Extreme Networks Inc (EXTR)
Profitability ratios
Return on sales
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Gross profit margin | 62.20% | 56.47% | 57.50% | 56.63% | 57.97% |
| Operating profit margin | 1.49% | -2.59% | 8.25% | 5.77% | 3.41% |
| Pretax margin | 0.37% | -6.94% | 7.17% | 4.69% | 1.01% |
| Net profit margin | -0.65% | -7.69% | 5.95% | 3.98% | 0.19% |
The analysis of Extreme Networks Inc’s profitability ratios over the period from June 30, 2021, to June 30, 2025, reveals several key trends and insights.
Gross Profit Margin:
The gross profit margin remained relatively stable throughout the period, fluctuating between approximately 56.47% and 62.20%. It saw a slight decline from 57.97% in 2021 to 56.63% in 2022 but then increased to 57.50% in 2023. The margin dipped again in 2024 to 56.47%, indicating consistent control over the cost of goods sold relative to revenue, with a notable increase to 62.20% in 2025 representing an improvement in gross profitability.
Operating Profit Margin:
The operating profit margin demonstrated a positive trend from 2021 to 2023, rising from 3.41% to 8.25%. This suggests an improvement in operational efficiency and cost control during this period. However, in 2024, the margin fell sharply into negative territory at -2.59%, indicating an operational loss. The margin rebounded slightly in 2025 to 1.49%, reflecting a return toward operational profitability but still below the 2023 peak.
Pretax Margin:
The pretax margin followed a similar trajectory, increasing from 1.01% in 2021 to 7.17% in 2023. The decline into negative territory in 2024 (-6.94%) indicates that the company faced significant challenges affecting profitability before taxes, likely related to increased expenses or losses. The margin recovered somewhat in 2025 to 0.37%, but did not reach previous high levels.
Net Profit Margin:
The net profit margin was very modest in 2021 at 0.19%, improving substantially to 3.98% in 2022 and further to 5.95% in 2023, aligning with overall positive trends in profitability metrics. However, in 2024, the net margin turned negative at -7.69%, coinciding with the negative operating and pretax margins, indicative of a period of substantial net losses. The margin improved slightly to -0.65% in 2025, still reflecting overall challenges in achieving sustained profitability.
Overall, the profitability profile of Extreme Networks Inc exhibits a pattern of initial growth leading up to 2023, followed by a notable downturn in 2024 marked by losses at multiple levels of profitability. The partial recovery in 2025 suggests some stabilization, but profitability remains below previous peak levels. The fluctuations highlight periods of operational and net losses, emphasizing the importance of ongoing operational efficiency and cost management to sustain profitability.
Return on investment
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 1.47% | -2.77% | 9.49% | 6.01% | 3.40% |
| Return on assets (ROA) | -0.65% | -8.25% | 6.84% | 4.14% | 0.19% |
| Return on total capital | 30.80% | -194.04% | 95.49% | 71.93% | 60.66% |
| Return on equity (ROE) | -11.39% | -340.02% | 66.87% | 49.00% | 3.55% |
The analysis of Extreme Networks Inc.'s profitability ratios over the specified periods reveals several notable trends and fluctuations.
Starting with the Operating Return on Assets (Operating ROA), the data indicates a significant improvement from 3.40% on June 30, 2021, to 6.01% in 2022, and further to 9.49% in 2023. This upward trajectory signifies enhanced operating efficiency and better utilization of assets in generating operating income during this period. However, in 2024, the Operating ROA turns negative at -2.77%, suggesting a deterioration in operating performance possibly due to increased costs, reduced sales, or other operational challenges. By 2025, it partially recovers to 1.47%, indicating some level of operational improvement but remaining below historical levels.
The Return on Assets (ROA), which accounts for net income relative to total assets, demonstrates a similar pattern. It remains low at 0.19% in 2021 but then experiences a substantial increase to 4.14% in 2022 and further to 6.84% in 2023. This trend underscores improved overall profitability relative to total assets. Nonetheless, the negative ROA in 2024 at -8.25% reflects a significant decline in net income generation capabilities, with a slight recovery to -0.65% in 2025, though profitability remains weak.
The Return on Total Capital shows an upward trend from 60.66% in 2021 to 71.93% in 2022 and reaching 95.49% in 2023, indicating highly efficient use of capital during this growth phase. However, this ratio plunges into negative territory at -194.04% in 2024, pointing to severe losses relative to total capital and potentially reflecting substantial financial distress or write-downs. The ratio improves markedly to 30.80% in 2025, signifying a recovery in capital efficiency.
Lastly, the Return on Equity (ROE) follows an initially strong positive trajectory, rising from 3.55% in 2021 to a substantial 49.00% in 2022 and further to 66.87% in 2023. Such figures suggest highly profitable equity utilization during these years. Nevertheless, the negative ROE of -340.02% in 2024 indicates massive losses relative to shareholders' equity, implicating significant erosion of equity capital. The slight improvement to -11.39% in 2025 signals some stabilization but remains negative, reflecting ongoing challenges in generating returns for shareholders.
In summary, the profitability ratios exhibit a marked improvement through 2023, followed by a sharp decline into negative territory in 2024, with partial recovery in 2025. These fluctuations suggest a period of operational and financial volatility, with earlier years characterized by strong efficiency and profitability, succeeded by significant challenges impacting overall financial performance.