Revenue during the quarter grew 19.04 percent to $148.66 million from $124.89 million in the previous year period. Gross margin for the quarter expanded 503 basis points over the previous year period to 55.26 percent. Operating margin for the quarter stood at negative 2.18 percent as compared to a negative 7.14 percent for the previous year period.

Operating loss for the quarter was $3.25 million, compared with an operating loss of $8.91 million in the previous year period.

However, the adjusted operating income for the quarter stood at $13.96 million compared to $5.37 million in the prior year period. At the same time, adjusted operating margin improved 509 basis points in the quarter to 9.39 percent from 4.30 percent in the last year period.

"We are pleased to deliver our eighth consecutive quarter of strong financial results as demonstrated by continued growth in gross margins, operating income and earnings -" all exceeding expectations," stated Ed Meyercord, president and chief executive officer of Extreme Networks. "The strength of our cash flow and top line growth, driven by the successful integration of the Zebra WLAN acquisition, highlights the success of our accretive acquisition strategy. While our more disciplined discounting policies put pressure on revenue during the quarter, our focus on higher quality customer solutions contributed to enhanced non-GAAP gross margins that grew 360 basis points year-over-year. This improvement, combined with our operating expense management, drove cash flows significantly higher as evidenced by our non-GAAP operating income that more than doubled from the same period a year ago."

For the fourth-quarter 2017, Extreme Networks, Inc. expects revenue to be in the range of $168 million to $178 million. The company forecasts net income to be in the range of $5.10 million to $8.50 million and projects adjusted net income to be in the range of $16.20 million to $19.60 million. It company expects operating income to grow in the range of 4.40 percent to 6.10 percent and expects adjusted operating income to grow in the range of 11 percent to 12.30 percent. The company projects diluted earnings per share to be in the range of $0.04 to $0.07. On an adjusted basis, the company projects diluted earnings per share to be in the range of $0.14 to $0.17.

The company has spent $69.16 million cash to meet investing activities during the nine month period as against cash outgo of $2.80 million in the last year period.

Cash flow from financing activities was $48.33 million for the nine month period as against cash outgo of $3.66 million in the last year period.

Cash and cash equivalents stood at $117.28 million as on Mar. 31, 2017, up 32.77 percent or $28.95 million from $88.33 million on Mar. 31, 2016.

Working capital increases sharply
Extreme Networks, Inc. has recorded an increase in the working capital over the last year. It stood at $47.06 million as at Mar. 31, 2017, up 272.22 percent or $34.41 million from $12.64 million on Mar. 31, 2016. Current ratio was at 1.19 as on Mar. 31, 2017, up from 1.06 on Mar. 31, 2016.

Cash conversion cycle (CCC) has decreased to 39 days for the quarter from 46 days for the last year period. Days sales outstanding went up to 31 days for the quarter compared with 23 days for the same period last year.

Days inventory outstanding has decreased to 32 days for the quarter compared with 39 days for the previous year period. At the same time, days payable outstanding went up to 24 days for the quarter from 15 for the same period last year.