Extreme Networks Inc (EXTR) 2023 Q3 法說會逐字稿

Good day, and welcome to the Extreme Networks Q3 Fiscal Year 2023 Financial Results Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Stan Kovler. Please go ahead.

美好的一天，歡迎來到 Extreme Networks 2023 財年第三季度財務業績電話會議。此時，所有參與者都處於只聽模式。演講者介紹結束後，將進行問答環節。 （操作員說明）請注意，今天的會議正在錄製中。我現在想將會議交給您的發言人 Stan Kovler 先生。請繼續。

Thank you, operator, and good morning, everybody. Welcome to the Extreme Networks Third Fiscal Quarter 2023 Earnings Conference Call. Thank you all for your patience. We were experiencing some technical issues with the webcast that have been resolved now, so everyone is able to join. I lead Investor Relations and Corporate Strategy. With me today are Extreme Networks' President and CEO, Ed Meyercord, and Interim CFO, Cristina Tate.

謝謝接線員，大家早上好。歡迎參加 Extreme Networks 2023 財年第三季度收益電話會議。謝謝大家的耐心等待。我們在網絡廣播中遇到了一些技術問題，現在已經解決，因此每個人都可以加入。我領導投資者關係和公司戰略。今天和我在一起的有 Extreme Networks 的總裁兼首席執行官 Ed Meyercord 和臨時首席財務官 Cristina Tate。

We just distributed a press release and filed an 8-K detailing Extreme Networks' financial results for the quarter and earlier this week filed an 8-K announcing our new CFO. For your convenience, a copy of the press release, which includes our GAAP to non-GAAP reconciliations is available in the Investor Relations section of our website at extremenetworks.com along with our presentation, which should be up right now, there's a link.

我們剛剛發布了一份新聞稿，並提交了一份 8-K 報告，詳細說明了 Extreme Networks 本季度的財務業績，本週早些時候提交了一份 8-K 報告，宣布了我們的新任首席財務官。為方便起見，我們網站 extremenetworks.com 的投資者關係部分提供了新聞稿的副本，其中包括我們的 GAAP 與非 GAAP 對賬以及我們的演示文稿，現在應該已經發布了，這裡有一個鏈接。

I would like to remind you that during today's call, our discussion may include forward-looking statements about Extreme's future business, financial and operational results, growth expectations and strategies. Our financial disclosures on this call will be made on a non-GAAP basis unless stated otherwise. We caution you not to put undue reliance on these forward-looking statements as they involve risks and uncertainties that can cause actual results to differ materially from those anticipated by these statements as described by our risk factors in our 10-K report for the period ended June 30, 2022, filed with the SEC.

我想提醒您，在今天的電話會議中，我們的討論可能包括有關 Extreme 未來業務、財務和運營結果、增長預期和戰略的前瞻性陳述。除非另有說明，否則我們在本次電話會議上的財務披露將在非公認會計原則的基礎上進行。我們告誡您不要過分依賴這些前瞻性陳述，因為它們涉及風險和不確定性，這些風險和不確定性可能導致實際結果與我們 10-K 報告中風險因素所述的這些陳述所預期的結果大不相同。 2022 年 6 月 30 日，向 SEC 提交。

Any forward-looking statements made on this call reflect our analysis as of today, and we have no plans or duty to update them, except as required by law. Now I will turn the call over to Extreme's President and CEO, Ed Meyercord.

在本次電話會議上做出的任何前瞻性陳述都反映了我們截至今天的分析，除法律要求外，我們沒有計劃或義務更新它們。現在我將把電話轉給 Extreme 的總裁兼首席執行官 Ed Meyercord。

Thank you, Stan, and thank you all for joining us this morning. Extreme delivered another quarter of record results, driven by solid execution of our teams. Our top line performance was highlighted by improvements in our supply chain that drove 16% total revenue growth and 22% product revenue growth on a year-over-year basis. We achieved double-digit growth in 8 of the past 9 quarters. Our operating margin and EBITDA also achieved quarterly records in Q3.

謝謝你，斯坦，感謝大家今天早上加入我們。在我們團隊紮實的執行力的推動下，Extreme 又創造了四分之一的創紀錄業績。我們供應鏈的改善突顯了我們的頂級業績，推動總收入同比增長 16%，產品收入同比增長 22%。我們在過去 9 個季度中有 8 個實現了兩位數的增長。我們的營業利潤率和 EBITDA 在第三季度也創下了季度記錄。

Product orders grew 6% sequentially and orders from new customers grew 20% during this timeframe. This is the second consecutive quarter where new logos are playing a substantial role in our growth. We believe demand trends will continue as customers recognize the simplicity of our one network, one cloud solutions relative to the complexity and total cost of ownership of our largest competitors.

在此期間，產品訂單環比增長 6%，新客戶訂單增長 20%。這是新徽標連續第二個季度在我們的增長中發揮重要作用。我們相信，隨著客戶認識到我們的一個網絡、一個雲解決方案相對於我們最大競爭對手的複雜性和總擁有成本的簡單性，需求趨勢將繼續下去。

Although our Q3 bookings typically decline sequentially in the March quarter, we in fact grew from December, reflecting strong demand. With our funnel of opportunities remaining robust, we expect more normal seasonality and higher sequential growth in Q4. We expect total revenue growth to accelerate to over 20% from the prior year based on improved product availability. And we're reiterating our long-term growth outlook in the mid-teens through fiscal '25 based on confidence in our ability to take market share given the size of our market where small share gains have a big impact on our growth rate.

儘管我們的第三季度預訂量通常在 3 月季度連續下降，但實際上我們從 12 月開始有所增長，反映出強勁的需求。由於我們的機會渠道保持強勁，我們預計第四季度會有更多正常的季節性和更高的連續增長。基於產品可用性的提高，我們預計總收入增長將比上一年加速超過 20%。我們重申我們在 25 財年中期的長期增長前景，基於我們對我們佔據市場份額的能力的信心，因為我們的市場規模很小，份額增長對我們的增長率有很大影響。

For the first time, Extreme's non-GAAP operating margin surpassed the 15% mark, and we achieved EPS of $0.29 in Q3, up from $0.27 in Q2 and from $0.21 in the year ago quarter. We expect these bottom-line earnings trends to continue and for earnings to grow faster than revenues over the long term given increasing gross margins and operating leverage. Demand is being driven by the execution of our field teams, our strategic partners, and the competitive differentiation of our solutions. We're the only networking vendor that has flexible Universal hardware and combines cloud choice with best-in-class automation, the most widely deployed Fabric, and the industry's simplest licensing model. Our end-to-end solutions operationalized from one cloud makes it easy to manage the entire enterprise network. We offer visibility, access control, security, machine learning and AI across wired, wireless, and SD-WAN infrastructure by a single cloud.

Extreme 的非 GAAP 營業利潤率首次超過 15%，我們在第三季度的每股收益為 0.29 美元，高於第二季度的 0.27 美元和去年同期的 0.21 美元。考慮到毛利率和經營槓桿的增加，我們預計這些底線盈利趨勢將持續下去，並且從長期來看，盈利增長將快於收入增長。需求是由我們的現場團隊、我們的戰略合作夥伴的執行力以及我們解決方案的競爭優勢所驅動的。我們是唯一一家擁有靈活的通用硬件並將雲選擇與一流的自動化、部署最廣泛的 Fabric 和業界最簡單的許可模型相結合的網絡供應商。我們的端到端解決方案在一個雲中運行，可以輕鬆管理整個企業網絡。我們通過單一云提供跨有線、無線和 SD-WAN 基礎設施的可見性、訪問控制、安全性、機器學習和人工智能。

The evidence of our success can be seen in marquee new logo and large global deals with brands such as Kroger, Cedar Fair, Boingo, Ahold and others. We're gaining share across our key verticals, driven by our competitive differentiation. For example, in E-Rate, we grew faster than the market, and we gained share, most notably against our largest competitors. During the quarter, bookings from customers who spent more than $1 million with Extreme were the highest in our history. Given the strength of our solutions and our elevated profile with strategic partners, we're being invited to compete for larger projects and we're winning more. We expect these trends to continue.

我們成功的證據可以從新標誌和與 Kroger、Cedar Fair、Boingo、Ahold 等品牌的大型全球交易中看出。在競爭差異化的推動下，我們正在關鍵垂直領域獲得份額。例如，在 E-Rate 中，我們的增長速度快於市場，我們獲得了市場份額，尤其是在與我們最大的競爭對手的競爭中。在本季度，在 Extreme 上花費超過 100 萬美元的客戶的預訂量是我們歷史上最高的。鑑於我們解決方案的優勢以及我們在戰略合作夥伴中的知名度，我們被邀請參與更大的項目競爭，並且我們贏得了更多。我們預計這些趨勢將繼續下去。

Some top wins for the quarter included Kroger, one of the largest U.S. grocers with 2,800 stores across the country. This deployment will become the world's largest cloud managed network with more than 110,000 access points managed via Extreme Cloud. With WiFi 6E, Kroger will benefit from faster speeds, lower latency and more security across its entire network. Our technology will help Kroger drive energy savings, improve the shopper experience, streamline operations, and drive business transformation initiatives to create their store of the future.

本季度的一些頂級勝利包括克羅格，這是美國最大的雜貨商之一，在全國擁有 2,800 家商店。該部署將成為世界上最大的雲託管網絡，擁有超過 110,000 個接入點通過極進云進行管理。借助 WiFi 6E，Kroger 將在整個網絡中受益於更快的速度、更低的延遲和更高的安全性。我們的技術將幫助 Kroger 推動節能、改善購物者體驗、簡化運營並推動業務轉型計劃以創建他們的未來商店。

Our success in retail also extended into Europe, where Ahold Albert Heijn, a global supermarket chain with stores across 10 countries serving 60 million shoppers a week, chose Extreme for its cloud-driven wireless deployment and our CoPilot AIML insights available on Extreme Cloud.

我們在零售業的成功也延伸到了歐洲，Ahold Albert Heijn 是一家全球連鎖超市，在 10 個國家/地區設有門店，每週為 6000 萬購物者提供服務，它選擇了 Extreme，因為它的雲驅動無線部署和我們在 Extreme Cloud 上提供的 CoPilot AIML 見解。

In the Middle East, we won one of the largest healthcare providers in Saudi Arabia. Extreme and a partner deployed a secure end-to-end Fabric-enabled network at 2 new hospitals. The new state-of-the-art facilities will rely on Extreme to support and secure a wide range of new digital services.

在中東，我們贏得了沙特阿拉伯最大的醫療保健供應商之一。 Extreme 和合作夥伴在 2 家新醫院部署了安全的端到端支持 Fabric 的網絡。新的最先進設施將依靠 Extreme 來支持和保護範圍廣泛的新數字服務。

Cedar Fair, owner and operator of 15 amusement parks, 5 hotels across North America, selected Extreme to deploy Wi-Fi 6E-ready networks across its properties to provide high-speed connectivity and bandwidth for operational needs like digital signage, cashless payments and guest device connectivity.

Cedar Fair 是北美 15 個遊樂園和 5 家酒店的所有者和運營商，它選擇 Extreme 在其物業中部署 Wi-Fi 6E 就緒網絡，以提供高速連接和帶寬以滿足數字標牌、無現金支付和訪客等運營需求設備連接。

Catawba College in North Carolina will leverage machine learning and AI featured in CoPilot to proactively detect network anomalies, improve network performance, reduce time-consuming tasks for the IT team, and streamline operations. Catawba will also offer Extreme Academy as part of its computer science curriculum.

北卡羅來納州的卡托巴學院將利用 CoPilot 中的機器學習和人工智能來主動檢測網絡異常、提高網絡性能、減少 IT 團隊耗時的任務並簡化操作。 Catawba 還將提供 Extreme Academy 作為其計算機科學課程的一部分。

In the venue space, we had continued success with sports franchises and won Amica Mutual Arena in Rhode Island and Prudential Arena in New Jersey, home of the New Jersey Devils.

在場地空間方面，我們在體育特許經營方面繼續取得成功，並贏得了羅德島的 Amica Mutual 體育館和新澤西州惡魔隊主場新澤西州的 Prudential 體育館。

This quarter, we were able to bring our lead times down faster than expected in Q3, putting us in a healthier position. The actions we have taken with our supply chain over the past year give us greater visibility and confidence that the consistently quarter ramp-up of our product deliveries and revenue will continue. We expect our backlog will normalize to a range of $75 million to $100 million in our Q1 fiscal '25.

本季度，我們能夠比第三季度更快地縮短交貨時間，使我們處於更健康的位置。我們在過去一年中對供應鏈採取的行動使我們更加了解和相信我們的產品交付和收入將持續季度持續增長。我們預計我們的積壓訂單將在 25 財年第一季度正常化至 7500 萬至 1 億美元的範圍。

Our exposure to the fastest-growing areas of the networking market, our share gains and expanding go-to-market partnerships provide ample growth opportunities to drive double-digit bookings growth. We will also expand our subscription business to our entire hardware portfolio in fiscal '24. We are forecasting market share gains with large targeted partners, leveraging the strength of our existing integrated solutions in our core market verticals and have new partnerships with Comcast and new go-to-market motions with Verizon, for example.

我們涉足網絡市場增長最快的領域、我們的份額增長和不斷擴大的上市合作夥伴關係為推動兩位數的預訂量增長提供了充足的增長機會。我們還將在 24 財年將我們的訂閱業務擴展到我們的整個硬件產品組合。例如，我們正在預測與大型目標合作夥伴的市場份額增長，利用我們在核心市場垂直領域現有集成解決方案的優勢，並與 Comcast 建立新的合作夥伴關係，並與 Verizon 建立新的上市計劃。

Additionally, since we established a more strategic relationship with one particularly large U.S.-based reseller, our E-Rate awards grew 100% year-over-year with total bids submitted on behalf of Extreme by this reseller up 50% despite softness in the market. We will build on this and these other relationships as we enter fiscal '24.

此外，由於我們與一家特別大的美國經銷商建立了更具戰略意義的關係，我們的 E-Rate 獎項同比增長 100%，儘管市場疲軟，但該經銷商代表 Extreme 提交的總出價增長了 50% .當我們進入 24 財年時，我們將建立這種關係和其他關係。

As we look forward to the next quarter, I'm excited about our incoming CFO, Kevin Rhodes, who starts on May 30 and brings a wealth of experience from several successful SaaS companies. Kevin has a great track record of delivering operational and financial excellence with a clear focus on shareholder value. Last quarter, I asked Cristina Tate to step into the role of interim CFO, and she has executed flawlessly. Thank you, Cristina. I will look forward to her partnership, continuing with Kevin to drive our financial strategy and take Extreme to the next level. And with that, I will turn the call over to Cristina.

在我們期待下一個季度的時候，我對我們即將上任的首席財務官 Kevin Rhodes 感到興奮，他將於 5 月 30 日上任，並帶來了來自幾家成功的 SaaS 公司的豐富經驗。凱文在提供卓越的運營和財務方面有著良好的記錄，並明確關注股東價值。上個季度，我請 Cristina Tate 擔任臨時首席財務官一職，她的表現非常完美。謝謝你，克里斯蒂娜。我將期待與她的合作，繼續與凱文一起推動我們的財務戰略，並將 Extreme 提升到一個新的水平。有了這個，我會把電話轉給克里斯蒂娜。

Thanks, Ed. Q3 financial results reflect record revenue, operating margin, and EBITDA, driven by increased product availability. We were also able to pay down $25 million in debt and repurchased $25 million worth of our shares, leaving net debt at just $34 million. The strong execution of our teams drove 29% growth in new SaaS bookings and our SaaS ARR continued to rise. We are confident in our Q4 and FY '23 outlook and reiterate our commitment to mid-teens long-term growth through fiscal year '25.

謝謝，埃德。第三季度的財務業績反映了創紀錄的收入、營業利潤率和 EBITDA，這得益於產品可用性的提高。我們還能夠償還 2500 萬美元的債務並回購價值 2500 萬美元的股票，使淨債務僅為 3400 萬美元。我們團隊的強大執行力推動新 SaaS 預訂量增長 29%，我們的 SaaS ARR 繼續上升。我們對第四季度和 23 財年的前景充滿信心，並重申我們對 25 財年中期長期增長的承諾。

Our third quarter revenue of $332.5 million grew 16% year-over-year and 4% quarter-over-quarter, exceeding the high end of our expectations entering the quarter. Product revenue accelerated to 22% growth year-over-year and 8% sequentially, attributable to both campus switching and wireless LAN partially offset by a decline in data center.

我們第三季度的收入為 3.325 億美元，同比增長 16%，環比增長 4%，超出了我們進入本季度的預期上限。產品收入同比增長 22%，環比增長 8%，這歸因於園區交換和無線 LAN，部分被數據中心的下滑所抵消。

New subscription bookings grew by 29% year-over-year. SaaS ARR grew 22% year-over-year to $117 million, up from $96 million in the year ago quarter. Subscription deferred revenue was up 39% year-over-year to $199 million. Revenue on a geographic basis once again reflects the timing of product shipments to our distributors across the regions. Regarding our bookings performance, as Ed mentioned, product bookings grew 6% sequentially, and we continue to expect sequential bookings growth into Q4 as well.

新訂閱預訂量同比增長 29%。 SaaS ARR 同比增長 22% 至 1.17 億美元，高於去年同期的 9600 萬美元。訂閱遞延收入同比增長 39% 至 1.99 億美元。按地域劃分的收入再次反映了向我們跨地區的分銷商發貨的時間。關於我們的預訂表現，正如 Ed 所提到的，產品預訂環比增長了 6%，我們繼續預計第四季度的環比預訂量也會增長。

The supply chain environment is improving significantly, and lead times are coming down faster than we expected. During Q3, our direct customer order backlog did remain flat. With product shipment lead times coming down, our distributors are adjusting their stocking orders to align with delivery timing. At the end of Q3, our backlog represented 5x our expected normalized level. We continue to expect the normalized level of backlog to be in the range of $75 million to $100 million by Q1 fiscal year '25. Although distributor backlog is releasing at an accelerated pace, our scenario-based planning gives us confidence to reiterate our long-term guidance of mid-teens revenue growth and gross margin in the range of 64% to 66% through fiscal '25.

供應鏈環境正在顯著改善，交貨時間的下降速度比我們預期的要快。在第三季度，我們的直接客戶訂單積壓確實保持平穩。隨著產品發貨提前期的縮短，我們的分銷商正在調整他們的庫存訂單以與交貨時間保持一致。在第三季度末，我們的積壓工作是我們預期的標準化水平的 5 倍。我們繼續預計，到 25 財年第一季度，標準化的積壓水平將在 7500 萬至 1 億美元之間。儘管分銷商積壓訂單的釋放速度加快，但我們基於情景的規劃讓我們有信心重申我們對 25 財年中期收入增長和毛利率在 64% 至 66% 範圍內的長期指導。

From a vertical standpoint, our largest vertical remains government and education at over 35% of total bookings this quarter. The large wins in the retail sector increased the retail, transportation and logistics vertical mix to 15% of bookings. Manufacturing remained around 10%, while sports and entertainment grew to slightly less than 10% of bookings. Services and subscription revenue was $91.4 million, up 5% year-over-year. This growth was largely driven by the strength of cloud subscription revenue up 30% year-over-year.

從垂直的角度來看，我們最大的垂直領域仍然是政府和教育，佔本季度總預訂量的 35% 以上。零售業的巨大勝利將零售、運輸和物流垂直組合增加到預訂量的 15%。製造業保持在 10% 左右，而體育和娛樂業務增長到略低於 10% 的預訂量。服務和訂閱收入為 9140 萬美元，同比增長 5%。這一增長主要是由雲訂閱收入同比增長 30% 的強勁推動。

Total Q3 recurring revenue, including maintenance, managed services and subscriptions was at $87 million or 26% of total company revenue. The growth of cloud subscriptions and maintenance drove the total deferred revenue to $464 million, up 25% from the year-ago quarter and 4% sequentially. Our gross margin came in at 59.1%, up 60 basis points sequentially and 110 basis points from the year ago quarter. This was attributable to improvements in both our product gross margin and services gross margin. Product gross margin benefited from higher revenue and an improvement in supply chain and distribution costs as well as product mix. Our services and subscription gross margin was at 67.3% in Q3, up 30 basis points from the prior quarter and 2.2 percentage points from last year due to lower managed services and RMA costs based on better product quality.

第三季度的經常性總收入（包括維護、託管服務和訂閱）為 8700 萬美元，占公司總收入的 26%。雲訂閱和維護的增長推動總遞延收入達到 4.64 億美元，比去年同期增長 25%，環比增長 4%。我們的毛利率為 59.1%，環比上升 60 個基點，比去年同期上升 110 個基點。這歸因於我們的產品毛利率和服務毛利率的改善。產品毛利率得益於更高的收入以及供應鍊和分銷成本以及產品組合的改善。我們的服務和訂閱毛利率在第三季度為 67.3%，比上一季度增長 30 個基點，比去年同期增長 2.2 個百分點，這是由於更好的產品質量導致託管服務和 RMA 成本降低。

Q3 operating expenses were $144 million, up from $130 million in the year ago quarter and from $139 million in Q2 '23, reflecting higher R&D investment and sales and marketing expenses to support higher revenue growth. Total operating expense as a percentage of revenue was 43.4%, down 30 basis points versus last quarter and down 2.1 percentage points compared to last year as we continue to drive operating leverage in the business. The combination of strong revenue growth, gross margin expansion, and operating leverage contributed to achieving a record operating margin of 15.6%, up from 12.5% in the year ago quarter and from 14.9% in Q2.

第三季度運營費用為 1.44 億美元，高於去年同期的 1.3 億美元和 23 年第二季度的 1.39 億美元，反映出更高的研發投資以及銷售和營銷費用以支持更高的收入增長。總運營費用佔收入的百分比為 43.4%，比上一季度下降 30 個基點，比去年下降 2.1 個百分點，因為我們繼續推動業務的運營槓桿。強勁的收入增長、毛利率擴張和經營槓桿相結合，使經營利潤率達到創紀錄的 15.6%，高於去年同期的 12.5% 和第二季度的 14.9%。

Q3 earnings per share were $0.29, at the high end of our guidance entering the quarter. This quarter, we generated free cash flow of $45.8 million, driven by record EBITDA as well as a sequential 2-day improvement in our cash conversion cycle to 22 days.

第三季度每股收益為 0.29 美元，處於我們進入本季度的指導的高端。本季度，我們產生了 4580 萬美元的自由現金流，這得益於創紀錄的 EBITDA 以及我們的現金轉換週期連續 2 天縮短至 22 天。

Now turning to guidance, we remain confident in the revenue outlook for Q4 as supported by our strong funnel of opportunities, our product backlog and our services and subscription deferred revenue balance. As products get delivered to customers and networks are installed, this should drive subscription and services bookings and billings that in many cases have been deferred or delayed until products are delivered to match service terms. We continue to expect that the reduction in expedite fees and shipping costs, combined with the full impact of our recent pricing actions, will lead to a continued recovery in gross margin in Q4 and into fiscal year '24.

現在轉向指導，在我們強大的機會漏斗、產品積壓以及我們的服務和訂閱遞延收入餘額的支持下，我們對第四季度的收入前景充滿信心。隨著產品交付給客戶並安裝網絡，這應該會推動訂閱和服務的預訂和計費，在許多情況下，這些預訂和計費會被推遲或延遲，直到交付符合服務條款的產品。我們繼續預計，加快費用和運輸成本的降低，加上我們最近定價行動的全面影響，將導致第四季度毛利率持續回升，並進入 24 財年。

Against this backdrop, we expect for Q4 revenue to be in the range of $340 million to $350 million; gross margin to be in the range of 59% to 61%; operating margin to be in the range of 15.5% to 17.3%; and earnings to be in the range of $0.28 to $0.34 per diluted share. For full fiscal year '23, we expect revenue growth of 16% at the midpoint with an operating margin of around 15%. With that, I will now turn it over to the operator to begin the question-and-answer session.

在此背景下，我們預計第四季度收入將在 3.4 億美元至 3.5 億美元之間；毛利率在59%至61%之間；營業利潤率在 15.5% 至 17.3% 之間；每股攤薄收益在 0.28 美元至 0.34 美元之間。對於整個 23 財年，我們預計中點收入增長 16%，營業利潤率約為 15%。有了這個，我現在將它交給接線員開始問答環節。

Thank you. (Operator Instructions) Our first question will come from the line of Mike Genovese with Rosenblatt Securities.

謝謝。 （操作員說明）我們的第一個問題將來自 Rosenblatt Securities 的 Mike Genovese。

I guess I have to ask about just the distributor backlog change, if you could give us more color on that. I guess from the numbers you guys gave on calculating, the backlog maybe went down about $100 million quarter-over-quarter. And I guess one question is, is all of that going to be in revenue this quarter, next quarter, the quarter after? Or could some of that actually sort of "go away"?

我想我只需要詢問經銷商積壓的變化，如果你能給我們更多的顏色。我猜從你們給出的計算數字來看，積壓訂單可能比上一季度減少了大約 1 億美元。我想一個問題是，所有這些都會在本季度、下個季度和下個季度計入收入嗎？或者其中一些實際上可以“消失”嗎？

Yes, Mike, let me jump in and then Cristina, feel free to follow. Yes, we -- there's a distributor component of backlog and then there's the customer order component. And as we said, the customer order component of backlog did not change during the quarter. But the distributor ordering is driven by lead times and lead times came in faster than we expected this quarter, which that occurrence is good news because it means that the market is getting healthier, and we're able to deliver products to customers sooner. At the same time, it means that our distributors will adjust their orders accordingly. And the early ordering that we had experienced earlier would effectively go away and older orders would be adjusted effectively and modified to the shorter lead time. What we are doing is we're trying to focus people, Mike, on our revenue outlook, and we're confirming the mid-teens revenue growth through our fiscal '25. And with a new target point of $75 million to $100 million in ending backlog, we think that distributors going forward are going to have -- they'll keep more orders on us and they'll have more inventory on hand so they don't get caught the way they got caught this last cycle. What we want people to do is focus on that $75 million to $100 million, and then that would be a landing point for backlog and then focus on what we're calling is going to be this mid-teens, a mid-teens revenue growth rate through fiscal '25. Cristina, I don't know if you want to add anything to that?

是的，邁克，讓我加入，然後是克里斯蒂娜，請隨時跟進。是的，我們 - 有積壓的分銷商組件，然後是客戶訂單組件。正如我們所說，積壓的客戶訂單部分在本季度沒有變化。但分銷商的訂單是由交貨時間驅動的，而交貨時間比我們本季度預期的要快，這是個好消息，因為這意味著市場正在變得更加健康，我們能夠更快地向客戶交付產品。同時，這意味著我們的經銷商將相應地調整他們的訂單。我們之前經歷過的提前訂購將有效地消失，舊訂單將有效調整併修改為更短的交貨時間。我們正在做的是，邁克，我們正在努力讓人們關注我們的收入前景，並且我們正在通過我們的 25 財年確認十幾歲的收入增長。有了 7500 萬美元到 1 億美元的新目標點，我們認為未來的分銷商將會有——他們會向我們保留更多的訂單，他們手頭會有更多的庫存，所以他們不會像上一個循環一樣被抓住。我們希望人們做的是專注於 7500 萬到 1 億美元，然後這將成為積壓的著陸點，然後專注於我們所說的將是這個十幾歲中期，十幾歲中期的收入增長通過財政'25率。克里斯蒂娜，我不知道你是否想補充什麼？

Thanks, Ed. I would just add that the distributor -- as we went through this constrained supply chain environment, the days that distributors were on order with us was elevated. And as lead times come down, as Ed mentioned, the whole environment is getting normalized, and so the distributor orders and the backlog is coming to that normalized level of $75 million to $100 million. And we expect to get to that level at around Q1 '25. And as Ed said, our scenario-based planning gives us commitment and confidence in the guidance that we gave.

謝謝，埃德。我只想補充一點，分銷商——當我們經歷這個受限的供應鏈環境時，分銷商向我們訂購的日子有所增加。正如 Ed 提到的那樣，隨著交貨時間的縮短，整個環境正在變得正常化，因此分銷商訂單和積壓訂單將達到 7500 萬至 1 億美元的正常水平。我們希望在 25 年第一季度左右達到該水平。正如 Ed 所說，我們基於情景的規劃讓我們對我們提供的指導充滿信心和信心。

Perfect. That all makes sense, and clearly, when we do look at the growth rate for this year and what you're projecting for the next couple of years, we don't see anything sort of macro negative here. I was wondering, do you believe that's more of a function of healthy trends in the verticals that you play in? And it would be great if you could sort of go through some of those verticals and sort of rank what you're seeing. Or is it a function of share gains? Or how do you see your success, what's the main driver there?

完美的。這一切都是有道理的，而且很明顯，當我們查看今年的增長率以及您對未來幾年的預測時，我們在這裡看不到任何宏觀負面因素。我想知道，你是否認為這更像是你所從事的垂直行業中健康趨勢的一個功能？如果你能瀏覽其中的一些垂直領域並對你所看到的進行排序，那就太好了。或者它是股票收益的函數？或者你如何看待你的成功，那裡的主要驅動力是什麼？

Well, Mike, I think you hit on all 3. One is we are playing -- first of all, we're playing in -- we mentioned and I think Cristina reviewed our verticals and how we're doing in terms of our government accounts internationally and state and local governments and education, which remain strong. Retail was particularly strong for us this quarter. Obviously, when you get huge wins like Kroger, that has an effect on mix. Manufacturing remains strong. Overall, enterprise spending in networking has been pretty resilient, and I think when you do market checks with some of the larger distributors and some of the retailers out there, I think they'll tell you that networking is probably one of the more resilient categories. The other one is, obviously we're taking share and we're taking share in terms of our batting average and winning competitive processes, Kroger being a great example. And then also, we also mentioned an E-Rate win where we have a very large channel reseller, very well-known out in the market, that's doubling down on Extreme. They grew their E-rate bids with Extreme by 100% and then we won 50% more. Even in an E-rate market that was considered to be somewhat soft this year, with that channel partner we saw 50% growth. We have opportunities to grow with our partners. As I mentioned, our funnel looks very healthy, and our batting average continues to hold up. We're performing well because of competitive differentiation. And I think overall, where we play in the enterprise market is pretty resilient.

好吧，邁克，我想你說的都是三點。一個是我們正在玩——首先，我們正在玩——我們提到過，我認為克里斯蒂娜回顧了我們的垂直領域以及我們在政府方面的表現國際賬戶以及州和地方政府和教育仍然很強勁。本季度零售業對我們來說尤其強勁。顯然，當你獲得像 Kroger 這樣的巨大勝利時，這會對組合產生影響。製造業依然強勁。總體而言，企業在網絡方面的支出一直非常有彈性，我認為當您與一些較大的分銷商和一些零售商進行市場調查時，我認為他們會告訴您網絡可能是更具彈性的類別之一.另一個是，顯然我們正在分享，我們在擊球率和獲勝競爭過程方面分享，克羅格就是一個很好的例子。然後，我們還提到了 E-Rate 的勝利，我們有一個非常大的渠道經銷商，在市場上非常知名，在 Extreme 上加倍下注。他們將 Extreme 的 E-rate 出價提高了 100%，然後我們又多贏了 50%。即使在今年被認為有些疲軟的 E-rate 市場中，與該渠道合作夥伴一起，我們也看到了 50% 的增長。我們有機會與合作夥伴一起成長。正如我所提到的，我們的漏斗看起來非常健康，我們的安打率繼續保持穩定。由於競爭差異化，我們表現良好。我認為總的來說，我們在企業市場上的表現非常有彈性。

Perfect. If I could just do one final quick follow-up, I mean should we just assume that in the future that we won't see the backlog and the book-to-bill in the quarterly presentations? Is that a change going forward?

完美的。如果我可以做最後一次快速跟進，我的意思是我們是否應該假設將來我們不會在季度報告中看到積壓和訂單到賬單？這是向前的變化嗎？

Yes. I think what we'll do is just -- we'll let you know how we're trending towards that end goal.

是的。我認為我們要做的只是 - 我們會讓您知道我們如何朝著最終目標邁進。

One moment for our next question. And that will come from the line of Alex Henderson with Needham.

稍等一下我們的下一個問題。這將來自 Alex Henderson 和 Needham 的系列。

Obviously, a very nice quarter, nice print. The only thing that surprised me was that inventory actually went up. I was expecting that as supply improves, that inventory might go down and create additional cash flow. Obviously, you had excellent cash flow in the quarter, but inventory went up. Can you give us a sense of the timing of when you expect inventory to start to normalize and come back in and when that cash generation will occur?

顯然，這是一個非常好的季度，漂亮的印刷品。唯一讓我吃驚的是庫存實際上上升了。我原以為隨著供應的增加，庫存可能會下降並創造額外的現金流。顯然，您在本季度擁有出色的現金流，但存貨卻增加了。您能否告訴我們您預計庫存何時開始正常化並恢復正常以及何時會產生現金？

Yes. At a high level, Alex, we're shipping out a lot more product and we're expecting our product shipments to increase. I think you'll expect to see that build as we're building inventory to support shipments of more product. But let me have Cristina jump in.

是的。在高層，亞歷克斯，我們正在運送更多的產品，我們預計我們的產品出貨量會增加。我認為您會期望看到該構建，因為我們正在構建庫存以支持更多產品的發貨。但是讓我讓克里斯蒂娜插進來。

Sure. Inventory was actually unnaturally low during the supply chain constrained environment. The fact that our inventory is increasing is another sign that the supply chain environment is improving, raw material is flowing, finished goods, we're building our finished goods to be able to ship out. There is an element of timing to this as well, but we do actually expect inventory to keep going up for the next few quarters as the product flows and then we'll get to normalized level. I'll just say, just reiterate again that the levels we were seeing were not natural, and we're getting to a more normalized level of inventory internally as well.

當然。在供應鏈受限的環境中，庫存實際上異常低。我們庫存增加的事實是供應鏈環境正在改善的另一個跡象，原材料在流動，成品，我們正在建造成品以便能夠發貨。這也有時間因素，但我們確實預計隨著產品流動，庫存將在接下來的幾個季度繼續上升，然後我們將達到正常水平。我只想說，再次重申我們看到的水平是不自然的，我們也在內部達到更正常的庫存水平。

Looking at the subscription business, the SaaS particularly, the mechanics of this, of high growth in SaaS subscription, generally creates a reduction in realized revenue in the period that those contracts happen. If they had been a direct product order instead of a SaaS order, obviously you would have ended up with higher revenues on the upfront sale instead of just the small portion of the SaaS subscription. Can you give us any sense of what the cannibal -- what the reduction in the contribution to growth is as a result of the high rate of success in your SaaS business?

看看訂閱業務，特別是 SaaS，SaaS 訂閱的高增長機制，通常會在這些合同發生期間減少已實現收入。如果他們是直接產品訂單而不是 SaaS 訂單，顯然您最終會在前期銷售中獲得更高的收入，而不僅僅是 SaaS 訂閱的一小部分。您能否告訴我們什麼是食人者——由於您的 SaaS 業務的高成功率，對增長的貢獻減少了多少？

We're not seeing a high level of cannibalization. We had a very I would call pretty low upfront software business that has been trending down over time, but it was not significant or material. The subscription growth is not cannibalizing from that or from our product sales.

我們沒有看到高水平的蠶食。我們有一個非常低的前期軟件業務，隨著時間的推移一直呈下降趨勢，但這並不重要或實質性。訂閱增長並沒有從我們的產品銷售中蠶食。

Well, I mean it's not cannibalizing, but it's not being recognized in the current period, it's being deferred into future periods because of the mechanics of SaaS. Whereas normally, if you sold the product, the same amount of product that you sign in the SaaS subscription, you would get more upfront and less in the future periods. Almost by definition, since -- I mean if you signed something on March 31, you get no revenues in the quarter. Whereas if it was purchased, you would have the entire revenue. Clearly, it has to reduce the recognition of revenue.

嗯，我的意思是它不是蠶食，但它在當前時期沒有得到認可，由於 SaaS 的機制，它被推遲到未來時期。而通常情況下，如果您銷售的產品數量與您在 SaaS 訂閱中籤署的產品數量相同，那麼您在未來期間會獲得更多的前期費用和更少的費用。幾乎按照定義，因為——我的意思是如果你在 3 月 31 日簽署了一些東西，你在這個季度就沒有收入。而如果它被購買，您將獲得全部收入。顯然，它不得不減少收入的確認。

Sure. As the mix of our revenue shifts to more recurring revenue such as SaaS and subscription, absolutely that is going to happen. Because we book the contract in maybe a single year contract or a multiyear contract, but we recognize that revenue over time. Yes, as the mix, as our overall mix shifts, that phenomenon will be definitely there. I thought you were saying that it was actually reducing some other part of our business and that's not the case.

當然。隨著我們的收入組合轉向更多經常性收入，例如 SaaS 和訂閱，這絕對會發生。因為我們可能以單年合同或多年合同的形式預訂合同，但我們會隨著時間的推移確認收入。是的，隨著組合，隨著我們整體組合的變化，這種現象肯定會存在。我以為你是說這實際上是在減少我們業務的其他部分，但事實並非如此。

No, just the recognition timing of it. How much -- if it had been straight product sales, how much additional revenue growth would have been in the quarter?

不，只是它的識別時間。多少 - 如果它是直接的產品銷售，那麼本季度的額外收入增長會是多少？

I don't know if we have that answer for you.

我不知道我們是否有適合您的答案。

Yes, I don't have that answer.

是的，我沒有那個答案。

Maybe we can take it offline and come back and dig in a little deeper. I mean one of the things that Cristina mentioned earlier is that because of backlog, we do have a lot of subscription as well as service and maintenance tied up in that backlog. And then as that releases, we are expecting to see an acceleration in that growth rate. The other thing that I mentioned is that we're doing a lot of work so that we can effectively sell subscriptions on all of our hardware, which we don't have today, and that will also create a really nice growth wave in addition to some of the other, the packaging and the services that we're putting together with some of our partners.

也許我們可以將其離線，然後再回來進行更深入的挖掘。我的意思是克里斯蒂娜之前提到的一件事是，由於積壓，我們確實有很多訂閱以及服務和維護與積壓有關。然後隨著它的發布，我們預計會看到該增長率的加速。我提到的另一件事是，我們正在做很多工作，以便我們可以有效地銷售我們今天沒有的所有硬件的訂閱，這也將創造一個非常好的增長浪潮，除了其他一些，我們與一些合作夥伴一起提供的包裝和服務。

One last question and I'll cede the floor. The Universal product is making progress. I'm assuming that that's increasing as a percentage of revenues. There's gross margin benefit as that the increases as a percentage of shipped product. And you additionally have a lot of supply chain costs that you've been absorbing as a result of inflated logistics and parts costs. When we exit this year, how much is left of that cost to normalize in 2024, 2025?

最後一個問題，我將放棄發言權。 Universal 產品正在取得進展。我假設這佔收入的百分比正在增加。有毛利率的好處，因為增加了已發貨產品的百分比。此外，由於物流和零件成本膨脹，您還承擔了大量供應鏈成本。當我們今年退出時，在 2024 年、2025 年實現正常化的成本還剩多少？

Our expectation for gross margin, we're reiterating our long-term guidance of 64% to 66% by the end of FY '25. That gives you a sense of how much left. We're at 59.1% in Q3. We're guiding a midpoint of 60% in Q4. And then we expect to see that step improvement to the 64% to 66% range by the end of FY '25.

我們對毛利率的預期，我們重申到 25 財年末我們的 64% 至 66% 的長期指導。這讓您了解還剩多少。我們在第三季度為 59.1%。我們在第四季度指導 60% 的中點。然後我們預計到 25 財年末，這一比例將提高到 64% 至 66% 的範圍。

400 to 500 basis points margin that's caught up in those 2 variables?

400 到 500 個基點的保證金是否包含在這兩個變量中？

Both in supply chain costs as well as improvement in gross margin as well as the mix, seeing the subscription, higher margin subscription revenue in our mix, will also contribute to that margin expansion.

供應鏈成本以及毛利率和組合的改善，看到訂閱，我們組合中更高的利潤率訂閱收入，也將有助於利潤率的增長。

One moment for our next question. And that will come from the line of Dave Kang with B. Riley.

稍等一下我們的下一個問題。這將來自 Dave Kang 和 B. Riley 的系列。

My first question is regarding gross margins. You provided 60% for fiscal fourth quarter and then you're guiding to 65% for fiscal '25. For fiscal '24, should we think of gross margin sort of like a little bit like a linear ramp from fourth quarter to fiscal '25?

我的第一個問題是關於毛利率。你為第四財季提供了 60%，然後你指導 25 財年達到 65%。對於 24 財年，我們是否應該認為毛利率有點像從第四季度到 25 財年的線性增長？

Exactly. Similar to what we communicated last quarter, no change in that guidance that we expect to see about 0.5 point to 1 point of improvement each quarter sequentially as we head through FY '24.

確切地。與我們上個季度傳達的內容類似，該指導沒有變化，我們預計在我們進入 24 財年時，每個季度都會有大約 0.5 點到 1 點的改進。

Got it. And then on your Universal platform, can you give us an update? When do we expect -- when should we expect the full 100% Universal?

知道了。然後在你的通用平台上，你能給我們更新嗎？我們什麼時候可以期待——什麼時候我們應該期待完全 100% 的通用？

Yes, Dave, we will be completing the Universal platform, the buildout of our Universal platform, over the course of this year. We're excited about that. And then the adoption of our Universal platforms has been incredibly high. We would expect 90% by the end of the year. And one of the things -- it's been our most popular seller in terms of the adoption. The Universal platforms have been our most successful product releases. The other thing I'll say is that the quality of Universal has been significantly higher than any other product we've had in our history. As it relates to operational support, it's been a very, very popular product.

是的，Dave，我們將在今年完成 Universal 平台，即我們 Universal 平台的擴建。我們對此感到興奮。然後我們的通用平台的採用率非常高。我們預計到今年年底將達到 90%。其中一件事——就採用率而言，它一直是我們最受歡迎的賣家。通用平台是我們最成功的產品發布。我要說的另一件事是，Universal 的質量明顯高於我們歷史上的任何其他產品。由於它涉及運營支持，因此它一直是非常非常受歡迎的產品。

And then if I remember correctly, I believe you mentioned something about expecting an uptick once that happens. Can you kind of quantify the situation? I guess you're talking about next year, so should we expect some kind of a new uptick in orders or demand because of that?

然後，如果我沒記錯的話，我相信你提到了一些關於一旦發生這種情況就期待上漲的事情。你能量化一下情況嗎？我猜你說的是明年，那麼我們是否應該因此而期待訂單或需求出現某種新的增長？

Well, it's helpful. It's part of our solution. If you recall, Universal hardware is the most flexible hardware in the market in the enterprise space because you can run different personalities. When you combine that Universal hardware with management and the features of our cloud and the cloud choice we bring and then you combine that with our unique Fabric technology, we're able to build solutions in the market that are differentiated. End-to-end, wired, wireless across the wireless LAN in terms of our SD-WAN solution. It creates a lot of flexibility, it provides simplicity, and it provides choice. And yes, that's absolutely a contributor on the demand side. When we look at this linear growth in our gross margin, we factored in the adoption of Universal platforms into that equation. And Cristina, I don't know if you want to add anything to that from a gross margin perspective.

好吧，這很有幫助。這是我們解決方案的一部分。如果您還記得，通用硬件是企業空間市場上最靈活的硬件，因為您可以運行不同的個性。當您將通用硬件與我們雲的管理和功能以及我們帶來的雲選擇相結合，然後將其與我們獨特的 Fabric 技術相結合時，我們能夠在市場上構建與眾不同的解決方案。就我們的 SD-WAN 解決方案而言，跨無線 LAN 的端到端、有線、無線。它創造了很大的靈活性，提供了簡單性，並提供了選擇。是的，這絕對是需求方面的貢獻者。當我們查看毛利率的這種線性增長時，我們將通用平台的採用納入了該等式。克里斯蒂娜，我不知道你是否想從毛利率的角度添加任何東西。

No, just reiterate what you said, it's built into our outlook.

不，只是重申你所說的話，它已融入我們的前景。

Got it. And my last question is, should we still expect subscription revenue CAGR to be 35% to 45%?

知道了。我的最後一個問題是，我們是否仍應期望訂閱收入的複合年增長率為 35% 至 45%？

Yes, we're confirming our long-term guidance. Yep.

是的，我們正在確認我們的長期指導。是的。

(Operator Instructions) One moment for our next question -- and that will come from the line of Paul Silverstein with Cowen.

（操作員說明）請稍等一下我們的下一個問題——這將來自 Paul Silverstein 和 Cowen 的台詞。

It sounds like the demand you're describing is broad-based, but I've got to ask, how much of the strength is specific to education and government? It sounds like that was extremely strong for your comps.

聽起來你描述的需求是廣泛的，但我不得不問，有多少力量是針對教育和政府的？聽起來這對你的伴奏來說非常強大。

Well, Paul, we had an incredibly large number of $1 million plus deals in education. And I'd say that we are -- in that vertical, we are doing very well with the channel and partner community. I gave an E-Rate example where even in a kind of a soft E-rate climate, we have partner adoption, which is driving up our share in that market. We also have big wins this quarter. For example, Palm Beach County Schools, $6.5 million win. We're getting into larger deals, and we're winning more larger deals. And I think the channel community is realizing that they can get out and win with Extreme. And quite frankly, we have a differentiated solution. What's interesting is that because of our success and some of the even larger wins in the retail verticals and then sports verticals, it was actually down, the math. Normally, we talk about 40% state and local government education. And in this quarter, it was down to 35%. We ticked up to 15% in retail. The other verticals kind of held in there. It remains strong, and from our standpoint, we are seeing larger opportunities, we're winning larger opportunities, and that's part of the share gain story. Which is why we talk about large crumbs and the opportunity for us to take small share points, and it has a big impact on our bookings and overall, our long-term revenue target.

好吧，保羅，我們在教育方面有大量超過 100 萬美元的交易。我要說的是——在那個垂直領域，我們在渠道和合作夥伴社區方面做得很好。我舉了一個 E-Rate 的例子，即使在一種溫和的 E-Rate 環境中，我們也有合作夥伴採用，這正在提高我們在該市場的份額。本季度我們也取得了重大勝利。例如，棕櫚灘縣學校贏得了 650 萬美元。我們正在進行更大的交易，我們正在贏得更多更大的交易。而且我認為渠道社區正在意識到他們可以通過 Extreme 脫穎而出並獲勝。坦率地說，我們有一個差異化的解決方案。有趣的是，由於我們的成功以及在零售垂直領域和體育垂直領域的一些更大的勝利，它實際上是在下降，數學。通常，我們談論 40% 的州和地方政府教育。而在本季度，這一比例下降到了 35%。我們在零售業上調了 15%。其他垂直領域都在那裡。它仍然很強大，從我們的角度來看，我們看到了更大的機會，我們正在贏得更大的機會，這是分享收益故事的一部分。這就是為什麼我們談論大麵包屑和我們獲得小份額積分的機會，這對我們的預訂和整體長期收入目標有很大影響。

Ed, just to be clear, the question I'm trying to get at, just to be clear, the strength you're describing is broad-based. When you look at your order book, your funnel, your current revenue, that's not primarily or exclusively about that public sector and education vertical that's been 35% to 40% of revenue throughout your customer events. I just want to make sure.

艾德，要明確一點，我要解決的問題，要明確一點，你所描述的力量是廣泛的。當你查看你的訂單簿、你的漏斗、你當前的收入時，這並不是主要或完全關於公共部門和教育垂直領域，它們在你的客戶活動中佔收入的 35% 到 40%。我只是想確定一下。

That's correct. That's a correct statement. And the other point I'm trying to make is that there's partner penetration. I mean one of the things that we talked about, we have Comcast as a new partner of Extreme, a pretty large company, they do a lot of business. We won Cedar Fair, $8 million plus deal with a new relationship with a partner like Comcast. Verizon, we're now certified in Verizon's portfolio and we're working directly with their enterprise sellers. Well, this is new. We're opening up, and this is another large channel partner, and they're excited about our solution and bringing Extreme to market. With some of these larger partners now, we have what are new growth opportunities with the same portfolio of product. From that standpoint, it is broad-based. We will see enterprise, overall enterprise growth, and then we would expect to see this growth happen really littered across all of our verticals.

這是正確的。這是正確的說法。我想說的另一點是合作夥伴的滲透。我的意思是我們談到的一件事，我們有康卡斯特作為 Extreme 的新合作夥伴，這是一家相當大的公司，他們做很多生意。我們贏得了 Cedar Fair，800 萬美元外加與 Comcast 等合作夥伴建立新關係的交易。 Verizon，我們現在在 Verizon 的產品組合中獲得認證，我們正在直接與他們的企業銷售商合作。嗯，這是新的。我們正在開放，這是另一個大型渠道合作夥伴，他們對我們的解決方案和將 Extreme 推向市場感到興奮。現在有了這些更大的合作夥伴中的一些，我們擁有相同產品組合的新增長機會。從這個角度來看，它具有廣泛的基礎。我們將看到企業，整體企業的增長，然後我們希望看到這種增長真正發生在我們所有的垂直領域。

Thank you. One moment for our next question. That will come from the line of Eric Martinuzzi with Lake Street Capital.

謝謝。稍等一下我們的下一個問題。這將來自 Eric Martinuzzi 與 Lake Street Capital 的合作。

Yes. I understand the R&D spending is up. I know you guys have Extreme Connects coming up here in a couple of weeks. Just where are we pointing those R&D dollars? Are these kind of evolutionary enhancements to the existing products? Or could we see some expansion in the breadth of where you're headed with the product portfolio?

是的。我知道研發支出增加了。我知道你們幾個星期後會有 Extreme Connects 來到這裡。我們將這些研發資金指向何處？這些是對現有產品的進化增強嗎？或者我們能否看到您在產品組合方面的廣度有所擴展？

Thanks for the question, Eric. A lot of what we're doing is investing in our existing platforms and developing the completion of our Universal platforms, further development of our wireless platforms. And we're investing a lot obviously in cloud and the kinds of features that we can orchestrate over cloud. Historically, we've had a NAC product, which is effectively access control and security in the network. We are cloudifying that solution and we'll be adding that into our offerings. The other thing that we're doing is we're packaging our complete solutions for new channel partners to provide managed services. In our space, managed services are on the rise, but it's commercially really complicated. And you hear us talk about simplicity. We're bringing simplicity to a market that's complicated. And we think we have a real differentiator with our managed services solutions portfolio. And this is taking effectively the existing products and our cloud and services that we have that we're developing and packaging it in a very simple licensing framework that's generated a lot of interest in the marketplace. This is an area where we expect to take share. And effectively, what we're doing is we'll be supporting a managed service. Yes, that will be coming out at Connect. And then finally, EdgeCloud, there's a lot of conversation about EdgeCloud. There will be a reveal at Connect where because of the way we're developing our platform, and it's really around cloud choice. No enterprise customer or supplier in the networking industry is able to offer the kind of choice that we can provide. And choice has to do with public cloud versus private cloud versus what goes to data center versus kind of what stays on campus. We are going to be able to provide more flexibility than anyone as companies are wrestling with this. We'll also -- there will be a reveal around Extreme EdgeCloud and where data resides in enterprise networks that I think will be further differentiation for Extreme. These are areas that we're investing in, and quite frankly, there's a lot of interest in the market, particularly with large partners for these kinds of solutions.

謝謝你的問題，埃里克。我們正在做的很多事情是投資於我們現有的平台並開發我們的通用平台的完成，進一步開發我們的無線平台。我們顯然在雲以及我們可以通過雲協調的各種功能方面進行了大量投資。從歷史上看，我們有一個 NAC 產品，它可以有效地實現網絡中的訪問控制和安全性。我們正在將該解決方案雲化，並將其添加到我們的產品中。我們正在做的另一件事是，我們正在為新的渠道合作夥伴打包完整的解決方案，以提供託管服務。在我們的領域，託管服務正在興起，但它在商業上非常複雜。您會聽到我們談論簡單性。我們正在為複雜的市場帶來簡單。我們認為我們的託管服務解決方案組合具有真正的差異化優勢。這有效地利用了我們正在開發的現有產品以及我們擁有的雲和服務，並將其打包在一個非常簡單的許可框架中，這在市場上引起了很多興趣。這是我們希望分享的領域。實際上，我們正在做的是支持託管服務。是的，這將在 Connect 上發布。最後，EdgeCloud，關於 EdgeCloud 的討論很多。由於我們開發平台的方式，Connect 上將有一個揭示，它實際上是圍繞雲選擇。網絡行業中沒有企業客戶或供應商能夠提供我們可以提供的那種選擇。選擇與公共雲、私有云、數據中心的內容和校園內的內容有關。隨著公司正在努力解決這個問題，我們將能夠提供比任何人都更大的靈活性。我們還將 - 將揭示 Extreme EdgeCloud 以及數據駐留在企業網絡中的位置，我認為這將進一步區分 Extreme。這些是我們正在投資的領域，坦率地說，市場上有很多興趣，尤其是對這類解決方案的大型合作夥伴。

One moment for our next question. That will come from the line of Greg Mesniaeff with WestPark Capital.

稍等一下我們的下一個問題。這將來自 WestPark Capital 的 Greg Mesniaeff 系列。

I have a question for you regarding your network security offerings. As you continue to move upstream into subscription-based cloud-based services, what kind of next-gen network security products, or services rather, are you going to be offering? And in doing so, can you sort of deliberately encroach on the turf of some of the network security vendors that you're working with right now?

我有一個關於您的網絡安全產品的問題要問您。隨著您繼續向上游移動到基於訂閱的基於雲的服務，您將提供什麼樣的下一代網絡安全產品或服務？在這樣做的過程中，您是否可以故意侵占您目前正在合作的一些網絡安全供應商的地盤？

Yes, thanks for the question. Security in our industry is pretty complicated, and there's a lot of different layers. People make the analogy of the layers of the onion to describe all the different elements. One of the big differentiators that we have in our solution set today is our Fabric and our Fabric technology that has inherent security built in. And then the idea that we can extend that security out across the wide area network with our SD-WAN solution is truly unique in the marketplace and brings a level of security that's just inherent in the network. One of the things that we can do with that is effectively provide inherent security as opposed to an over-the-top solution, which brings a lot of simplicity again and likely savings. Remember, we also have Air Defense, which is one of the leading WiFi security solutions that's out in the marketplace. Obviously, this is something that's critical in winning something like a Kroger or these distributed networks. And that also is an element of our offer. And I referenced earlier network access control and policy and identity management around who is accessing the network and access security. And we are taking what is very mature and proven technology and we're cloudifying this. And once again, we will have an access control security element that will be inherent and built into the network, which will be differentiated. It will -- we will be in a position to compete and we think attract a lot of interest by simplifying these security elements into a single solution within a single license that we believe will be disruptive in the marketplace.

是的，謝謝你的提問。我們行業的安全性非常複雜，有很多不同的層次。人們用洋蔥的層次來類比來描述所有不同的元素。我們今天的解決方案集中的一大區別是我們的 Fabric 和我們的 Fabric 技術內置了固有的安全性。然後我們可以通過我們的 SD-WAN 解決方案將安全性擴展到廣域網的想法是在市場上真正獨一無二，並帶來網絡固有的安全級別。我們可以用它做的一件事是有效地提供固有的安全性，而不是一個過頂的解決方案，這再次帶來了很多簡單性和可能的節省。請記住，我們還有 Air Defense，這是市場上領先的 WiFi 安全解決方案之一。顯然，這對於贏得像 Kroger 或這些分佈式網絡這樣的東西至關重要。這也是我們報價的一個要素。我參考了之前關於誰在訪問網絡和訪問安全的網絡訪問控制以及策略和身份管理。我們正在採用非常成熟和經過驗證的技術，並將其云化。再一次，我們將擁有一個固有的並內置於網絡中的訪問控制安全元素，這將是有區別的。它將 - 我們將處於競爭的位置，我們認為通過將這些安全元素簡化為單一許可證中的單一解決方案來吸引很多興趣，我們認為這將在市場上造成破壞。

One moment for our next question. And that will come from the line of Christian Schwab with Craig-Hallum.

稍等一下我們的下一個問題。這將來自 Christian Schwab 和 Craig-Hallum 的系列。

As we look at the backlog, which we discussed looked to be down roughly $100 million due to adjustments in distributor orders, can you tell us what percentage of the backlog that's left is deferred revenue, customer orders or distributors still?

當我們查看積壓訂單時，由於分銷商訂單的調整，我們討論的積壓訂單看起來減少了大約 1 億美元，您能否告訴我們剩餘積壓訂單中有多少百分比是遞延收入、客戶訂單或分銷商？

Yes. Thanks, Christian, for the question. What we've said is that overall backlog is about 5x. Obviously, distributor behavior is a little more tied to lead times and lead times came down faster. We're expecting them to come down, so we really don't want to get into sort of dissecting backlog. Really what we want to do is reinforce our outlook of revenue growth. And we're doing that out through our fiscal '25, which is out there. We baked that into our revenue guide, and that's where we're trying to focus everyone.

是的。克里斯蒂安，謝謝你提出這個問題。我們所說的是總體積壓約為 5 倍。顯然，分銷商的行為與交貨時間有更多的聯繫，而且交貨時間下降得更快。我們希望它們能夠下降，所以我們真的不想陷入某種解剖積壓的狀態。我們真正想做的是加強我們的收入增長前景。我們正在通過我們的 25 財年做到這一點。我們將其納入了我們的收入指南，這就是我們試圖讓每個人都關注的地方。

Great. Okay. Ed, what you guys are doing then, I guess my second question is, when you look at your scenario-based planning over the next 2.5, 3 years, what do you expect the industry growth rate for the verticals you serve to be growing at? How much market share gain are you assuming in that growth rate over that timeframe? And then what percentage is catch-up orders from backlog that couldn't be shipped during COVID? Is that how you guys look at it? Or maybe you could explain.

偉大的。好的。 Ed，你們現在在做什麼，我想我的第二個問題是，當您查看未來 2.5、3 年的基於場景的規劃時，您預計您所服務的垂直行業的行業增長率是多少？您假設在該時間範圍內以該增長率獲得多少市場份額？那麼在 COVID 期間無法發貨的積壓訂單中有多少百分比是補貨訂單？你們是這樣看的嗎？或者你可以解釋一下。

Yes, look, we have to factor in the industry. We're obviously factoring a backlog runoff, and then we're also looking at share gains. I would say the overall industry, we see this kind of mid-single-digit growth in the overall industry. When you look at the release of backlog, as I mentioned before, we are expecting our distributors to have more on order with us in the future than they did in the past. Because if we go back to pre-supply chain issues, it was very much a just-in-time model, and that obviously put a lot of risk on their business. This is where we landed at that $75 million to $100 million number. In your model, you should think about $75 million to $100 million of backlog is kind of the ending point in our Q1 fiscal '25. That's where we see that. And then we have share gains. I know earlier in your report, you mentioned a large reseller that the outlook was down. In our case, with those kinds of resellers, because of their size, small share points create big opportunities. And we mentioned one of those resellers where literally in kind of a soft E-Rate market, we're up 50%. These are the kinds of things that we can do at Extreme because of our relative size and it gives us a growth advantage, if you will. Some of these other larger partners I mentioned, when you open up a Comcast, when you open up a Verizon, when you open up some of these larger managed services partners, we open up the door for growth opportunities where quite frankly we haven't played. And the growth opportunities are quite large. A point of market share is over 20% growth on top of the market, so it doesn't take a lot of share gains for Extreme to outgrow the market and then for us to get to that mid-teens number.

是的，看，我們必須考慮行業因素。我們顯然正在考慮積壓的徑流，然後我們也在考慮份額收益。我會說整個行業，我們在整個行業看到了這種中個位數的增長。正如我之前提到的，當您查看積壓訂單的發佈時，我們預計我們的分銷商未來會收到比過去更多的訂單。因為如果我們回到供應鏈之前的問題，那是一個非常及時的模型，這顯然給他們的業務帶來了很大的風險。這就是我們降落在 7500 萬到 1 億美元的數字的地方。在您的模型中，您應該考慮大約 7500 萬至 1 億美元的積壓訂單是我們 25 財年第一季度的終點。這就是我們看到的地方。然後我們有份額收益。我知道在您之前的報告中，您提到了一家大型經銷商的前景不佳。在我們的案例中，對於這些類型的經銷商，由於他們的規模，小的分享點創造了大的機會。我們提到了其中一個經銷商，在這些經銷商中，E-Rate 市場實際上處於一種疲軟的狀態，我們上漲了 50%。由於我們的相對規模，這些是我們可以在 Extreme 做的事情，如果你願意的話，它給我們帶來了增長優勢。我提到的其他一些更大的合作夥伴，當你打開康卡斯特，當你打開 Verizon，當你打開一些更大的託管服務合作夥伴時，我們打開了增長機會的大門，坦率地說，我們還沒有玩過。而且增長機會相當大。市場份額的一個點是在市場頂部增長超過 20%，因此 Extreme 不需要太多的份額增長就可以超越市場，然後我們就可以達到這個十幾歲的數字。

And I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Extreme Networks' CEO, Mr. Ed Meyercord.

我現在不會在隊列中顯示更多問題。我現在想將電話轉回給 Extreme Networks 的首席執行官 Ed Meyercord 先生。

Thanks, Cherise, and thanks everyone for joining the call. Obviously, we're excited about the quarter and the performance. We had a lot of records. I want to shout out to the Extreme employees, our partner community, everyone that they join in on these calls, because we have a lot of momentum right now, and we say there's never been a better time to be at Extreme. The competitive differentiation is there, and it's fun to be winning in the marketplace. Shout out to those teams. And then also investors for your continued participation and interest in the company. We're holding on to a very strong guide in terms of top line growth and margin expansion, both at the gross margin line and then operating leverage down to the bottom line. We appreciate your interest in Extreme, and we're quite confident about the quarters to come. Thanks, everyone, and have a great day.

謝謝 Cherise，也感謝大家加入電話會議。顯然，我們對本季度和業績感到興奮。我們有很多記錄。我想向 Extreme 員工、我們的合作夥伴社區以及他們加入這些電話會議的每個人大聲疾呼，因為我們現在有很大的動力，我們說現在是加入 Extreme 的最佳時機。競爭差異化就在那裡，在市場上獲勝很有趣。向那些團隊大聲喊叫。然後還有投資者對您的持續參與和對公司的興趣。我們在收入增長和利潤率擴張方面堅持非常有力的指導，無論是在毛利率線上，還是在經營槓桿上，一直到底線。感謝您對 Extreme 的關注，我們對未來幾個季度充滿信心。謝謝大家，祝你有美好的一天。

Thank you all for participating. This concludes today's program. You may now disconnect.

謝謝大家的參與。今天的節目到此結束。您現在可以斷開連接。