# Extreme Networks (EXTR.US)

Canonical: https://gigainvestors.com/s/EXTR

Analysis as of: 2026-10-16T07:28:26.685Z. Financial observations: FY1999–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: $22.40 per share; close as of 2026-10-15.

Estimated value: low $4.89 per share, central $5.37 per share, high $6.01 per share. Buy at or below the central value $5.37 per share. Valuation as of 2026-10-16T07:28:26.685Z; scenarios are not confidence intervals.

Expected annual return: 4.3% at the stated quote. About 4.3% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 2 revenue declines in the last 10 years (informational)

- more than 2 net loss years

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 2

- Years with a net loss: 6

- Operating margin variation: 6.97×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.01×

- FY2018: -0.04×

- FY2019: -0.01×

- FY2020: -0.10×

- FY2021: 0.03×

- FY2022: 0.07×

- FY2023: 0.09×

- FY2024: -0.03×

- FY2025: 0.02×

- FY2026: 0.05×

### moat: fail

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 4.5%

- ROIC, second-lowest year: -15.5%

- Typical minus recent gross margin: -4.9 pp

- Typical gross margin (annual median): 56.5%

- Recent gross margin (lower of latest and 3-year median): 61.5%

- Years with nonpositive capital: 8

- Capital spending / revenue: 1.7%

- ROIC including acquisitions, ten-year median: 8.6%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 50.9%

- FY2018: -60.1%

- FY2019: -3.9%

- FY2020: -15.5%

- FY2021: 4.8%

- FY2022: 13.6%

- FY2023: 23.6%

- FY2024: -8.3%

- FY2025: 4.1%

- FY2026: 18.3%

### economics: pass

- Owner earnings / net income, 5-yr: 1.75×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $124M

- Net income, five-year total: $71M

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: -0.7 pp

- Working capital / revenue, change between three-year averages: -4.5 pp

- Working capital / revenue, final three-year average: 13.9%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.56×

- FY2023: 1.27×

- FY2024: 0.87×

- FY2025: 1.50×

- FY2026: 1.00×

### management: fail

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- potential debt-funded buybacks (informational)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: -3.9% vs 4.1%

- Per-share earnings: -0.35 to -0.06 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- five-year and ten-year diluted share growth both above threshold

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 2.7%

- Ordinary dilution, 5-year annual growth: 1.1%

- Market cap gain: $3.2B

- Cumulative retained earnings: -$107M

- Diluted shares, 10-year annual growth: 2.7%

- Diluted shares, 5-year annual growth: 1.1%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value change: $0.30

- Per-share value, starting three-year median: -$0.35

- Per-share value, ending three-year median: -$0.06

- Buybacks concentrated in cheaper years (correlation): 0.00

- Average buyback yield: 3.0%

- Buyback history: 7 years

- Debt-funded buybacks: Yes

- Acquisition spending: $403M

- Cumulative net income, 10 years: -$128M

- ROIC, first three-year median: -3.9%

- ROIC, last three-year median: 4.1%

Chart: Earnings per share; fiscal year observations.

- FY2017: -$0.02

- FY2018: -$0.41

- FY2019: -$0.22

- FY2020: -$1.06

- FY2021: $0.02

- FY2022: $0.33

- FY2023: $0.58

- FY2024: -$0.66

- FY2025: -$0.06

- FY2026: $0.31

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: -6.9%

- Receivables to sales index (DSRI): 1.15×

- Restructuring years, last five: 2

- Stock compensation / operating cash flow: 71.7%

- Earnings backed by cash: Yes

- Operating cash / earnings: 2.92×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 4.52×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -12.6%

- FY2018: -8.5%

- FY2019: -17.3%

- FY2020: -16.6%

- FY2021: -14.1%

- FY2022: -7.9%

- FY2023: -15.0%

- FY2024: -13.6%

- FY2025: -13.8%

- FY2026: -6.9%

## Holders

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Lee Ainslie](https://gigainvestors.com/mc): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 31% since Jun 2026 · "However, management’s outlook for slower growth has prompted fresh questions from investors." (finance.yahoo.com, Oct 2025) · sales +12.6%

Story as of 2026-10-16T09:58:44.149Z; price observation 2026-10-15.

Price needs cash profits to grow 22.3% a year for ten years

- 2025-10-30: Extreme Networks (EXTR): Revisiting Valuation After Strong Results and Cautious Growth Guidance ([finance.yahoo.com](https://finance.yahoo.com/news/extreme-networks-extr-revisiting-valuation-212452162.html))

- 2026-04-21: Extreme Platform ONE Reduces Network Costs by 32%, Enterprise Adoption Gains Momentum ([finance.yahoo.com](https://finance.yahoo.com/sectors/technology/articles/extreme-platform-one-reduces-network-110500134.html))

- 2026-06-15: Extreme Networks (EXTR) Stock Valuation After Earnings Beat And Higher Revenue Guidance ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/extreme-networks-extr-stock-valuation-111016254.html))

### Sales · FY2025–2026

sales +12.6%; source https://www.sec.gov/Archives/edgar/data/1078271/000119312526352872/extr-20260630.htm; observed 2026-08-17.

- FY2017: $607M 

- FY2018: $983M 

- FY2019: $996M 

- FY2020: $948M 

- FY2021: $1.0B 

- FY2022: $1.1B 

- FY2023: $1.3B 

- FY2024: $1.1B 

- FY2025: $1.1B 

- FY2026: $1.3B 

### Gross margin · FY2026

gross margin 61.5%; source https://www.sec.gov/Archives/edgar/data/1078271/000119312526352872/extr-20260630.htm; observed 2026-08-17.

- FY2017: 54.5% 

- FY2018: 54.4% 

- FY2019: 55.4% 

- FY2020: 54.6% 

- FY2021: 58.0% 

- FY2022: 56.6% 

- FY2023: 57.5% 

- FY2024: 56.5% 

- FY2025: 62.2% 

- FY2026: 61.5% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in communication equipment; annual sales are USD 1.3 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1078271/000119312526352872/extr-20260630.htm (filed 2026-08-17); FY2026: revenue 1283593000; grossProfit 789141000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); EXTR.US: Extreme Networks, Inc., together with its subsidiaries, develops, markets, and sells network infrastructure equipment and related software in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. It offers ExtremeCloud IQ, a machine learning/AI powered, wired and wireless cloud network management solution that offers visibility and control over users, devices, and applications; ExtremeCloud IQ-Site Engine which extends cloud management to non-cloud native and multi-vendor devices; ExtremeCloud IQ Essentials provides wireless intrusion prevention system, location services, and guest management services; and ExtremeCloud SD-WAN, 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. The company also provides indoor and outdoor Wi-Fi 7 and prior generation Aps; WIPS solutions; switch products; Cloud Native Platforms and Applications for Service Providers; and ExtremeCloud Universal ZTNA. In addition, the company offers customer and support services, such as support services for end-users, resellers, and distributors; and premier, professional, and education services. It sells its products through original equipment manufacturers, strategic relationships, distributors, resellers, and field sales. The company serves mid-market and enterprise customers, and services providers. Extreme Networks, Inc., was incorporated in 1996 and is headquartered in Morrisville, North Carolina.

### Why customers stay

Margins ranged from 56.5% to 62.2% during 2024–26; it earns 4.5% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-17); FY2024: grossProfit / revenue = 56.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-17); FY2025: grossProfit / revenue = 62.2%.

- Source: https://www.sec.gov/Archives/edgar/data/1078271/000119312526352872/extr-20260630.htm (filed 2026-08-17); FY2026: grossProfit / revenue = 61.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-17); 10-year return on capital observations [[2017,0.5089447757324346],[2018,-0.6005112698191657],[2019,-0.03947091814057957],[2020,-0.15467377640167165],[2021,0.04815032700865199],[2022,0.13585406705895997],[2023,0.23598959375717807],[2024,-0.08283680604720567],[2025,0.0414725664819082],[2026,0.18272928355376114]]; median 0.04481144674528009. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 57% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/1078271/000119312526352872/extr-20260630.htm (filed 2026-08-17); Gross margin observations: [[2021,0.5796637270189356],[2022,0.5663275259569854],[2023,0.5750449158599082]]; range within 2 percentage points.

### Where the cash goes

Spends 20.8% of cash earnings on expansion; paid dividends in 2 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-17); FY2017: growth capex 0; upkeep 10425000; owner earnings 14171000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-17); FY2019: growth capex 0; upkeep 22730000; owner earnings 4290000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-17); FY2021: growth capex 0; upkeep 17176000; owner earnings 40077000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-17); FY2022: growth capex 0; upkeep 15433000; owner earnings 68999000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-17); FY2023: growth capex 0; upkeep 13800000; owner earnings 99150000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1078271/000119312526352872/extr-20260630.htm (filed 2026-08-17); FY2026: growth capex 8742000; upkeep 19199000; owner earnings 42119000. Growth capex / owner earnings = 0.20755478525131177.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-17); Dividend observations: [[2017,0],[2018,0],[2019,0],[2020,254500000],[2021,0],[2022,0],[2023,30140000],[2024,0],[2025,0],[2026,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1078271/000119312526352872/extr-20260630.htm (filed 2026-08-17); FY2026: cash repurchases 87000000 USD.

### Are managers owners

Insiders own 3.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); EXTR.US SharesStats.PercentInsiders = 3.109 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 22.3% yearly over ten years; actual growth was 36%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-08-17); Ten-year compound average after fade. Initial solved rate 0.3114334025541966. Price 22.4; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 0.014378019675184818 → FY2026 0.31206193969030155. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $4.21 per share

- 2016-11: $4.23 per share

- 2016-12: $5.03 per share

- 2017-01: $5.53 per share

- 2017-02: $6.25 per share

- 2017-03: $7.51 per share

- 2017-04: $7.82 per share

- 2017-05: $9.63 per share

- 2017-06: $9.22 per share

- 2017-07: $8.79 per share

- 2017-08: $11.43 per share

- 2017-09: $11.89 per share

- 2017-10: $12.00 per share

- 2017-11: $12.85 per share

- 2017-12: $12.52 per share

- 2018-01: $15.03 per share

- 2018-02: $11.41 per share

- 2018-03: $11.07 per share

- 2018-04: $10.70 per share

- 2018-05: $8.61 per share

- 2018-06: $7.96 per share

- 2018-07: $8.50 per share

- 2018-08: $6.27 per share

- 2018-09: $5.48 per share

- 2018-10: $5.55 per share

- 2018-11: $6.58 per share

- 2018-12: $6.10 per share

- 2019-01: $7.56 per share

- 2019-02: $8.22 per share

- 2019-03: $7.49 per share

- 2019-04: $8.00 per share

- 2019-05: $5.63 per share

- 2019-06: $6.47 per share

- 2019-07: $8.14 per share

- 2019-08: $6.68 per share

- 2019-09: $7.28 per share

- 2019-10: $6.44 per share

- 2019-11: $7.03 per share

- 2019-12: $7.37 per share

- 2020-01: $5.90 per share

- 2020-02: $5.03 per share

- 2020-03: $3.09 per share

- 2020-04: $3.40 per share

- 2020-05: $3.30 per share

- 2020-06: $4.34 per share

- 2020-07: $4.55 per share

- 2020-08: $4.37 per share

- 2020-09: $4.02 per share

- 2020-10: $4.06 per share

- 2020-11: $5.62 per share

- 2020-12: $6.89 per share

- 2021-01: $8.09 per share

- 2021-02: $9.17 per share

- 2021-03: $8.75 per share

- 2021-04: $11.38 per share

- 2021-05: $11.44 per share

- 2021-06: $11.16 per share

- 2021-07: $11.01 per share

- 2021-08: $10.83 per share

- 2021-09: $9.85 per share

- 2021-10: $9.83 per share

- 2021-11: $13.50 per share

- 2021-12: $15.70 per share

- 2022-01: $12.69 per share

- 2022-02: $11.49 per share

- 2022-03: $12.21 per share

- 2022-04: $9.60 per share

- 2022-05: $9.92 per share

- 2022-06: $8.92 per share

- 2022-07: $13.08 per share

- 2022-08: $14.33 per share

- 2022-09: $13.07 per share

- 2022-10: $17.94 per share

- 2022-11: $20.97 per share

- 2022-12: $18.31 per share

- 2023-01: $18.03 per share

- 2023-02: $18.72 per share

- 2023-03: $19.12 per share

- 2023-04: $17.78 per share

- 2023-05: $20.60 per share

- 2023-06: $26.05 per share

- 2023-07: $26.59 per share

- 2023-08: $27.45 per share

- 2023-09: $24.21 per share

- 2023-10: $20.62 per share

- 2023-11: $16.14 per share

- 2023-12: $17.64 per share

- 2024-01: $13.51 per share

- 2024-02: $12.64 per share

- 2024-03: $11.54 per share

- 2024-04: $11.20 per share

- 2024-05: $11.15 per share

- 2024-06: $13.45 per share

- 2024-07: $14.30 per share

- 2024-08: $15.75 per share

- 2024-09: $15.03 per share

- 2024-10: $14.93 per share

- 2024-11: $16.60 per share

- 2024-12: $16.74 per share

- 2025-01: $15.81 per share

- 2025-02: $15.45 per share

- 2025-03: $13.23 per share

- 2025-04: $13.16 per share

- 2025-05: $15.67 per share

- 2025-06: $17.95 per share

- 2025-07: $17.66 per share

- 2025-08: $21.38 per share

- 2025-09: $20.65 per share

- 2025-10: $19.02 per share

- 2025-11: $17.50 per share

- 2025-12: $16.65 per share

- 2026-01: $14.58 per share

- 2026-02: $13.98 per share

- 2026-03: $15.08 per share

- 2026-04: $22.09 per share

- 2026-05: $26.51 per share

- 2026-06: $32.37 per share

- 2026-07: $30.14 per share

- 2026-08: $22.49 per share

- 2026-09: $21.45 per share

- 2026-10: $22.40 per share

## Annual estimated value (USD per share)

- FY2017: low $1.29 per share, central $1.34 per share, high $1.38 per share

- FY2019: low $1.57 per share, central $1.66 per share, high $1.73 per share

- FY2020: low $1.73 per share, central $1.81 per share, high $1.87 per share

- FY2021: low $2.19 per share, central $2.30 per share, high $2.39 per share

- FY2022: low $1.73 per share, central $1.85 per share, high $1.94 per share

- FY2023: low $6.49 per share, central $8.09 per share, high $9.21 per share

- FY2024: low $5.03 per share, central $5.89 per share, high $6.70 per share

- FY2025: low $5.32 per share, central $5.83 per share, high $6.52 per share

- FY2026: low $4.79 per share, central $5.26 per share, high $5.89 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1078271/000119312526352872/extr-20260630.htm); period 2026-06-30, filed 2026-08-17.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.