Extreme Networks Inc

Item 1A. Risk Factors

Our operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended June 30, 2024, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock. There have been no material changes to our risk factors since our Annual Report on Form 10-K for the year ended June 30, 2024 and our Quarterly reports on Form 10-Q for the three months period ended September 30, 2024,  and December 31, 2024, except for the following risk factor which supplements the risk factors disclosed in the reports reference above.

Geopolitical changes are creating uncertainty regarding economic matters.

Recent political changes such as the newThe ongoing unpredictability of U.S. presidential administration have created an environmetrade policies, including recent of uncertaintytariff adjustments and shifts in economic matters, particularly with regard to tariffs and taxes. We do not manufacture products in Canada or Mexico and have only immaterialnforcement priorities, continues to create significant uncertainty in the global supply chain. Our direct manufacturing presence in China; therefore  remains minimal, and we do not expectanticipate material direct impacts duexposure to proposed the latest round of U.S. tariffs on goods from thChinese countries. Himports; however, eleour reliance on electronic and semiconductor components integral to our products are ssourced from thChina prese regions. Consequently, the nts ongoing risk. These components are essential to our proposed tducts, and any escalation in tariffs could lead toor imposition of new export controls by China may result in increased costs and potential supply chain disrupdelays. 

We also maintain significant manufacturing operations for these critiin Vietnam and the Philippines. These countries have periodically components. Additionally, othere under scrutiny in U.S. trade reviews and remain exposed to potential tariff-related ac hikes or new trade barriers.

Additions have been speculated, such as ally, global trade partners may continue to respond to U.S. tariffs on imports from other countries such with retaliatory measures. For instance, China has Vietnam anreiterated the Philippines, where we do have manufacturreats of restricting exports of critical raw materials, including operations, or reciprocal tariffs imposed by non-U.S.rare earth minerals essential to several of our countriemponents. If sSuch actions occur, they ccould create disrupt our supply chain disruptions and could further escala, elevate our productioninput costs, and reunder our products lessmine the competitiveness of our offerings, thereby adversely affecting our business, financial condition, and operating results. 

We are closactively monitoring these developments and evaluatevolving trade dynamics and are implementing diversification and supply chain resilience strategies to mitigate potential disruptions. This includes exploring alternative sourcing options and reassessing geographic risk in our manufacturing strategies tand logistics footprint.

The continued uncertainty around tariff policy and broader geopolitical tensions is contributing to mitigate potentialarket volatility, which has impacted the Companys stock price, and is likely to continue to do so. In addition, if tariffs are set that materially impacts.

An the Companys financial results, the Companys stock price could be negatively impacted.

In addition to policies regarding tariffs, any significant changes enacted by the new administration to the U.S. Tax Code, or specifically to the Tax Cuts and Jobs Act (the U.S. Tax Act) enacted in 2017, or to regulatory guidance associated with the U.S. Tax Act, could materially adversely affect our tax liabilities and effective tax rate.

Our stock price has been volatile in the past and may significantly fluctuate in the future.

In the past, the trading price of shares of our common stock has fluctuated significantly. This could continue as we or our competitors announce new products, our results or those of our customers or competition fluctuate, conditions in the networking or semiconductor industry change, conditions in the global economy change, or when investors change their sentiment toward stocks in the networking technology sector.

In addition, fluctuations in our stock price and our enterprise value to sales valuation may make our stock attractive to momentum, hedge or day-trading investors who often shift funds into and out of stock rapidly, exacerbating price fluctuations in either direction, particularly when viewed on a quarterly basis. These fluctuations may adversely affect the trading price or liquidity of our common stock.

Some companies, including us, that have had volatile market prices for their securities have had securities class action lawsuits filed against them. Such suits, regardless of its merits or outcome, can result in substantial costs and divert managements attention and resources.

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