~ Revenues of $477.9 million ~ GAAP
and Non-GAAP Earnings Per Share $2.46 and $2.47
Ubiquiti Inc. (NYSE: UI) (“Ubiquiti” or the “Company”) today
announced financial results for the fourth quarter and full year
fiscal 2021, ended June 30, 2021.
Fourth Quarter Fiscal 2021
Summary
- Revenues of $477.9 million, increasing 51.5%
year-over-year
- GAAP diluted EPS of $2.46, increasing 69.7% year-over-year
- Non-GAAP diluted EPS of $2.47, increasing 69.2%
year-over-year
- Repurchased 234,052 shares of common stock at an average price
of $286.75 per share
Full Fiscal 2021 Financial
Summary
- Revenues of $1.9 billion, increasing 47.8% year-over-year
- GAAP diluted EPS of $9.78 increasing 68.6% year-over-year
- Non-GAAP diluted EPS of $9.77, increasing 65.3%
year-over-year
- Repurchased 1,145,188 shares of common stock at an average of
$191.90 per share
Additional Financial
Highlights
- The Company repurchased and retired 93,152 shares of common
stock between July 1, 2021 and August 26, 2021 at an average price
of $299.66 for an aggregate amount of $27.9 million. As of August
26, 2021, the Company had $290.2 million available for share
repurchases under the 2020 May Program, as disclosed in the Form
8-K filed on May 8, 2020.
- The Company’s Board of Directors (the “Board”) declared a $0.60
per share cash dividend payable on September 15, 2021 to
shareholders of record at the close of business on September 7,
2021.
- The Company intends to pay regular quarterly cash dividends of
at least $0.60 per share during each quarter of fiscal year 2022,
although all subsequent dividends, and the establishment of record
and payment dates, are subject to final determination by the Board
each quarter after its review of the Company’s financial
performance and results of operations, available cash and cash
flow, capital requirements, applicable corporate legal
requirements, and other factors.
Financial Highlights ($, in millions, except per share data)
(unaudited)
Income statement highlights
F4Q21
F3Q21
F4Q20
Revenues
477.9
467.2
315.5
Service Provider Technology
163.5
152.4
121.9
Enterprise Technology
314.4
314.9
193.6
Gross profit
230.7
222.7
152.1
Gross Profit (%)
48.3%
47.7%
48.2%
Total Operating Expenses
47.9
43.7
34.0
Income from Operations
182.8
179.0
118.1
GAAP Net Income
154.3
146.1
92.6
GAAP EPS (diluted)
2.46
2.32
1.45
Non-GAAP Net Income
154.9
144.8
93.2
Non-GAAP EPS (diluted)
2.47
2.30
1.46
Ubiquiti Inc.
Revenues by Product Type (In
thousands)
(Unaudited)
Three Months Ended June
30,
Years Ended June 30,
2021
2020
2021 (1)
2020 (1)
Service Provider Technology
$
163,464
$
121,942
$
623,163
$
442,023
Enterprise Technology
314,424
193,580
1,274,931
842,477
Total revenues
$
477,888
$
315,522
$
1,898,094
$
1,284,500
Ubiquiti Inc.
Revenues by Geographical Area
(In thousands)
(Unaudited)
Three Months Ended June
30,
Years Ended June 30,
2021
2020
2021 (1)
2020 (1)
North America
$
212,197
$
160,067
$
836,032
$
571,901
Europe, the Middle East and Africa
197,781
111,248
785,288
517,132
Asia Pacific
39,072
23,369
154,536
112,121
South America
28,838
20,838
122,238
83,346
Total revenues
$
477,888
$
315,522
$
1,898,094
$
1,284,500
(1) Derived from audited consolidated statements as of and for
the year ended June 30, 2021 and 2020, respectively.
Income Statement Items
Revenues
Revenues for the fourth quarter fiscal 2021 were $477.9 million,
representing an increase from the comparable prior year period of
51.5% and an increase from the prior quarter of 2.3%. On a full
year basis, revenues for fiscal 2021 were $1.9 billion,
representing a 47.8% increase as compared to full year fiscal
2020.
Gross Margins
Fourth quarter fiscal 2021 gross profit was $230.7 million. GAAP
gross margin of 48.3% increased 0.1% versus the comparable
prior-year period of 48.2% and increased 0.6% versus the prior
quarter of 47.7%. On a full year basis, fiscal 2021 GAAP gross
profit was $912.3 million. Fiscal 2021 GAAP gross margin of 48.1%
increased 0.8% versus the comparable prior year period GAAP gross
margin of 47.3%.
The increase in GAAP gross margin for the fourth quarter fiscal
2021 as compared to the comparable prior year period was primarily
driven by favorable changes in product mix and lower tariffs on
United States imports, offset in part by higher shipping costs and
higher indirect costs.
The increase in GAAP gross margin for the fourth quarter fiscal
2021 as compared to the prior quarter was primarily driven by
favorable changes in product mix, offset in part by higher indirect
costs and shipping costs.
The increase in GAAP gross margin for full fiscal 2021 versus
full fiscal 2020 was primarily driven by favorable changes in
product mix, offset in part by higher shipping costs.
Research and Development
During the fourth quarter fiscal 2021, research and development
(“R&D”) expenses were $31.0 million. This reflects an increase
as compared to the R&D expenses of $23.4 million in the
comparable prior year period and R&D expenses of $30.5 million
in the prior quarter. On a full year basis, fiscal 2021 R&D
expenses were $116.2 million, reflecting an increase versus fiscal
2020 R&D expense of $89.4 million.
The increase in R&D expense for the fourth quarter fiscal
2021 as compared to the comparable prior year period was primarily
driven by higher employee-related expenses, professional and
service-related fees, depreciation and amortization expense.
The increase in R&D expense for the fourth quarter fiscal
2021 as compared to the prior quarter was primarily driven by
higher professional and service-related fees, offset in part by
lower non-recurring engineering ("NRE") expense.
The increase in R&D expense for fiscal 2021 versus fiscal
2020 was primarily driven by higher employee-related expenses, NRE
expense, professional and service-related fees, rent expense,
depreciation and amortization expense.
Sales, General and Administrative
The Company’s sales, general and administrative (“SG&A”)
expenses for the fourth quarter fiscal 2021 were $17.0 million.
This reflects an increase of $6.5 million as compared to the
SG&A expenses of $10.5 million in the comparable prior year
period and an increase of $3.7 million as compared to the SG&A
expenses of $13.3 million in the prior quarter. On a full year
basis, fiscal 2021 SG&A expense was $53.5 million, reflecting
an increase of $12.9 million as compared to the SG&A expense of
$40.6 million for fiscal 2020.
The increase in SG&A costs as compared to the comparable
prior year period was primarily driven by higher professional and
service fees and marketing costs.
The increase in SG&A costs as compared to the prior quarter
is primarily driven by higher professional and services fees and
the absence of a business e-mail compromise ("BEC") recovery
received in the third quarter of fiscal 2021.
The increase in fiscal 2021 SG&A expenses as compared to
fiscal 2020 was primarily driven by increased professional and
service fees and depreciation expense, offset in part by lower
payroll related costs, a legal settlement received in the second
quarter fiscal 2021 and a BEC recovery received in the third
quarter fiscal 2021.
Other Expenses
The decrease in other expense reflects the absence of a $5.0
million impairment charge recorded in the second quarter fiscal
2020 related to an unrealized loss on a cost-based investment.
Net Income and Earnings Per Share
During the fourth quarter fiscal 2021, GAAP net income was
$154.3 million and non-GAAP net income was $154.9 million. This
reflects an increase in GAAP net income and non-GAAP net income
from the comparable prior year period by 66.6% and 66.2%,
respectively, primarily driven by an increase in revenue and higher
gross margin.
During the fourth quarter fiscal 2021 GAAP earnings per diluted
share was $2.46 and non-GAAP earnings per diluted share was $2.47.
This reflects a 69.7% increase in GAAP earnings per share and a
69.2% increase in non-GAAP diluted earnings per share from the
comparable prior-year period. Both GAAP and non-GAAP earnings per
share benefited from higher net income and a reduction in GAAP and
non-GAAP diluted shares outstanding.
Global Component Supply
During the three months ended June 30, 2021, we continued to
experience a disruption in our supply chain as a result of the
COVID-19 pandemic and the global availability of components. The
current environment has impacted our suppliers' ability to
manufacture or provide key components and services and as a result
we have incurred, and we continue to incur, additional costs to
procure components and to expedite deliveries of components and
services and resulted in our inability to fulfill customer orders.
Our future results are dependent on our ability to procure
components and services and the effects of the global component
supply shortage and the COVID-19 pandemic may not be fully
reflected in the Company's financial results until future
periods.
About Ubiquiti Inc.
Ubiquiti Inc. is focused on democratizing network technology on
a global scale — aggregate shipments of over 126 million devices
play a key role in creating networking infrastructure in over 200
countries and territories around the world. Our professional
networking products are powered by our UNMS 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 statements regarding the impact
of COVID-19, global component supply and our intentions to pay
quarterly cash dividends and any statements or assumptions
underlying any of the foregoing.
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 economic and political conditions in the United States
and abroad. 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, 2021, 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,
http://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,
Years Ended June 30,
2021
2020
2021 (1)
2020 (1)
Revenues
$
477,888
$
315,522
$
1,898,094
$
1,284,500
Cost of revenues
247,140
163,462
985,818
676,328
Gross profit
$
230,748
$
152,060
$
912,276
$
608,172
Operating expenses:
Research and development
30,963
23,440
116,171
89,405
Sales, general and administrative
16,957
10,516
53,513
40,569
Total operating expenses
47,920
33,956
169,684
129,974
Income from operations
182,828
118,104
742,592
478,198
Interest expense and other, net
(2,518)
(4,646)
(14,938)
(28,002)
Income before income taxes
180,310
113,458
727,654
450,196
Provision for income taxes
25,978
20,840
111,070
69,899
Net income
$
154,332
$
92,618
$
616,584
$
380,297
Net income per share of common stock:
Basic
$
2.46
$
1.45
$
9.79
$
5.81
Diluted
$
2.46
$
1.45
$
9.78
$
5.80
Weighted average shares used in computing
net income per share of common stock:
Basic
62,711
63,689
62,991
65,427
Diluted
62,761
63,756
63,052
65,514
(1) Derived from audited consolidated statements as of and for
the year ended June 30, 2021 and 2020, respectively.
Ubiquiti Inc.
Reconciliation of GAAP Net Income to
Non-GAAP Net Income
(In thousands, except per share
data)
(Unaudited)
Three Months Ended
Years Ended June 30,
June 30, 2021
March 31, 2021
June 30, 2020
2021
2020
Net Income
$
154,332
$
146,075
$
92,618
$
616,584
$
380,297
Stock-based compensation:
Cost of revenues
22
23
27
102
121
Research and development
554
538
515
2,114
2,022
Sales, general and administrative
188
214
202
813
745
Business e-mail compromise ("BEC") fraud
recovery
—
(1,876
)
—
(1,876
)
—
Litigation settlement
—
—
—
(1,625
)
—
Impairment of cost-based investment
—
—
—
—
5,000
Tax effect of Non-GAAP adjustments
(181
)
(183
)
(176
)
(332
)
(679
)
Non-GAAP net income
$
154,915
$
144,791
$
93,186
$
615,780
$
387,506
Non-GAAP diluted EPS
$
2.47
$
2.30
$
1.46
$
9.77
$
5.91
Shares outstanding (Diluted)
62,761
62,865
63,756
63,052
65,514
Weighted-average shares used in Non-GAAP
diluted EPS
62,761
62,865
63,756
63,052
65,514
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 stock-based compensation expense, BEC fraud recovery,
Litigation settlement, impairment of cost-based investment 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:
- Stock-based compensation expense
- Business e-mail compromise ("BEC") fraud recovery
- Litigation settlement
- Impairment of cost-based investment
- 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/20210827005034/en/
Ubiquiti Inc. Investor Relations ir@ui.com
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