Ubiquiti(US:UI)2024-11-08 12:05Revenue Growth - Total revenues increased by $87.3 million, or 19%, from $463.1 million in Q3 2023 to $550.3 million in Q3 2024[108] - Enterprise Technology revenue increased by $90.1 million, or 24%, from $380.1 million in Q3 2023 to $470.2 million in Q3 2024[109] - Service Provider Technology revenue decreased by $2.8 million, or 3%, from $83.0 million in Q3 2023 to $80.2 million in Q3 2024[111] - North America revenues increased by $46.5 million, or 21%, from $224.8 million in Q3 2023 to $271.2 million in Q3 2024[112] - EMEA revenues increased by $32.5 million, or 19%, from $172.4 million in Q3 2023 to $204.9 million in Q3 2024[113] - Asia Pacific revenues increased by $4.9 million, or 13%, from $36.1 million in Q3 2023 to $40.9 million in Q3 2024[115] - South America revenues increased by $3.5 million, or 12%, from $29.8 million in Q3 2023 to $33.3 million in Q3 2024[116] Profitability - Gross profit margin improved to 42% in Q3 2024, up from 40% in Q3 2023[108] - Net income rose to $127.988 million, or 23% of revenues, in Q3 2024 compared to $87.750 million, or 19% of revenues, in Q3 2023[108] - Gross profit margin increased to 42.1% in Q3 2024, compared to 39.7% in Q3 2023[117] Expenses - Research and development expenses increased to $37.997 million, or 7% of revenues, in Q3 2024 from $36.283 million, or 8% of revenues, in Q3 2023[108] - Sales, general and administrative expenses rose to $24.415 million, or 4% of revenues, in Q3 2024 from $19.290 million, or 4% of revenues, in Q3 2023[108] - R&D expenses increased by $1.7 million, or 5%, from $36.3 million in Q3 2023 to $38.0 million in Q3 2024[118] - SG&A expenses increased by $5.1 million, or 27%, from $19.3 million in Q3 2023 to $24.4 million in Q3 2024[120] Financial Obligations - The company has $1,134.3 million in purchase commitments with third-party manufacturers as of September 30, 2024[141] - A $28.1 million obligation related to the transition tax on accumulated foreign earnings is expected to be settled in Q1 2026[142] - Other obligations totaling $6.2 million primarily consist of research and development project commitments as of September 30, 2024[143] - Unrecognized tax benefits amount to $34.6 million, with an additional $5.4 million in accrued interest as of September 30, 2024[144] Cash and Interest - Cash and cash equivalents were $165.2 million as of September 30, 2024, up from $126.3 million as of June 30, 2024[147] - Interest expense and other, net decreased by $10.6 million, or 50%, from $21.2 million in Q3 2023 to $10.6 million in Q3 2024[122] - A 200-basis-point increase in interest rates could result in an incremental charge of $11.1 million to income before taxes over the next 12 months[148] Currency Impact - A 10% fluctuation in the U.S. dollar relative to other currencies would impact income before taxes by approximately $3.0 million for Q3 2024[150] - A 10% change in the U.S. dollar relative to foreign currencies would affect income before taxes by approximately $6.1 million for fiscal year 2024[151] Sales Distribution - Sales to distributors accounted for 57% of revenues, while direct sales accounted for 43% in Q3 2024[97] Supply Chain and Operations - The company operates warehouses in the U.S., Europe, and Asia Pacific, and outsources logistics warehousing and order fulfillment functions primarily in Vietnam[99] - The company's products imported into the U.S. from China are subject to tariffs ranging between 7.5% and 25%, affecting operating results and margins[100] - The company monitors the Russia-Ukraine military conflict and China-Taiwan tensions, which could impact global supply chains and operations[91][92] - The company's inventory and vendor deposit balances have increased due to efforts to mitigate supply constraints, raising risks of future material excess and obsolete inventory[90]