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Ubiquiti (UI) Q4 Earnings Beat Estimates, Revenues Rise Y/Y

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·4 min read
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Ubiquiti Inc. UI reported solid fourth-quarter fiscal 2021 results, wherein both the bottom line and the top line beat the Zacks Consensus Estimate.

The New York-based network technology company’s share price increased 7.1% on Aug 27, closing the session at $321.87.

Net Income

On a GAAP basis, net income in the June quarter increased to $154.3 million or $2.46 per share from $92.6 million or $1.45 per share in the prior-year quarter. The rise was primarily driven by an increase in revenues and higher gross margin, and reflects a reduction in shares outstanding.

Quarterly non-GAAP net income was $154.9 million or $2.46 per share compared with $93.2 million or $1.46 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 11 cents.

Ubiquiti Inc. Price, Consensus and EPS Surprise

Ubiquiti Inc. Price, Consensus and EPS Surprise
Ubiquiti Inc. Price, Consensus and EPS Surprise

Ubiquiti Inc. price-consensus-eps-surprise-chart | Ubiquiti Inc. Quote

In fiscal 2021, net income was $616.6 million or $9.78 per share compared with $380.3 million or $5.80 per share in fiscal 2020.

Revenues

Quarterly revenues grew 51.5% year over year to $477.9 million, driven by higher sales of Service Provider Technology and Enterprise Technology products along with solid performance across all regions. The top line surpassed the consensus estimate of $465 million.

The company is benefiting from healthy order trends with an increase in direct sales through its webstores. That said, it continues to experience a disruption in its supply chain due to the pandemic and the global availability of components.

Revenues from Service Provider Technology increased to $163.5 million from $121.9 million in the year-ago quarter. Enterprise Technology revenues were $314.4 million, up from $193.6 million.

Region-wise, revenues from North America were $212.2 million compared with $160.1 million in the year-ago quarter. Revenues from Europe, Middle East and Africa were $197.8 million, up from $111.2 million. Revenues from Asia Pacific were $39.1 million compared with $23.4 million a year ago and the same from South America totaled $28.8 million, up from $20.8 million.

In fiscal 2021, revenues increased 47.8% year over year to $1,898.1 million.

Other Details

Gross profit increased to $230.7 million from $152.1 million in the year-ago quarter, with the respective margins of 48.3% and 48.2%. The rise was primarily driven by favorable changes in product mix and lower tariffs on the U.S. imports, partly offset by higher shipping costs and higher indirect costs.

Total operating expenses increased to $47.9 million from $34 million in the prior-year quarter. This was due to higher research and development as well as sales, general and administrative expenses. Operating income came in at $182.8 million compared with $118.1 million a year ago.

During the quarter, Ubiquiti repurchased 234,052 shares at an average price of $286.75.

Cash Flow & Liquidity

During fiscal 2021, Ubiquiti generated $612 million of cash from operating activities compared with $460.3 million in fiscal 2020. As of Jun 30, 2021, the company had $249.4 million in cash and cash equivalents with $467 million of long-term debt.

Zacks Rank & Stocks to Consider

Ubiquiti currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the industry are Clearfield, Inc. CLFD, Juniper Networks, Inc. JNPR and Qualcomm, Inc. QCOM. While Clearfield sports a Zacks Rank #1 (Strong Buy), Juniper and Qualcomm carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Clearfield delivered a trailing four-quarter earnings surprise of 49%, on average.

Juniper pulled off a trailing four-quarter earnings surprise of 7.5%, on average.

Qualcomm delivered a trailing four-quarter earnings surprise of 13.5%, on average.


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