Founder, BWS Financial Inc

Hamed Khorsand

Founder

Independent Stock Specific Research

BWS Financial Inc

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Equity Bottom-Up

<ul>
<li>UI June quarter (fiscal year end) showcased how investment in more inventory has led to Ubiquiti growing revenue and the return of gross margin above 40 percent</li>
<li>UI reported revenue of $491.1 million for the June quarter compared to our forecast of $483.4 million. Ubiquiti having more product in stock on a regular basis led to outperformance</li>
<li>Ubiquiti is now on pace to grow revenue again in fiscal 2024 with greater possibility of free cash flow compared to fiscal 2023</li>
</ul>


UI June quarter (fiscal year end) showcased how investment in more inventory has led to Ubiquiti growing revenue and the return of gross margin above 40 percent
UI reported revenue of $491.1 million for the June quarter compared to our forecast of $483.4 million. Ubiquiti having more product in stock on a regular basis led to outperformance
Ubiquiti is now on pace to grow revenue again in fiscal 2024 with greater possibility of free cash flow compared to fiscal 2023


<ul>
<li>UI reported fiscal third quarter (March) results mostly in line with our lowered estimates. The business climate for network hardware has cooled in recent months and Ubiquiti is no different</li>
<li>Ubiquiti has spent the past year building inventory to meet demand after many quarters of not having adequate supply</li>
<li>Simultaneous with revenue growth has been an improvement in gross margin. Gross margin is beginning to revert to prior levels of 45 percent and higher</li>
</ul>


UI reported fiscal third quarter (March) results mostly in line with our lowered estimates. The business climate for network hardware has cooled in recent months and Ubiquiti is no different
Ubiquiti has spent the past year building inventory to meet demand after many quarters of not having adequate supply
Simultaneous with revenue growth has been an improvement in gross margin. Gross margin is beginning to revert to prior levels of 45 percent and higher


<ul>
<li>UI is coming off a strong performance in the December quarter but should continue to show improving margins as the Company maintains products in stock and at higher prices</li>
<li>The March quarter can be seasonally challenging. For Ubiquiti, it could end up being a period where customers are able to find the products they are looking for in stock </li>
<li>In the March quarter Ubiquiti has maintained a higher level of product availability than what we had been observing in the prior year</li>
</ul>


UI is coming off a strong performance in the December quarter but should continue to show improving margins as the Company maintains products in stock and at higher prices
The March quarter can be seasonally challenging. For Ubiquiti, it could end up being a period where customers are able to find the products they are looking for in stock 
In the March quarter Ubiquiti has maintained a higher level of product availability than what we had been observing in the prior year


UI: Product Availability & Free Cash Flow

<ul>
<li>Ubiquiti (UI) reported fiscal second quarter (December) results affirming our expectations of the enterprise segment being the source of growth</li>
<li>Ubiquiti has introduced several new products lines over the past two years, which we believe are becoming an important part of the revenue story</li>
<li>The product mix and reduced shipping costs resulted in Ubiquiti reporting gross margin of 40 percent. This is the first time in four quarters gross margin reached 40 percent</li>
</ul>


Ubiquiti (UI) reported fiscal second quarter (December) results affirming our expectations of the enterprise segment being the source of growth
Ubiquiti has introduced several new products lines over the past two years, which we believe are becoming an important part of the revenue story
The product mix and reduced shipping costs resulted in Ubiquiti reporting gross margin of 40 percent. This is the first time in four quarters gross margin reached 40 percent


<ul>
<li>The enterprise segment has fueled revenue growth at Ubiquiti (UI) and it should remain the same in the fiscal second quarter</li>
<li>Ubiquiti has expanded its product offering for enterprise customers where it includes a complete solution down to the EV charging station</li>
<li>We have made several adjustments to our earnings model. We continue to assume gross margin rising sequentially due to lower costs</li>
</ul>


The enterprise segment has fueled revenue growth at Ubiquiti (UI) and it should remain the same in the fiscal second quarter
Ubiquiti has expanded its product offering for enterprise customers where it includes a complete solution down to the EV charging station
We have made several adjustments to our earnings model. We continue to assume gross margin rising sequentially due to lower costs


United States

Ubiquiti Inc. provides wireless networking products and solutions. The Company offers radios, antennas, and management tools that have been designed to deliver carrier class performance for wireless networking and other applications in the unlicensed radio frequency. Ubiquiti operates in the State of New York.

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Ubiquiti Inc. (UI US)

UI: Restart of Growth

UI's June quarter affirms our expectations of the return of revenue growth after UI invested in having ample inventory available to meet demand.

BWS Financial Inc

UI: Show Me After Results

Revenue was within 1 percent of our lower estimate. The climate for IT spending slowed in the quarter even though Ubiquiti has been building...

BWS Financial Inc

UI: Product Availability & Free Cash Flow

The March quarter can seasonally be soft, but we are expecting service provider segment revenue to rebound from the December quarter

BWS Financial Inc

UI: Margin Rebound with Revenue Growth

The rebound in gross margin suggests the business is back on track. UI investing in inventory this past quarter leads us to expect higher revenue

BWS Financial Inc

UI: Inventory Environment

Ubiquiti's share count declined in December implying there were more share repurchases. This is telling the business was able to generate free cash...

BWS Financial Inc

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