~ Revenues of $491.1 million ~
~ GAAP Diluted Earnings Per Share of $1.72
~
Ubiquiti Inc. (NYSE: UI) ("Ubiquiti" or the "Company") today
announced its financial results for the fourth quarter and full
year fiscal 2023, ended June 30, 2023.
Fourth Quarter Fiscal 2023 Financial
Summary
- Revenues of $491.1 million
- GAAP diluted EPS of $1.72
- Non-GAAP diluted EPS of $1.73
Full Fiscal 2023 Financial
Summary
- Revenues of $1.9 billion
- GAAP diluted EPS of $6.74
- Non-GAAP diluted EPS of $6.80
Additional Financial
Highlight
- The Company's Board of Directors (the "Board") declared a $0.60
per share cash dividend payable on September 11, 2023 to
shareholders of record at the close of business on September 5,
2023.
- The Company intends to pay regular quarterly cash dividends of
at least $0.60 per share during each quarter of fiscal year 2024,
although all subsequent dividends, and the establishment of record
and payment dates, are subject to final determination by the Board
each quarter after its review of the Company’s financial
performance and results of operations, available cash and cash
flow, capital requirements, applicable corporate legal
requirements, and other factors.
Financial Highlights ($, in millions, except per share
data)
Income statement highlights
F4Q23
F3Q23
F4Q22
Revenues
491.1
457.8
443.1
Enterprise Technology
404.1
373.6
344.5
Service Provider Technology
87.0
84.2
98.6
Gross profit
203.3
188.5
169.6
Gross Profit (%)
41.4%
41.2%
38.3%
Total Operating Expenses
59.5
55.0
57.1
Income from Operations
143.9
133.5
112.5
GAAP Net Income
103.7
98.6
92.5
GAAP EPS (diluted)
1.72
1.63
1.53
Non-GAAP Net Income
104.7
99.5
93.3
Non-GAAP EPS (diluted)
1.73
1.65
1.54
Ubiquiti Inc.
Revenues by Product Type
(In thousands)
(Unaudited)
Three Months Ended June
30,
Twelve Months Ended June
30,
2023
2022
2023(1)
2022(1)
Enterprise Technology
$
404,148
$
344,512
$
1,621,426
$
1,316,685
Service Provider Technology
86,987
98,633
319,086
375,007
Total revenues
$
491,135
$
443,145
$
1,940,512
$
1,691,692
Ubiquiti Inc.
Revenues by Geographical Area
(In thousands)
(Unaudited)
Three Months Ended June
30,
Twelve Months Ended June
30,
2023
2022
2023(1)
2022(1)
North America
$
238,323
$
211,098
$
922,230
$
790,809
Europe, the Middle East and Africa
190,904
176,471
759,405
675,306
Asia Pacific
32,343
32,809
148,502
134,961
South America
29,515
22,767
110,375
90,616
Total revenues
$
491,085
$
443,145
$
1,940,512
$
1,691,692
(1) Derived from audited
consolidated statements as of and for the year ended June 30, 2023
and 2022, respectively.
Income Statement Items
Revenues
Revenues for the fourth quarter fiscal 2023 were $491.1 million,
representing an increase from the prior quarter of 7.3% and an
increase from the comparable prior year period of 10.8%. On a full
year basis, revenues for fiscal 2023 were $1.9 billion,
representing a 14.7% increase compared to full year fiscal
2022.
The growth in revenues over the prior quarter and the prior year
were both primarily driven by increases in revenue from our
Enterprise Technology platform. Revenues from the Service Provider
Technology platform increased compared to the prior quarter but
decreased compared to the comparable prior year period.
Gross Margins
During the fourth quarter fiscal 2023, GAAP gross profit was
$203.3 million. GAAP gross margin of 41.4% increased by 0.2% as
compared to the prior quarter GAAP gross margin of 41.2% and
increased by 3.1% as compared to the comparable prior year period
GAAP gross margin of 38.3%. On a full year basis, fiscal 2023 GAAP
gross profit was $760.7 million. Fiscal 2023 GAAP gross margin of
39.2% decreased by 0.4% as compared to fiscal 2022 GAAP gross
margin of 39.6%.
The increase in gross profit margin as compared to the prior
quarter was primarily driven by lower component costs, partially
offset by changes in product mix. The increase in gross profit
margin as compared to the comparable prior year period was
primarily driven by lower shipping and component costs, partially
offset by changes in product mix. The decline in gross profit
margin for full fiscal 2023 as compared to full fiscal 2022 was
primarily driven by changes in product mix and higher component
costs, partially offset by lower shipping costs.
Research and Development
During the fourth quarter fiscal 2023, research and development
("R&D") expenses were $40.5 million. This reflects an increase
as compared to the R&D expenses of $38.2 million in the prior
quarter and R&D expenses of $37.4 million in the comparable
prior year period. On a full year basis, fiscal 2023 R&D
expenses were $145.2 million, representing an increase of $7.5
million as compared to R&D expenses of $137.7 million for
fiscal 2022.
The increase in R&D expenses as compared to the prior
quarter was primarily due to increased prototype-related expenses,
partially offset by lower employee-related expenses. The increase
in R&D expenses as compared to the comparable prior year period
was primarily driven by higher employee-related expenses and
prototype-related expenses. The increase in R&D expenses for
fiscal 2023 compared to fiscal 2022 was primarily driven by higher
employee-related expenses and facility costs.
Sales, General and Administrative
The Company’s sales, general and administrative ("SG&A")
expenses for the fourth quarter fiscal 2023 were $18.9 million.
This reflects an increase as compared to the SG&A expenses of
$16.7 million in the prior quarter and a decrease compared to the
SG&A expenses of $19.6 million in the comparable prior year
period. On a full year basis, fiscal 2023 SG&A expenses were
$71.0 million, reflecting an increase of $1.1 million as compared
to SG&A expenses of $69.9 million for fiscal 2022.
The increase in SG&A costs as compared to the prior quarter
was primarily due to higher professional fees. The decrease in
SG&A costs as compared to the comparable prior year period was
primarily due to lower marketing expenses and professional fees,
partially offset by higher employee-related expenses. The increase
in SG&A expenses for fiscal 2023 compared to fiscal 2022 was
primarily driven by higher fees associated with webstore credit
card processing, partially offset by lower professional fees and
marketing expenses.
Interest Expense and Other, net
During the fourth quarter fiscal 2023, Interest expense and
other, net ("I&O") expenses were $19.8 million. This reflects
an increase as compared to the I&O expenses of $16.5 million in
the prior quarter and I&O expenses of $8.0 million in the
comparable prior year period. On a full year basis, fiscal 2023
I&O expenses were $58.2 million, reflecting an increase of
$40.4 million as compared to the I&O expenses of $17.8 million
for fiscal 2022.
The increase in I&O expenses as compared to the prior
quarter and comparable prior year period was primarily due to
higher interest expense due to incremental borrowings and increased
interest rates. The increase in I&O expense for fiscal 2023 as
compared to fiscal 2022 was primarily driven by higher interest
expense due to incremental borrowings and increased interest
rates.
Net Income and Earnings Per Share
During the fourth quarter fiscal 2023, GAAP net income was
$103.7 million and non-GAAP net income was $104.7 million. This
reflects an increase in GAAP net income and non-GAAP net income
from the comparable prior year period by 12.1% and 12.2%,
respectively, primarily driven by higher revenues and higher gross
profit. Fourth quarter fiscal 2023 GAAP earnings per diluted share
was $1.72 and non-GAAP earnings per diluted share was $1.73. This
reflects an increase in GAAP and non-GAAP earnings per diluted
share from the comparable prior year period of 12.4% and 12.3%,
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 risk 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, 2023, 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 June
30,
Twelve Months Ended June
30,
2023
2022
2023(1)
2022(1)
Revenues
$
491,085
$
443,145
$
1,940,512
$
1,691,692
Cost of revenues
287,758
273,511
1,179,781
1,021,880
Gross profit
203,327
169,634
$
760,731
$
669,812
Operating expenses:
Research and development
40,539
37,445
145,172
137,689
Sales, general and administrative
18,913
19,619
70,993
69,859
Total operating expenses
59,452
57,064
216,165
207,548
Income from operations
143,875
112,570
544,566
462,264
Interest expense and other, net
(19,803
)
(8,032
)
(58,224
)
(17,815
)
Income before income taxes
124,072
104,538
486,342
444,449
Provision for income taxes
20,395
12,034
78,701
65,792
Net income
$
103,677
$
92,504
$
407,641
$
378,657
Net income per share of common stock:
Basic
$
1.72
$
1.53
$
6.75
$
6.14
Diluted
$
1.72
$
1.53
$
6.74
$
6.13
Weighted average shares used in computing
net income per share of common stock:
Basic
60,442
60,486
60,435
61,689
Diluted
60,449
60,507
60,451
61,723
(1) Derived from audited
consolidated statements as of and for the year ended June 30, 2023
and 2022, respectively.
Ubiquiti Inc.
Reconciliation of GAAP Net Income to
Non-GAAP Net Income
(In thousands, except per share
data)
(Unaudited)
Three Months Ended
Twelve Months Ended
June 30,
June 30, 2023
March 31, 2023
June 30, 2022
2023
2022
Net Income
$
103,677
$
98,577
$
92,504
$
407,641
$
378,657
Share-based compensation:
Cost of revenues
26
24
11
73
74
Research and development
1,017
942
755
3,541
2,541
Sales, general and administrative
297
280
247
1,120
901
Partial recovery of investment previously
impaired
—
—
—
—
(901
)
Tax effect of Non-GAAP adjustments
(321
)
(294
)
(239
)
(1,132
)
(830
)
Non-GAAP net income
$
104,696
$
99,529
$
93,278
$
411,243
$
380,442
Non-GAAP diluted EPS
$
1.73
$
1.65
$
1.54
$
6.80
$
6.16
Shares outstanding (Diluted)
60,449
60,455
60,507
60,451
61,723
Weighted-average shares used in Non-GAAP
diluted EPS
60,449
60,455
60,507
60,451
61,723
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, partial recovery of
investment previously impaired 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
- Partial recovery of investment previously impaired
- 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/20230824826615/en/
Investor Relations Ubiquiti
Inc. Investor Relations ir@ui.com Ph. 1-646-780-7958
Ubiquiti (NYSE:UI)
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