Q1 FY2027
Filed Oct 28, 2026Revenue climbs 10% on seven straight quarters of double-digit growth; SaaS ARR growth up 22%.
Revenue grew 10% year-over-year, SaaS ARR grew 22%, and both GAAP and non-GAAP profitability expanded materially. The company also guided to $ 345.8 million to $ 350.8 million of revenue for FQ2'27 and $ 1,402.3 million to $ 1,412.3 million for FY'27.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total net revenueGAAP | $341.1M | – | 10% |
| Product revenueGAAP | $218.3M | – | $ 24.3 million |
| Subscription and support revenueGAAP | $122.8M | – | $ 6.6 million |
| SaaS ARRother | $264.7M | – | 22% |
| Gross profitGAAP | $211.9M | – | – |
| Gross marginGAAP | 62.1% | – | 1.5 % |
| Gross profitnon-GAAP | $ 213,495 | – | – |
| Gross marginnon-GAAP | 62.6% | – | 1.3 % |
| Operating incomeGAAP | $23.09M | – | – |
| Operating marginGAAP | 6.8% | – | 3.1 % |
| Operating incomenon-GAAP | $59.45M | – | – |
| Operating marginnon-GAAP | 17.4% | – | 4.1 % |
| Research and development expenseGAAP | 57,820 | – | – |
| Sales and marketing expenseGAAP | 92,026 | – | – |
| General and administrative expenseGAAP | 31,501 | – | – |
| Restructuring and related chargesGAAP | 7,366 | – | – |
| Net incomeGAAP | $16M | – | 185% |
| Net incomenon-GAAP | $44.5M | – | 48% |
| Diluted earnings per shareGAAP | $0.12 | – | 200% |
| Diluted earnings per sharenon-GAAP | $0.33 | – | 50% |
| Adjusted EBITDAnon-GAAP | $65.6M | – | 47% |
| Cash flow provided by (used in) operationsGAAP | $45.4M | – | – |
| Capital expenditures for property, equipment and capitalized software development costsGAAP | (6.8 ) | – | – |
| Free cash flownon-GAAP | $38.6M | – | – |
| Cash and cash equivalentsGAAP | $244.5M | an increase of $32.7 million from the end of Q4 2026 | an increase of $35.5 million from the end of Q1 in the prior year |
| Gross debtother | $200M | – | – |
| Net cashnon-GAAP | $44.5M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| ProductProduct revenue was reported in the fiscal first-quarter results table. | $218.3M | – | $ 24.3 million |
| Subscription and supportSaaS ARR grew 22% year-over-year, based on strong customer adoption of Extreme Platform ONE. | $122.8M | – | $ 6.6 million |
FQ2'27 ending December 31, 2026; FY'27 ending June 30, 2027 outlook
- RevenueFQ2'27 GAAP and non-GAAP total net revenue: $ 345.8 million - $ 350.8 million; FY'27 GAAP and non-GAAP total net revenue: $ 1,402.3 million - $ 1,412.3 million
- Gross marginFQ2'27 GAAP: 61.8% - 62.3%; FQ2'27 non-GAAP: 62.2% - 62.7%; FY'27 GAAP: 61.9% - 62.4%; FY'27 non-GAAP: 62.3% - 62.8%
- NoteFQ2'27 GAAP operating margin: 9.1% - 10.2%
- NoteFQ2'27 non-GAAP operating margin: 16.4% - 17.4%
- NoteFQ2'27 GAAP earnings per share: $0.19 - $0.22
- NoteFQ2'27 non-GAAP earnings per share: $0.32 - $0.34
- NoteFY'27 GAAP operating margin: 9.2% - 9.7%
- NoteFY'27 non-GAAP operating margin: 17.2% - 17.6%
- NoteFY'27 GAAP earnings per share: $0.77 - $0.83
- NoteFY'27 non-GAAP earnings per share: $1.35 - $1.39
Capital returns
- Share repurchases of $25.0 million during the quarter equivalent to 844,131 shares at an average price of $29.62 per share.
- Repurchase of common stock was (25,000 ) in the condensed consolidated statements of cash flows.
What drove it
- Management attributed 22% SaaS ARR growth to strong customer adoption of Extreme Platform ONE.
- Platform ONE bookings were over 50% of subscription bookings and up 5x from the prior year.
- The company cited its enterprise fabric solution, Wi-Fi 7 offerings, and agentic AI management platform as marketplace advantages.
- Early engagement with Agent ONE Coworker was roughly 10x that of Extreme's first-generation conversational AI agent.
- Management said supply chain actions enabled more measured, targeted pricing actions while offsetting incremental supply chain costs.
Concerns
- Restructuring and related charges were 7,366, versus 371 in the prior-year period.
- Inventory increased to 100,028 at September 30, 2026 from 69,950 at June 30, 2026.
- The company identified risks including variability in demand, sales cycles and pipeline conversion, competition, trade policies, supply chain challenges, component shortages, AI adoption and regulation, cybersecurity, and litigation.
- FY'27 guidance includes restructuring and related charges, litigation charges, system transition costs, other non-recurring costs, and debt refinancing charges in the GAAP-to-non-GAAP reconciliation.
What to watch
- Progress toward FQ2'27 total net revenue guidance of $ 345.8 million - $ 350.8 million.
- Whether SaaS ARR growth and Platform ONE subscription bookings continue to support the company's expectation to sustain this level of growth through the year.
- Delivery of FQ2'27 non-GAAP operating margin guidance of 16.4% - 17.4%.
- Execution on Exchange zones, which are planned for general availability in the first half of CY27.
- Cash generation and the evolution of inventories, which were 100,028 at September 30, 2026.
Balance sheet and cash flow
- Q1 ending cash balance was $244.5 million.
- Gross debt was $ 200.0 million and net cash was $44.5 million at September 30, 2026.
- Cash flow provided by operations was $ 45.4 million, compared with $ (14.0 million) in the prior-year period.
- Total free cash flow was $ 38.6 million, compared with $ (20.9 million) in the prior-year period.
- Inventories were 100,028 at September 30, 2026, compared with 69,950 at June 30, 2026.
- Borrowings under revolving facility were 200,000 and payments on debt obligations were (165,000 ).
Analysis
Extreme opened fiscal 2027 with $ 341.1 million of GAAP revenue, up 10% year-over-year from $ 310.2 million. Product revenue was $ 218.3 million versus $ 194.0 million, while subscription and support revenue was $ 122.8 million versus $ 116.2 million. SaaS ARR reached $264.7 million and grew 22% year-over-year. Management linked ARR growth to Extreme Platform ONE adoption, noting that Platform ONE bookings exceeded 50% of subscription bookings and were up 5x from the prior year.
Profitability expanded across both reported frameworks. GAAP gross margin increased to 62.1% from 60.6%, while non-GAAP gross margin increased to 62.6% from 61.3%. GAAP operating margin was 6.8% compared with 3.6%, and non-GAAP operating margin was 17.4% compared with 13.3%. GAAP net income rose to $16.0 million from $ 5.6 million, while non-GAAP net income rose to $44.5 million from $ 30.1 million. Adjusted EBITDA was $65.6 million, up 47% year-over-year.
Cash generation improved materially. Cash flow provided by operations was $ 45.4 million compared with cash used in operations of $ (14.0 million) in the prior-year period, and non-GAAP free cash flow was $ 38.6 million compared with $ (20.9 million). Cash and cash equivalents ended at $244.5 million, gross debt was $ 200.0 million, and net cash was $44.5 million. The company repurchased $25.0 million of shares, equivalent to 844,131 shares at an average price of $29.62 per share. Inventory increased to 100,028 from 69,950 at the preceding fiscal year-end.
The outlook calls for FQ2'27 revenue of $ 345.8 million to $ 350.8 million, with GAAP operating margin of 9.1% to 10.2% and non-GAAP operating margin of 16.4% to 17.4%. For FY'27, Extreme targets revenue of $ 1,402.3 million to $ 1,412.3 million, GAAP earnings per share of $0.77 to $0.83, and non-GAAP earnings per share of $1.35 to $1.39. The guide reflects management's stated confidence in sustaining its growth level, while the reconciliation identifies share-based compensation, restructuring, litigation, system transition, other non-recurring, debt refinancing, and tax adjustments as relevant differences between GAAP and non-GAAP outcomes.
Management, verbatim
Extreme delivered its seventh consecutive quarter of double-digit year-over-year growth in Q1. Demand for Extreme Platform ONE continues to accelerate, with strong quarter-over-quarter subscription gains.
Ed Meyercord, President and CEO of Extreme
Based on the strength of our business and visibility of demand for our solutions, we are confident in calling 10% growth next quarter and for the rest of the year.
Ed Meyercord, President and CEO of Extreme
Adjusted EBITDA grew 47% year-over-year fueling 50% non-GAAP EPS growth in Q1. These trends are adding to our confidence in the growth of cash flow and earnings going forward.
Kevin Rhodes, Executive Vice President and Chief Financial Officer
Not in the filing
stated, not guessed- Previous-release outlook was not provided; therefore, no comparison of reported results with prior guidance is available.
- Dividend information was not reported.
- A quarterly tax-rate metric was not reported.
- Prior-quarter revenue, gross margin, operating margin, net income, EPS, adjusted EBITDA, operating cash flow, and free cash flow were not reported.
- A percentage year-over-year change for product revenue and subscription and support revenue was not reported.
- Standalone reportable business-segment revenue was not reported; the release reported product and subscription and support revenue categories.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.