(State or other jurisdiction of

incorporation)

(I.R.S. Employer Identification

No.)

Exhibit No.

Description

Current assets:

Cash and cash equivalents

Short-term investments

Accounts receivable, net

Inventories, net

Deferred income taxes

Prepaid expenses and other current assets, net

Total current assets

Property and equipment, net

Marketable securities

Other assets, net

Total assets

Current liabilities:

Accounts payable

Accrued compensation and benefits

Restructuring liabilities

Accrued warranty

Deferred revenue, net

Deferred revenue, net of cost of sales to distributors

Other accrued liabilities

Total current liabilities

Restructuring liabilities, less current portion

Deferred revenue, less current portion

Deferred income taxes

Other long-term liabilities

Commitments and contingencies

Stockholders’ equity:

Common stock

Treasury stock

Accumulated other comprehensive loss

Accumulated deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

Net revenues:

Product

Service

Total net revenues

Cost of revenues:

Product

Service

Total cost of revenues

Gross profit:

Product

Service

Total gross profit

Operating expenses:

Sales and marketing

Research and development

General and administrative

Total operating expenses

Operating income

Interest income

Interest expense

Other income / (expense) net

Income before income taxes

Provision for income taxes

Net Income

Basic and diluted net income per share:

Net income per share - basic

Net income per share - diluted

Shares used in per share calculation - basic

Shares used in per share calculation - diluted

Cash flows from operating activities:

Net income

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

Provision for doubtful accounts

Provision for excess and obsolete inventory

Deferred income taxes

Amortization of warrant

Loss on retirement of assets

Stock-based compensation

Changes in operating assets and liabilities, net

Accounts receivable

Inventories

Prepaid expenses and other assets

Accounts payable

Accrued compensation and benefits

Restructuring liabilities

Accrued warranty

Deferred revenue, net

Deferred revenue, net of cost of sales to distributors

Other accrued liabilities

Net cash provided by operating activities

Cash flows provided by (used in) investing activities:

Capital expenditures

Purchases of investments

Proceeds from maturities of investments and marketable securities

Proceeds from sales of investments and marketable securities

Net cash provided by (used in) investing activities

Cash flows (used in) provided by financing activities:

Proceeds from issuance of common stock

Repurchase of common stock, including expenses

Net cash (used in) provided by financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Net income (loss) - GAAP Basis

Non-GAAP adjustments

Stock-based compensation expense

Total non-GAAP adjustments

Net income (loss) - Non-GAAP Basis

Non-GAAP adjustments

Cost of product revenue

Cost of service revenue

Sales and Marketing

Research and Development

General and Administrative

Total non-GAAP adjustments

Operator:

Thank you, Mary, and thank you all for joining us today. I’d like to cover three points with you: a very brief review of the quarter, our view of success in a financial downturn, and market expansion opportunities that we are positioned to capture. I will then turn the call over to Karen for details on this quarter’s financials.

Revenue for the quarter was $89.5 million, which is up slightly from the prior year in spite of significant macro-economic headwinds that continue to drive caution in the industry. Pro-forma earnings were 2 cents per share.

Product Book to Bill was slightly above 1. In the quarter we materially increased our deferred product revenue, which Karen will elaborate later on.

In addition we generated over $20 million in cash flow from operations due to strong cash flow management and execution during the last couple of quarters.

Let’s talk about the economic environment.

In the near- and mid-term the macro-economic environment is likely to be challenging worldwide. The U.S. and the world economies are slowing. Although the industry is focused on challenges, we are looking for opportunities.

Let’s look at the Enterprise market. The downturn in 2001 was primarily driven by the failure of new and unproven technology companies. Customers were uncertain of the survival of these companies, so they bought only from large companies with large market shares. Today the situation is different. The current downturn is primarily driven by a de-leveraging of credit, rather than the failure of technology companies. Therefore we believe that many customers will turn to companies that have a proven track record of delivering high performance solutions that require require far lower capital expenditures. In other words: price matters, and cost matters.

Today, with the availability of infrastructure to deploy fully converged Ethernet based networks, our carrier customers are presented with the opportunity to deliver their existing and future services over one network – much cheaper to deploy and operate, significantly simpler to maintain and support, and faster to evolve and enhance. We believe we are at the cusp of a disruptive inflection point in this marketplace. At Extreme, we have focused on building powerful solutions that will put us at the forefront of enabling and leading this disruption. We believe the demand is clear, the market growth is impressive, and our technology ready to address our carrier customer requirements.

All technology companies face a degree of uncertainty. Extreme is no different. But I have always found that a strong product cycle is very important – headwind or tailwind – to success.

I’ve talked about our plans for success in Enterprise and in the Metro Ethernet market. Now I would like to touch on the Data Center market, another opportunity for market expansion. Within the Data Center market, the rise of 10 gigabit has enabled cost effective, flexible, scalable and standards compliant Ethernet to support and to enable the convergence of the Data Center infrastructure. Our customers in the Data Center are facing a need to transition from multiple physical communication media – like Fiber Channel, SCSI, etc. – to a lower-cost, more flexible converged-communications environment. In parallel with this the availability of newer communications protocols – like Fiber Channel over Ethernet, iSCSI, etc. – Data Center managers are now presented with the very real opportunity to unify and converge their connectivity infrastructure. At Extreme we have understood this trend and have been working on powerful solutions.

For example, in April we announced the Summit X650 - a leading 10 gigabit fixed configuration switch which changes the scalability and cost structure of delivering “top-of-rack” data center, compute grid and storage connectivity solutions. The architectural flexibility of the X650 enables the transformation of the Data Center to 10 gigabit bandwidth requirements and beyond. In addition to offering 10 gigabit communications over both Copper and fiber, the X650 is fully “stackable” with other members of the Summit product family. This unique capability allows us to deliver the reliability and availability of Chassis based products at a lower cost and with a smaller footprint and lower power consumption. We fully intend to provide technological and solution leadership in this high growth portion of the Ethernet market.

During the quarter, we continued to expand the breadth and depth of our relationship with our global partners. In combination, our sales with Avaya, Ericsson and Nokia remained at double digit growth rates from last year. Growth with our alliance partners continues to be solid and well

above the Company average, driven by the creation and delivery of powerful enterprise and carrier solutions. We have rolled out a new channel incentive program in both EMEA and the Americas and we are in process of rolling the program out in our Asia-Pacific geography. The program has been well received; it is helping us cement and extend the relationship with our long time channel partners and it is helping us attract new partners by enabling them to create and deliver specific solutions for their customer’s networks.

Turning to customer wins:

In the Enterprise space, ESPN, the sports television leader, continues to invest in their network infrastructure supporting High Definition programming with Extreme Networks’ scalable 10 gigabit solutions. This partnership demonstrates our ability to deliver powerful infrastructure for Video-on-Demand applications.

Lockheed Martin of Fort Worth, Texas has upgraded its network edge, migrating to our ExtremeXOS-based Summit switches, providing uniform features and performance.

We supplied the U.S. Marine Corps with our converged network solution delivering the speed and integrated security required for their demanding applications.

We assisted the U.S. Army by supporting them in building a high performance data center network with the added capacity to support sophisticated communications, including multicast video.

In Asia, the Korean Air Force chose Extreme to replace their ATM networks at seven separate air bases and migrated to a scalable gigabit Ethernet network featuring a range of Extreme products.

Within the Carrier Ethernet market, we continue to build new and extend existing networks. In Russia, Extreme is a part of the large Moscow network renovation project that includes a set of government facilities and approximately 3,000 schools, which are upgrading their networks to support next generation applications and converged services. We are working with local service provider MRS to deliver this leading and scalable network environment.

Ogero Telecom in the Middle East selected Extreme’s scalable Carrier Ethernet technology to support broadband network connectivity between local ISPs with plans to expand to the delivery bandwidth intensive IP-TV services. Another example of Extreme technology delivering sophisticated Video infrastructure solutions.

Certainly the state of the economy will present challenges in the near term. We will focus on investing in new products, improving partnerships with our channel and end users, improving processes, and yes, have a tight focus on cost control so that we are ready for the growth that will materialize as the economy regains its footing.

Nevertheless in this economic climate companies will look to proven brands which can deliver value. We have invested in our marketing with recent advertising and other brand creation activities. We offer value by delivering proven solutions at far more cost effective prices than our larger competitors. We have a lineup of fresh new products and our development organizations continue to deliver more state of the art technology to our field and our partners. Both the Summit X650 and the BD20K will help us execute during the second half of this fiscal year. Our field teams are in place and we have strong partners to work with.

We believe that we are well positioned as the only public “pure play” Ethernet Company at the beginning of a strong new product cycle.

With that, I’ll turn the call over to Karen for additional financial details.

Thanks, Mark, and good afternoon to everyone.

Overall, revenue for the quarter was slightly above the prior year, pro-forma gross margin improved 2 percentage points compared to the year ago quarter, and we generated over $20 million of cash flow from operations during the quarter.

Total revenue at $89.5 million was slightly above the year ago quarter and deferred product revenue increased $3.4 million from the fourth quarter of fiscal 2008. The increase in deferred product revenue was in part due to our adoption of SOP 97-2 software revenue recognition practices.

Product revenue at $74.3 million increased slightly from the year ago quarter, primarily driven by strong performance in the EMEA region. Our product book-to-bill ratio was slightly above 1 for the quarter.

Service revenue at $15.2 million increased slightly from the year ago quarter. We’re beginning to see stabilization of our services business due to increased sales focus and continued interest from our customers in protecting their technology investments.

Looking at the markets we address, the percent of enterprise to service provider sales for the quarter was 69% and 31%, respectively, compared to our historical pattern of 75% and 25%, respectively. The increased percentage of service provider sales was due to a higher proportion of service provider sales in the EMEA region.

Our new products released in the past 24 months have continued to gain customer acceptance and contributed above 40% of the Company’s revenue for the quarter.

The ratio of stackable and modular product sales was 63% and 37%, respectively, and in line with our historical pattern.

Looking at revenues by geography for the quarter:

North America’s revenue, which includes the U.S., Canada and Central America, was $35.7 million, a decrease of 14.2% from the year-ago quarter. We have seen a slowing of business in the America’s, which we believe is due to the broader macro economic climate. For the quarter, product and services revenue decreased 16.9% and 5.1%, respectively, in comparison to the year ago quarter.

EMEA had a very strong quarter, growing total revenue 34.5% over the year-ago-quarter to $41.6 million dollars. This is the 4th consecutive quarter of revenue growth in the region, primarily driven by service provider sales in Eastern Europe. Product sales in EMEA were up 34.3% and service revenue increased 37.5% compared to the year ago quarter.

Revenue in Asia-Pacific, including Japan, was $12.2 million, which is down $4.2 million or 25.4% from the year ago quarter. We continue to perform well in selected markets in Asia, including Korea and India and have turnaround programs underway to extend our presence in the rest of Asia.

I will turn now to non-GAAP results, which excludes the effect of stock-based compensation charges. Note that we have included, in our press release, a reconciliation of GAAP to non-GAAP financials.

As a percentage of revenue, total non-GAAP gross margin was 57.4%, and 2 percentage points improved from the prior years’ period.

Product non-GAAP gross margin as a percent of revenue was 59.3%, an improvement of 1.7 percentage points from the prior years’ period. The increase in product gross margin was primarily due to improved inventory and supply chain management resulting in lower excess and obsolescence costs, and lower standard costs – partially offset, by higher distribution and material scrap costs.

Service Non-GAAP gross margin at 48.2% of revenue improved 6 percentage points compared to the year-ago quarter, primarily due to increased revenue and non-recurring costs in the prior year period related to service upgrades.

Our non-GAAP operating expenses were $50.5 million, a decline of $3.9 million from the prior quarter and an increase of $3.8 million from the year ago quarter. Litigation charges for the quarter were $1.6 million, which is down $2.8 million from last quarter and up $0.8 million from the year ago quarter. The decline in litigation expenses from the prior sequential quarter was due to the completion of the Enterasys trial. Sales and marketing expenses increased $1.5 million compared to the year ago

quarter, primarily due to increased compensation expenses and timing of marketing programs related to new products R&D expenses increased slightly from the year ago quarter. G&A expenses, excluding litigation charges, increased $1.3 million compared to the year-ago quarter, primarily due to professional services related to the implementation of SOP 97-2 and increased compensation expenses.

Other income was $1.9 million and primarily includes interest on our investment portfolio of $1.4 million and foreword exchange gains related to assets in our international subsidiaries of $0.6 million

Turning to the bottom line, non-GAAP net income was $2.0 million or $0.02 per diluted share, which compares to $4.6 million or $0.04 per diluted share in the year-ago quarter.

In summary, while revenue and gross margins improved from the 1st fiscal quarter of last year, increased operating costs offset the stronger gross margin.

During the quarter we completed a share repurchase of 28.6 million shares of common stock, and ended the period with 88.3 million of total shares outstanding. Diluted earnings per share is calculated based on total weighted average shares outstanding during the period, which were 111.5 million for the quarter.

Looking at the balance sheet as of the end of September, we generated $20.6 million of cash from operations and used approximately $100 million of cash to complete the share repurchase, ending the quarter with $142.6 million of cash, cash equivalents, and investments, a net decrease of $83.1 million.

As mentioned, we generated $20.6 million of cash flow from operations for the period, which is up from the June quarter, primarily due to improved cash management of our accounts payable and increased collections from strong 4th quarter revenue. We do not anticipate the generation cash flow from operations to be as strong in the coming quarter, however we are managing the business to be cash flow positive.

Total full time regular employees were 862 and in line with the prior quarter.

Looking forward, we are continuing our practice of not providing specific guidance for the coming quarter. As Mark mentioned, we are continuing to focus on bringing our new products to market, enhancing our sales channels – and controlling costs. We continue to be sensitive to the changing economic environment and committed to managing the business to be cash flow positive and earnings positive.

With that, I will now turn the call back over to Mark.

Let’s talk in general about AMEA had some pretty good results and business was up in general and certainly the carrier part of the market was pretty strong. When you look at carriers; carriers, when they go about deploying networks, they can’t stop them in the middle. They have consumers and they have services they want to deploy and while they can modulate things, they have to put out those new capabilities. So we think in general the cycle for carriers sales tend to be longer, it takes longer to win them, and once you’ve won them, they also tend to generate a much steadier recurring stream.

So we continue to work with the carriers that have started deployments and they’re all in various stages of the life cycle of deploying their networks and obviously we’re working really hard to go get new carriers, to win new carriers business.

I was personally there in Europe for about a week and a half earlier towards the end of September and the beginning of October and while a lot of our customers in Eastern Europe and potentially new customers did talk about the financial markets and the possibility that credit would be tighter, they were all pretty convinced that they needed to deploy new and newer networks.

So while we see that there might be some slowdown, we are going to continue to be very aggressive there and keep our sales teams focused on winning new business.

If I look at each of the three lines, sales and marketing for example, sales and marketing in the quarter, you realize that we did have a higher increase in deferred revenue this quarter, when you look at sales and marketing as a percent of revenue.

Then, if I turn to the G&A line, we have litigation charges that vary over quarters depending upon where we are in litigation. We do have other litigation other than in Enterasys and we do try to manage those tightly. However some of that is not exactly in our control.

In looking at G&A types of charges that will continue into Q2, is that we will continue to incur professional services related to the adoption of 97-2 in the second quarter as well and I would not anticipate those professional services to be ongoing, but I do anticipate incurring those in the second quarter.

Sam Wilson:

Karen Rogge:

Mark Canepa:

Sam Wilson:

Mark Canepa:

Sam Wilson:

Karen Rogge:

Operator:

Scott Thompson:

Mark Canepa:

Scott Thompson:

Mark Canepa:

Operator:

Mark Canepa:

Mark Canepa:

Sanjit Singh:

Karen Rogge:

Sanjit Singh:

Karen Rogge:

Sanjit Singh:

Mark Canepa:

Operator:

Michael Coady:

Karen Rogge:

Michael Coady:

Karen Rogge:

Mark Canepa:

Michael Coady:

Mark Canepa:

Michael Coady:

Mark Canepa:

Operator:

Manny Recarey:

Karen Rogge:

Manny Recarey:

Karen Rogge:

Manny Recarey:

Mark Canepa:

Operator:

Jess Lubert:

Mark Canepa:

Operator:

Mark Canepa:

Operator: