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Ubiquiti's (UBNT) Earnings Streak Continues in Q1, Up Y/Y
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Ubiquiti Networks, Inc. maintained its winning streak with another striking beat, as its first-quarter fiscal 2017 reported earnings of 86 cents a share crushed the Zacks Consensus Estimate of 65 cents by 32.3%.The earnings surprise marks Ubiquiti’s sixth consecutive beat.
Encouraged by positive business trends and a favorable demand environment, Ubiquiti provided an optimistic guidance for the upcoming quarter.
Investors cheered the company’s solid results, with shares climbing 11.5% in after-hours trading, following the release.
On a non-GAAP basis, the company’s earnings per share were 79 cents, reflecting 54.9% growth year over year. The figure also surpassed the projected range of 68–74 cents. Ubiquiti’s overarching business model and impressive top-line growth drove the stellar performance during the quarter.
Inside the Headlines
Total revenue of $204.8 million steered past the company’s projected range of $180–$190 million. Also, it grew 35.2% on a year-over-year basis and topped the Zacks Consensus Estimate of $185 million comfortably. Strong demand of all product lines across each end market proved conducive to top-line growth.
The company’s Enterprise Technology segment continued to fare remarkably well, with revenues soaring a whopping 75.2% year over year to $84.1 million. The striking growth was fuelled by the entire UniFi product family and other industry-leading products.
Even the Service Provider Technology segment achieved growth of 16.6% year over year, generating $120.6 million. Robust sales of airMAX product family and EdgeMAX product lines drove the segment’s growth.
On a geographic basis, revenues in Asia Pacific continued to be strong, rising a striking 61.3% year over year. In addition, North America and Europe, the Middle East and Africa, surged 39.5% and 34.6%, respectively from the comparable period last year. Moreover, after few quarters of weak sales, South America also witnessed a rebound, with revenues growing 9.5% on a year-over-year basis during the fiscal first quarter.
Non-GAAP gross margin for the quarter shrunk 50 basis points year over year to 48.0%.
Notable Developments
Keeping its momentum of new offerings alive in the quarter, Ubiquiti launched a powerful multi-hop, self-healing mesh product line – UniFi Mesh technology – in a bid to expand UniFi's software-defined-networking platform. Additionally, the company introduced EdgePower, which offers reliable DC power to the EdgePoint EP-R8 and EP-S16 devices and their attached PoE devices.
Encouragingly, the company witnessed stellar market traction of UniFi Video and UniFi Switch products that significantly bolstered revenues during the reported quarter.
This apart, the company entered into a retail partnership with Amazon Inc., (AMZN - Free Report) , to foster the development of AmpliFi HD router and AmpliFi Mesh Points.
Liquidity & Share Repurchases
Ubiquiti ended the fiscal first quarter with cash and cash equivalents of $573.6 million, compared with $551.0 million as of Jun 30, 2016. Long-term debt was $187.9 million, slightly down from $191.6 million a year back.
Guidance
Incorporating the strong performance in the reported quarter, as well as favorable business trends and sturdy demand environment, the company released optimistic guidance for second-quarter fiscal 2017.
Management projects revenues in the range of $200–210 million. Non-GAAP earnings are expected within 73–79 cents per share, while GAAP earnings per share are projected to be in the band of 72–78 cents.
To Conclude
Ubiquiti delivered yet another quarter of exceptional results in rough times. We believe that the company’s scalable business model is its biggest asset which helps it to adapt to any ever evolving markets. Moreover, its effective management of its strong global network of over 100 distributors and master resellers has improved its visibility for future demand as well as inventory management techniques.
Going forward, we perceive that the company’s steady introduction of fresh products will continue to supplement the top line. This apart, its strong position in the wireless broadband market and increasing foothold in the enterprise WLAN access point markets, signals brighter days ahead. We believe that the U.S. government’s strong focus on “E-Rate funding” program, that aids schools and libraries in obtaining affordable broadband, will act as a meaningful catalyst for the Zacks Rank #3 (Hold) company.
Adobe Systems is a leading player in the computer software space. The company has a striking earnings surprise history over the trailing four quarters, having beaten estimates all through, for an average beat of 5.6%.
InterDigital develops and markets advanced digital wireless telecommunications systems, using proprietary technologies for voice and data communications. The company has an excellent earnings surprise history, beating estimates thrice over the trailing four quarters, with a robust average positive surprise of 30.0%.
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Ubiquiti's (UBNT) Earnings Streak Continues in Q1, Up Y/Y
Ubiquiti Networks, Inc. maintained its winning streak with another striking beat, as its first-quarter fiscal 2017 reported earnings of 86 cents a share crushed the Zacks Consensus Estimate of 65 cents by 32.3%.The earnings surprise marks Ubiquiti’s sixth consecutive beat.
Encouraged by positive business trends and a favorable demand environment, Ubiquiti provided an optimistic guidance for the upcoming quarter.
Investors cheered the company’s solid results, with shares climbing 11.5% in after-hours trading, following the release.
On a non-GAAP basis, the company’s earnings per share were 79 cents, reflecting 54.9% growth year over year. The figure also surpassed the projected range of 68–74 cents. Ubiquiti’s overarching business model and impressive top-line growth drove the stellar performance during the quarter.
Inside the Headlines
Total revenue of $204.8 million steered past the company’s projected range of $180–$190 million. Also, it grew 35.2% on a year-over-year basis and topped the Zacks Consensus Estimate of $185 million comfortably. Strong demand of all product lines across each end market proved conducive to top-line growth.
The company’s Enterprise Technology segment continued to fare remarkably well, with revenues soaring a whopping 75.2% year over year to $84.1 million. The striking growth was fuelled by the entire UniFi product family and other industry-leading products.
Even the Service Provider Technology segment achieved growth of 16.6% year over year, generating $120.6 million. Robust sales of airMAX product family and EdgeMAX product lines drove the segment’s growth.
On a geographic basis, revenues in Asia Pacific continued to be strong, rising a striking 61.3% year over year. In addition, North America and Europe, the Middle East and Africa, surged 39.5% and 34.6%, respectively from the comparable period last year. Moreover, after few quarters of weak sales, South America also witnessed a rebound, with revenues growing 9.5% on a year-over-year basis during the fiscal first quarter.
Non-GAAP gross margin for the quarter shrunk 50 basis points year over year to 48.0%.
Notable Developments
Keeping its momentum of new offerings alive in the quarter, Ubiquiti launched a powerful multi-hop, self-healing mesh product line – UniFi Mesh technology – in a bid to expand UniFi's software-defined-networking platform. Additionally, the company introduced EdgePower, which offers reliable DC power to the EdgePoint EP-R8 and EP-S16 devices and their attached PoE devices.
UBIQUITI NETWRK Price, Consensus and EPS Surprise
UBIQUITI NETWRK Price, Consensus and EPS Surprise | UBIQUITI NETWRK Quote
Encouragingly, the company witnessed stellar market traction of UniFi Video and UniFi Switch products that significantly bolstered revenues during the reported quarter.
This apart, the company entered into a retail partnership with Amazon Inc., (AMZN - Free Report) , to foster the development of AmpliFi HD router and AmpliFi Mesh Points.
Liquidity & Share Repurchases
Ubiquiti ended the fiscal first quarter with cash and cash equivalents of $573.6 million, compared with $551.0 million as of Jun 30, 2016. Long-term debt was $187.9 million, slightly down from $191.6 million a year back.
Guidance
Incorporating the strong performance in the reported quarter, as well as favorable business trends and sturdy demand environment, the company released optimistic guidance for second-quarter fiscal 2017.
Management projects revenues in the range of $200–210 million. Non-GAAP earnings are expected within 73–79 cents per share, while GAAP earnings per share are projected to be in the band of 72–78 cents.
To Conclude
Ubiquiti delivered yet another quarter of exceptional results in rough times. We believe that the company’s scalable business model is its biggest asset which helps it to adapt to any ever evolving markets. Moreover, its effective management of its strong global network of over 100 distributors and master resellers has improved its visibility for future demand as well as inventory management techniques.
Going forward, we perceive that the company’s steady introduction of fresh products will continue to supplement the top line. This apart, its strong position in the wireless broadband market and increasing foothold in the enterprise WLAN access point markets, signals brighter days ahead. We believe that the U.S. government’s strong focus on “E-Rate funding” program, that aids schools and libraries in obtaining affordable broadband, will act as a meaningful catalyst for the Zacks Rank #3 (Hold) company.
Stocks to Consider
Some better-ranked stocks in the sector include Adobe Systems Inc., (ADBE - Free Report) and InterDigital, Inc. (IDCC - Free Report) , both of which carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Adobe Systems is a leading player in the computer software space. The company has a striking earnings surprise history over the trailing four quarters, having beaten estimates all through, for an average beat of 5.6%.
InterDigital develops and markets advanced digital wireless telecommunications systems, using proprietary technologies for voice and data communications. The company has an excellent earnings surprise history, beating estimates thrice over the trailing four quarters, with a robust average positive surprise of 30.0%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand.Click to see them now>>