material cash requirements beyond the next 12 months other than those described above for fiscal 2024 and our known contractual obligations. See the section titled “ Contractual Obligations ” below.
We are not currently aware of any material cash requirements beyond the next 12 months other than those described above for fiscal 2025 and our known contractual obligations.
Key Components of Cash Flows and Liquidity A summary of the sources and uses of cash and cash equivalents is as follows for the fiscal years ended June 30, 2024, 2023 and 2022 (in thousands): Year Ended June 30, 2024 June 30, 2023 June 30, 2022 Net cash provided by operating activities $ 55,486 $ 249,212 $ 128,177 Net cash used in investing activities (18,121 ) (13,800 ) (84,950 ) Net cash used in financing activities (114,978 ) (194,783 ) (94,663 ) Foreign currency effect on cash and cash equivalents (514 ) (325 ) (936 ) Net increase (decrease) in cash and cash equivalents $ (78,127 ) $ 40,304 $ (52,372 ) Cash and cash equivalents were $156.7 million at June 30, 2024, representing a decrease of $78.1 million from $234.8 million at June 30, 2023.
Key Components of Cash Flows and Liquidity A summary of the sources and uses of cash and cash equivalents is as follows for the fiscal years ended June 30, 2025, 2024 and 2023 (in thousands): Year Ended June 30, 2025 June 30, 2024 June 30, 2023 Net cash provided by operating activities $ 152,031 $ 55,486 $ 249,212 Net cash used in investing activities (24,713 ) (18,121 ) (13,800 ) Net cash used in financing activities (52,586 ) (114,978 ) (194,783 ) Foreign currency effect on cash and cash equivalents 314 (514 ) (325 ) Net increase (decrease) in cash and cash equivalents $ 75,046 $ (78,127 ) $ 40,304 Cash and cash equivalents were $231.7 million at June 30, 2025, representing a increase of $75.0 million from $156.7 million at June 30, 2024.
Factors contributing to cash provided by operating activities were net income of $44.3 million, non-cash expenses of $104.0 million for items such as amortization of intangible assets, stock-based compensation, depreciation, reduction in carrying amount of right-of-use assets, deferred income taxes, provision for excess and obsolete inventory and interest.
Factors contributing to cash provided by operating activities were the net loss of $7.5 million and non-cash expenses of $118.1 million for items such as amortization of intangible assets, stock-based compensation, depreciation, reduction in carrying amount of right-of-use assets, provision for excess and obsolete inventory and interest.
Subscription and support gross profit increased to $248.6 million for the year ended June 30, 2023, from $228.8 million in fiscal 2022, primarily due to higher subscription and support revenues partially offset by higher professional services fees and increased cloud service costs.
Subscription and support gross profit increased to $305.5 million for the year ended June 30, 2025, from $297.3 million in fiscal 2024, primarily due to higher subscription revenues, partially offset by higher personnel costs and increased cloud service costs. 37 Subscription and support gross profit increased to $297.3 million for the year ended June 30, 2024, from $248.6 million in fiscal 2023, primarily due to higher subscription and support revenues and lower headcount partially offset by higher professional services fees and increased cloud service costs.
Sales and marketing expenses increased by $8.9 million or 2.6% for the year ended June 30, 2024, as compared to fiscal 2023, primarily due to a $1.5 million increase in personnel costs due to higher salaries and benefits costs, a $7.2 million increase in sales promotions and marketing related expenses, and a $1.2 million increase in professional fees offset by a $1.0 million decrease in other costs primarily related to contractor costs and travel costs. 39 Sales and marketing expenses increased by $42.4 million or 14.4% for the year ended June 30, 2023, as compared to fiscal 2022, primarily due to a $35.1 million increase in personnel costs due to higher compensation and benefits costs primarily related to share-based compensation, a $5.9 million increase in travel expenses due to loosening of COVID-19 restrictions, and a $1.4 million increase in other expenses primarily professional fees and sales and marketing activities.
Sales and marketing expenses increased by $8.9 million or 2.6% for the year ended June 30, 2024, as compared to fiscal 2023, primarily due to a $1.5 million increase in personnel costs due to higher salaries and benefits costs, a $7.2 million increase in sales promotions and marketing related expenses, and a $1.2 million increase in professional fees, offset by a $1.0 million decrease in other costs primarily related to contractor costs and travel costs. 38 General and Administrative Expenses General and administrative expenses consist primarily of personnel costs (which includes compensation, benefits and share-based compensation), legal and professional service costs, travel and facilities and information technology costs.
Operating Expenses The following table presents operating expenses for the fiscal years ended June 30, 2024, 2023 and 2022 (in thousands, except percentages): Year Ended Year Ended June 30, 2024 June 30, 2023 $ Change % Change June 30, 2023 June 30, 2022 $ Change % Change Research and development $211,931 $214,270 $(2,339) (1.1)% $214,270 $190,591 $23,679 12.4 % Sales and marketing 345,802 336,906 8,896 2.6 % 336,906 294,470 42,436 14.4 % General and administrative 99,938 89,934 10,004 11.1 % 89,934 68,697 21,237 30.9 % Acquisition and integration costs — 390 (390) (100.0)% 390 7,009 (6,619) (94.4)% Restructuring and related charges 36,321 2,860 33,461 1,170.0 % 2,860 1,748 1,112 63.6 % Amortization of intangible assets 2,041 2,047 (6) (0.3)% 2,047 3,235 (1,188) (36.7)% Total operating expenses $696,033 $646,407 $49,626 7.7 % $646,407 $565,750 $80,657 14.3 % The following table highlights our operating expenses and operating income as a percentage of net revenues for the fiscal years ended June 30, 2024, 2023 and 2022: Year Ended June 30, 2024 June 30, 2023 June 30, 2022 Research and development 19.0 % 16.3 % 17.1 % Sales and marketing 31.0 % 25.7 % 26.5 % General and administrative 8.9 % 6.9 % 6.2 % Acquisition and integration costs — — 0.6 % Restructuring and related charges 3.3 % 0.2 % 0.2 % Amortization of intangible assets 0.2 % 0.2 % 0.3 % Total operating expenses 62.3 % 49.2 % 50.9 % Operating income (loss) (5.8 )% 8.3 % 5.8 % Research and Development Expenses Research and development expenses consist primarily of personnel costs (which includes compensation, benefits and stock-based compensation), consultant fees and engineering expenses related to the design, development, and testing of our products.
Operating Expenses The following table presents operating expenses for the fiscal years ended June 30, 2025, 2024 and 2023 (in thousands, except percentages): Year Ended Year Ended June 30, 2025 June 30, 2024 $ Change % Change June 30, 2024 June 30, 2023 $ Change % Change Research and development $221,459 $211,931 $9,528 4.5 % $211,931 $214,270 $(2,339) (1.1)% Sales and marketing 327,563 345,802 (18,239) (5.3)% 345,802 336,906 8,896 2.6 % General and administrative 139,621 99,938 39,683 39.7 % 99,938 89,934 10,004 11.1 % Acquisition and integration costs — — — — — 390 (390) (100.0)% Restructuring and related charges (benefits) 1,492 36,321 (34,829) (95.9)% 36,321 2,860 33,461 1,170.0 % Amortization of intangible assets 2,043 2,041 2 0.1 % 2,041 2,047 (6) (0.3)% Total operating expenses $692,178 $696,033 $(3,855) (.6)% $696,033 $646,407 $49,626 7.7 % The following table highlights our operating expenses and operating income as a percentage of net revenues for the fiscal years ended June 30, 2025, 2024 and 2023: Year Ended June 30, 2025 June 30, 2024 June 30, 2023 Research and development 19.4 % 19.0 % 16.3 % Sales and marketing 28.7 % 31.0 % 25.7 % General and administrative 12.2 % 8.9 % 6.9 % Acquisition and integration costs — — — Restructuring and related charges (benefits) 0.1 % 3.3 % 0.2 % Amortization of intangible assets 0.2 % 0.2 % 0.2 % Total operating expenses 60.7 % 62.3 % 49.2 % Operating income (loss) 1.5 % (5.8 )% 8.3 % Research and Development Expenses Research and development expenses consist primarily of personnel costs (which includes compensation, benefits and stock-based compensation), consultant fees and engineering expenses related to the design, development, and testing of our products.
Net Revenues The following table presents net product and subscription and support revenues for the fiscal years ended June 30, 2024, 2023 and 2022 (in thousands, except percentages): Year Ended Year Ended June 30, 2024 June 30, 2023 $ Change % Change June 30, 2023 June 30, 2022 $ Change % Change Net revenues: Product $699,257 $932,454 $(233,197) (25.0)% $932,454 $761,721 $170,733 22.4 % Percentage of net revenues 62.6% 71.0% 71.0% 68.5% Subscription and support 417,946 380,000 37,946 10.0 % 380,000 350,600 29,400 8.4 % Percentage of net revenues 37.4% 29.0% 29.0% 31.5% Total net revenues $1,117,203 $1,312,454 $(195,251) (14.9)% $1,312,454 $1,112,321 $200,133 18.0 % We generate product revenues primarily from sales of our networking equipment.
Net Revenues The following table presents net product and subscription and support revenues for the fiscal years ended June 30, 2025, 2024 and 2023 (in thousands, except percentages): Year Ended Year Ended June 30, 2025 June 30, 2024 $ Change % Change June 30, 2024 June 30, 2023 $ Change % Change Net revenues: Product $704,462 $699,257 $5,205 0.7 % $699,257 $932,454 $(233,197) (25.0)% Percentage of net revenues 61.8% 62.6% 62.6% 71.0% Subscription and support 435,605 417,946 17,659 4.2 % 417,946 380,000 37,946 10.0 % Percentage of net revenues 38.2% 37.4% 37.4% 29.0% Total net revenues $1,140,067 $1,117,203 $22,864 2.0 % $1,117,203 $1,312,454 $(195,251) (14.9)% We generate product revenues primarily from sales of our networking equipment.
Cash used in financing activities during the fiscal year ended June 30, 2022 was $94.7 million due primarily to share repurchases of $45.0 million, debt repayments of $38.1 million, payments of contingent consideration of $1.0 million and $4.0 million of deferred payments on acquisitions and a $6.5 million payment for taxes on vested and released stock awards net of proceeds from the issuance of shares of our common stock under our ESPP and exercise of stock options.
Net Cash Used in Financing Activities Cash used in financing activities during the fiscal year ended June 30, 2025 was $52.6 million due primarily to share repurchases of $38.0 million, debt repayments of $10.0 million and $3.9 million in payments for taxes on vested and released stock awards net of proceeds from the issuance of shares of our common stock under our Employee Stock Purchase Plan (“ESPP”) and through the exercise of stock options.
The first tier consists of a limited number of independent distributors that stock our products and sell primarily to resellers. The second tier of the distribution channel consists of non-stocking distributors and value-added resellers that sell directly to end-users. Products and services may be sold separately or in bundled packages.
We sell our products and SaaS and maintenance contracts direct to customers and to partners in two distribution channels, or tiers. The first tier consists of a limited number of independent distributors that stock our products and sell primarily to resellers. The second tier of the distribution channel consists of non-stocking distributors and value-added resellers that sell primarily to end-users.
General and administrative expenses increased by $21.2 million or 30.9% for the year ended June 30, 2023, as compared to fiscal 2022, primarily due to a $10.1 million increase in personnel costs due to higher compensation and benefits costs primarily related to share-based compensation and higher headcount, a $6.2 million increase in professional fees primarily for legal fees, a $5.1 million increase for litigation settlement charges, a $0.9 million increase in system transition costs, partially offset by a $1.2 million decrease in other expenses primarily for travel and facilities related costs.
General and administrative expenses increased by $39.7 million or 39.7% for the year ended June 30, 2025, as compared to fiscal 2024, primarily due to a $16.3 million increase in system transition costs, a $6.8 million increase in personnel costs due to higher compensation and benefits costs, a $24.2 million increase in expense for legal costs related to litigation matters and a $1.5 million increase in other costs primarily related to third-party licensing fees, information technology and travel costs, partially offset by a $5.2 million decrease in professional service fees and a $4.0 million decrease in depreciation expense.
During the year ended June 30, 2024, we repurchased a total of 2,365,220 shares of common stock on the open market at a total cost of $49.9 million with an average price of $21.08 per share. As of June 30, 2024, we have $50.3 million available under our share repurchase program.
During the year ended June 30, 2025, we repurchased a total of approximately 2.4 million shares of our common stock on the open market at a total cost of $38.0 million with an average price of $15.89 per share under the 2022 Repurchase Program.
Product revenues increased $170.7 million or 22.4% for the year ended June 30, 2023, compared to fiscal 2022.
Product revenues increased $5.2 million or 0.7% for the year ended June 30, 2025, compared to fiscal 2024.
Revenue Recognition We derive the majority of our revenue from sales of our networking equipment, with the remaining revenue generated from software delivered as a service (“SaaS”) and support fees relating to maintenance contracts, professional services, and training for our products. We sell our products and maintenance contracts direct to customers and to partners in two distribution channels, or tiers.
Revenue Recognition We derive the majority of our revenue from sales of our networking equipment, with the remaining revenues generated from sales of subscription and support, which primarily includes software subscriptions delivered as software as a service (“SaaS”) and additional revenues from maintenance contracts, professional services and training for the products we offer.
Other sources of cash for the period included decrease in account receivable and increases in accounts payable, accrued compensation and deferred revenue. These amounts were partially offset by increases in inventories and prepaid expenses and other assets and decreases in operating lease liabilities. Cash provided by operating activities during the fiscal year ended June 30, 2022 was $128.2 million.
Other sources of cash for the period included a decrease in inventories and increases in accounts payable, accrued compensation and benefits, deferred revenue and other accrued liabilities. This was partially offset by increases in net accounts receivable and prepaid expenses and other assets, and a decrease in operating lease liabilities.
Cash and cash equivalents were $156.7 million as of June 30, 2024, a decrease of $78.1 million, compared to $234.8 million at the end of fiscal 2023.
Cash and cash equivalents were $231.7 million as of June 30, 2025, an increase of $75.0 million, compared to $156.7 million at the end of fiscal 2024.
Foreign Currency Effect on Cash and cash equivalents Foreign currency effect on cash and cash equivalents increased in 2024, primarily due to changes in exchange rates between the U.S. Dollar and particularly the Indian Rupee, U.K. Pound, and the Euro.
The amounts were partially offset by cash received of $25.0 million from the 2023 Revolving Facility. Foreign Currency Effect on Cash and cash equivalents Foreign currency effect on cash and cash equivalents increased in 2025, primarily due to changes in exchange rates between the U.S. Dollar and particularly the Indian Rupee, U.K.
Our cost of subscription and support revenues consist primarily of labor, overhead, repair and freight costs and the cost of service parts used in providing support under customer maintenance contracts as well as third-party professional services costs, data center costs and cloud hosting service costs. 38 Subscription and support gross profit increased to $297.3 million for the year ended June 30, 2024, from $248.6 million in fiscal 2023, primarily due to higher subscription and support revenues and lower headcount partially offset by higher professional services fees and increased cloud service costs.
Our cost of subscription and support revenues consist primarily of labor, overhead, repair and freight costs and the cost of service parts used in providing support under customer maintenance contracts as well as third-party professional services costs, data center costs and cloud hosting service costs.
Research and development expenses increased by $23.7 million or 12.42% for the year ended June 30, 2023 as compared to fiscal 2022, primarily due to a $15.4 million increase in personnel costs due to higher compensation and benefits costs primarily related to share-based compensation and higher headcount, a $3.8 million increase in third-party software licenses and engineering project costs, a $2.2 million increase in contractor and consultant fees, a $1.3 million increase in facility and information technology costs and a $2.3 million increase in other costs primarily related to travel.
Research and development expenses increased by $9.5 million or 4.5% for the year ended June 30, 2025 as compared to fiscal 2024, primarily due to a $10.5 million increase in personnel costs due to increased compensation and benefits costs, a $2.9 million increase in other costs primarily related to software costs, professional service fees, non-recurring engineering project costs and travel costs and a $2.6 million increase in information technology costs, offset by a $6.5 million decrease in contractor costs.
Interest income increased across each of the periods primarily due to higher interest earned on cash deposits. Interest Expense 40 We incurred $17.0 million, $17.4 million, and $12.8 million of interest expense for fiscal years ended June 30, 2024, 2023 and 2022, respectively.
The increase in interest income in the fiscal year ended June 30, 2024 as compared to fiscal 2023 was primarily driven by higher interest earned on cash deposits. Interest Expense We recorded $15.9 million, $17.0 million, and $17.4 million of interest expense for fiscal years ended June 30, 2025, 2024 and 2023, respectively.
For a discussion of our credit agreements, see the section titled " Liquidity and Capital Resources " below. Other Income, net We had other income, net of less than $0.1 million, $0.1 million, and $0.4 million in fiscal years ended June 30, 2024, 2023 and 2022, respectively.
Other Income (Expense), net We had other expense, net of $1.1 million and other income, net of less than $0.1 million and $0.1 million in fiscal years ended June 30, 2025, 2024 and 2023, respectively.
Cash used in investing activities during the fiscal year ended June 30, 2022 was $85.0 million, primarily due to the payment of $69.5 million (net of cash acquired) for the acquisition of Ipanema and $15.4 million for purchases of property and equipment.
Net Cash Used in Investing Activities Cash used in investing activities during the fiscal year ended June 30, 2025 was $24.7 million for the purchases of property and equipment. Cash used in investing activities during the fiscal year ended June 30, 2024 was $18.1 million for the purchases of property and equipment.
Contractual Obligations As of June 30, 2024, we have contractual obligations for debt obligations, purchase obligations, lease obligations and other obligations. Our debt obligations relate to amounts owed under our 2023 Credit Agreement. As of June 30, 2024, we have $190.0 million of debt outstanding which is payable in quarterly installments through our fiscal year 2028.
As of June 30, 2025, we have $180.0 million of debt outstanding which is payable in quarterly installments through our fiscal year 2028. We are subject to interest on our debt obligations and unused commitment fee.
During the fiscal years ended June 30, 2023 and 2022, we recognized transaction costs related to this acquisition of $0.4 million and $7.0 million, respectively, which are included in “Acquisition and integration costs” in the accompanying consolidated statements of operations. 36 Results of Operations The following is a summary of our results of operations during the fiscal year ended June 30, 2024: • Net revenues of $1,117.2 million, decreased 14.9% from fiscal 2023 net revenues of $1,312.5 million. • Product revenues of $699.3 million, decreased 25.0% from fiscal 2023 product revenues of $932.5 million. • Subscription and support revenues of $417.9 million, increased 10.0% from fiscal 2023 subscription and support revenues of $380.0 million. • Total gross margin of 56.5% of net revenues in fiscal 2024, compared to 57.5% in fiscal 2023. • Operating loss of $65.2 million in fiscal 2024, compared to operating income of $108.3 million in fiscal 2023. • Net loss was $86.0 million in fiscal 2024, compared to net income of $78.1 million in fiscal 2023. • Cash flow provided by operating activities of $55.5 million, compared to cash flow provided by operating activities of $249.2 million in fiscal 2023, a decrease of $193.7 million.
All references herein to “fiscal 2025” or “2025"; “fiscal 2024” or “2024”; “fiscal 2023” or “2023” represent the fiscal years ended, respectively. 35 Results of Operations The following is a summary of our results of operations during the fiscal year ended June 30, 2025: • Net revenues of $1,140.1 million, increased 2.0% from fiscal 2024 net revenues of $1,117.2 million. • Product revenues of $704.5 million, increased 0.7% from fiscal 2024 product revenues of $699.3 million. • Subscription and support revenues of $435.6 million, increased 4.2% from fiscal 2024 subscription and support revenues of $417.9 million. • Total gross margin of 62.2% of net revenues in fiscal 2025, compared to 56.5% in fiscal 2024. • Operating income of $35.9 million in fiscal 2025, compared to operating loss of $65.2 million in fiscal 2024. • Net loss was $7.5 million in fiscal 2025, compared to net loss of $86.0 million in fiscal 2024. • Cash flow provided by operating activities of $152.0 million, compared to cash flow provided by operating activities of $55.5 million in fiscal 2024, an increase of $96.5 million.
Subscription and support revenues increased $29.4 million or 8.4% for the year ended June 30, 2023, compared to fiscal 2022. The increase in subscription and support revenues was primarily due to the growth in our subscription business. 37 We operate in three regions: Americas, EMEA (Europe, Middle East and Africa) and APAC (Asia Pacific).
The increase in subscription and support revenues was primarily due to increased adoption of our cloud network management solutions, higher attachment rates of cloud support services on product sales, and continued growth in our subscription business. 36 We operate in three regions: Americas, EMEA (Europe, Middle East and Africa) and APAC (Asia Pacific).
Product gross profit increased to $506.2 million for the year ended June 30, 2023, from $401.2 million in fiscal 2022, primarily due to increased product revenues along with lower amortization of intangibles of $3.8 million due to certain intangibles being fully amortized, and lower distribution costs of $1.1 million due to easing of supply chain constraints, partially offset by higher direct product costs, higher excess and obsolete inventory charges of $6.3 million and higher warranty reserves cost of $2.1 million.
Product gross profit increased to $403.6 million for the year ended June 30, 2025, from $333.5 million in fiscal 2024, primarily due to higher product revenues as well as lower provisions for excess and obsolete inventory and lower warranty costs, partially offset by higher overhead and distribution costs related to increased purchases of inventory.
During the quarter ended June 30, 2024, the Company borrowed and subsequently repaid $30.0 million against its $150.0 million revolving credit facility. At the Company’s election, the initial term loan (the “Initial Term Loan”) under the 2023 Credit Agreement may be made as either a base rate loan or a Secured Overnight Financing Data Rate (“SOFR loan").
We may use proceeds of the loans for working capital and general corporate purposes. At our election, the initial term loan (the “Initial Term Loan”) under the 2023 Credit Agreement may be made as either a base rate loan or a Secured Overnight Financing Data Rate (“SOFR loan”).
The decrease in amortization expense in fiscal 2023 from fiscal 2022 was primarily due to certain acquired intangibles from previous acquisitions becoming fully amortized. Interest Income Interest income was $4.6 million, $3.2 million and $0.4 million in fiscal years ended June 30, 2024, 2023 and 2022, respectively.
Interest Income Interest income was $4.3 million, $4.6 million and $3.2 million in fiscal years ended June 30, 2025, 2024 and 2023, respectively. The decrease in interest income in the fiscal year ended June 30, 2025 as compared to fiscal 2024 was primarily driven by lower interest earned on cash deposits.
On November 17, 2022, the Board increased the authorization to repurchase in any quarter from $25.0 million per quarter to $50.0 million per quarter. The current repurchase authorization supersedes and replaces any previously authorized repurchase programs. Purchases may be made from time to time in the open market or pursuant to a 10b5-1 plan.
Under these repurchase programs, purchases may be made from time to time in the open market or pursuant to a 10b5-1 plan.
This increase was primarily due to cash provided by operating activities of $249.2 million, which is offset by cash used in financing activities of $194.8 million mainly as a result of payments on the 2019 Initial Term Loan and share repurchases and cash used in investing activities of $13.8 million primarily for the purchase of property and equipment. 43 Net Cash Provided by Operating Activities Cash provided by operating activities during the fiscal year ended June 30, 2024 was $55.5 million.
This increase was primarily due to cash provided by operating activities of $152.0 million, offset by cash used in financing activities of $52.6 million mainly as a result of payments for borrowings under the Amended Credit Agreement and share repurchases as well as cash used in investing activities of $24.7 million primarily for the purchase of property and equipment. 42 Cash and cash equivalents were $156.7 million at June 30, 2024, representing a decrease of $78.1 million from $234.8 million at June 30, 2023.
The increase in interest expense in fiscal year ended June 30, 2023 as compared to fiscal 2022 was primarily driven by higher average rates under our Credit Agreements and write-off of the unamortized deferred financing costs related to our 2019 Credit Agreement, as we amended the 2019 Credit Agreement and entered into the 2023 Credit Agreement during June 2023.
The decrease in interest expense in fiscal year ended June 30, 2025 as compared to fiscal 2024 was primarily driven by lower interest rates on lower outstanding balances under the 2023 Credit Agreement.
On May 18, 2022, our Board of Directors authorized a share repurchase program with authorization to repurchase up to $200.0 million of our common stock over a three-year period beginning in our fiscal year commencing July 1, 2022. A maximum of $25.0 million may be repurchased in any quarter.
See the section titled “ Contractual Obligations ” below. 41 On February 18, 2025, we announced that our Board had authorized management to repurchase up to $200.0 million shares of the Company's common stock over a three-year period, commencing July 1, 2025 (the “2025 Repurchase Program”). As of June 30, 2025, the 2022 Repurchase Program expired.
Removed
Extreme is a leading provider of cloud networking solutions and industry leading services and support. Extreme designs, develops and manufactures wired, wireless, and SD-WAN infrastructure equipment. The Company's cloud solution is a single platform that offers unified network management of wireless access points, switches and SD-WAN.
Added
Extreme is a leader in AI-powered cloud networking, focused on delivering simple and secure solutions that help businesses address challenges and enable connections among devices, applications, and users. We push the boundaries of technology, leveraging the powers of artificial intelligence, analytics, and automation and have industry leading support services.
Removed
It leverages ML, AI Operations, and analytics to help customers deliver secure connectivity at the edge of the network, speed cloud deployments, and uncover actionable insights to save time, lower costs and streamlines operations. Enterprise network administrators need to respond to the rapid digital transformational trends of cloud, mobility, big data, social business and the ever-present need for network security.
Added
Tens of thousands of customers globally trust Extreme to drive value, foster innovation, and overcome extreme challenges. Extreme also designs, develops, and manufactures wired, wireless, and SD-WAN infrastructure equipment.
Removed
Accelerators such as IoT, AI, BYOD, ML, cognitive computing, and robotics add complexity to challenge the capabilities of traditional networks. Technology advances have a profound effect across the entire enterprise network placing unprecedented demands on network administrators to enhance management capabilities, scalability, programmability, agility, and analytics of the enterprise networks they manage.
Added
Our Extreme Platform ONE solution, announced in December 2024 and made generally available in July 2025, is a technology platform that reduces the complexity for enterprises by seamlessly integrating networking, security and AI solutions into a single platform.
Removed
A direction affecting the Enterprise Network Equipment market is the continued adoption of the cloud-managed enterprise WLAN in the enterprise market. Hybrid cloud is a cloud computing environment which uses a mix of on-premises, private cloud, and third-party, public cloud services with orchestration between multiple platforms.
Added
AI-powered automation includes conversational, interactive and autonomous AI agents—to assist, advise and accelerate the productivity of networking, security and business teams—designed to reduce the time to complete complex tasks.
Removed
We introduced our Cloud offering in 2016 and in August 2019 acquired Aerohive Networks, Inc to enhance our Cloud strategy with a 3 rd generation Cloud platform and to accelerate adoption of hybrid cloud networking solutions in the Enterprise.
Added
Our global footprint provides service to some of the world’s leading names in business across verticals such as large sports and entertainment venues, hospitality, retail, transportation and logistics, education, government, healthcare, manufacturing and service providers. We derive all our revenues from the sale of our networking equipment, software subscriptions, and related maintenance contracts.
Removed
We believe Extreme’s enhanced Cloud solution is the only offering in the market that seamlessly integrates the cloud with on-premises infrastructures and enables visibility from the edge to everywhere. See Part 1, Item 1. Business , for additional discussion of our business. Fiscal Year The Company uses a fiscal calendar year ending on June 30.
Added
Fiscal Year The Company uses a fiscal calendar year ending on June 30.
Removed
All references herein to “fiscal 2024” or “2024"; “fiscal 2023” or “2023”; “fiscal 2022” or “2022” represent the fiscal years ended, respectively. Acquisitions Ipanematech SAS On September 14, 2021 (the “Acquisition Date”), we completed our acquisition (the “Acquisition”) of Ipanematech SAS (“Ipanema”), the cloud-native enterprise Software-Defined Wide Area Network business unit of InfoVista pursuant to a Sale and Purchase Agreement.
Added
The product revenues increase for the year ended June 30, 2025 as compared to fiscal 2024 was primarily driven by higher bookings and shipments in the second half of fiscal 2025 than in the corresponding period in fiscal 2024 which was impacted by elongated sales cycles to end customers and lower channel sell-through caused by macroeconomic conditions.
Removed
Under the terms of the Acquisition, the net consideration paid by Extreme to Ipanema stockholders was $70.9 million. The primary reason for the Acquisition was to acquire the talent and the technology to allow us to expand our portfolio with new cloud-managed SD-WAN and security offerings to support our enterprise customers.
Added
Sales and marketing expenses decreased by $18.2 million or 5.3% for the year ended June 30, 2025, as compared to fiscal 2024, primarily due to a $9.8 million decrease in personnel costs due to lower head count, a $3.1 million decrease in contractor costs and professional fees, a $2.6 million decrease in information technology and facilities costs, a $2.3 million decrease in travel costs, and $0.4 million in other expenses primarily related to lower depreciation expense.
Removed
The acquisition was accounted for using the acquisition method of accounting whereby the acquired assets and liabilities of Ipanema were recorded at their respective fair values including an amount for goodwill representing the difference between the acquisition consideration and the fair value of the identifiable net assets.
Added
Fiscal year 2025 During fiscal 2025, the Company recorded $1.5 million of restructuring charges which were primarily related to severance and benefits costs and professional services fees associated with the reduction-in-force actions related to the “Q2 2024 Plan” and “Q3 2024 Plan”, each as described in Note 14, Restructuring and Related Charges, in Notes to the Consolidated Financial Statements included elsewhere in this Report.

… 19 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+0 added−0 removed3 unchanged
Biggest changeThese contracts have maturities of less than 40 days. Changes in the fair value of derivatives are recognized in "other income, net." For the fiscal years ended June 30, 2024, 2023, and 2022, the net losses recorded in the consolidated statement of operations from these contracts were $0.3 million, $0.4 million, and $1.4 million, respectively.
Biggest changeChanges in the fair value of derivatives are recognized in "other income (expense), net." For the fiscal years ended June 30, 2025, 2024, and 2023, the consolidated statements of operations included net gains of $1.0 million, net losses of $0.3 million, and net losses of $0.4 million, respectively from these contracts.
Item 7A. Quantitative and Qualitat ive Disclosures About Market Risk Interest Rate Sensitivity Our exposure to market risk for changes in interest rates relates primarily to our financial debt and foreign currencies. As of June 30, 2024, we did not have any financial investments that were exposed to interest rate risk.
Item 7A. Quantitative and Qualitat ive Disclosures About Market Risk Interest Rate Sensitivity Our exposure to market risk for changes in interest rates relates primarily to our financial debt and foreign currencies. As of June 30, 2025, we did not have any financial investments that were exposed to interest rate risk.
Debt At certain points in time we are exposed to the impact of interest rate fluctuations, primarily in the form of variable rate borrowings from the 2023 Credit Agreement, which is described in Note 8, Debt , in the Notes to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
Debt At certain points in time we are exposed to the impact of interest rate fluctuations, primarily in the form of variable rate borrowings from the Amended Credit Agreement, which is described in Note 7, Debt , in the Notes to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
As of June 30, 2024 we have not entered into any derivative instruments to hedge the impact of the changes in variable interest rates under our 2023 Credit Agreement.
As of June 30, 2025 we have not entered into any derivative instruments to hedge the impact of the changes in variable interest rates under our Amended Credit Agreement.
Changes in the fair value of these foreign exchange forward contracts are offset largely by re-measurement of the underlying foreign currency denominated assets and liabilities. As of June 30, 2024 and June 30, 2023, foreign exchange forward currency contracts not designated as hedging instruments had the total notional amount of $31.3 million and $3.4 million, respectively.
Changes in the fair value of these foreign exchange forward contracts are offset largely by re-measurement of the underlying foreign currency denominated assets and liabilities. As of June 30, 2025 and June 30, 2024, foreign exchange forward currency contracts not designated as hedging instruments had the total notional principal amounts of $57.2 million and $31.3 million, respectively.
There were no foreign exchange forward currency contracts that were designated as hedging instruments at June 30, 2024 and 2023. For the fiscal year ended June 30, 2024, 2023 and 2022 the Company recorded foreign currency transaction gains from operations of $0.6 million, $0.8 million and $1.7 million, respectively. 46
There were no foreign exchange forward currency contracts that were designated as hedging instruments at June 30, 2025 and 2024. For the fiscal year ended June 30, 2025, 2024 and 2023 the Company recognized foreign currency transaction net losses of $1.8 million, net gains of $0.6 million and net gains of $0.8 million, respectively. 45
The following table presents hypothetical changes in interest expense for the year ended June 30, 2024, on the outstanding borrowings under the 2023 Credit Agreement as of June 30, 2024, that are sensitive to changes in interest rates (in thousands): Change in interest expense given a decrease in interest rate of X bps* Average outstanding Change in interest expense given an increase in interest rate of X bps* Description (100 bps) (50 bps) as of June 30, 2024 100 bps 50 bps Debt $ (1,992 ) $ (996 ) $ 199,221 $ 1,992 $ 996 * Underlying interest rate was 7.44% as of June 30, 2024.
The following table presents hypothetical changes in interest expense for the year ended June 30, 2025, on the outstanding borrowings under the Amended Credit Agreement as of June 30, 2025, that are sensitive to changes in interest rates (in thousands): Change in interest expense given a decrease in interest rate of X bps* Average outstanding Change in interest expense given an increase in interest rate of X bps* Description (100 bps) (50 bps) as of June 30, 2025 100 bps 50 bps Debt $ (1,927 ) $ (964 ) $ 192,706 $ 1,927 $ 964 * Underlying interest rate was 6.43% as of June 30, 2025.
As of June 30, 2024, we had $190.0 million of debt outstanding, all of which was from the 2023 Credit Agreement. Through the end of our fiscal year 2024, the average daily outstanding amount was $199.2 million with a high of $225.0 million and a low of $190.0 million.
As of June 30, 2025, we had $180.0 million of debt outstanding, all of which was from the Amended Credit Agreement. Through the end of our fiscal year 2025, the average daily outstanding amount was $192.7 million with a high of $217.5 million and a low of $180.0 million.

Other EXTR 10-K year-over-year comparisons