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Tech Shines as Markets Defy "Sell in May and Go Away" Adage: 5 Picks
ZACKS· 2025-06-02 12:26
Market Overview - April 2023 ended on a mixed note for investors, contrasting with its historical reputation as a favorable month [1] - May 2023 saw significant gains in U.S. stock markets, with the Dow, S&P 500, and Nasdaq Composite increasing by 3.9%, 6.2%, and 9.6% respectively, marking the best month for Nasdaq since November 2023 [2] Technology Sector Performance - The technology sector was a primary driver of May's market turnaround, with the Technology Select Sector SPDR (XLK) surging over 10% [2][9] - Five technology companies with favorable Zacks Ranks and double-digit returns in the past month are recommended for investment: Intuit Inc. (INTU), Amphenol Corp. (APH), Broadcom Inc. (AVGO), Twilio Inc. (TWLO), and Ubiquiti Inc. (UI) [3] Company Insights Intuit Inc. (INTU) - Intuit has seen steady revenue growth from its Online Ecosystem and Desktop segments, with strong performance in Mailchimp, payroll, and Money services [6] - The company is transitioning to a cloud-based subscription model, which is expected to provide stable long-term revenues [7] - Intuit's generative AI-powered "Intuit Assist" offers personalized financial insights, integrated into various products [8] - Expected revenue and earnings growth rates for the current year are 14.8% and 18% respectively, with a 3.7% improvement in earnings estimates over the last 30 days [10] Amphenol Corp. (APH) - Amphenol provides AI and machine learning-based connectivity solutions, benefiting from a diversified business model [11] - The company anticipates earnings growth from its acquisition of Andrew, expected to add approximately $0.09 to earnings in 2025 [13] - Expected revenue and earnings growth rates for the current year are 32.3% and 40.7% respectively, with a 3.1% improvement in earnings estimates over the last 30 days [13] Broadcom Inc. (AVGO) - Broadcom is experiencing strong demand for its networking products and AI accelerators, with AI revenues expected to rise 44% year-over-year to $4.4 billion in Q2 fiscal 2025 [14][18] - The company’s acquisition of VMware has enhanced its infrastructure software solutions, with 70% of its largest customers adopting VMware Cloud Foundation [15] - Expected revenue and earnings growth rates for the current year are 21.2% and 36.1% respectively, with a 0.2% improvement in earnings estimates over the last seven days [18] Twilio Inc. (TWLO) - Twilio focuses on generative AI offerings, launching Customer AI technology to enhance customer engagement [19] - The company has partnered with Alphabet Inc. for Google Cloud integration, which is expected to boost revenue growth [21] - Expected revenue and earnings growth rates for the current year are 7.8% and 22.6% respectively, with a 7.1% improvement in earnings estimates over the last 30 days [23] Ubiquiti Inc. (UI) - Ubiquiti's adaptable global business model supports growth and operational efficiency [24] - The company leverages its community of service providers and IT professionals to enhance product support and information dissemination [25] - Expected revenue and earnings growth rates for the current year are 1.7% and 10.8% respectively, with a 0.1% improvement in earnings estimates over the last 60 days [26]
Ubiquiti Q3 Earnings Beat Estimates, Top Line Surges Y/Y
ZACKS· 2025-05-12 15:40
Core Insights - Ubiquiti, Inc. reported strong third-quarter fiscal 2025 results, with both revenue and net income exceeding Zacks Consensus Estimates, driven by robust demand in the Enterprise Technology segment [1][2]. Financial Performance - Net income on a GAAP basis was $180.4 million or $2.98 per share, a significant increase from $76.3 million or $1.26 in the same quarter last year [2]. - Non-GAAP net income was $181.8 million or $3 per share, compared to $77.6 million or $1.28 in the prior year, beating the consensus estimate by $1.14 [2]. - Revenue for the quarter reached $664.2 million, up from $493 million year-over-year, surpassing the consensus estimate by $50 million [3]. Segment Performance - The Enterprise Technology segment generated $585.7 million in revenues, a substantial increase from $414.3 million in the prior-year quarter, exceeding the estimate of $526.5 million [3]. - Service Provider Technology revenues were $78.4 million, slightly down from $78.7 million year-over-year, primarily due to soft demand in North America, South America, and Asia Pacific [4]. Regional Performance - North America revenues increased to $322.7 million from $242.5 million year-over-year [5]. - EMEA revenues rose to $282.1 million from $200.7 million [5]. - Asia Pacific revenues grew to $37.5 million from $26.5 million, while South America revenues decreased to $21.8 million from $23.4 million [5]. Profitability and Expenses - Gross profit was $295.9 million, up from $174.1 million in the prior year, with gross margins improving to 44.5% from 35.3% [6]. - Research and development expenses increased to $44.3 million from $42.5 million due to higher software and employee-related expenses [7]. - Operating income rose to $226.9 million from $111.2 million year-over-year [7]. Cash Flow and Liquidity - Ubiquiti generated $509.7 million in cash from operating activities in the first nine months of fiscal 2025, compared to $310.1 million in the prior year [8]. - As of March 31, 2025, the company had $151 million in cash and cash equivalents, with $22.1 million in other long-term liabilities [8].
Ubiquiti Inc. (UI) Beats Q3 Earnings and Revenue Estimates
ZACKS· 2025-05-09 13:15
Company Performance - Ubiquiti Inc. reported quarterly earnings of $3 per share, exceeding the Zacks Consensus Estimate of $1.86 per share, and up from $1.28 per share a year ago, representing an earnings surprise of 61.29% [1] - The company posted revenues of $664.17 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 8.18%, compared to $493 million in the same quarter last year [2] - Ubiquiti has surpassed consensus EPS estimates four times over the last four quarters and topped consensus revenue estimates three times during the same period [2] Stock Outlook - Ubiquiti shares have increased approximately 6.4% since the beginning of the year, while the S&P 500 has declined by 3.7% [3] - The current consensus EPS estimate for the upcoming quarter is $1.94 on revenues of $594.82 million, and for the current fiscal year, it is $8.22 on revenues of $2.36 billion [7] Industry Context - The Wireless Equipment industry, to which Ubiquiti belongs, is currently ranked in the top 13% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that Ubiquiti's stock may outperform the market based on its current Zacks Rank 2 (Buy) [5][6]
Ubiquiti(UI) - 2025 Q3 - Quarterly Results
2025-05-09 11:07
Financial Performance - Revenues for Q3 FY2025 reached $664.2 million, a 10.7% increase from the previous quarter and a 34.7% increase year-over-year[8]. - GAAP diluted earnings per share (EPS) for Q3 FY2025 was $2.98, reflecting a 136.5% increase compared to the same period last year[17]. - Gross profit for Q3 FY2025 was $295.9 million, with a gross margin of 44.5%, up from 41.2% in the prior quarter and 35.3% year-over-year[9]. - Net income for Q3 FY2025 was $180.4 million, representing a 136.5% increase from the same period last year[17]. - Ubiquiti Inc. reported a net income of $180,435,000 for the three months ended March 31, 2025, compared to $136,795,000 for the same period in 2024, representing a year-over-year increase of 32%[24]. - Non-GAAP net income for the three months ended March 31, 2025, was $181,829,000, up from $138,148,000 in the prior year, reflecting a growth of 31.5%[24]. - For the nine months ended March 31, 2025, Ubiquiti Inc. achieved a net income of $445,217,000, significantly higher than $246,156,000 for the same period in 2024, indicating an increase of 80.9%[24]. Expenses - Research and development (R&D) expenses increased to $44.3 million in Q3 FY2025, compared to $40.0 million in the prior quarter and $42.5 million in the same period last year[11]. - Sales, general and administrative (SG&A) expenses decreased to $24.8 million in Q3 FY2025, down from $28.5 million in the prior quarter but up from $20.4 million year-over-year[13]. - Share-based compensation expenses for the three months ended March 31, 2025, amounted to $1,848,000, which includes costs from revenues, research and development, and sales, general and administrative[24]. Revenue Breakdown - Enterprise Technology revenues were $585.7 million in Q3 FY2025, up from $518.2 million in the prior quarter and $414.3 million year-over-year[4]. - North America accounted for $322.7 million of total revenues in Q3 FY2025, an increase from $242.5 million in the same period last year[7]. Earnings Per Share - Non-GAAP diluted earnings per share (EPS) increased to $3.00 for the three months ended March 31, 2025, compared to $2.28 for the same period in 2024, marking a rise of 31.5%[24]. - The company’s non-GAAP diluted EPS for the nine months ended March 31, 2025, was $7.42, compared to $4.13 in the same period of the previous year, reflecting an increase of 79.5%[24]. Dividends and Future Outlook - The Company declared a cash dividend of $0.60 per share, payable on May 27, 2025[3]. - Future outlook includes continued focus on expanding networking technology globally, with operations in over 200 countries[18]. Non-GAAP Financial Measures - Ubiquiti Inc. emphasizes the importance of non-GAAP financial measures for evaluating operating performance and planning future periods, as these measures exclude certain costs and tax effects[28]. - The company believes that non-GAAP financial information provides useful insights into financial trends and conditions, aiding investors in their assessments[27]. - Management uses non-GAAP net income and earnings per diluted share as primary indicators for operational performance and to meet specified targets[28]. - The reconciliation of GAAP net income to non-GAAP net income highlights the adjustments made, including share-based compensation and tax effects, which are critical for understanding the company's financial results[30].
Ubiquiti(UI) - 2025 Q3 - Quarterly Report
2025-05-09 10:58
Revenue and Sales Performance - Total revenues increased by $171.2 million, or 35%, from $493.0 million in Q1 2024 to $664.2 million in Q1 2025 [111]. - For the nine months ended March 31, 2025, sales to distributors accounted for 55% of revenues, while direct sales accounted for 45% [100]. - Enterprise Technology revenue increased by $171.4 million, or 41%, from $414.3 million in Q1 2024 to $585.7 million in Q1 2025 [114]. - North America revenues increased by $80.2 million, or 33%, from $242.5 million in Q1 2024 to $322.7 million in Q1 2025 [120]. - EMEA revenues increased by $81.5 million, or 41%, from $200.7 million in Q1 2024 to $282.1 million in Q1 2025 [122]. - Service Provider Technology revenue decreased marginally by $0.2 million, or 0.3%, from $78.7 million in Q1 2024 to $78.4 million in Q1 2025 [117]. Profitability and Expenses - Gross profit margin increased to 45% in Q1 2025, compared to 35% in Q1 2024, driven by lower inventory charges and favorable product mix [129]. - Research and Development expenses increased by $1.8 million, or 4%, from $42.5 million in Q1 2024 to $44.3 million in Q1 2025, while decreasing as a percentage of revenues from 9% to 7% [130]. - Total operating expenses increased by $6.1 million, or 10%, from $62.9 million in Q1 2024 to $69.0 million in Q1 2025 [130]. - SG&A expenses increased by $4.4 million, or 21%, from $20.4 million in Q1 2024 to $24.8 million in Q1 2025, remaining consistent at 4% of revenues [133]. - Interest expense and other net expenses decreased by $13.5 million, or 71%, from $18.9 million in Q1 2024 to $5.4 million in Q1 2025, representing 1% of revenue compared to 4% in the prior year [136]. - Provision for income taxes increased by $24.9 million, or 155%, from $16.1 million in Q1 2024 to $41.0 million in Q1 2025, with an effective tax rate rising to 18.5% from 17.4% [139]. Cash Flow and Financial Position - Net cash provided by operating activities for the nine months ended March 31, 2025, was $509.7 million, up from $310.1 million in the prior year [143]. - Cash and cash equivalents as of March 31, 2025, were $151.0 million, compared to $126.3 million as of June 30, 2024 [142]. - Cash used in financing activities during the nine months ended March 31, 2025, was $477.6 million, including $368.1 million repaid under the Company's Facilities [147]. - The company had $1,264.5 million in purchase commitments with third-party manufacturers as of March 31, 2025 [156]. - The company expects to settle a $28.1 million obligation related to the mandatory transition tax in the first quarter of fiscal 2026 [157]. Market and Operational Challenges - The company has experienced significant supply constraints, particularly during the COVID-19 pandemic, leading to increased inventory and vendor deposit balances [94]. - Recent U.S. tariffs on imports from China and other countries have increased product costs, which may continue to affect operating results and margins [93]. - The company is monitoring geopolitical tensions, including the Russia-Ukraine conflict and China-Taiwan tensions, which may impact operations and supply chains [96][97]. Research and Development - The company expects research and development expenses to increase over time due to significant investments in developing new products and versions of existing products [108]. - The company utilizes a decentralized R&D approach, allowing direct customer interaction with R&D, marketing, and support teams [90]. Interest Rate and Currency Impact - A 200-basis-point increase in interest rates would result in an incremental charge of approximately $6.8 million to income before income taxes over the next twelve months [165]. - A 10% appreciation or depreciation of the U.S. dollar relative to other currencies would result in a charge or benefit of approximately $3.1 million for income before income taxes for the three months ended March 31, 2025 [166]. - The same 10% currency fluctuation would also impact bank accounts outside the U.S., resulting in a similar charge or benefit of approximately $3.1 million for the three and nine months ended March 31, 2025 [167].
Ubiquiti Skyrockets 184% in a Year: Worth Betting on UI Stock Now?
ZACKS· 2025-03-05 15:51
Core Viewpoint - Ubiquiti Inc. (UI) has experienced a significant stock surge of 184.1% over the past year, attributed to a growing customer base and robust revenues supported by a flexible business model [1] Group 1: Growth Drivers - The increasing demand for faster and seamless connectivity due to the proliferation of the Internet and bandwidth-intensive applications has led to a shift towards wireless networks, which require lower capital investments compared to traditional wired networks [3] - Ubiquiti offers a comprehensive portfolio of networking products, including carrier-class network infrastructure for fixed wireless broadband and wireless LAN infrastructure, catering to both service providers and enterprise customers [4] - The company benefits from a strong community of service providers, distributors, and IT professionals, which enhances its business model's flexibility and adaptability to market demands [5] Group 2: Market Opportunities - Ubiquiti aims to capitalize on growth opportunities in both emerging and developed economies, driven by the need for wireless networking infrastructure and the demand for higher bandwidth [6] - The effective management of a global network of over 100 distributors has improved Ubiquiti's visibility for future demand and inventory management, supporting its growth momentum [7] Group 3: Innovation and R&D - Significant investments in research and development (R&D) are aimed at developing innovative products and expanding the addressable market, with a focus on enhancing the UniFi ecosystem and AmpliFi product family [8] - Strategic product launches at competitive prices have allowed Ubiquiti to outperform rivals, while R&D initiatives have also focused on reducing labor-related costs [9]
Ubiquiti Q2 Earnings Beat Estimates, Top Line Surges Y/Y
ZACKS· 2025-02-10 16:46
Core Insights - Ubiquiti, Inc. reported strong second-quarter fiscal 2025 results, with both revenue and net income exceeding Zacks Consensus Estimates, driven by robust demand in the Enterprise Technology segment and healthy traction in North America, Europe, the Middle East, and Africa [1][4]. Financial Performance - Net income on a GAAP basis for the quarter was $136.8 million or $2.26 per share, compared to $82.1 million or $1.36 in the same quarter last year, reflecting solid top-line growth despite higher operating expenses [2]. - Non-GAAP net income was $138.1 million or $2.28 per share, up from $83.3 million or $1.38 year-over-year, beating the Zacks Consensus Estimate of $1.71 [3]. Revenue Breakdown - Total net sales increased to $599.9 million from $465 million in the prior-year quarter, surpassing the consensus estimate by $79 million [4]. - The Enterprise Technology segment generated $518.2 million in revenues, up from $391.5 million year-over-year, exceeding the estimate of $450 million [4]. - Service Provider Technology revenues rose to $81.7 million from $73.5 million, driven by demand in North and South America, beating the revenue estimate of $74.2 million [5]. Regional Performance - North America revenues were $321.6 million, up from $225.9 million year-over-year [6]. - EMEA revenues increased to $208.6 million from $173 million [6]. - Asia Pacific revenues rose to $43.1 million from $33.3 million, while South America revenues decreased to $26.6 million from $32.9 million [6]. Profitability Metrics - Gross profit for the quarter was $247.2 million, compared to $177.6 million in the prior-year quarter, with gross margins improving to 41.2% from 38.2% [7]. - Operating income increased to $178.8 million from $121.1 million year-over-year [8]. Cash Flow and Liquidity - In the first six months of fiscal 2025, Ubiquiti generated $386.1 million in cash from operating activities, compared to $146.3 million in the prior-year period [9]. - As of December 31, 2024, the company had $133.1 million in cash and cash equivalents, with long-term debt of $381.1 million [9].
Ubiquiti Inc. (UI) Tops Q2 Earnings and Revenue Estimates
ZACKS· 2025-02-07 14:21
Core Viewpoint - Ubiquiti Inc. reported strong quarterly earnings, significantly surpassing consensus estimates, indicating robust financial performance and potential for future growth [1][2]. Financial Performance - Ubiquiti's earnings for the quarter were $2.28 per share, exceeding the Zacks Consensus Estimate of $1.71 per share, and up from $1.38 per share a year ago, representing a 33.33% earnings surprise [1]. - The company posted revenues of $599.88 million for the quarter, surpassing the Zacks Consensus Estimate by 15.19%, and up from $464.95 million year-over-year [2]. Market Performance - Ubiquiti shares have increased approximately 28.6% since the beginning of the year, outperforming the S&P 500's gain of 3.4% [3]. - The current consensus EPS estimate for the upcoming quarter is $1.67, with expected revenues of $544.54 million, and for the current fiscal year, the EPS estimate is $7.30 on revenues of $2.19 billion [7]. Industry Outlook - The Wireless Equipment industry, to which Ubiquiti belongs, is currently ranked in the top 30% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8]. - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5].
Ubiquiti(UI) - 2025 Q2 - Quarterly Results
2025-02-07 12:06
Financial Performance - Revenues for Q2 Fiscal 2025 reached $599.9 million, a 9.0% increase from the prior quarter and a 29.0% increase year-over-year[8] - GAAP diluted earnings per share (EPS) for Q2 Fiscal 2025 was $2.26, reflecting a 66.2% increase compared to the same period last year[18] - Non-GAAP diluted EPS for Q2 Fiscal 2025 was $2.28, representing a 65.2% increase year-over-year[18] - Gross profit for Q2 Fiscal 2025 was $247.2 million, with a gross margin of 41.2%, a decrease of 0.9% from the prior quarter but an increase of 3.0% year-over-year[9] - Net income for Q2 Fiscal 2025 was $136.8 million, a 66.6% increase from the same period last year[18] - Ubiquiti Inc. reported a net income of $136,795,000 for the three months ended December 31, 2024, compared to $127,988,000 for the previous quarter, representing a 6.4% increase[25] - Non-GAAP net income for the same period was $138,148,000, up from $129,268,000 in the prior quarter, indicating a 6.5% growth[25] - For the six months ended December 31, 2024, net income was $264,783,000, significantly higher than $169,866,000 for the same period in 2023, marking a 55.8% increase[25] - Non-GAAP net income for the six months ended December 31, 2024, was $267,416,000, compared to $172,152,000 in the prior year, showing a 55.4% growth[25] Expenses - Research and development (R&D) expenses for Q2 Fiscal 2025 were $40.0 million, up from $38.0 million in the prior quarter and $36.9 million in the same period last year[11] - Sales, general and administrative (SG&A) expenses for Q2 Fiscal 2025 were $28.5 million, an increase from $24.4 million in the prior quarter and $19.6 million year-over-year[13] - The company reported share-based compensation expenses of $1,793,000 for the three months ended December 31, 2024, which includes costs from revenues, R&D, and administrative expenses[25] Revenue Breakdown - Enterprise Technology revenues were $518.2 million, while Service Provider Technology revenues were $81.7 million for Q2 Fiscal 2025[4] - North America accounted for $321.6 million of total revenues in Q2 Fiscal 2025, a significant increase from $225.9 million in the same period last year[7] Shareholder Returns - The company declared a cash dividend of $0.60 per share, payable on February 24, 2025[3] Non-GAAP Financial Measures - Management emphasizes the importance of non-GAAP financial measures for evaluating operating performance and planning future periods[29] - The company believes that non-GAAP measures provide useful insights into financial trends and conditions, aiding investors in their assessments[28] - Non-GAAP adjustments exclude share-based compensation and tax effects, which may vary significantly based on company activities[30] Share Information - The diluted shares outstanding were 60,527,000 for the three months ended December 31, 2024, slightly up from 60,494,000 in the previous quarter[25]
Ubiquiti(UI) - 2025 Q2 - Quarterly Report
2025-02-07 12:00
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-35300 UBIQUITI INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of inc ...