UBNT - Ubiquiti Networks

[rkbabang]

Another great quarter!

 

• Revenues of $473.5 million, increasing 46.5% year-over-year

• GAAP diluted EPS of $2.46, increasing 72.0% year-over-year

• Non-GAAP diluted EPS of $2.47, increasing 71.5% year-over-year

Additional Financial Highlights

• Repurchased 602,003 shares of common stock at an average price of $162.10 per share during the quarter and an

additional 309,133 shares of common stock at an average price of $178.11 per share subsequent to September 30, 2020

 

http://ir.ui.com/sites/default/files/2020-11/ui-earnings-release-9-30-20_0.pdf

 

[chrispy]

Great quarter. Gonna dig into the results. The discussion on seeking alpha has been informative, including this:

 

On September 11, 2020, the Company received notification from the SEC that it has concluded its investigation as to the Company and does not intend to recommend an enforcement action against the Company.

[Dustin T]

I enjoy that they've quit giving guidance, results are usually more of a surprise and either it's a big win like today or a buying opportunity.

 

If Pera has bought back shares at $180 then it's worth north of that. I wouldn't be afraid to add shares today if it weren't already a large position for me.

 

Nice news on the SEC investigation, wondered what came of that.

[chrispy]

Maybe the price drops after this initial pop but, the return on buybacks is simply exceptional

[rkbabang]

Absolutely.  It is a rare company that puts that much thought and effort into its buybacks.  The average price of buybacks is close to the low end of the trading range every single quarter.

[Castanza]

Maybe the price drops after this initial pop but, the return on buybacks is simply exceptional

 

Let's hope, I missed the boat on this the past few months. Removed it from my watchlist somehow and completely forgot about it. Their products are top notch. Setup a whole home enterprise network in my home this past year.

[chrispy]

Fantastic results again by Pera and Team:

 

Business:

• Revenues of $479.4 million, increasing 55.5% year-over-year

• GAAP diluted EPS of $2.54, increasing 92.4% year-over-year

• Non-GAAP diluted EPS of $2.53, increasing 80.7% year-over-year

 

Share repurchase program:

Only purchased 55m worth of shares but the average share repurchase price of $178 equates to an 80-90% return

 

http://ir.ui.com/sites/default/files/2021-02/ui-earnings-release-2q21.pdf

[LC]

Most may have seen already but posting here as well:

https://krebsonsecurity.com/2021/03/whistleblower-ubiquiti-breach-catastrophic/

The whistleblower is referred to as "Adam" in the below.

Quote

 

In reality, Adam said, the attackers had gained administrative access to Ubiquiti’s servers at Amazon’s cloud service, which secures the underlying server hardware and software but requires the cloud tenant (client) to secure access to any data stored there.

“They were able to get cryptographic secrets for single sign-on cookies and remote access, full source code control contents, and signing keys exfiltration,” Adam said.

Adam says the attacker(s) had access to privileged credentials that were previously stored in the LastPass account of a Ubiquiti IT employee, and gained root administrator access to all Ubiquiti AWS accounts, including all S3 data buckets, all application logs, all databases, all user database credentials, and secrets required to forge single sign-on (SSO) cookies.

Such access could have allowed the intruders to remotely authenticate to countless Ubiquiti cloud-based devices around the world. According to its website, Ubiquiti has shipped more than 85 million devices that play a key role in networking infrastructure in over 200 countries and territories worldwide.

 

 

 

[chrispy]

I do not know quite what to make of it. Holding my position steady and haven't added. What are others thinking?

 

Ironically, Pera will be using this share price drop to buy up shares

[rkbabang]

I added a little, if this isn't catastrophic enough to bring the company down completely it will recover.  Hopefully this breach is something that can be fixed somehow.    And like you said I'm sure Pera will be buying back shares.

Edited April 6, 2021 by rkbabang

[SandU]

On 4/5/2021 at 2:19 PM, LC said:

Most may have seen already but posting here as well:

https://krebsonsecurity.com/2021/03/whistleblower-ubiquiti-breach-catastrophic/

The whistleblower is referred to as "Adam" in the below.

 

 

To me it seems highly unlikly that "Adam" is who he claims to be and tells the trouth in relation to other options like he benefits from a falling shareprice, extorsion or by making UI harm. Neither do i understand why the hacker extorded UI for 50 bitcoin for telling them where the "backdoor" was - i mean its got to be really low probability or expected value that they pay you. If you really had the juicy data it should be a much higher EV to lay low and sell it or to start hacking customers? Im neither a hacker or a theif though so i may be wrong here. But its game over since Pera owns 89,6% of this allreday, he will just buy back shares to cross 90% and take it private?

[Dustin T]

I'm holding, the price had gotten a little high too fast and it's just back down to a more reasonable valuation. I would bet share buybacks would give it a floor around 225-250. 

Adam may be a disgruntled employee, when I read through the glassdoor reviews it was a healthy mix of engineers who loved the power and responsibility they were given to do unfettered engineering and those that felt that expectations were too high. I would guess Adam was one of the latter. 

[chrispy]

I think the response from Ubiquiti left the door open to the idea of a disgruntled employee. UI may not be able to comment much more if there is an investigation