Extreme Networks, Inc. (EXTR)
F3Q10 Earnings Call
April 26, 2008 5:00 pm ET
Robert L. Corey – Chief Financial Officer, Acting President & Chief Executive Officer
Paul A. Hooper – Chief Marketing Officer.
Rohit Chopra – Wedbush Morgan
Douglas Whitman – Whitman Capital
John Evans – Edmunds White Partners, LLC.
Previous Statements by EXTR
» Extreme Networks, Inc. F2Q10 (Qtr Ending 12/27/09) Earnings Call Transcript
» Extreme Networks, Inc. F1Q10 (Qtr End 09/27/09) Earnings Call Transcript
» Extreme Networks, Inc. F4Q09 (QTR End 06/28/09) Earnings Call Transcript
This afternoon Extreme Networks issued a press release announcing the company’s financial results for the third fiscal quarter of 2010. A copy of this release and a slide presentation of the supporting financial materials are available in the investor relations section of the company’s website at www.ExtremeNetworks.com. This call is being broadcast live over the Internet and will be posted on the Extreme Networks website for a reply shortly after the conclusion of the call.
The company has asked me to remind you that this conference call contains forward-looking statements that involve risks and uncertainties including statements regarding the company’s expectations regarding its financial performance, strategies, growth of customer bandwidth demand, development of new product, customer acceptance of the company’s product, customer spending and economic conditions in the company’s markets.
Actual results could differ materially from those projected in the forward-looking statements. As a result of certain risk factors including but not limited to a challenging macroeconomic environment both in the United States and overseas, fluctuations in demands for the company’s products and services, a highly competitive business environment for network switching equipment, the company’s effectiveness in controlling expenses, the possibility that the company might experience delays in the development of new technology and products, customer response to its new technology and products, the timing of any recovery in the global economy, risks related to pending or future litigation and the dependency on third parties for certain components and for the manufacturing of the company’s products.
The company undertakes no obligation to update this information on the conference call. More information about potential factors that affect our business and financial results is included in the company’s filings with the Securities & Exchange Commission. Throughout the conference call the company will reference both GAAP and non-GAAP financial results. The company has provided a reconciliation table of GAAP to non-GAAP and information in the tables that accompany the press release on its website.
Please go to the investor relations section of the company’s website at www.ExtremeNetworks.com. In addition, all announced results are preliminary and may be subject to change when the review of the fiscal quarter is concluded and/or a Form 10Q is filed. I would now like to turn the call over to Mr. Bob L. Corey, CFO and Acting President and CEO of Extreme Networks.
Robert L. Corey
Welcome to the Extreme Networks Q3 fiscal 2010 earnings conference call. I’m joined today by Paul Hooper our Chief Marketing Officer. I’ll begin with some brief comments on the quarter followed by more detailed comments by Paul regarding our new products released during the quarter and our messaging to our markets. Then, I’ll summarize and provide guidance for our fiscal Q4. We’ll then open up for a Q&A.
Our goal is to provide more time for questions and answers and more time for reading our scripts. Additionally, we posted a slide presentation on our website at www.ExtremeNetworks.com under investor relations that I hope you’ll find useful. Historically, our Q3 performance for revenue has trended down sequentially from Q2 by a range of 10% to 12%.
Based upon our backlog and trends in the markets coming out of Q2, we issued guidance that did not reflect this historical down performance from Q2. I’m very happy to report that we achieved the midrange of revenue guidance at $78.2 million and exceeded the guidance for earnings by 45% with non-GAAP operating income of $4.7 million. Paul will talk about our new products in a minute however, I’m pleased to announce that our direct attached datacenter, network solution and architecture has been selected as a finalist for the Best of Interop 2010 awards. The Interop show is underway now in Las Vegas.
Additionally, to further expand our channels during the quarter, we signed a strategic reseller agreement with CTC of Japan. CTC is Japan’s premier technology integration company with over $3 billion in revenue. We remain committed to delivering new products to the datacenter and our traditional markets to drive revenue growth, take market share and increase stockholder value.
As a reminder, all of my comments will be non-GAAP except for the revenue and the number of common shares. There is reconciliation from non-GAAP to GAAP financial results in the slide presentation under investor relations on our website that I mentioned previously. Once again, before I go any further, I want to thank every employee in our organization for their dedicated efforts and commitment which contributed directly to our performance in Q3.
During Q3 we continued to perform and improve our operational execution and reported $78.2 million of net revenue, bucking the historical trend of down sequential performance coming off Q2. With regard to total revenue by geography, the Americas reported $32.6 million for the current quarter and that’s up 19% sequentially and up 21% year-over-year. The America’s showed increased deal size and a strong contribution from Mexico during the current quarter.