Ubiquiti (UI) 9 Nov 172018 Q1 Earnings call transcript

Good morning and welcome to the Ubiquiti Networks First Quarter Fiscal 2018 Conference Call. [Operator Instructions] I would now like to turn the conference over to Ms. Laura Kiernan. Please go ahead.

Good morning, ladies and gentlemen, welcome. our joining for you call today. Thank Robert with Pera, Chief Chairman. and Officer Executive I’m like you just started, I to And would remind of Safe of the before Harbor statements. some get we

this during actual a most statements Presentations on obligation unknown uncertainties will expressed perspectives the Q&A-only. from risks call. to we’re no this November our results, section prepared These and management contained and recent and financial in results that on materially these are review forward-looking market of future forward-looking those call to statements And of and Some are is on make the during Xth, XX-K. subject to to statements update statements, Information our on our call are today, differ chance we as this factors the including conditions which filing competition. Events had cause remarks, uncertainties of and Form products, them. assume could constitute And posted known website. and We we our risk making you’ve is hope

to yourself limit questions. we we for time now questions; follow-up questions. please So, Operator, will allow are ready permitting, for two

the comes JMP question-and-answer Instructions] We will Suppiger question Securities. today [Operator begin first from Please The go session. with Erik ahead.

question. Thanks points the of for taking here. Couple

for December quarter the outlook Your is revenues. for flat relatively

provided? do terms so current December adjusting uptick they to that the from here discuss bit to migrating of distributors their inventory curious warehouses Where about times little are terms reflect introduced those in warehouses Can And why in in I’d a seasonally, see to distributors think of are are you some you your think would a warehouses see can stock lead those you’ve I where and seasonal uptick. think you you that then, ordering inventory. you understand, we the that starting be quarter? levels secondly, do your

quarter best say this in like the quarter for is probably question. to I’d our the Thanks history.

well years. really better side, in executing the on R&D much than previous We’re

I think this is noticeable to end users. our

said say, variation, will of I And a guidance removing going from quarter-to-quarter [ph] to good I reason, and quarter-to-quarter have for continue objects that next As start of long-term we’re conclusions opportunity. for and our always quarterly fiscal year. to because variations is reflection not drawing

I think, in this best our and I’m pretty to best our But, lot quarter have of history was quarters of a ahead the are do. we still confident us. work

and in I take As for our I look three our business three supply step in you grade a chain our areas. -- operations logistics back, if and at execution, business

is So, model business vision. first our and

at we’re think I the peer top group in area. our of that

the area And in The we and is it’s up say strides and responsible in for our execution area, recently growth capabilities. our design coming second our that R&D and growth huge made I our would future.

lot at And perfect. I of our some demand. when see service base I the sales start channel true is look they picture think you’ll operations, I as and area matching you very third -- our have that customer once weakest not lot things it’s opinion I -- of why The chain quarter-to-quarter the is them reason of can’t our classify and supply margins, to in area improve become channel our chain, think obvious at our results our improving I’m the still to of our business. operations, these sales area. look fully I our better, to create committed interesting. of think us work There sales a a our these the We we my that supply business, address area expect would very I And with think, because to you variations, do. execution. that’s imperfect

the of And bring those true a we to to ought in so, have I operationally we year. still put improve line personally that’s our objects results think bit focus in one, this for priority we next down and little me business to head between demand. and quarter-to-quarter better a And with number mismatch probably have And our reality.

your this operational When introduction, like your you closer to was of to say the want product perspective getting be? you chain making best feel you you quarter supply that you’re improvements are history, where feel you you do cycle from or in kind to the are referring product the like and

pretty the at are Well, the numbers, if good. you look numbers

$X rate to right now. close billion run We’re

We XX% have operating expenses. upto back

in generation turning new up. We the operator with LTU both believe airMAX are just about I space corner disruption is pick AC phase X; technologies the of second our within to

have fiber. We GPON

look gateways; software we’re security UniFi-ACs end the is world, to UniFi starting is higher which at You evolving. rapidly introduce

out adjacent corner. good video with small rounding is of the technologies, which of enterprise platform to is business. years We’re Ubiquiti pretty then, Labs, like be it’s was new bet a going looking couple ago And turning a a now kind

Intelligence. comes Bloomberg question go next Please with Jin Ho Woo from The ahead.

questions. for Great, thanks your Robert And last my think you it addressed I commentary. in taking

guidance Just $X.XX $X your for for billion are you year? clarification, the billion reaffirming

believe range. still we’ll that I hit Yes.

from was Okay. there than products XXXX. back upon drivers? revenues probably dynamics then second the growth but it umber about was -- ago, that’s ever dynamic we is And about you first of And growth. second on then, some from done this guidance, how to it moment existing hockey mean, Company best half what XX% for need half since to different back that we You as sort start well? And I But, lot is understand pricing ramp the the products, today then. going or I over should touched than thinking stick drive think it based the growth your a that’s half that you’ve what quarter. new just hit or a hit one, should record up you’ve

continues to If becoming in really system it’s standard the world, and upper almost be UniFi -- a because and product I business, picked markets new new hotel serious starting introduce it’s And I a small, think the to get up expansion it’s combination. the see enterprise. by credibility think would it’s we the just medium in some deployments, you didn’t integrators. UniFi

the airMAX we’re plan that to in really pretty going most the we’re course, for start UniFi on But, our even -- to end release year. goes And like a And new ship they of our before product, very the X introduced product; LTU. the and of have aggressive click. we to pretty stacked we high performance we before world, in think have UFiber. products. the It’s Of We AP it’s icing the it’s probably Same a competitive. cost initial things cake, disruptive if gen early I very year. that’s follow-on, not priced; with end

it’s combination. So, a

product benefit we expansion. operator think expansion, then and and integrator I also from system

then to or the should are to especially revenue? board align starting the $X my thinking help me users revenue, you the from for Okay. the in like given alignment million billion about Ubiquiti X-K follow-on, help this registered that the it deliver understand how filing X looks for morning, me you of substantially Community And you XXX,XXX. I in of registered number between number start reduced users Could the just to

like sounds are shorts getting Yes. you’re It nervous.

really that So, that critical of number think is I an observation. don’t

But our and total up community sessions engaged users. ever. more is IR user than Our people regardless, user mixed

where to more you the back just R&D compare have excitement -- overall. it’s engagement. executing two a And the We say more in if more for community it of as improvement three nearly features, at stories, wasn’t years our my opinion, higher or requests in level, huge it quality

the floor I’ll leave I more have for but questions, Okay. others.

Sure.

The next question [ph] from James. Mike Raymond with go comes ahead. Kobin Please

question. This my for Mike Thanks McCourt. Tavis is taking on [ph] Hi. for Kobin

Just I just two kind to of understood. make sure -- want I

feel way, numbers do you given in are You good that feel same the you’ve still range. said, Is as the that out you revenue EPS about well? confident -- you

Next question?

And…

question The next Tim from Capital. with BMO Long comes

you. if I Robert. could, Thank Two

little about or up model, to talk a and internal Silicon Valley access you mentioned market? about focus working First, you give how -- with talk with the an could then, you it’s up little Obviously, or to whether that’s product some larger you’ve doing move on go-to-market us gone does to secondly, in the to continue just that the accounts. What less it you you talent Could And take you better side? think more for Can pipeline? you. product investment? area. about bit move on bit a of more out distributed engineering a to that just update of talk Thank

we had We cost low as we Sure. one UniFi manage capability great the I But gave for Good performance control struggled improving the just things its the price corner start years APs. going last with ago breakout. years, a questions. that’s and well. is And think of UniFi in the upstream. in And we gave them UniFi the centrally plane. couple did is I’ll first we few what we really and a years okay, several in to performance few turned I and think first. the launched And

able of we past And the that’s regardless which the I fees. Security this the could computers the something a some in we’re ACAPs. our driver were cloud. about added technology. really called and as think requirement that also gateway to best capability with next XX having very removed those a support then added we the level. your talked light serves ACAPs guess We fabric not as or or we something we a switches a access really the fees a to and really And market UniFi disguise solution the performance, just cloud And used and called really just And Key all it’s and cloud we really APs hybrid low running gives the in industry. to the device shortcoming cost of the the but having without that well, high-end -- being expand performance cost, network remote cloud solution offering all to PoE Cloud the and performing cloud of to I it’s switch the now a small really pretty the So, I And disruptive solved that platform to exposing plug embedded improved XX of you without from the us Gateway in the took software locally. wireless have cloud think we’ve whole the weight maybe year, control

think addition these believe And we place things I where our interesting new very we’re add, could have in expansion, maybe taking service overall expansion, higher UniFi now even on opportunity towards products, data to a centers. at add like just working and stadiums a to I we end and we’re evangelism very could higher nice levels. products. So, services we both, targeted And margin for

your upstream. you UniFi a going that’s can am me so again? I And remind sorry second question,

that’s going? how Around engineering and and and access distributive the model talent to

Okay.

other and really So, very going And good going in to to and weather is or Silicon tough my and time to myself go the places teams need their a little them. believe to do market. adversity that aren’t, like space the in bubble run. able And it’s in adversity, I it’s through go be going where And we market, the or for you’re is the sports run. you guys guys down, to long-term. something our to the through we be technology teams of run. ago, assured and move. storm my a it there right right long take employer’s find I all now I you we’re very are invest think several the guess, leaders because make invest that the Company in out sit by competing an the and it’s distracted And are storm that guys going you’re I And rare teams, And, lot And AmpliFi. in think made the long it was to I could And an to building that are into decision need I to weather long And was around, in in like in this Valley the in it’s strategically is It’s for going invest in it’s time a employee’s years something bit to differences money in like -- really competition, build question. a Valley, these not and for to opinion, are have invest opportunities take of areas and like sure it I I to going committed that going opinion, hard. could when R&D war. into and rest be

than looking or but executed a we’re X% Android at team. X% have a which blueprint funding. at was something incredible Now, XXX because have business stuck downloads. of even And all our could in we’ve with higher AmpliFi is tens that employees a wasn’t is eero, guys opinion we’re we a my And of done selling I we we well, like and have leverage. and and gotten And of Ubiquiti company, which dollars just startup millions it they lot it it incredible was better, appears -- eight the model

to business and should very just and done enterprise in that work with it as believe, have the market, I And And things is so the work high And innings have HR. to operator future do we it’s if But, think so, I culture. I consumer things, think I to our our high we’ve fit run can really this the better do easy we that, scale job And way. do believe of I we’re product applied selecting a long very market. to tough model the again very of Ubiquiti. proving at certain upfront a engineers it we in as I not standards. applied bright. ship I we the have a we could early be market, standards.

Please next comes from go Lynch. America Liani, The of you. Paulina question with Bank Thank ahead. Merrill

Hey, it’s Bartus a have this behalf Robert. of taking Thanks on questions. Hey, for Bank more questions of two and America, Tal Liani related but then I clarification. product Tal. with the Dan

interest about So, looks ask did it product. to I like first, want airCube; an

And just if a is are doing can incremental walk in completely opportunity, this customers your So, currently mind? what maybe there? WISP your you through

Sure.

the tens the is a us deploy customer-premises airMAX because millions to -- airMAX are of airCube proprietary And essentially these that to our they have for of problem customer’s equipment around So, airMAX Ethernet with of their inside AP. today, opportunity to house or have top WISP good And a inside a world. CPEs, signal which CPEs on Wi-Fi house bridge Wi-Fi Ethernet rooftops apartment. wireless the we goes

the it because operators stable the up own operator’s whether or has select and have the their and if responsibility, it house to Wi-Fi a they a problem, select Now, on not. dilemma and not that’s like the leave AP they customer locks becomes one

they range, okay deploy but good because did along power the their airGateway, that ago And range Wi-Fi so, lot several operators our service as aggressive, our which tried diminished these that with it something most monitor WISPs for could solution put a really want their didn’t part we to a experience. is And the furthermore, these wireless network. from provider years they of power And CPE, opinion. was of really this a do the airMAX it any further was to and to I It and unfortunately, getting cool it so customers. into concept a my Wi-Fi be going into benefits thought it plugged monster second supply closets went operators wasn’t felt And enough the and that with attempt supplies hit. And airCube very call cost range. amplified we’re design

with volume the we set, goes. price it now, Network Management Ubiquiti year see point, it We’ll it feature could a right we for integration say have think us. And should think per what runner dollar Hard to be I hit be I how of but tens UNMS. millions think of call System, opportunity. to a I

being now. it’s for strong UniFi cycle, Sounds And on the good. AC a while

kind trying driver of for I’m the hands next to So, get around that. growth just my what’s big

coming that seen you -- of the cost to even the that disruptive increases. is think product new kind year? for we’ve continue, end instance, of seen So, that ASP that’s out that we’ve going with Do

with switching I got it definitely AC improves GPS we’ve for backward it a with AP. to by point that the is -- networks existing opportunity out compatibility just UniFi The see

we greatly we’ll to get going a can opportunity the -- we applications higher if Because we’ll of the -- expand is tens millions products to internet slightly also have upgrade it’s out challenge. have a lot ASP on, new have Now, do replacements of of at opportunity which built operators CPEs, higher think and because believe ASP but I there. because it’s of having being used, been revenue. being to which their bandwidth a And huge I of individual out essentially demands them have radios the networks

the improved at it’s think robust. very we’ve airMAX the AC where point I and finally protocol

see introduce, you’ll it lowest probably, us and right, be CPE replacements. So, targets this our in specifically I ACCP towards think is cost airMAX will and

these maybe couple very a going and to can evangelism essentially In some with within UNMS believe system be or And UMobile few seconds addition, is good CPEs in the we next plan cloned we’re rally the of around deployed where we that and have in minutes. months. new the field now

excited so, opportunity. that about And I’m

Okay. be getting quarterly then And guidance you Are plans. just giving just is it… to full quick or clarification on going and the targets not year guidance

Correct.

So, year, point guidance end we’ll forward, quarterly fiscal be the just next and this at guidance. giving the year of fiscal we’ll stop from that

right, All thanks. Okay.

This Pera like turn to the conference closing for concludes I to Mr. session. Robert any over back our question-and-answer would remarks.

from remarks No me.

you. Thank

you. Thank

now conference presentation. concluded. for attending is This today’s Thank you

now may disconnect. You