Founder, BWS Financial Inc

Hamed Khorsand

Founder

Independent Stock Specific Research

BWS Financial Inc

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Equity Bottom-Up

<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


<ul>
<li>UI continued to report growth in its enterprise segment with total revenue rising to a new record. </li>
<li>Ubiquiti has been operating through a difficult supply chain environment where particular chipsets have been nearly impossible to purchase beyond allocation from the producer.</li>
<li>Ubiquiti has expanded its enterprise product portfolio to include more options where Ubiquiti is generating recurring revenue</li>
</ul>


UI continued to report growth in its enterprise segment with total revenue rising to a new record. 
Ubiquiti has been operating through a difficult supply chain environment where particular chipsets have been nearly impossible to purchase beyond allocation from the producer.
Ubiquiti has expanded its enterprise product portfolio to include more options where Ubiquiti is generating recurring revenue


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)

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