EXTREME NETWORKS INC

Previous wording

This Quarterly Report on Form 10-Q for the second quarter ended December 31, 2024 (this “Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including in particular, our expectations regarding market demands, customer requirements and the general economic environment, future results of operations, and other statements that include words such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” and similar expressions. These forward-looking statements involve risks and uncertainties. We caution investors that actual results may differ materially from those projected in the forward-looking statements as a result of certain risk factors identified in the section entitled “Risk Factors” in this Report, our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, and other filings we have made with the Securities and Exchange Commission. These risk factors include, but are not limited to: adverse general economic conditions; fluctuations in demand for our products and services; a highly competitive business environment for network switching equipment; our effectiveness in controlling expenses; the possibility that we might experience delays in the development or introduction of new technology and products; customer response to our new technology and products; fluctuations in the global economy, including as a result of political, social, economic, currency and regulatory factors; geopolitical tensions and conflicts; risks related to pending or future litigation and a dependency on third parties for certain components and for the manufacturing of our products.

Current wording

This Quarterly Report on Form 10-Q for the third quarter ended March 31, 2025 (this “Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including in particular, our expectations regarding market demands, customer requirements and the general economic environment, future results of operations, and other statements that include words such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” and similar expressions. These forward-looking statements involve risks and uncertainties. We caution investors that actual results may differ materially from those projected in the forward-looking statements as a result of certain risk factors identified in the section entitled “Risk Factors” in this Report, our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, and other filings we have made with the Securities and Exchange Commission. These risk factors include, but are not limited to: adverse general economic conditions; fluctuations in demand for our products and services; a highly competitive business environment for network switching equipment; our effectiveness in controlling expenses; the possibility that we might experience delays in the development or introduction of new technology and products; customer response to our new technology and products; fluctuations in the global economy, including as a result of political, social, economic, and regulatory factors, currency fluctuations, and tariff and trade policies; geopolitical tensions and conflicts; risks related to pending or future litigation and a dependency on third parties for certain components and for the manufacturing of our products.

Previous wording

Extreme Networks, Inc. (“Extreme” or “Company”) is a leading provider of cloud networking with integrated security and Artificial Intelligence (“AI”) solutions along with industry leading services and support. Extreme designs, develops, and manufactures wired, wireless, and software-defined wide area-network (“SD-WAN”) infrastructure equipment, software and cloud-based network management solutions and security and AI software solutions. The Company’s Platform ONETM solution, announced in December 2024, is a technology platform that reduces the complexity for enterprises by seamlessly integrating networking, security and AI solutions into a single platform. AI-powered automation includes conversational, interactive and autonomous AI agents—to assist, advise and accelerate the productivity of networking, security and business teams—reducing the time to complete complex.

Current wording

Extreme Networks, Inc. (“Extreme” or “Company”) is a leading provider of cloud networking with integrated security and Artificial Intelligence (“AI”) solutions along with industry leading services and support. Extreme designs, develops, and manufactures wired, wireless, and software-defined wide area-network (“SD-WAN”) infrastructure equipment, software and cloud-based network management solutions and security and AI software solutions. The Company’s Platform ONETM solution, announced in December 2024, is a technology platform that reduces the complexity for enterprises by seamlessly integrating networking, security and AI solutions into a single platform. AI-powered automation includes conversational, interactive and autonomous AI agents—to assist, advise and accelerate the productivity of networking, security and business teams—reducing the time to complete complex tasks.

Previous wording

Enterprises across every industry are going through unprecedented changes, such as leading digital initiatives, migrating their workloads to cloud-based environments, modernizing applications, finding new ways to leverage generative AI (“GenAI”) technology, and adapting to a distributed workforce. To accomplish this, they are adopting new Information Technology (“IT”) delivery models and applications that require fundamental network alterations and enhancements spanning from the access edge to the data center. As networks become more complex and more distributed in nature, we believe IT teams in every industry will need more control and better insights than ever before to deliver secure, distributed connectivity and comprehensive centralized visibility. Networking is mission critical and touches all elements of how services are delivered to customers, employees, students, and patients. Managing networks from a single platform that integrates AI networking and security is critical to help reduce complexity and minimize the time it takes to complete tasks.

Current wording

Enterprises across every industry are going through unprecedented changes, such as digital transformation initiatives, migrating their workloads to cloud-based environments, modernizing applications, finding new ways to leverage generative AI (“GenAI”) technology, and adapting to a distributed workforce. To accomplish this, they are adopting new Information Technology (“IT”) delivery models and applications that require fundamental network alterations and enhancements spanning from the access edge to the data center. As networks become more complex and more distributed in nature, we believe IT teams in every industry will need more control and better insights than ever before to deliver secure, distributed connectivity and comprehensive centralized visibility. Networking is mission critical and touches all elements of how services are delivered to customers, employees, students, and patients. Managing networks from a single platform that integrates AI networking and security is critical to help reduce complexity and minimize the time it takes to complete tasks.

Previous wording

We believe that the network has never been more vital than it is today. As administrators grapple with more data, coming from more places, more connected devices, and more Software-as-a-Service (“SaaS”) based applications, the cloud is fundamental to managing and maintaining a modern network. Traditional network offerings are not well-suited to fulfill enterprise expectations for rapid delivery of new services, more flexible business models, real-time response, and massive scalability.

Current wording

We believe that the network has never been more vital than it is today. As administrators grapple with more data, coming from more places, more connected devices, and more Software-as-a-Service (“SaaS”) based applications, the cloud is fundamental to managing and maintaining a modern network. Traditional network offerings are not well-suited to fulfill enterprise expectations for rapid delivery of new services, more flexible business models, real-time response, and massive scalability. We expect Platform ONE’s new capabilities to deliver significant productivity gains for IT teams by streamlining network design, deployment, management, and commercial operations.

Previous wording

Additional AI Capabilities. The ExtremeCloud IQ CoPilot license tier is an add-on to the Pilot license tier. It includes all the capabilities of the ExtremeCloud Pilot and Navigator license tiers. CoPilot serves as more than a centralized point of management with AIOps and other enhancements to network management and automation. It is a trusted digital advisor for your Extreme cloud-managed Wi-Fi networks that proactively reduces risk and provides the fastest time to the best experience. This includes advanced anomaly detection and capabilities to ensure the user experience of wireless and wired devices.

Current wording

Additional AI Capabilities in ExtremeCloud IQ. The ExtremeCloud IQ CoPilot license tier is an add-on to the Pilot license tier. It includes all the capabilities of the ExtremeCloud Pilot and Navigator license tiers. CoPilot serves as more than a centralized point of management with AIOps and other enhancements to network management and automation. It is a trusted digital advisor for your Extreme cloud-managed Wi-Fi networks that proactively reduces risk and provides the fastest time to the best experience. This includes advanced anomaly detection and capabilities to ensure the user experience of wireless and wired devices.

Previous wording

Provide a new enterprise connectivity platform - Extreme Platform ONE. Expected in the second half of calendar year 2025, this will integrate networking and security with AI into one simplified experience so organizations can manage and secure the network faster and more efficiently than ever. Extreme Platform ONE will provide:

Current wording

Provide a new enterprise connectivity platform - Extreme Platform ONE. In February 2025, Extreme launched what we believe is the industry's leading multi-tenant architecture and consumption-based billing model for managed service providers, with poolable licensing, which creates significant benefits and cost savings for partners and customers alike. In the second half of the calendar year 2025, Extreme will integrate networking and security with AI into one simplified experience so organizations can manage and secure the network faster and more efficiently than ever into Platform ONE for end customers that will provide:

Previous wording

There are several ways customers will be able to leverage our AI in the future as part of Extreme Platform ONE:

Current wording

AI capabilities in Extreme Platform ONE. There are several ways customers will be able to leverage our AI in the future as part of Extreme Platform ONE:

Previous wording

During the second quarter of fiscal 2025, we achieved the following results:

Current wording

During the third quarter of fiscal 2025, we achieved the following results:

Previous wording

Total gross margin of 62.7% of net revenues compared to 61.9% of net revenues in the second quarter of fiscal 2024.

Current wording

Total gross margin of 61.7% of net revenues compared to 56.8% of net revenues in the third quarter of fiscal 2024.

Previous wording

During the first six months of fiscal 2025, we reflected the following results:

Current wording

During the first nine months of fiscal 2025, we reflected the following results:

Previous wording

Cash flows provided by operating activities of $40.1 million compared to $109.9 million in the six months ended December 31, 2023.

Current wording

Cash flows provided by operating activities of $70.1 million compared to $40.0 million in the nine months ended March 31, 2024.

Previous wording

Cash and cash equivalents of $170.3 million as of December 31, 2024 compared to $156.7 million as of June 30, 2024.

Current wording

Cash and cash equivalents of $185.5 million as of March 31, 2025 compared to $156.7 million as of June 30, 2024.

Previous wording

Product revenues decreased $14.4 million or 7.7% for the three months ended December 31, 2024 as compared to the corresponding period in fiscal 2024. Product revenues decreased $105.5 million or 24.0% for the six months ended December 31, 2024 as compared to the corresponding period in fiscal 2024. The decrease in product revenues was primarily driven by higher shipments in the corresponding period in fiscal 2024 due to the release of product backlog resulting from the easing of supply chain constraints.

Current wording

Product revenues increased $71.6 million or 67.3% for the three months ended March 31, 2025 as compared to the corresponding period in fiscal 2024. The increase in product revenues was primarily driven by higher shipments than in the corresponding period in fiscal 2024 which was impacted by elongated sales cycles to end customers and lower channel sell-through caused by macroeconomic conditions. Product revenues decreased $33.9 million or 6.2% for the nine months ended March 31, 2025 as compared to the corresponding period in fiscal 2024. The decrease in product revenues was primarily driven by higher shipments in the corresponding period in fiscal 2024 due to the release of product backlog resulting from the easing of supply chain constraints.

Previous wording

Product gross profit decreased $5.5 million or 5.2% for the three months ended December 31, 2024 as compared to the corresponding period in fiscal 2024. The decrease in product gross profit was primarily due to lower product revenues and higher distribution costs, partially offset by lower reserves for excess and obsolete inventories.

Current wording

Product gross profit increased $56.4 million or 123.7% for the three months ended March 31, 2025 as compared to the corresponding period in fiscal 2024. The increase in product gross profit was primarily due to higher product revenues and lower reserves for excess and obsolete inventories, partially offset by higher overhead and distribution costs.

Previous wording

Product gross profit decreased 57.5 million or 23.0% for the six months ended December 31, 2024 as compared to the corresponding period in fiscal 2024. The decrease in product gross profit was primarily due to lower product revenues, partially offset by lower reserves for excess and obsolete inventory and lower distribution costs.

Current wording

Product gross profit decreased $1.1 million or 0.4% for the nine months ended March 31, 2025 as compared to the corresponding period in fiscal 2024. The decrease in product gross profit was primarily due to lower product revenues and increased overhead costs, partially offset by lower reserves for excess and obsolete inventory.

Previous wording

Subscription and support gross profit increased $5.9 million or 4.0% for the six months ended December 31, 2024 as compared to the corresponding period in fiscal 2024. The increase in subscription and support gross profit was primarily due to increased subscription revenues and lower professional fees offset by higher subscription costs.

Current wording

Subscription and support gross profit increased $5.0 million or 2.2% for the nine months ended March 31, 2025 as compared to the corresponding period in fiscal 2024. The increase in subscription and support gross profit was primarily due to increased subscription revenues, partially offset by higher subscription hosting costs.

Previous wording

Research and development expenses increased by $2.1 million or 3.9% for the three months ended December 31, 2024 as compared to the corresponding period in fiscal 2024. The increase in research and development expenses was primarily due to a $4.6 million increase in personnel costs due to higher headcount and higher compensation and benefits costs and a $0.6 million increase in other expenses primarily consisting of recruiting fees, partially offset by a $3.1 million decrease in contractor costs.

Current wording

Research and development expenses increased by $1.1 million or 2.1% for the three months ended March 31, 2025 as compared to the corresponding period in fiscal 2024. The increase in research and development expenses was primarily due to a $1.1 million increase in personnel costs due to higher headcount and higher compensation and benefits costs, a $0.7 million increase in engineering project costs, and a $0.5 million increase in other expenses primarily consisting of software costs, partially offset by a $1.2 million decrease in contractor costs.

Previous wording

Research and development expenses decreased by $1.5 million or 1.4% for the six months ended December 31, 2024 as compared to the corresponding period in fiscal 2024. The decrease in research and development expenses was primarily due to a $5.8 million decrease in contractor costs, partially offset by a $1.9 million increase in personnel costs due to higher headcount and higher compensation and benefits costs, a $1.4 million increase in information technology and facility related expenses, and a $1.0 million increase in other expenses primarily consisting of recruiting and professional fees.

Current wording

Research and development expenses decreased by $0.4 million or 0.2% for the nine months ended March 31, 2025 as compared to the corresponding period in fiscal 2024. The decrease in research and development expenses was primarily due to a $7.0 million decrease in contractor costs, partially offset by a $3.0 million increase in personnel costs due to higher headcount and higher compensation and benefits costs, a $1.6 million increase in information and technology and facilities related costs, and a $2.0 million increase in other expenses primarily consisting of recruiting and professional fees.

Previous wording

Sales and marketing expenses decreased by $5.2 million or 6.1% for the three months ended December 31, 2024 as compared to the corresponding period in fiscal 2024. The decrease in sales and marketing expenses was primarily due to a $3.2 million decrease in personnel costs primarily due to lower headcount, a $0.4 million decrease in contractor costs and professional fees and a $1.6 million decrease in other expenses primarily related to travel and other marketing event costs.

Current wording

Sales and marketing expenses decreased by $7.9 million or 9.0% for the three months ended March 31, 2025 as compared to the corresponding period in fiscal 2024. The decrease in sales and marketing expenses was primarily due to a $4.3 million decrease in personnel costs primarily due to lower headcount, a $2.4 million decrease in other expenses primarily related to marketing expenses for trade shows and information technology and facilities expenses, and a $1.2 million decrease in professional fees.

Previous wording

Sales and marketing expenses decreased by $15.7 million or 8.9% for the six months ended December 31, 2024 as compared to the corresponding period in fiscal 2024. The decrease in sales and marketing expenses was primarily due to a $12.4 million decrease in personnel costs due to lower headcount, a $1.5 million decrease in contractor costs and professional fees, a $1.3 million decrease in travel expenses and a $0.5 million decrease in other expenses.

Current wording

Sales and marketing expenses decreased by $23.7 million or 8.9% for the nine months ended March 31, 2025 as compared to the corresponding period in fiscal 2024. The decrease in sales and marketing expenses was primarily due to a $16.7 million decrease in personnel costs due to lower headcount, a $2.7 million decrease in information technology and facilities costs, a $2.8 million decrease in contractor costs and professional services costs, and a $1.5 million decrease in travel expenses.

Previous wording

General and administrative expenses increased by $0.7 million or 2.7% for the three months ended December 31, 2024 as compared to the corresponding period in fiscal 2024. The increase in general and administrative expenses was primarily due to a $3.0 million increase in system transition costs, a $2.4 million increase in personnel costs, partially offset by a $3.1 million decrease in professional fees, a $1.1 million decrease in facilities related expenses, and a $0.5 million increase in legal costs related to litigation matters, net of insurance recoveries.

Current wording

General and administrative expenses increased by $4.3 million or 17.1% for the three months ended March 31, 2025 as compared to the corresponding period in fiscal 2024. The increase in general and administrative expenses was primarily due to a $6.7 million increase in system transition costs, partially offset by a $1.5 million decrease in legal costs related to litigation matters, net of insurance recoveries, and a $0.9 million decrease in professional fees.

Previous wording

General and administrative expenses increased by $13.4 million or 27.2% for the six months ended December 31, 2024 as compared to the corresponding period in fiscal 2024. The increase in general and administrative expenses was primarily due to an $8.8 million increase in legal costs related to litigation matters, net of insurance recoveries, a $7.8 million increase in system transition costs, partially offset by a $2.8 million decrease in professional fees, and a $0.4 million decrease in other expenses primarily facilities related expenses.

Current wording

General and administrative expenses increased by $17.7 million or 23.8% for the nine months ended March 31, 2025 as compared to the corresponding period in fiscal 2024. The increase in general and administrative expenses was primarily due to a $14.5 million increase in system transition costs and a $7.3 million increase in legal costs related to litigation matters, net of insurance recoveries, partially offset by a $3.7 million decrease in professional fees, and a $0.4 million decrease in other costs related to recruiting fees and advertising.

Previous wording

For the three and six months ended December 31, 2024, we recorded restructuring and related charges of $1.0 million and $2.3 million, respectively, which primarily consisted of additional severance and benefits costs and professional services fees associated with the reduction-in-force actions related to the “Q2 2024 Plan”, and “Q3 2024 Plan”, each as described in Note 13, Restructuring and Related Charges, in Notes to the Condensed Consolidated Financial Statements included elsewhere in this Report.

Current wording

For the three and nine months ended March 31, 2025, we recorded restructuring benefit of $0.4 million and restructuring charges of $1.9 million, respectively, which primarily consisted of additions to severance and benefits costs and professional services fees as well as reversals of previously established accruals related to unused severance benefits associated with the reduction-in-force actions related to the “Q2 2024 Plan”, and “Q3 2024 Plan”, each as described in Note 13, Restructuring and Related Charges, in Notes to the Condensed Consolidated Financial Statements included elsewhere in this Report.

Previous wording

For the three and six months ended December 31, 2023, we recorded restructuring and related charges of $9.2 million and $11.9 million, which primarily consisted of severance and benefits costs associated with the reduction-in-force actions related to the “Q1 2024 Plan” and the “Q2 2024 Plan”.

Current wording

For the three and nine months ended March 31, 2024, we recorded restructuring and related charges of $14.4 million and $26.3 million, which primarily consisted of severance and benefits costs and professional services fees associated with the reduction-in-force actions related to the “Q1 2024 Plan”, “Q2 2024 Plan”, and “Q3 2024 Plan”.

Previous wording

During the six months ended December 31, 2024 and 2023, we recorded $1.0 million of operating expenses for each period related to the amortization of intangible assets.

Current wording

During the nine months ended March 31, 2025 and 2024, we recorded $1.5 million of operating expenses for each period related to the amortization of intangible assets.

Previous wording

During the three months ended December 31, 2024 and 2023, we recorded $0.8 million and $1.4 million, respectively, in interest income. The decrease in interest income was primarily related to the lower interest earned on our cash accounts due to lower interest rates as well as lower cash and cash equivalents balances held during the second quarter in fiscal 2025.

Current wording

During the three months ended March 31, 2025 and 2024, we recorded $1.0 million and $1.2 million, respectively, in interest income. The decrease in interest income was primarily related to the lower interest earned on our cash accounts due to lower cash and cash equivalents balances held during the third quarter in fiscal 2025.

Previous wording

During the six months ended December 31, 2024 and 2023, we recorded $1.7 million and $2.7 million, respectively, in interest income. The decrease in interest income is primarily related to the lower interest earned on our cash accounts due to lower interest rates as well as lower cash and cash equivalents balances held during the first half of fiscal 2025.

Current wording

During the nine months ended March 31, 2025 and 2024, we recorded $2.7 million and $3.9 million, respectively, in interest income. The decrease in interest income is primarily related to the lower interest earned on our cash accounts due to lower cash and cash equivalents balances held during the first three quarters of fiscal 2025.

Previous wording

During the three months ended December 31, 2024 and 2023, we recorded $4.2 million and $4.3 million, respectively, in interest expense related to the debt obligations held under our Amended Credit Agreement. The decrease in interest expense was primarily due to lower average rates under the Amended Credit Agreement.

Current wording

During the three months ended March 31, 2025 and 2024, we recorded $3.8 million and $4.2 million, respectively, in interest expense related to the debt obligations held under our Amended Credit Agreement. The decrease in interest expense was primarily due to lower average rates under the Amended Credit Agreement.

Previous wording

During each of the six months ended December 31, 2024 and 2023, we recorded $8.6 million in interest expense related to the debt obligations held under the Amended Credit Agreement.

Current wording

During the nine months ended March 31, 2025 and 2024, we recorded $12.4 million and $12.8 million, respectively, in interest expense related to the debt obligations held under the Amended Credit Agreement. The decrease in interest expense was primarily due to lower average rates under the Amended Credit Agreement.

Previous wording

During the three months ended December 31, 2024 and 2023, we recorded other income, net of $0.7 million and other expense, net of $0.4 million, respectively. The other income (expense), net for each period primarily related to the foreign exchange impact from the revaluation of certain assets and liabilities denominated in foreign currencies into U.S. Dollars.

Current wording

During the three months ended March 31, 2025 and 2024, we recorded other expense, net of $0.4 million and other income, net of $0.4 million, respectively. The other income (expense), net for each period primarily related to the foreign exchange impact from the revaluation of certain assets and liabilities denominated in foreign currencies into U.S. Dollars.

Previous wording

During the six months ended December 31, 2024 and 2023, we recorded other expense, net of less than $0.1 million and other income, net of less than $0.1 million, respectively. The other income (expense), net for each period primarily related to the foreign exchange impact from the revaluation of certain assets and liabilities denominated in foreign currencies into U.S. Dollars.

Current wording

During the nine months ended March 31, 2025 and 2024, we recorded other expense, net of $0.4 million and other income, net of $0.4 million, respectively. The other income (expense), net for each period primarily related to the foreign exchange impact from the revaluation of certain assets and liabilities denominated in foreign currencies into U.S. Dollars.

Previous wording

For the six months ended December 31, 2024 and 2023, we recorded income tax provision of $4.1 million and $7.6 million, respectively.

Current wording

For the three months ended March 31, 2025 and 2024, we recorded income tax provision of $3.7 million and an income tax benefit of $0.6 million, respectively.

Previous wording

For the three months ended December 31, 2024 and 2023, we recorded income tax provision of $2.6 million and $3.1 million, respectively.

Current wording

For the nine months ended March 31, 2025 and 2024, we recorded income tax provision of $7.8 million and $7.0 million, respectively.

Previous wording

The income tax provisions for the three and six months ended December 31, 2024 and 2023 consisted of (1) taxes on the income of our foreign subsidiaries, (2) state taxes in jurisdictions where we have no remaining state net operating losses, (3) foreign withholding taxes, and (4) tax expense associated with the establishment of a U.S. deferred tax liability for amortizable goodwill resulting from the acquisition of Enterasys Networks, Inc., the WLAN business from Zebra Technologies Corporation, the Campus Fabric Business from Avaya LLC and the Data Center Business from Brocade Communications System. In addition, the income tax provision for the three months ended December 31, 2024 includes U.S. federal income tax expense of $1.4 million and $0.2 million, respectively.

Current wording

The income tax provisions for the three and nine months ended March 31, 2025 and 2024 consisted of (1) taxes on the income of our foreign subsidiaries, (2) state taxes in jurisdictions where we have no remaining state net operating losses, (3) foreign withholding taxes, and (4) tax expense associated with the establishment of a U.S. deferred tax liability for amortizable goodwill resulting from the acquisition of Enterasys Networks, Inc., the WLAN business from Zebra Technologies Corporation, the Campus Fabric Business from Avaya LLC and the Data Center Business from Brocade Communications System. In addition, the income tax provision for each of the three and nine months ended March 31, 2025 includes U.S. federal income tax expense of $1.5 million.

Previous wording

As of December 31, 2024, our principal sources of liquidity consisted of cash and cash equivalents of $170.3 million, accounts receivable, net of $117.6 million, and available borrowings under our 2023 Revolving Facility of $135.8 million. Our principal uses of cash include the purchase of finished goods inventory from our contract manufacturers, payroll and other operating expenses related to the development and marketing of our products, purchases of property and equipment, and repayments of debt and related interest and share repurchases. We believe that our $170.3 million of cash and cash equivalents at December 31, 2024, our cash flow from operations and the availability of borrowings from the 2023 Revolving Facility will be sufficient to fund our planned operations for at least the next 12 months and into the foreseeable future.

Current wording

As of March 31, 2025, our principal sources of liquidity consisted of cash and cash equivalents of $185.5 million, accounts receivable, net of $99.5 million, and available borrowings under our 2023 Revolving Facility of $135.8 million. Our principal uses of cash include the purchase of finished goods inventory from our contract manufacturers, payroll and other operating expenses related to the development and marketing of our products, purchases of property and equipment, and repayments of debt and related interest and share repurchases. We believe that our $185.5 million of cash and cash equivalents at March 31, 2025, our cash flow from operations and the availability of borrowings from the 2023 Revolving Facility will be sufficient to fund our planned operations for at least the next 12 months and into the foreseeable future.

Previous wording

On May 18, 2022, our Board of Directors (the “Board”) authorized management to repurchase up to $200.0 million shares of our common stock over a three-year period commencing July 1, 2022 (as amended, the “2022 Repurchase Program”). A maximum of $25.0 million may be repurchased in any quarter. On November 17, 2022, the Board increased the authorization to repurchase in any quarter from $25.0 million per quarter to $50.0 million per quarter. Purchases may be made from time to time in the open market or pursuant to 10b5-1 plan. The manner, timing and amount of any future purchases will be determined by our management based on their evaluation of market conditions, stock price, Extreme’s ongoing determination that it is the best use of available cash and other factors. The 2022 Repurchase Program does not obligate us to acquire any shares of its common stock, may be suspended or terminated at any time without prior notice and will be subject to regulatory considerations. During the three and six months ended December 31, 2024, the Company did not repurchase any shares of its common stock. As of December 31, 2024, the Company had $50.3 million available for share repurchases under the 2022 Repurchase Program.

Current wording

On February 18, 2025, we announced that our Board had authorized management to repurchase up to $200 million shares of the Company's common stock over a three-year period, commencing July 1, 2025 (the “2025 Repurchase Program”). As of March 31, 2025, we had approximately $37.3 million remaining from the $200.0 million share repurchase authorization approved in May 2022 (the “2022 Repurchase Program”), which expires on June 30, 2025. Under these repurchase programs, purchases may be made from time to time in the open market or pursuant to a 10b5-1 plan. The manner, timing and amount of any future purchases will be determined by our management based on their evaluation of market conditions, stock price, Extreme’s ongoing determination that it is the best use of available cash and other factors. Neither of the 2022 Repurchase Program or the 2025 Repurchase Program obligate us to acquire any shares of our common stock, and they may be suspended or terminated at any time without prior notice and will be subject to regulatory considerations. During the three and nine months ended March 31, 2025, we repurchased a total of 853,247 shares of our common stock on the open market at a total cost of $13.0 million with an average price of $15.24 per share.

Previous wording

On August 14, 2024, we entered into an Amendment Number One to the 2023 Credit Agreement the “Amended Credit Agreement.” Under the Amended Credit Agreement, we modified the definition of the consolidated EBITDA for the purposes of evaluating compliance with financial covenants under the 2023 Credit Agreement. The amended definition of consolidated EBITDA modifies the amount and type of add-backs that are allowable to better align with our operations and activities.

Current wording

On August 14, 2024, we entered into an Amendment Number One to the 2023 Credit Agreement the (the 2023 Credit Agreement as amended by that certain Amendment Number One, “Amended Credit Agreement”). Under the Amended Credit Agreement, we modified the definition of the consolidated EBITDA for the purposes of evaluating compliance with financial covenants under the Amended Credit Agreement. The amended definition of consolidated EBITDA modifies the amount and type of add-backs that are allowable to better align with our operations and activities.

Previous wording

During the three and six months ended December 31, 2024, the Company was in compliance with the modified terms and financial covenants under the Amended Credit Agreement.

Current wording

During the three and nine months ended March 31, 2025, the Company was in compliance with the modified terms and financial covenants under the Amended Credit Agreement.

Previous wording

Cash flows provided by operations in the six months ended December 31, 2024 were $40.1 million, including our net loss of $3.1 million and non-cash expenses of $54.7 million for items such as amortization of intangible assets, share-based compensation, depreciation, reduction in carrying amount of right-of-use assets, deferred income taxes, provision for excess and obsolete inventory and interest. Other sources of cash for the period included a decrease in inventories and increases in accounts payable, deferred revenue and accrued compensation and benefits. This was partially offset by increases in accounts receivable and other assets as well as decreases in operating lease liabilities and other liabilities.

Current wording

Cash flows provided by operations in the nine months ended March 31, 2025 were $70.1 million, including our net income of $0.3 million and non-cash expenses of $86.0 million for items such as amortization of intangible assets, share-based compensation, depreciation, reduction in carrying amount of right-of-use assets, deferred income taxes, provision for excess and obsolete inventory and interest. Other sources of cash for the period included a decrease in inventories and increases in deferred revenue and accrued compensation and benefits. This was partially offset by increases in accounts receivable and prepaid expenses and other assets as well as decreases in accounts payable, operating lease liabilities and other liabilities.

Previous wording

Cash flows provided by operations in the six months ended December 31, 2023 were $109.9 million, including our net income of $32.7 million and non-cash expenses of $73.4 million for items such as amortization of intangible assets, share-based compensation, depreciation, reduction in carrying amount of right-of-use assets, deferred income taxes, provision for excess and obsolete inventory and interest. Other sources of cash for the period included a decrease in accounts receivable, and increases in deferred revenue and other current and long-term liabilities. This was partially offset by increases in inventories and prepaid expenses and other assets as well as decreases in accounts payable and accrued compensation and benefits.

Current wording

Cash flows provided by operations in the nine months ended March 31, 2024 were $40.0 million, including our net loss of $31.8 million and non-cash expenses of $109.3 million for items amortization of intangible assets, share-based compensation, depreciation, reduction in carrying amount of right-of-use assets, deferred income taxes, and interest. Other sources of cash for the period included a decrease in accounts receivable, and increases in deferred revenue and other current and long-term liabilities. This was partially offset by increases in inventories and prepaid expenses and other assets as well as decreases in accounts payable, operating lease liabilities and accrued compensation and benefits.