Back to top

Ubiquiti (UBNT) Q1 Earnings & Revenues Top Estimates, Up Y/Y

Read MoreHide Full Article

Ubiquiti Networks, Inc. (UBNT - Free Report) maintained its unbeaten earnings streak, as its first-quarter fiscal 2018 reported adjusted earnings of 92 cents per share surpassed the Zacks Consensus Estimate of 79 cents by 16.5%.This marks Ubiquiti’s third consecutive beat.

The company also fared well in year-over-year comparison, with adjusted earnings reflecting growth of 16.5% compared with the prior-year quarter’s tally of 79 cents. Ubiquiti’s overarching business model and impressive top-line growth drove the stellar performance during the quarter.

Inside the Headlines

Total revenues of $245.9 million came within the company’s projected range of $230-$250 million. Further, it grew 20.1% on a year-over-year basis and topped the Zacks Consensus Estimate of $209 million comfortably. Strong demand in all product lines across end markets proved conducive to top-line growth.

The company’s Enterprise Technology segment continued to fare impressively, with revenues rising a whopping 49.8% year over year to $126 million in the quarter. The striking growth was fueled by UniFi product family and the evolution toward AC technology products, higher average selling prices as well as growth in switching.

The Service Provider Technology segment’s revenues declined marginally (down 0.6%) year over year to $119.9 million. Robust sales of airMAX products, airFiber and AmpliFi platforms lines supplemented the segment’s sales.

Ubiquiti Networks, Inc. Price, Consensus and EPS Surprise

Ubiquiti Networks, Inc. Price, Consensus and EPS Surprise | Ubiquiti Networks, Inc. Quote

On a geographic basis, revenues in Asia Pacific remained steady, rising 1.2% year over year. North America and EMEA regions (Europe, the Middle East and Africa) surged 29.7% and 14.7%, respectively, from the comparable period last year. South America also witnessed an impressive growth on a year-over-year basis, with revenues growing 28.4% during the fiscal first quarter.

GAAP gross margin for the quarter was down year over year to 45.4%.

Significant Developments

Keeping its momentum of new offerings alive in the quarter, Ubiquiti launched UniFi AC SHD access points in a bid to offer persistent threat management combined with the modern Wave 2 technology. Additionally, the company released GPS Sync for airMAX AC, offering GPS synchronization between airMAX AC and airMAX M series equipment.

Moreover during the reported quarter, the company introduced FrontRow, which features a latest camera technology that allows effortless capture and sharing of life’s experiences. This apart, the company announced considerable updates to its proprietary UCRM software, including enhanced billing features as well as multi-language support.

Liquidity & Share Repurchases

Ubiquiti ended the fiscal first quarter with cash and cash equivalents of $631.8 million, compared with $604.2 million as of Jun 30, 2017. Long-term debt was $283.1 million, compared with $241.8 million as of Jun 30, 2017.


Incorporating the strong performance in the reported quarter as well as sturdy demand environment, the company released guidance for second-quarter fiscal 2018. Management projects revenues for the fiscal second quarter in the range of $240-250 million. GAAP earnings are expected within 85-92 cents per share, while the company anticipates its gross margins to remain consistent sequentially.

To Conclude

Ubiquiti delivered yet another quarter of impressive results. We believe that the company’s effective management of its strong global network has improved its visibility for future demand as well as inventory management techniques. We expect that steady introduction of new products will continue to supplement the company’s top-line. This apart, the company believes strong investments in research and development, inventory and operations will help it expand its addressable market and maintain its dominant foothold in the industry.

Ubiquiti currently carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

Some similar-ranked stocks worth considering in the same space include Sonus Networks, Inc. (SONS - Free Report) , Motorola Solutions, Inc. (MSI - Free Report) and Comtech Telecommunications Corp. (CMTL - Free Report) . While Sonus Networks sports a Zacks Rank #1 (Strong Buy), Motorola Solutions and Comtech Telecommunications carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sonus Networks has an impressive earnings surprise history, surpassing estimates in the trailing four quarters with an average beat of 50.4%.

Motorola Solutions has an excellent earnings surprise history, exceeding estimates in the trailing four quarters with an average beat of 13.2%.

Comtech Telecommunications has an impressive earnings surprise history, exceeding estimates in the trailing four quarters with an average beat of 78.8%.

More Stock News: This Is Bigger than the iPhone!                   

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.  

Click here for the 6 trades >>

More from Zacks Analyst Blog

You May Like