Extreme Networks (EXTR) Rosenblatt Securities Age of AI Technology Summit summary

Market outlook and revenue trends

• Q3 marked the revenue bottom at $211M, with Q4 guidance up to $255M, indicating sequential growth.

• Channel inventory digestion impacted Q4, but demand is returning, especially expected to strengthen in the second half of the fiscal year.

• Run-rate business and small deals are improving, signaling a market rebound.

• Competitive disruption from Cisco and Juniper M&A is creating opportunities to gain share.

• Europe is showing early signs of recovery, with expectations for gradual improvement.

New go-to-market strategies and business models

• Two new routes to market—MSP and service provider (SP)—were launched this fiscal year and are expected to become significant in 2025 and 2026.

• The MSP program is consumption-based, reducing transaction costs and balance sheet risk for partners.

• SP model is subscription-based, tailored for large providers not set up for consumption billing.

• 25 MSP partners signed this year, with plans to add 25 annually; each could generate $2M–$5M per year at scale.

• These models are additive, targeting new customers and resellers, not cannibalizing existing business.

Technology and upgrade cycle drivers

• Cloud migration is now mainstream, driving architectural changes and technology upgrades.

• Wi-Fi 6E/7, Multi-Gig edge switching, PoE++ power, and unified cloud management are fueling a solution-based upgrade cycle.

• Integration of networking, security, and cloud is accelerating, especially as SASE and cloud-based management gain traction.