EXTREME NETWORKS INC

Current report

The ongoing unpredictability of U.S. trade policies, including recent tariff adjustments and shifts in enforcement priorities, continues to create significant uncertainty in the global supply chain. Our direct manufacturing presence in China remains minimal, and we do not anticipate material direct exposure to the latest round of U.S. tariffs on Chinese imports; however, our reliance on electronic and semiconductor components sourced from China presents ongoing risk. These components are essential to our products, and any escalation in tariffs or imposition of new export controls by China may result in increased costs and potential delays.

Current report

We also maintain significant manufacturing operations in Vietnam and the Philippines. These countries have periodically come under scrutiny in U.S. trade reviews and remain exposed to potential tariff hikes or new trade barriers.

Current report

Additionally, global trade partners may continue to respond to U.S. tariffs with retaliatory measures. For instance, China has reiterated threats of restricting exports of critical raw materials, including rare earth minerals essential to several of our components. Such actions could disrupt our supply chain, elevate input costs, and undermine the competitiveness of our offerings, thereby adversely affecting our business, financial condition, and operating results.

Current report

We are actively monitoring these evolving trade dynamics and are implementing diversification and supply chain resilience strategies to mitigate potential disruptions. This includes exploring alternative sourcing options and reassessing geographic risk in our manufacturing and logistics footprint.

Current report

The continued uncertainty around tariff policy and broader geopolitical tensions is contributing to market volatility, which has impacted the Company’s stock price, and is likely to continue to do so. In addition, if tariffs are set that materially impact the Company’s financial results, the Company’s stock price could be negatively impacted.

Current report

Our stock price has been volatile in the past and may significantly fluctuate in the future.

Current report

In the past, the trading price of shares of our common stock has fluctuated significantly. This could continue as we or our competitors announce new products, our results or those of our customers or competition fluctuate, conditions in the networking or semiconductor industry change, conditions in the global economy change, or when investors change their sentiment toward stocks in the networking technology sector.

Current report

In addition, fluctuations in our stock price and our enterprise value to sales valuation may make our stock attractive to momentum, hedge or day-trading investors who often shift funds into and out of stock rapidly, exacerbating price fluctuations in either direction, particularly when viewed on a quarterly basis. These fluctuations may adversely affect the trading price or liquidity of our common stock.

Current report

Some companies, including us, that have had volatile market prices for their securities have had securities class action lawsuits filed against them. Such suits, regardless of its merits or outcome, can result in substantial costs and divert management’s attention and resources.

Current report

There were no sales of unregistered equity securities during the three months ended March 31, 2025.

Current report

The following table provides stock repurchase activity during the three months ended March 31, 2025 (in thousands, except per share amounts):

Current report

On May 18, 2022, we announced that our Board had authorized management to repurchase up to $200.0 million of its common stock over a three-year period commencing on July 1, 2022. Refer to Note 9, Stockholders’ Equity, in Notes to the Condensed Consolidated Financial Statements included elsewhere in this Report for further information regarding the 2022 Share Repurchase Program.

Current report

The aggregate price and the average price per share does not include the effect of the excise tax under the provision of the Inflation Reduction Act.

Previous report

Recent political changes such as the new U.S. presidential administration have created an environment of uncertainty in economic matters, particularly with regard to tariffs and taxes. We do not manufacture products in Canada or Mexico and have only immaterial manufacturing in China; therefore we do not expect direct impacts due to proposed U.S. tariffs on goods from these countries. However, electronic and semiconductor components integral to our products are sourced from these regions. Consequently, the proposed tariffs could lead to increased costs and potential supply chain disruptions for these critical components. Additionally, other tariff-related actions have been speculated, such as U.S. tariffs on imports from other countries such as Vietnam and the Philippines, where we do have manufacturing operations, or reciprocal tariffs imposed by non-U.S. countries. If such actions occur, they could create supply chain disruptions and could further escalate our production costs and render our products less competitive, thereby adversely affecting our business, financial condition, and operating results. We are closely monitoring these developments and evaluating strategies to mitigate potential impacts.