Extreme Networks Inc (EXTR)

Return on total capital

		Jun 30, 2025	Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	20,201	-54,411	-104,248	-97,298	-55,149	32,259	125,918	130,889	111,491	83,264	70,748	64,497	64,983	71,856	83,120	71,318	54,820	42,487	-26,900	-33,199
Long-term debt	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	65,584	71,705	51,208	32,721	25,282	64,962	108,184	108,482	116,752	103,192	84,567	110,603	90,343	99,263	69,599	72,325	54,468	35,136	17,925	9,911
Return on total capital		30.80%	-75.88%	-203.58%	-297.36%	-218.14%	49.66%	116.39%	120.66%	95.49%	80.69%	83.66%	58.31%	71.93%	72.39%	119.43%	98.61%	100.65%	120.92%	-150.07%	-334.97%

June 30, 2025 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $20,201K ÷ ($—K + $65,584K)
= 30.80%

The analysis of Extreme Networks Inc's return on total capital over the specified period reveals significant fluctuations indicative of the company's evolving profitability and financial structure. During the fiscal year ending September 30, 2020, the return was markedly negative at approximately -335%, suggesting substantial losses relative to the capital invested. This negative trend persisted into December 2020, with a diminished yet still significant deficit near -150%, reflecting ongoing challenges and possibly substantial expenses or impairments.

A noteworthy turnaround occurred by March 31, 2021, when the return shifted to a positive figure of approximately 121%, indicating a period of improved operational performance and capital utilization. This positive trend persisted through June 2021 and September 2021, with returns around 101% and 99%, respectively, suggesting sustained profitability and efficient capital deployment. Further, into December 2021, the return remained positive at roughly 119%, though gradually declining, which may reflect some saturation or narrowing profit margins.

In the subsequent periods, the return on total capital exhibited slight declines but generally remained positive, with values like 72% in March 2022, 72% in June 2022, and approximately 58% in September 2022. The figure increased again to over 83% in December 2022 and hovered close to 81% in March 2023, before slightly rising to nearly 95% in June 2023. The peak during this cycle was observed at approximately 121% in September 2023, indicating robust profitability and effective use of capital during that period.

However, from late 2023 onward, the data illustrate a dramatic reversal. The return fell sharply to 49.66% in March 2024, followed by a precipitous decline into negative territory, at -218% in June 2024. The subsequent periods saw continued negative returns, with -297% in September 2024, and -204% in December 2024, suggesting severe financial distress or substantial impairments. Although there was some recovery to around -76% in March 2025, the data indicates a potential positive turn with the return reaching approximately 31% in June 2025, which could signify early signs of improvement or restructuring efforts.

Overall, the trend reflects a company with periods of strong profitability and capital efficiency interrupted by episodes of significant losses and instability. The pronounced negative return in recent periods underscores ongoing challenges, possibly relating to industry headwinds, operational issues, or financial restructuring. Conversely, the historical positive phases indicate that the company has previously achieved effective capital utilization and profitability, emphasizing the volatility inherent in its financial performance.