Ubiquiti Networks Inc. (NASDAQ:UBNT): Reports Strong 1Q14 Results and Raises 2Q14 Guidance


Dallas, Texas 11/11/2013 (Financialstrend) – Late last week, Ubiquiti Networks Inc. (NASDAQ:UBNT) reported strong 1Q14 results for the period ended September 30, 2013. The company reported non-GAAP net income of $41.2 million or $0.46 per share, exceeding the analysts’ estimate of $0.39 per share. The company had reported adjusted net income of $13.6 million or about $0.15 per share during 1Q13. Net income on GAAP basis was $40.5 million in 1Q14 as compared to $13.2 million in 1Q13, suggesting almost three times or over 200% growth. Earnings increased to $0.45 per share in the reported quarter as compared to $0.14 per share in the prior year quarter, suggesting about 221.4% increase.

The strong earnings during 1Q14 were primarily driven by growth in Ubiquiti Networks’ core business. The company’s persistence on improving services and increasing investments in innovation and development help boost the growth. The company’s opportunities in the enterprise business as well as the management’s executive abilities must also be factor in for the reported earnings growth.

The company reported close to 111% year over year increase in its total revenue and about 28% quarter over quarter. The total revenue for 1Q14 was $129.7 million. The reported revenue beat consensus estimate of $113 million by 14.8%. The revenue growth was largely driven by increased transaction volumes as well as addition of new services for existing customers. Moreover the strong performances from its Enterprise Technology business also contributed top line growth.

The operating income was $45.9 million in 1Q14 as compared to $15.8 million in 1Q13. Gross margins increased to 44.7% in 1Q14 from 40.7% in 1Q13. The Research and Development expenses increased 34.1% to $6.3 million in 1Q14 compared to $4.7 million in 1Q13. Sales, General and Administration expenses were $5.8 million in 1Q14 compared to $4.5 million in 1Q13.

Cash and cash equivalents were $279.7 million at the quarter end as compared to $227.8 million at the end of Jun 30, 2013.

The company also raised its 2Q14 revenue guidance which is estimated to be around $130 to $136 million.

The stock increased about 10.95% during Friday’s trade and closed at $41.25.