EXTREME NETWORKS INC

Our operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A,“Risk Factors” in our Annual Report on Form 10-K for the year ended June 30, 2024, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock. There have been no material changes to our risk factors since our Annual Report on Form 10-K for the year ended June 30, 2024 and our Quarterly reports on Form 10-Q for the three months period ended September 30, 2024 and December 31, 2024, except for the following risk factor which supplements the risk factors disclosed in the reports reference above.

Geopolitical changes are creating uncertainty regarding economic matters.

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.

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.

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.

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.

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.

In addition to policies regarding tariffs, any significant changes enacted by the new administration to the U.S. Tax Code, or specifically to the Tax Cuts and Jobs Act (the “U.S. Tax Act”) enacted in 2017, or to regulatory guidance associated with the U.S. Tax Act, could materially adversely affect our tax liabilities and effective tax rate.

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

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.

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.

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.