Ubiquiti Inc. · NYSE:UI
Ubiquiti — Ubiquiti Networks — Investor Presentation (November 2017)
43 slides from Ubiquiti's investor presentation, Nov 9, 2017
Slide 1: Investor Presentation November 2017
Investor Presentation November 2017
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation 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 inclu
Slide 3: A Different Kind of Networking Technology Company With a Successful, Disruptive Business Model
A Different Kind of Networking Technology Company With a Successful, Disruptive Business Model 1. Diluted EPS for the fiscal year ending June 30, 2013 of $0.89 through the fiscal year ending June 30, 2017 of $3.09 3 Underserved & Underpenetrated Innovative, high performance, easily deployable Up to
Slide 4: The Ubiquiti Story
T H E U B I Q U I T I S T O R Y Disruptive Business Model. Delivering High Performance 4 A high performance company Disruptive business model Two growth segments Long growth runway Copyright © Ubiquiti Networks, Inc. 2017
Slide 5: At a Glance: Two Segments. Strong Global Footprint
A T A G L A N C E Two Segments. Strong Global Footprint Year Ending June 30, 2017 5 Revenue Breakdown $865M Key Metrics (Consolidated) By Product Mix By Geography >200 >100 62% ~60% $485M2 Countries & territories Distributors Sales outside N. America Employees in R&D ~$5B Stock repurchases Market ca
Slide 6: Global Exposure to Rapidly Growing Markets
Global Exposure to Rapidly Growing Markets • 62% of Ubiquiti’s revenue from outside N. America. • Serving fast growing and underserved & underpenetrated markets 6 Revenue Breakdown by Region ‐ Fiscal 2017 38% N. America 12% S. America 39% EMEA 11% Asia Pacific Copyright © Ubiquiti Networks, Inc. 201
Slide 7: A Company on the Move
A Company on the Move 7 2005 ‐ 2011 2011 ‐ 2016 2017+ • Built disruptive business model – targeted initial market • Expanded into adjacent markets – leveraged low operating cost model • Long growth runway – multiple opportunities Copyright © Ubiquiti Networks, Inc. 2017
Slide 8: Success in Initial Target Market Demonstrated Power of Our Business Model
• Targeted and transformed wireless broadband in underserved markets • Superior product at disruptive price • Shipped 45+ million airMAX® units to ~60 countries (life‐to‐date) Success in Initial Target Market Demonstrated Power of Our Business Model 8 Built $2B airMAX® business Copyright © Ubiquiti
Slide 9: Expanded into Adjacent Markets that Leveraged Core Expertise
Expanded into Adjacent Markets that Leveraged Core Expertise 9 Ubiquiti Platform Target Market Total Addressable Market1 UniFi • Enterprise Wi‐Fi (AP, Switches, Routers) $30B UniFi Video • Video Surveillance $ 5B AmpliFi • Consumer Home Wi‐Fi $4B EdgeMax • Carrier Routing and Switching $ 4B airFiber
Slide 10: Ubiquiti Networks Provides an Integrated End-to-End Solution
Enterprise Technology Broadband Utilization Ubiquiti Networks Provides an Integrated End‐to‐End Solution 10 Service Provider Technology “Last Mile” Solutions Consumer Technology Wi‐Fi Mesh Home Wi‐Fi Mesh Systems Wireless Backhaul Edge Routing Point‐to‐ Multipoint Copyright © Ubiquiti Networks, Inc.
Slide 11: Successful Revenue Growth in Targeted Markets
Successful Revenue Growth in Targeted Markets 11 FY '13 FY '14 FY '15 FY '16 FY '17 $865M $321M $573M $596M $666M 28% CAGR Enterprise Segment Service Provider Segment Copyright © Ubiquiti Networks, Inc. 2017
Slide 12: Results: An Unusual Combination – Disruptive Model + Highly Profitable
Results: An Unusual Combination – Disruptive Model + Highly Profitable 12 $321M $865M 2013 2017 Fiscal Period Revenues ($M) EPS1 ($) $0.89 $3.09 2013 2017 Fiscal Period $152M $348M 2013 2017 Fiscal Period Net Cash ($M) 2.7X 3.5X 2.3X 1. Diluted Copyright © Ubiquiti Networks, Inc. 2017
Slide 13: The Ubiquiti Story
T H E U B I Q U I T I S T O R Y Disruptive Business Model. Delivering High Performance 13 A high performance company Disruptive business model Two growth segments Long growth runway Copyright © Ubiquiti Networks, Inc. 2017
Slide 14: A Disruptive Business Model
A Disruptive Business Model 14 1. Target underserved and underpenetrated markets 2. Deliver innovative, high performance products 3. Low cost operations and new product development 4. Disruptive pricing 5. Unmatched financial profile The Ubiquiti Community Copyright © Ubiquiti Networks, Inc. 2017
Slide 15: At the Center: The Ubiquiti Community
A T T H E C E N T E R The Ubiquiti Community – A Core Competitive Advantage 15 3M 230K 11M Registered user visits Private message views All user visits1 Calendar Year 2016 Key Metrics FORUMS 1.3million posts2 STORIES 1,400 posts2 25 8 39 2 173K New registered users 1. Includes anonymous and register
Slide 16: Advantages of Ubiquiti Community
A T T H E C E N T E R Advantages of Ubiquiti Community 16 Highly engaged and loyal evangelists Drives market awareness, avoids the cost of a direct sales force Real‐time feedback to R&D teams faster, lower cost product development Scalable and self‐sustaining Copyright © Ubiquiti Networks, Inc. 20
Slide 17: 1. Target Underserved Markets
B U S I N E S S M O D E L # 1 1. Target Underserved Markets 17 Characteristics of Targeted Markets Enterprise – UniFi AP, Switches, Cameras… Consumer AmpliFi Market Examples Underserved by traditional players Need for high performance, easy to install and maintain products Price sensitive Good growt
Slide 18: 1. Target Underserved Markets (Examples)
B U S I N E S S M O D E L # 1 1. Target Underserved Markets 18 Service Provider – Examples Enterprise Solutions – Examples • Small, medium & large businesses in need of high performance, price sensitive solutions • Hospitality, manufacturing, retail, education & many other verticals • The connected
Slide 19: 2. Develop Innovative, High Performance Products
B U S I N E S S M O D E L # 2 2. Develop Innovative, High Performance Products • High performance − include proprietary components, protocols and processes − latest technologies • Intellectual property1 − 53 patents in U.S., 34 in foreign countries, over 100 pending • “Last entrant” advantage − desi
Slide 20: 3. Low Cost Operations
• Hire elite engineers, lower cost countries (Eastern Europe & China) • Distributors, resellers and connection with Ubiquiti Community drive sales B U S I N E S S M O D E L # 3 3. Low Cost Operations 20 • Contract manufacturing in China • Low cost bill of material Operating Expenses 12% of sales vs.
Slide 21: 4. Deliver Products at Industry Leading / Disruptive Prices
B U S I N E S S M O D E L # 4 4. Deliver Products at Industry Leading / Disruptive Prices 21Note: Graph is for illustrative purposes only. Performance Price $300 $600 $900 $1,200 $1,500 UAP AC HD Vendor R Vendor A Vendor C $0 $1,800 Low High In February 2017, the Company launched UniFi AC HD, the hi
Slide 22: 5. Financial Profile of a Disruptive Player
B U S I N E S S M O D E L # 5 5. Financial Profile of a Disruptive Player 22 Mid‐range Gross Margin (Disruptive Pricing) Leanest OpEx to Sales 2nd Highest Sales per Employee Highest 3‐YR Operating Income Margin Sector Avg 24%‐77% 45% Sector Avg 21%‐84% 12% Sector Avg $0.3‐$1.4M $1.3M Sector Avg ‐15%
Slide 23: The Ubiquiti Story
T H E U B I Q U I T I S T O R Y Disruptive Business Model. Delivering High Performance 23 A high performance company Disruptive business model Two growth segments Long growth runway Copyright © Ubiquiti Networks, Inc. 2017
Slide 24: Two Growth Segments
Two Growth Segments 24 Long Term Sustainable Growth Disruptive Business Model Service Provider Solutions • $455M 2017 revenues • 53% of total Enterprise Solutions • $410M 2017 revenues • 47% of total Copyright © Ubiquiti Networks, Inc. 2017
Slide 25: Service Provider Solutions – Consistent and Steady Growth
S E R V I C E P R O V I D E R Service Provider Solutions – Consistent and Steady Growth 25 Profile Revenues $418M $418M $455M 2015 2016 2017 Fiscal Year 4% CAGR Q1F18 revenues of $120 million consistent with Q1F17 Key products1: 1. airMAX AC GEN2 was launched in March 2017; UFiber launch occurred in
Slide 26: Service Provider: Positioned in Large, Growing Market
S E R V I C E P R O V I D E R Positioned in Large, Growing Market1 Note: Market size and growth here does not include GPON (new in F2018) 26 1. Source: IDC custom Fixed Wireless Access (FWA): Global and Regional Market Opportunity Analysis dated October 2013, and Management estimates. Total market i
Slide 27: Typical airMAX Network Setup
S E R V I C E P R O V I D E R S O L U T I O N S Typical airMAX® Network Setup 27 Internet Cafe Corporate Buildings Small Business Internet Backbone ISP Network airFiber® X Antenna with airFiber X Radio airFiber® X Antenna with airFiber X Radio airPrism Antenna with Rocket5ac Prism Radios Point‐to‐Po
Slide 28: Two Growth Segments
Two Growth Segments 28 Long Term Sustainable Growth Disruptive Business Model Service Provider Solutions • $455M 2017 revenues • 53% of total Enterprise Solutions • $410M 2017 revenues • 47% of total Copyright © Ubiquiti Networks, Inc. 2017
Slide 29: Enterprise Solutions Continuing to Grow Rapidly
E N T E R P R I S E S O L U T I O N S Enterprise Solutions Continuing to Grow Rapidly 29 Key products1: Profile Revenues $178M $248M $410M 2015 2016 2017 Fiscal Year 52% CAGR Q1F18 revenues of $126 million Up 50% over Q1F17 HD 1. UniFi AC HD AP launched 3QF17; AmpliFi launched 2QF17 Copyright © Ubiq
Slide 30: Enterprise: Positioned in Large, Growing Market
E N T E R P R I S E S O L U T I O N S Positioned in Large, Growing Market1 Note: Market size and growth here does not include Consumer Home Wi‐Fi (launched in F2017) 30 Market Size 2016 Market Growth 2016‐2020 1. Sources: Dell’Oro Group WLAN 5‐Yr Forecast Report January 2017, Gartner study, August 2
Slide 31: Gaining Market Share in Wireless LAN Market
E N T E R P R I S E S O L U T I O N S Gaining Market Share in Wireless LAN Market1 31 $4.3B $4.9B 2014 2016 Global Market Ubiquiti Global Access Point Sales (Per Dell’Oro) $120M $208M 2014 2016 12% 16% 2014 2016 Global Unit Market Share UniFi Access Points (Per Dell’Oro) +13% +73% +34% 1. Data for E
Slide 32: Typical UniFi Network Setup
E N T E R P R I S E S O L U T I O N S Typical UniFi® Network Setup Clients Want Convergence and Flexibility1 32 Total network control on ONE screen Controller Internet Cafe Dorm or Residence Corporate Buildings Hotel University / Industrial Campus 1. Controller Advantage: 2016 wired and wireless acc
Slide 33: The Ubiquiti Story
T H E U B I Q U I T I S T O R Y Disruptive Business Model. Delivering High Performance 33 A high performance company Disruptive business model Two growth segments Long growth runway Copyright © Ubiquiti Networks, Inc. 2017
Slide 34: Continuing to Execute Consistent and Proven Strategy
Continuing to Execute Consistent and Proven Strategy 34 Continue to deliver high performance products — at disruptive prices Leverage technologies / business model into adjacent markets Maintain / extend technology leadership Continue to grow powerful user community Continue to cross‐sell existing c
Slide 35: Continue to Innovate, Grow in Adjacent Markets
35 1 Excel in core businesses 2 Build leadership in adjacent markets Fixed Wireless Broadband Enterprise WLAN Present / Large / Growing Future / Growth High Performance airMAX ASIC Chip Consumer AmpliFi Video Surveillance Connected Home UniFi Family Products A C L O S E R L O O K A T S T R A T E G Y
Slide 36: Outlook: Growth Drivers Next 2-3 Years
O U T L O O K Growth Drivers Next 2‐3 Years $1B‐$1.15B in Revenue and $3.70‐$4.30 Diluted EPS Fiscal 2018 36 Service Provider • airMAX AC GEN2 upgrade cycle • New UFiber GPON offering to enable WISP’s to compete with traditional ISP’s in developing markets • Other new high ASP sophisticated products
Slide 37: Longer Term will Continue to Deliver Industry-Leading Financial Profile
Longer Term will Continue to Deliver Industry‐Leading Financial Profile 37 As % of Revenues LTM Q1F18 Long Term Model Revenues 100% 100% Gross margin 45% 45% ‐ 50% R&D 8% 6% ‐ 8% SG&A 4% 3% ‐ 5% Operating margin 33% 30% ‐ 38% Net income margin 30% 25% ‐ 35% Copyright © Ubiquiti Networks, Inc. 20171.
Slide 38: Current Valuation – Set to Improve as Margin Sustainability Understood
Current Valuation – Set to Improve as Margin Sustainability and Growth Profile Understood 381. Prices and next 12 month analyst estimated EPS at November 7, 2017 sourced from Bloomberg. Group average is 26x. 18x 30x High Growth Sector Average High Growth Sector Companies • Arista • Avigilon Forward
Slide 39: Summary: Disruptive Business Model. Delivering High Performance
S U M M A R Y Disruptive Business Model. Delivering High Performance 39 The Performance The Business Model The Products The Future • Proven, consistent performance outgrowing the industry • Disruptive business model • Continually introducing disruptive price / performance products • Long growth ru
Slide 40: Investor Relations Contact
INVESTOR RELATIONS CONTACT: Laura Kiernan SVP Investor Relations Ubiquiti Networks, Inc. Laura.Kiernan@UBNT.com Ph: 1‐914‐598‐7733 About Ubiquiti Networks Ubiquiti Networks, Inc. (NASDAQ: UBNT) currently focuses on 3 main technologies: high‐ capacity distributed Internet access, unified information
Slide 41: Appendix
Appendix J UBIQUITI
Slide 42: UBNT Key Metrics Versus Sector
UBNT Key Metrics Versus Sector1 Ticker LTM Sales/Emp loyee (millions) LTM Gross Margin % Operating Expense to Sales Ratio (%) LTM Op. Margin % 3 Year Avg. Operating Income Margin (%) LTM Net Income Margin % Next 12 Months PE Ratio Next 12 Months PE/Growth Ratio UBNT $ 1.3 45% 12% 33% 32% 30% 18 0.8
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