Executive Summary
Ubiquiti reported a solid QQ4 2024 with revenue of USD 507.5 million, up 3.3% year over year and 2.9% quarter over quarter. Gross margin remained resilient at approximately 40.2%, supporting an operating margin near 27.3% and a net margin around 20.5%. Net income of USD 103.8 million and earnings per diluted share of USD 1.72 underscored strong profitability despite a modest step up in operating expense pressure from R&D and SG&A components. Free cash flow was robust at USD 229.5 million, driven by solid operating cash flow of USD 231.4 million and modest capital expenditure (USD 1.9 million). In parallel, liquidity remained ample (current ratio 3.22) even as balance sheet leverage remained elevated: total debt of USD 757.3 million and net debt of USD 630.9 million, with equity of USD 95.1 million, yielding a debt-to-capitalization dynamic of about 0.88. Management did not issue explicit quarterly guidance in the release, but the cash-generative profile and margin durability support a constructive view on sustainable profitability, while the heavy leverage and high valuation multiples suggest a requirement for disciplined capital allocation and deleveraging optionality over the near term.
Key Performance Indicators
Key Insights
Revenue: USD 507.461 million; YoY +3.33%; QoQ +2.93%. Gross Profit: USD 204.14 million; Gross Margin ~40.23%; YoY +0.40%; QoQ +17.25%. Operating Income: USD 138.369 million; Operating Margin ~27.27%; YoY -3.83%; QoQ +24.41%. Net Income: USD 103.804 million; Net Margin ~20.46%; YoY +0.12%; QoQ +36.07%. EPS (Diluted): USD 1.72; YoY 0.00%; QoQ +36.51%. Operating Cash Flow: USD 231.401 million. Free Cash Flow: USD 229.535 million. Capex: USD -1.866 million. Balance Sheet: Total Assets USD 1.154 bill...
Financial Highlights
Revenue: USD 507.461 million; YoY +3.33%; QoQ +2.93%. Gross Profit: USD 204.14 million; Gross Margin ~40.23%; YoY +0.40%; QoQ +17.25%. Operating Income: USD 138.369 million; Operating Margin ~27.27%; YoY -3.83%; QoQ +24.41%. Net Income: USD 103.804 million; Net Margin ~20.46%; YoY +0.12%; QoQ +36.07%. EPS (Diluted): USD 1.72; YoY 0.00%; QoQ +36.51%. Operating Cash Flow: USD 231.401 million. Free Cash Flow: USD 229.535 million. Capex: USD -1.866 million. Balance Sheet: Total Assets USD 1.154 billion; Total Liabilities USD 1.059 billion; Total Equity USD 95.06 million; Cash USD 126.342 million; Total Debt USD 757.286 million; Net Debt USD 630.944 million. Liquidity: Current Ratio 3.22; Quick Ratio 1.161; Cash Ratio 0.444. Efficiency: DSO 30 days; DIO 173.73 days; DPO 15.16 days; Asset Turnover 0.440; Inventory Turnover 0.518. Valuation (as of QQ4 2024): P/E ~21.5x; Price to Sales ~17.6x; Price to Book ~93.7x; EV/EBITDA ~66.7x; Dividend Yield ~0.41%.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
507.46M |
3.33% |
2.93% |
| Gross Profit |
204.14M |
0.40% |
17.25% |
| Operating Income |
138.37M |
-3.83% |
24.41% |
| Net Income |
103.80M |
0.12% |
36.07% |
| EPS |
1.72 |
0.00% |
36.51% |
Key Financial Ratios
operatingProfitMargin
27.3%
operatingCashFlowPerShare
$3.83
freeCashFlowPerShare
$3.8
dividendPayoutRatio
34.9%
Management Commentary
Note: The earnings transcript data were not provided in the input. As a result, no verbatim management quotes or call-by-call nuances could be incorporated. The analysis below integrates the disclosed financials with typical strategic themes observed in Technology hardware/software networking providers to outline likely discussion points and catalysts to monitor. Key themes to consider (without direct quotes): (1) Margin resilience supported by a high-margin product ecosystem and favorable mix; (2) Cash flow discipline and the potential for capital allocation optimization; (3) Leverage intensity and opportunities for deleveraging or selective equity actions; (4) Growth opportunities in enterprise networking, fixed wireless access, and UniFi/cloud-based management; (5) Channel/partnership dynamics and customer concentration risks.
Transcript unavailable in the provided data.
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Transcript unavailable in the provided data.
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Forward Guidance
Guidance absence: There is no explicit forward-looking target provided in the QQ4 2024 filing. In assessing the outlook, investors should monitor: (1) Sustainment of gross and operating margins amid competitive pricing pressure and potential mix shifts toward higher-margin enterprise products; (2) Cash flow trajectory and deleveraging progress given the elevated debt balance and interest burden; (3) Product and market expansion, particularly around UniFi ecosystem adoption in enterprise and service-provider segments; (4) Capex cadence from customers that could influence order cycles; (5) Macro and FX dynamics given the USD reporting and dual-listed investor base. Overall, the investment thesis rests on continued FCF generation and margin stability with a cautious stance on leverage and valuation. Suggested watchpoints: changes in debt levels, capital allocation decisions (dividends vs. buybacks vs. debt repayment), and any updated guidance in subsequent quarters or annual reports.