Extreme Networks (NASDAQ:EXTR) stock fell ~20% on Wednesday while FQ2 results beat estimates and the company announced the resignation of CFO Rémi Thomas.

Non-GAAP EPS grew +28.6% Y/Y to $0.27, while total net revenue increased +13.3% Y/Y to ~$318.35M. Both figures surpassed analysts expectations.

“The continued strength of subscription and accelerated product deliveries drove another quarter of double-digit year-over-year revenue growth,” said President and CEO Ed Meyercord.

Product revenue grew +16.9% Y/Y to $223.45M, while Service and subscription revenue increased +5.6% Y/Y to $94.90M.

GAAP operating margin was 7.4% compared to 6.4% in Q2 of fiscal year 2022.

FQ2 ending cash balance was $202.5M, as per the company.

CFO Thomas is leaving Extreme to join a privately held software company. However, Thomas will remain with the company till Feb. 16. Cristina Tate, SVP and head of Financial Planning & Analysis, will take over as interim CFO.

Outlook:

“We are raising our FY23 revenue growth outlook to the high-end of our 10-15% range and expect this momentum to continue into FY24, as the supply chain environment continues to improve,” Meyercord added.

For FQ3 of fiscal 2023, the company expects total net revenue to be between $315M and $325M (consensus $313.88M).

Extreme anticipates non-GAAP net income per share to be in the range of $0.23 to $0.29 (consensus of $0.26).

“The majority of our bookings are with government, education, and healthcare sectors, where spending is more resilient. Our enhanced fabric and cloud subscription offerings are gaining traction in the marketplace. Finally, we have good visibility for the second half of the year based on the strength of our sales funnel,” Meyercord commented.