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EXTR, Extreme Networks Inc.

Communications Equipment consumer brand Distress / turnaroundCyclicalSerial acquirer

Extreme is a leader in AI-powered cloud networking, focused on delivering simple and secure solutions that help businesses address challenges and enable connections among devices, applications, and users.

In the course of operating our business, we routinely make decisions as to the timing of the payment of invoices, the collection of receivables, the manufacturing and shipment of products, the fulfillment of orders, the purchase of supplies, and the building of inventory and service parts, among other matters.

We derive a majority of our revenues from the sale of our networking equipment, software subscriptions and services, and related maintenance contracts.

Latest annual: FY2025 10-K

EXTR · Extreme Networks Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$1.1B

+2.0% YoY · 4% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $1.3B 5-yr avg $1.1B

Gross margin 61% 5-yr avg 58%

Operating margin 3.2% 5-yr avg 2.6%

ROIC 33% 5-yr avg 20%

Owner-earnings margin 9% 5-yr avg 11%

Free cash flow margin 8% 5-yr avg 11%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is Products (62%) and Subscription and Support (38%).
Situation: Distress / turnaround. Thin interest coverage, or operating cash burned against real debt, across the record. The balance sheet carries this situation; the debt schedule sets the clock. Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power. Serial acquirer. Goodwill and acquired intangibles are 35% of assets, with meaningful acquisition spending in 4 of the record's 10 years; much of what this business is was bought, at prices the record carries.
What moves the needle: Operating margin has run around −1.5% through the cycle on a 55% gross margin, the operating line in the red even at its best — so the lever is whether the spending below the gross line can come down enough to clear a profit: revenue growth against the cost curve, and the cash runway until it does. On its own account, the filing leans hardest on debt terms & refinancing, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median −0%, above 15% in 3 of 10 years). The steadier read is owner earnings: roughly 8% of revenue reaches owners as cash, consistently. The cycle and the balance sheet decide this one; the worst year tells more than the median, and the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

Products is 62% of revenue, with Subscription And Support the other meaningful line at 38%.

Revenue by product line, FY2025

Products62%$704M
Subscription And Support38%$436M

By geographyUnited States48%EMEA40%Asia Pacific8%Other Americas4%

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$520M	$607M	$983M	$996M	$948M	$1.0B	$1.1B	$1.3B	$1.1B	$1.1B	$1.3B	RevenueRevenue
51%	55%	54%	55%	55%	58%	57%	58%	56%	62%	61%	Gross marginGross mgn
7%	6%	5%	6%	6%	7%	6%	7%	9%	12%	11%	SG&A / revenueSG&A/rev
15%	15%	19%	21%	22%	20%	17%	16%	19%	19%	18%	R&D / revenueR&D/rev
($30M)	$6M	($38M)	($15M)	($99M)	$34M	$64M	$108M	($65M)	$17M	$40M	Operating incomeOp. inc.
−5.8%	1.0%	−3.9%	−1.5%	−10.4%	3.4%	5.8%	8.3%	−5.8%	1.5%	3.2%	Operating marginOp. mgn
($36M)	($2M)	($47M)	($26M)	($127M)	$2M	$44M	$78M	($86M)	($7M)	$16M	Net incomeNet inc.
—	—	—	—	—	—	15%	17%	—	—	45%	Effective tax rateTax rate
											Cash flow & returns
$30M	$59M	$19M	$105M	$36M	$145M	$128M	$249M	$55M	$152M	$132M	Operating cash flowOp. cash
$11M	$11M	$23M	$27M	$29M	$23M	$20M	$20M	$24M	$15M	$15M	DepreciationDeprec.
$41M	$38M	$15M	$71M	$96M	$81M	$20M	$88M	$41M	$62M	$14M	Working capital & otherWC & other
$5M	$10M	$40M	$23M	$15M	$17M	$15M	$14M	$18M	$25M	$27M	CapexCapex
1.0%	1.7%	4.1%	2.3%	1.6%	1.7%	1.4%	1.1%	1.6%	2.2%	2.2%	Capex / revenueCapex/rev
$25M	$49M	($4M)	$82M	$21M	$127M	$113M	$235M	$37M	$137M	$117M	Owner earningsOwner earn.
4.8%	8.0%	−0.5%	8.3%	2.2%	12.6%	10.1%	17.9%	3.3%	12.0%	9.4%	Owner earnings marginOE mgn
$25M	$49M	($21M)	$82M	$21M	$127M	$113M	$235M	$37M	$127M	$105M	Free cash flowFCF
4.8%	8.0%	−2.2%	8.3%	2.2%	12.6%	10.1%	17.9%	3.3%	11.2%	8.4%	Free cash flow marginFCF mgn
—	$51M	$98M	—	$219M	—	$70M	—	—	—	$70M	AcquisitionsAcquis.
—	—	—	$15M	$30M	—	$45M	$100M	$50M	$38M	—	BuybacksBuybacks
-37%	3%	-16%	-4%	-19%	4%	27%	87%	-92%	72%	33%	ROICROIC
-36%	-1%	-42%	-22%	-2350%	4%	49%	67%	-340%	-11%	21%	Return on equityROE
−36%	−1%	−42%	−22%	n/m	4%	49%	67%	−340%	−11%	21%	Retained to equityRetained/eq
											Balance sheet
$98M	$135M	$121M	—	—	—	$195M	$235M	$157M	$232M	$240M	Cash & investmentsCash+inv
$81M	$93M	$212M	$174M	$123M	$156M	$184M	$182M	$90M	$127M	$163M	ReceivablesReceiv.
$41M	$47M	$64M	$64M	$63M	$33M	$49M	$89M	$141M	$103M	$77M	InventoryInvent.
$31M	$32M	$76M	$66M	$48M	$60M	$84M	$100M	$51M	$64M	$81M	Accounts payablePayables
$92M	$109M	$201M	$172M	$137M	$129M	$149M	$171M	$179M	$165M	$158M	Operating working capitalOper. WC
$229M	$299M	$428M	$442M	$414M	$488M	$489M	$576M	$467M	$535M	$542M	Current assetsCur. assets
$212M	$213M	$360M	$356M	$398M	$456M	$500M	$576M	$518M	$588M	$593M	Current liabilitiesCur. liab.
1.1×	1.4×	1.2×	1.2×	1.0×	1.1×	1.0×	1.0×	0.9×	0.9×	0.9×	Current ratioCurr. ratio
$71M	$80M	$139M	$139M	$331M	$331M	$400M	$395M	$394M	$400M	$398M	GoodwillGoodwill
$374M	$460M	$770M	$757M	$979M	$1.0B	$1.1B	$1.1B	$1.0B	$1.2B	$1.2B	Total assetsAssets
$55M	$93M	$198M	$179M	$411M	$340M	$304M	$222M	$188M	$178M	$197M	Total debtDebt
($43M)	($42M)	$77M	$179M	$411M	$340M	$109M	($13M)	$31M	($54M)	($43M)	Net debt / (cash)Net debt
-9.7×	1.5×	-2.7×	-1.2×	-4.2×	1.5×	5.0×	6.2×	-3.8×	1.1×	2.9×	Interest coverageInt. cov.
$102M	$126M	$113M	$116M	$5M	$54M	$90M	$117M	$25M	$66M	$79M	Shareholders’ equityEquity
2.8%	2.1%	2.8%	3.3%	4.0%	3.9%	3.9%	4.8%	6.9%	7.2%	7.0%	Stock comp / revenueSBC/rev
											Per share
103M	108M	114M	118M	120M	128M	133M	134M	129M	132M	135M	Shares out (diluted)Shares
$5.04	$5.61	$8.61	$8.44	$7.91	$7.91	$8.33	$9.82	$8.64	$8.62	$9.28	Revenue / shareRev/sh
$-0.35	$-0.02	$-0.41	$-0.22	$-1.06	$0.02	$0.33	$0.58	$-0.66	$-0.06	$0.12	EPS (diluted)EPS
$0.24	$0.45	$-0.04	$0.70	$0.17	$1.00	$0.84	$1.76	$0.29	$1.04	$0.87	Owner earnings / shareOE/sh
$0.24	$0.45	$-0.19	$0.70	$0.17	$1.00	$0.84	$1.76	$0.29	$0.96	$0.78	Free cash flow / shareFCF/sh
$0.05	$0.10	$0.35	$0.19	$0.13	$0.13	$0.12	$0.10	$0.14	$0.19	$0.20	Cap. spending / shareCapex/sh
$0.99	$1.16	$0.99	$0.98	$0.05	$0.43	$0.68	$0.87	$0.20	$0.50	$0.59	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+6.1%/yr	+1.7%/yr
Owner earnings / share	+17.5%/yr	+43.2%/yr
Capital spending / share	+15.3%/yr	+7.9%/yr
Book value / share	−7.4%/yr	+61.5%/yr

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

132Mpeak FY2023

ROIC

72%low FY2024

Gross margin

62%low FY2016

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$137Mowner earningsvs.($7M)net incomelow FY2018

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business earned $137M of owner earnings, the operating cash left after the $15M it takes just to hold its position. It put $10M more into growth; free cash flow, after that spending, was $127M.

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	($7M)	($86M)	$78M	$44M	$2M
Depreciation & amortizationnon-cash charge added back	+$15M	+$24M	+$20M	+$20M	+$23M
Stock-based compensationreal costnon-cash, but a real cost	+$82M	+$77M	+$63M	+$43M	+$39M
Working capital & othertiming of cash in and out, other non-cash items	+$62M	+$41M	+$88M	+$20M	+$81M
Cash from operations	$152M	$55M	$249M	$128M	$145M
Maintenance capital expenditurethe spending needed just to hold position and volume	−$15M	−$18M	−$14M	−$15M	−$17M
Owner earnings	$137M	$37M	$235M	$113M	$127M
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	−$10M	—	—	—	—
Free cash flow	$127M	$37M	$235M	$113M	$127M
Owner-earnings marginowner earnings ÷ revenue	12%	3%	18%	10%	13%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $15M, roughly its depreciation, the rate its assets wear out). The other $10M of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows. The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $82M), owner earnings is nearer $55M.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 1.1×

Thin

Operating income $17M ÷ interest expense $16M

What this means
Operating profit covers interest, but with little room. A bad year, a refinancing at higher rates, or a revenue wobble closes the gap fast.
How heavy is the debt, net of cash? +$58M

Net cash

Cash $232M + ST investments $4M − debt $178M

What this means
Cash and short-term investments exceed every dollar of debt by $58M, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 73d

Long (60+ days)

DSO 41 + DIO 87 − DPO 54 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital -4%

Below average through the cycle

10-yr median, range -92%–87%; 72% latest = NOPAT $8M ÷ invested capital $12M

Industry peers: median 4%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 72% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 8%

Solid through the cycle

10-yr median margin, range -0%–18%; latest $137M = operating cash $152M − maintenance capex $15M

Industry peers: median 11%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 12% of revenue this year, a 8% median across 10 years. Treating stock comp as the real expense it is (less $82M of SBC) leaves $55M.
Are earnings backed by cash? $152M

Loss, but cash-generative

Net income ($7M) · cash from operations $152M

What this means
The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did.

How is the cash used?

Where do the earnings go? 28%

Reinvests most of it

Dividends + buybacks $38M ÷ Owner Earnings $137M

What this means
Of $137M Owner Earnings, $38M (28%) went back to shareholders, $0 dividends, $38M buybacks. But the buybacks barely exceed stock issued to employees ($82M SBC), net of dilution, little was truly returned. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 1.68×

Expanding

Capex $25M ÷ depreciation $15M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 0 of 5 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Near

Revenue ≥ $2B · $1.1B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 0.91×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $178M vs ($53M) WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (10-yr record) · 7 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth —

Earnings +33% over the record · —

What this means
Earnings were negative early in the record, a growth rate isn't meaningful.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $-0.04/share (latest year $-0.06), the averaged base the calculator's gate runs on, and book value is $0.50/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 3 of 10

What this means
Lost money in 7 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 3 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin −3% → 1% (3-yr avg ends)

What this means
Through the cycle the operating margin widened — about −3% early to 1% lately, median −1% — pricing power intact or improving.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Owner earnings growth +10%/yr

What this means
Owner earnings grew about 10% a year over the record.
Worst year 2020 · −10.4% op. margin

What this means
Operations went underwater in 2020, understand why before trusting the good years.
Share count +2.8%/yr

What this means
The share count is rising, dilution works against you on a per-share basis.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing Framed as a capability

The filing positions AI as something the company uses, not something it fears.

“Extreme is a leader in AI-powered cloud networking, focused on delivering simple and secure solutions that help businesses address challenges and enable connections among devices, applications, and users.”

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat, and the company is using it that way.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$542M

Cash & short-term investments$240M
Receivables$163M
Inventory$77M
Other current assets$63M

Current liabilities$593M

Debt due within a year$48M
Accounts payable$81M
Other current liabilities$464M

Current ratio0.91×all current assets ÷ what's due · Graham looked for 2×

Quick ratio0.78×stricter: inventory excluded

Cash ratio0.40×strictest: cash alone against what's due

Working capital($51M)the cushion left after near-term bills

Debt due this year vs. cash$48M due · $240M cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet

Revenue, latest quarter vs. a year ago+11.4%the freshest read on whether the business is still growing

Current ratio, recent quarters0.9× → 0.9×

Deeper floors

Tangible book value($323M)equity stripped of goodwill & intangibles

Debt incl. operating leases$236M$38M of it operating leases

Deferred revenue$647Mcustomer cash collected before delivery; operating float

From the company's latest filing.

How the cash was used, 2016–2025

Over the record, the business generated $979M of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.

Reinvested$183M · 19%
Buybacks$278M · 28%
Retained (debt / cash)$518M · 53%

Returned to owners$278M
34% of the owner earnings the business produced over the span, $0 as dividends and $278M as buybacks.
Average price paid for buybacks$13.42
Across the years where the filing reports a share count, 21M shares were bought for $278M, about $13.42 each. Year to year the price paid ranged from $6.34 (2019) to $20.77 (2024); its heaviest year, 2023, paid $18.49 ($100M).
Net change in share count30.9%
The diluted count rose from 103M to 135M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$406M35% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equityexceeds itgoodwill alone is larger than the company’s entire book equity; stripped of the acquisition premium, there is no net book worth

Cash spent acquiring$438Mover 10 years buying other businesses, against $183M of capital spent building

None written down over the record; the goodwill is still carried at full cost. That is the deals holding their value on the books so far; whether they keep doing so is the test an owner watches, since the write-down, when it comes, is the admission the price was too high.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Edward B. Meyercord	$5.6M	$17.7M	$127M
2022	Edward B. Meyercord	$8.9M	$6.2M	$113M
2023	Edward B. Meyercord	$16.1M	$52.7M	$235M
2024	Edward B. Meyercord	$15.0M	−$12.2M	$37M
2025	Edward B. Meyercord	$12.0M	$19.6M	$137M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership3.6%
The stake all directors and executive officers hold together, per the 2025 proxy: skin in the game, the first thing Munger reads.
CEO pay ratio116:1
What the chief earns for every dollar the median employee makes, per the 2025 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.
Stock-based compensation$82M
The slice of the business handed to employees in shares this year, 7% of revenue, equal to 486% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Extreme Networks Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

1 of the 4 tests turned up something to look into; the other 3 came back clean.

Look hereDid the share count rise anyway?30.9%
Diluted shares grew 30.9% over 2016–2025, even as the company spent $278M on buybacks. The repurchases were a treadmill: stock issued to staff outran them, so owners' slice still shrank. Read the buyback line beside this one, not on its own.

And these came back clean

Is it less profitable than it was?
Did debt outgrow the business?
Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Revenue recognition, Income taxes, Inventory, Acquisitions as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Communications Equipment

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
FFIVF5 Inc.	$3.1B	81%	23.1%	26%	27%
PBIPitney Bowes Inc.	$1.9B	44%	0.3%	0%	7%
CRSRCorsair Gaming Inc.	$1.5B	25%	1.4%	1%	2%
OMCLOmnicell	$1.2B	46%	2.3%	2%	11%
EXTRExtreme Networks Inc.	$1.1B	56%	-0.2%	-0%	8%
NTGRNETGEAR Inc.	$700M	30%	3.1%	4%	3%
DGIIDigi International Inc.	$430M	53%	6.7%	5%	11%
ATENA10 Networks Inc.	$291M	78%	10.6%	38%	16%
Group median	—	49%	2.7%	3%	9%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Extreme Networks Inc. has delivered.

Extreme Networks Inc.’s latest year runs above its own through-cycle margin — the reported figure may flatter a peak. So the tool opens on the through-cycle base, Graham’s averaging cutting both ways; clear the toggle below to read the latest year exactly as reported.

Today’s price $

Through the cycle, Extreme Networks Inc. earns about $93M on its 8.2% median owner-earnings margin. This year’s 12.0% margin runs above that; the reported figure may flatter a peak you'd be paying on. Normalize, below, values the price on that through-cycle figure rather than the latest year. It comes pre-checked here for that reason, the same rule that already normalizes a trough; clear it to price the year as filed.

Base Normalize · through-cycle ($93M) Net of stock comp (−$87M) Steady-state · maintenance capex ($118M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25−8%/yr

Owner-earnings growth · ’16→’25+9%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $105M on 131M shares outstanding, per the 10-Q cover, as of 2026-04-24; net cash $43M. The if-converted diluted count is 135M, 3% above the shares outstanding: the dilution overhang (convertibles, options) a buyer inherits. The base opens on the through-cycle figure (the latest year sits above the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. Capex ($27M) runs well above depreciation ($15M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $118M, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh EXTR against another business →

Cite: Owner Scorecard, "Extreme Networks Inc. (EXTR), the owner's record," https://ownerscorecard.com/c/EXTR, data as of 2026-07-09.

Manual order: ← EXR its page in the Manual EYE →

Industry order: ← ERIC the Communications Equipment chapter FFIV →