Core Insights - Ubiquiti, Inc. reported strong fourth-quarter fiscal 2025 results, with both revenue and net income exceeding Zacks Consensus Estimates, driven by robust demand in the Enterprise Technology segment [1][10] Financial Performance - Net income for the quarter was $266.7 million or $4.41 per share, a significant increase from $103.8 million or $1.72 per share in the same quarter last year, despite higher operating expenses [2] - For fiscal 2025, net income rose to $711.9 million or $11.76 per share, compared to $349.9 million or $5.79 per share in 2024 [3] Revenue Growth - Net sales in the quarter increased to $759.2 million from $507.5 million year-over-year, surpassing the consensus estimate by $144 million [4][10] - The Enterprise Technology segment generated $680.1 million in revenues, up from $431.7 million in the prior-year quarter, exceeding estimates [5] - Service Provider Technology revenues increased to $79 million from $75.7 million year-over-year, driven by strength in North Europe, the Middle East, and Africa [6] Regional Performance - North America revenues were $379.9 million, up from $253.3 million in the year-ago quarter, while EMEA revenues reached $303.8 million, up from $194.1 million [7] Profitability Metrics - Gross profit for the quarter was $342.7 million, with a margin of 45.1%, compared to $204.1 million and 40.2% margin in the prior year, driven by a favorable product mix [8] - Operating income increased to $261.4 million from $138.3 million year-over-year [9] Cash Flow and Liquidity - Ubiquiti generated $640 million in cash from operating activities in 2025, compared to $541.5 million in the prior year [11]

Core Insights - Ubiquiti Inc. reported strong fiscal Q4 results for the April-June period, with accelerated growth and strong margins that surprised the market, leading to a 31% increase in stock price for the day [1] Financial Performance - The company demonstrated significant growth in its enterprise networking segment, which contributed to the positive market reaction [1] Market Reaction - The stock price surged by 31% following the announcement of the fiscal Q4 results, indicating strong investor confidence and market optimism regarding the company's future prospects [1]

Group 1 - Ubiquiti Inc. reported quarterly earnings of $3.54 per share, exceeding the Zacks Consensus Estimate of $1.94 per share, and showing an increase from $1.74 per share a year ago, resulting in an earnings surprise of +82.47% [1] - The company achieved revenues of $759.15 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 23.43%, compared to $507.46 million in the same quarter last year [2] - Ubiquiti has consistently outperformed consensus EPS estimates over the last four quarters, with a favorable trend in estimate revisions leading to a Zacks Rank 2 (Buy) for the stock [6] Group 2 - The current consensus EPS estimate for the upcoming quarter is $2.21 on revenues of $629.43 million, and for the current fiscal year, it is $9.29 on revenues of $2.5 billion [7] - The Wireless Equipment industry, to which Ubiquiti belongs, is currently ranked in the top 33% of over 250 Zacks industries, indicating a strong potential for outperformance compared to lower-ranked industries [8]

Core Insights - Ubiquiti Inc. reported quarterly earnings of $3.57 per share, significantly exceeding the Zacks Consensus Estimate of $1.94 per share, and up from $1.74 per share a year ago, representing an earnings surprise of +84.02% [1] - The company achieved revenues of $759.15 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 23.43%, compared to $507.46 million in the same quarter last year [2] - Ubiquiti has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The sustainability of Ubiquiti's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3] - The current consensus EPS estimate for the upcoming quarter is $2.21 on revenues of $629.43 million, and for the current fiscal year, it is $9.29 on revenues of $2.5 billion [7] Industry Context - The Wireless Equipment industry, to which Ubiquiti belongs, is currently ranked in the top 33% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Ubiquiti's stock performance [5][6]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) This section summarizes Ubiquiti Inc.'s key financial performance for Q4 and full fiscal year 2025, including revenue, earnings per share, and capital allocation decisions [Fourth Quarter Fiscal 2025 Financial Summary](index=1&type=section&id=Fourth%20Quarter%20Fiscal%202025%20Financial%20Summary) Ubiquiti Inc. achieved record revenue of $759.2 million in Q4 FY2025, with GAAP diluted EPS of $4.41 and non-GAAP diluted EPS of $3.54 | Metric | F4Q25 (million USD) | F3Q25 (million USD) | F4Q24 (million USD) | | :-------------------------- | :------------------ | :------------------ | :------------------ | | Revenue | 759.2 | 664.2 | 507.5 | | Enterprise Technology Revenue | 680.1 | 585.7 | 431.7 | | Service Provider Technology Revenue | 79.0 | 78.4 | 75.7 | | Gross Profit | 342.7 | 295.9 | 204.1 | | Gross Margin (%) | 45.1% | 44.5% | 40.2% | | Total Operating Expenses | 81.3 | 69.0 | 65.8 | | Operating Income | 261.4 | 226.9 | 138.4 | | GAAP Net Income | 266.7 | 180.4 | 103.8 | | GAAP Diluted EPS | 4.41 | 2.98 | 1.72 | | Non-GAAP Net Income | 214.4 | 181.8 | 105.1 | | Non-GAAP Diluted EPS | 3.54 | 3.00 | 1.74 | [Full Fiscal 2025 Financial Summary](index=1&type=section&id=Full%20Fiscal%202025%20Financial%20Summary) The company achieved $2.6 billion in revenue for the full fiscal year 2025, with GAAP diluted EPS of $11.76 and non-GAAP diluted EPS of $10.96 | Metric | FY2025 (billion USD) | | :---------------- | :------------------- | | Revenue | 2.6 | | GAAP Diluted EPS | 11.76 | | Non-GAAP Diluted EPS | 10.96 | [Additional Financial Highlights](index=1&type=section&id=Additional%20Financial%20Highlights) The board declared a cash dividend of $0.80 per share and plans to pay at least $0.80 quarterly in FY2026, while also initiating a new $500 million stock repurchase program - The board declared a cash dividend of **$0.80 per share**, payable on September 8, 2025, to shareholders of record as of the close of business on September 2, 2025[5](index=5&type=chunk) - The company plans to pay a regular quarterly cash dividend of at least **$0.80 per share** in fiscal year 2026, with all subsequent dividends subject to quarterly board review[5](index=5&type=chunk) - The company initiated a new stock repurchase program, authorizing the repurchase of up to **$500 million** of its common stock[5](index=5&type=chunk) [Detailed Financial Performance Analysis](index=2&type=section&id=Detailed%20Financial%20Performance%20Analysis) This section provides an in-depth analysis of Ubiquiti Inc.'s financial results, covering revenue breakdown, gross margin drivers, operating expenses, interest, taxes, and net income [Revenues](index=2&type=section&id=Revenues) Q4 FY2025 revenue reached $759.2 million, increasing 14.3% sequentially and 49.6% year-over-year, with full-year revenue at $2.6 billion, up 33.4%, primarily driven by enterprise technology platforms | Metric | F4Q25 (million USD) | F3Q25 (million USD) | F4Q24 (million USD) | Sequential Growth | Year-over-Year Growth | | :----- | :------------------ | :------------------ | :------------------ | :---------------- | :-------------------- | | Revenue | 759.2 | 664.2 | 507.5 | 14.3% | 49.6% | | Metric | FY2025 (billion USD) | FY2024 (billion USD) | Year-over-Year Growth | | :----- | :------------------- | :------------------- | :-------------------- | | Revenue | 2.6 | 1.9 | 33.4% | - Revenue growth was primarily driven by increased Enterprise Technology platform revenue, with contributions from the Service Provider Technology platform as well[8](index=8&type=chunk) [Revenues by Product Type](index=2&type=section&id=Revenues%20by%20Product%20Type) This subsection details Ubiquiti Inc.'s revenue distribution across enterprise technology and service provider segments for quarterly and annual periods | Product Type | Three Months Ended June 30, 2025 (thousand USD) | Three Months Ended June 30, 2024 (thousand USD) | Twelve Months Ended June 30, 2025 (thousand USD) | Twelve Months Ended June 30, 2024 (thousand USD) | | :------------------ | :-------------------------------------------- | :-------------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Enterprise Technology | 680,147 | 431,733 | 2,254,254 | 1,617,665 | | Service Provider | 79,006 | 75,728 | 319,291 | 310,825 | | **Total Revenue** | **759,153** | **507,461** | **2,573,545** | **1,928,490** | [Revenues by Geographical Area](index=2&type=section&id=Revenues%20by%20Geographical%20Area) This subsection presents Ubiquiti Inc.'s revenue breakdown by major geographical regions for both quarterly and annual performance | Geographical Area | Three Months Ended June 30, 2025 (thousand USD) | Three Months Ended June 30, 2024 (thousand USD) | Twelve Months Ended June 30, 2025 (thousand USD) | Twelve Months Ended June 30, 2024 (thousand USD) | | :------------------------ | :-------------------------------------------- | :-------------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | North America | 379,899 | 253,274 | 1,295,515 | 946,428 | | Europe, Middle East, and Africa | 303,796 | 194,102 | 999,384 | 740,113 | | Asia Pacific | 47,344 | 32,087 | 168,843 | 127,901 | | South America | 28,114 | 27,998 | 109,803 | 114,048 | | **Total Revenue** | **759,153** | **507,461** | **2,573,545** | **1,928,490** | [Gross Margin](index=2&type=section&id=Gross%20Margin) Q4 FY2025 GAAP gross profit was $342.7 million with a 45.1% gross margin, increasing 0.6% sequentially and 4.9% year-over-year, while full-year GAAP gross margin was 43.4%, up 5.0%, driven by favorable product mix, lower obsolete inventory charges, and indirect operating expenses, partially offset by higher tariffs | Metric | F4Q25 (million USD) | F3Q25 (million USD) | F4Q24 (million USD) | Sequential Change | Year-over-Year Change | | :----------- | :------------------ | :------------------ | :------------------ | :---------------- | :-------------------- | | GAAP Gross Profit | 342.7 | 295.9 | 204.1 | +46.8 | +138.6 | | GAAP Gross Margin | 45.1% | 44.5% | 40.2% | +0.6% | +4.9% | | Metric | FY2025 (million USD) | FY2024 (million USD) | Year-over-Year Change | | :----------- | :------------------- | :------------------- | :-------------------- | | GAAP Gross Profit | 1,117.5 | 739.8 | +377.7 | | GAAP Gross Margin | 43.4% | 38.4% | +5.0% | - Gross margin growth was primarily driven by a favorable product mix, lower obsolete inventory charges, reduced freight costs, and lower indirect operating expenses, partially offset by higher tariffs[10](index=10&type=chunk) [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Total operating expenses for Q4 FY2025 were $81.3 million, increasing from both the prior quarter and the prior year, with full-year operating expenses growing to $281.2 million from FY2024 | Metric | F4Q25 (million USD) | F3Q25 (million USD) | F4Q24 (million USD) | | :----------------- | :------------------ | :------------------ | :------------------ | | Total Operating Expenses | 81.3 | 69.0 | 65.8 | | Metric | FY2025 (million USD) | FY2024 (million USD) | | :----------------- | :------------------- | :------------------- | | Total Operating Expenses | 281.2 | 240.8 | [Research and Development Expenses](index=2&type=section&id=Research%20and%20Development%20Expenses) This subsection outlines Ubiquiti Inc.'s research and development expenditures for the reported periods, highlighting key drivers of change | Metric | F4Q25 (million USD) | F3Q25 (million USD) | F4Q24 (million USD) | | :------------------ | :------------------ | :------------------ | :------------------ | | Research and Development Expenses | 47.5 | 44.3 | 44.1 | | Metric | FY2025 (million USD) | FY2024 (million USD) | | :------------------ | :------------------- | :------------------- | | Research and Development Expenses | 169.7 | 159.8 | - The increase in research and development expenses was primarily due to higher prototype-related and employee-related expenses, with the full year also reflecting increased depreciation and software expenses[12](index=12&type=chunk) [Sales, General and Administrative Expenses](index=3&type=section&id=Sales%2C%20General%20and%20Administrative%20Expenses) This subsection details Ubiquiti Inc.'s sales, general, and administrative expenses, identifying factors contributing to their fluctuations | Metric | F4Q25 (million USD) | F3Q25 (million USD) | F4Q24 (million USD) | | :------------------ | :------------------ | :------------------ | :------------------ | | SG&A Expenses | 33.9 | 24.8 | 21.7 | | Metric | FY2025 (million USD) | FY2024 (million USD) | | :------------------ | :------------------- | :------------------- | | SG&A Expenses | 111.5 | 81.0 | - The increase in SG&A expenses was primarily due to higher allowance for doubtful accounts, credit card processing fees from incremental web store sales, professional fees, marketing expenses, and employee-related expenses[14](index=14&type=chunk) [Interest Expense and Other, Net](index=3&type=section&id=Interest%20Expense%20and%20Other%2C%20Net) Q4 FY2025 interest expense and other, net, was $3.2 million, decreasing from both the prior quarter and prior year, with the full-year expense significantly reduced by $44.6 million from FY2024 due to lower borrowings and interest rates | Metric | F4Q25 (million USD) | F3Q25 (million USD) | F4Q24 (million USD) | | :-------------------------- | :------------------ | :------------------ | :------------------ | | Interest Expense and Other, Net | 3.2 | 5.4 | 16.8 | | Metric | FY2025 (million USD) | FY2024 (million USD) | | :-------------------------- | :------------------- | :------------------- | | Interest Expense and Other, Net | 30.6 | 75.2 | - The decrease in interest expense and other, net, was primarily due to lower borrowings and interest rates, along with a foreign exchange gain in Q4 FY2025 compared to a foreign exchange loss in the prior year period[16](index=16&type=chunk) [Income Taxes](index=3&type=section&id=Income%20Taxes) Q4 FY2025 GAAP income tax benefit was $8.5 million, primarily from the transfer of intangible assets from foreign subsidiaries to the U.S., resulting in a $53.7 million R&D expenditure recognized as a U.S. deferred tax asset | Metric | F4Q25 (million USD) | F4Q24 (million USD) | | :---------------------- | :------------------ | :------------------ | | Income Tax (Benefit)/Expense | (8.5) | 17.8 | | Metric | FY2025 (million USD) | FY2024 (million USD) | | :--------------- | :------------------- | :------------------- | | Income Tax Expense | 93.7 | 73.9 | - The Q4 income tax benefit was primarily due to the company's transfer of certain intangible assets held by foreign subsidiaries to the U.S., resulting in a **$53.7 million** R&D expenditure recognized as a U.S. deferred tax asset and immediately recognized[17](index=17&type=chunk) [Net Income and Earnings Per Share](index=3&type=section&id=Net%20Income%20and%20Earnings%20Per%20Share) Q4 FY2025 GAAP net income was $266.7 million and non-GAAP net income was $214.4 million, increasing 156.9% and 104.1% year-over-year respectively, with GAAP diluted EPS at $4.41 and non-GAAP diluted EPS at $3.54, driven by increased revenue, improved gross margin, and an income tax benefit | Metric | F4Q25 (million USD) | F4Q24 (million USD) | Year-over-Year Growth | | :------------------ | :------------------ | :------------------ | :-------------------- | | GAAP Net Income | 266.7 | 103.8 | 156.9% | | Non-GAAP Net Income | 214.4 | 105.1 | 104.1% | | GAAP Diluted EPS | 4.41 | 1.72 | 156.4% | | Non-GAAP Diluted EPS | 3.54 | 1.74 | 103.4% | - The increase in net income and EPS was primarily driven by increased revenue, improved gross margin, and an income tax benefit[18](index=18&type=chunk) - The difference between GAAP and non-GAAP net income primarily stems from the **$53.7 million** deferred tax asset immediately recognized under GAAP[18](index=18&type=chunk) [Company Overview](index=3&type=section&id=Company%20Overview) This section provides a brief introduction to Ubiquiti Inc., outlining its mission, product platforms, global presence, and investor contact information [About Ubiquiti Inc.](index=3&type=section&id=About%20Ubiquiti%20Inc.) Ubiquiti Inc. is dedicated to making networking technology accessible globally, providing high-capacity distributed internet access and unified IT management through its UISP and UniFi software platforms across over 200 countries and territories - Ubiquiti Inc. focuses on making networking technology accessible globally, creating network infrastructure in over **200 countries and territories**[19](index=19&type=chunk) - The company's specialized networking products are powered by its UISP and UniFi software platforms, offering high-capacity distributed internet access and unified information technology management, respectively[19](index=19&type=chunk) [Investor Relations Contact](index=3&type=section&id=Investor%20Relations%20Contact) Investors can contact Ubiquiti Inc.'s investor relations department via email at ir@ui.com - Investor Relations contact: **ir@ui.com**[21](index=21&type=chunk) [Legal and Financial Disclosures](index=4&type=section&id=Legal%20and%20Financial%20Disclosures) This section covers Ubiquiti Inc.'s legal disclaimers regarding forward-looking statements and presents its condensed consolidated statements of operations and comprehensive income [Safe Harbor for Forward-Looking Statements](index=4&type=section&id=Safe%20Harbor%20for%20Forward-Looking%20Statements) This press release contains forward-looking statements regarding future dividend payments, stock repurchases, and financial performance, which are subject to various risks and uncertainties that could cause actual results to differ materially from expectations, urging investors to review SEC filings for detailed risk factors - Forward-looking statements include intentions regarding quarterly cash dividend payments, stock repurchases, and future events and financial performance[22](index=22&type=chunk) - These statements are subject to various risks and uncertainties that could cause actual future results to differ materially from expectations, including tariff impacts, public health concerns, fluctuations in product demand, political and economic conditions, competition, technological developments, supply chain reliance, legal compliance costs, and reliance on the management team[23](index=23&type=chunk) - The company undertakes no obligation to update forward-looking information and advises investors to carefully review risk factors in its SEC filings[24](index=24&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) This section presents Ubiquiti Inc.'s condensed consolidated statements of operations and comprehensive income for the three and twelve months ended June 30, 2025, and 2024, detailing key financial data including revenue, costs, gross profit, operating expenses, net income, and EPS | Metric | Three Months Ended June 30, 2025 (thousand USD) | Three Months Ended June 30, 2024 (thousand USD) | Twelve Months Ended June 30, 2025 (thousand USD) | Twelve Months Ended June 30, 2024 (thousand USD) | | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Revenue | 759,153 | 507,461 | 2,573,545 | 1,928,490 | | Cost of Revenue | 416,423 | 303,320 | 1,456,094 | 1,188,728 | | **Gross Profit** | **342,730** | **204,141** | **1,117,451** | **739,762** | | Operating Expenses: | | | | | | Research and Development | 47,455 | 44,076 | 169,672 | 159,768 | | Sales, General and Administrative | 33,873 | 21,695 | 111,499 | 80,997 | | **Total Operating Expenses** | **81,328** | **65,771** | **281,171** | **240,765** | | **Operating Income** | **261,402** | **138,370** | **836,280** | **498,997** | | Interest Expense and Other, Net | 3,191 | 16,813 | 30,628 | 75,169 | | **Income Before Income Taxes** | **258,211** | **121,557** | **805,652** | **423,828** | | Income Tax (Benefit)/Expense | (8,494) | 17,753 | 93,730 | 73,868 | | **Net Income** | **266,705** | **103,804** | **711,922** | **349,960** | | Net Income Per Common Share: | | | | | | Basic | 4.41 | 1.72 | 11.77 | 5.79 | | Diluted | 4.41 | 1.72 | 11.76 | 5.79 | | Weighted-Average Shares Used in Computing Net Income Per Common Share: | | | | | | Basic | 60,491 | 60,462 | 60,480 | 60,454 | | Diluted | 60,545 | 60,466 | 60,534 | 60,458 | [Non-GAAP Financial Information](index=5&type=section&id=Non-GAAP%20Financial%20Information) This section explains Ubiquiti Inc.'s non-GAAP financial measures, providing reconciliations to GAAP and clarifying their purpose and limitations for financial analysis [Reconciliation of GAAP to Non-GAAP Net Income](index=5&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Net%20Income) The company provides a reconciliation of GAAP to non-GAAP net income, primarily adjusting for stock-based compensation expenses and their tax impact, along with a deferred tax benefit from an internal intangible asset reorganization | Metric | Three Months Ended June 30, 2025 (thousand USD) | Three Months Ended March 31, 2025 (thousand USD) | Three Months Ended June 30, 2024 (thousand USD) | Twelve Months Ended June 30, 2025 (thousand USD) | Twelve Months Ended June 30, 2024 (thousand USD) | | :---------------------------------------------- | :-------------------------------------------- | :----------------------------------------------- | :-------------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Net Income | 266,705 | 180,435 | 103,804 | 711,922 | 349,960 | | Stock-based Compensation: | | | | | | | Cost of Revenue | 65 | 62 | 45 | 238 | 159 | | Research and Development | 1,331 | 1,351 | 1,264 | 5,238 | 4,831 | | Sales, General and Administrative | 476 | 435 | 378 | 1,732 | 1,368 | | Tax Impact of Non-GAAP Adjustments for Stock-based Compensation | (462) | (454) | (441) | (1,772) | (1,560) | | Deferred Tax Benefit from Intangible Asset Reorganization Transaction | (53,668) | — | — | (53,668) | — | | **Non-GAAP Net Income** | **214,447** | **181,829** | **105,050** | **663,690** | **354,758** | | Non-GAAP Diluted EPS | 3.54 | 3.00 | 1.74 | 10.96 | 5.87 | [Use and Usefulness of Non-GAAP Financial Information](index=5&type=section&id=Use%20and%20Usefulness%20of%20Non-GAAP%20Financial%20Information) The company uses non-GAAP net income and diluted EPS to supplement GAAP results, providing additional insights into non-cash and significant items for understanding financial and business trends, with management relying on these metrics for planning and performance evaluation, while acknowledging their limitations as non-GAAP alternatives - Non-GAAP net income and diluted EPS provide supplemental information regarding non-cash expenses and significant items, aiding in understanding financial and business trends[30](index=30&type=chunk) - Management uses non-GAAP metrics as primary bases for planning, forecasting future periods, and evaluating operating performance against specific goals and thresholds[30](index=30&type=chunk) - Non-GAAP measures are not substitutes for GAAP, may differ significantly from similar non-GAAP measures used by other companies, and do not reflect certain items that could have a material impact on reported financial results[31](index=31&type=chunk)

PART I [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Ubiquiti designs and sells high-performance networking equipment and software platforms globally, emphasizing a lean R&D model and community-driven sales - Ubiquiti Inc. was founded in 2005 by Robert Pera, operating globally to democratize network technology in over **200 countries and territories**[21](index=21&type=chunk) - The business model relies on entrepreneurial, decentralized R&D and community-driven brand awareness, not a traditional direct sales force[23](index=23&type=chunk) - Solutions are categorized into high-performance networking for enterprises, service providers, and consumers, powered by UISP and UniFi OS platforms[22](index=22&type=chunk) Key Financial Highlights (Fiscal Years Ended June 30) | Metric | FY2025 (Millions) | FY2024 (Millions) | FY2023 (Millions) | | :------------------- | :---------------- | :---------------- | :---------------- | | Revenues | $2,573.5 | $1,928.5 | $1,940.5 | | Net Income | $711.9 | $350.0 | $407.6 | [Business Overview](index=4&type=section&id=Business%20Overview) Ubiquiti sells networking equipment and software globally through distributors and webstores, democratizing network technology - Ubiquiti sells equipment and software platforms globally via **over 100 distributors**, online retailers, and direct webstores, democratizing network technology[21](index=21&type=chunk) - Professional networking products are powered by UISP and UniFi OS, providing high-capacity internet access and unified IT management[21](index=21&type=chunk) - Product differentiation is driven by proprietary software, firmware expertise, and hardware design capabilities[24](index=24&type=chunk) [Industry Overview](index=5&type=section&id=Industry%20Overview) Rapid growth in global internet traffic drives demand for wireless networks, especially in underserved markets - Rapid growth in global internet traffic, fueled by increased users and high-bandwidth applications, makes wireless networks an attractive alternative to costly wired infrastructure[26](index=26&type=chunk) [Our Technology and Products](index=5&type=section&id=Our%20Technology%20and%20Products) Ubiquiti offers proprietary technology solutions across multiple markets, leveraging low-cost hardware and innovative software - Ubiquiti offers proprietary technology solutions across multiple markets, utilizing low-cost hardware and innovative software/firmware for price-performance solutions[27](index=27&type=chunk) - Enterprise Technology solutions include UniFi Cloud Gateway, UniFi WiFi, UniFi Protect, UniFi Switch, UniFi Access, and UniFi Talk[28](index=28&type=chunk) - Service Provider technology includes airMAX, airFiber, UFiber GPON, and Wave products for wireless and fiber networks[28](index=28&type=chunk)[33](index=33&type=chunk) [Research and Development](index=6&type=section&id=Research%20and%20Development) Ubiquiti's R&D team, with 1,187 employees, focuses on product design and development, anticipating increased expenses - Ubiquiti's R&D organization, with **1,187 full-time equivalent employees** as of June 30, 2025, focuses on product design, development, and testing with a flat reporting structure[29](index=29&type=chunk)[30](index=30&type=chunk) Research and Development Expenses (Fiscal Years Ended June 30) | Fiscal Year | R&D Expenses (Millions) | | :---------- | :---------------------- | | 2025 | $169.7 | | 2024 | $159.8 | | 2023 | $145.2 | - The company anticipates an increase in R&D personnel and expenses over time[30](index=30&type=chunk) [Manufacturing and Suppliers](index=6&type=section&id=Manufacturing%20and%20Suppliers) Ubiquiti relies on contract manufacturers and limited suppliers, increasing vulnerability to supply chain disruptions - Ubiquiti relies on contract manufacturers, primarily in Vietnam and China, and depends on a single or limited number of suppliers for key components, especially chipsets[31](index=31&type=chunk) - The company does not stockpile sufficient components and lacks guaranteed supply arrangements, making it vulnerable to shortages, increased costs, and production delays[32](index=32&type=chunk) - Past mitigation efforts for supply constraints (2020-2023) included increasing inventory, paying higher costs, and modifying product designs, which increased inventory and vendor deposit balances[34](index=34&type=chunk) [Tariffs](index=7&type=section&id=Tariffs) U.S. tariffs on imports from China and Vietnam have increased product costs, impacting operating results and margins - U.S. government tariffs on imports from China and Vietnam have increased product costs, affecting operating results and margins, with historical gross profit margins not indicative of future periods[35](index=35&type=chunk) [Sales and Distribution](index=7&type=section&id=Sales%20and%20Distribution) Ubiquiti sells products globally through over 100 distributors and webstores, with no single customer accounting for 10% of revenue - Ubiquiti sells products globally to enterprises and service providers through an extensive network of **over 100 distributors** and direct webstores in **over 75 countries**[36](index=36&type=chunk) - No single customer represented **10% or more of revenue** in fiscal years 2025, 2024, or 2023[36](index=36&type=chunk) - A majority of sales are outside the United States, and non-U.S. sales are expected to remain a significant portion of revenues[37](index=37&type=chunk) [Competition](index=7&type=section&id=Competition) The networking solutions market is highly competitive, driven by total cost of ownership, ease of deployment, and product support - The markets for networking solutions are highly competitive, influenced by factors such as total cost of ownership, ease of deployment, reliability, brand awareness, and product support[38](index=38&type=chunk)[39](index=39&type=chunk) - Key competitors include Cambium Networks, Cisco, Fortinet, HPE Aruba Networks, Juniper Networks, and various video surveillance providers[41](index=41&type=chunk) [Intellectual Property](index=8&type=section&id=Intellectual%20Property) Ubiquiti protects its proprietary rights through patents, copyrights, and trademarks, but acknowledges limited protection - Ubiquiti protects its proprietary rights through patents, copyrights, trademarks, trade secrets, confidentiality procedures, and contractual restrictions, acknowledging these provide limited protection[42](index=42&type=chunk) - The company has obtained and filed numerous patents and trademarks in the U.S. and other countries, but faces risks of challenges, invalidation, or circumvention of these rights[43](index=43&type=chunk) [Environmental matters](index=8&type=section&id=Environmental%20matters) Ubiquiti complies with environmental regulations, which have not materially impacted its financial position to date - Ubiquiti is subject to environmental regulations regarding materials usage, packaging, and conflict minerals in the U.S. and other countries, with compliance having no material effect on capital expenditures, earnings, or competitive position to date[45](index=45&type=chunk) [Human Capital Management](index=8&type=section&id=Human%20Capital%20Management) Ubiquiti employs 1,667 full-time equivalents globally, with a focus on attracting and retaining talent through incentive plans - As of June 30, 2025, Ubiquiti employed **1,667 full-time equivalent employees**, with **1,187 in R&D**, **357 in operations**, and **123 in sales, general, and administrative roles**[46](index=46&type=chunk) - The workforce is geographically diversified, with **65% in Asia Pacific**, **24% in EMEA**, and **11% in the Americas**[46](index=46&type=chunk) - Incentive plans are designed to attract, retain, and motivate high-value personnel through equity and non-equity-based compensation, aligning with short- and long-term objectives[49](index=49&type=chunk) [Available Information](index=9&type=section&id=Available%20Information) The company's SEC filings and other information are available free of charge on its investor relations website - The company's SEC filings (10-K, 10-Q, 8-K) and other information are available free of charge on its investor relations website (http://ir.ui.com) and the SEC's website (www.sec.gov)[49](index=49&type=chunk)[50](index=50&type=chunk) [Item 1A. Risk Factors](index=10&type=section&id=Item%201A.%20Risk%20Factors) Ubiquiti faces diverse risks from limited forecasting, supply chain reliance, international operations, IP, and key personnel - Key risks include limited sales forecasting, market volatility, inventory write-downs, reliance on limited distributors and suppliers, inability to keep pace with technological changes, product defects, and cybersecurity threats[55](index=55&type=chunk) - International operations are susceptible to geopolitical events (e.g., Russia-Ukraine conflict, China-Taiwan tensions), tariffs, foreign currency fluctuations, and varying legal/regulatory regimes[55](index=55&type=chunk)[115](index=115&type=chunk)[118](index=118&type=chunk) - The company's success is highly dependent on its founder and CEO, Robert J. Pera, who also holds a majority of common stock, influencing corporate control and potentially stock price volatility[55](index=55&type=chunk)[153](index=153&type=chunk)[173](index=173&type=chunk) [Risk Factors Summary](index=10&type=section&id=Risk%20Factors%20Summary) Ubiquiti's risks include limited forecasting, operational dependencies, and legal/regulatory challenges - The company's ability to forecast results is limited due to reliance on distributors, leading to potential inventory write-downs or lost sales[55](index=55&type=chunk)[57](index=57&type=chunk) - Operational risks include reliance on limited contract manufacturers and suppliers, potential disruptions from natural disasters or geopolitical tensions, and product complexity leading to defects[55](index=55&type=chunk) - Legal and regulatory risks encompass intellectual property litigation, use of open-source software, and compliance with trade protection, anti-corruption, and data privacy laws[55](index=55&type=chunk)[62](index=62&type=chunk) [Risks Related to Our Business and Industry](index=11&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) Limited sales forecasting, reliance on few manufacturers, and cybersecurity threats pose significant business risks - Limited visibility into end-customer demand and channel inventory levels makes sales forecasting difficult, potentially leading to excess inventory or inability to fulfill orders[57](index=57&type=chunk)[58](index=58&type=chunk) - The company relies on a limited number of contract manufacturers and suppliers, primarily in Vietnam and China, increasing risks of component shortages, capacity constraints, and increased costs[83](index=83&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk) - Security vulnerabilities in products, services, or the supply chain, including cyber-attacks, could lead to reduced revenues, litigation, and reputational damage[73](index=73&type=chunk)[75](index=75&type=chunk)[78](index=78&type=chunk) [Risks Related to Our International Operations](index=15&type=section&id=Risks%20Related%20to%20Our%20International%20Operations) International operations expose Ubiquiti to geopolitical events, trade tensions, and foreign policy changes - International operations, particularly in China, Taiwan, and Ukraine, expose Ubiquiti to risks such as foreign laws, currency fluctuations, trade barriers, tariffs, and political/economic instability[115](index=115&type=chunk)[116](index=116&type=chunk)[118](index=118&type=chunk) - Geopolitical events like the Russia-Ukraine conflict and escalating China-Taiwan tensions could disrupt supply chains, increase costs, and negatively impact business and financial results[94](index=94&type=chunk)[95](index=95&type=chunk)[128](index=128&type=chunk) - Changes in U.S. trade policies, tariffs, and foreign government responses can significantly increase product costs, disrupt supply chains, and reduce demand for products[118](index=118&type=chunk)[121](index=121&type=chunk) [Risks Related to Intellectual Property](index=23&type=section&id=Risks%20Related%20to%20Intellectual%20Property) Ubiquiti faces challenges in enforcing IP rights and extensive litigation, alongside risks from open-source software use - Ubiquiti's ability to obtain and enforce intellectual property rights is limited, especially in countries like China, Russia, and South America, where protection regimes are less comprehensive[133](index=133&type=chunk)[139](index=139&type=chunk) - The company faces extensive intellectual property litigation, which can be costly, time-consuming, divert management attention, and potentially lead to significant damages or injunctions[141](index=141&type=chunk)[145](index=145&type=chunk) - The use of open-source software in products carries risks, including potential requirements to publicly release proprietary source code or re-engineer products[149](index=149&type=chunk)[151](index=151&type=chunk) [Risks Related to Our Management and Structure](index=25&type=section&id=Risks%20Related%20to%20Our%20Management%20and%20Structure) High reliance on the CEO, expansion into new product areas, and increasing operating expenses pose management and structural risks - The company is highly reliant on its founder and CEO, Robert J. Pera, and the loss of Mr. Pera or other key personnel would disrupt business operations and product development[153](index=153&type=chunk) - Expanding into new product areas may lead to lower profitability, increased development costs, and challenges in competing with existing market participants[157](index=157&type=chunk) - Increasing operating expenses due to investments in infrastructure, personnel, and international expansion, along with potential need for a traditional direct sales force, could impact profitability[159](index=159&type=chunk)[160](index=160&type=chunk) [Risks Related to Our Common Stock](index=28&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) CEO Robert J. Pera's majority stock ownership, unpredictable quarterly results, and dividend policies can affect stock price - Robert J. Pera, the CEO, owns a majority of common stock (**56,278,181 shares** as of August 22, 2025), giving him control over stockholder matters and potentially affecting the stock's market price[173](index=173&type=chunk)[174](index=174&type=chunk) - Fluctuations in quarterly results of operations, which are difficult to predict, could cause the market price of common stock to decline[176](index=176&type=chunk) - Not paying cash dividends or repurchasing shares could negatively impact investor confidence and cause the market price of common stock to decline[175](index=175&type=chunk) [Risks Related to Regulatory, Legal and Tax Matters](index=29&type=section&id=Risks%20Related%20to%20Regulatory,%20Legal%20and%20Tax%20Matters) Ubiquiti faces risks from export controls, evolving privacy laws, and unfavorable tax changes - The company is subject to U.S. and foreign export control and economic sanctions laws, with past violations leading to self-disclosures and potential future penalties[180](index=180&type=chunk)[181](index=181&type=chunk)[183](index=183&type=chunk) - Compliance with evolving global privacy, data security, and cybersecurity laws (e.g., GDPR, China Cybersecurity Law, CCPA/CPRA) is complex and could lead to enforcement actions, litigation, and reputational harm[188](index=188&type=chunk)[190](index=190&type=chunk)[193](index=193&type=chunk) - Unfavorable tax law changes, government reviews of tax returns, or shifts in geographic earnings mix could adversely affect the company's tax rate and financial condition[204](index=204&type=chunk)[207](index=207&type=chunk)[209](index=209&type=chunk) [Item 1B. Unresolved Staff Comments](index=35&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments to report for the current period - No unresolved staff comments were reported[210](index=210&type=chunk) [Item 1C. Cybersecurity](index=35&type=section&id=Item%201C.%20Cybersecurity) Ubiquiti manages cybersecurity risks through external consultants, internal training, and board oversight, not anticipating material impacts - Ubiquiti employs external consultants for monitoring and resolving cybersecurity threats and requires annual mandatory cybersecurity training for employees[212](index=212&type=chunk)[213](index=213&type=chunk) - Security measures include proprietary gateway consoles with intrusion detection, in-office network or VPN with multi-factor authentication, and a public bug bounty program[214](index=214&type=chunk) - While past cyber-attacks (e.g., January 2021 IT system access) have occurred, the company does not currently anticipate material adverse effects from cybersecurity threats on its business or financial condition[215](index=215&type=chunk)[216](index=216&type=chunk) - The Board of Directors provides oversight for cybersecurity risk management, with senior management and a cross-functional cybersecurity team responsible for day-to-day management[216](index=216&type=chunk)[217](index=217&type=chunk) [Item 2. Properties](index=36&type=section&id=Item%202.%20Properties) Ubiquiti leases its New York headquarters and various global facilities for R&D, warehousing, and logistics - Ubiquiti's headquarters are leased in New York, NY, through September 30, 2027[218](index=218&type=chunk)[220](index=220&type=chunk) - The company leases office and building space worldwide for R&D, business development, support, warehouses, and logistics centers[218](index=218&type=chunk) Material Leased Properties as of June 30, 2025 | Location | Sq. Ft | Lease expiration | Purpose | | :---------------- | :------- | :--------------- | :--------------------------- | | New York | 6,500 | 9/30/2027 | Corporate Office | | Taiwan | 352,000 | 2/28/2030 | Factory, R&D and Administration | | Czech Republic | 80,000 | 3/31/2029 | Warehouse and R&D | | Utah | 53,000 | 6/30/2028 | Warehouse and R&D | | Utah | 87,000 | 10/31/2028 | Warehouse | | China | 126,000 | 2/29/2028 | R&D and Administration | | Netherlands | 149,000 | 5/31/2036 | Warehouse | | Memphis | 161,000 | 8/31/2031 | Warehouse | | Chicago - Schaumburg | 31,000 | 7/31/2031 | Corporate Office & R&D | | Latvia | 35,000 | 12/31/2029 | R&D | | Portland | 19,000 | 3/31/2032 | R&D | [Item 3. Legal Proceedings](index=36&type=section&id=Item%203.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 9 to the Consolidated Financial Statements - Details on legal proceedings are found in Note 9 of the Consolidated Financial Statements[221](index=221&type=chunk) [Item 4. Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Ubiquiti Inc - Mine Safety Disclosures are not applicable to the company[222](index=222&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=36&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Ubiquiti's common stock trades on the NYSE under 'UI', with 60.5 million shares outstanding and consistent quarterly dividends - Ubiquiti's common stock is traded on the New York Stock Exchange under the ticker symbol 'UI'[3](index=3&type=chunk) - As of August 21, 2025, there were **60,498,713 shares** of common stock issued and outstanding[6](index=6&type=chunk) - The company did not make any issuer purchases of equity securities during fiscal 2025[229](index=229&type=chunk) Cash Dividends Paid Per Common Stock (Fiscal Years 2024-2025) | Fiscal Year | Q1 | Q2 | Q3 | Q4 | | :---------- | :---- | :---- | :---- | :---- | | 2025 | $0.60 | $0.60 | $0.60 | $0.60 | | 2024 | $0.60 | $0.60 | $0.60 | $0.60 | - On August 22, 2025, the Board declared a cash dividend of **$0.80 per share** payable on September 8, 2025, for Q1 fiscal 2026, with intentions to maintain this rate quarterly, subject to Board approval[231](index=231&type=chunk) [Item 6. Reserved](index=38&type=section&id=Item%206.%20Reserved) This item is reserved and contains no information - Item 6 is reserved[233](index=233&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Ubiquiti's fiscal 2025 saw **33.4% revenue growth** and **51.0% gross profit increase**, driven by platform expansion and improved margins Consolidated Statements of Operations Highlights (Fiscal Years Ended June 30) | Metric | FY2025 (Thousands) | FY2024 (Thousands) | Change (%) | | :------------------------- | :----------------- | :----------------- | :--------- | | Revenues | $2,573,545 | $1,928,490 | 33.4% | | Cost of revenues | $1,456,094 | $1,188,728 | 22.5% | | Gross profit | $1,117,451 | $739,762 | 51.0% | | Gross profit margin | 43.4% | 38.4% | +5.0 pp | | Income from operations | $836,280 | $498,997 | 67.6% | | Net income | $711,922 | $349,960 | 103.4% | | Basic EPS | $11.77 | $5.79 | 103.3% | | Diluted EPS | $11.76 | $5.79 | 103.1% | - The increase in revenue was driven by growth in both Enterprise Technology and Service Provider Technology platforms, and increased direct sales through webstores and distributors[271](index=271&type=chunk) - Liquidity is primarily sourced from cash, operating cash flow, and credit facilities, expected to meet near-term working capital, dividends, share repurchases, and capital expenditure needs[287](index=287&type=chunk)[295](index=295&type=chunk) [Overview](index=38&type=section&id=Overview) Ubiquiti develops technology platforms for internet access and IT management, facing challenges from tariffs and geopolitical risks - Ubiquiti develops technology platforms for high-capacity distributed Internet access, unified information technology, and consumer electronics, targeting enterprises, service providers, and consumers[233](index=233&type=chunk) - The company distributes products through a worldwide network of **over 100 distributors**, online retailers, and direct webstores[236](index=236&type=chunk) - Ongoing challenges include tariffs and trade tensions increasing product costs, periodic volatility in component supply, and geopolitical risks from the Russia-Ukraine conflict and China-Taiwan tensions[237](index=237&type=chunk)[238](index=238&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk) [Key Components of Our Results of Operations and Financial Condition](index=39&type=section&id=Key%20Components%20of%20Our%20Results%20of%20Operations%20and%20Financial%20Condition) Revenues are primarily from hardware sales and implied post-contract customer support, with gross profit influenced by product mix and tariffs - Revenues are primarily from hardware sales and related implied post-contract customer support (PCS), classified into Enterprise Technology and Service Provider Technology[242](index=242&type=chunk)[243](index=243&type=chunk) Revenue Distribution by Sales Channel (Fiscal Years Ended June 30) | Sales Channel | FY2025 (%) | FY2024 (%) | | :------------ | :--------- | :--------- | | Distributors | 56% | 62% | | Webstore Sales | 44% | 38% | - Cost of revenues includes procurement from contract manufacturers, key components, labor, tooling, testing, quality assurance, warranty costs, logistics, tariffs, and inventory write-downs[245](index=245&type=chunk) - Gross profit is influenced by product mix, target markets, channel inventory, tariffs, competitive pricing, production costs, and global demand for electronic components[248](index=248&type=chunk) - Operating expenses are categorized as research and development (R&D) and sales, general and administrative (SG&A), both expected to increase over time[249](index=249&type=chunk)[252](index=252&type=chunk) [Critical Accounting Policies and Estimates](index=40&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Revenue recognition, inventory valuation, and income tax accounting involve significant management judgment and estimates - Revenue is recognized when control of promised goods or services is transferred to customers, with hardware revenue recognized at shipment and implied PCS recognized ratably over the service period[251](index=251&type=chunk)[253](index=253&type=chunk) - Inventory is valued at the lower of cost (FIFO) and net realizable value, with provisions for estimated obsolescence or lack of marketability based on demand forecasts[261](index=261&type=chunk)[263](index=263&type=chunk) - Income taxes involve recognizing deferred tax assets and liabilities, establishing valuation allowances, and assessing uncertain tax positions based on complex tax laws and management judgment[265](index=265&type=chunk)[266](index=266&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) Fiscal 2025 saw significant revenue growth, improved gross profit margin, and increased operating expenses, with a lower effective tax rate Revenues by Product Type (Fiscal Years Ended June 30) | Product Type | FY2025 (Thousands) | FY2025 (%) | FY2024 (Thousands) | FY2024 (%) | | :------------------------ | :----------------- | :--------- | :----------------- | :--------- | | Enterprise Technology | $2,254,254 | 88% | $1,617,665 | 84% | | Service Provider Technology | $319,291 | 12% | $310,825 | 16% | | Total revenues | $2,573,545 | 100% | $1,928,490 | 100% | Revenues by Geography (Fiscal Years Ended June 30) | Geography | FY2025 (Thousands) | FY2025 (%) | FY2024 (Thousands) | FY2024 (%) | | :------------------------- | :----------------- | :--------- | :----------------- | :--------- | | North America | $1,295,515 | 50% | $946,428 | 49% | | Europe, Middle East, Africa | $999,384 | 39% | $740,113 | 38% | | Asia Pacific | $168,843 | 7% | $127,901 | 7% | | South America | $109,803 | 4% | $114,048 | 6% | - Gross profit margin increased to **43.4% in fiscal 2025** from **38.4% in fiscal 2024**, primarily due to favorable product mix, lower excess/obsolete inventory charges, and lower indirect operating expenses, partially offset by higher tariffs[280](index=280&type=chunk) - R&D expenses increased by **6.2% to $169.7 million** in fiscal 2025, while SG&A expenses increased by **37.7% to $111.5 million**, driven by credit card processing fees, accounts receivable reserves, and higher employee/marketing costs[281](index=281&type=chunk)[282](index=282&type=chunk) - Interest expense and other, net, decreased by **59.3% to $30.6 million** in fiscal 2025, mainly due to lower borrowings and interest rates[283](index=283&type=chunk) - Provision for income taxes increased by **26.9% to $93.7 million**, but the effective tax rate decreased to **11.6% from 17.4%** due to a one-time deferred tax benefit of **$53.7 million** from intangible property transfer to the U.S. and changes in income mix[284](index=284&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) Ubiquiti's liquidity is strong, with operating cash flow of **$640.0 million** in fiscal 2025, supporting debt repayments and dividends Consolidated Cash Flow Data (Fiscal Years Ended June 30) | Cash Flow Activity | FY2025 (Thousands) | FY2024 (Thousands) | | :----------------------------- | :----------------- | :----------------- | | Net cash provided by operating activities | $640,027 | $541,516 | | Net cash used in investing activities | $(12,586) | $(11,975) | | Net cash used in financing activities | $(604,056) | $(518,025) | | Net increase in cash and cash equivalents | $23,385 | $11,516 | - Operating cash flow in fiscal 2025 was **$640.0 million**, driven by net income and decreasing vendor deposits, partially offset by increases in inventories and accounts receivable[289](index=289&type=chunk)[290](index=290&type=chunk) - Investing activities primarily consisted of capital expenditures of **$12.6 million** in fiscal 2025[292](index=292&type=chunk) - Financing activities used **$604.1 million** in fiscal 2025, mainly for debt repayments (**$175.0 million** Revolving, **$283.1 million** Term Loan) and common stock dividends (**$145.2 million**)[293](index=293&type=chunk) - The company believes existing cash, operating cash flow, and credit facilities will be sufficient for near-term liquidity needs, with plans for a new credit facility before the existing one matures in March 2026[295](index=295&type=chunk) [Warranties and Indemnifications](index=47&type=section&id=Warranties%20and%20Indemnifications) Products carry a 12-24 month warranty, with provisions for estimated future costs and unestimable indemnification liabilities - Products generally carry a **12-24 month warranty**, with a provision for estimated future warranty costs recorded in cost of goods sold[296](index=296&type=chunk) - Ubiquiti enters into standard indemnification agreements with business partners and directors/officers, covering intellectual property infringement, defective products, and other losses, with maximum potential future indemnification being unestimable[297](index=297&type=chunk)[298](index=298&type=chunk) [Contractual Obligations and Off-Balance Sheet Arrangements](index=47&type=section&id=Contractual%20Obligations%20and%20Off-Balance%20Sheet%20Arrangements) Ubiquiti has **$1.3 billion** in purchase commitments and a **$28.1 million** tax obligation due in Q1 fiscal 2026 - As of June 30, 2025, purchase commitments with third-party manufacturers and component suppliers totaled **$1,295.1 million**[301](index=301&type=chunk) - An obligation of **$28.1 million** related to the 2017 Tax Cuts and Jobs Act transition tax is expected to be settled in Q1 fiscal 2026[302](index=302&type=chunk) - Other obligations include **$4.4 million** primarily for R&D projects and **$34.7 million** in unrecognized tax benefits with **$5.5 million** in accrued interest[303](index=303&type=chunk)[304](index=304&type=chunk) [Recent Accounting Pronouncements](index=48&type=section&id=Recent%20Accounting%20Pronouncements) For a discussion of recent accounting pronouncements, refer to Note 2 to the Consolidated Financial Statements - For a discussion of recent accounting pronouncements, refer to Note 2 to the Consolidated Financial Statements[305](index=305&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Ubiquiti faces market risks from interest rate fluctuations on variable-rate debt and foreign currency exchange rate changes - The fair value of cash and cash equivalents would not be significantly affected by a **10% interest rate change** due to their short-term nature[306](index=306&type=chunk) - An instantaneous and sustained **200-basis-point increase** in interest rates on floating-rate debt would result in an approximate **$5.0 million incremental charge** to income before income taxes over the next twelve months[307](index=307&type=chunk) - A **10% appreciation or depreciation** of the U.S. dollar relative to other currencies would result in an approximate **$12.8 million charge or benefit** to income before income taxes for fiscal year 2025[308](index=308&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=48&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The financial statements and supplementary data are submitted as a separate section of this Form 10-K, as detailed in Item 15 - Financial statements and supplementary data are provided in Item 15[310](index=310&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=48&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There are no changes in or disagreements with accountants on accounting and financial disclosure to report - No changes in or disagreements with accountants on accounting and financial disclosure were reported[311](index=311&type=chunk) [Item 9A. Controls and Procedures](index=48&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of June 30, 2025 - As of June 30, 2025, management concluded that disclosure controls and procedures were effective at the reasonable assurance level[313](index=313&type=chunk) - Management also concluded that the company maintained effective internal control over financial reporting as of June 30, 2025, based on the COSO framework, with an audit by KPMG LLP[316](index=316&type=chunk)[317](index=317&type=chunk) - There were no material changes in internal control over financial reporting during the quarter ended June 30, 2025[318](index=318&type=chunk) [Item 9B. Other Information](index=49&type=section&id=Item%209B.%20Other%20Information) There is no other information to report under this item - No other information is reported under this item[319](index=319&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=49&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to Ubiquiti Inc - Disclosure regarding foreign jurisdictions that prevent inspections is not applicable[320](index=320&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=49&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2025 Proxy Statement - Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 Proxy Statement[322](index=322&type=chunk)[323](index=323&type=chunk) [Item 11. Executive Compensation](index=50&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the 2025 Proxy Statement - Information on executive compensation is incorporated by reference from the 2025 Proxy Statement[323](index=323&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=50&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership and related stockholder matters is incorporated by reference from the 2025 Proxy Statement - Information on security ownership and related stockholder matters is incorporated by reference from the 2025 Proxy Statement[324](index=324&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=50&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the 2025 Proxy Statement - Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2025 Proxy Statement[325](index=325&type=chunk) [Item 14. Principal Accounting Fees and Services](index=50&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the 2025 Proxy Statement - Information on principal accounting fees and services is incorporated by reference from the 2025 Proxy Statement[326](index=326&type=chunk) PART IV [Item 15. Exhibits, Financial Statement Schedules](index=51&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists financial statements, schedules, and exhibits filed as part of the Annual Report on Form 10-K - The financial statements are identified in the Index to Consolidated Financial Statements on page 55[328](index=328&type=chunk) - Exhibits include corporate governance documents, equity incentive plans, employment agreements, lease agreements, and credit agreements[332](index=332&type=chunk)[333](index=333&type=chunk) - Certifications required under the Securities Exchange Act of 1934 are furnished as exhibits[333](index=333&type=chunk)[335](index=335&type=chunk) [Item 16. Form 10-K Summary](index=53&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - Form 10-K Summary is not applicable[337](index=337&type=chunk) [Signatures](index=54&type=section&id=Signatures) The Annual Report on Form 10-K is duly signed by Ubiquiti Inc.'s CEO and Chief Accounting and Finance Officer - The report is signed by Robert J. Pera (CEO and Director) and Kevin Radigan (Chief Accounting and Finance Officer) on August 22, 2025[340](index=340&type=chunk)[341](index=341&type=chunk) [Report of Independent Registered Public Accounting Firm](index=56&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) KPMG LLP issued unqualified opinions on Ubiquiti's consolidated financial statements and internal control over financial reporting [Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting](index=56&type=section&id=Opinions%20on%20the%20Consolidated%20Financial%20Statements%20and%20Internal%20Control%20Over%20Financial%20Reporting) KPMG LLP issued unqualified opinions on Ubiquiti's consolidated financial statements and internal control over financial reporting - KPMG LLP provided an unqualified opinion on the consolidated financial statements for fiscal years 2025 and 2024, confirming fair presentation in accordance with U.S. GAAP[347](index=347&type=chunk) - KPMG LLP also provided an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of June 30, 2025, based on COSO criteria[347](index=347&type=chunk) [Basis for Opinions](index=56&type=section&id=Basis%20for%20Opinions) The audit was conducted according to PCAOB standards, assessing risks and evaluating accounting principles; KPMG LLP has been the auditor since 2016 - Audits were conducted according to PCAOB standards, assessing risks of material misstatement and evaluating accounting principles, estimates, and internal control effectiveness[349](index=349&type=chunk)[350](index=350&type=chunk) - KPMG LLP has been the company's auditor since 2016[358](index=358&type=chunk) [Definition and Limitations of Internal Control Over Financial Reporting](index=56&type=section&id=Definition%20and%20Limitations%20of%20Internal%20Control%20Over%20Financial%20Reporting) Internal control provides reasonable assurance for financial reporting but has inherent limitations, potentially failing to prevent or detect all misstatements - Internal control over financial reporting aims to provide reasonable assurance for reliable financial reporting and GAAP-compliant financial statement preparation[351](index=351&type=chunk)[352](index=352&type=chunk) - Inherent limitations mean internal controls may not prevent or detect all misstatements, and effectiveness can be compromised by changing conditions or declining compliance[353](index=353&type=chunk) [Critical Audit Matter](index=57&type=section&id=Critical%20Audit%20Matter) The valuation of excess or obsolete finished goods inventory was a critical audit matter due to subjective judgments - The valuation of excess or obsolete finished goods inventory was a critical audit matter due to subjective judgments in estimating anticipated demand and market conditions[355](index=355&type=chunk)[356](index=356&type=chunk) - Audit procedures included evaluating internal controls for inventory valuation, assessing current year demand estimates, and comparing prior year forecasts to actual sales results[357](index=357&type=chunk) [Consolidated Financial Statements](index=58&type=section&id=Consolidated%20Financial%20Statements) Ubiquiti's consolidated financial statements provide a comprehensive overview of its financial position, operations, and cash flows [Consolidated Balance Sheets](index=58&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$1,466.5 million** in 2025, driven by inventories and receivables, while total liabilities decreased due to debt reduction Consolidated Balance Sheet Highlights (June 30, in thousands) | Metric | 2025 | 2024 | Change (2025 vs 2024) | | :------------------------- | :---------- | :---------- | :-------------------- | | Cash and cash equivalents | $149,727 | $126,342 | +$23,385 | | Accounts receivable, net | $244,616 | $169,147 | +$75,469 | | Inventories | $675,098 | $462,032 | +$213,066 | | Total current assets | $1,173,222 | $916,013 | +$257,209 | | Total assets | $1,466,451 | $1,154,412 | +$312,039 | | Total current liabilities | $710,855 | $284,791 | +$426,064 | | Debt — short-term | $249,557 | $36,508 | +$213,049 | | Debt — long-term | $— | $669,878 | - $669,878 | | Total liabilities | $798,191 | $1,059,352 | -$261,161 | | Total stockholders' equity | $668,260 | $95,060 | +$573,200 | - The significant increase in total current liabilities is primarily due to a reclassification of long-term debt to short-term debt as the facilities mature in March 2026[360](index=360&type=chunk)[429](index=429&type=chunk) [Consolidated Statements of Operations](index=59&type=section&id=Consolidated%20Statements%20of%20Operations) Ubiquiti's fiscal 2025 saw revenues increase by **33.4% to $2,573.5 million**, with net income more than doubling to **$711.9 million** Consolidated Statements of Operations (Fiscal Years Ended June 30, in thousands, except per share amounts) | Metric | FY2025 | FY2024 | FY2023 | | :------------------------- | :---------- | :---------- | :---------- | | Revenues | $2,573,545 | $1,928,490 | $1,940,512 | | Cost of revenues | $1,456,094 | $1,188,728 | $1,179,781 | | Gross profit | $1,117,451 | $739,762 | $760,731 | | Research and development | $169,672 | $159,768 | $145,172 | | Sales, general and administrative | $111,499 | $80,997 | $70,993 | | Total operating expenses | $281,171 | $240,765 | $216,165 | | Income from operations | $836,280 | $498,997 | $544,566 | | Interest expense and other, net | $30,628 | $75,169 | $58,224 | | Income before income taxes | $805,652 | $423,828 | $486,342 | | Provision for income taxes | $93,730 | $73,868 | $78,701 | | Net income | $711,922 | $349,960 | $407,641 | | Basic EPS | $11.77 | $5.79 | $6.75 | | Diluted EPS | $11.76 | $5.79 | $6.74 | [Consolidated Statements of Stockholders' Equity (Deficit)](index=60&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)) Total stockholders' equity significantly increased to **$668.3 million** in 2025, driven by strong net income, partially offset by dividends Consolidated Statements of Stockholders' Equity (Deficit) Highlights (in thousands, except share data) | Metric | June 30, 2025 | June 30, 2024 | | :-------------------------------------- | :------------ | :------------ | | Common Stock (Shares) | 60,492,105 | 60,462,539 | | Common Stock (Amount) | $61 | $60 | | Additional Paid-In Capital | $17,075 | $10,645 | | Retained Earnings | $651,124 | $84,355 | | Total Stockholders' Equity (Deficit) | $668,260 | $95,060 | | Net Income (FY2025) | $711,922 | | | Dividends paid on Common Stock (FY2025) | $(145,153) | | - The increase in retained earnings from **$84.4 million in FY2024 to $651.1 million in FY2025** reflects the strong net income of **$711.9 million**, partially offset by dividends[365](index=365&type=chunk) [Consolidated Statements of Cash Flows](index=61&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Ubiquiti generated **$640.0 million** in operating cash flow in fiscal 2025, with cash and cash equivalents increasing to **$149.7 million** Consolidated Statements of Cash Flows (Fiscal Years Ended June 30, in thousands) | Cash Flow Activity | FY2025 | FY2024 | FY2023 | | :---------------------------------- | :---------- | :---------- | :---------- | | Net cash provided by operating activities | $640,027 | $541,516 | $(145,428) | | Net cash used in investing activities | $(12,586) | $(11,975) | $(20,934) | | Net cash used in financing activities | $(604,056) | $(518,025) | $144,964 | | Net increase (decrease) in cash and cash equivalents | $23,385 | $11,516 | $(21,398) | | Cash and cash equivalents at end of period | $149,727 | $126,342 | $114,826 | - Operating cash flow in fiscal 2025 was positively impacted by net income of **$711.9 million** and a decrease in vendor deposits of **$64.2 million**, despite increases in inventories and accounts receivable[289](index=289&type=chunk)[290](index=290&type=chunk) - Financing activities in fiscal 2025 included **$175.0 million** in Revolving Facility repayments, **$283.1 million** in Term Loan Facilities repayments, and **$145.2 million** in common stock dividends[293](index=293&type=chunk) [Notes to Consolidated Financial Statements](index=62&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail Ubiquiti's accounting policies, financial components, and commitments, providing context for the consolidated statements [NOTE 1—BUSINESS AND BASIS OF PRESENTATION](index=62&type=section&id=NOTE%201%E2%80%94BUSINESS%20AND%20BASIS%20OF%20PRESENTATION) Ubiquiti Inc. develops high-performance networking technology globally, with consolidated financial statements prepared under U.S. GAAP - Ubiquiti Inc. develops high-performance networking technology for service providers, enterprises, and consumers globally[370](index=370&type=chunk) - The company operates on a fiscal year ending June 30, with fiscal 2025, 2024, and 2023 referring to the years ended June 30 of those respective years[370](index=370&type=chunk) - Consolidated financial statements are prepared in accordance with U.S. GAAP, including wholly-owned subsidiaries, with all intercompany transactions eliminated[371](index=371&type=chunk) [NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=62&type=section&id=NOTE%202%E2%80%94SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines Ubiquiti's key accounting policies for revenue, inventory, income taxes, and recent accounting pronouncements - Revenue from hardware sales is recognized upon transfer of control (shipment), while implied PCS revenue is recognized ratably over the estimated service period[373](index=373&type=chunk) - Inventories are valued at the lower of cost (FIFO) and net realizable value, with write-downs for obsolescence based on demand forecasts[386](index=386&type=chunk)[387](index=387&type=chunk) - Income tax accounting involves recognizing deferred tax assets/liabilities and assessing uncertain tax positions, requiring significant management judgment[400](index=400&type=chunk)[401](index=401&type=chunk) - The company adopted ASU 2023-07 (Segment Reporting) in fiscal 2025 with no material impact and expects future disclosure-only impacts from ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures)[408](index=408&type=chunk)[409](index=409&type=chunk)[410](index=410&type=chunk) [NOTE 3—REVENUES](index=67&type=section&id=NOTE%203%E2%80%94REVENUES) Ubiquiti's revenue is primarily from hardware sales and implied PCS, with deferred revenues of **$62.0 million** as of June 30, 2025 - Revenue is primarily from hardware sales and implied PCS, recognized when performance obligations are satisfied[411](index=411&type=chunk)[412](index=412&type=chunk) Deferred Revenues (June 30, in thousands) | Category | 2025 | 2024 | | :------------------------ | :---------- | :---------- | | Deferred revenue — short term | $35,968 | $20,332 | | Deferred revenue — long-term | $26,015 | $13,416 | | Total Deferred Revenue | $61,983 | $33,748 | - The company recognized **$20.3 million** and **$17.9 million** from previous years' deferred revenue balances in fiscal 2025 and 2024, respectively[417](index=417&type=chunk) [NOTE 4—EARNINGS PER SHARE](index=68&type=section&id=NOTE%204%E2%80%94EARNINGS%20PER%20SHARE) Ubiquiti calculates basic and diluted EPS using the treasury stock method, with fiscal 2025 diluted EPS at **$11.76** Earnings Per Share (Fiscal Years Ended June 30, in thousands, except per share amounts) | Metric | FY2025 | FY2024 | FY2023 | | :-------------------------------------- | :---------- | :---------- | :---------- | | Net income | $711,922 | $349,960 | $407,641 | | Weighted-average shares (Basic) | 60,480 | 60,454 | 60,435 | | Weighted-average shares (Diluted) | 60,534 | 60,458 | 60,451 | | Basic EPS | $11.77 | $5.79 | $6.75 | | Diluted EPS | $11.76 | $5.79 | $6.74 | - The company excludes potentially dilutive securities from diluted EPS calculations if their effect would be anti-dilutive[419](index=419&type=chunk) [NOTE 5—BALANCE SHEET COMPONENTS](index=69&type=section&id=NOTE%205%E2%80%94BALANCE%20SHEET%20COMPONENTS) This note details balance sheet components, including inventories, property and equipment, and other current liabilities Inventories (June 30, in thousands) | Category | 2025 | 2024 | | :------------ | :---------- | :---------- | | Finished goods | $627,971 | $387,447 | | Raw materials | $47,127 | $74,585 | | Total | $675,098 | $462,032 | Property and Equipment, Net (June 30, in thousands) | Category | 2025 | 2024 | | :------------------------------------- | :---------- | :---------- | | Property and equipment, gross | $159,821 | $159,697 | | Less: Accumulated depreciation and amortization | $(86,326) | $(78,571) | | Property and equipment, net | $73,495 | $81,126 | Other Long-term Assets (June 30, in thousands) | Category | 2025 | 2024 | | :-------------------- | :---------- | :---------- | | Hong Kong tax deposit | $60,270 | $60,402 | | Intangible assets, net | $2,628 | $4,164 | | Other long-term assets | $4,213 | $9,005 | | Total | $67,111 | $73,571 | Other Current Liabilities (June 30, in thousands) | Category | 2025 | 2024 | | :------------------------ | :---------- | :---------- | | Deferred revenue — short term | $35,968 | $20,332 | | Inventory received not billed | $120,826 | $72,560 | | Total | $255,772 | $173,713 | [NOTE 6—ACCRUED WARRANTY](index=70&type=section&id=NOTE%206%E2%80%94ACCRUED%20WARRANTY) Ubiquiti's warranty accrual increased to **$11.7 million** in 2025, reflecting new accruals partially offset by settlements Warranty Obligations (June 30, in thousands) | Metric | 2025 | 2024 | | :----------------------------------------- | :---------- | :---------- | | Beginning balance | $10,825 | $8,745 | | Accruals for warranties issued during the period | $15,208 | $12,823 | | Changes in liability for pre-existing warranties during the period | $(1,702) | $1,043 | | Settlements made during the period | $(12,592) | $(11,786) | | Total | $11,739 | $10,825 | [NOTE 7—DEBT](index=71&type=section&id=NOTE%207%E2%80%94DEBT) Ubiquiti's debt includes a **$700 million** Revolving Facility and a **$500 million** Term Loan, both maturing in March 2026 - The company has a **$700 million** senior secured revolving credit facility and a **$500 million** senior secured term loan facility, both maturing on March 30, 2026[429](index=429&type=chunk) Debt Composition (June 30, in thousands) | Category | 2025 | 2024 | | :------------------------------------- | :---------- | :---------- | | Initial Term Loan Facility - short term | $250,000 | $25,000 | | First Amendment Term Loan Facility - short-term | $— | $12,500 | | Total Debt - short term | $249,557 | $36,508 | | Initial Term Loan Facility - long term | $— | $393,750 | | First Amendment Term Loan Facility - long-term | $— | $101,875 | | Revolving Facility - long term | $— | $175,000 | | Total Debt - long term | $— | $669,878 | - As of June 30, 2025, **$250.0 million** was outstanding on the Initial Term Loan Facility, and the Revolving Facility had **$700.0 million** available[435](index=435&type=chunk) - Debt obligations are guaranteed by domestic subsidiaries and collateralized by substantially all assets (excluding intellectual property)[430](index=430&type=chunk) - The Amended Credit Agreement requires maintaining a maximum consolidated total leverage ratio of **3.50 to 1.00** and a minimum consolidated interest coverage ratio of **3.50 to 1.00**[434](index=434&type=chunk) [NOTE 8—LEASES](index=73&type=section&id=NOTE%208%E2%80%94LEASES) Ubiquiti leases real estate globally, with total lease costs of **$18.0 million** in fiscal 2025 and a weighted-average lease term of six years - The company leases real estate in North America, Europe, and Asia Pacific, with non-cancellable leases expiring through fiscal 2036[439](index=439&type=chunk) Total Lease Costs (Fiscal Years Ended June 30, in thousands) | Lease Cost Type | FY2025 | FY2024 | | :-------------- | :---------- | :---------- | | Fixed lease costs | $16,451 | $15,709 | | Variable lease costs | $1,538 | $1,462 | | Total lease costs | $17,989 | $17,171 | Operating Lease Liabilities (June 30, 2025, in thousands) | Metric | Amount | | :-------------------------------------- | :---------- | | Total future fixed operating lease payments | $52,721 | | Less: Imputed interest | $(4,862) | | Total operating lease liabilities | $47,859 | | Weighted-average remaining lease term | Six years | | Weighted-average discount rate | 4.1% | [NOTE 9—COMMITMENTS AND CONTINGENCIES](index=74&type=section&id=NOTE%209%E2%80%94COMMITMENTS%20AND%20CONTINGENCIES) Ubiquiti has **$1.3 billion** in purchase commitments, a **$28.1 million** tax obligation, and is involved in patent infringement litigation - As of June 30, 2025, Ubiquiti had **$1,295.1 million** in purchase commitments with third-party manufacturers and component suppliers[442](index=442&type=chunk) - An obligation of **$28.1 million** for the 2017 Tax Cuts and Jobs Act transition tax is expected to be fully settled in the first quarter of fiscal 2026[443](index=443&type=chunk) - Other obligations include **$4.4 million** primarily related to research and development projects[444](index=444&type=chunk) - The company is involved in a patent infringement lawsuit filed by Intellectual Ventures I LLC, alleging infringement of a 'Beamforming' patent, which Ubiquiti plans to vigorously defend[448](index=448&type=chunk) [NOTE 10—RELATED PARTY TRANSACTIONS AND CERTAIN OTHER TRANSACTIONS](index=76&type=section&id=NOTE%2010%E2%80%94RELATED%20PARTY%20TRANSACTIONS%20AND%20CERTAIN%20OTHER%20TRANSACTIONS) Ubiquiti engages in transactions with the Memphis Grizzlies, an NBA team controlled by CEO Robert J. Pera - The Memphis Grizzlies, controlled by CEO Robert J. Pera, purchased approximately **$270,000** in products from Ubiquiti through its webstore in fiscal 2025[449](index=449&type=chunk) - These sales were on terms no less favorable than those available to unaffiliated third parties[449](index=449&type=chunk) - The Grizzlies also engage in product testing and marketing activities for Ubiquiti[449](index=449&type=chunk) [NOTE 11—SHARE-BASED COMPENSATION](index=77&type=section&id=NOTE%2011%E2%80%94SHARE-BASED%20COMPENSATION) Ubiquiti's share-based compensation expense was **$7.2 million** in fiscal 2025, with **$14.5 million** in unrecognized RSU costs - The company operates under the 2010 Equity Incentive Plan and the 2020 Omnibus Incentive Plan, with **4,848,742 authorized shares** available for future issuance as of June 30, 2025[451](index=451&type=chunk)[452](index=452&type=chunk)[454](index=454&type=chunk) Share-based Compensation Expense (Fiscal Years Ended June 30, in thousands) | Category | FY2025 | FY2024 | FY2023 | | :---------------------------- | :---------- | :---------- | :---------- | | Cost of revenues | $238 | $159 | $73 | | Research and development | $5,238 | $4,831 | $3,541 | | Sales, general and administrative | $1,732 | $1,368 | $1,120 | | Total | $7,208 | $6,358 | $4,734 | - No stock options were granted during fiscal 2025, 2024, or 2023, and there was no unrecognized compensation cost related to stock options as of June 30, 2025[457](index=457&type=chunk)[458](index=458&type=chunk) - As of June 30, 2025, there were **100,064 non-vested RSUs** with an unrecognized compensation cost of **$14.5 million**, to be recognized over a weighted-average period of **3.3 years**[460](index=460&type=chunk)[461](index=461&type=chunk) [NOTE 12—INCOME TAXES](index=78&type=section&id=NOTE%2012%E2%80%94INCOME%20TAXES) Ubiquiti's effective tax rate decreased to **11.6%** in fiscal 2025 due to a **$53.7 million** deferred tax benefit, with ongoing tax examinations Income Before Provision for Income Taxes (Fiscal Years Ended June 30, in thousands) | Category | FY2025 | FY2024 | FY2023 | | :------- | :---------- | :---------- | :---------- | | Domestic | $326,371 | $149,523 | $102,930 | | Foreign | $479,281 | $274,305 | $383,412 | | Total | $805,652 | $423,828 | $486,342 | Provision for Income Taxes (Fiscal Years Ended June 30, in thousands) | Category | FY2025 | FY2024 | FY2023 | | :------------------- | :---------- | :---------- | :---------- | | Current tax expense | $165,922 | $85,835 | $95,558 | | Deferred tax benefit (expense) | $(72,192) | $(11,967) | $(16,857) | | Total | $93,730 | $73,868 | $78,701 | Effective Tax Rate Reconciliation (Fiscal Years Ended June 30) | Factor | FY2025 (%) | FY2024 (%) | FY2023 (%) | | :------------------------ | :--------- | :--------- | :--------- | | Statutory rate | 21.0 | 21.0 | 21.0 | | Effect of foreign operations | (5.0) | (5.7) | (6.8) | | Intangibles realignment | (6.6) | — | — | | Effective tax rate | 11.6 | 17.4 | 16.2 | - The decrease in the effective tax rate for fiscal 2025 was primarily due to a one-time deferred tax benefit of **$53.7 million** from the transfer of certain intangible properties from foreign subsidiaries to the U.S.[284](index=284&type=chunk)[464](index=464&type=chunk) - As of June 30, 2025, the company had **$34.7 million** in unrecognized tax benefits and **$5.5 million** in accrued interest related to uncertain tax matters[465](index=465&type=chunk)[466](index=466&type=chunk) - Ubiquiti is currently under income tax examinations by the U.S. IRS and the Hong Kong IRD, with a pending U.S. Tax Court petition challenging a proposed **$50.0 million** income adjustment for fiscal 2015 and 2016[467](index=467&type=chunk)[468](index=468&type=chunk) [NOTE 13—SEGMENT INFORMATION, REVENUES BY GEOGRAPHY AND SIGNIFICANT CUSTOMERS](index=81&type=section&id=NOTE%2013%E2%80%94SEGMENT%20INFORMATION,%20REVENUES%20BY%20GEOGRAPHY%20AND%20SIGNIFICANT%20CUSTOMERS) Ubiquiti operates as a single segment, with Enterprise Technology accounting for **88% of revenues** and North America as the largest geographical market - Ubiquiti operates as one reportable segment, with the CEO (CODM) assessing performance based on consolidated net income[471](index=471&type=chunk) Revenues by Product Type (Fiscal Years Ended June 30, in thousands) | Product Type | FY2025 | FY2025 (%) | FY2024 | FY2024 (%) | FY2023 | FY2023 (%) | | :------------------------ | :---------- | :--------- | :---------- | :--------- | :---------- | :--------- | | Enterprise Technology | $2,254,254 | 88% | $1,617,665 | 84% | $1,621,426 | 84% | | Service Provider Technology | $319,291 | 12% | $310,825 | 16% | $319,086 | 16% | | Total revenues | $2,573,545 | 100% | $1,928,490 | 100% | $1,940,512 | 100% | Revenues by Geography (Fiscal Years Ended June 30, in thousands) | Geography | FY2025 | FY2025 (%) | FY2024 | FY2024 (%) | FY2023 | FY2023 (%) | | :------------------------- | :---------- | :--------- | :---------- | :--------- | :---------- | :--------- | | North America | $1,295,515 | 50% | $946,428 | 49% | $922,230 | 48% | | Europe, Middle East, Africa | $999,384 | 39% | $740,113 | 38% | $759,405 | 39% | | Asia Pacific | $168,843 | 7% | $127,901 | 7% | $148,502 | 8% | | South America | $109,803 | 4% | $114,048 | 6% | $110,375 | 5% | | Total revenues | $2,573,545 | 100% | $1,928,490 | 100% | $1,940,512 | 100% | - No single customer accounted for **10% or more of total revenues** or accounts receivable during the periods presented[474](index=474&type=chunk) [NOTE 14—SUBSEQUENT EVENTS](index=81&type=section&id=NOTE%2014%E2%80%94SUBSEQUENT%20EVENTS) Subsequent to June 30, 2025, Ubiquiti approved a new **$500 million** stock repurchase program and declared a **$0.80 per share** dividend - On August 21, 2025, the Board approved a new **$500 million** stock repurchase program, expiring September 30, 2026[475](index=475&type=chunk) - On August 22, 2025, a quarterly cash dividend of **$0.80 per share** was declared, payable on September 8, 2025[476](index=476&type=chunk)

Company Overview - Ubiquiti is set to announce its Q4 FY'25 earnings on August 22, 2025, with anticipated earnings of approximately $2.23 per share, up from $1.74 per share in the same quarter last year [2] - The expected revenue for the quarter is about $635 million, reflecting a nearly 25% increase compared to the previous year, driven by strong demand in the Enterprise Technology segment [2] Financial Performance - The company currently has a market capitalization of $24 billion and reported revenue of $2.3 billion over the past twelve months [3] - Ubiquiti achieved operational profitability with $713 million in operating profits and a net income of $549 million [3] Market Trends - Growth is attributed to increased sales of upgraded Wi-Fi 6 and 7 networks, which offer faster speeds and lower latency [2] - Companies are investing more in software-defined networking, cloud-based management, and network security, which are expected to benefit Ubiquiti [2] Earnings Reaction History - Over the last five years, Ubiquiti recorded 20 earnings data points, resulting in 9 positive and 11 negative one-day (1D) returns, with positive returns observed about 45% of the time [6] - The median of the 9 positive returns is 9.8%, while the median of the 11 negative returns is -8.6% [6] Correlation Analysis - Analyzing the correlation between short-term and medium-term returns post-earnings can provide insights for trading strategies [7] - Historical data indicates that the correlation between 1D and 5D returns can guide traders in positioning themselves effectively [7]

Industry Overview - The Zacks Wireless Equipment industry is experiencing healthy demand trends due to rapid 5G deployment and upgrades to cloud and fiber network infrastructure [1] - The industry includes companies providing networking solutions, wireless telecom products, and related services for voice and data communications [3] - Key products include integrated circuit devices, system software, two-way radios, satellite telecommunications, and security products [3] Future Trends - Network convergence is a significant trend, with operators combining voice, video, and data communications into a single network, which is expected to reduce service delivery costs and enhance broadband competition [4] - The industry is focused on supporting high user volumes and minimizing performance degradation through scalable solutions [4] Profitability Challenges - Short-term profitability is at risk due to high costs associated with first-generation 5G products, geopolitical tensions, and supply chain disruptions [5] - Elevated customer inventory levels and macroeconomic challenges are additional headwinds affecting profitability [5] Growth Drivers - The demand for advanced wireless products and services is driven by the need for network optimization and the rapid pace of 5G deployment [6] - The expansion of fiber optic networks and the growth of cloud networking solutions are acting as tailwinds for the industry [6] Market Performance - The Zacks Wireless Equipment industry has outperformed the S&P 500 and the broader Zacks Computer and Technology sector, with a growth of 34.9% over the past year compared to 17.2% and 22.8% respectively [10] - The industry currently has a Zacks Industry Rank of 96, placing it in the top 39% of over 250 Zacks industries, indicating positive prospects [8] Valuation Metrics - The industry is trading at a trailing 12-month EV/EBITDA of 25.07X, higher than the S&P 500's 17.85X and the sector's 18.23X [13] Notable Companies - **Ubiquiti Inc. (UI)**: Gained 160.3% over the past year, with strong growth opportunities in both emerging and developed economies [16][20] - **InterDigital Inc. (IDCC)**: Achieved an 87.6% increase in stock price, with a long-term earnings growth expectation of 15% [19][20] - **Clearfield, Inc. (CLFD)**: Gained 12.1% over the past year, benefiting from strong demand in fiber optic products and regional service provider verticals [23]

Company Overview - Ubiquiti Inc. offers a comprehensive portfolio of networking products and solutions for service providers and enterprises, including carrier-class network infrastructure for fixed wireless broadband and wireless backhaul systems [11] - The company was previously known as Ubiquiti Networks Inc. and traded under the symbol "UBNT" [11] Investment Ratings - Ubiquiti Inc. holds a 2 (Buy) rating on the Zacks Rank, indicating a favorable investment outlook [12] - The company has a VGM Score of B, suggesting a balanced combination of value, growth, and momentum characteristics [12] Performance Metrics - Ubiquiti Inc. has a Momentum Style Score of B, with shares increasing by 1.9% over the past four weeks [12] - For fiscal 2025, one analyst has revised their earnings estimate upwards in the last 60 days, with the Zacks Consensus Estimate increasing by $1.14 to $9.36 per share [12] - The company boasts an average earnings surprise of 29.9%, indicating strong performance relative to expectations [12] Investment Considerations - With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, Ubiquiti Inc. is recommended for investors' consideration [13]

Market Performance - The three major U.S. indexes saw significant increases last week, with the Nasdaq Composite rising by 3.27%, the Dow Jones Industrial Average by 2.91%, and the S&P 500 by 2.45% [1] - Investor optimism was driven by a ceasefire agreement in the Middle East, particularly regarding the Israel-Iran situation, and expectations of an interest rate cut by the Federal Reserve [1] Economic Indicators - The Department of Commerce reported a 0.1% increase in personal consumption expenditure (PCE) in May, with a year-over-year rise to 2.3% from 2.2% [2] - The U.S. economy contracted by 0.5% in Q1 2025, a deeper contraction than the previously estimated 0.2%, marking the first negative GDP reading since Q1 2022 [3] - Consumer confidence fell to 93 in June, down from 98 in May, while personal income, spending, and savings also declined [3] Stock Performance - Banco Bradesco S.A. shares increased by 30% since being upgraded to a Zacks Rank 2 (Buy) on April 24, outperforming the S&P 500's 14.8% increase [4] - Ubiquiti Inc. shares rose by 28.7% since its upgrade to a Zacks Rank 2 on April 25, also outperforming the S&P 500's 12.4% increase [5] - Zacks Rank 1 (Strong Buy) stocks returned +6.51% in May 2025, compared to +4.47% for the S&P 500 [6] Portfolio Performance - A hypothetical portfolio of Zacks Rank 1 stocks has returned -2.59% in 2025 (through June 2), underperforming the S&P 500's -1.12% [6] - The Zacks Focus List portfolio returned +2.90% year-to-date (through May 31, 2025), outperforming the S&P 500's +1.07% [15] - The Zacks Earnings Certain Admiral Portfolio (ECAP) returned +3.20% in Q1 2025, compared to the S&P 500's -4.30% decline [18] Notable Stock Upgrades - Flotek Industries, Inc. shares surged by 101% since being upgraded to Outperform by Zacks on May 6 [9] - Goldman Sachs has returned 20.6% year-to-date as part of Zacks' Top 10 Stocks for 2025 list [24] - Fastenal Company returned 10.2% over the past 12 weeks, while 3M Company increased by 5% during the same period [21]