~ Revenues of $457.8 million ~

~ GAAP Diluted Earnings Per Share of $1.63 ~

Ubiquiti Inc. (NYSE:UI) ("Ubiquiti" or the "Company") today announced its financial results for the third quarter fiscal 2023, ended March 31, 2023.

Third Quarter Fiscal 2023 Financial Summary

Revenues of $457.8 million
GAAP diluted EPS of $1.63
Non-GAAP diluted EPS of $1.65

Additional Financial Highlight

The Company's Board of Directors declared a $0.60 per share cash dividend payable on May 22, 2023 to shareholders of record at the close of business on May 15, 2023.

Financial Highlights ($, in millions, except per share data)

Income statement highlights	F3Q23	F2Q23	F3Q22
Revenues	457.8	493.6	358.1
Enterprise Technology	373.6	417.4	295.0
Service Provider Technology	84.2	76.2	63.0
Gross profit	188.5	197.6	116.0
Gross Profit (%)	41.2%	40.0%	32.4%
Total Operating Expenses	55.0	52.4	53.4
Income from Operations	133.5	145.2	62.6
GAAP Net Income	98.6	112.2	50.4
GAAP EPS (diluted)	1.63	1.86	0.82
Non-GAAP Net Income	99.5	113.0	51.0
Non-GAAP EPS (diluted)	1.65	1.87	0.83

Ubiquiti Inc. Revenues by Product Type (In thousands) (Unaudited)
	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Enterprise Technology	$	373,573	$	295,043	$	1,217,279	$	972,173
Service Provider Technology		84,200		63,025		232,148		276,374
Total revenues	$	457,773	$	358,068	$	1,449,427	$	1,248,547

Ubiquiti Inc. Revenues by Geographical Area In thousands) (Unaudited)
	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
North America	$	230,741	$	183,575	$	683,907	$	579,711
Europe, the Middle East and Africa		173,262		135,227		568,502		498,836
Asia Pacific		26,880		26,455		116,158		102,152
South America		26,890		12,811		80,860		67,848
Total revenues	$	457,773	$	358,068	$	1,449,427	$	1,248,547

Income Statement Items

Revenues

Revenues for the third quarter fiscal 2023 were $457.8 million, representing a decrease from the prior quarter of 7.3% and an increase from the comparable prior year period of 27.8%. The decrease in revenues over the prior quarter and the increase from the prior year were both primarily driven by changes in revenue from our Enterprise Technology platform. Revenues from the Service Provider Technology platform increased compared to the prior quarter and the comparable prior year period.

Gross Margins

During the third quarter fiscal 2023, gross profit was $188.5 million. GAAP gross margin of 41.2% increased by 1.2% as compared to the prior quarter GAAP gross margin of 40.0% and increased by 8.8% as compared to the comparable prior year period GAAP gross margin of 32.4%. The increase in gross profit margin as compared to the prior quarter was primarily driven by lower shipping costs. The increase in gross profit margin as compared to the comparable prior year period was primarily driven by lower shipping costs.

Research and Development

During the third quarter fiscal 2023, research and development ("R&D") expenses were $38.2 million. This reflects an increase as compared to the R&D expenses of $33.8 million in the prior quarter and R&D expenses of $35.3 million in the comparable prior year period. The increase in R&D expenses as compared to the prior quarter and the comparable prior year period were both primarily driven by higher employee related expenses.

Sales, General and Administrative

The Company's sales, general and administrative ("SG&A") expenses for the third quarter fiscal 2023 were $16.7 million. This reflects a decrease as compared to the SG&A expenses of $18.6 million in the prior quarter and $18.2 million in the comparable prior year period. The decrease in SG&A costs as compared to the prior quarter was primarily due to lower credit card processing fees, marketing expenses and professional fees. The decrease in SG&A costs as compared to the comparable prior year period was primarily due to lower marketing expenses, professional fees and charitable contributions, offset, in part, by higher employee related expenses and credit card processing fees.

Interest Expense and Other, net

During the third quarter fiscal 2023, Interest expense and other, net expenses ("I&O") were $16.5 million. This reflects an increase as compared to the I&O expenses of $11.3 million in the prior quarter and I&O expenses of $3.3 million in the comparable prior year period. The increase in I&O expenses as compared to the prior quarter and comparable prior year period was primarily due to higher interest expense due to incremental borrowings and increased interest rates, offset, in part, by foreign exchange gains.

Net Income and Earnings Per Share

During the third quarter fiscal 2023, GAAP net income was $98.6 million and non-GAAP net income was $99.5 million. This reflects an increase in GAAP net income and non-GAAP net income from the comparable prior year period by 95.8% and 95.1%, respectively, primarily driven by higher revenues and higher gross profit. Third quarter fiscal 2023 GAAP earnings per diluted share was $1.63 and non-GAAP earnings per diluted share was $1.65. This reflects an increase in both GAAP and non-GAAP earnings per diluted share from the comparable prior year period of 98.8%.

Supply Constraints and Risks

We have experienced significant supply constraints caused, in part, by the COVID-19 pandemic. Our efforts to mitigate these supply constraints have included, for example, increasing our inventory build in an attempt to secure supply and meet customer demand, paying higher component and shipping costs to secure supply and modifying our product designs to leverage alternate suppliers. Although these mitigation efforts are intended to optimize our access to the components required to meet customer demand for our products, they have increased, and are expected to continue to increase, our balances of finished goods and raw material inventories. The increasing balance of finished goods and raw material inventory significantly increases the risks of future material excess, obsolete inventory and related losses. We believe that we are taking the right actions to mitigate these continuing supply constraints, however, we recognize the associated risks.

About Ubiquiti Inc.

Ubiquiti Inc. is focused on democratizing network technology on a global scale — creating networking infrastructure in over 200 countries and territories around the world. Our professional networking products are powered by our UISP 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, supply constraints, inventory balance and costs of finished goods and components, product design modifications, logistics related costs and delays 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 and we are subject to numerous U.S. export control and economic sanctions laws; costs related to responding to government inquiries related to regulatory compliance; our reliance on certain key members of our management team, including our founder and chief executive officer, Robert J. Pera; adverse tax-related matters such as tax audits, changes in our effective tax rate or new tax legislative proposals; whether the final determination of our income tax liability may be materially different from our income tax provisions; the impact of any intellectual property litigation and claims for indemnification; litigation related to U.S. securities laws; and social, economic and political conditions in the United States and abroad, including the impact of the military conflict between Russia and Ukraine. We discuss these risks in greater detail under the heading "Risk Factors" and elsewhere in our Annual Report on Form 10-K for the year ended June 30, 2022, and subsequent filings filed with the U.S. Securities and Exchange Commission (the "SEC"), which are available at the SEC's website at www.sec.gov. Copies may also be obtained by contacting the Ubiquiti Inc. Investor Relations Department, by email at IR@ui.com or by visiting the Investor Relations section of the Ubiquiti Inc. website, https://ir.ui.com/.

Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management's beliefs and assumptions only as of the date made. Except as required by law, Ubiquiti Inc. undertakes no obligation to update information contained herein. You should review our SEC filings carefully and with the understanding that our actual future results may be materially different from what we expect.

Ubiquiti Inc. Condensed Consolidated Statements of Operations and Comprehensive Income (In thousands, except per share data) (Unaudited)
	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Revenues	$	457,773	$	358,068	$	1,449,427	$	1,248,547
Cost of revenues		269,297		242,050		892,023		748,369
Gross profit		188,476		116,018	$	557,404	$	500,178
Operating expenses:
Research and development		38,210		35,261		104,633		100,181
Sales, general and administrative		16,741		18,151		52,080		50,302
Total operating expenses		54,951		53,412		156,713		150,483
Income from operations		133,525		62,606		400,691		349,695
Interest expense and other, net		(16,497)		(3,252)		(38,421)		(9,784)
Income before income taxes		117,028		59,354		362,270		339,911
Provision for income taxes		18,451		9,000		58,306		53,758
Net income	$	98,577	$	50,354	$	303,964	$	286,153
Net income per share of common stock:
Basic	$	1.63	$	0.82	$	5.03	$	4.61
Diluted	$	1.63	$	0.82	$	5.03	$	4.61
Weighted average shares used in computing net income per share of common stock:
Basic		60,441		61,411		60,432		62,089
Diluted		60,455		61,435		60,451		62,125

Ubiquiti Inc. Reconciliation of GAAP Net Income to Non-GAAP Net Income (In thousands, except per share data) (Unaudited)
	Three Months Ended						Nine Months Ended March 31,
	March 31, 2023		December 31, 2022		March 31, 2022		2023		2022
Net Income	$	98,577	$	112,205	$	50,354	$	303,964	$	286,153
Stock-based compensation:
Cost of revenues		24		13		18		47		63
Research and development		942		813		629		2,524		1,786
Sales, general and administrative		280		275		227		823		654
Partial recovery of investment previously impaired		—		—		—		—		(901)
Tax effect of Non-GAAP adjustments		(294)		(260)		(206)		(801)		(589)
Non-GAAP net income	$	99,529	$	113,046	$	51,022	$	306,557	$	287,166
Non-GAAP diluted EPS	$	1.65	$	1.87	$	0.83	$	5.07	$	4.62

Shares outstanding (Diluted)		60,455		60,448		61,435		60,451		62,125
Weighted-average shares used in Non-GAAP diluted EPS		60,455		60,448		61,435		60,451		62,125

Use of Non-GAAP Financial Information

To supplement our condensed consolidated financial results prepared under generally accepted accounting principles, or GAAP, we use non-GAAP measures of net income and earnings per diluted share that are adjusted to exclude certain costs, expenses and gains such as stock-based compensation expense, partial recovery of investment previously impaired and the tax effects of these non-GAAP adjustments.

Reconciliations of the adjustments to GAAP results for the periods presented are provided above. In addition, an explanation of the ways in which management uses non-GAAP financial information to evaluate its business, the substance behind management's decision to use this non-GAAP financial information, material limitations associated with the use of non-GAAP financial information, the manner in which management compensates for those limitations, and the substantive reasons management believes that this non-GAAP financial information provides useful information to investors is included under the paragraphs below.

Usefulness of Non-GAAP Financial Information to Investors

We believe that the presentation of non-GAAP net income and non-GAAP earnings per diluted share provides important supplemental information regarding non-cash expenses, significant items that we believe are important to understanding our financial, and business trends relating to our financial condition and results of operations. Non-GAAP net income and non-GAAP earnings per diluted share are among the primary indicators used by management as a basis for planning and forecasting future periods and by management and our board of directors to determine whether our operating performance has met specified targets and thresholds. Management uses non-GAAP net income and non-GAAP earnings per diluted share when evaluating operating performance because it believes that the exclusion of the items described below, for which the amounts or timing may vary significantly depending upon the Company's activities and other factors, facilitates comparability of the Company's operating performance from period to period. We have chosen to provide this information to investors so they can analyze our operating results in the same way that management does and use this information in their assessment of our business and the valuation of our Company.

About our Non-GAAP Net Income and Non-GAAP Earnings per Diluted Share

We compute non-GAAP net income and non-GAAP earnings per diluted share by adjusting GAAP net income and GAAP earnings per diluted share to remove the impact of certain adjustments and the tax effect of those adjustments. Items excluded from net income are:

Stock-based compensation expense
Partial recovery of investment previously impaired
Tax effect of non-GAAP adjustments, applying the principles of ASC 740

These non-GAAP measures are not in accordance with, or an alternative to, GAAP and may be materially different from other non-GAAP measures, including similarly titled non-GAAP measures used by other companies. The presentation of this additional information should not be considered in isolation from, as a substitute for, or superior to, net income or earnings per diluted share prepared in accordance with GAAP. Non-GAAP financial measures have limitations in that they do not reflect certain items that may have a material impact upon our reported financial results.

For more information on the non-GAAP adjustments, please see the table captioned "Reconciliation of GAAP Net Income to non-GAAP Net Income" included in this press release.

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Ubiquiti Inc. Reports Third Quarter Fiscal 2023 Financial Results