Extreme Networks Inc (EXTR)

Inventory turnover

		Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Cost of revenue (ttm)	US$ in thousands	959,809	970,171	997,391	1,015,157	987,475	939,256	910,707	883,393	855,845	845,399	820,238	792,666	777,428	737,562	740,998	778,370	821,336	861,196	865,783	836,728
Inventory	US$ in thousands	141,032	185,357	152,521	100,823	89,024	70,310	63,763	51,766	49,231	37,738	37,180	32,439	32,885	43,924	49,830	55,830	62,589	66,214	79,664	82,394
Inventory turnover		6.81	5.23	6.54	10.07	11.09	13.36	14.28	17.07	17.38	22.40	22.06	24.44	23.64	16.79	14.87	13.94	13.12	13.01	10.87	10.16

June 30, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $959,809K ÷ $141,032K
= 6.81

The inventory turnover of Extreme Networks Inc has fluctuated over the past few quarters, ranging from a low of 5.23 to a high of 24.44. A higher inventory turnover generally indicates that the company is more efficient in managing its inventory levels and converting its inventory into sales. Extreme Networks Inc saw a significant increase in inventory turnover in the first half of 2022, peaking at 24.44 in March 2022, before gradually declining in subsequent quarters.

The decreasing trend in inventory turnover from 2022 to 2024 may indicate that the company is potentially facing challenges in selling its inventory efficiently or is carrying excess inventory levels. This could lead to higher storage costs and potential risks of inventory obsolescence. Extreme Networks Inc may need to evaluate its inventory management practices to optimize its inventory turnover and align it with market demand to improve its overall operational efficiency.

It is important for Extreme Networks Inc to closely monitor its inventory turnover ratio and take proactive measures to ensure that its inventory levels are adequately aligned with sales demand to maintain a healthy working capital cycle and optimize its profitability.