Ubiquiti Revenue Jumps 50% in Fiscal Q4

Key Points

• Revenue jumped nearly 50 % year over year to $759.2 million and beat analyst estimates by a wide margin.

• Operating margin and GAAP net income surged, driven by higher gross margins and a one-time tax benefit.

• Management reaffirmed a quarterly dividend and announced a new $500 million share repurchase program.

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Ubiquiti (NYSE:UI), a global networking technology company best known for its internet infrastructure hardware and software, reported results for the fourth quarter of fiscal 2025 on August 22, 2025. The period featured standout performance, with GAAP revenue of $759.2 million far surpassing both last year's levels and analyst expectations. Operating metrics, including gross margin and GAAP net income, rose sharply. GAAP revenue totaled $759.2 million, compared to a GAAP estimate of $517.36 million. Non-GAAP earnings per share reached $3.54 versus an estimate of $2.14. The results, which also included expanded margin and exceptional net income growth, reflected a strong period for the company and its core business segments.

Source: Analyst estimates for the quarter provided by FactSet.

Ubiquiti's Business Profile and Growth Drivers

Ubiquiti (NYSE:UI) is a networking technology company focused on designing, manufacturing, and selling wireless communications products for enterprise and internet service provider markets. It delivers network equipment, cloud-enabled management systems, and related software solutions, serving customers across more than 75 countries.

A core feature of its approach is its non-traditional business model. Rather than employing a large direct sales force, it relies on community-driven marketing, web-based distribution, and a global network of partners. The company’s success depends on proprietary technology platforms, robust brand loyalty driven by its user base, continuous innovation through research and development, and close management of its global supply chain.

Quarter in Review: Key Results and Drivers

Revenue reached a record for the company in the fourth quarter. The Enterprise Technology segment, which includes products for enterprise networking such as the UniFi hardware and software platform and UISP tools for internet service providers, delivered the vast majority of growth in the fourth quarter and throughout FY2025. Enterprise Technology revenue jumped 57.6% compared to the fourth quarter of fiscal 2024. Service Provider Technology saw growth of 2.7% compared to fiscal 2024.

Gross margin, a measure of profit made on each dollar of sales before other operating costs, rose to 45.1%. This represented both a sequential improvement from the prior period and a sizeable increase compared to last year. The gross margin improvement (GAAP) stemmed from a favorable product mix and lower inventory and shipping expenses, partially offset by higher tariffs. Lower inventory and shipping expenses also contributed, although higher tariffs continued to weigh on profitability.

Revenue in North America climbed to $379.9 million on a GAAP basis, compared to $253.3 million in the fourth quarter of fiscal 2024, a 50% increase. Europe, the Middle East, and Africa brought in $303.8 million (GAAP), compared to $194.1 million in the fourth quarter of fiscal 2024, growing 56.5%. Asia Pacific revenue was $47.3 million, compared to $32.1 million in the fourth quarter of fiscal 2024, a 48% increase. The company's customer base remained highly diversified, with no single customer contributing more than 10% of total revenue.

Operating expenses moved higher, reflecting scale and ongoing investments. Research and development expenses were $47.5 million, compared to $44.1 million in the fourth quarter of fiscal 2024. Selling, general, and administrative costs (GAAP) grew more quickly, up 56% to $33.9 million, mainly attributed to higher customer-facing costs such as payment processing, receivable reserves, broader marketing, and professional fees. Income from operations increased 89.0% year over year as higher sales more than offset expense growth.

Net income, the company’s bottom-line profit, grew 156.9% year over year to $266.7 million. This result was boosted by a one-time benefit of $53.7 million related to deferred tax assets following an intangible property realignment. Excluding this item, non-GAAP net income increased more than 100%, indicating robust underlying profit growth. On a per-share basis, GAAP diluted earnings rose to $4.41 versus $1.72 in the fourth quarter of fiscal 2024, Non-GAAP diluted earnings per share increased to $3.54 from $1.74 in the fourth quarter of fiscal 2024.

Capital allocation also featured prominently. The board authorized a new $500 million share repurchase program, as disclosed in the Form 8-K filed on August 22, 2025. The company maintained its regular quarterly dividend of $0.80 per share, as it continues its approach to returning capital to shareholders.

Business Model and Strategic Focus

The company’s business model emphasizes online sales and community-driven engagement instead of a conventional direct sales team. It continues to benefit from global reach and rapid scalability while maintaining a disciplined cost structure. The well-diversified revenue base—with more than 75 countries served and no major revenue concentration—mitigates market and customer risk.

Proprietary platforms such as UniFi (enterprise systems featuring network switches, access points, and cloud-managed controllers) and UISP (software and hardware solutions for internet service providers) underpin growth for the company. These platforms combine hardware with proprietary operating systems and management software. R&D remains central, supporting continuous product refreshes and expansion into new segments, as seen in the sustained increase in development spending, which rose from $145.2 million in fiscal 2023 to $159.8 million in fiscal 2024 and $169.7 million in fiscal 2025. The company’s attention to supply chain continuity and manufacturing partners, mainly located in Asia, remains a risk and a critical area for ongoing management focus, with tariffs and international sourcing highlighted as continuing headwinds.

Looking Ahead: Guidance and Investor Focus Points

Management did not provide forward guidance for fiscal 2026 in this earnings release. meaning investors will need to rely on the data and trends reported this quarter, as well as updates in future filings and presentations. The company intends to pay regular quarterly cash dividends of at least $0.80 per share during each quarter of fiscal 2026, although all subsequent dividends are subject to final determination by the Board each quarter.

In the absence of detailed forward guidance, factors investors may want to watch include the pace of operating expense growth, gross margin stability, ongoing effects from tariffs, and the impact of sustained R&D investment. Management introduced a new $500 million share repurchase program, as disclosed on August 22, 2025, expanding its capital return toolkit for upcoming periods. As products in the Enterprise Technology segment continue to drive overall business performance, ongoing innovation and successful navigation of supply chain risks will be important variables for future quarters.

The company declared a $0.80 per share cash dividend payable on September 8, 2025, and intends to pay regular quarterly cash dividends of at least $0.80 per share during each quarter of fiscal 2026, subject to Board approval.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Motley Fool Markets Team is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. The Motley Fool takes ultimate responsibility for the content of these articles. Motley Fool Markets Team cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool recommends Ubiquiti. The Motley Fool has a disclosure policy.