UI Ubiquiti Inc

~ Record Revenues of $599.9 million ~

~ GAAP Diluted Earnings Per Share of $2.26 ~

Ubiquiti Inc. (NYSE: UI) ("Ubiquiti" or the "Company") today announced its financial results for the second quarter ended December 31, 2024.

Second Quarter Fiscal 2025 Financial Summary

• Revenues of $599.9 million
• GAAP diluted EPS of $2.26
• Non-GAAP diluted EPS of $2.28

Additional Financial Highlight

• The Company's Board of Directors declared a $0.60 per share cash dividend payable on February 24, 2025 to shareholders of record at the close of business on February 18, 2025.

Financial Highlights ($, in millions, except per share data)

Income statement highlights

 

F2Q25

 

F1Q25

 

F2Q24

Revenues

 

599.9

 

550.3

 

465.0

Enterprise Technology

 

518.2

 

470.2

 

391.5

Service Provider Technology

 

81.7

 

80.2

 

73.5

Gross profit

 

247.2

 

231.6

 

177.6

Gross Profit (%)

 

41.2%

 

42.1%

 

38.2%

Total Operating Expenses

 

68.4

 

62.4

 

56.5

Income from Operations

 

178.8

 

169.2

 

121.1

GAAP Net Income

 

136.8

 

128.0

 

82.1

GAAP EPS (diluted)

 

2.26

 

2.12

 

1.36

Non-GAAP Net Income

 

138.1

 

129.3

 

83.3

Non-GAAP EPS (diluted)

 

2.28

 

2.14

 

1.38

 

Ubiquiti Inc.

 

 

 

 

Revenues by Product Type

(In thousands)

(Unaudited)

 

 

Three Months Ended December 31,

 

Six Months Ended December 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

Enterprise Technology

 

$

518,202

 

$

391,492

 

$

988,385

 

$

771,586

Service Provider Technology

 

 

81,677

 

 

73,462

 

 

161,838

 

 

156,446

Total revenues

 

$

599,879

 

$

464,954

 

$

1,150,223

 

$

928,032

 

Ubiquiti Inc.

 

 

 

 

Revenues by Geographical Area

(In thousands)

(Unaudited)

 

 

Three Months Ended December 31,

 

Six Months Ended December 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

North America

 

$

321,644

 

$

225,858

 

$

592,890

 

$

450,642

Europe, the Middle East and Africa

 

 

208,579

 

 

172,951

 

 

413,467

 

 

345,345

Asia Pacific

 

 

43,081

 

 

33,270

 

 

84,019

 

 

69,356

South America

 

 

26,575

 

 

32,875

 

 

59,847

 

 

62,689

Total revenues

 

$

599,879

 

$

464,954

 

$

1,150,223

 

$

928,032

Income Statement Items

Revenues

Revenues for the second quarter fiscal 2025 were $599.9 million, representing an increase from the prior quarter of 9.0% and an increase from the comparable prior year period of 29.0%.

The increase in revenues compared to the prior quarter as well as the comparable prior year period was driven by an increase in revenue from both our Enterprise Technology platform and Service Provider Technology platform.

Gross Margins

During the second quarter fiscal 2025, GAAP gross profit was $247.2 million. GAAP gross margin of 41.2% decreased by 0.9% as compared to the prior quarter GAAP gross margin of 42.1% and increased by 3.0% as compared to the comparable prior year period GAAP gross margin of 38.2%.

The decrease in gross profit margin as compared to the prior quarter was primarily driven by unfavorable product mix, higher shipping and tariff costs offset in part by lower warehouse related expenses and excess and obsolete inventory charges. The increase in gross profit margin as compared to the comparable prior year period was primarily driven by favorable product mix , lower warehouse-related expenses and excess and obsolete inventory charges, offset in part by higher shipping and tariff costs.

Research and Development

During the second quarter fiscal 2025, research and development ("R&D") expenses were $40.0 million. This reflects an increase as compared to the R&D expenses of $38.0 million in the prior quarter and an increase as compared to the R&D expenses of $36.9 million in the comparable prior year period.

The increase in R&D expenses as compared to the prior quarter was primarily driven by higher prototype-related expenses. The increase in R&D expenses as compared to the comparable prior year period was primarily driven by higher prototype-related expenses and employee-related expenses.

Sales, General and Administrative

The Company’s sales, general and administrative ("SG&A") expenses for the second quarter fiscal 2025 were $28.5 million. This reflects an increase as compared to the SG&A expenses of $24.4 million in the prior quarter and an increase compared to the SG&A expenses of $19.6 million in the comparable prior year period.

The increase in SG&A costs as compared to the prior quarter was primarily due to higher bad debt expenses relating to a customer default and higher fees associated with webstore credit card processing offset in part by lower marketing expenses and professional fees. The increase in SG&A as compared to the comparable prior year period was primarily due to higher bad debt expenses relating to a customer default and higher fees associated with webstore credit card processing.

Interest Expense and Other, net

During the second quarter fiscal 2025, interest expense and other, net ("I&O") expenses were $11.4 million. This reflects an increase as compared to the I&O expenses in the prior quarter of $10.6 million and a decrease as compared to the I&O expenses in the comparable prior year period of $18.3 million, respectively.

The increase in I&O expenses as compared to the prior quarter was primarily due to higher foreign exchange losses offset in part by lower interest expense driven by a decrease in borrowings and lower interest rates. The decrease in I&O expenses as compared to the comparable prior year period was primarily due to lower interest expense driven by a decrease in borrowings and lower interest rates, partly offset by higher foreign exchange losses.

Net Income and Earnings Per Share

During the second quarter fiscal 2025, GAAP net income was $136.8 million and non-GAAP net income was $138.1 million. This reflects an increase in GAAP net income and non-GAAP net income from the comparable prior year period by 66.6% and 65.9%, respectively, primarily driven by higher revenues and gross profit. Second quarter fiscal 2025 GAAP earnings per diluted share was $2.26 and non-GAAP earnings per diluted share was $2.28. This reflects an increase in GAAP and non-GAAP earnings per diluted share from the comparable prior year period of 66.2% and 65.2%, respectively.

About Ubiquiti Inc.

Ubiquiti Inc. is focused on democratizing network technology on a global scale — creating networking infrastructure in over 200 countries and territories around the world. Our professional networking products are powered by our UISP and UniFi software platforms to provide high-capacity distributed Internet access and unified information technology management, respectively.

Ubiquiti and the U logo are trademarks or registered trademarks of Ubiquiti and/or its affiliates in the United States and other countries. For more information, please visit www.ui.com.

Safe Harbor for Forward Looking Statements

Certain statements in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements other than statements of historical fact including words such as "look", "will", "anticipate", "believe", "estimate", "expect", "forecast", "consider" and "plan" and statements in the future tense are forward looking statements. The statements in this press release that could be deemed forward-looking statements include the statement regarding our intention to pay quarterly cash dividends, any statements or assumptions underlying the foregoing, and any statement regarding future events and the future financial performance of Ubiquiti Inc. that involves risks or uncertainties.

Forward-looking statements are subject to certain risks and uncertainties that could cause our actual future results to differ materially or cause a material adverse impact on our results. Potential risks and uncertainties include, but are not limited to, the impact of public health problems, such as COVID-19, and U.S. tariffs on results; fluctuations in our operating results; varying demand for our products due to the financial and operating condition of our distributors and their customers, and our distributors’ inventory management practices; political and economic conditions and volatility affecting the stability of business environments, economic growth, currency values, commodity prices and other factors that may influence the ultimate demand for our products in particular geographies or globally; impact of counterfeiting and our ability to contain such impact; our reliance on a limited number of distributors; inability of our contract manufacturers and suppliers to meet our demand; our dependence on chipset suppliers for chipsets without a short-term alternative; as we move into new markets competition from certain of our current or potential competitors who may be more established in such markets; our ability to keep pace with technological and market developments; success and timing of new product introductions by us and the performance of our products generally; our ability to effectively manage the significant increase in our transactional sales volumes; we may become subject to warranty claims, product liability and product recalls; that a substantial majority of our sales are into countries outside the United States and we are subject to numerous U.S. export control and economic sanctions laws; costs related to responding to government inquiries related to regulatory compliance; our reliance on certain key members of our management team, including our founder and chief executive officer, Robert J. Pera; adverse tax-related matters such as tax audits, changes in our effective tax rate or new tax legislative proposals; whether the final determination of our income tax liability may be materially different from our income tax provisions; the impact of any intellectual property litigation and claims for indemnification; litigation related to U.S. securities laws; and social, economic and political conditions in the United States and abroad, including the impact of the military conflict between Russia and Ukraine and the tension between China and Taiwan. We discuss these risks in greater detail under the heading "Risk Factors" and elsewhere in our Annual Report on Form 10-K for the year ended June 30, 2024, and subsequent filings filed with the U.S. Securities and Exchange Commission (the "SEC"), which are available at the SEC’s website at www.sec.gov. Copies may also be obtained by contacting the Ubiquiti Inc. Investor Relations Department, by email at IR@ui.com or by visiting the Investor Relations section of the Ubiquiti Inc. website, https://ir.ui.com/.

Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date made. Except as required by law, Ubiquiti Inc. undertakes no obligation to update information contained herein. You should review our SEC filings carefully and with the understanding that our actual future results may be materially different from what we expect.

 

Ubiquiti Inc.

 

 

 

 

Condensed Consolidated Statements of Operations

and Comprehensive Income

(In thousands, except per share data) (Unaudited)

 

 

Three Months Ended December 31,

 

Six Months Ended December 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

Revenues

 

$

599,879

 

$

464,954

 

$

1,150,223

 

$

928,032

Cost of revenues

 

 

352,649

 

 

287,307

 

 

671,375

 

 

566,510

Gross profit

 

 

247,230

 

 

177,647

 

 

478,848

 

 

361,522

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

 

39,958

 

 

36,911

 

 

77,955

 

 

73,194

Sales, general and administrative

 

 

28,460

 

 

19,634

 

 

52,875

 

 

38,923

Total operating expenses

 

 

68,418

 

 

56,545

 

 

130,830

 

 

112,117

Income from operations

 

 

178,812

 

 

121,102

 

 

348,018

 

 

249,405

Interest expense and other, net

 

 

11,440

 

 

18,262

 

 

22,018

 

 

39,486

Income before income taxes

 

 

167,372

 

 

102,840

 

 

326,000

 

 

209,919

Provision for income taxes

 

 

30,577

 

 

20,724

 

 

61,217

 

 

40,053

Net income

 

$

136,795

 

$

82,116

 

$

264,783

 

$

169,866

Net income per share of common stock:

 

 

 

 

 

 

 

 

Basic

 

$

2.26

 

$

1.36

 

$

4.38

 

$

2.81

Diluted

 

$

2.26

 

$

1.36

 

$

4.38

 

$

2.81

Weighted average shares used in computing net income per share of common stock:

 

 

 

 

 

 

 

 

Basic

 

 

60,470

 

 

60,448

 

 

60,470

 

 

60,447

Diluted

 

 

60,527

 

 

60,451

 

 

60,514

 

60,451

 

Ubiquiti Inc.

 

 

Reconciliation of GAAP Net Income to Non-GAAP Net Income

(In thousands, except per share data)

(Unaudited)

 

Three Months Ended

Six Months Ended December 31,

 

December 31, 2024

September 30, 2024

December 31, 2023

 

2024

 

 

2023

Net Income

$

136,795

 

$

127,988

 

$

82,116

 

$

264,783

 

$

169,866

Share-based compensation:

 

 

 

 

 

Cost of revenues

 

57

 

 

54

 

 

35

 

 

111

 

 

69

Research and development

 

1,318

 

 

1,237

 

 

1,161

 

 

2,556

 

 

2,295

Sales, general and administrative

 

418

 

 

405

 

 

310

 

 

822

 

 

642

Tax effect of Non-GAAP adjustments

 

(440

)

 

(416

)

 

(361

)

 

(856

)

 

(720)

Non-GAAP net income

$

138,148

 

$

129,268

 

$

83,261

 

$

267,416

 

$

172,152

Non-GAAP diluted EPS

$

2.28

 

$

2.14

 

$

1.38

 

$

4.42

 

$

2.85

 

 

 

 

 

 

Shares outstanding (Diluted)

 

60,527

 

 

60,494

 

 

60,451

 

 

60,514

 

 

60,451

Weighted-average shares used in Non-GAAP diluted EPS

 

60,527

 

 

60,494

 

 

60,451

 

 

60,514

 

 

60,451

Use of Non-GAAP Financial Information

To supplement our condensed consolidated financial results prepared under generally accepted accounting principles, or GAAP, we use non-GAAP measures of net income and earnings per diluted share that are adjusted to exclude certain costs, expenses and gains such as share-based compensation expense and the tax effects of these non-GAAP adjustments.

Reconciliations of the adjustments to GAAP results for the periods presented are provided above. In addition, an explanation of the ways in which management uses non-GAAP financial information to evaluate its business, the substance behind management’s decision to use this non-GAAP financial information, material limitations associated with the use of non-GAAP financial information, the manner in which management compensates for those limitations, and the substantive reasons management believes that this non-GAAP financial information provides useful information to investors is included under the paragraphs below.

Usefulness of Non-GAAP Financial Information to Investors

We believe that the presentation of non-GAAP net income and non-GAAP earnings per diluted share provides important supplemental information regarding non-cash expenses, significant items that we believe are important to understanding our financial, and business trends relating to our financial condition and results of operations. Non-GAAP net income and non-GAAP earnings per diluted share are among the primary indicators used by management as a basis for planning and forecasting future periods and by management and our board of directors to determine whether our operating performance has met specified targets and thresholds. Management uses non-GAAP net income and non-GAAP earnings per diluted share when evaluating operating performance because it believes that the exclusion of the items described below, for which the amounts or timing may vary significantly depending upon the Company’s activities and other factors, facilitates comparability of the Company’s operating performance from period to period. We have chosen to provide this information to investors so they can analyze our operating results in the same way that management does and use this information in their assessment of our business and the valuation of our Company.

About our Non-GAAP Net Income and Non-GAAP Earnings per Diluted Share

We compute non-GAAP net income and non-GAAP earnings per diluted share by adjusting GAAP net income and GAAP earnings per diluted share to remove the impact of certain adjustments and the tax effect of those adjustments. Items excluded from net income are:

• Share-based compensation expense
• Tax effect of non-GAAP adjustments, applying the principles of ASC 740

These non-GAAP measures are not in accordance with, or an alternative to, GAAP and may be materially different from other non-GAAP measures, including similarly titled non-GAAP measures used by other companies. The presentation of this additional information should not be considered in isolation from, as a substitute for, or superior to, net income or earnings per diluted share prepared in accordance with GAAP. Non-GAAP financial measures have limitations in that they do not reflect certain items that may have a material impact upon our reported financial results.

For more information on the non-GAAP adjustments, please see the table captioned "Reconciliation of GAAP Net Income to non-GAAP Net Income" included in this press release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250206953560/en/

Investor Relations Ubiquiti Inc. Investor Relations ir@ui.com Ph.1-646-780-7958