Executive Summary
Ubiquiti Inc delivered a resilient QQ3 2024 result characterized by mid-single-digit revenue growth and solid operating profitability, supported by robust operating cash flow and meaningful free cash flow production. Revenue totaled $492.997 million, up 7.69% year over year and 6.03% quarter over quarter, while net income reached $76.29 million and diluted EPS $1.26. The company generated $163.85 million of operating cash flow and $160.62 million in free cash flow, underscoring strong cash generation despite heightened leverage.
From a balance sheet perspective, total assets stood at $1.2238 billion with total liabilities of $1.1979 billion and shareholders’ equity of approximately $25.9 million, leaving net debt of about $824.5 million. Leverage remains a material consideration, with long-term debt at $876.5 million and a long-term debt-to-capitalization ratio near 0.97, indicating reliance on debt financing relative to equity. Nevertheless, the company exhibits healthy liquidity metrics (current ratio ~3.95, cash balance ~$102.5 million) and a solid cash conversion profile (operating cash flow to revenue around 0.33). The near-term profitability remained buoyant (operating margin ~22.6%, EBITDA margin ~23.6%), though gross margin eased modestly year over year. For investors, the key takeaway is a company generating substantial FCF and operating cash flow to support debt service and potential deleveraging, while continuing to invest in growth initiatives and product platforms in a competitive technology hardware market.
Key Performance Indicators
QoQ: -8.16% | YoY:-16.70%
QoQ: -7.09% | YoY:-22.61%
QoQ: -7.35% | YoY:-22.70%
Key Insights
Revenue: $492.997m; YoY +7.69%, QoQ +6.03%
Gross Profit: $174.100m; Gross Margin: 35.31% (YoY -7.63%, QoQ -2.00%)
Operating Income: $111.223m; Operating Margin: 22.56% (YoY -16.70%, QoQ -8.16%)
Net Income: $76.29m; Net Margin: 15.47% (YoY -22.61%, QoQ -7.09%)
EPS (Diluted): $1.26; YoY -22.70%, QoQ -7.35%
EBITDA: $116.293m; EBITDA Margin: ~23.59%
Cash Flow: Net cash from operating activities $163.852m; Capex $3.232m; Free cash flow $160.620m
Liquidity/Leverage: Cash & equivalents $102.487m; T...
Financial Highlights
Revenue: $492.997m; YoY +7.69%, QoQ +6.03%
Gross Profit: $174.100m; Gross Margin: 35.31% (YoY -7.63%, QoQ -2.00%)
Operating Income: $111.223m; Operating Margin: 22.56% (YoY -16.70%, QoQ -8.16%)
Net Income: $76.29m; Net Margin: 15.47% (YoY -22.61%, QoQ -7.09%)
EPS (Diluted): $1.26; YoY -22.70%, QoQ -7.35%
EBITDA: $116.293m; EBITDA Margin: ~23.59%
Cash Flow: Net cash from operating activities $163.852m; Capex $3.232m; Free cash flow $160.620m
Liquidity/Leverage: Cash & equivalents $102.487m; Total debt $927.011m; Net debt $824.524m; Current ratio 3.95; Interest coverage 5.89x
Balance Sheet: Total assets $1.2238b; Total liabilities $1.1979b; Total stockholders’ equity $25.873m
Cash Flow Profile: Operating cash flow conversion ratio ~0.33; Free cash flow per share $2.66; Operating cash flow per share $2.71
Valuation Signals: Price-to-earnings ~22.81x; Price-to-sales ~14.12x; Price-to-book ~269.06x; Dividend yield ~0.52%
Working Capital: DSO 34.24 days; DIO 192.95 days; Inventory turns 0.466x; Inventory level ~$533.5m; Inventory build appears aligned with demand tailwinds and lead times in a hardware component market
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
493.00M |
7.69% |
6.03% |
| Gross Profit |
174.10M |
-7.63% |
-2.00% |
| Operating Income |
111.22M |
-16.70% |
-8.16% |
| Net Income |
76.29M |
-22.61% |
-7.09% |
| EPS |
1.26 |
-22.70% |
-7.35% |
Key Financial Ratios
operatingProfitMargin
22.6%
operatingCashFlowPerShare
$2.71
freeCashFlowPerShare
$2.66
dividendPayoutRatio
47.6%
Management Commentary
Note: The earnings transcript data is not provided in the source material. No management quotes or themes from an QQ3 2024 earnings call are available here to cite directly. The analysis below integrates only the disclosed financials and ratio data; when a transcript becomes available, the highlights can be updated to reflect management commentary on strategy, execution, and outlook.
Forward Guidance
There is no explicit forward guidance included in the provided data for QQ3 2024. Informed by the quarterly results, the near-term outlook hinges on balancing revenue growth with margin preservation while managing leverage. Potential drivers include continued demand for Ubiquiti’s enterprise and service-provider networking platforms (e.g., UniFi, EdgeMAX, airMAX/airFiber ecosystems), ongoing penetration of SMB and mid-market deployments, and the potential monetization of cloud-managed solutions. Risks include macro technology capex softness, competitive intensity from Ethernet/wireless providers, and the high debt burden limiting financial flexibility. Scenarios:
- Base case: Moderate top-line growth supported by stable demand, with gross margins stabilizing in the mid-30s and operating leverage improving as core platforms scale, enabling deleveraging from FCF of ~$160–170m per quarter trajectory.
- Upside: Strength in enterprise networking adoption, higher-margin software/cloud offerings, and effective working capital optimization could lift margins and accelerate debt reduction.
- downside: A downturn in technology capex or supply chain disruptions could pressure revenue and margins, constraining FCF and delaying deleveraging. Key factors investors should monitor: revenue growth rate, gross and operating margins, free cash flow generation, debt levels and refinancing risk, inventory management, and any changes in capital allocation strategy (dividends vs. debt paydown vs. strategic investments).