Extreme Networks shares fell slightly after missing on its fiscal second-quarter earnings and seeing a tumble in product sales. Revenues overall fell 9.5% to $242.1m but gross margin rose to 61% from 60%. Operating margin rose on a non-GAAP basis as well, to 10.2% from 9%. But net income missed despite improving to $16m from $13.1m, a 22% gain.
"Our final Q2 results are highlighted by 3% sequential revenue growth and record non-GAAP gross margins, driven by a third consecutive quarter of improvement in product gross margin," says CFO Remi Thomas.
Revenue breakout: Product, $165.8m (down 13%); Service and subscription, $76.3m (down 1%).
Net cash from operations was $38m (up from a year-ago $22.1m), and free cash flow was $33m (up from $17.9m).
Extreme reiterated its previous outlook for fiscal Q3 and expects double-digit revenue growth and margin expansion in the second half due to increased demand.
