Press Release: Ubiquiti Inc. Reports Second Quarter Fiscal 2021 Financial Results
Ubiquiti Inc. Reports Second Quarter Fiscal 2021 Financial Results
Record Revenues of $479.4 million
Record GAAP Earnings Per Share of $2.54
Ubiquiti Inc. (NYSE: UI) ("Ubiquiti" or the "Company") today announced results for the second quarter fiscal 2021, ended December 31, 2020.
Second Quarter Fiscal 2021 Financial Summary
Additional Financial Highlights
Financial Highlights ($, in millions, except per share data)
Income Statement Items
Revenues for the second quarter fiscal 2021 were $479.4 million, representing an increase from the prior quarter of 1.2% and an increase from the comparable prior year period of 55.5%. Revenues for the first six months of fiscal 2021 were $953.0 million, representing an increase of 50.9% from the first six months of fiscal 2020. The fiscal quarter sequential increase in revenue was primarily due to an increase in our direct sales through our webstores.
During the second quarter fiscal 2021, gross profit was $230.7 million. GAAP gross margin of 48.1% increased 1.0% versus the comparable prior year period GAAP gross margin of 47.1% and decreased 0.1% versus the prior quarter GAAP gross margin of 48.2%. The increase in gross profit margin for the second quarter fiscal 2021 as compared to the comparable prior-year period was primarily driven by favorable changes in product mix, partially offset by higher shipping costs. The decrease in gross profit margin compared to the prior quarter was primarily driven by higher shipping costs, partially offset by lower tariffs on United States imports.
Research and Development
During the second quarter fiscal 2021, research and development ("R&D") expenses were $28.9 million. This reflects an increase as compared to the R&D expenses of $24.0 million in the comparable prior year period and an increase as compared to R&D expenses of $25.8 million in the prior quarter. The increase in R&D expenses as compared to the comparable prior year period and prior quarter were both primarily driven by higher employee related expenses and professional and service related fees.
Sales, General and Administrative
The Company's sales, general and administrative ("SG&A") expenses for the second quarter fiscal 2021 were $11.0 million. This reflects an increase as compared to the SG&A expenses of $9.0 million in the comparable prior year period and a decrease as compared to the SG&A expenses of $12.4 million in the prior quarter. The increase in SG&A costs as compared to the comparable prior year period was primarily due to higher professional and service fees and higher depreciation expense, partially offset by a legal settlement received, lower payroll and lower marketing expenses. The decrease in SG&A costs as compared to the prior quarter is primarily driven by a legal settlement received in the second quarter fiscal 2021 and lower professional fees.
Net Income and Earnings Per Share
During the second quarter fiscal 2021, GAAP net income was $159.7 million and non-GAAP net income was $159.0 million. This reflects an increase in GAAP net income and non-GAAP net income from the comparable prior year period by 86.0% and 74.0% respectively, primarily driven by an increase in revenues and higher gross margin. Second quarter fiscal 2021 GAAP earnings per diluted share was $2.54 and non-GAAP earnings per diluted share was $2.53. This reflects an increase in GAAP and non-GAAP earnings per diluted share from the comparable prior year period of 92.4% and 80.7% respectively. Both GAAP and non-GAAP earnings per share benefited from higher net income and a reduction in GAAP and non-GAAP diluted shares outstanding.
During the three months ended December 31, 2020, we continued to experience a disruption in our supply chain as a result of the COVID-19 pandemic. This disruption impacted our suppliers' ability to manufacture or provide key components and services and as a result we have incurred, and we continue to incur, additional costs to expedite deliveries of components and services. While our ability to procure components and services has improved during the quarter, the disruptions in our supply chain have not been fully remediated and the effects, if any, of the COVID-19 pandemic may not be fully reflected in the Company's financial results until future periods.
About Ubiquiti Inc.
Ubiquiti Inc. is focused on democratizing network technology on a global scale -- aggregate shipments of over 108 million devices play a key role in creating networking infrastructure in over 200 countries and territories around the world. Our professional networking products are powered by our UNMS and UniFi software platforms to provide high-capacity distributed Internet access and unified information technology management, respectively.
Ubiquiti and the U logo are trademarks or registered trademarks of Ubiquiti and/or its affiliates in the United States and other countries. For more information, please visit www.ui.com.
Safe Harbor for Forward Looking Statements
Certain statements in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements other than statements of historical fact including words such as "look", "will", "anticipate", "believe", "estimate", "expect", "forecast", "consider" and "plan" and statements in the future tense are forward looking statements. The statements in this press release that could be deemed forward-looking statements include statements regarding the impact of COVID-19 and our intentions to pay quarterly cash dividends and any statements or assumptions underlying any of the foregoing.
Forward-looking statements are subject to certain risks and uncertainties that could cause our actual future results to differ materially or cause a material adverse impact on our results. Potential risks and uncertainties include, but are not limited to, the impact of public health problems, such as COVID-19, and U.S. tariffs on results; fluctuations in our operating results; varying demand for our products due to the financial and operating condition of our distributors and their customers, and our distributors' inventory management practices; political and economic conditions and volatility affecting the stability of business environments, economic growth, currency values, commodity prices and other factors that may influence the ultimate demand for our products in particular geographies or globally; impact of counterfeiting and our ability to contain such impact; our reliance on a limited number of distributors; inability of our contract manufacturers and suppliers to meet our demand; our dependence on chipset suppliers for chipsets without a short-term alternative; as we move into new markets competition from certain of our current or potential competitors who may be more established in such markets; our ability to keep pace with technological and market developments; success and timing of new product introductions by us and the performance of our products generally; our ability to effectively manage the significant increase in our transactional sales volumes; we may become subject to warranty claims, product liability and product recalls; that a substantial majority of our sales are into countries outside the United States
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