Extreme Networks Inc. [NASDAQ: EXTR], a technology company that provides cloud-driven networking solutions has announced today the financial results of its first-quarter ending September 30, 2020. The company also has announced that it has made a partial repayment of its revolving loan facility. It expects to carry a more detailed full review of its financial status on October 28, 2020.
Current Earnings Outlook
Extreme Networks is basing its report on the preliminary review and expects to report an impressive $233 to $236 million as revenue. This figure will be about a 9% increase as compared to the last quarter in which the company reported $215.5 million. Following these projections, Extreme expects about ($0.11) to ($0.08) GAAP loss per share as well as $0.05 to $0.008 of a non-GAAP EPS. This is a bit better than the previous quarter where the company reported $220 to $230 million, ($0.14) to ($0.11) of GAAP loss per share and a Non-GAAP EPS of $0.01 to $0.04. Extreme expects these figures to improve based on their preliminary review.
Partial Repayment of Revolving Credit Facility
Extreme made profound steps after it reduced its credit by a massive $20 million. It had about $55 million draws from its revolving credit facility as of March 24, 2020. The company is also servicing a $361 million Term Loan A. This loan is set to mature in 2024. With the payments done in this quarter, Extreme has managed to reduce its net debt by about $24 million and still has managed to maintain liquidity and operate efficiently. It still has another revolving credit of $35 million and cash on cash equivalents of about $193 million bringing its total debt to approximately $203 million.
Extreme Networks President and CEO Ed Meyercord noted that their customer-oriented services that include the simple to use ExtremeCloud IQ platform, Wi-Fi applications and edge switching as well as the company’s end-to-end fabric technology has set them apart from their competitors. These services have been their differentiating factor even as the market was facing a serious challenge in the just-ended financial year. He further said that they are pleased with how the Extreme team has executed their mandate allowing the company the second quarter of sequential revenue that will be higher than the Non-GAAP revenue.
Remi Thomas, Extreme Networks Chief Financial Officer expressed his joy in the manner in which the company has balanced cost and expense giving the company solid operating leverage that has as a result enabled a strong cash flow. He expects the trend to go on as they look forward to the October review.