Alex Henderson: So your commentary about $1.1 billion being the run rate revenue number and the guide for the fourth quarter of the fiscal year at 265 to 275 is more normalized. It is a little bit troubling considering in the fourth quarter of 2019, you did $252 million and for the full year 2019, you did roughly $1 billion at $995.8 million and that’s 2019 that would put a growth rate to your normalized $1.1 billion of around 2.5% over that time frame. And certainly, you would not say that’s a reasonable growth rate. So the question, I have for you is, what is the real normalized number if you were to adjust these numbers to fully normalize the baseline, you say $1.1 billion is normalized but I don’t think you believe your 2.5% growth company.
So can you please adjust that language a little bit for us, in terms of understanding how much the fourth quarter is still unnormalized as opposed to more normalized? And what would be the run rate of revenue if you had a fully normalized full year? Thank you.
Ed Meyercord: Yeah, Alex. So let me, Kevin, just hit a high level, and then I’ll let you come in and fill in. But Alex, we’re – obviously, it’s a pretty massive reset here in our Q3 with a lot of cleanup involved. We have new teams and we have a new approach that are coming in and looking to sort of build off of a base in resetting the foundation, whether or not it would be normal seasonality going into Q1, or is there still conservatism in that, that Q4 number where you could still see some growth — sequential growth coming out of that. We wanted to provide the outlook for the — our fiscal Q4 to provide again what we’re calling more normalized. Will that be a fully more normalized bookings number? There I think we need some work on that and we’ll definitely be coming back to you with a more refined outlook on how we see the evolution of booking especially considering these other commercial models which quite frankly we have not included in our outlook.
Kevin Rhodes: I think that’s the key, as I think that the MST model is very nascent very early to ESPO model we have as well the private subscription offers also very early at stages. This is based on the run rate of the existing business and products that we’ve got ZTNA coming on board, we’ve got Wi-Fi 7 coming on board, we’ve got new products, innovations coming out. That will continue to give us that tailwind in the future. Right now, we’re just not prepared to go and guide for 2025 or beyond, but wanted to give at least a normalized Q4 at this point.
Ed Meyercord: And Alex, the other comment to make is that we have seen — earlier we saw Asia-Pacific recovering more quickly. And then, we’ve seen EMEA come with year-over-year growth that Kevin mentioned. And we just — we haven’t seen it yet in the Americas. And so the timing of that America’s recovery to the normal buying cycle and how all of that kicks in from a timing perspective. And we have a lot of large deals that are in the hopper for us. Really exciting from a brand perspective in terms of where we are in these competitive processes. But they’re very lumpy, and I think it’s a little challenging for the team right now to stick their necks out and call some of these larger deals. If that makes sense.
Alex Henderson: That’s not my problem. My problem is the guide commentary that normalized full year revenue run rate would be at $1.1 billion, which is obviously still incorporating a significant amount of backlog adjustment and the comment that more normalized implies that it’s almost normal and it’s certainly not in the fourth quarter, so what is the nut that you’re assuming for the fourth quarter? What would be fully normalized fourth quarter? You mean can you give us some sense of what more normalized means in terms of the scaling of it?
Ed Meyercord: Yeah. I mean I’m not sure we’re there, I’m not sure we’re there yet. I mean if we look at a 275 number. Yeah, if we look at a 275 number in Q4 and obviously, there’s the math to get to 1.1 when you just roll that over. So there’s not, I guess you would say there’s not a lot of growth built into that for a normalized fiscal ‘25, Alex.
Alex Henderson: Well, I mean, you did 253 in fourth quarter of 2019, and now you’re telling me 275 is close to normalized? Difficult trying to reconcile those two numbers. Not even close to normalized in that context, so how big is the nut? Are we still absorbing $30 million, $40 million in the June quarter of inventory absorption?
Kevin Rhodes: Yeah, Alex. The thing that you’re missing I think is the North America is still recovering. It was down year-over-year.
Alex Henderson: I’m not missing anything, I’m asking what the nut is that you’re assuming when you give us the guidance for the fourth quarter in terms of the absorption in the recovery in the environment. How big is that nut?
Kevin Rhodes: We’re assuming no incremental amount as you say nuts in the fourth quarter. We assume absorption will occur in the third quarter with no more absorption needed in the fourth quarter. What we need to see is, we need to see the market, the entire market is down right now, this is not just an Extreme issue, this is an exogenous issue that’s across all IT and all networking. And so where we see and where we hope is that the market starts to come back. And that we will see the North American market come back. And appreciate your points, but we got to get the whole market to come back and spend across the board to help.
Alex Henderson: Great. Thanks.
Kevin Rhodes: Okay.
Operator: Thank you. And I will now turn the call back over to Mr. Ed Meyercord for any closing remarks.
