01—Abstract
Summary
Summary of the 10-K filed August 23, 2024. Cited figures are marked; the original filing is the authoritative source.
Ubiquiti Inc. (NYSE: UI) reported fiscal 2024 (year ended June 30, 2024) revenues of $1.93 billiona, down slightly from $1.94 billion in fiscal 2023, and net income of $350.0 million, compared with $407.6 million a year earlier.
Gross profit margin declined to 38.4% from 39.2%, driven by incremental excess and obsolete inventory charges and warehouse-related operating expenses, partially offset by lower shipping costs and lower tariffs. Income from operations was $499.0 millionb versus $544.6 million in fiscal 2023, and interest expense and other, net rose to $75.2 million from $58.2 million on higher average debt and interest rates. Enterprise Technology revenue was $1.62 billion (84% of revenue), while Service Provider Technology revenue was $310.8 million (16%).
Cash flow from operations was $541.5 millionc in fiscal 2024, a sharp reversal from a $145.4 million outflow in fiscal 2023, largely because inventories decreased by $250.7 million after a $487.9 million build the prior year. The company used $518.0 million in financing activities, mainly repaying $215.0 million on its revolver and $157.5 million on its term loans, and paying $145.1 million in dividends. Total debt fell to roughly $706 million (short-term $36.5 million plus long-term $669.9 million) from about $1.08 billion, and cash and cash equivalents rose to $126.3 million from $114.8 million.
The company declared a $0.60d per share quarterly dividend on August 23, 2024, and stated its intention to pay at least $0.60 per share in each remaining quarter of fiscal 2025, subject to Board approval. The filing also highlights material risks, including a tax dispute with the IRS over approximately $50.0 million of incremental tax liability, $60.4 million of refundable deposits with Hong Kong tax authorities, reliance on Mr. Robert J. Pera, who beneficially owned 56,278,181 shares as of August 23, 2024, and tariffs of 7.5% to 25% on most products imported from China.
02—Key points
Key Highlights
- Revenue of $1.93 billion in fiscal 2024 versus $1.94 billion in fiscal 2023; net income of $350.0 million versus $407.6 million.
- Gross profit margin fell to 38.4% from 39.2%, reflecting excess and obsolete inventory charges and warehouse-related operating expenses.
- Operating cash flow of $541.5 million, reversing a $145.4 million outflow in fiscal 2023, as inventories decreased by $250.7 million.
- Total debt reduced to about $706 million from roughly $1.08 billion through $372.5 million of combined term loan and revolver repayments.
- Interest expense and other, net increased to $75.2 million from $58.2 million due to higher average debt and interest rates.
- Quarterly dividends of $0.60 per share were paid in each quarter of fiscal 2024, and the company intends to pay at least $0.60 per share in each remaining quarter of fiscal 2025.
- Pending IRS dispute over fiscal 2015 and 2016 tax years carries an estimated incremental tax liability of approximately $50.0 million, and $60.4 million of Hong Kong tax deposits are expected to be refunded upon audit completion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Ubiquiti kept $0.18.
- Revenue$1.93B100.0%
- Cost of revenue−$1.19B61.6%
- Gross profit$739.8M38.4%
- Operating costs−$240.8M12.5%
- Operating income$499.0M25.9%
- Interest, other & tax−$149.0M7.7%
- Net income$350.0M18.1%
Where FY2024 revenue went
$1.93B- Cost of revenue: $1.19B, 62% of revenue
- Net income: $350.0M, 18% of revenue
- R&D: $159.8M, 8.3% of revenue
- SG&A: $81.0M, 4.2% of revenue
- Interest, other & tax: $149.0M, 7.7% of revenue
Kept 18% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed August 23, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $1.93B$1.94B | −0.6% |
| Cost of Revenue | $1.19B$1.18B | +0.8% |
| Gross Profit | $739.76M$760.73M | −2.8% |
| R&D Expenses | $159.77M$145.17M | +10.1% |
| SG&A Expenses | $81.00M$70.99M | +14.1% |
| Operating Expenses | $240.76M$216.16M | +11.4% |
| Operating Income | $499.00M$544.57M | −8.4% |
| Net Income | $349.96M$407.64M | −14.1% |
| EPS (Basic) | $5.79$6.75 | −14.2% |
| EPS (Diluted) | $5.79$6.74 | −14.1% |
| Shares Outstanding (Basic) | 60.45M60.44M | 0.0% |
| Shares Outstanding (Diluted) | 60.46M60.45M | 0.0% |
05—Questions
Frequently Asked Questions
How did Ubiquiti's profitability change in fiscal 2024?
Net income fell to $350.0 million from $407.6 million. Income from operations declined to $499.0 million from $544.6 million, as gross profit margin fell to 38.4% from 39.2% and interest expense and other, net rose to $75.2 million from $58.2 million.
Why did operating cash flow improve so significantly?
Net cash provided by operating activities was $541.5 million in fiscal 2024 compared with a $145.4 million outflow in fiscal 2023. The filing attributes the swing mainly to a $250.7 million decrease in inventories, after a $487.9 million inventory increase in fiscal 2023 made to secure component supply.
What is Ubiquiti's dividend policy?
The company paid $0.60 per share in each quarter of fiscal 2024 and declared another $0.60 per share dividend on August 23, 2024, payable September 9, 2024. It intends to pay regular quarterly dividends of at least $0.60 per share in each remaining quarter of fiscal 2025, subject to Board approval.
How much debt does Ubiquiti carry and how has it changed?
Total debt was about $706 million at June 30, 2024 ($36.5 million short-term and $669.9 million long-term), down from about $1.08 billion a year earlier. The company repaid $215.0 million on its revolver and $157.5 million on its term loans during fiscal 2024, and $175.0 million remained outstanding on the revolver.
What are the most significant risks flagged in the filing?
Key risks include reliance on founder and CEO Robert J. Pera, who owns a majority of the common stock; dependence on a limited number of contract manufacturers in Vietnam and China and suppliers such as Qualcomm and Broadcom; tariffs of 7.5% to 25% on most products imported from China; an unresolved IRS dispute with an estimated incremental tax liability of about $50.0 million; and ongoing patent litigation including suits by Vivato, Network-1 and Intellectual Ventures I LLC.
06—Continue