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10-Gig Drives Extreme Revenues

Extreme Networks Inc. (Nasdaq: EXTR) reported its second-quarter results last night, posting net revenues of $100.3 million, up 20 percent on the same quarter last year, and topping analyst estimates of $98.4 million (see Extreme Reports Q2).

Earnings per share were 8 cents, up from a net loss of 5 cents in the same quarter last year. This also came in above analyst estimates of 4 cents.

Extremes CEO Gordon Stitt, speaking on a conference call, explained that clamor for 10-Gigabit Ethernet helped drive sales, particularly for the company’s Black Diamond and Summit products. “We saw 10-Gigabit Ethernet demand grow 50 percent over the last quarter,” he said.

According to Stitt, this proves that Extreme’s network message is getting through. ”It is driven by our two-tier architecture and using 10-Gigabit Ethernet links to tie the core to the access layer."

Stitt kept returning to this two-tier mantra throughout the call. Rather than the traditional three-tier network, Extreme is touting an approach that consists of an intelligent core and an access layer. The company maintains that this reduces the number of devices used, resulting in a lower cost of ownership.

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