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Ubiquiti Q3 Earnings Beat Estimates, Top Line Surges Y/Y
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Ubiquiti, Inc. (UI - Free Report) reported strong third-quarter fiscal 2025 results, with both bottom and top lines surpassing the respective Zacks Consensus Estimates. The New York-based networking products and solutions provider reported revenue growth year over year, owing to healthy traction in the Enterprise Technology segment. Healthy demand in North America, Europe, the Middle East and Africa regions is a major tailwind. Solid growth in cash flow is a positive.
UI’s Net Income
Net income, on a GAAP basis, in the quarter was $180.4 million or $2.98 per share compared with $76.3 million or $1.26 in the year-ago quarter. Despite higher operating expenses, solid top-line growth boosted the net income.
Non-GAAP net income in the quarter was $181.8 million or $3 per share compared with $77.6 million or $1.28 in the year-earlier quarter. The bottom line beat the Zacks Consensus Estimate by $1.14.
Net sales in the quarter increased to $664.2 million from $493 million in the prior-year quarter. The healthy demand in the Enterprise Technology segment supported the top line. The metric beat the consensus estimate by $50 million. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Enterprise Technology generated $585.7 million in revenues, up from $414.3 million in the prior-year quarter. The top line surpassed our estimate of $526.5 million. Strong demand trends in all regions except South America drove net sales in this segment.
Service Provider Technology registered $78.4 million in revenues, marginally down from $78.7 million in the year-ago quarter. The decrease in revenues is primarily attributed to soft demand in North America, South America and the Asia Pacific regions. Healthy demand in Europe, the Middle East and Africa (EMEA) partially reversed this trend. Net sales missed our revenue estimate of $79.1 million.
Region-wise, revenues from North America were $322.7 million compared with $242.5 million in the year-ago quarter. Net sales from EMEA aggregated $282.1 million, up from $200.7 million. Asia Pacific revenues increased to $37.5 million from $26.5 million in the year-earlier quarter. Revenues from South America were $21.8 million, down from $23.4 million a year ago.
Other Details for UI
During the March quarter, gross profit was $295.9 million compared with $174.1 million in the year-ago quarter, with respective margins of 44.5% and 35.3%. Favorable product mix, lower excess and obsolete inventory charges, and lower tariffs drove the gross margin. Higher shipping costs partially reversed this positive trend.
The research and development expenses increased to $44.3 million from $42.5 million due to higher software expenses, prototype-related expenses and employee-related expenses. Operating income was $226.9 million, up from $111.2 million in the prior year.
UI’s Cash Flow & Liquidity
In the first nine months of fiscal 2025, Ubiquiti generated $509.7 million of cash in operating activities compared with $310.1 million in the prior-year quarter. As of March 31, 2025, the company had $151 million in cash and cash equivalents, with $22.1 million of other long-term liabilities.
UI’s Zacks Rank & Stocks to Consider
Ubiquiti currently carries a Zacks Rank #2 (Buy).
Here are some other top-ranked stocks that investors may consider.
In the last reported quarter, it delivered an earnings surprise of 4.88%. Juniper is leveraging the 400-gig cycle to capture hyperscale switching opportunities inside the data center. The company is set to capitalize on the increasing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence. Juniper also introduced new features within the AI-driven enterprise portfolio that enable customers to simplify the rollout of their campus wired and wireless networks while bringing greater insight to network operators.
InterDigital (IDCC - Free Report) carries a Zacks Rank #2 at present. In the trailing four quarters, InterDigital delivered an earnings surprise of 160.15%. It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. InterDigital boasts a comprehensive portfolio of more than 33,000 granted patents and applications. The company witnessed an exceptional year in innovation in 2024, with more than 5,000 new patent filings worldwide.
T-Mobile US, Inc. (TMUS - Free Report) carries a Zacks Rank #2 at present. Headquartered in Bellevue, WA, T-Mobile is a national wireless service provider. It continues to deploy 5G with the mid-band 2.5 GHz spectrum from Sprint. The 2.5 GHz 5G delivers superfast speeds and extensive coverage with signals that go through walls and trees, unlike 5G networks that are controlled by the mmWave spectrum. This gives T-Mobile a competitive edge over AT&T and Verizon.
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Ubiquiti Q3 Earnings Beat Estimates, Top Line Surges Y/Y
Ubiquiti, Inc. (UI - Free Report) reported strong third-quarter fiscal 2025 results, with both bottom and top lines surpassing the respective Zacks Consensus Estimates. The New York-based networking products and solutions provider reported revenue growth year over year, owing to healthy traction in the Enterprise Technology segment. Healthy demand in North America, Europe, the Middle East and Africa regions is a major tailwind. Solid growth in cash flow is a positive.
UI’s Net Income
Net income, on a GAAP basis, in the quarter was $180.4 million or $2.98 per share compared with $76.3 million or $1.26 in the year-ago quarter. Despite higher operating expenses, solid top-line growth boosted the net income.
Non-GAAP net income in the quarter was $181.8 million or $3 per share compared with $77.6 million or $1.28 in the year-earlier quarter. The bottom line beat the Zacks Consensus Estimate by $1.14.
Ubiquiti Inc. Price, Consensus and EPS Surprise
Ubiquiti Inc. price-consensus-eps-surprise-chart | Ubiquiti Inc. Quote
UI’s Revenues
Net sales in the quarter increased to $664.2 million from $493 million in the prior-year quarter. The healthy demand in the Enterprise Technology segment supported the top line. The metric beat the consensus estimate by $50 million. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Enterprise Technology generated $585.7 million in revenues, up from $414.3 million in the prior-year quarter. The top line surpassed our estimate of $526.5 million. Strong demand trends in all regions except South America drove net sales in this segment.
Service Provider Technology registered $78.4 million in revenues, marginally down from $78.7 million in the year-ago quarter. The decrease in revenues is primarily attributed to soft demand in North America, South America and the Asia Pacific regions. Healthy demand in Europe, the Middle East and Africa (EMEA) partially reversed this trend. Net sales missed our revenue estimate of $79.1 million.
Region-wise, revenues from North America were $322.7 million compared with $242.5 million in the year-ago quarter. Net sales from EMEA aggregated $282.1 million, up from $200.7 million. Asia Pacific revenues increased to $37.5 million from $26.5 million in the year-earlier quarter. Revenues from South America were $21.8 million, down from $23.4 million a year ago.
Other Details for UI
During the March quarter, gross profit was $295.9 million compared with $174.1 million in the year-ago quarter, with respective margins of 44.5% and 35.3%. Favorable product mix, lower excess and obsolete inventory charges, and lower tariffs drove the gross margin. Higher shipping costs partially reversed this positive trend.
The research and development expenses increased to $44.3 million from $42.5 million due to higher software expenses, prototype-related expenses and employee-related expenses. Operating income was $226.9 million, up from $111.2 million in the prior year.
UI’s Cash Flow & Liquidity
In the first nine months of fiscal 2025, Ubiquiti generated $509.7 million of cash in operating activities compared with $310.1 million in the prior-year quarter. As of March 31, 2025, the company had $151 million in cash and cash equivalents, with $22.1 million of other long-term liabilities.
UI’s Zacks Rank & Stocks to Consider
Ubiquiti currently carries a Zacks Rank #2 (Buy).
Here are some other top-ranked stocks that investors may consider.
Juniper Networks, Inc. (JNPR - Free Report) sports a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last reported quarter, it delivered an earnings surprise of 4.88%. Juniper is leveraging the 400-gig cycle to capture hyperscale switching opportunities inside the data center. The company is set to capitalize on the increasing demand for data center virtualization, cloud computing and mobile traffic packet/optical convergence. Juniper also introduced new features within the AI-driven enterprise portfolio that enable customers to simplify the rollout of their campus wired and wireless networks while bringing greater insight to network operators.
InterDigital (IDCC - Free Report) carries a Zacks Rank #2 at present. In the trailing four quarters, InterDigital delivered an earnings surprise of 160.15%. It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. InterDigital boasts a comprehensive portfolio of more than 33,000 granted patents and applications. The company witnessed an exceptional year in innovation in 2024, with more than 5,000 new patent filings worldwide.
T-Mobile US, Inc. (TMUS - Free Report) carries a Zacks Rank #2 at present. Headquartered in Bellevue, WA, T-Mobile is a national wireless service provider. It continues to deploy 5G with the mid-band 2.5 GHz spectrum from Sprint. The 2.5 GHz 5G delivers superfast speeds and extensive coverage with signals that go through walls and trees, unlike 5G networks that are controlled by the mmWave spectrum. This gives T-Mobile a competitive edge over AT&T and Verizon.