David Kang: Got it. And my follow up question was on the bookings. You said bookable was way over 1. But just wondering if you can comment on how they compare, like maybe sequentially or maybe year-over-year?
Kevin Rhodes: On the booking side?
David Kang: Yes. Product bookings.
Kevin Rhodes: Yes, we didn’t describe, how it was. I would say it’s still a challenged, environment for bookings. I would say our overall bookings product and overall bookings was similar to what we had last quarter. Slightly down from where it was last quarter, but similar from that. So, I would say that that’s good because it gives you some level of stability in what the bookings are going to be quarter-to-quarter. That being said, we’re really looking for us to have, as Ed said, Europe come back in other areas of strength to come back in the second half of next year for us to really start to see significant growth.
David Kang: And my last question is, regarding Europe, I mean, what particular verticals are weak? It sounded like education was pretty good. any particular verticals that’s still weak in Europe?
Ed Meyercord: Yes, it’s mainly the government business. we look at our category of SLED, which in Europe basically is including state and country governments and local governments in education. And we’ve seen a pause in spending there. And I think this is where we have a lot of business. That 40% mix was a mix for the entire company. that will come back. We are confident that it’s going to come back. But I think more now than ever before, we’re seeing them sweating assets and taking more time to move forward with planned network upgrades. And a lot of these are existing customers. And this is where we, especially in the German market that we call DAC, which has been very slow for us. When that comes back and we believe it will come back, it’s going to bring a lot of momentum to our sales recovery.
Kevin Rhodes: And I would note that we are looking at quarter-over-quarter Q4 versus Q3, an increase in our bookings expectations at this point, given the revenue growth.
David Kang: Got it. Thank you.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Timothy Horan from Oppenheimer. Your question, please.
Timothy Horan: Thanks. Just following up on the government side. What percentage of that do you think is in office space versus places like railroad stations and other public venues? Only because, I’ve been in a bunch of government buildings lately and like no one’s in the office. I mean, do they really need to upgrade these Wi-Fi networks anytime soon if people aren’t coming in all that much?
Ed Meyercord: Yes, Tim, I’m not sure we’re able to we’re going to be able to pinpoint it. And we have we have we have a lot of different government agencies, everything from, in Germany, the Department of IT, for example. We have many defense ministries in different European countries. And so, it’s very distributed. The other comment that I’ll make is that we also have very distributed channel and our channel partners have longstanding and very strong relationships with all these customers. And so, it is very much of a cyclical business. And when they when they when they make the decision to refresh and then when they release the funds, they go through with it. We’re not hearing anything that says, oh, that what we know is that the cycles have been delayed, but we have not heard anything to the effect of we’re just not going to do it. And we think at some point that there will be a return to normalcy, particularly in the government verticals.
Timothy Horan: And maybe just related to this, I mean, what is the average upgrade cycle historically? And, I know you’re saying it’s kind of extended out like, how much can they extend it out if they really want to? And I guess related to this, what impact is 6E and 7 having on those basically life cycles?
Ed Meyercord: Yes, well, I think normally and in wireless, we would say wireless 3 to five years switching five to 7 years would be the normal life cycles, Tim, that we think about. Sometimes there may be an acceleration or a breakthrough. Wi-Fi 6E was important because it adds 6 gigahertz spectrum and it’s kind of a game changer in terms of what it does in extending the range of Wi-Fi, lower latency, etc. So, Wi-Fi 7 will carry that as well. And then it also depends on devices that are coming into the network and being able to support the bandwidth. in some cases, you’ll see customers, usually customers will fall into that range. if you’re getting to five years on Wi-Fi gear, you’re starting to fall behind and it becomes more and more difficult to support the edge devices that are coming into your environment.
And so and especially when we think about the stadium environments, etc., that are early adopters and moving quickly into 6E. So, Yes, I think it’s fair to go with those ranges. there are rare examples of people that are still running switches that are 10 years old. But it’s not really prudent to do that because usually those devices are end of life and a support. And if there’s a networking issue, it’s hard to recover if you have the older gear.
Timothy Horan: Great. Thanks a lot. And just lastly, are you seeing any change in churn at all in your customer base?
Ed Meyercord: No, I think our customer base remains very solid. Most of our business is with our existing customers. And we see this in terms of subscription renewals. We see it in terms of service rules and in terms of competitive wins out in the marketplace in terms of projects. I would chalk up the current phenomenon more to delays, elongated sales cycles and spending delays more than competitive. Our story in the market today is resonating now more than ever before, particularly with the complexity, lack of flexibility and then the expense of total cost of ownership of dealing with the largest competitor. And there’s frustration there. There’s also that frustration of the channel. For example, in Germany, we’ve heard that they’ve discontinued some of their gold partners who are now looking for a new home, in which case Extreme is the best alternative today.
And so our competitive position, given the differentiation of our technology, given our vision and the integration of security with networking and then the modern networking tools that we’re bringing to bear. Not just with our purpose-built machine learning, AI tools for the network, but also new generative AI capabilities that we just rolled out. So I think people are excited about the vision and Extreme is the only pure play networking company. So as people are contemplating upgrading to the most modern and future forward networking infrastructure, we also have the capability through our cloud to manage our competitors’ equipment. We’re the only people that can do that. And we have a very unique value proposition with Fabric. So, all of these things coming together, our sellers and our partners can position Extreme in a way that’s stronger today than ever before.
