Jay Smith @jaynemesis: "//𝘗𝘢𝘳𝘵 𝟣 𝘰𝘧 𝟤 –..."

United Kingdom

//𝘗𝘢𝘳𝘵 𝟣 𝘰𝘧 𝟤 – 𝘚𝘦𝘦 𝘤𝘰𝘮𝘮𝘦𝘯𝘵𝘴 𝘧𝘰𝘳 𝘗𝘢𝘳𝘵 𝟤 $UI (Ubiquiti Inc) has been a favoured stock of mine for years, though it recently saw a valuation decline. Its Q3 2025 earnings, however, led to a 20%+ surge in share price. Let’s break down why and what’s next for the company. 𝙀𝙖𝙧𝙣𝙞𝙣𝙜𝙨 𝙃𝙞𝙜𝙝𝙡𝙞𝙜𝙝𝙩𝙨 Ubiquiti’s financials showed extremely strong growth: 𝑅𝑒𝑣𝑒𝑛𝑢𝑒: $ 664M (+34.7% YoY, +10.7% QoQ) 𝐸𝐵𝐼𝑇𝐷𝐴: $ 233M (+101% YoY, +27.5% QoQ) 𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒: $ 180M (+136.5% YoY, +31.9% QoQ) 𝑁𝑒𝑡 𝐷𝑒𝑏𝑡: $ 232M (-71.8% YoY, -26.9% QoQ) 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛: 34.2% (+4.4% QoQ) Despite Ubiquiti’s minimal investor communication (no earnings calls and no supporting documentation for investors), their balance sheet reveals some key shifts: 𝟷. 𝑍𝑒𝑟𝑜 𝑙𝑜𝑛𝑔-𝑡𝑒𝑟𝑚 𝑑𝑒𝑏𝑡 Their long-term debt decreased from $ 381M to $ 0M, while short-term debt grew from $ 37M to $ 339M. This suggests refinancing of their debt into short-term debt, with lower interest rates that could leave the company debt free within a year. 𝟸. 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑔𝑟𝑜𝑤𝑡ℎ I found it intriguing that inventory grew while revenue and profit margins expanded. Without margin and revenue growth this might be concerning, but I put this down to the company catching up to normal inventory levels after years of struggling to meet demand. 𝙄𝙢𝙥𝙧𝙤𝙫𝙞𝙣𝙜 𝙎𝙤𝙛𝙩𝙬𝙖𝙧𝙚 & 𝙄𝙣𝙩𝙚𝙜𝙧𝙖𝙩𝙞𝙤𝙣𝙨 Historically, Ubiquiti released great hardware first, sometimes without even utilizing the full potential with it’s own software. On top of this, the hardware was locked down, so no 3rd party software could interact with it. That’s finally changed with the new Alarm Manager feature for UniFi Protect. This enables custom automation like security alerts when a vehicle appears after hours or Slack notifications when an employee enters the office. Additionally, they’ve added API support—finally bringing deeper third-party integrations that users have requested for years. This demonstrates the company’s shifting priorities towards better interoperability and more advanced features that are sought after by larger customers. 𝙀𝙭𝙥𝙖𝙣𝙙𝙞𝙣𝙜 𝙋𝙧𝙤𝙙𝙪𝙘𝙩 𝙇𝙞𝙣𝙚 Ubiquiti has been aggressively expanding their product lineup, launching (among many other things): • 𝑊𝑖-𝐹𝑖 𝟽 𝑎𝑐𝑐𝑒𝑠𝑠 𝑝𝑜𝑖𝑛𝑡𝑠 • 𝑁𝑒𝑤 𝑠𝑒𝑐𝑢𝑟𝑖𝑡𝑦 𝑐𝑎𝑚𝑒𝑟𝑎𝑠 • 𝐴𝐼 𝐻𝑎𝑟𝑑𝑤𝑎𝑟𝑒 • 𝑀𝑜𝑟𝑒 𝑃𝑟𝑜𝑠𝑢𝑚𝑒𝑟 & 𝑆𝑀𝐵 𝑛𝑒𝑡𝑤𝑜𝑟𝑘𝑖𝑛𝑔 • 𝑀𝑜𝑟𝑒 𝐸𝑛𝑡𝑒𝑟𝑝𝑟𝑖𝑠𝑒-𝑙𝑒𝑣𝑒𝑙 𝑖𝑛𝑓𝑟𝑎𝑠𝑡𝑟𝑢𝑐𝑡𝑢𝑟𝑒 To simplify things, I’ll break down the key products by target market - Prosumer/SMB vs. Enterprise. 𝙋𝙧𝙤𝙨𝙪𝙢𝙚𝙧 & 𝙎𝙢𝙖𝙡𝙡 𝘽𝙪𝙨𝙞𝙣𝙚𝙨𝙨 𝙋𝙧𝙤𝙙𝙪𝙘𝙩𝙨 In previous posts about Ubiquiti I’ve highlighted their strong appeal to small businesses, and their growing dominance for small network and camera deployments. I even questioned the strategy of trying to push further into Enterprise, rather than doubling down to focus on Prosumers and Small-Medium Businesses. So I’m pleased to see their product lineup is still growing for this market. Their new AI Protect products are a highlight: • 𝐴𝐼 𝑃𝑜𝑟𝑡 This device adds AI-powered motion analysis, facial recognition & plate detection to legacy and 3rd party cameras. Something that may help onboard more customers who aren’t willing to replace all their cameras but want to benefit from AI features. • 𝐴𝐼 𝐾𝑒𝑦 This small device works as a local edge AI processor that enables natural language queries for Protect devices. For example: “Find someone in a red hoodie between 4–6 PM” “Transcribe the reception conversation between Mark & Alice” All processed locally, no subscriptions required—a major advantage over competitors. Each AI Key can analyze up to 1000 hours of smart detections, with an unlimited number of devices, so 1 Key is often enough for small-medium businesses. On the networking side: • 𝑈𝑛𝑖𝐹𝑖 𝐸𝑥𝑝𝑟𝑒𝑠𝑠 𝟽 Is a new compact router/access point perfect for home users or small deployments like retail units. • 𝐷𝑟𝑒𝑎𝑚 𝑅𝑜𝑢𝑡𝑒𝑟 𝟽 Is the next step up from the Express, it includes Protect support for cameras and has an SD card slot for video storage. Another good choice for home users or small deployments like retail units. They also introduced UniFi Play, marking a new audio-visual expansion. Their first product is an amplifier, this has use cases for prosumer & enterprise markets. I’m interested to see what other products are introduced to this lineup. //𝘌𝘯𝘥 𝘰𝘧 𝘗𝘢𝘳𝘵 𝟣 𝘰𝘧 𝟤 – 𝘚𝘦𝘦 𝘤𝘰𝘮𝘮𝘦𝘯𝘵𝘴 𝘧𝘰𝘳 𝘗𝘢𝘳𝘵 𝟤 𝘰𝘧 𝟤

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Ubiquiti Inc

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