~ Revenues of $498.1 million ~

~ GAAP Diluted Earnings Per Share of $1.54 ~

Ubiquiti Inc. (NYSE: UI) ("Ubiquiti" or the "Company") today announced its financial results for the first quarter fiscal 2023, ended September 30, 2022.

First Quarter Fiscal 2023 Financial Summary

• Revenues of $498.1 million
• GAAP diluted EPS of $1.54
• Non-GAAP diluted EPS of $1.55

Additional Financial Highlight

• The Company's Board of Directors declared a $0.60 per share cash dividend payable on November 21, 2022 to shareholders of record at the close of business on November 14, 2022.

Income Statement Items

Revenues

Revenues for the first quarter fiscal 2023 were $498.1 million, representing an increase from the prior quarter and the comparable prior year period of 12.4% and 8.5%, respectively. The increase in revenue over both periods was primarily driven by our Enterprise Technology platform. The revenue from the Service Provider Technology platform declined when compared to the prior quarter and the comparable prior year period. While revenues for the first quarter fiscal 2023 increased when compared to both periods, our revenues continue to be negatively impacted by our inability to fulfill demand due to the global component supply shortage.

Gross Margins

During the first quarter fiscal 2023, gross profit was $171.4 million. GAAP gross margin of 34.4% decreased 11.2% versus the comparable prior year period GAAP gross margin of 45.6% and decreased 3.9% versus the prior quarter GAAP gross margin of 38.3%. The decline in gross profit margin as compared to the comparable prior year period was primarily driven by changes in product mix, higher component costs and shipping costs. The decline in gross profit margin as compared to the prior quarter was primarily driven by changes in product mix and higher component costs.

Research and Development

During the first quarter fiscal 2023, research and development ("R&D") expenses were $32.7 million. R&D expenses were consistent with the comparable prior year period expenses of $32.1 million and decreased as compared to R&D expenses of $37.4 million in the prior quarter. The decrease in R&D expenses as compared to prior quarter was primarily driven by lower prototype testing expenses.

Sales, General and Administrative

The Company’s sales, general and administrative ("SG&A") expenses for the first quarter fiscal 2023 were $16.7 million. This reflects an increase as compared to the SG&A expenses of $15.7 million in the comparable prior year period and a decrease as compared to the SG&A expenses of $19.6 million in the prior quarter. The increase in SG&A costs as compared to the comparable prior year period was primarily due to higher webstore credit card processing fees and professional fees, offset, in part, by lower marketing expenses. The decrease in SG&A costs as compared to the prior quarter was primarily due to lower professional fees and marketing expenses.

Interest Expense and Other, net

During the first quarter fiscal 2023, Interest expense and other, net expenses ("I&O") were $10.7 million. This reflects an increase as compared to the I&O expenses of $3.8 million in the comparable prior year period and $8.0 million in the prior quarter. The increase in I&O expenses as compared to the comparable prior year period and prior quarter was primarily due to higher interest expense due to incremental borrowings, increased interest rates and foreign exchange losses.

Net Income and Earnings Per Share

During the first quarter fiscal 2023, GAAP net income was $93.2 million and non-GAAP net income was $94.0 million. This reflects a decrease in GAAP net income and non-GAAP net income from the comparable prior year period by 30% and 29%, respectively, primarily driven by lower gross margin. First quarter fiscal 2023 GAAP earnings per diluted share was $1.54 and non-GAAP earnings per diluted share was $1.55. This reflects a decrease in both GAAP and non-GAAP earnings per diluted share from the comparable prior year period of 27%.

Global Component Supply

During the three months ended September 30, 2022, we continued to experience a disruption in our supply chain as a result of the COVID-19 pandemic and the global shortage of available components. The current environment has resulted in our inability to fulfill customer orders and has increased our cost base as we have incurred, and we continue to incur, additional costs to expedite deliveries of components and services. Our future results are dependent on our ability to procure components and services and we expect the Company's results to be negatively impacted until the ongoing supply chain and logistics issues caused by the global component supply shortage and the COVID-19 pandemic are resolved.

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, global component supply, 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.

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 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
• 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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