Extreme Networks Inc (EXTR)

Financial leverage ratio

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Total assets	US$ in thousands	1,153,220	1,042,590	1,141,710	1,068,510	1,010,090
Total stockholders’ equity	US$ in thousands	65,584	25,282	116,752	90,343	54,468
Financial leverage ratio		17.58	41.24	9.78	11.83	18.54

June 30, 2025 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $1,153,220K ÷ $65,584K
= 17.58

The financial leverage ratio of Extreme Networks Inc. exhibits notable fluctuations over the analyzed period from June 30, 2021, to June 30, 2025. As of June 30, 2021, the company's leverage ratio stood at 18.54, indicating a high degree of reliance on debt relative to equity. By June 30, 2022, this ratio decreased significantly to 11.83, suggesting a reduction in leverage and potentially a shift toward a more conservative capital structure. The downward trend continued into June 30, 2023, with the ratio reaching 9.78, reflecting an ongoing deleveraging process and potentially enhanced financial stability.

However, a substantial increase occurred by June 30, 2024, when the leverage ratio surged to 41.24. This sharp rise indicates a significant escalation in financial leverage, implying that the company leaned heavily on debt financing during this period. Such an increase could signal increased borrowing to fund expansion, acquisitions, or other strategic initiatives, but also elevates financial risk due to higher debt obligations.

By June 30, 2025, the leverage ratio decreased again to 17.58, reflecting a partial deleveraging from the peak observed in 2024. Although lower than the 2024 peak, this ratio remains higher than the levels seen in 2021 through 2023, indicating residual elevated leverage. This pattern suggests a period of financial restructuring or strategic borrowing that resulted in temporary heightened leverage, followed by efforts to reduce debt levels subsequently.

Overall, the company's financial leverage ratio demonstrates considerable variability, with periods of both deleveraging and significant leverage increases. Such fluctuations imply a dynamic capital structure influenced by strategic financial decisions and market conditions, with recent figures indicating a trend toward reducing leverage from a markedly elevated peak.