| COMPANY |
Extreme Networks, Inc. |
| COURT |
United States District Court for the Northern District of California |
| CASE NUMBER |
24-cv-05102 |
| JUDGE |
The Hon. Trina Lynn Thompson |
| CLASS PERIOD |
July 27, 2022 through January 30, 2024 |
| SECURITY TYPE |
Securities |
LEAD PLAINTIFF DEADLINE IS OCTOBER 15, 2024.
If you have suffered losses and would like to discuss your rights, please fill out this form or you may contact Jonathan Naji, Esq. at (484) 270-1453 or via e-mail at info@ktmc.com.
Case Background:
On January 25, 2023, Extreme announced the resignation of its CFO, effective February 16, 2023. That same day, Extreme reported its financial results for the second quarter of its fiscal year ("FY") 2023. Among other items, Extreme revealed that, compared to the prior quarter, the company's backlog had fallen to $542 million, its Product Book to Bill Ratio had fallen from 1.3x to 0.9x, and its Service Book to Bill Ratio had fallen from 1.4x to 1.2x. On a related earnings call, Extreme also shortened the timeline for backlog normalization. On this news, Extreme's stock price fell $2.81 per share, or 14.55%, to close at $16.50 per share on January 25, 2023.
On August 24, 2023, Extreme filed its annual report for FY 2023 with the SEC and disclosed that its backlog stood at just $267.3 million, a roughly $245 million decline year-over-year and a $275.7 million decline during the prior six months. On this news, Extreme's stock price fell $2.52 per share, or 9.1%, to close at $25.16 per share on August 25, 2023.
On January 8, 2024, Extreme issued a press release that provided a business update, advising that "second quarter revenues are now expected to be approximately $294 to $297 million, compared to the prior outlook of $312 to $327 million." Extreme attributed its revised guidance to "industry headwinds of channel digestion and elongated sales cycles." On this news, Extreme's stock price fell $1.29 per share, or 7.36%, to close at $16.23 per share on January 9, 2024.
Then, on January 31, 2024, Extreme reported disappointing financial results and operational trends for the second quarter of FY 2024. Specifically, Extreme disclosed that its revenues for the quarter were $296.4 million, down 7% year-over-year, and that it had generated just $186.6 million in product revenue, a decline of 37% year-over-year. Extreme further revealed that its product backlog had already normalized during the quarter and that the company made the "conscious decision to put channel digestion behind [it] in the March quarter," leading to a "$40 million to $50 million reduction in channel inventory in the third quarter" that would result in "demand . . . being masked by inventory flowing out of the channel." Rather than increasing revenues as previously represented, Extreme provided new guidance that revealed the company was in fact on track to suffer lower revenues in FY 2024.
On this news, Extreme's stock price fell $4.05 per share, or 24.34%, over the following three trading sessions, to close at $12.59 per share on February 2, 2024.
What is a Lead Plaintiff?
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.