“Our story and our product portfolio are resonating well with European customers,” Meyercord said on the company’s fiscal second quarter of 2019 earnings call. “European governments are also placing greater scrutiny on the security concerns around Huawei products, which is creating an opportunity for us in the marketplace,” he added, according to a Seeking Alpha transcript.
Most of the news about Huawei’s woes has been 5G-related, pointing to a financial boost for U.S. and Western European telecom equipment providers like Cisco, Ericsson, and Nokia. But these same security concerns and potential product bans also create a market opportunity for data center networking vendors.
Meyercord noted one such customer win against Huawei with a “large European auto manufacturer.” The carmaker needed a secure networking solution in its assembly plants, he said. “The customer implemented our Fabric Connect solutions based on features, security, support, and differentiated technology despite a much lower competitive bid from Huawei.”
Later on the call, Meyercord said it would be tough to forecast how much of a financial benefit Extreme will see because of Huawei’s troubles.
“So while [Huawei] is still very much alive in the enterprise space, we do think that there is some trickle down, and we don’t know exactly how this is going to play out,” he said. “But we know that people are starting to think about it, and for us it creates an opportunity if we are in a competitive situation to just to point that out to customers when they’re considering their choice of networking vendor.”
In addition to wining an enterprise customer in a battle against Huawei, Extreme also beat Wall Street’s expectations with its fiscal 2019 second-quarter earnings. It reported a net income of $7.2 million after reporting a loss in the same period a year earlier. And it posted revenue of $252.7 million, up 9 percent year over year and up 5 percent quarter over quarter.
The company said it expects revenue in the range of $247 million to $257 million for the fiscal third quarter.