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UI

Ubiquiti Inc. (UI)·Q4 2025 Earnings Summary

Executive Summary

  • UI delivered a strong Q4 FY25: revenue $759.2M (+14.3% q/q, +49.6% y/y), non-GAAP EPS $3.54; GAAP EPS $4.41 benefited from an $8.5M tax benefit tied to a deferred tax asset recognition from intercompany intangibles realignment .
  • Material beats vs S&P Global consensus: revenue $759.2M vs $635.2M*, non-GAAP EPS $3.54 vs $2.23*; coverage was thin (1 estimate for both) so magnitude should be viewed with caution *.
  • Gross margin expanded to 45.1% (+60 bps q/q, +490 bps y/y) on favorable product mix and lower E&O/shipping/indirect costs, partly offset by higher tariffs .
  • Capital return stepped up: $0.80/share dividend declared (vs $0.60 prior quarters) and new $500M buyback authorization through Sep 30, 2026, both potential stock catalysts .

What Went Well and What Went Wrong

  • What Went Well

    • Record revenue and margin expansion: $759.2M revenue, 45.1% GM driven by favorable mix and lower E&O/indirect costs; operating income rose to $261.4M .
    • Notable P&L leverage: GAAP net income $266.7M (vs $103.8M y/y) aided by lower interest expense (borrowings down) and FX gains vs losses last year .
    • Shareholder returns: raised the quarterly dividend to $0.80 and announced a $500M repurchase program, signaling confidence in cash flow durability .

  • What Went Wrong

    • Tariff headwinds persisted and partially offset margin gains, with management calling out higher tariffs in Q4 .
    • SG&A rose to $33.9M (from $24.8M q/q; $21.7M y/y) due to A/R reserves, higher webstore credit card fees, professional fees, marketing, and employee costs .
    • R&D expense increased to $47.5M (from $44.3M q/q; $44.1M y/y) on higher prototype and employee-related costs; healthy, but adds opex pressure .

Financial Results

Headline P&L vs prior periods

MetricQ4 2024Q3 2025Q4 2025
Revenue ($M)$507.5 $664.2 $759.2
Gross Profit ($M)$204.1 $295.9 $342.7
Gross Margin (%)40.2% 44.5% 45.1%
Total Operating Expenses ($M)$65.8 $69.0 $81.3
Income from Operations ($M)$138.4 $226.9 $261.4
Interest Expense and Other, net ($M)$16.8 $5.4 $3.2
Income Tax (Benefit)/Provision ($M)$17.8 $41.0 $(8.5)
GAAP Net Income ($M)$103.8 $180.4 $266.7
GAAP Diluted EPS ($)$1.72 $2.98 $4.41
Non-GAAP Net Income ($M)$105.1 $181.8 $214.4
Non-GAAP Diluted EPS ($)$1.74 $3.00 $3.54

Actual vs S&P Global consensus (Q4 FY25)

MetricConsensus*Actual
Revenue ($M)$635.2*$759.2
Non-GAAP EPS ($)$2.23*$3.54

Values retrieved from S&P Global*

Segment revenue mix (Product)

Product ($M)Q4 2024Q3 2025Q4 2025
Enterprise Technology$431.7 $585.7 $680.1
Service Provider Technology$75.7 $78.4 $79.0
Total$507.5 $664.2 $759.2

Geographic revenue mix

Region ($M)Q4 2024Q3 2025Q4 2025
North America$253.3 $322.7 $379.9
EMEA$194.1 $282.1 $303.8
Asia Pacific$32.1 $37.5 $47.3
South America$28.0 $21.8 $28.1
Total$507.5 $664.2 $759.2

Selected KPIs/Operating drivers

KPI ($M unless noted)Q4 2024Q3 2025Q4 2025
R&D Expense$44.1 $44.3 $47.5
SG&A Expense$21.7 $24.8 $33.9
Gross Margin (%)40.2% 44.5% 45.1%
I&O Expense$16.8 $5.4 $3.2
Dividend declared ($/sh)—$0.60 $0.80

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash Dividend (per share)FY26 (quarterly intention)None stated; recent dividends were $0.60 in Q2–Q3 FY25 Intends to pay at least $0.80 per quarter in FY26 Raised vs recent run rate
Cash Dividend (per share)Q4 FY25 (declaration)$0.60 in Q3 FY25 $0.80 payable Sep 8, 2025; record Sep 2, 2025 Increased
Share Repurchase AuthorizationThrough Sep 30, 2026NoneNew $500M authorization approved Aug 21, 2025 New program

Earnings Call Themes & Trends

Note: An earnings call transcript for Q4 FY25 was not available in our document set; themes below reflect company disclosures in quarterly press releases.

TopicQ-2 (Q2 FY25)Q-1 (Q3 FY25)Current (Q4 FY25)Trend
Gross margin driversGM fell q/q to 41.2% on unfavorable mix and higher shipping/tariffs; partially offset by lower warehouse/E&O GM rose to 44.5% on favorable mix and lower indirect costs GM rose to 45.1% on favorable mix; lower E&O/indirect; partially offset by higher tariffs Improving mix, steady tariff headwinds
Tariffs/macroHigher tariffs cited as headwind Tariffs lower y/y but shipping higher Higher tariffs partially offset margin gains Persistent headwind
SG&A dynamicsHigher due to bad debt (customer default) and webstore card fees Down q/q; still elevated from webstore fees, marketing, payroll Up to $33.9M on A/R reserves, webstore fees, prof. fees, marketing, payroll Elevated costs from channel mix/collections
R&D executionR&D up on prototypes and employee costs R&D up on employee/software/prototypes R&D up on prototypes and employee costs Sustained investment
Interest/FX and leverageI&O $11.4M; higher FX losses partially offset by lower interest (borrowings down) I&O $5.4M; FX gains and lower interest (borrowings down) I&O $3.2M; lower interest, FX gains vs y/y losses Lower interest burden; FX supportive in Q3–Q4
Regional trendsNA/EMEA drove growth NA/EMEA strongest NA $379.9M; EMEA $303.8M lead growth Broad-based, led by NA/EMEA

Management Commentary

  • “The Company intends to pay regular quarterly cash dividends of at least $0.80 per share during each quarter of fiscal year 2026,” subject to Board review of financial performance, cash and other factors .
  • Management attributed margin expansion to “favorable product mix” and lower “excess and obsolete inventory charges” and “indirect operating expenses,” with “higher tariffs” a partial offset .
  • Lower interest expense was driven by “a decrease in borrowings,” and Q4 also benefited from “foreign exchange gains” vs losses in the prior year period .
  • GAAP tax was a benefit in Q4 due to recognition of a $53.7M R&D-related deferred tax asset following the transfer of certain intangibles to the U.S. .

Q&A Highlights

  • An earnings call transcript for Q4 FY25 was not available in our document catalog; as a result, Q&A themes, guidance clarifications, and tone checks could not be extracted from a call transcript.

Estimates Context

  • Revenue and non-GAAP EPS materially exceeded S&P Global consensus: $759.2M vs $635.2M* and $3.54 vs $2.23*, respectively; only one estimate was recorded for each, indicating limited coverage and potentially amplifying the apparent beat *.
  • Given the scale of the beat and ongoing mix/tariff dynamics, sell-side models will likely lift forward gross margin and EPS assumptions, and reflect higher shareholder returns (dividend step-up, buyback) .

Values retrieved from S&P Global*

Key Takeaways for Investors

  • Strong demand momentum in Enterprise Technology continues to drive outsized growth and margin expansion; watch for sustainability of favorable mix into FY26 .
  • Structural margin recovery appears durable, with multiple quarters of sequential improvement despite tariff headwinds; this supports upward revisions to earnings power .
  • Capital returns meaningfully increased (dividend to $0.80, $500M buyback), offering downside support and signaling confidence in cash generation .
  • Operating expense growth (SG&A) tied to webstore mix, A/R reserves, and higher go-to-market costs bears monitoring for operating leverage trajectory .
  • Lower interest expense and reduced borrowings, along with favorable FX vs last year, provide incremental tailwinds below the line .
  • The Q4 GAAP tax benefit was a one-time effect from intangibles realignment; investors should anchor on non-GAAP EPS for run-rate comparisons .
  • With thin consensus coverage, post-quarter estimate resets may be substantial; near-term stock narrative likely focuses on sustained margin expansion plus enlarged capital return program .