Robert L. Corey – Chief Financial Officer, Acting President & Chief Executive Officer Helmut Wilke – Senior Vice President Worldwide Sales Frank Blohm – Vice President Worldwide Operations & Chief Quality Officer

Sam Wilson – JMP Securities Steve Salberta – Boenning & Scattergood Douglas Whitman – Whitman Capital Rohit Chopra – Wedbush Morgan

Welcome to the Extreme Networks 2010 second quarter conference call. At this time all participants are in a listen only mode. Following today’s presentation instructions will be given for the question and answer session. On the call today from Extreme Network are Bob Corey, CFO and Acting President and CEO, Helmut Wilke, Senior Vice President Worldwide Sales, Frank Blohm Vice President of Worldwide Operations and Chief Quality Officer. As a reminder, this conference is being recorded today February 1, 2010. This afternoon Extreme Networks issued a press release announcing the company’s financial results for the second fiscal quarter of 2010. A copy of this release and a slide presentation of supporting materials are available in the investor relations section of the company’s website at www.ExtremeNetworks.com. This call is being broadcast live over the Internet and will be posted on the Extreme Networks website for a replay shortly after the conclusion of this call. The company has asked me to remind you that this conference call contains forward-looking statements that involve risks and uncertainties including statements regarding the company’s expectations regarding its financial performance, strategy, growth of customer bandwidth demand, development of new products, customer acceptance of the company’s products, customer spending and economic conditions in the company’s market. Actual results could differ materially from those projected in the forward-looking statements as a results of certain risk factors including but not limited to fluctuations in the demand of the company’s products and services, supply chain constraints and the ability of third parties to manufacture the company’s products and components thereof, a highly competitive business environment network switching and equipment, it’s effectiveness in controlling expenses, the possibility the company might experience delays in the development of new technology and products, customer response to its new technology and products, the timing of any recovery in the global economy and risks related to pending or potential future litigation. The company undertakes no obligation to update the information on this conference call. More information about potential factors that affect our business and financial results is included in the company’s filings with the Securities & Exchange Commission. Throughout the conference call, the company will reference both GAAP and non-GAAP financial results. The company has provided a reconciliation table of GAAP to non-GAAP in information tables that accompany the press release on its website. Please go to the investor relations section of the company’s website at www.ExtremeNetworks.com. In addition, all announced results are preliminary and may be subject to change when the review of the fiscal quarter is concluded and/or a Form 10Q is filed. I would now like to turn the call over to Mr. Bob Corey, CFO, Acting President and CEO of Extreme Networks. Robert L. Corey: Welcome to the Extreme Networks Q2 fiscal 2010 earnings conference call. As the operator said, I am joined today by Helmut Wilke, Senior VP of Worldwide Sales and Frank Blohm, our VP of Worldwide Operations and Chief Quality Officer. I’ll begin with some brief comments on the quarter followed by some more detailed comments by Helmut and Frank regarding our performance in the quarter. Then, I will summarize and provide guidance for our fiscal Q3. We’ll then open up for a Q and A. Our goal is to provide more time for Q and A and less time reading our scripts. Additionally, we’ve posted a slide presentation on our website at www.ExtremeNetworks.com under investor relations that I hope you will find useful. I want to take a minute and share our vision and mission with you. Our vision, simply stated is that we see a fully connected world enabled by Ethernet everywhere. This is more true today than it was when the company was founded and Ethernet was the genesis of Extreme Networks. Our mission is that we are dedicated to the delivery of high performance, innovated products and superior services to ensure the success of our customers and partners. With these guiding principles we are focused on our strategy that is of growing revenue, gaining market share while continually improving our operational execution. During the quarter we simplified and streamlined our organization to allow us to compete more effectively. The reorganization was affected and completed in the first month of Q2 resulting in a reduction in headcount of about 8%. During the quarter we worked to resolve the supply chain constraints that negatively impacted us in Q1. Frank will comment further on the progress here. In December, we launched our vision for the next generation datacenter at the Gartner Datacenter Conference. In that vision we provide a clear roadmap for the enterprise, hosting and co-location service providers to migrate from a physical, to a virtual and than a cloud based architecture. Our vision is unique in that it does not force a certain technology or operating methodology on our customers. In January in support of our vision, we announced the latest additions to our datacenter product portfolio, the Black Diamond 8800 XL modules and the Summit X 4800 Stackable Switch family, both of which are expected to be available in Q3. As a reminder, all of my comments will be non-GAAP except for revenue and the number of common shares. There is a reconciliation from non-GAAP to GAAP financial results in the slide presentation under investor relations on the website that I mentioned previously. Before I go any further, I want to thank every employee in our organization for their dedicated effort and commitment which contributed directly to our performance in Q2. During Q2 we dramatically improved our operational execution and reported $79.4 million of net revenue representing a 27% sequential increase in product revenue. Helmut will comment on sales performance later on. Our gross margin percentage expanded to 58% and was the highest in the history of the company. Operating income was $4.3 million or 5.4% of revenue and was the strongest quarterly performance in over three years. Cash flow was $4 million positive allowing us to exit the quarter with about $135 million of cash and investments and of course, no debt. Deferred revenue on the balance sheet increased by over $5 million sequentially and is up about 20% from yearend while DSOs and account receivables improved to 46 days from 50 days in Q1. Inventory remained in the $16 million range with consistent turnover of about eight times. With that, I’d like to introduce Helmut Wilke, our Senior VP of Worldwide sales.

Let me provide you with some color and comment on the sales performance in Q2 and let me start with a geographic perspective. For the quarter where we saw good sales momentum around the world. We had a particularly strong performance in Asia Pacific where we are starting to benefit from the management changes we put in place last year. Revenue in Q2 was up more than 20% over Q1 and 18% year-over-year with stronger business and traction in China and Japan in addition to our traditional areas Korea and India. Europe and EMEA continued its strong performance in the enterprise space where we saw some softness in our Eastern European service provider business. The customers are still in the process of deploying the equipment purchased in the previous quarters. The US economy has still not fully recovered but we saw growth over our Q1 business with increase in pipeline and deal size. We will remain fully invested in the US marketplace and we’ll be ready to respond to an improved demand situation. Next, let’s talk about customers and where we went. Across the globe we have won 100 new customers representing around 20% of our business. Of those 100 plus new customers, 29 were over $100,000 and represent a number that keep trending up for us. Some of the more notable new customer wins this quarter were one of the largest banks in India, a major ship builder in Korea, a facilities security in Saudi Arabia, several universities and institutions of higher education around the world. As recently announced in the US, we won the Baltimore school district with 200 facilities and 82,000 students. In addition, we were happy that a long standing customer of ours Wynn Resorts selected Extreme for their new tower and expansion in Macau. The business came from a broad range of vertical markets with a continued strength in education and service providers. But, why do they buy from us? We are the innovators, we offer such features at the XOS operating system which results in ease of use and flexibility of network management, network performance and just overall favorable cost of ownership with product and service quality being important factors as well. Our improved margin performance is a testament to the strength of our product portfolio and the overall value proposition that we bring to our customers. The competitive landscape remains tough particularly in the US. The downturn has just made every vendor push harder for business resulting in a higher noise level and a very competitive climate. We continued to see a high level of interest among enterprises to investigate alternatives and more cost efficient solutions to the market leader. We see this increase competition as benefitting us as we continue to expand our partnerships and grow our customer base with our unique pure play value proposition. Our focus and investments and our strategic partnership keep paying off. Our business with Ericsson has grown quarter-over-quarter as well as year-over-year. This will remain an area of investment for us. To summarize, overall a good quarter and we’re looking forward to being able to retain the sales momentum in to Q3 and beyond. With that said, I’d like to hand it over to Frank Blohm, our VP of Operations and Chief Quality Officer for an update on the supply situation in Q2.

In my opinion 2009 was one of the most challenging years for those of us in the supply chain management in the networking industry. Forecast reductions by many companies including Extreme caused suppliers to react and drastically cut their output and supply. Lead times increased substantially and in some cases more than doubled for suppliers which caused lead time increases by Extreme and many of its competitors. Since then we made significant investment in our supply chain and inventory levels which helped us bring lead times almost in line with historical levels and obtain the greatly improved results in Q2. We expect to continue seeing tight availability of key components from our suppliers through the first half of calendar year 2010 but believe the actions we have taken have resolved short term constraints and position us well to meet future demands at close to historical lead times in the new few quarters. As we look in to the future, we are implementing a project to more closely align the distribution locations of our finished goods with our manufacturing locations to reduce freight, cost and improved customer lead time. Our current timing is to complete this project in our fiscal 2011. We have also implemented a program to more aggressively manage the cost associated with our service Spares inventory. We are partnering with leading logistic management companies to leverage their cost efficiencies and geographic presence. From a product quality standpoint, over the last two quarters we have improved key hardware and software quality metrics which contributed to the improved margins and our lower operating costs. In addition, we believe we will see continued improved quality as a result of the restructuring we announced last quarter which brought engineering in to a unified functional organization. I’ll now turn the call back over to Bob. Robert L. Corey: I’m going to make some summary comments. We executed well in Q2 and we see signs of improved sales momentum around the world. While the US economy performed well in calendar year Q4 with a GDP growth rate of 5.7% there’s still a question if it’s fully recovered and if the recovery is sustainable. On the other hand, we have been seeing particularly strong performance in Asia Pac and EMEA’s enterprise business is showing signs of strength. The competitive landscape continues to change and evolve while remaining strong particularly in the US. We see that benefitting Extreme as a opportunity to expand our partnerships and grow our customer base by providing high performance, innovative products and superior services to ensure our customer and partner success. I’ll now turn to guidance for Q3. Over the past two years we have experienced seasonally about a 12% sequential decline in revenue in Q3. However, as a result of signs of an improving macroeconomic climate, increased sales momentum and increase in our backlog and deferred revenue, we are not anticipating historical sequential decrease in revenue for Q3 but rather we anticipate net revenue to be between $77 and $79 million. Further, we anticipate the gross margin percentage being between 57% and 58% and operating income of $3.0 to $3.5 million resulting in earnings per share of $0.03 to $0.04. We believe the economic recovery which appears to be underway will be uneven across geographies and as I said last quarter we will continue to closely manage our operating expense while selectively investing for revenue growth to accelerate earnings and cash flow and gain market share. We remain committed to make our customers and partners successful and creating value for our stockholders. With that, I’m happy to open it up for questions.

(Operator Instructions) Your first question comes from Sam Wilson – JMP Securities. Sam Wilson – JMP Securities: I have about four questions here. I’ll just ask them one at a time. First, for the December quarter can you give us a sense how much revenue was recognized in the December quarter but was actually really booked and originally expected to be delivered in the September quarter when you preannounced the downside but ending up being shipped in December because of the supply chain issues? I’m just trying to get a sense for sort of organic end market demand versus catch up revenue? Robert L. Corey: If you recall, we had about $5 million of increase to the backlog, etc. coming out of Q1 in to Q2 so if you normalize Q2 that’s about a 12% sequential increase for products revenues for Q2 coming out of Q1. Sam Wilson – JMP Securities: Second is, can you just talk a little bit about you saw some nice things in gross margins but on both your actual service dropped, product margins were up, can you talk about what was influencing those factors and should we expect bigger swings here in the future or are gross margins stabilizing by category down a little bit? Robert L. Corey: Let me talk about the service margin first. If you recall, we forecasted the decline in service margins in Q2 and that was because through Q1 we had completely utilized the previously written off spares inventory that the prior three quarters had received a benefit from by using those. So the service margins have popped over a 60% plus I think in Q3, Q4 and Q1 sequentially but we had utilized all that previously written off spares inventory and we forecasted a decrease in the service margin in Q2. So in fact the service margin came in right around the areas where we were expecting it to come in in Q2. We do expect the service margins to normalize going forward in around the 55% to 57% range. The product margin it benefitted this quarter one by mix in products contributed strong gross margins. Number two, my a stabilization in the warranty costs and improved quality that Frank had talked about, etc. and lastly the E&O, the excess and obsolete inventory reserve charges in Q2 were down from what they were in Q1. So we would anticipate that those margins in the product line are going to stay stabilized and we think over time trend up for some of the reasons that Frank outlined in the distribution and manufacturing areas. Sam Wilson – JMP Securities: Last question, can you talk a little bit about pricing pressure and competitive environment? Then specifically can you throw in some of your two cents on what HP 3COM combined means specifically for Extreme? How much do you see in ProCurve, how much do you see in 3COM, does the two combined changed the dynamics? So the pricing pressure in December quarter and then HP 3COM specifically.

Let me talk about the pricing pressure. The market is competitive, I mean particularly in the US with every player here, it is a little less competitive overseas frankly and we benefit certainly about two thirds of our business comes from geographies outside the US and we have a strong business place there and not all of the competitors are playing there. So, we don’t see that much of margin pressure. We are aggressive on deals where we need to be but typically in a sales cycle customer appreciate the feature set we have, the quality of the product, the functionality and we’re typically able to differentiate ourselves enough from other vendors who just let’s say with a more basic feature set try and sell more aggressively on price. So as you can see from the margin situation and the revenue situation we’re holding our space in the market above those vendors quite well. Sam Wilson – JMP Securities: Then could you talk about HP 3COM, what that means?

We don’t see them that much yet. There’s the usual confusion in the market, what does it mean, what does it mean for resellers who are now selling either one of the other, there’s consolidation on the reseller channel so we certainly use that irritation that there is in the transition period to win partners over to move to us as the alternative so we’ll see how it all pans out. Right now we don’t see that much of an effect yet other than what I just described.

Your next question comes from Steve Salberta – Boenning & Scattergood. Steve Salberta – Boenning & Scattergood: Can you give us a little bit more detail in the North American business? I would have expected it to be up a little bit more. Can you talk about just what you’re seeing in the pipeline, backlog, that sort of thing and seasonality in North America?

Yes, the US still has to recover fully I would say but my previous answer pointed out how strong we are overseas. The US is still a lot more competitive, there are a lot more players here. We see some recovery in the school business, [inaudible] funding seems to be coming through, that has stabilized a bit. We still don’t see very much defense spending go up. We had hoped that would be stronger but it hasn’t quite materialized. So our strong strengthen remains in the enterprise businesses. Deal sizes I would say are still to go up. Customer are cautious and buying in smaller chunks. Even winning a project doesn’t mean million dollar orders are placed right away, customers deploy over time. We see this particularly in the US, I mean the nervousness about the overall economy shows more through in the US than any other area. Robert L. Corey: We’re watching the US economy very closely and we’re obviously watching the pipelines, etc. and we’re going to be ready as we see expanding pipelines, etc. to make the appropriate investments to make sure we stay ahead of the recovery in the US economy. Steve Salberta – Boenning & Scattergood: Did I hear you right Bob, when you were giving the part on guidance say that part of what gives you comfort in better seasonality is that backlog is up again in the quarter? Robert L. Corey: That’s correct. Steve Salberta – Boenning & Scattergood: How would that apply to your different regions? Is backlog up in the North American market? Robert L. Corey: I think the backlog was pretty well stabilized in North America however I’d say the book-to-bill was maybe a smidge over one. We certainly had strength in Asia Pac and those pipelines continued to expand. In EMEA on the enterprise side of the business, we’re starting to see that actual part of the market over there strengthen and show some positive trends. Steve Salberta – Boenning & Scattergood: Last quarter you talked about China mobile being a partner or if you actually got revenue from them last quarter, did that drive strength for you this quarter?

That continues to be a partner. As you probably know, worldwide we partner with Ericsson. Ericsson builds infrastructure projects around the world, a lot of them being in India, a lot of them being in Africa, Middle East and increasingly in China. One of our customers is China Mobile and we managed now with having a much stronger team on the ground in China to engage a lot better with Ericsson and their end customers in China which resulted in a very nice uptick in business with Ericsson to China Mobile and we saw that starting about half a year ago and that continued last quarter and that looks quite promising. Steve Salberta – Boenning & Scattergood: Inventory, fairly flat sequentially but you’re confident that you’ve resolved the issues, is it mix? Do you feel comfortable that you can get more inventory if you need to?

Actually yes, we work very closely with our manufacturing partners and our key component manufacturers and believe we have enough inventory secured given any mix variation that could come in to play this quarter. Steve Salberta – Boenning & Scattergood: Do you expect that to go up again in March?

We were flat Q1 to Q2 and we expect to remain about flat at eight turns a year.

My last question guys is with respect to your target margin, 11% operating margin. I think in the past you’ve said near term or something to that affect. Can you give us a time frame and just go through it looks like sales and marketing is where you need to see the most leverage to get there which according to my calculations indicates not a lot of incremental dollars of investment. How do you get there? What sort of things are you doing to take that step in timing of it? Robert L. Corey: I think what we’re doing is we’re clearly focused on trying to drive revenue growth. So if you look at the 11% operating income target in our model, I expect it’s going to take s probably around $90 million on a quarterly basis to break through double digit to get to 11%. We’re continuing to review and expand our sales channels where appropriate and we are going to selectively invest in additional sales teams on a global basis where we see revenue growth opportunities. We are focused on trying to grow the revenue and most specifically gain market share. We are highly committed to driving through that double digit operating income percentage contribution and like I said, I think roughly $90 million will get us there on a quarterly basis and we’re continuing to see how we drive that revenue line. Steve Salberta – Boenning & Scattergood: Can you tell us how much of the $2.2 million that you took out of the model, how much benefit that you got in the quarter from that? Robert L. Corey: We got roughly almost two thirds of the benefit. We effected the reduction in force right about the end of October.

Your next question comes from Douglas Whitman – Whitman Capital. Douglas Whitman – Whitman Capital: Can we talk a little bit about the cash balance, it’s now about two thirds of the overall market capitalization of the company and you also grew cash sequentially $5 million so congratulations on that but now that you’ve stabilized the company and outgrowing the industry maybe you can talk a little bit about given the low valuation what the thoughts are on buyback and whether that is back on the table? Robert L. Corey: Well you know Doug, we did a Dutch option buyback just about a little over a year or year and a half ago, September of 2008 where the company took about $100 million of our available cash I can’t remember the number of shares off the top of my head. We did a Dutch option. The company has been focused on like you suggested stabilizing the business and how do we grow revenues so we think remaining cash positive is an important metric for the company. We are aimed at deploying that cash to seeing how we can expand channels, sure up partner arraignments and opportunities, organically drive the business and we want to assume a reasonably aggressive posture trying to gain market share. So there are no short term considerations for additional buyback now. Douglas Whitman – Whitman Capital: Can you talk a little bit about on the inventory your relatively flat on the inventory and you were early kind of to have this problem and get in the order process but as you’re giving that guidance on the first quarter, and thank you for the good expectations but, how much of a concern is components at this point in time for the first quarter?

Again, I think we’ve done a lot of investing over the last 90 to 120 days in our inventory and in our supply chain so right now we see minimal impacts. Again, the industry is still tight so we will probably have one op issues that we will work with but we believe we have enough materials secured to manage through any risk or mix issues we may have for the quarter. Douglas Whitman – Whitman Capital: Then one of the things you have also been investing in is the future and so can you talk a little bit about is there a date we should be looking for some of the new product stuff that you’re working on. Robert L. Corey: We certainly have a roadmap in the company both for hardware and software products and imminently you’re looking at some upgrades and product releases on improving the software performance of the products for XOS our operating system. In January we just announced like I said on the call in the comments earlier a couple of product releases to support our datacenter vision and thrust there so you’re going to continue to hear more about new products coming to market. Douglas Whitman – Whitman Capital: I know you gave kind of long term gross margins, how much of that is some attritional operating improvements that you plan to have on manufacturing? Robert L. Corey: I think the margin forecast in the model is the gross margin is 57% to 59% so we just posted 58% so we’re clearly square in the middle of that financial model. We’re going to continue to drive like Frank outlined efficiencies and cost reductions in savings just economies in operations, etc. Quality will also play a large role in driving the gross margin as we go forward. Now, obviously it’s a competitive world so we’re going to continue to drive those costs and those efficiencies and respond to a competitive environment.

Your next question comes from Rohit Chopra – Wedbush Morgan. Rohit Chopra – Wedbush Morgan: I just wanted to ask you a few questions and maybe you can update us first on the CEO search? I just want to see if you guys were imminently ready to hire somebody? Robert L. Corey: Well, as you know there is a CEO search that is underway by the board. The feedback I’m getting, the updates are there has been great progress made on that. We’ve got a grouping of very qualified candidates and the board is culling down a number of candidates. I can’t give you an exact date as to when we may have a new CEO on board but the board is making great progress on this and like I said, we have good quality candidates and I expect in the next few months we’ll certainly have something to announce. Rohit Chopra – Wedbush Morgan: Could you also provide an update on Motorola? The product announcement I think that was made last quarter, is there anything coming of that yet?

Yes, we made the announcement that we take on the Motorola wireless product line and sell this as an OEM product and that started to sell last quarter. We’re in the ramp up phase and we’re very pleased with that. The product seems to be really, really good. Acceptance by my sales organization is great, the corporation with Motorola is really promising so we’re actually very enthusiastic about this and this should contribute to the revenue stream going forward and expect the ramp up really this quarter. Rohit Chopra – Wedbush Morgan: Then Helmut while you’re right there I just wanted to ask you a question. While you were speaking you indicated that – I think you were talking about the 100 new customers and you saw strength in education and service provider and then in the slides it looks like that if I’m right, service provider was actually down as a percentage of sales. I just wanted to reconcile your comments with the slide’s indicating that service provider was actually down this quarter?

Good catch, you are absolutely right. Overall, 20% to 30% of our business comes from service provider and it has been like this over a long period so we continue to consider this one of our verticals where we are strong, we have loyal customers who like our architecture and buy products from us and they are a very important vertical for us. At the same time I commented on this that yes, last quarter we were a bit light, we sold a little less than our usual percentage in the service provider space in Q2. That was my specific comment. We expect this was seasonal, this was part of the Eastern European economy was hitting us as well as particularly strong sales we had a few quarters before and we still see customers growing production with the gear they have and putting it in the network. That’s where we saw that little less than normal performance in the service provider space but it continues to be a key vertical for us. Rohit Chopra – Wedbush Morgan: I only had two other questions. I just want to get a sense with Ericsson are you working with any US carriers on upgrading the back haul in the US?

I can’t comment on specific deals we’re working with. Robert L. Corey: We have some discussions underway with some carriers that will give us some OEM opportunities in the wireless back haul area. They are not fully finalized yet but we’re engaged in those and we’re looking forward to making an announcement on them once they are finalized. Rohit Chopra – Wedbush Morgan: My last question, and I don’t want to take away from anything that you’ve done because I think there’s been a lot of changes and they all have been very positive in the last few quarters and clearly the environment is improving as well but I just wanted to come back to one of Sam’s questions which I think is important. You talked a little bit about competition and I just want to get your sense Bob on how Juniper is able to get from zero to $74 million in revenue in the switching area within a quarter? Revenues at Extreme, they are improving so like I said I don’t want to take anything away from you but what are they doing right and what needs to continue to happen at Extreme?

Well, they certainly did a respectable job with their new product line there’s no question about it. They have a customer base with their routers they can go after, they have a customer base with the security product they have and they can sell in to those which gave a bit of a strong leverage on their other product lines and we’ll see how well they will be able to do what they have been doing the last couple of quarters. We’re very confident our product line the main target for us remains the big pie which is CISCO so the more customers we can convince that there is an alternative and a very powerful feature set that gives them low operating cost and a better product and take the jump to one of the smaller vendors the better it is. So, we continue to stay focused on that really big side of the market. Robert L. Corey: Plus, with the reorganization we accomplished last quarter if you recall, one of the main thrusts of that was to allow us to compete more effectively in the marketplace. So clearly, the whole company here is focused on growing revenue and gaining market share so we restructure the business to give us the flexibility to be more aggressive in the market and you will continue to see us be more aggressive in the market and grow revenue.

At this time there are no further questions. I’d like to turn the call back over to Mr. Bob Corey for any closing or additional remarks. Robert L. Corey: I just want to thank everybody for calling in. We’re excited about our opportunities here at Extreme Networks and we look forward to reporting the results of Q3 to you in April this spring. Thank you very much.

That concludes today’s conference. We thank you for your participation