10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File No. 001-35300

UBIQUITI INC.

(Exact name of registrant as specified in its charter)

Delaware	32-0097377
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

685 Third Avenue, 27th Floor, New York, NY 10017

(Address of principal executive offices, Zip Code)

(646) 780-7958

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	UI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒		Accelerated filer	☐
Non-accelerated filer	☐	(Do not check if a smaller reporting company)	Smaller reporting company	☐
			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of May 5, 2021, 62,814,126 shares of Common Stock, par value $0.001, were issued and outstanding.    

UBIQUITI INC.

INDEX TO

QUARTERLY REPORT ON FORM 10-Q

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2021

		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations and Comprehensive Income	4
	Consolidated Statements of Stockholders’ Deficit	5
	Consolidated Statements of Cash Flows	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	30
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3.	Defaults Upon Senior Securities	51
Item 4.	Mine Safety Disclosures	51
Item 5.	Other Information	51
Item 6.	Exhibits	52
Signatures		53

2

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

UBIQUITI INC.

Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited) 

	March 31, 2021		June 30, 2020
Assets
Current assets:
Cash and cash equivalents	$	262,791	$	142,617
Investments — short-term	1,013		925
Accounts receivable, net of allowance for doubtful accounts of $52 and $203 at March 31, 2021 and June 30, 2020, respectively	187,315		142,160
Inventories	224,930		285,943
Vendor deposits	7,808		5,934
Prepaid income taxes	32		34
Prepaid expenses and other current assets	14,099		9,034
Total current assets	697,988		586,647
Property and equipment, net	79,889		78,522
Operating lease right-of-use assets, net	38,702		24,444
Deferred tax assets — long-term	3,507		4,102
Investments — long-term	726		513
Other long-term assets	72,196		43,223
Total assets	$	893,008	$	737,451
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	63,783	$	155,547
Taxes payable	13,467		30,961
Debt — short-term	23,865		24,067
Other current liabilities	156,526		53,722
Total current liabilities	257,641		264,297
Income taxes payable — long-term	106,600		115,330
Operating lease liabilities —long-term	31,480		18,533
Debt — long-term	548,133		628,437
Other long-term liabilities	9,363		6,312
Total liabilities	953,217		1,032,909
Commitments and contingencies (Note 10)
Stockholders’ deficit:
Preferred stock—$0.001 par value; 50,000,000 shares authorized; none issued	—		—
Common stock—$0.001 par value; 500,000,000 shares authorized:
62,814,126 and 63,687,891 outstanding as of March 31, 2021 and June 30, 2020, respectively	63		64
Additional paid–in capital	696		447
Accumulated other comprehensive income	3		9
Retained earnings (deficit)	(60,971)		(295,978)
Total stockholders’ deficit	(60,209)		(295,458)
Total liabilities and stockholders’ deficit	$	893,008	$	737,451

See notes to consolidated financial statements.

3

UBIQUITI INC.

Consolidated Statements of Operations and Comprehensive Income

(In thousands, except per share amounts)

(Unaudited) 

	Three Months Ended March 31,				Nine Months Ended March 31,
	2021		2020		2021		2020
Revenues	$	467,237	$	337,417	$	1,420,206	$	968,978
Cost of revenues	244,499		177,782		738,678		512,866
Gross profit	$	222,738	$	159,635	$	681,528	$	456,112
Operating expenses:
Research and development	30,483		21,672		85,208		65,965
Sales, general and administrative	13,255		10,606		36,556		30,053
Total operating expenses	43,738		32,278		121,764		96,018
Income from operations	179,000		127,357		559,764		360,094
Interest expense and other, net	(4,890)		(6,618)		(12,420)		(23,356)
Income before income taxes	174,110		120,739		547,344		336,738
Provision for income taxes	28,035		17,017		85,092		49,059
Net income	$	146,075	$	103,722	$	462,252	$	287,679
Net income per share of common stock:
Basic	$	2.33	$	1.60	$	7.33	$	4.36
Diluted	$	2.32	$	1.60	$	7.32	$	4.35
Weighted average shares used in computing net income per share of common stock:
Basic	62,810		64,630		63,084		66,003
Diluted	62,865		64,699		63,148		66,094
Other comprehensive income:
Unrealized losses on available-for-sale securities	$	(1)	$	(90)	$	(6)	$	(415)
Other Comprehensive loss	(1)		(90)		(6)		(415)
Comprehensive income	$	146,074	$	103,632	$	462,246	$	287,264

See notes to consolidated financial statements.

4

UBIQUITI INC.

Consolidated Statements of Stockholders’ Deficit

(In thousands, except per share amounts)

(Unaudited)

	Three and Nine Months Ended March 31, 2021
	Common Stock			Additional Paid-In Capital		Retained Earnings (Deficit)		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Deficit
	Shares	Amount		Amount		Amount		Amount		Amount
Balance at June 30, 2020	63,687,891	$	64	$	447	$	(295,978)	$	9	$	(295,458)
Net Income	—	—		—		156,509		—		156,509
Other comprehensive income (loss)	—	—		—		—		(1)		(1)
Stock options exercised	2,194	—		21		—		—		21
Restricted stock units issued, net of tax withholdings	8,768	—		(615)		—		—		(615)
Repurchases of Common Stock	(602,003)	(1)		(593)		(96,994)		—		(97,588)
Stock-based compensation expense	—	—		740		—		—		740
Dividends Paid on Common Stock ($0.40 per share)	—	—		—		(25,470)		—		(25,470)
Balances at September 30, 2020	63,096,850	$	63	$	—	$	(261,933)	$	8	$	(261,862)
Net Income	—	—		—		159,668		—		159,668
Other comprehensive income (loss)	—	—		—		—		(4)		(4)
Stock options exercised	2,384	—		22		—		—		22
Restricted stock units issued, net of tax withholdings	8,141	—		(201)		—		—		(201)
Repurchases of Common Stock	(309,133)	—		(516)		(54,542)		—		(55,058)
Stock-based compensation expense	—	—		750		—		—		750
Dividends Paid on Common Stock ($0.40 per share)	—	—		—		(25,115)		—		(25,115)
Balances at December 31, 2020	62,798,242	$	63	$	55	$	(181,922)	$	4	$	(181,800)
Net Income	—	—		—		146,075		—		146,075
Other comprehensive income (loss)	—	—		—		—		(1)		(1)
Stock options exercised	4,372	—		48		—		—		48
Restricted stock units issued, net of tax withholdings	11,512	—		(182)		—		—		(182)
Stock-based compensation expense	—	—		775		—		—		775
Dividends Paid on Common Stock ($0.40 per share)	—	—		—		(25,124)		—		(25,124)
Balances at March 31, 2021	62,814,126	$	63	$	696	$	(60,971)	$	3	$	(60,209)

5

	Three and Nine Months Ended March 31, 2020
	Common Stock			Additional Paid-In Capital		Retained Earnings (Deficit)		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Deficit
	Shares	Amount		Amount		Amount		Amount		Amount
Balance at June 30, 2019	69,472,568	$	69	$	—	$	98,815	$	393	$	99,277
Net Income	—	—		—		98,146		—		98,146
Other comprehensive income (loss)	—	—		—		—		(153)		(153)
Stock options exercised	678	—		3		—		—		3
Restricted stock units issued, net of tax withholdings	9,743	—		(501)		—		—		(501)
Repurchases of Common Stock	(3,635,534)	(3)		(191)		(416,025)		—		(416,219)
Stock-based compensation expense	—	—		689		—		—		689
Dividends Paid on Common Stock ($0.30 per share)	—	$	—	$	—	$	(20,669)	$	—	$	(20,669)
Balances at September 30, 2019	65,847,455	$	66	$	—	$	(239,733)	$	240	$	(239,427)
Net Income	—	—		—		85,811		—		85,811
Other comprehensive income (loss)	—	—		—		—		(172)		(172)
Stock options exercised	17,192	—		124		—		—		124
Restricted stock units issued, net of tax withholdings	7,935	—		(139)		—		—		(139)
Repurchases of Common Stock	(995,495)	(1)		(250)		(119,321)		—		(119,572)
Stock-based compensation expense	—	—		730		—		—		730
Dividends Paid on Common Stock ($0.30per share)	—	$	—	$	—	$	(19,460)	$	—	$	(19,460)
Balances at December 31, 2019	64,877,087	$	65	$	465	$	(292,703)	$	68	$	(292,105)
Net Income	—	—		—		103,722		—		103,722
Other comprehensive income (loss)	—	—		—		—		(90)		(90)
Stock options exercised	2,478	—		25		—		—		25
Restricted stock units issued, net of tax withholdings	16,374	—		(416)		—		—		(416)
Repurchases of Common Stock	(1,112,606)	(1)		(799)		(147,600)		—		(148,400)
Stock-based compensation expense	—	—		725		—		—		725
Dividends Paid on Common Stock ($0.30 per share)	—	—		—		(19,447)		—		(19,447)
Balances at March 31, 2020	63,783,333	$	64	$	—	$	(356,028)	$	(22)	$	(355,986)

See notes to consolidated financial statements.

6

UBIQUITI INC.

Consolidated Statements of Cash Flows

(In thousands) (Unaudited)

	Nine Months Ended March 31,
	2021		2020
Cash Flows from Operating Activities:
Net income	$	462,252	$	287,679
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	8,313		5,098
Impairment of equity investment	—		5,000
Amortization of debt issuance costs	1,462		1,308
Non-cash lease expense	226		1085
Premium amortization and (discount accretion), net	5		(56)
Write off unamortized debt issuance costs	267		105
Provision for inventory obsolescence	569		5,823
Provision for loss on vendor deposits and purchase commitments	7,502		1,587
Stock-based compensation	2,265		2,144
Deferred taxes	595		126
Other, net	495		102
Changes in operating assets and liabilities:
Accounts receivable	(45,166)		(17,839)
Inventories	60,837		53,293
Vendor deposits	(3,554)		2,442
Prepaid income taxes	2		4
Prepaid expenses and other assets	(27,059)		3,399
Accounts payable	(91,447)		22,715
Income taxes payable	(26,224)		(25,413)
Deferred revenues	8,798		1,093
Accrued and other liabilities	87,635		(14,365)
Net cash provided by operating activities	$	447,773	$	335,330
Cash Flows from Investing Activities:
Purchase of property and equipment and other long-term assets	(16,002)		(28,786)
Purchase of investments	—		(27,957)
Proceeds from sale of investments	—		103,848
Proceeds from maturities of investments	922		13,272
Net cash provided by (used in) investing activities	$	(15,080)	$	60,377
Cash Flows from Financing Activities:
Proceeds from borrowing under the credit facility - Term	37,500		37,500
Proceeds from borrowing under the credit facility- Revolver	75,000		340,000
Repayment against credit facility- Revolver	(180,000)		(170,000)
Repayment against credit facility- Term	(12,500)		(18,750)
Debt issuance costs	(3,257)		(3,138)
Repurchases of common stock	(152,646)		(681,205)
Payment of common stock cash dividends	(75,709)		(59,576)
Proceeds from exercise of stock options	91		152
Tax withholdings related to net share settlements of restricted stock units	(998)		(1,056)
Net cash (used in) financing activities	$	(312,519)	$	(556,073)
Net increase (decrease) in cash and cash equivalents	120,174		(160,366)
Cash and cash equivalents at beginning of period	142,617		238,147
Cash and cash equivalents at end of period	$	262,791	$	77,781
Supplemental Disclosure of Cash Flow Information:
Income taxes paid, net of refunds	$	110,766	$	74,465
Interest paid	$	9,453	$	17,513
Non-Cash Investing and Financing Activities:
Right-of-use asset recognized	$	20,773	$	5,665
Unpaid stock repurchases	$	—	$	5,210
Unpaid property and equipment and other long-term assets	$	49	$	19
Net unsettled investment purchases	$	1,234	$	117

See notes to consolidated financial statements.

7

UBIQUITI INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1—BUSINESS AND BASIS OF PRESENTATION

Business— Ubiquiti Inc. and its wholly owned subsidiaries (collectively, “Ubiquiti” or the “Company”) develop high performance networking technology for service providers, enterprises, and consumers globally.

The Company operates on a fiscal year ending June 30. In this Quarterly Report, the fiscal year ending June 30, 2021 is referred to as “fiscal 2021” and the fiscal year ended June 30, 2020 is referred to as “fiscal 2020”.

Basis of Presentation— The Company’s consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) related to interim financial statements based on applicable Securities and Exchange Commission (“SEC”) rules and regulations. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. These consolidated financial statements reflect all adjustments, which are, in the opinion of the Company, of a normal and recurring nature and those necessary to state fairly the statements of financial position, results of operations and cash flows for the dates and periods presented. The June 30, 2020 balance sheet was derived from the audited financial statements as of that date. All significant intercompany transactions and balances have been eliminated.

These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended June 30, 2020, included in its Annual Report on Form 10-K, as filed with the SEC on August 21, 2020 (the “Annual Report”). The results of operations for the three and nine months ended March 31, 2021 are not necessarily indicative of the results to be expected for any future periods.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies are disclosed in its audited consolidated financial statements for the year ended June 30, 2020, included in the Annual Report on Form 10-K. Except as noted below, there have been no other changes to the Company’s significant accounting policies as discussed in the Annual Report.

Use of Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and the accompanying notes. Those estimated assumptions include, but are not limited to, revenue recognition and deferred revenue; allowance for doubtful accounts and sales return reserves; inventory valuation and vendor deposits; accounting for income taxes, including the valuation allowance on deferred tax assets and reserves for uncertain tax positions; determinations of fair value for stock-based awards; estimate of incremental borrowing rate for determining the present value of future lease payments; and valuation of warranty accruals. The Company evaluates its estimates and assumptions based on historical experience and other assumptions that are believed to be reasonable under the circumstances. Actual results could differ materially from those estimates.

Recently Adopted Accounting Pronouncements

Credit Losses on Financial Instruments

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 replaces the existing incurred loss impairment model with a forward-looking expected credit loss model which will result in earlier recognition of credit losses for certain financial instruments and financial assets. For trade receivables, we are required to estimate lifetime expected credit losses. For available-for-sale debt securities, the Company will recognize an allowance for credit losses rather than a reduction to the carrying value of the asset. ASU 2016-13 is effective for the Company’s fiscal year beginning July 1, 2020 on a modified retrospective basis.

As of July 1, 2020, the Company adopted the new standard, including identifying, evaluating and quantifying the impact on its consolidated financial statements. The Company concluded that the expected credit loss impact to the opening balance of fiscal 2021 retained earnings was deemed immaterial, and as a result the adoption did not have a material impact the Company's consolidated financial position, results of operations, or cash flow.

Recent Accounting Pronouncements Not Yet Effective

Income Taxes

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740), which amends the existing guidance relating to the accounting for income taxes. ASU 2019-12 is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes and to improve the consistent application of GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. ASU 2019-12 is effective for the Company’s fiscal year beginning July 1, 2021. The Company is currently evaluating the impact of this new standard on its consolidated financial statements

8

and related disclosures.

NOTE 3—REVENUES

Revenue is primarily generated from the sale of hardware as well as the related implied post contract services (“PCS”). Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Revenue is recognized when obligations under the terms of a contract with customers are satisfied; generally, this occurs with the transfer of control of the Company’s products and PCS to its customers. Transfer of control to the customer for products generally occurs at the point in time when products have been shipped to customers as this represents the point in time when the customer has a present obligation to pay and physical possession including title and risk of loss have been transferred to the customer. Revenue for PCS is recognized ratably over time over the estimated period for which implied PCS services will be delivered.

Disaggregation of Revenue

See Note 15 of Notes to Consolidated Financial Statements “Segment Information” for disaggregation of revenue by product category and geography.

Contract Balances

The timing of revenue recognition, billing and cash collections results in billed accounts receivable, deferred revenue primarily attributable to PCS and customer deposits on the Consolidated Balance Sheets. Accounts receivable are recognized in the period the Company’s right to the consideration is unconditional. The Company’s contract liabilities consist of advance payments (Customer deposits) as well as billing in excess of revenue recognized primarily related to deferred revenue. The Company classifies customer deposits as a current liability, and deferred revenue as a current or non-current liability based on the timing of when we expect to fulfill these remaining performance obligations. The current portion of deferred revenue is included in other current liabilities and the non-current portion is included in other long-term liabilities in the Company’s consolidated balance sheets.

As of March 31, 2021 and June 30, 2020, the Company’s customer deposits were $4.3 million and $2.1 million, respectively.

As of March 31, 2021, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $22.2 million and $9.3 million, respectively.

As of June 30, 2020, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $16.5 million and $6.3 million, respectively.

NOTE 4—FAIR VALUE OF FINANCIAL INSTRUMENTS

Pursuant to the accounting guidance for fair value measurements and its subsequent updates, fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The accounting guidance establishes a three-tier fair value hierarchy that requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:

Level 1—Quoted prices in active markets for identical assets or liabilities;

Level 2—Inputs other than the quoted prices in active markets, that are observable either directly or indirectly;

Level 3—Unobservable inputs based on the Company’s own assumption.

The Company records securities available-for-sale at fair value on a recurring basis. The Company classifies its investments within Level 1 or 2 because they are valued using either quoted market prices or inputs other than quoted prices which are directly or indirectly observable in the market, including readily-available pricing sources for the identical underlying security which may not be actively traded.

The Company’s fixed income available-for-sale securities consist of high-quality investment grade securities from diverse issuers. The valuation techniques used to measure the fair value of the Company’s marketable securities incorporate bond terms and conditions, current performance data, proprietary pricing models, real time quotes from contributing dealers, trade prices and other market data.

The Company held no Level 3 financial instruments as of March 31, 2021 and June 30, 2020.

The following tables summarize the Company’s financial instruments’ adjusted cost, gross unrealized gains and losses, and fair value by significant investment category as of March 31, 2021 and June 30, 2020 (in thousands):

9

	March 31, 2021
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents (1)		Short-Term Investments		Long-Term Investments
Level 1
Money market funds	$	724	$	—	$	—	$	724	$	724	$	—	$	—
Subtotal	$	724	$	—	$	—	$	724	$	724	$	—	$	—
Level 2
Corporate securities	$	1,736	$	4	$	(1)	$	1,739	$	—	$	1,013	$	726
Subtotal	$	1,736	$	4	$	(1)	$	1,739	$	—	$	1,013	$	726
Total	$	2,460	$	4	$	(1)	$	2,463	$	724	$	1,013	$	726

(1) Cash and cash equivalents on the consolidated balance sheets includes securities that have a maturity of three months or less at the date of purchase. The carrying amount approximates fair value, primarily due to the short maturity of cash equivalent instruments.

	June 30, 2020
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents (1)		Short-Term Investments		Long-Term Investments
Level 1
Money market funds	$	1,055	$	—	$	—	$	1,055	$	1,055	$	—	$	—
Subtotal	$	1,055	$	—	$	—	$	1,055	$	1,055	$	—	$	—
Level 2
Corporate securities	$	1,429	$	9	$	—	$	1,438	$	—	$	925	$	513
Subtotal	$	1,429	$	9	$	—	$	1,438	$	—	$	925	$	513
Total	$	2,484	$	9	$	—	$	2,493	$	1,055	$	925	$	513

(1) Cash and cash equivalents on the consolidated balance sheets includes securities that have a maturity of three months or less at the date of purchase. The carrying amount approximates fair value, primarily due to the short maturity of cash equivalent instruments.

For the three and nine months ended March 31, 2021 the Company did not recognize any net gains or losses from accumulated other comprehensive income related to unrealized gains or losses. For the three months ended March 31, 2020, the Company's reclassified realized net loss to earnings from accumulated other comprehensive income related to unrealized gains or losses, was immaterial.

For the nine months ended March 31, 2020, the Company reclassified realized net gain of $0.4 million to earnings from accumulated other comprehensive income related to unrealized gains or losses.

During the three and nine months ended March 31, 2021, interest income on the Company’s investment securities was immaterial.

During the three and nine months ended March 31, 2020, the Company had $0.2 million and $1.0 million interest income on the Company's investment securities.

The following table represents the Company's marketable securities that had been in continuous unrealized loss position for less than 12 months and for 12 months or greater as of March 31, 2021 (in thousands):

	Continuous Unrealized Loss
	Less than 12 Months		12 Months or Greater		Total
Fair Value of marketable securities	$	1,133	$	—	$	1,133
Unrealized Loss	(1)		—		(1)

The Company had no continuous unrealized loss position from marketable securities as of June 30, 2020.

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The following table represents the adjusted costs and fair value of cash equivalents and investments by contractual maturity as of March 31, 2021 (in thousands):

	Available-For-Sale
	Adjusted Cost		Fair Value
Due within 1 year and money market funds	$	1,734	$	1,737
Due after 1 year through 5 years	726		726
Total	$	2,460	$	2,463

For certain of the Company’s financial instruments, other than those presented in the disclosures above, including cash, accounts receivable, accounts payable and other current liabilities, the carrying amounts approximate fair value due to their short maturities.

As of March 31, 2021 and June 30, 2020, the Company had outstanding loans associated with its credit facilities, which are carried at historical cost. The fair value of the Company’s debt disclosed below was estimated based on the current rates offered to the Company for debt with similar terms and remaining maturities and was a Level 2 measurement. As of March 31, 2021 and June 30, 2020, the fair value of the Company’s debt, which is carried at historical cost was $575.0 million and $655.0 million, respectively.

NOTE 5—EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share for the periods indicated (in thousands, except per share data):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2021		2020		2021		2020
Numerator:
Net income	$	146,075	$	103,722	$	462,252	$	287,679
Denominator:
Weighted-average shares used in computing basic earnings per share	62,810		64,630		63,084		66,003
Add—dilutive potential common shares:
Stock options	15		24		18		33
Restricted stock units	40		45		46		58
Weighted-average shares used in computing diluted net income per share	62,865		64,699		63,148		66,094
Net income per share of common stock:
Basic	$	2.33	$	1.60	$	7.33	$	4.36
Diluted	$	2.32	$	1.60	$	7.32	$	4.35

The Company excludes potentially dilutive securities from its diluted net income per share calculation when their effect would be anti-dilutive to net income per share amounts. The following table summarizes the total potential shares of common stock that were excluded from the diluted per share calculation, because to include them would have been anti-dilutive for the period (in thousands):

	Three Months Ended March 31,		Nine Months Ended March 31,
	2021	2020	2021	2020
Restricted stock units	—	11	4	4

NOTE 6—BALANCE SHEET COMPONENTS

Inventories

Inventories consisted of the following (in thousands):

	March 31, 2021		June 30, 2020
Finished goods	$	221,307	$	282,381
Raw materials	3,623		3,562
Total	$	224,930	$	285,943

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Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

	March 31, 2021		June 30, 2020
Testing equipment	$	14,985	$	12,476
Tooling equipment	15,387		13,601
Leasehold improvements	14,781		12,944
Computer and other equipment	8,401		7,676
Software	7,818		7,266
Furniture and fixtures	2,384		2,147
Corporate aircraft	65,807		64,659
Property and equipment, gross	129,563		120,769
Less: Accumulated depreciation	(49,674)		(42,247)
Property and equipment, net	$	79,889	$	78,522

Other Long-term Assets

Other long-term assets consisted of the following (in thousands):

	March 31, 2021		June 30, 2020
Hong Kong Tax deposit (1)	57,423		35,495
Intangible assets, net (2)	9,021		3,063
Other long-term assets, net	5,752		4,665
Total	$	72,196	$	43,223

(1) The Company made a total of $57.4 million of deposits with the Hong Kong Inland Revenue Department (“IRD”) in connection with extending the statute of limitation for income tax examinations currently under audit for the 2010-2014 tax years. These deposits were made during fiscal years 2021, 2020, 2019, and 2018 in the amounts of $21.9 million, $15.5 million, $13.4 million and $6.6 million, respectively. The Company expects the $57.4 million of deposits made with the IRD to be refunded upon completion of the audit. See Note 14 to the consolidated financial statements for additional details regarding this ongoing tax audit.

(2) Accumulated amortization was $2.4 million and $1.8 million as of March 31, 2021 and June 30, 2020, respectively.

Other Current Liabilities

Other current liabilities consisted of the following (in thousands):

	March 31, 2021		June 30, 2020
Deferred revenue — short-term	$	22,193	16,464
Accrued expenses	22,788		12,148
Lease liability— current	8,593		7,056
Warranty accrual	4,753		4,538
Accrued compensation and benefits	4,178		4,084
Customer deposits	4,280		2,061
Reserve for sales returns	2,153		1,275
Inventory received not billed	82,105		1,607
Other payables	5,483		4,489
Total	$	156,526	$	53,722

Other Long-Term Liabilities

Other long-term liabilities consisted of the following (in thousands):

	March 31, 2021		June 30, 2020
Deferred Revenue — long-term	$	9,323	$	6,254
Other long-term liabilities	40		58
Total	$	9,363	$	6,312

NOTE 7—ACCRUED WARRANTY

The Company offers warranties on certain products, generally a period of one to two years and records a liability for the estimated

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future costs associated with potential warranty claims. The warranty costs are reflected in the Company’s consolidated statements of operations and comprehensive income within cost of revenues. The warranties are typically in effect for one year for distributors from the date of shipment and two years for direct sales from the date of delivery. The Company assesses the adequacy of its accrued warranty liabilities and adjusts the amounts as necessary based on historical experience factors and changes in future estimates. Historical factors include product failure rates, material usage and service delivery costs incurred in correcting product failures. In certain circumstances, the Company may have recourse from its contract manufacturers for replacement cost of defective products, which it also factors into its warranty liability assessment.

Warranty obligations, included in other current liabilities, were as follows (in thousands):

	Nine Months Ended March 31,
	2021		2020
Beginning balance	$	4,538	$	4,518
Accruals for warranties issued during the period	6,680		5,828
Changes in liability for pre-existing warranties during the period	(1,114)		408
Settlements made during the period	(5,351)		(6,210)
Ending balance	$	4,753	$	4,544

NOTE 8—DEBT

On March 30, 2021, the Company, as borrower and certain domestic subsidiaries entered into an amended and restated credit agreement (the “Third Amended and Restated Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”), the other financial institutions named as lenders therein, and Wells Fargo as administrative agent and collateral agent for the lenders, that extended the $700 million senior secured revolving credit facility (the “Revolving Facility”) and provided a new $500 million senior secured term loan facility (the “Term Facility”, together with the Revolving Facility, the “Facilities”), and extended the maturity of the Facilities to March 30, 2026. In addition, the Facilities include an option to request increases in the amounts of such credit facilities by up to an additional $500 million in the aggregate.

The Third Amended and Restated Credit Agreement replaced the Company's existing $700 million senior secured revolving facility (the “Existing Revolving Facility”) and $500 million senior secured term loan facility (the “Existing Term Facility”, together with the Existing Revolving Facility, the “Existing Facilities”) under the Second Amended & Restated Credit Agreement, dated as of January 17, 2018 (as amended by the First Amendment, dated as of June 29, 2018, the Second Amendment, dated as of March 15, and the Third Amendment, dated as of September 9, 2019, the “Existing Credit Agreement”). The Facilities replace the Company's Existing Facilities under the Existing Credit Agreement, which has been terminated in connection with the Third Amended and Restated Credit Agreement.

At the closing of the Third Amended and Restated Credit Agreement, the Term facility was fully drawn, of which $462.5 million and $0.7 million was used to repay the Existing Term Facility under the Existing Credit Agreement for principal and interest, respectively.

Additionally, at closing of the Third Amended and Restated Credit Agreement, $75.0 million and $0.4 million of the Existing Revolving Facility under the Existing Credit Agreement was repaid for principal and interest, respectively. The Company then borrowed $75.0 million under the Revolving Facility under the Third Amended and Restated Credit Agreement.

The Company incurred $3.3 million of debt issuance costs which are capitalized and amortized as interest expense over the life of the facilities.

The Company’s Debt consisted of the following (in thousands):

	March 31, 2021		June 30, 2020
Term Loan - short term	$	25,000	$	25,000
Debt issuance costs, net	(1,135)		(933)
Total Debt - short term	23,865		24,067
Term Loan - long term	475,000		450,000
Revolver - long term	75,000		180,000
Debt issuance costs, net	(1,867)		(1,563)
Total Debt - long term	$	548,133	$	628,437

The Revolving Facility includes a sub-limit of $25.0 million for letters of credit and a sub-limit of $25.0 million for swingline loans. The Facilities are available for working capital and general corporate purposes that comply with the terms of the Third Amended and Restated Credit Agreement, including to finance the repurchase of the Company’s common stock or to make dividends to the holders

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of the Company’s common stock. Under the Third Amended and Restated Credit Agreement, revolving loans and swingline loans may be borrowed, repaid and reborrowed until March 30, 2026, at which time all amounts borrowed must be repaid. The term loan is payable in quarterly installments of 1.25% of the original principal amount of the term loan, commencing with the quarter ending June 30, 2021. Revolving, swingline and term loans may be prepaid at any time without penalty. Revolving and term loans bear interest, at the Company’s option, at either (i) a floating rate per annum equal to the base rate plus a margin of between 0.50% and 1.25%, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter or (ii) a floating per annum rate equal to the applicable LIBOR rate (or replacement rate) for a specified period, plus a margin of between 1.50% and 2.25%, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter. Swingline loans bear interest at a floating rate per annum equal to the base rate plus a margin of between 0.50% and 1.25%, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter. Base rate is defined as the greatest of (A) Wells Fargo’s prime rate, (B) the federal funds rate plus 0.50% or (C) the applicable LIBOR rate (or replacement rate) for a period of one month plus 1.00%. A default interest rate shall apply on all obligations during certain events of default under the Third Amended and Restated Credit Agreement at a rate per annum equal to 2.00% above the applicable interest rate. The Company will pay to each lender a facility fee on a quarterly basis based on the unused amount of each lender’s commitment to make revolving loans, of between 0.20% and 0.35%, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter. The Company will also pay to the applicable lenders on a quarterly basis certain fees based on the daily amount available to be drawn under each outstanding letter of credit, including aggregate letter of credit commissions of between 1.50% and 2.25%, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter, and issuance fees of 0.125% per annum. The Company is also obligated to pay Wells Fargo, as agent, fees customary for a credit facility of this size and type.

The Third Amended and Restated Credit Agreement requires the Company to maintain during the term of the Facilities a maximum consolidated total leverage ratio of 3.50 to 1.00 and a minimum consolidated interest coverage ratio of 3.5 to 1.00. In addition, the Third Amended and Restated Credit Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the ability of the Company and its subsidiaries to, among other things, grant liens or enter into agreements restricting their ability to grant liens on property, enter into mergers, dispose of assets, change their accounting or reporting policies, change their business and incur indebtedness, in each case subject to customary exceptions for a credit facility of this size and type. The Third Amended and Restated Credit Agreement includes customary events of default that include, among other things, non-payment of principal, interest or fees, inaccuracy of representations and warranties, violation of covenants, cross default to certain other indebtedness, bankruptcy and insolvency events, material judgments, change of control and certain ERISA events. The occurrence of an event of default could result in the acceleration of the obligations under the Third Amended and Restated Credit Agreement.

The Facilities

As of March 31, 2021, $500.0 million was outstanding on the Term Facility and $75.0 million on the Revolving Facility, leaving $625.0 million available on the Revolving Facility.

Term Facility:

Under the Existing Credit Agreement, during the three months ended March 31, 2021, the Company made no principal payments against the Existing Term Facility, however, made $2.0 million payment of interest. During the nine months ended March 31, 2021, the Company made aggregate payments of $19.1 million under the Existing Term Facility, of which $12.5 million was repayment of principal and $6.6 million was payment of interest.

As of March 31, 2021, the interest rate on the term loan was 1.61%. As of April 30, 2021, the most currently available reset date, the Term Facility has an interest rate of 1.6%.

Revolving Facility:

Under the Existing Credit Agreement, during the three months ended March 31, 2021, the Company made aggregate payments of $71.0 million under the Existing Revolving Facility, of which $70.0 million was repayment of principal and $1.0 million was payment of interest. During the nine months ended March 31, 2021, the Company made aggregate payments of $182.9 million under the Existing Revolving Facility, of which $180.0 million was repayment of principal and $2.9 million was payment of interest.

The table below shows the respective interest rates as of March 31, 2021, in addition to the interest rate reset dates as available for each revolver draw.

Debt Payment Obligations	Interest Rate as of March 31, 2021		Rate Reset Date	Reset Rate
$75 Million Revolver	1.61	%	April 30, 2021	1.61%

The following table summarizes the Company’s estimated debt and interest payment obligations as of March 31, 2021, for the remainder of fiscal 2021 and future fiscal years (in thousands):

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	2021 (remainder)		2022		2023		2024		2025		Thereafter		Total
Debt payment obligations	$	6,250	$	25,000	$	25,000	$	25,000	$	25,000	$	468,750	$	575,000
Interest and other payments on debt payment obligations (1)	2,654		10,391		9,983		9,601		9,167		6,590		48,386
Total	$	8,904	$	35,391	$	34,983	$	34,601	$	34,167	$	475,340	$	623,386

(1) - Interest payments are calculated based on the applicable rates and payment dates as of March 31, 2021. Although the Company’s interest rates on our debt obligations may vary, the Company has assumed the most recent available interest rates for all periods presented.

NOTE 9—LEASES

The Company enters into agreements under which it leases various real estate spaces in North America, Europe and Asia Pacific, under non-cancellable leases that expire on various dates through fiscal 2029. Some of the Company’s leases include options to extend the term of such leases for a period from 12 months to 60 months, and/or have options to early terminate the lease. As of March 31, 2021, the Company included such options in determining the lease terms for certain of the Company’s leases because the Company was reasonably certain that it would exercise the extension options. Most of the Company’s leases require it to pay certain operating expenses in addition to base rent, such as taxes, insurance and maintenance costs.

The following table summarizes the Company’s lease costs for the three and nine months ended March 31, 2021 and 2020 (in thousands):

	Financial Statement Classification	Three Months Ended March 31,				Nine Months Ended March 31,
		2021		2020		2021		2020
Operating lease costs:
Fixed lease costs	Operating expenses	$	1,994	$	1,568	$	5,652	$	4,415
Fixed lease costs	Cost of revenues	507		515		1,525		1,553
Variable lease costs	Operating expenses	244		81		639		256
Variable lease costs	Cost of revenues	113		107		327		309
Total lease costs		$	2,858	$	2,271	$	8,143	$	6,533

The operating lease costs in the table above include costs for long-term and short-term leases. Total short-term costs for the three and nine months ended March 31, 2021 and 2020 were immaterial. Variable lease costs primarily include maintenance, utilities and operating expenses that are incremental to the fixed base rent payments and are excluded from the calculation of operating lease liabilities and ROU assets. For the three and nine months ended March 31, 2021, cash paid for amounts associated with the Company’s operating lease liabilities were approximately $2.8 million and $8.2 million, respectively. For the three and nine months ended March 31, 2020, cash paid for amounts associated with the Company’s operating lease liabilities were approximately $2.3 million and $6.6 million, respectively. Cash paid for amounts associated with the Company’s operating lease liabilities were classified as operating activities in the consolidated statement of cash flows.

The following table shows the Company’s undiscounted future fixed payment obligations under the Company’s recognized operating leases and a reconciliation to the operating lease liabilities as of March 31, 2021:

Remainder of Fiscal 2021	$	2,466
Fiscal 2022	9,343
Fiscal 2023	8,258
Fiscal 2024	7,820
Fiscal 2025	7,265
Thereafter	8,020
Total future fixed operating lease payments	$	43,172
Less: Imputed interest	$	3,099
Total operating lease liabilities	$	40,073
Weighted-average remaining lease term - operating leases	5 years
Weighted-average discount rate - operating leases	2.8		%

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NOTE 10—COMMITMENTS AND CONTINGENCIES

Operating Leases

See Note 9- Leases for future minimum lease payments under non-cancelable operating leases as of March 31, 2021.

Purchase Obligations

The Company subcontracts with third parties to manufacture its products and has purchase commitments with key component suppliers. During the normal course of business, the Company’s contract manufacturers procure components and manufacture products based upon orders placed by the Company. If the Company cancels all or part of the orders, the Company may still be liable to the contract manufacturers for the cost of the components purchased by the subcontractors to manufacture the Company's products. The Company periodically reviews the potential liability, and as of March 31, 2021, the Company recorded a purchase obligation liability of $8.3 million related to component purchase commitments. There have been no other significant liabilities for cancellations recorded as of March 31, 2021. The Company’s consolidated financial position and results of operations could be negatively impacted if it were required to compensate the contract manufacturers for any unrecorded liabilities incurred. The Company may be subject to additional purchase obligations for supply agreements and components ordered by its contract manufacturers based on manufacturing forecasts it provides them each month. The Company estimates the amount of these additional purchase obligations to range from $150.3 million to $756.5 million as of March 31, 2021, depending upon the timing of orders placed for these components by its contract manufacturers.

Other Obligations

As of March 31, 2021, the Company has other obligations of $52.9 million which consisted primarily of commitments related to raw materials and research and development projects.

Indemnification Obligations

The Company enters into standard indemnification agreements with many of its business partners in the ordinary course of business. These agreements include provisions for indemnifying the business partner against any claim brought by a third-party to the extent any such claim alleges that a Company product infringes a patent, copyright or trademark, or violates any other proprietary rights of that third-party. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is not estimable and the Company has not incurred any material costs to defend lawsuits or settle claims related to these indemnification agreements to date.

Legal Matters

The Company may be involved, from time to time, in a variety of claims, lawsuits, investigations, and proceedings relating to contractual disputes, intellectual property rights, employment matters, regulatory compliance matters and other litigation matters relating to various claims that arise in the normal course of business. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. The Company assesses its potential liability by analyzing specific litigation and regulatory matters using available information. The Company develops its views on estimated losses in consultation with inside and outside counsel, which involves a subjective analysis of potential results and outcomes, assuming various combinations of appropriate litigation and settlement strategies. Taking all of the above factors into account, the Company records an amount where it is probable that the Company will incur a loss and where that loss can be reasonably estimated. However, the Company’s estimates may be incorrect and the Company could ultimately incur more or less than the amounts initially recorded. The Company may also incur significant legal fees, which are expensed as incurred, in defending against these claims. The Company is not currently aware of any pending or threatened litigation that would have a material adverse effect on the Company’s financial statements.

Vivato/XR

On April 19, 2017, XR Communications, LLC, d/b/a Vivato Technologies (“Vivato”), filed a complaint against the Company in the United States District Court for the Central District of California, alleging that at least one of the Company’s products infringes United States Patent Numbers 7,062,296 (the “‘296 Patent”), 7,729,728 (the “‘728 Patent”), and 6,611,231 (the “‘231 Patent” and, collectively, the “Patents-in-Suit”). The ‘296 and ‘728 Patents are entitled “Forced Beam Switching in Wireless Communication Systems Having Smart Antennas.” The ‘231 Patent is entitled “Wireless Packet Switched Communications Systems and Networks Using Adaptively Steered Antenna Arrays.” Vivato amended its complaint on June 23, 2017 and again on July 6, 2017. According to the complaint, the products accused of infringing the Patents-in-Suit include Wi-Fi access points and routers supporting MU-MIMO, including without limitation access points and routers utilizing the IEEE 802.11ac-2013 standard. Vivato has also filed nine other lawsuits asserting the same patents against other defendants in the Central District of California. On October 2, 2017, the ten cases were consolidated into a single action for all purposes except trial. On March 19, 2018, the Company and the remaining defendants in the consolidated action moved to stay the case (the “Motion to Stay”) pending completion of certain inter partes review proceedings before the Patent Trial and Appeal Board. On April 9, 2018, the Court held a hearing on the Motion to Stay, and, on April 11, 2018, the Court granted the motion. On February 11, 2019, the Court maintained the stay pending a status conference scheduled for

16

December 2, 2019. The Court maintained the stay in full pending a further status conference, which was originally scheduled for March 17, 2020 and subsequently rescheduled for February 22, 2021 and was postponed pending submission and approval of a scheduling order as described below.

The Patent Trial and Appeal Board, in the aforementioned series of inter partes review proceedings, invalidated two of the three patents-in-suit, but it rejected the challenge to the ‘231 Patent. That decision was appealed, and on November 25, 2020, the Federal Circuit Court of Appeals affirmed the Patent Trial and Appeal Board decision.

On February 16, 2021, the parties submitted a joint status report to the Court seeking to lift the stay. On February 17, 2021, the Court ordered the parties to submit a further report by March 1, 2021, at which time the stay would be lifted. The parties submitted their joint report and proposals for a case schedule, and the Court has not yet issued a schedule in this matter.

The Company plans to vigorously defend itself against these claims; however, there can be no assurance that the Company will prevail in the lawsuit. The Company cannot currently estimate the possible loss or range of losses, if any, that it may experience in connection with this litigation.

Ubiquiti Inc. v. National Union National Union Fire Insurance Company of Pittsburgh, Pa. (“National Union”)

The Company filed this action in February of 2018, in the Superior Court of California County of Santa Clara. The Company alleged causes of action for breach of the applicable insurance contract and breach of the implied covenant of good faith and fair dealing, arising from National Union’s coverage denial for a loss from an email compromise scam that occurred in 2015.

The parties reached a confidential settlement of the lawsuit on March 4, 2021. Pursuant to the settlement, the case was dismissed by the Court on March 24, 2021.

NOTE 11—COMMON STOCK AND TREASURY STOCK

Common Stock Repurchases

On November 6, 2019, the Company’s Board of Directors approved a $200 million stock repurchase program (the “2019 November Program”). Under the 2019 November Program, the Company is authorized to repurchase up to $200 million of common stock. The 2019 November Program expires on December 31, 2021. During the three months ended September 30, 2020, under the 2019 November Program, the Company repurchased and retired 228,180 shares of common stock at an average price per share of $166.05 for an aggregate amount of $37.9 million. As of September 15, 2020, the Company had no remaining balance available for share repurchase under the 2019 November Program.

On May 5, 2020, the Company's Board of Directors approved a $500 million stock repurchase program (the “2020 May Program”). Under the 2020 May Program, the Company may repurchase up to $500 million of its common stock. The 2020 May Program expires on March 31, 2022. During the six months ended December 31, 2020, under the 2020 May Program, the Company repurchased and retired 682,956 shares of common stock at an average price per share of $168.03 for an aggregate amount of $114.8 million. The Company made no repurchases during the three months ended March 31, 2021.

Under both programs, for the nine months ended March 31, 2021, the Company repurchased and retired 911,136 shares of common stock at an average price per share of $167.53 for an aggregate amount of $152.6 million.

As of March 31, 2021, the Company had $385.2 million available for share repurchases under the 2020 May Program.

The following table provides information with respect to the Company’s Share Repurchase programs and the activity under the available share repurchase programs during the nine months ended March 31, 2021 (in millions, except share and per share amounts):

Date of Publicly Announced Program	Amount of Publicly Announced Program	Total Number of Shares Purchased as Part of Publicly Announced Programs	Average Price Paid per Share		Total Aggregate Amount Paid		Period of Purchases	Estimated Remaining Balance Available for Share Repurchases under the Program		Expiration date of Program
November 8, 2019	$200 million	228,180	$	166.05	$	37.9	August 21, 2020 - September 15, 2020	$	—	12/31/2021
May 8, 2020	$500 million	682,956	$	168.03	$	114.8	September 15, 2020 - November 2, 2020	$	385.2	3/31/2022

NOTE 12—ACCUMULATED OTHER COMPREHENSIVE INCOME

Comprehensive income consists of two components, net income and other comprehensive income. Other comprehensive income refers to unrealized gains and losses that are recorded as an element of stockholders’ equity but are excluded from net income pursuant to GAAP. For the three and nine months ended March 31, 2021 and 2020, the Company’s accumulated other comprehensive income includes net unrealized gains and losses from the Company’s available-for-sale securities, respectively.

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NOTE 13—STOCK BASED COMPENSATION

Stock-Based Compensation Plans

The Company’s 2010 Equity Incentive Plan and 2005 Equity Incentive Plan are described in the Company’s Annual Report.

In December 2020, the Company's stockholders approved the Ubiquiti Inc. 2020 Omnibus Incentive Plan (the “2020 Equity Plan”) that will succeed the Company's 2010 Equity Incentive Plan (the “Prior Plan”), and no additional awards will be granted under the Prior Plan following January 31, 2021. Under the terms of the 2020 Equity Plan, the Company is authorized to grant awards for up to five million shares of common stock over the term of the 2020 Equity Plan. Outstanding awards under the Prior Plan remain in effect pursuant to the terms of the Prior Plan.

As of March 31, 2021, the Company had 4,989,876 authorized shares available for future issuance under all of its stock incentive plans.

Stock-Based Compensation

The following table shows total stock-based compensation expense included in the Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2021		2020		2021		2020
Cost of revenues	$	23	$	29	$	80	$	94
Research and development	538		499		1,560		1,507
Sales, general and administrative	214		197		625		543
	$	775	$	725	$	2,265	$	2,144

Stock Options

The following is a summary of option activity for the Company’s stock incentive plans for the nine months ended March 31, 2021:

	Common Stock Options Outstanding
	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (In thousands)
Balance, June 30, 2020	22,265	$	11.07	2.16	$	3,640
Exercised	(8,950)	$	10.20
Forfeitures and cancellations	(6)	$	2.90
Balance, March 31, 2021	13,309	$	11.65	1.56	$	3,815
Vested as of March 31, 2021	13,309	$	11.65	1.56	$	3,815
Vested and exercisable as of March 31, 2021	13,309	$	11.65	1.56	$	3,815

During the three months ended March 31, 2021 and 2020, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $1.4 million and $0.3 million, respectively, as determined as of the date of option exercise.

During the nine months ended March 31, 2021 and 2020, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $2.4 million and $3.5 million, respectively, as determined as of the date of options exercise.

As of March 31, 2021, the Company had no unrecognized compensation costs related to stock options.

The Company did not grant any employee stock options during the three and nine months ended March 31, 2021 and 2020.

Restricted Stock Units (“RSUs”)

The following table summarizes the activity of the RSUs made by the Company:

	Number of Shares	Weighted Average Grant Date Fair Value Per Share
Non-vested RSUs, June 30, 2020	82,571	$	99.57
RSUs granted	14,880	$	249.02
RSUs vested	(33,335)	$	86.07
RSUs canceled	(2,001)	$	105.82
Non-vested RSUs, March 31, 2021	62,115	$	142.42

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The intrinsic value of RSUs vested in the three months ended March 31, 2021 and 2020 was $3.2 million and $3.3 million, respectively.

The intrinsic value of RSUs vested in the nine months ended March 31, 2021 and 2020 was $7.7 million and $6.7 million, respectively.

The total intrinsic value of all outstanding RSUs was $18.5 million as of March 31, 2021.

As of March 31, 2021, there were unrecognized compensation costs related to RSUs of $6.6 million which the Company expects to recognize over a weighted average period of 3.4 years.

NOTE 14—INCOME TAXES

The Company recorded tax provisions of $28.0 million and $85.1 million for the three and nine months ended March 31, 2021 as compared to $17.0 million and $49.1 million for the three and nine months ended March 31, 2020. The increase is primarily related to an increase in profit before tax for the three and nine months ended March 31, 2021 as compared to the three and nine months ended March 31, 2020.

The Company’s estimated fiscal year 2021 effective tax rate, before discrete items, differs from the U.S. statutory rate primarily due to profits earned in jurisdictions where the tax rate is lower than the U.S. tax rate, partially offset by additional US tax related to the Company’s non-U.S. operations under Global Intangible Low-Taxes Income (“GILTI”) provision.

As of March 31, 2021, the Company had approximately $34.0 million of unrecognized tax benefits, substantially all of which would, if recognized, affect its tax expense. During the nine months ended March 31, 2021, the Company recorded an increase of its unrecognized tax benefits of $1.5 million. The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying Consolidated Statements of Operations and Comprehensive Income. Accrued interest and penalties are included within the related tax liability line in the Consolidated Balance Sheets. As of March 31, 2021, the Company had $4.6 million accrued interest related to uncertain tax matters.

The Company and one or more of its subsidiaries, files income tax returns in the United States federal jurisdiction, and various state, local, and foreign jurisdictions and is currently undergoing income tax examinations by the U.S. Internal Revenue Service and the Hong Kong IRD. All material consolidated federal, state and local income tax matters have been concluded for years through 2014. The majority of the Company’s foreign jurisdictions have been concluded through 2014, with the exception of Hong Kong which has been reviewed through 2009 and is currently under audit for the 2010-2016 tax years.

During fiscal years 2020, 2019, and 2018, the Company made a total of $15.5 million, $13.4 million, and $6.6 million of deposits with the Hong Kong IRD in connection with extending the statute of limitation for income tax examinations currently under audit for 2010-2015 tax years. On December 30, 2020, the Company received notification that the Hong Kong IRD is seeking an additional $67.8 million deposit covering the 2015 tax year. The Company has filed a formal protest in response to this notice and the Assessor's office agreed to a reduced deposit of $21.9 million which was remitted on March 26, 2021. These refundable deposits totaling $57.4 million are included within other long-term assets on the Company’s Consolidated Balance Sheets. The IRD is examining the Company’s claims that its revenue is generated through activities performed wholly outside of the Hong Kong tax jurisdiction and are therefore exempt from Hong Kong tax. The Company is fully cooperating with the examination including submitting documentation in support of its position. The Company continues to believe that its tax positions filed with IRD are more likely than not to be sustained based on their technical merits and therefore no reserve has been provided for this tax uncertainty and the Company expects the $57.4 million of deposits made with IRD to be refunded upon completion of the audit. However, there can be no assurance that this matter will be resolved in the Company’s favor and therefore it's possible that an adverse outcome of the matter could have a material effect on the Company’s results of operations and financial condition.

In July 2018, the Company received a draft Notice of Proposed Adjustment (“Draft NOPA”) from the Internal Revenue Service (“IRS”) proposing an adjustment to income for the fiscal 2015 and fiscal 2016 tax years based on its interpretation of certain obligations of the non-US entities under the credit facility. This Draft NOPA was superseded by an Acknowledgement of Facts (“AOF”) issued to the Company by the IRS on January 17, 2020. The IRS in its AOF continued to propose an adjustment to the Company’s income for its fiscal 2015 and fiscal 2016 tax years based on the IRS’ interpretation of certain obligations of the Company’s foreign subsidiaries under the Company’s credit facilities. On May 12, 2020, the IRS issued a final Notice of Proposed Adjustment to the Company with respect to the 2015/2016 tax years. The Company has formally protested the adjustment and the case is expected to be moved from the Examination Division to the IRS Appeals Division where a formal review of the facts and the applicable law will take place. The timing of when the case will be scheduled to be reviewed by the Appeals Division is uncertain at this time due in large part to an existing backlog of cases awaiting review by the Division. The Company strongly believes the position of the IRS with regard to this matter is without merit. However, there can be no assurance that this matter will be resolved in the Company’s favor. Regardless of whether the matter is resolved in the Company’s favor, the final resolution of this matter could be expensive and time-consuming to defend and/or settle. The Company estimates the incremental tax liability associated with the income adjustment proposed in the AOF would be approximately $50.0 million, excluding potential interest and penalties, after adjusting for the impact of an adjustment on the amount of transition tax payable in future years by the Company. As the Company believes that the tax originally paid in fiscal 2015 and fiscal 2016 is correct, it has not provided a reserve for this tax uncertainty. However, an adverse outcome may have a material and adverse effect on the Company’s results of operations and financial condition.

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The Coronavirus Aid, Relief, and Economic Security Act (“CARES”) was signed into law on March 25, 2020. The bill was meant to address the economic fallout in response to locally mandated shelter-in-place orders that were executed in an attempt to slow the spread of COVID-19. None of these provisions of CARES are expected to have material impacts to the Company’s fiscal 2021 tax provision. The Company will monitor the updates, both to the Company’s business as well as guidance issued with respect to CARES that could impact the current interpretation of the provisions under CARES, to determine whether any additional considerations need to be made with respect to the Company’s tax provision in future periods. On December 27, 2020, the Consolidations Appropriations Act (“CAA”) 2020 was enacted. The CCA was enacted as a supplement to the CARES legislation providing additional financial relief. The impact of the CCA on the Company's tax provision is immaterial.

NOTE 15—SEGMENT INFORMATION, REVENUES BY GEOGRAPHY AND SIGNIFICANT CUSTOMERS

Management has determined that the Company operates as one reportable and operating segment as it only reports financial information on an aggregate and consolidated basis to its Chief Executive Officer, who is the Company’s Chief Operating Decision Maker. Furthermore, the Company does not organize or report its costs on a segment basis. The Company presents its revenues by product type in two primary categories: Service Provider Technology and Enterprise Technology.

•Service Provider Technology includes the Company’s airMAX, EdgeMAX, UFiber, and airFiber platforms, as well as embedded radio products and other 802.11 standard products including base stations, radios, backhaul equipment and CPE. Additionally, Service Provider Technology includes antennas and other products primarily in the 0.9 to 6.0 GHz spectrum and miscellaneous products such as mounting brackets, cables and power over Ethernet adapters.

•Enterprise Technology includes the Company’s UniFi platform, including UniFi enterprise Wi-Fi, UniFi Protect, UniFi Access, UniFi switching and routing solutions and the Company’s AmpliFi platform.

Revenues by product type are as follows (in thousands, except percentages):

	Three Months Ended March 31,								Nine Months Ended March 31,
	2021				2020				2021				2020
Service Provider Technology	$	152,362	33	%	$	106,439	32	%	$	459,699	32	%	$	320,081	33	%
Enterprise Technology	314,875		67	%	230,978		68	%	960,507		68	%	648,897		67	%
Total revenues	$	467,237	100	%	$	337,417	100	%	$	1,420,206	100	%	$	968,978	100	%

Revenues by geography based on customer’s ship-to destinations were as follows (in thousands, except percentages):

	Three Months Ended March 31,								Nine Months Ended March 31,
	2021				2020				2021				2020
North America (1)	$	209,515	45	%	$	133,917	40	%	$	623,835	44	%	$	411,834	43	%
Europe, the Middle East and Africa ("EMEA")	189,573		41	%	159,436		47	%	587,507		41	%	405,883		42	%
Asia Pacific	36,145		8	%	26,232		8	%	115,464		8	%	88,753		9	%
South America	32,004		7	%	17,832		5	%	93,400		7	%	62,508		6	%
Total revenues	$	467,237	100	%	$	337,417	100	%	$	1,420,206	100	%	$	968,978	100	%

 (1) Revenue for the United States was $193.2 million and $125.4 million for the three months ended March 31, 2021 and 2020, respectively. Revenue for the United States was $582.1 million and $389.0 million for the nine months ended March 31, 2021 and 2020, respectively.

Customers with an accounts receivable balance of 10% or greater of total accounts receivable and customers with net revenues of 10% or greater of total revenues are presented below for the periods indicated:

	Percentage of Revenues				Percentage of Accounts Receivable
	Three Months Ended March 31,		Nine Months Ended March 31,		March 31,	June 30,
	2021	2020	2021	2020	2021	2020
Customer A	*	*	*	*	10%	*
Customer B	*	10%	*	12%	*	17%

NOTE 16—RELATED PARTY TRANSACTIONS AND CERTAIN OTHER TRANSACTIONS

Aircraft Lease Agreement

On November 13, 2013, the Company entered into an aircraft lease agreement (the “Aircraft Lease Agreement”) with RJP Manageco LLC (the “Lessor”), a limited liability company owned by the Company’s CEO, Robert J. Pera. Pursuant to the Aircraft Lease Agreement, the Company may lease an aircraft owned by the Lessor for Company business purposes. Under the Aircraft Lease Agreement, the aircraft may be leased at a rate of $5,000 per flight hour. This hourly rate does not include the cost of flight crew or

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on-board services, which the Company purchases from a third-party provider. Pursuant to the Aircraft Lease Agreement, the Company had no expense during the three and nine months ended March 31, 2021 and recognized a total of approximately $0.4 million and $1.3 million in expenses during the three and nine months ended March 31, 2020, respectively. All expenses pursuant to the Aircraft Lease Agreement have been included in the Company’s sales, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income.

NOTE 17 - SUBSEQUENT EVENTS

Dividends

On May 6, 2021, the Company's Board of Directors had approved a quarterly cash dividend of $0.40 per share payable on May 24, 2021 to shareholders of record at the close of business on May 17, 2021. Any future dividends will be subject to the approval of the Company’s Board of Directors.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read together with the financial statements and related notes that are included elsewhere in this quarterly report. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this quarterly report, particularly in Note 10 “Commitments and Contingencies” to our consolidated financial statements and Part II “Other Information”, Item 1-Legal Proceedings and 1A-Risk Factors, in this report.

Overview

The Company develops technology platforms for high-capacity distributed Internet access, unified information technology, and consumer electronics for professional, home and personal use. We categorize our solutions in to three main categories: high performance networking technology for service providers, enterprises and consumers. We target the service provider and enterprise markets through our highly engaged community of service providers, distributors, value added resellers, webstores, systems integrators and corporate IT professionals, which we refer to as the Ubiquiti Community. We target consumers through digital marketing, retail chains and, to a lesser extent, the Ubiquiti Community.

The majority of our human capital resources consist of entrepreneurial and de-centralized research and development (“R&D”) personnel. We do not employ a traditional direct sales force, but instead drive brand awareness through online reviews and publications, our website, our distributors and the Company’s user community where customers can interface directly with our R&D, marketing, and support teams. Our technology platforms were designed from the ground up with a focus on delivering highly-advanced and easily deployable solutions that appeal to a global customer base market.

We offer a broad and expanding portfolio of networking products and solutions for operator-owners of wireless internet services (“WISPs”), enterprises and smart homes. Our operator-owner service provider-product platforms provide carrier-class network infrastructure for fixed wireless broadband, wireless backhaul systems and routing and the related software for WISPs to easily control, track and bill their customers. Our enterprise product platforms provide wireless LAN (“WLAN”) infrastructure, video surveillance products, switching and routing solutions, security gateways, and other complimentary WLAN products along with a unique software platform, which enables users to control their network from one simple, easy to use software interface. Our consumer products, sold under the Ubiquiti Labs brand name, are targeted to the smart home and highly connected consumers. We believe that our products are highly differentiated due to our proprietary software, firmware expertise, and hardware design capabilities.

We distribute our products through a worldwide network of over 100 distributors and on-line retailers.

COVID-19 Update- The 2019 novel coronavirus (COVID-19), which the World Health Organization (“WHO”) characterized as a pandemic in March 2020, continues to disrupt global economies, and has spread to the major markets in which we operate, including the United States, Asia, Europe and South America. The COVID-19 pandemic has resulted in significant governmental measures being implemented to control the spread of the virus, including, among others, restrictions on travel, stay-at-home orders or work remote or from home conditions in many of the locations where we have offices. We have taken and will continue to take precautionary measures intended to help minimize the risk of COVID-19 to our employees. While we have not yet experienced a significant disruption to the productivity of our employees as a result of the COVID-19 pandemic, if the stay-at-home orders or work remote or from home conditions in any of our facilities continue for an extended period of time, or if we have an outbreak in any of our facilities, we may, among other issues, experience delays in product development, a decreased ability to support our customers, disruptions in sales and an overall lack of productivity. We have experienced a disruption in our supply chain and production as a result of the COVID-19 related restrictions and the global shortage of components. The current environment has impacted our suppliers’ ability to manufacture or provide key components or services, and we have incurred, and continue to incur, additional cost to expedite deliveries of components and services. The extent to which the COVID-19 pandemic and the global availability of components impacts our business going forward will depend on numerous evolving factors we cannot reliably predict, including further disruptions to our supply chain, reductions in demand due to disruptions in the operations of our customers or their end customers, disruptions in local and global economies, volatility in the global financial markets, overall reductions in demand, restrictions on the export or shipment of our products or other COVID-19-related events. This uncertainty also affects management’s

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accounting estimates and assumptions, which could result in greater variability in a variety of areas that depend on these estimates and assumptions. Refer to Risk Factors (Part II, Item 1A of this Form 10-Q) for a discussion of these factors and other risks.

Key Components of Our Results of Operations and Financial Condition

Revenues

We operate our business as one reportable and operating segment. Further information, regarding Segments can be found in Note 15 to our Consolidated Financial Statements. Our revenues are derived principally from the sale of networking hardware. Because we have historically included implied post-contract customer support (“PCS”) free of charge in many of our arrangements, we attribute a portion of our systems revenues to this implied PCS.

We classify our revenues into two primary product categories: Service Provider Technology and Enterprise Technology.

•Service Provider Technology includes the Company’s airMAX, EdgeMAX, UFiber, and airFiber platforms, as well as embedded radio products and other 802.11 standard products including base stations, radios, backhaul equipment and CPE. Additionally, Service Provider Technology includes antennas and other products primarily in the 0.9 to 6.0 GHz spectrum and miscellaneous products such as mounting brackets, cables and power over Ethernet adapters.

•Enterprise Technology includes the Company’s UniFi platforms, including UniFi enterprise Wi-Fi, UniFi Protect, UniFi Access, UniFi switching and routing solutions and the Company’s AmpliFi platform.

We sell our products and solutions globally to service providers and enterprises primarily through our extensive network of distributors, and, to a lesser extent, through direct sales. Sales to distributors accounted for 85% of our revenues during the nine months ended March 31, 2021. Direct sales accounted for 15% of our revenue during the nine months ended March 31, 2021.

For the nine months ended March 31, 2020, sales to distributors accounted for 95% of our revenues and direct sales accounted for 5% of our revenues.

Cost of Revenues

Our cost of revenues is comprised primarily of the costs of procuring finished goods from our contract manufacturers and certain key components that we consign to certain of our contract manufacturers. In addition, cost of revenues includes labor and other costs which include salary, benefits and stock-based compensation in addition to costs associated with tooling, testing and quality assurance, warranty costs, logistics costs, tariffs and excess and obsolete inventory write-downs.

We currently operate warehouses located in the U.S. and the Czech Republic. In addition, we outsource other logistics warehousing and order fulfillment functions located in China and to a lesser extent in other countries. We also evaluate and utilize other vendors for various portions of our supply chain from time to time. Our operations organization consists of employees and consultants engaged in the management of our contract manufacturers, new product introduction activities, logistical support and engineering.

Gross Profit

Our gross profit has been, and may in the future be, influenced by several factors including changes in product mix, target end markets for our products, channel inventory levels, tariffs, pricing due to competitive pressure, production costs and global demand for electronic components. Although we procure and sell our products mostly in U.S. dollars, our contract manufacturers incur many costs, including labor costs, in other currencies. To the extent that the exchange rates move unfavorably for our contract manufacturers, they may try to pass these additional costs on to us, which could have a material impact on our future average selling prices and unit costs. In June 2018, the Office of the United States Trade Representative announced new proposed tariffs for certain products imported into the U.S. from China. The vast majority of our products that are imported into the U.S. from China are currently subject to tariffs that range between 7.5% and 25%. On January 22, 2020, the Office of the United States Trade Representative announced it will reduce Section 201 List 4A and additional tariffs from 15% to 7.5% and the List 4B tariffs would not go into effect. These tariffs have already affected our operating results and margins. For so long as such tariffs are in effect, we expect it will continue to affect our operating results and margins. As a result, our historical and current gross profit margins may not be indicative of our gross profit margins for future periods. Refer to “Part II—Item 1A. Risk Factors—Risks Related to Our International Operations—Our business may be negatively affected by political events and foreign policy responses” for additional information.

Operating Expenses

We classify our operating expenses as research and development and, sales, general and administrative expenses. 

•Research and development expenses consist primarily of salary and benefit expenses, including stock-based compensation, for employees and costs for contractors engaged in research, design and development activities, as well as costs for prototypes, licensed or purchased intellectual property, facilities and travel. Over time, we expect our research and development costs to increase as we continue making significant investments in developing new products in addition to new versions of our existing products.

•Sales, general and administrative expenses include salary and benefit expenses, including stock-based compensation, for employees and costs for contractors engaged in sales, marketing and general and administrative activities, as well as the costs of legal expenses, trade shows, marketing programs, promotional materials, bad debt expense, professional services, facilities,

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general liability insurance and travel. As our product portfolio and targeted markets expand, we may need to employ different sales models, such as building a traditional direct sales force. These sales models would likely increase our costs. Over time, we expect our sales, general and administrative expenses to increase in absolute dollars due to continued growth in headcount, expansion of our efforts to register and defend trademarks and patents and to support our business and operations.

Provisions for Income Taxes

We use the asset and liability method to account for income taxes. Significant management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets. In preparing the consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. The Company must assess such potential exposures and, where necessary, provide a reserve to cover any expected loss. To the extent that the Company establishes a reserve, its provision for income taxes would be increased. If the Company ultimately determines that payment of these amounts is unnecessary, it reverses the liability and recognizes a tax benefit during the period in which it determines that the liability is no longer necessary. The Company records an additional charge in its provision for taxes in the period in which it determines that tax liability is greater than its original estimate. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations and comprehensive income. Refer to “Part II—Item 1A. Risk Factors—Risks Related to Regulatory, Legal and Tax Matters—Changes in applicable tax regulations could negatively affect our financial results” for additional information.

Critical Accounting Policies

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. In other cases, management’s judgment is required in selecting among available alternative accounting standards that provide for different accounting treatment for similar transactions. The preparation of consolidated financial statements also requires us to make estimates and assumptions that affect the amounts we report as assets, liabilities, revenues, costs and expenses and affect the related disclosures. We base our estimates on historical experience and other assumptions that we believe are reasonable under the circumstances. In many instances, we could reasonably use different accounting estimates, and in some instances changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, our actual results could differ significantly from the estimates made by our management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. Our critical accounting policies are discussed in our Annual Report, filed with the SEC on August 21, 2020, and there have been no material changes other than that have been disclosed in Note 2 to our consolidated financial statements herein. Additionally, as the COVID-19 pandemic continues to develop, many of our estimates could require increased judgement and carry a higher degree of variability and volatility. As events continue to evolve our estimates may change materially in future periods. We believe that the accounting policies discussed in our Annual Report, are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Results of Operations

Comparison of Three and Nine Months Ended March 31, 2021 and 2020

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	Three Months Ended March 31,								Nine Months Ended March 31,
	2021				2020				2021				2020
	(In thousands, except percentages)
Revenues	$	467,237	100	%	$	337,417	100	%	$	1,420,206	100	%	$	968,978	100	%
Cost of revenues (1)	244,499		52	%	177,782		53	%	738,678		52	%	512,866		53	%
Gross profit	222,738		48	%	159,635		47	%	681,528		48	%	456,112		47	%
Operating expenses:
Research and development (1)	30,483		7	%	21,672		6	%	85,208		6	%	65,965		7	%
Sales, general and administrative (1)	13,255		3	%	10,606		3	%	36,556		3	%	30,053		3	%
Total operating expenses	43,738		10	%	32,278		10	%	121,764		9	%	96,018		10	%
Income from operations	179,000		38	%	127,357		38	%	559,764		39	%	360,094		37	%
Interest expense and other, net	(4,890)		(1	%)	(6,618)		(2	%)	(12,420)		(1	%)	(23,356)		(2	%)
Income before income taxes	174,110		37	%	120,739		36	%	547,344		38	%	336,738		35	%
Provisions for income taxes	28,035		6	%	17,017		5	%	85,092		6	%	49,059		5	%
Net income	$	146,075	31	%	$	103,722	31	%	$	462,252	32	%	$	287,679	30	%
(1)    Includes stock-based compensation as follows:
Cost of revenues	23				29				80				94
Research and development	538				499				1,560				1,507
Sales, general and administrative	214				197				625				543
Total stock-based compensation	775				725				2,265				2,144

Revenues

Total revenues increased $129.8 million, or 38%, from $337.4 million in the three months ended March 31, 2020 to $467.2 million in the three months ended March 31, 2021.

Total revenues increased $451.2 million, or 47%, from $969.0 million in the nine months ended March 31, 2020 to $1.4 billion in the nine months ended March 31, 2021.

While the Company's revenue year over year increased, revenue for the three months ended March 31, 2021 declined compared to the three months ended December 31, 2020. This was primarily due to the disruption in our supply chain as a result of the COVID-19 pandemic and the global availability of components. The current environment has impacted our suppliers' ability to manufacture or provide key components and services and as a result the lack of available inventory limited our ability to meet customer orders. In addition, we continue to incur additional costs to expedite deliveries of components and services.

During the three and nine months ended March 31, 2021, there were no material price changes in the Company’s products sold.

However, the Company continues to introduce new products which may have average selling prices and margins different than our legacy products.

Revenues by Product Type

	Three Months Ended March 31,								Nine Months Ended March 31,
	2021				2020				2021				2020
	(in thousands, except percentages)
Service Provider Technology	$	152,362	33	%	$	106,439	32	%	$	459,699	32	%	$	320,081	33	%
Enterprise Technology	314,875		67	%	230,978		68	%	960,507		68	%	648,897		67	%
Total revenues	$	467,237	100	%	$	337,417	100	%	$	1,420,206	100	%	$	968,978	100	%

Service Provider Technology revenue increased $45.9 million, or 43%, from $106.4 million in the three months ended March 31, 2020 to $152.4 million in the three months ended March 31, 2021 and increased $139.6 million, or 44%, from $320.1 million in the nine months ended March 31, 2020 to $459.7 million in the nine months ended March 31, 2021.

The increase in Service Provider Technology revenue during the three and nine months ended March 31, 2021 as compared to the same periods in the prior year, was primarily due to increased revenue in all regions across all the platforms.

Enterprise Technology revenue increased $83.9 million, or 36%, from $231.0 million in the three months ended March 31, 2020 to $314.9 million in the three months ended March 31, 2021 and increased $311.6 million, or 48%, from $648.9 million in the nine months ended March 31, 2020 to $960.5 million in the nine months ended March 31, 2021.

The increase in Enterprise Technology revenue during the three months ended March 31, 2021 as compared to the same period in the

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prior year, was primarily due to product expansion and further adoption of our UniFi technology platform across all regions.

The increase in Enterprise Technology revenue during the nine months ended March 31, 2021 as compared to the same period in the prior year, was primarily due to product expansion and further adoption of our UniFi technology platform across all regions, except South America.

Revenues by Geography

We have determined the geographical distribution of our product revenues based on our customers’ ship-to destinations. A majority of our sales are to distributors who either sell to resellers or directly to end customers, who may be located in different countries than the initial ship-to destination. The following are our revenues by geography for the three and nine months ended March 31, 2021 and 2020 (in thousands, except percentages):  

	Three Months Ended March 31,								Nine Months Ended March 31,
	2021				2020				2021				2020
	(in thousands, except percentages)
North America(1)	$	209,515	45	%	$	133,917	40	%	$	623,835	44	%	$	411,834	43	%
Europe, the Middle East and Africa ("EMEA")	189,573		41	%	159,436		47	%	587,507		41	%	405,883		42	%
Asia Pacific	36,145		8	%	26,232		8	%	115,464		8	%	88,753		9	%
South America	32,004		7	%	17,832		5	%	93,400		7	%	62,508		6	%
Total revenues	$	467,237	100	%	$	337,417	100	%	$	1,420,206	100	%	$	968,978	100	%

(1) Revenue for the United States was $193.2 million and $125.4 million for the three months ended March 31, 2021 and 2020, respectively. Revenue for the United States was $582.1 million and $389.0 million for the nine months ended March 31, 2021 and 2020, respectively.

North America

Revenues in North America increased $75.6 million, or 56%, from $133.9 million in the three months ended March 31, 2020 to $209.5 million in the three months ended March 31, 2021 and increased $212.0 million, or 51%, from $411.8 million in the nine months ended March 31, 2020 to $623.8 million in the nine months ended March 31, 2021.

The increase in North America revenues during the three and nine months ended March 31, 2021 as compared to the same periods in the prior year, was primarily due to increased revenues from both our Enterprise Technology products and Service Provider Technology products.

Europe, the Middle East, and Africa (EMEA)

Revenues in EMEA increased $30.1 million, or 19%, from $159.4 million in the three months ended March 31, 2020 to $189.6 million in the three months ended March 31, 2021 and increased $181.6 million, or 45% from $405.9 million in the nine months ended March 31, 2020 to $587.5 million in the nine months ended March 31, 2021.

The increase in EMEA revenues during the three and nine months ended March 31, 2021 as compared to the same periods in the prior year, was primarily due to increased revenues from both our Enterprise Technology products and Service Provider Technology products.

Asia Pacific

Revenues in the Asia Pacific region increased $9.9 million, or 38%, from $26.2 million in the three months ended March 31, 2020 to $36.1 million in the three months ended March 31, 2021 and increased $26.7 million, or 30%, from $88.8 million in the nine months ended March 31, 2020 to $115.5 million in the nine months ended March 31, 2021.

The increase in Asia Pacific revenues during the three and nine months ended March 31, 2021 as compared to the same periods in the prior year was primarily due to increased revenues from both our Enterprise Technology products and Service Provider Technology products.

South America

Revenues in South America increased $14.2 million, or 79%, from $17.8 million in the three months ended March 31, 2020 to $32.0 million in the three months ended March 31, 2021 and increased $30.9 million, or 49%, from $62.5 million in the nine months ended March 31, 2020 to $93.4 million in the nine months ended March 31, 2021.

The increase in South America revenues during the three months ended March 31, 2021 as compared to the same period in the prior year was primarily due to increased revenues from both our Enterprise Technology products and Service Provider Technology products. The increase in the nine months ended March 31, 2021 as compared to the same periods in the prior year was primarily due to increased revenues from our Service Provider Technology products, partially offset by decreased revenues from our Enterprise Technology products.

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Cost of Revenues and Gross Profit

Cost of revenues increased $66.7 million, or 38%, from $177.8 million in the three months ended March 31, 2020 to $244.5 million in the three months ended March 31, 2021. The increase is primarily due to cost increase associated with an overall increase in revenue and higher shipping costs, partially offset by lower other indirect costs and lower tariffs.

Cost of revenues increased $225.8 million, or 44%, from $512.9 million in the nine months ended March 31, 2020 to $738.7 million in the nine months ended March 31, 2021. The increase is primarily due to cost increases associated with an overall increase in revenue, higher tariff-related costs and shipping costs, partially offset by lower other indirect costs.

Gross profit margin increased to 47.7% in the three months ended March 31, 2021 compared to 47.3% in the three months ended March 31, 2020. Gross profit margin increased to 48.0% in the nine months ended March 31, 2021 compared to 47.1% in the nine months ended March 31, 2020.

The increase in gross profit margin during the three months ended March 31, 2021 was primarily driven by higher revenue and favorable changes in product mix, tariffs and other indirect cost being lower as a percentage of overall revenue partially offset by higher shipping costs as a percentage of revenue.

The increase in gross profit margin during the nine months ended March 31, 2021 was primarily driven by higher revenue and favorable changes in product mix, and other indirect cost being lower as a percentage of overall revenue partially offset by higher shipping costs and higher tariff-related costs as a percentage of revenue.

Operating Expenses

Research and Development

Research and development (“R&D”) expenses increased $8.8 million, or 41%, from $21.7 million in the three months ended March 31, 2020 to $30.5 million in the three months ended March 31, 2021. As a percentage of revenues, R&D expenses increased from 6% for the three months ended March 31, 2020 to 7% for the three months ended March 31, 2021.

R&D expenses increased $19.2 million, or 29%, from $66.0 million in the nine months ended March 31, 2020 to $85.2 million in the nine months ended March 31, 2021. As a percentage of revenues, R&D expenses decreased from 7% for the nine months ended March 31, 2020 to 6% for the nine months ended March 31, 2021.

The increase in R&D expenses in absolute dollars for both the three and nine months ended March 31, 2021 as compared to the same periods in the prior year was primarily due to higher employee related expenses and other costs to support the increase in development activities.

Sales, General and Administrative

Sales, general and administrative (“SG&A”) expenses increased $2.6 million, or 25%, from $10.6 million in the three months ended March 31, 2020 to $13.3 million in the three months ended March 31, 2021. As a percentage of revenues, SG&A expenses decreased from 3.1% for the three months ended March 31, 2020 to 2.8% for the three months ended March 31, 2021.

SG&A expenses increased $6.5 million, or 22%, from $30.1 million in the nine months ended March 31, 2020 to $36.6 million for the nine months ended March 31, 2021. As a percentage of revenues, SG&A expenses decreased from 3.1% for the nine months ended March 31, 2020 to 2.6% for the nine months ended March 31, 2021.

The increase in SG&A expenses in absolute dollars for three months ended March 31, 2021 as compared to the same period in the prior year was primarily due to higher professional and service fees and higher depreciation expense, partially offset by lower payroll expense and a business e-mail compromise recovery received in the third quarter fiscal 2021.

The increase in SG&A expenses in absolute dollars for the nine months ended March 31, 2021 as compared to the same period in the prior year was primarily due to higher professional and service fees and higher depreciation expense offset, in part by legal settlement received in the second quarter fiscal 2021, a business e-mail compromise recovery received, lower employee related expenses and lower marketing expense.

Provision for Income Taxes

Our provision for income taxes increased $11.0 million, or 64.7%, from $17.0 million for the three months ended March 31, 2020 to $28.0 million for the three months ended March 31, 2021. Our effective tax rate increased to 16.1% for the three months ended March 31, 2021 as compared to 14.1% for the three months ended March 31, 2020.

Our provisions for income taxes increased $36.0 million, or 73%, from $49.1 million for the nine months ended March 31, 2020 to $85.1 million for the nine months ended March 31, 2021. Our effective tax rate increased to 15.5% for the nine months ended March 31, 2021 as compared to 14.6% for the nine months ended March 31, 2020.

The change in effective tax rates for the three and nine months ended March 31, 2021 as compared to the same periods in the prior year was primarily due to the increase in overall taxable income in jurisdictions with higher tax rates.

Liquidity and Capital Resources

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Sources and Uses of Cash

Our principal source of liquidity are cash and cash equivalents, cash generated by operations, the availability of additional funds under the Facilities and short-term and long-term investments. We had cash and cash equivalents of $262.8 million and $142.6 million as of March 31, 2021 and June 30, 2020, respectively.

Consolidated Cash Flow Data

The following table sets forth the major components of our consolidated statements of cash flows data for the periods presented:

	Nine Months Ended March 31,
	2021		2020
	(In thousands)
Net cash provided by operating activities	$	447,773	$	335,330
Net cash provided by (used in) investing activities	(15,080)		60,377
Net cash (used in) financing activities	(312,519)		(556,073)
Net increase (decrease) in cash and cash equivalents	$	120,174	$	(160,366)

Cash Flows from Operating Activities

Net cash provided by operating activities in the nine months ended March 31, 2021 consisted primarily of net income of $462.3 million partially offset by changes in operating assets and liabilities that resulted in net cash outflows of $36.2 million. This net change consisted primarily of a $60.8 million decrease in inventory offset by $3.6 million increase in vendor deposits, a $45.2 million increase in accounts receivable due to higher revenue for the period, a $3.8 million decrease in net accounts payable and accrued liabilities, a $26.2 million decrease in taxes payable due to the timing of federal tax payments and a $27.1 million increase in prepaid expense and other assets.

Net cash provided by operating activities in the nine months ended March 31, 2020 consisted primarily of net income of $287.7 million, in addition to the changes in operating assets and liabilities that resulted in net cash inflows of $25.3 million. This net change consisted primarily of a $53.3 million decrease in inventory and $2.4 million decrease in vendor deposit, $8.4 million increase in net accounts payable and accrued liabilities, $3.4 million decrease in prepaid expense and other assets, a $17.8 million increase in accounts receivable and a $25.4 million decrease in taxes payable due to the timing of federal tax payments.

Cash Flows from Investing Activities

We used $15.1 million of cash in investing activities during the nine months ended March 31, 2021. Our investing activities consisted primarily of $16.0 million of capital expenditures and purchase of intangible assets, partially offset by maturities of investment securities of $0.9 million.

Net cash provided by investing activities in the nine months ended March 31, 2020 was $60.4 million. Our investing activities consisted primarily of cash inflows of $89.2 million net proceeds from our available-for-sale securities offset, in part by cash outflows of $28.8 million of capital expenditures.

Cash Flows from Financing Activities

The Company used $312.5 million of cash in financing activities during the nine months ended March 31, 2021. During the nine months ended March 31, 2021, we used $80.0 million of net funds for repayments under the Facilities, $152.6 million related to the repurchase of our common stock, $75.7 million related to dividends paid on our common stock and $3.3 million of debt issuance costs related to the amended and restated credit agreement. See Note 8- Debt of the Notes to our Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information regarding the Facilities.

The Company used $556.1 million of cash in financing activities during the nine months ended March 31, 2020. During the nine months ended March 31, 2020, we generated $188.8 million of net funds from borrowing and repayments under the Company's credit facilities, which were more than offset by financing cash outflows of $681.2 million related to the repurchase of our common stock, $59.6 million related to dividends paid on our common stock and $3.1 million of debt issuance costs.

Liquidity

We believe our existing cash and cash equivalents, cash provided by operations and the availability of additional funds, under our Facilities will be sufficient to meet our working capital, future stock repurchases, dividends, and capital expenditure needs for the next twelve months. However, this estimate is based on a number of assumptions that may prove to be wrong and we could exhaust our available cash and cash equivalents earlier than presently anticipated or need to rely more heavily on our Facilities or other sources of liquidity to continue to meet our needs. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth, the timing and extent of spending to support development efforts, the timing of new product introductions, market acceptance of our products, the availability of additional funds under our Facilities and overall economic conditions. The COVID-19 pandemic and resulting global disruptions have caused significant volatility in financial

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markets and the domestic and global economy. This disruption can contribute to potential payment delays or defaults in our accounts receivable, affect asset valuations resulting in impairment charges, and affect the availability of financing credit as well as other segments of the credit markets. For a further discussion of the uncertainties and business risks associated with the COVID-19 pandemic, refer to “Part II-Item 1A. Risk Factors – Risks Related to Our Business and Industry - Our contract manufacturers, logistics centers and certain administrative and research and development operations, as well as our customers and suppliers, are located in areas likely to be subject to natural disasters and public health problems, which could adversely affect our business, results of operations and financial condition” for additional information. We expect to continue to maintain financing flexibility in the current market conditions. However, due to the rapidly evolving global situation, it is not possible to predict whether unanticipated consequences of the pandemic are reasonably likely to materially affect our liquidity and capital resources in the future.

Warranties and Indemnifications

Our products are generally accompanied by a twelve to twenty- four-month warranty from date of purchase, which covers both parts and labor. Generally, the distributor is responsible for the freight costs associated with warranty returns, and we absorb the freight costs of replacing items under warranty. In accordance with the Financial Accounting Standards Board’s (“FASB’s”), Accounting Standards Codification (“ASC”), 450-20, Loss Contingencies, we record an accrual when we believe it is reasonably estimable and probable based upon historical experience. We record a provision for estimated future warranty work in cost of goods sold upon recognition of revenues, and we review the resulting accrual regularly and periodically adjust it to reflect changes in warranty estimates.

We have entered and may in the future enter into standard indemnification agreements with certain distributors as well as other business partners in the ordinary course of business. These agreements may include provisions for indemnifying the distributor, OEM or other business partner against any claim brought by a third-party to the extent any such claim alleges that a Ubiquiti product infringes a patent, copyright or trademark or violates any other proprietary rights of that third-party. The maximum amount of potential future indemnification is unlimited. The maximum potential amount of future payments we could be required to make under these indemnification agreements is not estimable.

We have agreed to indemnify our directors, officers and certain other employees for certain events or occurrences, subject to certain limits, while such persons are or were serving at our request in such capacity. We may terminate the indemnification agreements with these persons upon the termination of their services with us, but termination will not affect claims for indemnification related to events occurring prior to the effective date of termination. The maximum amount of potential future indemnification is unlimited. We have a Directors and Officers insurance policy that limits our potential exposure for our indemnification obligations to our directors, officers and certain other employees. We believe the fair value of these indemnification agreements is minimal. We have not recorded any liabilities for these agreements as of March 31, 2021.

Based upon our historical experience and information known as of the date of this report, we do not believe it is likely that we have a material liability for the above indemnities as of March 31, 2021.

Contractual Obligations and Off-Balance Sheet Arrangements

Our contractual obligations represent material expected or contractually committed future payment obligations. We believe that we will be able to fund these obligations through our existing cash and cash equivalents, cash generated from operations and the availability of additional funds, under the Facilities.

The following table summarizes the Company’s contractual obligations as of March 31, 2021 for the remainder of fiscal 2021 and future fiscal years (in thousands):

	2021 (remainder)		2022		2023		2024		2025		Thereafter		Total
Operating leases	2,466		9,343		8,258		7,820		7,265		8,020		43,172
Debt payment obligations	6,250		25,000		25,000		25,000		25,000		468,750		575,000
Interest and other payments on debt payment obligations	2,654		10,391		9,983		9,601		9,167		6,590		48,386
Transition tax	—		9,004		9,004		16,882		22,509		28,136		85,535
Other obligations	6,212		20,000		20,000		6,667		—		—		52,879
Total	$	17,582	$	73,738	$	72,245	$	65,970	$	63,941	$	511,496	$	804,972

Purchase Obligations

We subcontract with third parties to manufacture our products and have purchase commitments with key component suppliers. During the normal course of business, our contract manufacturers procure components and manufacture products based upon orders placed by us. If we cancel all or part of the orders, we may still be liable to the contract manufacturers for the cost of the components purchased by the subcontractors to manufacture our products. We periodically review the potential liability, and as of March 31, 2021, we have recorded a purchase obligation liability of $8.3 million related to component purchase commitments. There have been no other

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significant liabilities for cancellations recorded as of March 31, 2021. Our consolidated financial position and results of operations could be negatively impacted if we were required to compensate the contract manufacturers for any unrecorded liabilities incurred. We may be subject to additional purchase obligations for supply agreements and components ordered by our contract manufacturers based on manufacturing forecasts we provide them each month. We estimate the amount of these additional purchase obligations to range from $150.3 million to $756.5 million as of March 31, 2021, depending upon the timing of orders placed for these components by our contract manufacturers.

Transition Tax

The Company also had obligations of $85.5 million as of March 31, 2021, related to Transition Tax. These obligations are included within Income taxes payable and Long-term taxes payable on our Consolidated Balance Sheets.

Other Obligations

The Company had other obligations of $52.9 as of March 31, 2021, which consisted primarily of commitments related to raw materials and research and development projects.

Unrecognized Tax Benefits

As of March 31, 2021, we had $34.0 million and an additional $4.6 million for accrued interest, classified as non-current liabilities. At this time, we are unable to make a reasonably reliable estimate of timing of payments in individual years in connection with these tax liabilities; therefore, such amounts are not included in the above contractual obligation table.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, refer to Note 2 to the Consolidated Financial Statements.

Note About Forward-Looking Statements

When used in this Report, the words “anticipates,” “believes,” “could,” “seeks,” “estimates,” “expects,” “intends,” “may,” “plans” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions and negatives of those terms are intended to identify forward-looking statements. These are statements that relate to future periods and include statements about our future results, sources of revenue, our dividend, our continued growth, our gross margins, market trends, our product development, our introduction of new products, technological developments, the features, benefits and performance of our current and future products, the ability of our products to address a variety of markets, the anticipated growth of demand for connectivity worldwide, our growth strategies, future price reductions, our competitive status, our dependence on our senior management and our ability to attract and retain key personnel, dependency on and concentration of our distributors, our employee relations, current and potential litigation, current or potential indemnification liabilities, the effects of government regulations, the impact of tariffs, the expected impact of taxes on our liquidity and results of operations, our compliance with laws and regulations, our expected future operating costs and expenses and expenditure levels for research and development, selling, general and administrative expenses, fluctuations in operating results, fluctuations in our stock price, our payment of dividends, our future liquidity and cash needs, and the adequacy of and our reliance on our source of liquidity to meet such needs, our Facilities, future acquisitions of and investments in complimentary businesses and the expected impact of various accounting policies and rules adopted by the Financial Accounting Standards Board and the impact of COVID-19 pandemic on our business. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include, but are not limited to, the impact of U.S. tariffs on results of operations, our ability to manage our growth, our ability to sustain or increase profitability, demand for our products, our ability to compete, our ability to rapidly develop new technology and introduce new products, our ability to safeguard our intellectual property, trends in the networking industry and fluctuations in general economic conditions, the impact of COVID-19 pandemic on our business, results and liquidity, volatility in our short-term investments, and the risks set forth throughout this Report, including under Part II: “Other Information”, Item 1, “Legal Proceedings” and under Item 1A, “Risk Factors.” These forward-looking statements speak only as of the date hereof. Except as required by law, we expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Sensitivity

We had cash and cash equivalents of $262.8 million and $142.6 million as of March 31, 2021 and June 30, 2020, respectively. Cash and cash equivalents include securities that have a maturity of three months or less at the date of purchase. These amounts were held primarily in cash deposit accounts in U.S. dollars. The fair value of our cash and cash equivalents would not be significantly affected by either a 10% increase or decrease in interest rates due mainly to the short-term nature of these instruments.

Debt

We are exposed to interest rates risks primarily through borrowing under our credit facility. Interest on our borrowings is based on variable rates. Based on a sensitivity analysis, as of March 31, 2021, an instantaneous and sustained 200-basis-point increase in interest rates affecting our floating rate debt obligations, and assuming that we take no counteractive measures, would result in an

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incremental charge to our income before income taxes of approximately $11.5 million over the next twelve months.

Foreign Currency Risk

The vast majority of our sales are denominated in U.S. dollars, and therefore, our revenues are not directly subject to foreign currency risk. Certain of our operating expenses are denominated in the currencies of the countries in which our operations are located, and may be subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Chinese Yuan, Euro, and Taiwan Dollar. A 10% appreciation or depreciation in the value of the U.S. dollar relative to the other currencies in which our expenses are denominated would result in a charge or benefit to our income before income taxes of approximately $2.3 million.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Management, with the participation of the Company’s Chief Executive Officer and Chief Accounting and Finance Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2021. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives. Based on the evaluation of our disclosure controls and procedures as of March 31, 2021, our Chief Executive Officer and Chief Accounting and Finance Officer concluded that, as of such date, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the three months ended March 31, 2021, that materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

PART II: OTHER INFORMATION

Item 1. Legal Proceedings

Please see Part I, Item 1, Note 10 of the notes to consolidated financial statements for a discussion of our legal proceedings.

Item 1A. Risk Factors

This Report contains forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include, but are not limited to, the risk factors set forth below. These risks and uncertainties are not the only ones we face. If any event related to these known or unknown risks or uncertainties actually occurs, our business prospects, operating results, and financial condition could be materially adversely affected.

Risk Factors Summary

•our limited ability to forecast our results of operations and sales;

•volatility and competition in the markets we serve or our inability to compete effectively with our competitors;

•our reliance on a limited number of distributors for our products and the inability of our distributors to manage inventory of our products effectively, timely sell our products or estimate future demand for our products;

•our inventory decisions, including, without limitation, for new product introductions, are based on assumptions and forecasts, which, if inaccurate, may result in write-downs of inventory or components;

•our inability to keep pace with rapid technological and market changes or to maintain competitive prices for products;

•the technological complexity of our products, which may contain undetected hardware defects or software bugs;

•our inability to anticipate or mitigate cyberattacks, security vulnerabilities or other fraudulent or illegal activity;

•our inability to manage our growth and expand our operations;

•our inability to maintain or enhance the strength of our brand;

•our reliance on a limited number of contract manufacturers to manufacture our products, and potential quality or product supply problems for our products if we are unable to secure sufficient components for our products or there is a shortage of manufacturing capacity;

•our reliance on a limited number of suppliers and our inability to predict shortages in components or other supply disruptions, including, without limitations, as a result of COVID-19, or to identify or qualify alternative suppliers;

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•disruption to the manufacturing or shipping of our products due to natural disasters, labor shortages or operational reductions from outbreaks of diseases or other public health events, including, without limitation, COVID-19, or similar disruptions in the countries or regions in which our contract manufacturers or logistics contractors are located;

•a global economic downturn;

•lower than expected returns from our investments in growth areas or our enterprise and service provider technologies;

•the ineffective management of product introductions, product transitions and marketing or our inability to remain competitive and stimulate customer demand for our products;

•our inability to anticipate consumer preferences and develop desirable consumer products and solutions, or to execute our strategy for our consumer products or develop our sales channels;

•general credit, liquidity, market, and interest rate risks to our investment securities;

•exposure to increased economic and operational uncertainties from our international operations, including, without limitation, as a result of foreign policy and geopolitical developments, varying legal and regulatory regimes and the effects of foreign currency exchange rates;

•the failure of our foreign warehouse and logistics providers to safeguard, manage and properly report our inventory;

•exposure to increased operational risks and liability to the extent we develop our own foreign manufacturing capacity;

•our inability to manage geographically dispersed research and development teams;

•our limited ability to obtain and enforce our intellectual property rights, particularly in China and South America;

•the misappropriation of our intellectual property and trade secrets by our contract manufacturers or others to manufacture competitive products or counterfeit products;

•our exposure to extensive intellectual property litigation;

•the risks of using open source software in our products;

•our debt levels and the impact our debt levels may have on our ability to raise capital or otherwise finance our business;

•the risks of expanding our product offerings or our operations or increases in our operating expenses;

•exposure to increased operational risks associated with our investments in new businesses, products, services, technologies, joint ventures and other strategic transactions;

•our reliance on third-party software and services for certain aspects of our operations, including, without limitation, our financial reporting functions;

•our inability to integrate future acquisitions;

•changes in LIBOR reporting practices and the index used to replace LIBOR;

•our reliance on our founder and chief executive officer, who owns a majority of our common stock;

•volatility in the price of our common stock due to volatility in our results of operations or our failure to pay cash dividends or to repurchase shares of our common stock pursuant to our repurchase programs;

•the reliance of our products on unlicensed radio frequency spectrum, and the increasing reliance of consumer and other products on the same spectrum or from the introduction of regulation of such spectrum;

•potential liability under trade protection, anti-corruption, and other laws resulting from our global operations;

•changes in laws and regulations relating to the handling of personal data;

•the adverse impact from litigation matters;

•the adverse impact to our results of operations from successful warranty claims, product losses or recalls;

•indemnification claims against us for intellectual property infringement, defective products, and security vulnerabilities;

•our inability to maintain an effective system of internal controls; and

•changes in tax laws and regulations or reviews or audits of our tax returns.

Risks Related to Our Business and Industry

We have limited visibility into future sales, which makes it difficult to forecast our future results of operations.

Because of our limited visibility into end customer demand and channel inventory levels, our ability to accurately forecast our future sales is limited. We sell our products and solutions globally to network operators, service providers and consumers, primarily through our network of distributors and resellers. We do not employ a traditional direct sales force. Sales to our distributors have accounted for the majority of our revenues. Our distributors do not make long term purchase commitments to us, and do not typically provide us with information about market demand for our products. We endeavor to obtain information on inventory levels and sales data from our distributors. This information has been generally difficult to obtain in a timely manner, and we cannot always be certain that the information is reliable. If we over forecast demand, we may not be able to decrease our expenses in time to offset any shortfall in revenues, which could harm our ability to achieve or sustain expected results of operations. If we under forecast demand, our ability to fulfill sales orders will be compromised and sales to distributors may be deferred or lost altogether, which would reduce our revenues and could harm our ability to achieve or sustain expected results of operations.

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The markets we serve can be especially volatile, and weakness in orders could harm our future results of operations.

Weakness in orders, directly or indirectly, from the markets we serve, including as a result of any slowdown in capital expenditures by the markets we service (which may be more prevalent during a global economic downturn, or periods of economic, political or regulatory uncertainty), could have a material adverse effect on our business, results of operations, liquidity and financial condition. Such slowdowns may continue or recur in future periods. Orders from the markets we serve could decline for many reasons other than the competitiveness of our products and services within their respective markets. These conditions have harmed our business and results of operations in the past, and some of these or other conditions in the markets we serve could affect our business and results of operations, liquidity or financial condition in any future period of such slowdowns.

We are subject to risks associated with our distributors’ inventory management practices.

Our distributors purchase and maintain their own inventories of our products, and we do not control their inventory management. Distributors may manage their inventories in a manner that causes significant fluctuations in their purchases from quarter to quarter, and which may not be in alignment with the actual demand of end customers for our products. If some distributors decide to purchase more of our products than are required to satisfy their customers’ demand in any particular quarter, because they do not accurately forecast demand or otherwise, they may reduce future orders until their inventory levels realign with their customers’ demand. If some distributors decide to purchase less of our products than are required to satisfy their customers’ demand in any particular quarter, because they do not accurately forecast demand or otherwise, sales of our products may be deferred or lost altogether, which could materially adversely affect our results of operations.

If our forecasts of future sales are inaccurate, we may manufacture too many or not enough products.

We may over or under forecast our customers’ actual demand for our products or the actual mix of our products that they will ultimately demand. If we over-forecast demand, we may build excess inventory which could materially adversely affect our operating results. If we under-forecast demand, we may miss opportunities for sales and may impair our customer relationships, which could materially adversely affect our results of operations.

The lead times that we face for the procurement of components and subsequent manufacturing of our products are usually much longer than the lead time from our customers’ orders to the expected delivery date. This increases the risk that we may manufacture too many or not enough products in any given period.

We may need to build inventory for new product announcements and shipments or decide to increase or maintain higher levels of inventory, which may result in inventory write-downs.

The Company must order components for its products and build inventory, both of finished products and components, in advance of new product announcements and shipments. Decisions to build inventory for new products or to increase or maintain higher inventory levels are typically based upon uncertain forecasts or other assumptions and may expose us to a greater risk of carrying excess or obsolete inventory. Because the markets in which the Company compete are volatile, competitive and subject to rapid technology and price changes, if the assumptions on which we base these decisions turn out to be incorrect, our financial performance could suffer and we could be required to write-off the value of excess products or components inventory or not fully utilize firm purchase commitments.

We rely on a limited number of distributors, and changes in our relationships with our distributors or changes within our distributors may disrupt our sales.

Although we have a large number of distributors in numerous countries who sell our products, a limited number of these distributors represent a significant portion of our sales. One or more of our major distributors may suffer from a decline in their financial condition, decrease in demand from their customers, or a decline in other aspects of their business which could impair their ability to purchase and resell our products. Any distributor may also cease doing business with us at any time with little or no notice. The termination of a relationship with a major distributor, either by us or by the distributor, could result in a temporary or permanent loss of revenues, slower or impaired collection on accounts receivable and costly and time-consuming litigation or arbitration. We may not be successful in finding other suitable distributors on satisfactory terms, or at all, and this could adversely affect our ability to sell in certain geographic markets or to certain network operators and service providers. We do not generally obtain letters of credit or other security for payment from the distributors, so we are not protected against accounts receivable default by the distributors.

We may not be able to enhance our products to keep pace with technological and market developments while offering competitive prices.

The market for our wireless broadband networking equipment is emerging and is characterized by rapid technological change, evolving industry standards, frequent new product introductions and short product life cycles. The markets for enterprise networking equipment and consumer products possess similar characteristics of rapid technological updates, evolving industry standards, frequent changes in consumer preferences, frequent new product introductions and short and unpredictable product life cycles. Our ability to keep pace in these markets depends upon our ability to enhance our current products, and continue to develop and introduce new products rapidly and at competitive prices. The success of new product introductions or updates on existing products depends on a

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number of factors including, but not limited to, timely and successful product development, market acceptance, our ability to manage the risks associated with new product production ramp-up, the effective management of our inventory and manufacturing schedule and the risk that new products may have defects or other deficiencies in the early stages of introduction. The development of our products is complex and costly, and we typically have several products in development at the same time. Given the complexity, we occasionally have experienced, and could experience in the future, lower than expected yields on new or enhanced products and delays in completing the development and introduction of new products and enhancements to existing products. In addition, new products may have lower selling prices or higher costs than existing products, which could negatively impact our results of operations. Our ability to compete successfully will depend in large measure on our ability to maintain a technically skilled development and engineering staff, to successfully innovate, and to adapt to technological changes and advances in the industry. Development and delivery schedules for our products are difficult to predict. We may fail to introduce new products or enhancements to existing products in a timely fashion. If new releases of our products are delayed, our distributors may curtail their efforts to market and promote our products and our users may switch to competing products.

The markets in which we compete are highly competitive.

The networking, enterprise WLAN, routing, switching, video surveillance, wireless backhaul, machine-to-machine communications and consumer markets in which we primarily compete are highly competitive and are influenced by competitive factors including:

•our ability to rapidly develop and introduce new high-performance integrated solutions;

•the price and total cost of ownership and return on investment associated with the solutions;

•the simplicity of deployment and use of the solutions;

•the reliability and scalability of the solutions;

•the market awareness of a particular brand;

•our ability to provide secure access to wireless networks;

•our ability to offer a suite of products and solutions;

•our ability to allow centralized management of the solutions; and

•our ability to provide product support.

New entrants seeking to gain market share by introducing new technology and new products may also make it more difficult for us to sell our products, and could create increased pricing pressure. In addition, broadband equipment providers or system integrators may also offer wireless broadband infrastructure equipment for free or as part of a bundled offering, which could force us to reduce our prices or change our selling model to remain competitive.

If there is a shift in the market such that network operators and service providers begin to use closed network solutions that only operate with other equipment from the same vendor, we could experience a significant decline in sales because our products would not be interoperable.

We expect competition to continuously intensify as other established and new companies introduce new products in the same markets that we serve or intend to enter, as these markets consolidate. Our business, results of operations, liquidity and financial condition will suffer if we do not maintain our competitiveness.

A number of our current or potential competitors have longer operating histories, greater brand recognition, larger customer bases and significantly greater resources than we do.

As we move into new markets for different types of products, our brand may not be as well-known as the incumbents’ brands in those markets. Potential customers may prefer to purchase from their existing suppliers or well-known brands rather than a new supplier, regardless of product performance or features. We expect increased competition from other established and emerging companies if our market continues to develop and expand. As we enter new markets, we expect to face competition from incumbent and new market participants and there is no assurance that our entry into new markets will be successful.

Many of these companies have significantly greater financial, technical, marketing, distribution and other resources than we do and are better positioned to acquire and offer complementary products and technologies.

Industry consolidation, acquisitions and other arrangements among competitors may adversely affect our competitiveness because it may be more difficult to compete with entities that have access to their combined resources. As a result of such consolidation, acquisition or other arrangements, our current and potential competitors might be able to adapt more quickly to new technologies and consumer preference, devote greater resources to the marketing and promotion of their products, initiate or withstand price competition, and take advantage of acquisitions or other opportunities more readily and develop and expand their products more quickly than we do. These combinations may also affect customers’ perceptions regarding the viability of companies of our size and, consequently, affect their willingness to purchase our products.

The complexity of our products could result in unforeseen delays or expenses caused by undetected defects or bugs.

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Our products may contain defects and bugs when they are introduced, or as new versions are released. We have focused, and intend to focus in the future, on getting our new products to market quickly. Due to our rapid product introductions, defects and bugs that may be contained in our products may not yet have manifested. We have in the past experienced, and may in the future experience, defects and bugs. If any of our products contain material defects or bugs, or has reliability, quality or compatibility problems, we may not be able to correct these problems promptly or successfully. The existence of defects or bugs in our products may damage our reputation and disrupt our sales. If any of these problems are not found until after we have commenced commercial production and distribution of a new product, we may be required to incur additional development costs, repair or replacement costs, and other costs relating to regulatory proceedings, product recalls and litigation, which could harm our reputation and results of operations. Undetected defects or bugs may lead to negative online Internet reviews of our products, which are increasingly becoming a significant factor in the success of our new product launches, especially for our consumer products. If we are unable to quickly respond to negative reviews, including end user reviews posted on various prominent online retailers, our ability to sell these products will be harmed. Moreover, we may offer stock rotation rights to our distributors. If we experience greater returns from retailers or end customers, or greater warranty claims, in excess of our reserves, our business, revenue and results of operations could be harmed.

Security vulnerabilities in our products, services and systems could lead to reduced revenues and claims against us.

The quality and performance of some of our products and services may depend upon their ability to withstand cyber-attacks. Third parties may develop and deploy viruses, worms and other malicious software programs, some of which may be designed to attack our products, systems, or networks. Some of our products and services also involve the storage and transmission of users’ and customers’ proprietary information which may be the target of cyber-attacks. Hardware and software that we produce or procure from third parties also may contain defects in manufacture or design, including bugs and other problems, which could compromise their ability to withstand cyber-attacks.

We have experienced cyber-attacks in the past, and may experience cyber-attacks in the future. As a result, unauthorized parties have obtained, and may in the future obtain, access to our systems and data and may have obtained, and may in the future obtain, our users’ or customers’ data. Our security measures have in the past, and may in the future, be breached due to employee error, malfeasance, or otherwise. Third parties may also attempt to induce employees, users, or customers to disclose sensitive information in order to gain access to our data or our users’ or customers’ data. Any such breach or unauthorized access could result in significant legal and financial exposure, damage to our reputation, and a loss of confidence in the security of our products and services. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.

For example, in January 2021, we became aware that certain of our information technology systems hosted by a third party cloud provider were improperly accessed and certain of our source code and the credentials used to access the information technology systems themselves had been compromised. We received a threat to publicly release these materials unless we made a payment, which we have not done. As a result, it is possible that the source code and other information could be publicly disclosed or made available to our competitors. Due to the nature of the source code and the other information that we believe was improperly accessed, we at this time do not believe that any public disclosure will have a material adverse effect on our business or operations, but it is impossible to gauge the precise impact of any such disclosure. We have taken, and will continue to take, steps to remediate access controls to our information technology systems.

The costs to us to eliminate or alleviate security vulnerabilities can be significant, and our efforts to address these problems may not be successful and could result in interruptions, delays, cessation of service and loss of existing or potential customers that may impede our sales, manufacturing, distribution or other critical functions, as well as potential liability to the company. The risk that these types of events could seriously harm our business is likely to increase as we expand the web-based products and services that we offer.

We may be unable to anticipate or fail to adequately mitigate against increasingly sophisticated methods to engage in illegal or fraudulent activities against us.

Despite any defensive measures we take to manage threats to our business, our risk and exposure to these matters remain heightened because of, among other things, the evolving nature of such threats in light of advances in computer capabilities, new discoveries in the field of cryptography, new and sophisticated methods used by criminals including phishing, social engineering or other illicit acts, or other events or developments that we may be unable to anticipate or fail to adequately mitigate. In June 2015, we determined that we were the victim of criminal fraud known to law enforcement authorities as business e-mail compromise fraud which involved employee impersonation and fraudulent requests targeting our finance department. The fraud resulted in transfers of funds aggregating $46.7 million held by a Company subsidiary incorporated in Hong Kong to other overseas accounts held by third parties. To date, the Company has recovered $18.6 million. The Company recovered $8.1 million in fiscal 2015, resulting in a charge of $39.1 million in the fourth quarter of fiscal 2015, including additional expenses consisting of professional service fees associated with the fraud loss. In fiscal 2016, the Company recorded a net recovery of an additional $8.3 million, comprised of an $8.6 million recovery less $0.3 million of professional service fees associated with the recovery. In March 2021, the Company recorded a recovery of an additional $1.9 million. No additional recoveries were made since March 31, 2021.

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The Company is continuing to pursue the recovery of the remaining $28.1 million and is cooperating with numerous overseas law enforcement authorities who are actively pursuing a multi-agency criminal investigation. However, any additional recoveries are likely remote and therefore cannot be assured.

While we do not expect the fraud to have a material impact on our business, we have borne, and will continue to bear additional expenses in connection with the remediation and investigation of the fraud.

Any future illegal acts such as phishing, social engineering or other fraudulent conduct that go undetected may have significant negative impacts on our reputation, operating results and stock price.

Our business and prospects depend on the strength of our brand.

Maintaining and enhancing our brand is critical to expanding our base of distributors and end customers. Maintaining and enhancing our brand will depend largely on our ability to continue to develop and provide products and solutions that address the price-performance characteristics sought by end customers and the users of our products and services, particularly in developing markets which comprise a significant part of our business. If we fail to promote, maintain and protect our brand successfully, our ability to sustain and expand our business and enter new markets will suffer.

We may fail to effectively manage the challenges associated with our growth.

Over the past several years we have expanded, and continue to expand, our product offerings, the number of customers we sell to, our transaction volumes, the number of our facilities, and the number of contract manufacturers that we utilize to produce our products. Failure to effectively manage the increased complexity associated with this expansion, particularly in light of our lean management structure, would make it difficult to conduct our business, fulfill customer orders, and pursue our strategies. We may also need to increase costs to add personnel, upgrade or replace our existing reporting systems, as well as improve our business processes and controls as a result of these changes. If we fail to effectively manage any of these challenges, we could suffer inefficiencies, errors and disruptions in our business, which in turn would adversely affect our results of operations.

We rely on a limited number of contract manufacturers to produce our products. Supply chain issues or a shortage of adequate component supply or manufacturing capacity could increase our costs or delay our ability to fulfill future orders and could have a material adverse impact on our business and results of operations.

We retain contract manufacturers, located primarily in China and Vietnam, to manufacture our products. Any significant change in our relationship with these manufacturers could have a material adverse effect on our business, results of operations and financial condition. Our reliance on contract manufacturers for manufacturing our products can present significant risks to us because, among other things, we do not have direct control over their activities. If we fail to manage our relationship with our manufacturers effectively, or if they experience operational difficulties, our ability to ship products to our retailers and distributors could be impaired and our competitive position and reputation could be harmed.

We significantly depend upon our contract manufacturers to:

•assure the quality of our products;

•manage capacity during periods of volatile demand;

•qualify appropriate component suppliers;

•ensure adequate supplies of components and materials;

•deliver finished products at agreed upon prices and schedules; and

•safeguard materials and finished goods.

The ability and willingness of our contract manufacturers to perform is largely outside our control.

In the event that we receive shipments of products that fail to comply with our technical specifications or that fail to conform to our quality control standards, and we are not able to obtain replacement products in a timely manner, we risk revenue losses from the inability to sell those products, increased administrative and shipping costs, and lower profitability. Additionally, if defects are not discovered until after distributors and/or end users purchase our products, they could lose confidence in the technical attributes of our products and our business and results of operations could be harmed.

We do not control our contract manufacturers or suppliers, including their labor, environmental or other practices. Environmental regulations or changes in the supply, demand or available sources of natural resources may affect the availability and cost of goods and services necessary to run our business. Non-compliance or deliberate violations of labor, environmental or other laws by our contract manufacturer or suppliers, or a failure of these parties to follow ethical business practices, could lead to negative publicity and harm our reputation or brand.

We believe that our orders may not represent a material portion of our contract manufacturers’ total orders and, as a result, fulfilling our orders may not be a priority in the event our contract manufacturers are constrained in their capacity. If any of our contract manufacturers experiences problems in its manufacturing operations, or if we have to change or add additional contract manufacturers, our ability to ship products to our customers would be impaired.

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Additionally, any or all of the following could either limit supply or increase costs, directly or indirectly, to us or our contract manufacturers:

•labor strikes or shortages; including shortages in labor as a result of, or to mitigate, the spread of COVID-19

•financial problems of either contract manufacturers or component suppliers;

•reservation of manufacturing capacity at our contract manufactures by other companies, inside or outside of our industry;

•changes or uncertainty in tariffs, economic sanctions, and other trade barriers; and

•industry consolidation occurring within one or more component supplier markets, such as the semiconductor market.

We rely upon a limited number of suppliers, and it can be costly and time consuming to use components from other suppliers.

We purchase components, directly or through our contract manufacturers, from third parties that are necessary for the manufacture of our products. Shortages in the supply of components or other supply disruptions, including, without limitations, due to reductions in supply as a result of COVID-19, may not be predicted in time to design-in different components or qualify other suppliers. Shortages or supply disruptions may also increase the prices of components due to market conditions. While many components are generally available from a variety of sources, we and our contract manufacturers currently depend on a single or limited number of suppliers for several components for our products. For example, we currently rely upon some chipset suppliers, such as Qualcomm Atheros and Broadcom, as single-source suppliers of certain components for some of our products, and a disruption in the supply of those components would significantly disrupt our business.

We and our contract manufacturers generally rely on short-term purchase orders rather than long-term contracts with the suppliers of components for our products. As a result, even if components are available, we and our contract manufacturers may not be able to procure sufficient components at reasonable prices to build our products in a timely manner. Further, in order to minimize their inventory risk, our manufacturers might not order components from third-party suppliers with adequate lead time, thereby impacting our ability to meet our demand forecast. We may, therefore, be unable to meet customer demand for our products, which would have a material adverse effect on our business, results of operations and financial condition.

Our products, especially new products, sometimes utilize custom components available from only one or limited number of sources. When a component or product uses new technologies, capacity constraints may exist until the suppliers’ yields have matured or manufacturing capacity has increased. Many factors may affect the continued availability of these components at acceptable prices, including if those suppliers decide to concentrate on the production of common components instead of components customized to meet our requirements. There is no assurance that the supply of such components will not be delayed or constrained.

Our contract manufacturers, logistics centers and certain administrative and research and development operations, as well as our customers and suppliers, are located in areas likely to be subject to natural disasters and public health problems, which could adversely affect our business, results of operations and financial condition.

The manufacturing or shipping of our products at one or more facilities may be disrupted because our manufacturing and logistics contractors are primarily located in southern China. Our principal executive offices are located in New York, New York. The risks of earthquakes, extreme storms and other natural disasters in these geographic areas are significant. Any disruption resulting from these events could cause significant delays in product development or shipments of our products until we are able to shift our development, manufacturing or logistics centers from the affected contractor to another vendor, or shift the affected administrative or research and development activities to another location. Our business may be materially adversely affected by public health problems, particularly in China. For example, in the last decade, China has suffered health crises related to the outbreak of avian influenza, severe acute respiratory syndrome and COVID-19. The COVID-19 pandemic and resulting global disruptions have caused significant volatility in financial markets and the domestic and global economy. This disruption can contribute to potential payment delays or defaults in our accounts receivable, affect asset valuations resulting in impairment charges, and affect the availability of financing credit as well as other segments of the credit markets. Public health problems may also result in quarantines, business closures, unavailability of key personnel, domestic and international transportation restrictions, import and export complications, and otherwise cause shortages in the supply of components or cause other disruptions within our supply chain. Public health problems currently cause and may continue to cause disruptions, delays, shortages, and increased costs within our supply chain, and distribution channels. In addition, public health problems may require us to take precautionary measures to minimize the risk to our employees, including requiring our employees to work remotely and suspending non-essential travel, which could negatively affect our business. Additionally, we have experienced a disruption in our supply chain as a result of the COVID-19 related restrictions that have impacted our suppliers’ ability to manufacture or provide key components or services, and we have incurred, and continue to incur, additional cost to expedite deliveries of components and services. The disruptions in our supply chain have not been fully remediated as of the date of this report. As a result of the transition to a remote working environment, we may experience disruptions or inefficiencies in our ability to operate our business. The continuation of these remote working measures also introduces additional operational risk, including increased cybersecurity risk. These cybersecurity risks include greater phishing, social engineering, malware, and other cybersecurity attacks, greater risk of a security breach resulting in the unauthorized release, destruction or misuse of valuable information, and potential impairment of our ability to perform critical functions, all of which could expose us to risks of data or financial loss, litigation and liability and could seriously disrupt our operations, which could materially and adversely affect our business, financial condition or

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results of operations. Public health problems may expose us to unanticipated liability or require us to change our business practices in a manner materially adverse to our business, results of operations and financial condition. In addition, the outbreak of communicable diseases could result in a widespread health crisis that could adversely affect general commercial activity and the economies and financial markets of many countries which may affect the demand for our products and services and our ability to obtain financing for our business. The extent to which public health problems will impact our business, results of operations and financial conditions will depend on developments that are highly uncertain and cannot be predicted. Such developments may include the geographic spread of the public health problems, the severity of the public health problems, the duration of the outbreak and the type and duration of actions that may be taken by various governmental authorities in response to the outbreak and the impact on the U.S. and the global economy. An outbreak of public health problems, or the perception that such an outbreak could occur, and the measures taken by the government of countries affected, could adversely affect our business, results of operations, liquidity and financial condition.

A general global economic downturn may negatively affect our customers and their ability to purchase our products. A downturn may decrease our revenues and increase our costs and may increase credit risk with our customers and impact our ability to collect account receivable and recognize revenue.

The global macroeconomic environment has been challenging and inconsistent caused by instability in the global credit markets, the impact of uncertainty regarding global central bank monetary policy, the instability in the geopolitical environment in many parts of the world, including the June 2016 referendum by the United Kingdom in which voters approved an exit from the European Union, commonly referred to as “Brexit”. As a result of the referendum, the British government formally initiated the process for withdrawal in March 2017, and, following agreed extensions between the European Council and the United Kingdom on March 22, 2019, April 11, 2019 and October 28, 2019, “Brexit” became effective on January 31, 2020 under the terms of a Withdrawal Agreement that was ratified by the U.K. Parliament, and the European Parliament in Brussels, in late January 2020. Under the Withdrawal Agreement, a “transition period” will come into force for eleven months, from February 1, 2020 until December 31, 2020. On January 1, 2021, the United Kingdom left the European Union. On December 24, 2020, the European Commission reached a trade agreement with the United Kingdom on the terms of its future cooperation with the European Union, subject to final approval by the European Parliament. The most significant impact of the new trade agreement are new regulations regarding trade, tax, and employees, among others, in the United Kingdom. Brexit could continue to cause disruptions in the markets that we serve. Additionally, we may be adversely affected by the Brexit in ways we do not currently anticipate.

Disruptions in the financial markets have had and may continue to have an adverse effect on the U.S. and world economies, which could adversely and materially impact business spending patterns. Tightening of credit in financial markets could adversely affect the ability of our customers and suppliers to obtain financing for significant purchases and operations and could result in a decrease in or cancellation of orders for our products.

Economic downturns may exacerbate some of the other risks that affect our business, results of operations and financial condition. A tighter credit market for consumer, business, and service provider spending may have several adverse effects, including reduced demand for our products, increased price competition or deferment of purchases and orders by our customers. Additional effects may include increased demand for customer finance, difficulties in collection of accounts receivable, higher overhead costs as a percentage of revenue and higher interest expense, risk of supply constraints, risk of excess and obsolete inventories, risk of excess facilities and manufacturing capacity and increased risk of counterparty failures.

An economic downturn or economic uncertainty in our key U.S. and international markets, as well as fluctuations in currency exchange rates, may adversely affect consumer discretionary spending and demand for our consumer products. Factors affecting the level of consumer spending include general market conditions, macroeconomic conditions, fluctuations in foreign exchange rates and interest rates, and other factors such as consumer confidence, the availability and cost of consumer credit, levels of unemployment and tax rates. If global economic conditions are volatile or if economic conditions deteriorate, consumers may delay or reduce purchases of our consumer products resulting in consumer demand for our products that may not reach our sales targets. For example, the Brexit caused significant short-term volatility in global stock markets as well as currency exchange rate fluctuations, resulting in further strengthening of the U.S. dollar. Our sensitivity to economic cycles and any related fluctuation in consumer demand could adversely affect our business, financial condition and results of operations.

We have been investing and expect to continue to invest in growth areas and in our enterprise and service provider technologies, and if the return on these investments is lower or develops more slowly than we expect, our results of operations may be harmed.

We have and we may continue to invest and dedicate resources into new growth areas, such as consumer products, while also focusing on in our enterprise and service provider technologies. However, the return on our investments may be lower, or may develop more slowly, than we expect. If we do not achieve the benefits anticipated from these investments (including if our selection of areas for investment does not play out as we expect), or if the achievement of these benefits is delayed, our results of operations may be adversely affected. Additionally, as we invest and dedicate resources into new growth areas, there is no assurance that we may succeed at maintaining our competitive position in enterprise and service provider technologies.

To remain competitive and stimulate customer demand, we must effectively manage product introductions, product transitions and marketing.

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We believe that we must continually develop and introduce new products, enhance our existing products, effectively stimulate customer demand for new and upgraded products, and successfully manage the transition to these new and upgraded products to maintain or increase our revenue. The success of new product introductions depends on a number of factors including, but not limited to, timely and successful research and development, pricing, market and consumer acceptance, the effective forecasting and management of product demand, purchase commitments and inventory levels, the availability of products in appropriate quantities to meet anticipated demand, the management of manufacturing and supply costs, the management of risks associated with new product production ramp-up issues, and the risk that new products may have quality issues or other defects or bugs in the early stages of introduction. Therefore, we may not correctly determine in advance the ultimate effect of new product introductions and transitions. Additionally, if the assumptions on which we based our forecasts and management of product demand, purchase commitments or inventory levels turn out to be incorrect, our financial performance could suffer and we could be required to write-off the value of excess products or components inventory or not fully utilize firm purchase commitments.

In addition, the introduction or announcement of new products or product enhancements may shorten the life cycle of our existing products or reduce demand for our current products, thereby offsetting any benefits of successful product introductions and potentially lead to challenges in managing inventory of existing products. Failure to complete product transitions effectively or in a timely manner could harm our brand and lead to, among other things, lower revenue, excess prior generation product inventory, or a deficit of new product inventory and reduced profitability.

In connection with introduction of new products, and our consumer products, in particular, we may spend significant amount on advertising and other marketing campaigns, such as television, print advertising, social media and others, as well as increased promotional activities, to build brand awareness and acquire new users. While we seek to structure our advertising campaigns in the manner that we believe is most likely to encourage people to use our products and services, we may fail to identify advertising opportunities that satisfy our anticipated return on advertising spend, accurately predict customer acquisition, or fully understand or estimate the conditions and behaviors that drive customer behavior. If for any reason any of our advertising campaigns prove less successful than anticipated in attracting new customers, we may not be able to recover our advertising spend, and our rate of user acquisition may fail to meet our expectations, either of which could have an adverse effect on our business. There can be no assurance that our advertising and other marketing efforts will result in increased sales of our consumer products.

If we are unable to anticipate consumer preferences and successfully develop desirable consumer products and solutions, we might not be able to maintain or increase revenue and profitability.

Our success in the consumer product market depends on our ability to identify and originate product trends as well as to anticipate, gauge and react to changing consumer demands in a timely manner. All of our consumer products are subject to changing consumer preferences that cannot be predicted with certainty and lead times for our products may make it more difficult for us to respond rapidly to new or changing product or consumer preferences. If we are unable to introduce appealing new consumer products or novel technologies in a timely manner, or our new consumer products or technologies are not accepted or adopted by consumers, our competitors may increase their market share, which could hurt our competitive position in the consumer product market. It is also possible that competitors could introduce new products and services that negatively impact consumer preference in the type of consumer products that we supply, which could result in decreased sales of our product and a loss in market share. We may not be able to achieve an acceptable return, if any, on our research and development efforts, and our business, results of operations, liquidity and financial condition may be adversely affected. As we continually seek to enhance our consumer products, we will incur additional costs to incorporate new or revised features. We might not be able to, or determine that it is not in our interests to, raise prices to compensate for any additional costs.

Our strategy for our consumer products depends upon effectively maintaining and further developing our sales channels, including developing and supporting our retail sales channel and distributors.

We depend upon effective sales channels to reach the consumers who are the ultimate purchasers of our consumer products. In the United States, we primarily sell our consumer products through a mix of retail channels, including, e-commerce, big box, mid-market and specialty retailers, and we reach certain U.S. markets through distributors. In international markets, we primarily sell through distributors who in turn sell to local retailers.

With some of our consumer products, we depend on retailers to provide adequate and attractive space for our products in their stores. We further depend on our retailers to employ, educate and motivate their sales personnel to effectively sell our consumer products. If our retailers do not adequately display our products, choose to reduce the space for our products in their stores or locate them in less than premium positioning, choose not to carry some or all of our consumer products or promote competitors’ products over ours, or do not effectively explain to customers the advantages of our consumer products, our sales could decrease and our business could be harmed. Similarly, our business could be adversely affected if any of our large retail customers were to experience financial difficulties, or change the focus of their businesses in a way that deemphasized the sale of our products.

Our distributors generally offer products from several different manufacturers. Accordingly, we are at risk that these distributors may give higher priority to selling other companies’ products. We have limited number of distributors in certain regions, and if we were to lose the services of a distributor, we might need to find another distributor in that area and there can be no assurance of our ability to do so in a timely manner or on favorable terms. Additionally, as a result of the COVID-19 pandemic, certain of our distributors have been forced to temporarily suspend or otherwise reduce operations, which may adversely impact sales of our products. Further, our

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distributors build inventory in anticipation of future sales, and if such sales do not occur as rapidly as they anticipate, our distributors will decrease the size of their future product orders. We are also subject to the risks of our distributors encountering financial difficulties, which could impede their effectiveness and also expose us to financial risk if they are unable to pay for the products they purchase from us. Additionally, our international distributors buy from us in U.S. dollars and generally sell to retailers in local currency so significant currency fluctuations could impact their profitability, and in turn, affect their ability to buy future products from us. For example, the Brexit, caused significant short-term volatility in global stock markets as well as currency exchange rate fluctuations, resulting in further strengthening of the U.S. dollar.

Any reduction in sales by our current distributors, loss of key distributors or decrease in revenue from our distributors could adversely affect our revenue, results of operations and financial condition.

We may experience risks in our investments due to changes in the market, which could adversely affect the value or liquidity of our investments.

We maintain a portfolio of marketable securities in a variety of instruments, which may include, but not limited to, money market funds, corporate bonds, U.S. agency bonds and commercial papers. These investments are subject to general credit, liquidity, market, and interest rate risks. As a result, we may experience a reduction in value or loss of liquidity of our investments. These market risks associated with our investment portfolio may have a negative adverse effect on our business, results of operations, and financial condition.

Risks Related to Our International Operations

Our business is susceptible to risks associated with operations outside of the United States.

We have operations in China, the Czech Republic, Lithuania, Poland, Latvia, Ukraine, Canada, India, Taiwan and elsewhere. We also sell to distributors in numerous countries throughout the world. Our operations outside of the United States subject us to risks that we generally do not face in the United States. These include:

•the burdens of complying with a wide variety of foreign laws and regulations, and the risks of non-compliance;

•fluctuations in currency exchange rates;

•import and export license requirements, tariffs, economic sanctions, contractual limitations and other trade barriers;

•increasing labor costs, especially in China;

•difficulties in managing the geographically remote personnel;

•the complexities of foreign tax systems and changes in their tax rates and rules;

•stringent consumer protection and product compliance regulations that are costly to comply with and may vary from country to country;

•limited protection and enforcement regimes for intellectual property rights in some countries;

•business disruptions created by health crises and outbreaks of communicable diseases, especially in China, such as the outbreak of COVID-19;

•increased financial accounting and reporting burdens and complexity; and

•political, social and economic instability in some jurisdictions.

If any of these risks were to come to fruition, it could negatively affect our business outside the United States and, consequently, our results of operations. Additionally, operating in markets outside the United States requires significant management attention and financial resources. We cannot be certain that the investment and additional resources required to establish, acquire or integrate operations in other countries will produce anticipated levels of revenues or profitability.

Our third-party logistics and warehousing providers in China and elsewhere may fail to safeguard and accurately manage and report our inventory.

We use third-party logistics and warehousing providers located in China and other countries to fulfill a portion of our worldwide sales. We also rely on our third-party logistics and warehousing providers to safeguard and manage and report on the status of our products at their warehouse and in transit. These service providers may fail to safeguard our products, fail to accurately segregate and report our inventory, or fail to manage and track the delivery of our products, which could have a material adverse effect on our business, results of operations and financial condition.

To the extent that we develop some of our own manufacturing capacity, we will be subject to various risks associated with such activities.

We invested in developing our own manufacturing capacity to support our product development and prototyping. To the extent that we may invest in and expand or relocate these manufacturing capabilities, and increasingly rely upon such activities, we will face

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increased risks associated with:

•bearing the fixed costs of these activities;

•directly procuring components and materials;

•regulatory and other compliance requirements, including import and export license requirements, tariffs, economic sanctions, contractual limitations and other trade barriers;

•exposure to casualty loss and other disruptions;

•quality control;

•labor relations; and

•our limited experience in operating manufacturing facilities.

Since these activities are currently conducted in China and could be expanded to other foreign countries, some of these risks may be more significant due to the less predictable legal and political environment.

Our business may be negatively affected by political events and foreign policy responses.

Geopolitical uncertainties and events could cause damage or disruption to international commerce and the global economy, and thus could have a material adverse effect on us, our suppliers, logistics providers, manufacturing vendors and customers, including our channel partners. Changes in commodity prices may also cause political uncertainty and increase currency volatility that can affect economic activity. Policies and statements by the current White House administration have created uncertainty with how trade might be affected between the U.S. and the rest of the world, and China, in particular. For example, in June 2018, the Office of the United States Trade Representative announced new proposed tariffs for certain products imported into the U.S. from China. The vast majority of our products that are imported into the U.S. from China are currently subject to tariffs that range between 7.5% and 25%. On January 22, 2020, the United States of Trade Representative announced it will reduce Section 301 List 4A additional tariffs from 15% to 7.5% and that List 4B tariffs would not go into effect. These tariffs have already affected our operating results and margins. The progress and continuation of trade negotiations between the U.S. and China continues to be uncertain and a further escalation of the trade war remains a possibility. These tariffs have, and will continue to have, an adverse effect on our results of operations and margins. We can provide no assurance regarding the magnitude, scope or duration of the imposed tariffs or the magnitude, scope or duration from any relief in increases to such tariffs, as well as the potential for additional tariffs or trade barriers by the U.S., China or other countries, nor that any strategies we may implement to mitigate the impact of such tariffs or other trade actions will be successful.

Changes in U.S. social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries where we currently develop and sell products, and any negative sentiments towards the U.S. as a result of such changes, could also adversely affect our business. For example, if the U.S. government withdraws or materially modifies existing or proposed trade agreements, places greater restriction on free trade generally or imposes increases on tariffs on goods imported into the U.S., particularly from China, our business, financial condition and results of operations could be adversely affected. In addition, negative sentiments towards the U.S. among non-U.S. customers and among non-U.S. employees or prospective employees could adversely affect sales or hiring and retention, respectively.

The foreign policies of governments may be volatile, and may result in rapid changes to import and export requirements, customs classifications, tariffs, trade sanctions and embargoes or other retaliatory trade measures that may cause us to raise prices, prevent us from offering products or providing services to particular entities or markets, may cause us to make changes to our operations, or create delays and inefficiencies in our supply chain. For example, political unrests and uncertainties in Eastern Europe and Middle East may lead to disruptions in commerce in those regions, which would in turn impact our sales to those regions. Furthermore, if the U.S. government imposes new sanctions against certain countries or entities, such sanctions could sufficiently restrict our ability to market and sell our products and may materially adversely affect our results of operations.

In addition, reports of certain intelligence gathering methods of the U.S. government could affect customers’ perception of the products of companies based in the United States. Trust and confidence in us as an equipment supplier is critical to the development and growth of our markets. Impairment of that trust, or foreign regulatory actions taken in response to reports of certain intelligence gathering methods of the U.S. government, could affect the demand for our products from customers outside of the United States and could have an adverse effect on our results of operations.

Our ability to introduce new products and support our existing products depends on our ability to manage geographically dispersed research and development teams.

Significant parts of our research and development operations are conducted in geographically dispersed localities. Our success depends on the effectiveness of our research and development activities. We must successfully manage these geographically dispersed teams in order to meet our objectives for new product introduction, product quality and product support. It can be difficult to effectively manage geographically dispersed research and development teams. If we fail to do so, we could incur unexpected costs or delays in product development.

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Risks Related to Intellectual Property

We have limited ability to obtain and enforce intellectual property rights, and may fail to effectively obtain and enforce such rights.

Our success can depend significantly upon our intellectual property rights. We rely on a combination of patent, copyright, trademark, trade secret laws, and contractual rights to establish, maintain and protect these intellectual property rights, all of which afford only limited protection. Our patent rights, and the prospective rights sought in our pending patent applications, may not be meaningful or provide us with any commercial advantage and they could be opposed, contested, circumvented or designed around by our competitors or be declared invalid or unenforceable in legal proceedings. In addition, patents may not be issued from any of our current or future patent applications. Any failure of our patents or other intellectual property rights to adequately protect our technology might make it easier for our competitors to offer similar products or technologies.

We may fail to apply for patents on important products, services, technologies or designs in a timely fashion, or at all. We may not have sufficient intellectual property rights in all countries where unauthorized third party copying or use of our proprietary technology occurs and the scope of our intellectual property might be more limited in certain countries. Our existing and future patents may not be sufficient to protect our products, services, technologies or designs and/or may not prevent others from developing competing products, services, technologies or designs. We cannot predict the validity and enforceability of our patents and other intellectual property with certainty.

We have registered, and applied to register, certain of our trademarks in several jurisdictions worldwide. In some of those jurisdictions, third party filings exist for the same, similar or otherwise related products or services, which could block the registration of our marks. Even if we are able to register our marks, competitors may adopt or file similar marks to ours, register domain names that mimic or incorporate our marks, or otherwise infringe upon our trademark rights. Although we police our trademark rights carefully, there can be no assurance that we are aware of all third party uses or that we will prevail in enforcing our rights in all such instances. Any of these negative outcomes could impact the strength, value and effectiveness of our brand, as well as our ability to market our products. We have also registered domain names for websites, or URLs, that we use in our business, such as www.ui.com. If we are unable to protect our domain names, our brand, business, and results of operations could be adversely affected. Domain names similar to ours have already been registered in the United States and elsewhere, and we may be unable to prevent third parties from acquiring and using domain names that infringe, are similar to, or otherwise decrease the value of, our brand or our trademarks. In addition, although we own www.ui.com and various other global top-level domains, we might not be able to, or may choose not to, acquire or maintain other country-specific URLs in which we currently conduct or intend to conduct business.

Confidentiality agreements with our employees, licensees, independent contractors and others may not effectively prevent disclosure of our trade secrets, and may not provide an adequate remedy in the event of unauthorized use or disclosure of our trade secrets. We may also fail or have failed to obtain such agreements from such persons due to administrative oversights or other reasons.

Monitoring unauthorized use of our intellectual property is difficult and costly. Unauthorized use of our intellectual property, such as the production of counterfeits of our products, and unauthorized registration and use of our trademarks by third parties, is a matter of ongoing concern. The steps we have taken may not prevent unauthorized use of our intellectual property. We may fail to detect infringements of, or take appropriate steps to enforce, our intellectual property rights. Our competitors might independently develop similar technology without infringing our intellectual property rights. Our inability or failure to effectively protect our intellectual property could reduce the value of our technology and could impair our ability to compete. Any inability or failure by us to meaningfully protect our intellectual property could result in competitors offering products that incorporate our most technologically advanced features.

We have initiated and may continue to initiate legal proceedings to enforce our intellectual property rights. Litigation, whether we are a plaintiff or a defendant, can be expensive and time-consuming, may place our intellectual property at risk of being invalidated or narrowed in scope, and may divert the efforts of our technical staff and managerial personnel.

Enforcement of our intellectual property rights abroad, particularly in China and South America, is limited.

The intellectual property protection and enforcement regimes in certain countries outside the United States are generally not as comprehensive as in the United States, and may not adequately protect our intellectual property. The legal regimes relating to the recognition and enforcement of intellectual property rights in China and South America are particularly limited. Legal proceedings to enforce our intellectual property in these jurisdictions may progress slowly, during which time infringement may continue largely unimpeded. Countries that have relatively inefficient intellectual property protection and enforcement regimes represent a significant portion of the demand for our products. These factors may make it more challenging for us to enforce our intellectual property rights against infringement. The infringement of our intellectual property rights, particularly in these jurisdictions, may materially harm our business in these markets and elsewhere by reducing our sales, and adversely affecting our results of operations, and diluting our brand or reputation.

Our contract manufacturers may not respect our intellectual property, and may produce products that compete with ours.

Our contract manufacturers operate primarily in China, where the prosecution of intellectual property infringement and trade secret theft is more difficult than in the United States. In the past, our contract manufacturers, their affiliates, their other customers or their

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suppliers have attempted to participate in efforts to misappropriate our intellectual property and trade secrets to manufacture our products for themselves or others without our knowledge. Even if the agreements with our contract manufacturers, and applicable laws, prohibit them from misusing our intellectual property and trade secrets, we may be unsuccessful in monitoring and enforcing our intellectual property rights against them. We have in the past, and may continue to discover, counterfeit goods being sold as our products or as other brands.

We operate in an industry with extensive intellectual property litigation.

Our commercial success depends in part upon us and our component suppliers not infringing intellectual property rights owned by others, and being able to resolve intellectual property claims without major financial expenditures. Our key component suppliers are often targets of intellectual property claims, and we are subject to claims as well.

There are numerous patents and patent applications in the United States and other countries relating to communications technologies. It can be difficult or impossible to conduct meaningful searches for patents relating to our technologies, or to approach third parties to seek a license to their patents. Even extensive searches for patents that may be relevant to our products may not uncover all relevant patents and patent applications. Because of the existence of a large number of patents in the networking field, the secrecy of some pending patents, and the rapid rate of issuance of new patents, it is not economically practical or even possible to determine in advance whether a product or any of its components infringes or will infringe on the patent rights of others. The asserted claims and/or initiated litigation can include claims against us or our manufacturers, suppliers, or customers, alleging infringement of their proprietary rights with respect to our existing or future products or components of those products. Regardless of the merit of these claims, they can be time-consuming, result in costly litigation and diversion of technical and management personnel, or require us to develop a non-infringing technology or enter into license agreements. Where claims are made by customers, resistance even to unmeritorious claims could damage customer relationships.

We cannot determine with certainty whether any existing or future third-party intellectual property rights would require us to alter our technologies, obtain licenses or cease certain activities. There can be no assurance that licenses will be available on acceptable terms and conditions, if at all, or that our suppliers will indemnify us, or that any indemnification will be adequate to cover our costs if a claim were brought directly against us or our customers. Furthermore, because of the potential for high court awards that are not necessarily predictable, it is not unusual to find even arguably unmeritorious claims settled for significant amounts.

We have received, and may in the future receive, claims from third parties, including competitors and non-practicing entities, asserting intellectual property infringement and other related claims. We expect to continue to receive such intellectual property claims in the future. As our revenues grow and our profile increases, the frequency and significance of these claims may increase.

Whether or not there is merit to a given claim, it can be time consuming and costly to defend against, and could:

•adversely affect our relationships with our current or future users, customers and suppliers;

•cause delays or stoppages in the shipment of our products;

•cause us to modify or redesign our products;

•cause us to rebrand our products or services;

•subject us to a temporary or permanent injunction;

•divert management’s attention and resources;

•subject us to significant damages or settlements;

•cause us to give up some of our intellectual property;

•require us to enter into costly licensing agreements; or

•require us to cease offering certain of our products or services.

Some of our competitors may have substantially greater resources than we do and may be able to sustain the costs of complex intellectual property litigation to a greater degree and for longer periods of time than we could. In addition, patent holding companies and other third-party non-practicing entities that focus on extracting royalties and settlements by enforcing patent rights may target our component suppliers, manufacturers, us, our distributors, members of our sales channels, our network operators and service providers, or other purchasers of our products. These companies typically have little or no product revenues and therefore our patents may provide little or no deterrence against such companies filing patent infringement lawsuits against our component suppliers, manufacturers, us, our distributors, members of our sales channels, network operators and service providers, or other purchasers of our products.

In addition to liability for monetary damages against us or, in certain circumstances, against end users of our products, we may be prohibited from developing, commercializing or continuing to provide certain of our products unless we obtain licenses from the holders of the patents or other intellectual property rights. We cannot assure you that we will be able to obtain any such licenses on commercially reasonable terms, or at all. If we do not obtain licenses, our business, results of operations and financial condition could be materially affected and we could, for example, be required to cease offering our products or be required to materially alter our products, which could involve substantial costs and time to develop.

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The production of counterfeit versions of our products may reduce our sales levels and damage our brand.

We have in the past and continue to discover counterfeit versions of our products. Although we have taken steps to combat counterfeiting, it is difficult or impossible to detect or prevent all instances of counterfeiting. Particularly if the quality of counterfeit products is poor, damage could be done to our brand. Combating counterfeiting is difficult and expensive, and may not be successful, especially in countries that have a relatively weak legal regime for the protection of intellectual property.

We use open source software in our products that may subject source code to public release or require us to re-engineer our products.

We use open source software in certain of our products, and may use more open source software in the future.

There have been claims challenging the ownership of software and claims of copyright infringement against companies that use open source software in the development of their products. We could become subject to claims regarding the ownership of what we believe to be our proprietary software and claims of copyright infringement.

Usage of open source software can also lead to greater risks than the use of third-party commercial software, because open source licensors generally do not provide warranties or controls on origin of the software.

Some open source licenses contain requirements that users make available and license the source code for the modifications or derivative works that they create based upon the open source software. If we combine our proprietary software with open source software we could, in some circumstances, be required to release our proprietary source code publicly or license such source code on unfavorable terms or at no cost. That could significantly diminish the value of some of our products and negatively affect our business.

Risks Related to Our Management and Structure

We may lose the services of our founder and Chief Executive Officer, Robert J. Pera, or other key personnel.

Our success and future growth depend on the skills, working relationships and continued services of our management team, and in particular our founder and Chief Executive Officer, Robert J. Pera. Our future performance may also depend on our ability to retain other key personnel. We do not maintain any significant key person insurance with regard to any of our personnel.

Our business model relies in part on leanly staffed, independent and efficient research and development teams. Our research and development teams are organized around small groups or individual contributors for a given platform, and there is little overlap in knowledge and responsibilities. In the event that we are unable to retain the services of any key contributors, we may be unable to bring our products or product improvements to market in a timely manner, if at all, due to disruption in our development activities.

Our future success also depends on our ability to attract, retain and motivate skilled personnel. Competition for personnel exists in the industries in which we participate, particularly for persons with specialized experience in areas such as antenna design and radio frequency equipment. If we are unable to attract and retain the necessary personnel our business, results of operations and financial condition could be materially adversely affected.

We may fail to manage our growth effectively and develop and implement appropriate control systems.

We have substantially expanded our business and operations in recent periods, including increases in the number of our distributors, contract manufacturers, headcount locations and facilities. This rapid expansion places a significant strain on our managerial, administrative, and operational resources. Our business model reflects our decision to operate with streamlined infrastructure, with lower support and administrative headcount. This may increase the risks associated with managing our growth, and we may not have sufficient internal resources to adapt or respond to unexpected challenges and compliance requirements.

Our profitability may decline as we expand into new product areas.

We receive a substantial majority of our revenues from the sale of outdoor wireless networking equipment and enterprise WLAN. As we expand into other products and services, such as video surveillance equipment, voice communication equipment, security access equipment, wireless backhaul, consumer electronics, and machine-to-machine communications, we may not be able to compete effectively with existing market participants and may not be able to realize a positive return on the investment we have made in these products or services. Entering these markets may result in increased product development costs, and our new products may have extended time to market relative to our current products. If our introduction of a new product is not successful, or if we are not able to achieve the revenues or margins we expect, our results of operations may be harmed and we may not recover our product development and marketing expenditures.

We may also be required to add a traditional direct sales force and customer support personnel to market and support new or existing products, which would cause us to experience substantially lower product margins or increase our operating expenses. Adding a traditional direct sales force or customer support personnel would reduce our operating income and may not be successful.

Our operating expenses are increasing as we make expenditures to enhance and expand our operations.

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Over the past several years, we have increased our expenditure on infrastructure to support our anticipated growth. We are continuing to make significant investments in information systems, hiring more administrative personnel, using more professional services and expanding our operations outside the United States. We intend to make additional investments in systems and personnel and continue to expand our operations to support anticipated growth in our business. As a result, we expect our operating expenses to increase.

In addition, we may need in the future to build a traditional direct sales force to market and sell our products or provide additional resources or cooperative funds to our distributors. Such changes to our existing sales model would likely result in higher selling, general and administrative expenses as a percentage of our revenues.

Compliance with conflict mineral disclosure requirements will create additional compliance cost and may create reputational challenges.

Pursuant to Section 1502 of the Dodd-Frank Act, United States publicly-traded companies are required to disclose use or potential use of certain minerals and their derivatives, including tantalum, tin, gold and tungsten, that are mined from the Democratic Republic of Congo and adjoining countries and deemed conflict minerals.

These requirements necessitate due diligence efforts to assess whether such minerals are used in our products in order to make the relevant required annual disclosures. There are, and will be, ongoing costs associated with complying with these disclosure requirements, including diligence to determine the sources of those minerals that may be used or necessary to the production of our products. We may face reputational challenges that could impact future sales if we determine that certain of our products contain minerals not determined to be conflict free or if we are unable to verify with sufficient accuracy the origins of all conflict minerals used in our products.

We rely on third-party software and services to conduct our enterprise resource planning, financial planning and analysis, and financial reporting. We also rely on third party software and service for our computing, storage, bandwidth, and other services. Any disruption of or interference with these services would negatively affect our operations and seriously harm our business.

We currently use NetSuite and other software and services to conduct our order management and financial processes. The availability of this service is essential to the management of our business. As we expand our operations, we expect to utilize additional systems and service providers that may also be essential to managing our business. Although the systems and services that we require are typically available from a number of providers, it is time consuming and costly to qualify and implement these relationships.

We rely on third party service providers, such as G-Suite, Google Cloud and Amazon Web Services, to provide distributed computing infrastructure platforms for business operations, or what is commonly referred to as a “cloud” computing service. Any transition of the cloud services currently provided by these service providers to another cloud provider would be difficult to implement and will cause us to incur significant time and expense. If our existing cloud service providers experience interruptions in service regularly or for a prolonged basis, or other similar issues, our business would be seriously harmed. Additionally, our existing cloud service providers have broad discretion to change and interpret its terms of service and other policies with respect to us, and they may take actions beyond our control that could harm our business.

Our ability to manage our business would suffer if one or more of our providers suffer an interruption in their business, or experience delays, disruptions or quality control problems in their operations, or we have to change or add additional systems and services. We may not be able to control the quality of the systems and services we receive from third party service providers, which could impair our financial reporting and may negatively impact our business, results of operations and financial condition.

Our debt levels could adversely affect our ability to raise additional capital to pay dividends, repurchase our shares of common stock and fund our operations or limit our ability to react to changes in our industry or the economy.

As of March 31, 2021, our balance outstanding under the Third Amended and Restated Credit Agreement for our Term Facility and Revolving Facility, was $500.0 million and $75.0 million, respectively. In the future we may need to raise additional capital to finance our payment of dividends or repurchase shares of our common stock and fund our growth and operational goals. If additional financing is not available when required or on acceptable terms, we may not be able to pay dividends, repurchase shares of common stock, expand our business, develop or enhance our products, take advantage of business opportunities or respond to competitive pressures, which could result in lower revenues and reduce the competitiveness of our products.

In addition, any potential debt level increases could have important consequences, including:

requiring a substantial portion of cash flows from operations to be dedicated to the payment of principal and interest on our indebtedness, thereby reducing our ability to use our cash flows to fund our operations and capital expenditures, pay dividends, repurchase shares of our common stock and pursue business opportunities;

•increasing our vulnerability to general industry and economic conditions;

•limiting our ability to make strategic acquisitions or causing us to make non-strategic divestitures;

•limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes; and

•limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to

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competitors who are less highly leveraged or have access to more capital.

If we are unable to integrate future acquisitions successfully, our business, results of operations and prospects could be harmed.

We may make acquisitions to improve or expand our product offerings. Our future acquisition strategy will depend on our ability to identify, negotiate, complete and integrate acquisitions. These transactions involve numerous risks, including:

•difficulties in integrating and managing the operations, technologies and products of the companies we acquire, particularly in light of our lean organizational structure;

•diversion of our management’s attention from normal daily operation of our business;

•our inability to maintain the key business relationships and the brand equity of the businesses we acquire;

•our inability to retain key personnel of the acquired business, particularly in light of the demands we place on individual contributors;

•uncertainty of entry into markets in which we have limited or no prior experience and in which competitors have stronger market positions;

•our dependence on unfamiliar affiliates and partners of the companies we acquire;

•insufficient revenues to offset our increased expenses associated with acquisitions;

•our responsibility for the liabilities of the businesses we acquire, including those which we may not anticipate; and

•our inability to maintain internal standards, controls, procedures and policies, particularly in light of our lean organizational structure.

We may be unable to secure the equity or debt funding necessary to finance future acquisitions on terms that are acceptable to us. Completing acquisitions could consume significant amounts of cash. If we finance acquisitions by issuing equity or convertible debt securities, our existing stockholders will likely experience dilution, and if we finance future acquisitions with debt funding, we will incur interest expense and may have to comply with covenants and secure that debt obligation with our assets.

Our investments in new businesses, products, services, technologies, joint ventures and other strategic transactions are inherently risky, and could disrupt our current operations.

We have invested and expect to continue to invest in new businesses, products, services, technologies, joint ventures and other strategic initiatives. These investments may involve significant risks and uncertainties, including insufficient revenues from such investments to offset any new liabilities assumed and expenses incurred in connection with these new investments, inadequate return of or loss of our investments, distraction of management from current operations, and unidentified issues not discovered in our due diligence of such investments that could cause us to fail to realize the anticipated benefits of such investments and incur unanticipated costs, expenses and liabilities. Because these investments are inherently risky, no assurance can be given that such investments will be successful and will not adversely affect our reputation, business prospects, results of operation and financial condition.

We may be adversely affected by changes in LIBOR reporting practices or the index used to replace LIBOR.

Our Term Facility and Revolving Facility primarily use the London Interbank Offered Rate (“LIBOR”) to calculate interest due to our lenders. On July 27, 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. As a result, it is possible that LIBOR will be discontinued as a reference rate after 2021. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, is considering replacing U.S. dollar LIBOR with a newly created index, calculated by reference to short-term repurchase agreements backed by U.S. Treasury securities, called the Secured Overnight Financing Rate (“SOFR”). Whether SOFR will become a widely accepted benchmark in place of LIBOR, however, remains in question. As such, the future of LIBOR and potential alternative reference rates are uncertain at this time. If LIBOR is discontinued, the terms of our Third Amended and Restated Credit Agreement provide for the use of an alternative rate. Such an event would not affect our ability to borrow or maintain already outstanding borrowings, but the alternative rate could be higher and more volatile than LIBOR prior to its discontinuance and may result in interest obligations which are higher or lower or that do not otherwise correlate over time with the interest payments that would have been made on such debt if LIBOR remained in its current form. Accordingly, the potential effects of the foregoing on our cost of capital cannot yet be determined. Further, the same costs and risks that may lead to the unavailability of LIBOR may make one or more of the alternative rate methods impossible or impracticable to determine. Any of these proposals or consequences could materially and adversely affect our financing costs, and as a result, our financial condition, operating results and cash flows.

Risks Related to Our Common Stock

Our Chief Executive Officer owns a majority of our common stock.

Robert J. Pera, our founder, Chairman, and Chief Executive Officer, is able to exercise voting rights with respect to a majority of the

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voting power of our outstanding stock and therefore has the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of our assets. This concentrated control could delay, defer, or prevent a change of control, merger, consolidation, or sale of all or substantially all of our assets that our other stockholders support, or conversely this concentrated control could result in the consummation of such a transaction that our other stockholders do not support. This concentrated control could also discourage certain potential investors from acquiring our common stock and might harm the trading price of our stock. In addition, Mr. Pera has the ability to control the management and major strategic investments of our company as a result of his position as our Chief Executive Officer and his ability to control the election or replacement of our directors. In the event of his death, the shares of our stock that Mr. Pera owns will be transferred to his successors. As a board member and officer, Mr. Pera owes a fiduciary duty to our stockholders and must act in good faith in a manner he reasonably believes to be in the best interests of our stockholders. As a stockholder, even a controlling stockholder, Mr. Pera is entitled to vote his shares in his own interests, which may not always be in the interests of our stockholders generally.

As of May 7, 2021, Mr. Pera beneficially owned 56,278,181 shares of our common stock. These shares are eligible for resale into the public market within the restrictions imposed by Rule 144 under the Securities Act of 1933. Sales of a significant amount of Mr. Pera’s shares could adversely affect the market price for our common stock. Mr. Pera had informed us he has entered into arrangements under which he has pledged up to 25% of the shares of our common stock that he beneficially owns to secure loans with financial institutions. Mr. Pera had also indicated these loans have or will have various requirements to repay all or a portion of the loan upon the occurrence of various events, including when the price of the common stock goes below certain specified levels. Mr. Pera may need to sell shares of our common stock to meet these repayment requirements. Upon a default under one or more of these loans, the lender could sell the pledged shares into the market without limitation on volume or manner of sale. Sales of shares by Mr. Pera to reduce his loan balance or the lenders upon foreclosure are likely to adversely affect our stock price. Mr. Pera has also indicated to us that he may in the future from time to time pledge additional shares of common stock as collateral for margin or other loans, enter into derivative transactions based on the value of our common stock, dispose of shares of common stock, otherwise monetize shares of his common stock and/or engage in other transactions relating to shares of our common stock and/or other securities of the company. Any of these activities by Mr. Pera may adversely affect the price of our common stock. However, Mr. Pera has also indicated that he intends to continue to own at least a majority of our outstanding shares of common stock.

Not paying cash dividends to our stockholders, or repurchasing shares of our common stock pursuant to our previously announced stock repurchase program, could cause the market price for our common stock to decline.

Our payment of cash dividends is subject to, among other things, declaration by the Board of Directors of the Company our financial position and results of operations, available cash and cash flow, capital requirements, our obligations, contingent liabilities, applicable corporate legal requirements, and other factors. If the Company fails to meet expectations related to dividends, its stock price may decline, which could have a material adverse impact on investor confidence and employee retention. These and other factors may also affect the continuation of, or activity under, our previously announced stock repurchase program. Failure to pay cash dividends could cause the market price of our common stock to decline. The discontinuance of, or lack of activity under, our previously announced stock repurchase program could also result in a lower market price of our common stock.

Fluctuations in our results of operations could cause the market price of our common stock to decline.

Our quarterly results of operations fluctuate significantly due to a variety of factors, many of which are outside of our control and are difficult or impossible to predict. We expect our results of operations will continue to fluctuate. You should not rely on our past results as an indication of our future performance. If our revenues or results of operations fall below the expectations of investors or securities analysts, or below any estimates we may provide to the market, the price of our common stock would likely decline substantially, which could have a material adverse impact on investor confidence and employee retention. Our common stock has experienced substantial price volatility since our initial public offering. In addition, the stock market as a whole has experienced major price and volume fluctuations that have affected the stock price of many technology companies in ways that may have been unrelated to these companies’ operating performance.

Factors that could cause our results of operation and stock price to fluctuate include:

•varying demand for our products due to the financial and operating condition of our distributors and their customers, distributor inventory management practices and general economic conditions;

•shifts in our fulfillment practices including increasing inventory levels as part of efforts to decrease our delivery lead times;

•failure of our suppliers to provide chips or other components;

•failure of our contract manufacturers and suppliers to meet our demand;

•success and timing of new product introductions by us, and our competitors;

•increased warranty costs;

•announcements by us or our competitors regarding products, promotions or other transactions;

•costs related to legal proceedings or responding to government inquiries;

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•our ability to control and reduce product costs; and

•expenses of our entry into new markets.

In addition, our business may be subject to seasonality, although our recent growth rates and timing of product introductions may have historically masked our seasonal changes in demand. For example, our consumer products may be subject to general seasonal spending trends associated with holidays.

Risks Related to Regulatory, Legal and Tax Matters

We are subject to export control and economic sanctions laws in the United States and elsewhere which could impair our ability to compete in international markets and subject us to liability if we do not comply with applicable laws.

A substantial majority of our sales are into countries outside of the United States. Sales of our products into certain countries are restricted or prohibited under U.S. export control and economic sanctions laws. In addition, certain of our products incorporate encryption components that are subject to export control regulations.

In May 2011, we filed a self-disclosure statement with the U.S. Commerce Department, Bureau of Industry and Security’s (“BIS”) Office of Export Enforcement (“OEE”) relating a review conducted by us regarding certain export transactions from 2008 through March 2011 in which products may have been later sold into Iran by third parties. In June 2011, we also filed a self-disclosure statement with the U.S. Department of the Treasury’s Office of Foreign Asset Control (“OFAC”) regarding these compliance issues. We resolved the matters described in our self-disclosures with the BIS and OFAC, and have taken significant steps towards ensuring our compliance with export control regulations and embargoes. It is, however, possible that violations may occur in the future. If violations should occur in the future, the response of regulators may be more severe in light of prior compliance concerns.

In addition to U.S. export regulations, various other countries regulate the import of certain encryption technology and products, and these laws could limit our ability to distribute our products or our customers’ ability to implement our products in those countries. Changes in our products or changes in export and import regulations may create delays in the introduction of our products in other countries, prevent our customers with international operations from deploying our products or, in some cases, prevent the transfer of our products to certain countries altogether. Any change in export or import regulations or related legislation, shift in approach to the enforcement or scope of existing regulations, or change in the countries, persons or technologies targeted by such regulations, could negatively impact our ability to sell our products to existing customers or the ability of our current and potential distributors, network operators and service providers outside the United States.

Even though we take precautions to prevent our products from being provided to targets of U.S. sanctions, our products, including our firmware updates, could be provided by our distributors, resellers and/or end users despite such precautions. Any such provision could have negative consequences, including government investigations, penalties and reputational harm. Our failure or inability to obtain required import or export approval for our products could harm our international and domestic sales and adversely affect our revenue.

Existing and new regulations, changes in existing regulations, or the enforcement of any regulations related to our products may result in unanticipated burdens, costs and liabilities and could materially and adversely affect our financial condition, results of operations, and our brand.

Our products are subject to governmental regulations in a variety of jurisdictions. In order to achieve and maintain market acceptance, our products must continue to comply with these regulations as well as a significant number of industry standards. For example, our wireless communication products operate through the transmission of radio signals, and radio emissions are subject to regulation in the United States and in other countries in which we do business. In the United States, various federal agencies including the Center for Devices and Radiological Health of the Food and Drug Administration, the Federal Communications Commission, the Occupational Safety and Health Administration and various state agencies have promulgated regulations that concern the use of radio/electromagnetic emissions standards. Member countries of the European Union and other countries have enacted similar standards concerning electrical safety and electromagnetic compatibility and emissions, and chemical substances and use standards.

As these regulations and standards evolve, and if new regulations or standards are implemented, we will be required to modify our products or develop and support new versions of our products, and our compliance with these regulations and standards may become more burdensome. The failure of our products to comply, or delays in compliance, with the various existing and evolving industry regulations and standards could prevent or delay introduction of our products, which could harm our business. End customer uncertainty regarding future policies may also affect demand for communications products, including our products. If existing laws or regulations regarding the use of our products or services are enforced in a manner not previously contemplated by us, our channel partners or our end customers, it could expose us or them to liability and could have a material adverse effect on our financial condition, results of operations, and our brand. Moreover, channel partners or end customers may require us, or we may otherwise deem it necessary or advisable, to alter our products to address actual or anticipated changes in the regulatory environment. Our inability to alter our products to address these requirements and any regulatory changes may have a material adverse effect on our financial condition, results of operations, and our brand. Further, the enforcement of laws and regulations may force us to withdraw one or more of our products from sale in certain jurisdictions or to recall one or more of our products in certain jurisdictions. We may

47

incur costs and expenses relating to a withdrawal from a particular market or a recall of one or more of our products. The process of identifying products that have been widely distributed for withdrawals and recalls may be lengthy and require significant resources and we may incur significant replacement costs, damage claims and harm to our reputation. We are and expect to continue to be the subject of investigations, inquiries, data requests, actions, orders, and audits by government authorities and regulators in the United States, the European Union, and around the world. Orders issued by, or inquiries or enforcement actions initiated by, government or regulatory authorities could cause us to incur substantial costs, expose us to unanticipated liability or penalties or require us to change our business practices in a manner materially adverse to our financial condition, results of operations, and our brand.

Our failure to comply with U.S. and foreign laws related to privacy, data security, cybersecurity and data protection, such as the E.U. Data Protection Directive and China Cybersecurity Law, could adversely affect our financial condition, results of operations, and our brand.

We are or may become subject to a variety of laws and regulations in the United States and abroad regarding privacy, data security, cybersecurity and data protection. These laws and regulations are continuously evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting, particularly with respect to foreign laws.

In particular, there are numerous U.S. federal, state, and local laws and regulations and foreign laws and regulations regarding privacy and the collection, sharing, use, processing, disclosure, and protection of personal information and other user data. Such laws and regulations often have changes in scope, may be subject to differing interpretations, and may be inconsistent among different jurisdictions. For example, in April 2016, the E.U. Parliament approved a new data protection regulation, known as the General Data Protection Regulation (“GDPR”), which came into force on May 25, 2018. The GDPR includes operational requirements for companies that receive or process personal data of residents of the European Union that are different than those previously in place in the European Union, and that include significant penalties for non-compliance. Another example, in November 2016, the Standing Committee of China’s National People’s Congress passed China’s first Cybersecurity Law (“CSL”), which took effect in June 2017. The CSL is the first Chinese law that systematically lays out the regulatory requirements on cybersecurity and data protection, subjecting many previously under-regulated or unregulated activities in cyberspace to government scrutiny. More recently, California enacted the California Consumer Privacy Act (the “CCPA”) that will, among other things, require covered companies to provide new disclosures to California consumers, and afford such consumers new abilities to opt-out of certain sales of personal information. The CCPA took, effect on January 1, 2020 with the privacy provisions enforceable by the California Attorney General as of July 1, 2020, and the regulations becoming enforceable as of August 1, 2020. Given the recent implementation of the regulations, we cannot yet predict the impact of the CCPA on our business or operations. The costs of compliance with, and other burdens imposed by, the GDPR, CSL and CCPA may limit the use and adoption of our products and services and could have an adverse impact on our business, results of operations and financial condition.

We strive to comply with all applicable laws, policies and legal obligations relating to privacy, data security, cybersecurity and data protection. However, given that the scope, interpretation, and application of these laws and regulations are often uncertain and may be conflicting, it is possible that these obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices. Any failure or perceived failure by us or third-party service-providers to comply with our privacy or security policies or privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information or other user data, may result in governmental enforcement actions, litigation, or negative publicity, and could have an adverse effect on our brand, results of operations and financial condition.

Governments are continuing to focus on privacy, cybersecurity, data protection and data security and it is possible that new privacy or data security laws will be passed or existing laws will be amended in a way that is material to our business. Any significant change to applicable laws, regulations, or industry practices regarding our employees’ and users’ data could require us to modify our business, services and products features, possibly in a material manner, and may limit our ability to develop new products, services, and features. Although we have made efforts to design our policies, procedures, and systems to comply with the current requirements of applicable state, federal, and foreign laws, changes to applicable laws and regulations in this area could subject us to additional regulation and oversight, any of which could significantly increase our operating costs.

Government regulations designed to protect personal privacy may make it difficult for us to sell our products.

Our products may transmit and store personal information. The handling of such information is increasingly subject to regulations in numerous jurisdictions around the world. These regulations are typically intended to protect the privacy and security of personal information that is collected, stored and transmitted in or from the governing jurisdiction. In addition, because various foreign jurisdictions have different regulations concerning the storage and transmission of personal information, we may face unknown requirements that pose compliance challenges in new geographic markets that we seek to enter. Our efforts to protect the privacy of information may also fail if our encryption and security technology is inadequate or fails to operate as expected. The difficulties in complying with privacy and data protection regulations could subject us to costs, delayed product launches, liabilities or negative publicity that could impair our ability to maintain or expand our operations into some countries and therefore limit our future growth.

The vast majority of our products rely on the availability of specific unlicensed radio frequency spectrum.

The vast majority of our products operate in unlicensed radio frequency (“RF”) spectrum, which is used by a wide range of devices

48

such as cordless phones, baby monitors, and microwave ovens, and is becoming increasingly crowded. If such spectrum usage continues to increase through the proliferation of consumer electronics and products competitive with ours, and others, the resultant higher levels of clutter and interference in the frequency bands used by our products could decrease the usage of our products. Our business could be further harmed if currently unlicensed RF spectrum becomes subject to licensing in the United States or elsewhere. Network operators and service providers that use our products may be unable to obtain licenses for RF spectrum at reasonable prices or at all. Even if the unlicensed spectrum remains unlicensed, existing and new government regulations may require we make changes in our products. For example, to provide products for network operators and service providers who utilize unlicensed RF spectrum, we may be required to limit their ability to use our products in licensed RF spectrum. The operation of our products by network operators or service providers in the United States or elsewhere in a manner not in compliance with local law could result in fines, operational disruption, or harm to our reputation. In addition, if new spectrums, either licensed or unlicensed, are made available by government regulatory agencies for broadband wireless communication that may disrupt the competitive landscape of our industry and impact our business.

We could be adversely affected by unfavorable results in litigation.

We may be involved, from time to time, in a variety of claims, lawsuits, investigations, and proceedings relating to contractual disputes, intellectual property rights, employment matters, regulatory compliance matters, consumer or securities class-actions and other litigation matters relating to various claims that arise in the normal course of business and otherwise. It can be difficult or impossible to predict the outcome of legal proceedings with any degree of certainty, particularly given that laws may be ambiguous and factual findings can often be the result of incomplete evidence, opinions, varying standards or proof, and extraneous factors. Any such proceedings or matters may adversely affect how we operate the business, divert the attention of management from the operation of the business, have an adverse effect on our reputation, result in additional costs and adversely affect our results of operations. If one or more of the legal proceedings to which we may be or become a party are resolved against us, our results of operations and financial condition could be adversely affected.

We may become subject to warranty claims, product liability and product recalls.

We have received, and may in the future receive, warranty or product liability claims that may require us to make significant expenditures to defend these claims or pay damage awards. In the event of a successful warranty claim, we may also incur costs if we compensate the affected network operator or service provider. Such claims may require a significant amount of time and expense to resolve and defend against, and could also harm our reputation by calling into question the quality of our products. We also may incur costs and expenses relating to a recall of one or more of our products. The process of identifying recalled products that have been widely distributed may be lengthy and require significant resources and we may incur significant replacement costs, contract damage claims and harm to our reputation.

Our customers and the users of our products may expect us to indemnify them against claims for intellectual property infringement, defective products and other losses.

Our customers, users and other parties may expect us to indemnify them for losses incurred in connection with our products, including as a result of intellectual property infringement, defective products, and security vulnerabilities, even if our agreements with them do not require us to provide this indemnification. In some instances, we may decide to defend and indemnify them, irrespective of whether we believe that we have an obligation to do so. The expenses associated with providing indemnification can be substantial. We may also reject demands for indemnification, which may lead to disputes with a customer or other party and may negatively impact our relationships with them.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial condition or results of operations or safeguard our assets.

Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with other controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations, and prevent us from producing accurate and timely financial statements to manage our business. If we fail to do so, our business could be negatively affected and our independent registered public accounting firm may be unable to attest to the fair presentation of our Consolidated Financial Statements included in our Annual Report on Form 10-K in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. If we cannot provide reliable financial reports and effectively prevent fraud, our reputation and results of operations could be harmed. Even effective internal controls have inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud. Therefore, even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. The preparation of Consolidated Financial Statements also requires us to make estimates and assumptions. We base our estimates on historical experience and other assumptions that we believe are reasonable under the circumstances. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. Additionally, as the COVID-19 pandemic continues to develop, many of our estimates could require increased judgement and carry a higher degree of variability and

49

volatility. As events continue to evolve our estimates may change materially in future periods. In addition, projections of any evaluation of effectiveness of internal control over financial reporting in future periods are subject to the risk that the control may become inadequate because of changes in conditions or a deterioration in the degree of compliance with the policies or procedures. We have in the past and may in the future fail to maintain adequate internal controls. For example, as reported in the Annual Reports on Form 10-K for the years ended June 30, 2015 and 2016, management of the Company determined that the Company did not maintain an effective control environment, which contributed to three material weaknesses in internal control over financial reporting. As described in more detail in our Annual Report on Form 10-K for year ended June 30, 2017, under Item 9A. “Controls and Procedures”, the Company completed the remediation efforts of such material weakness, completed testing of the controls to address such material weaknesses and concluded that the previously reported material weaknesses in internal controls over financial reporting have been satisfactorily remediated as of June 30, 2017. Any such failure (including any failure to implement new or improved controls, difficulties in the execution of such implementation or deterioration of our current control practices) may result in an inability to prevent fraud, or cause us to fail to meet our reporting obligations. Any such failures may cause a material adverse effect on our business and financial results, and investor confidence and the market price of our stock may be adversely affected.

Failure to comply with the FCPA and similar laws could subject us to penalties and other adverse consequences.

We face significant risks if we fail to comply with the Foreign Corrupt Practices Act (“FCPA”) of the United States and other laws (such as the U.K. Bribery Act of 2010) that prohibit improper payments or offers of payment to foreign governments and their officials and political parties by us and other business entities acting on our behalf for the purpose of obtaining or retaining business. In many foreign countries, particularly in countries with developing economies, which represent our principal markets, it may be a local custom that businesses operating in such countries engage in business practices that are prohibited by the FCPA or other laws and regulations. Although we have implemented a company policy requiring our employees and consultants to comply with the FCPA and similar laws, there can be no assurance that all of our employees, and agents, as well as those companies to which we outsource certain of our business operations, will not take actions in violation of our policies, for which we may be ultimately held responsible. Any violation of FCPA or similar laws could result in severe criminal or civil sanctions and suspension or debarment from U.S. government contracting, which could have a material and adverse effect on our reputation, business, results of operations and financial condition.

Our results could be adversely affected by unfavorable tax law changes, an unfavorable government review of our tax returns, or changes in our geographic earnings mix.

We are subject to periodic audits or other reviews by tax authorities in the jurisdictions in which we conduct our activities. Tax authorities could challenge our assertions with respect to how we have conducted our business operations as might result in a claim for larger tax payments from us, including, but not limited to, income and withholding taxes. The expense of defending and resolving such audits may be significant.

In the ordinary course of our business, there are many instances where the determination of tax implications is uncertain. Our calculations of income taxes may be based on our interpretations of applicable tax laws in the jurisdictions in which we file. The final determination of our income tax liabilities may be materially different than what is reflected in our income tax provisions and accruals.

The legislative bodies in many jurisdictions regularly consider proposed legislation that, if adopted, could affect our tax rate in such jurisdictions, and the carrying value of our deferred tax assets or our tax liabilities. Multi-jurisdictional changes enacted in response to the guidelines provided by the Organization for Economic Cooperation and Development (“OECD”) to address base erosion and profit shifting (“BEPS”), and additional amendments or guidance regarding comprehensive U.S. tax reform, among other things, may change certain U.S. tax rules impacting the way U.S. multinationals are taxed, increase tax uncertainty and adversely impact our provision for income taxes.

As a global company, we conduct operations in multiple jurisdictions, and therefore our effective tax rate is influenced by the amounts of income and expense attributed to each such jurisdiction and the amount and type of presence in each such jurisdiction. If such amounts were to change so as to increase the amounts of our net income subject to taxation in higher tax jurisdictions, or if we were to increase our operations in jurisdictions assessing relatively higher tax rates, our effective tax rate could be adversely affected. Additionally, withholding taxes vary by jurisdiction and any changes to our operations in each jurisdiction could result in greater taxation to the company. A number of factors may affect our future effective tax rates including, but not limited to:

• the interpretation of country-by-country reports and outcome of discussions with various tax authorities regarding

intercompany transfer pricing arrangements;

• changes that involve Ubiquiti’s supply chain outside of the United States;

• changes in the composition of earnings in countries or states with differing tax rates;

• the resolution of issues arising from tax audits with various tax authorities,

• changes to tax laws regarding R&D tax credits;

• changes in stock-based compensation; and

50

• changes in tax law and/or generally accepted accounting principles;

From time to time the United States, foreign and state governments make substantive changes to tax rules and the application of rules to companies which may impact our taxes on international earnings. We regularly assess the likelihood of favorable or unfavorable outcomes resulting from examinations to determine the adequacy of our provision for income taxes. Although we believe our tax estimates are reasonable, there can be no assurance that any final determination will not be materially different than the treatment reflected in our historical income tax provisions and accruals, which could materially and adversely affect our business results of operations and financial condition.

Changes in applicable tax regulations could negatively affect our financial results.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “2017 Tax Act”). A significant portion of our earnings are earned by our subsidiaries outside the U.S. Changes to the taxation of certain foreign earnings resulting from the 2017 Tax Act, along with the state tax impact of these changes and potential future cash distributions, may have an adverse effect on our effective tax rate. Furthermore, changes to the taxation of undistributed foreign earnings could change our future intentions regarding reinvestment of such earnings. Although the accounting for the impact of the 2017 Tax Act was completed as of December 22, 2018, we are continuing to monitor ongoing changes and ruling updates to the 2017 Tax Act. There can be no assurance that further changes in the 2017 Tax Act will not materially and adversely affect our effective tax rate, tax payments, financial condition and results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The following table provides information with respect to the Company’s share repurchase programs and the activity under the available share repurchase programs during the nine months ended March 31, 2021 (in millions, except share and per share amounts):

Date of Publicly Announced Program	Amount of Publicly Announced Program	Total Number of Shares Purchased as Part of Publicly Announced Programs	Average Price Paid per Share	Total Aggregate Amount Paid	Period of Purchases	Estimated Remaining Balance Available for Share Repurchases under the Program	Expiration date of Program
November 8, 2019	$200 million	228,180	$166.05	$37.9	August 21, 2020 - September 15, 2020	$—	12/31/2021
May 8, 2020	$500 million	682,956	$168.03	$114.8	September 15, 2020 - November 2, 2020	$385.2	3/31/2022

Common Stock repurchases activity under the share repurchase program during the three months ended March 31, 2021 was as follows (in thousands, except share and per share amounts):

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs	Estimated Remaining Balance Available for Share Repurchases
January 1, 2021 - January 31, 2021	—	$	—	—	$	385,245
February 1, 2021 -February 28, 2021	—	$	—	—	$	385,245
March 1, 2021 - March 31, 2021	—	$	—	—	$	385,245
Total	—	$	—	—	$	385,245

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

51

None.

Item 6.

Exhibits 

Exhibit Number		Incorporated by Reference from Form	Incorporated by Reference from Exhibit Number	Date Filed	Filed Herewith
10.1	Third Amended and Restated Credit Agreement, dated as of March 30, 2021, by and among Ubiquiti Inc. as borrower, certain domestic subsidiaries of the borrower, as guarantors, the lenders and other financial institutions party thereto and Wells Fargo Bank, National Association, as administrative agent.	Filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 5, 2021
31.1	Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.				X
31.2	Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.				X
32.1	Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350.				X
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Schema Linkbase Document
101.CAL	Inline XBRL Taxonomy Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Labels Linkbase Document
101.PRE	Inline XBRL Taxonomy Presentation Linkbase Document
104	Cover Page Interactive Date File - (formatted as Inline XBRL and contained in Exhibit 101)

52

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. 

		UBIQUITI INC.
Dated:	May 7, 2021	By:	/s/ Robert J. Pera
			Robert J. Pera
			Chief Executive Officer and Director (Principal Executive Officer)
Dated:	May 7, 2021	By:	/s/ Kevin Radigan
			Kevin Radigan
			Chief Accounting and Finance Officer and Principal Accounting Officer (Principal Financial Officer)

53

Exhibit Index

Exhibit Number		Incorporated by Reference from Form	Incorporated by Reference from Exhibit Number	Date Filed	Filed Herewith
10.1	Third Amended and Restated Credit Agreement, dated as of March 30, 2021, by and among Ubiquiti Inc. as borrower, certain domestic subsidiaries of the borrower, as guarantors, the lenders and other financial institutions party thereto and Wells Fargo Bank, National Association, as administrative agent.	Filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 5, 2021
31.1	Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.				X
31.2	Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.				X
32.1	Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350.				X
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Schema Linkbase Document
101.CAL	Inline XBRL Taxonomy Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Labels Linkbase Document
101.PRE	Inline XBRL Taxonomy Presentation Linkbase Document
104	Cover Page Interactive Date File - (formatted as Inline XBRL and contained in Exhibit 101)

54

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO

EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert J. Pera, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Ubiquiti Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 7, 2021
/s/ Robert J. Pera
Robert J. Pera Chief Executive Officer and Director (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Kevin Radigan, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Ubiquiti Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 7, 2021
/s/ Kevin Radigan
Kevin Radigan Chief Accounting and Finance Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert J. Pera, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Ubiquiti Inc. on Form 10-Q for the fiscal quarter ended March 31, 2021 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Ubiquiti Inc.

Date: May 7, 2021

By:	/s/ Robert J. Pera
Name:	Robert J. Pera
Title:	Chief Executive Officer and Director (Principal Executive Officer)

I, Kevin Radigan, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Ubiquiti Inc. on Form 10-Q for the fiscal quarter ended March 31, 2021 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Ubiquiti Inc.

Date: May 7, 2021

By:	/s/ Kevin Radigan
Name:	Kevin Radigan
Title:	Chief Accounting and Finance Officer (Principal Financial Officer)

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	Mar. 31, 2021	May 05, 2021
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Entity File Number	001-35300
Entity Registrant Name	UBIQUITI INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	32-0097377
Entity Address, Address Line One	685 Third Avenue
Entity Address, Address Line Two	27th Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10017
City Area Code	646
Local Phone Number	780-7958
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	UI
Security Exchange Name	NYSE
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Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2021	Jun. 30, 2020
Current assets:
Cash and cash equivalents	$ 262,791	$ 142,617
Investments — short-term	1,013	925
Accounts receivable, net of allowance for doubtful accounts of $_____ and $203 at March 31, 2021 and June 30, 2020, respectively	187,315	142,160
Inventories	224,930	285,943
Vendor deposits	7,808	5,934
Prepaid income taxes	32	34
Prepaid expenses and other current assets	14,099	9,034
Total current assets	697,988	586,647
Property and equipment, net	79,889	78,522
Operating lease right-of-use assets, net	38,702	24,444
Deferred tax assets — long-term	3,507	4,102
Investments — long-term	726	513
Other long-term assets	72,196	43,223
Total assets	893,008	737,451
Current liabilities:
Accounts payable	63,783	155,547
Taxes payable	13,467	30,961
Debt — short-term	23,865	24,067
Other current liabilities	156,526	53,722
Total current liabilities	257,641	264,297
Income taxes payable — long-term	106,600	115,330
Operating lease liabilities —long-term	31,480	18,533
Debt — long-term	548,133	628,437
Other long-term liabilities	9,363	6,312
Total liabilities	953,217	1,032,909
Commitments and contingencies (Note 10)
Stockholders’ deficit:
Preferred stock—$0.001 par value; 50,000,000 shares authorized; none issued	0	0
Common stock—$0.001 par value; 500,000,000 shares authorized: [___] and 69,472,568 outstanding as of December 31, 2019 and June 30, 2019, respectively	63	64
Additional paid–in capital	696	447
Accumulated other comprehensive income	3	9
Retained earnings (deficit)	(60,971)	(295,978)
Total stockholders’ deficit	(60,209)	(295,458)
Total liabilities and stockholders’ deficit	$ 893,008	$ 737,451

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2021	Jun. 30, 2020
Statement of Financial Position [Abstract]
Allowance for doubtful accounts receivable	$ 52	$ 203
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares outstanding (in shares)	62,814,126	63,687,891

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Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Income Statement [Abstract]
Revenues	$ 467,237	$ 337,417	$ 1,420,206	$ 968,978
Cost of revenues	244,499	177,782	738,678	512,866
Gross profit	222,738	159,635	681,528	456,112
Operating expenses:
Research and development	30,483	21,672	85,208	65,965
Sales, general and administrative	13,255	10,606	36,556	30,053
Total operating expenses	43,738	32,278	121,764	96,018
Income from operations	179,000	127,357	559,764	360,094
Interest expense and other, net	(4,890)	(6,618)	(12,420)	(23,356)
Income before income taxes	174,110	120,739	547,344	336,738
Provision for income taxes	28,035	17,017	85,092	49,059
Net income	$ 146,075	$ 103,722	$ 462,252	$ 287,679
Net income per share of common stock:
Basic (in usd per share)	$ 2.33	$ 1.60	$ 7.33	$ 4.36
Diluted (in usd per share)	$ 2.32	$ 1.60	$ 7.32	$ 4.35
Weighted average shares used in computing net income per share of common stock:
Basic (in shares)	62,810	64,630	63,084	66,003
Diluted (in shares)	62,865	64,699	63,148	66,094
Other comprehensive income:
Unrealized losses on available-for-sale securities	$ (1)	$ (90)	$ (6)	$ (415)
Other Comprehensive loss	(1)	(90)	(6)	(415)
Comprehensive income	$ 146,074	$ 103,632	$ 462,246	$ 287,264

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Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings (Deficit)	Accumulated Other Comprehensive Income (Loss)
Beginning balance (in shares) at Jun. 30, 2019		69,472,568
Beginning balance at Jun. 30, 2019	$ 99,277	$ 69		$ 98,815	$ 393
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	98,146			98,146
Other comprehensive income (loss)	(153)				(153)
Stock options exercised (in shares)		678
Stock options exercised	3		$ 3
Restricted stock units issued, net of tax withholdings (in shares)		9,743
Restricted stock units issued, net of tax withholdings	(501)		(501)
Repurchases of Common Stock (in shares)		(3,635,534)
Repurchases of Common Stock	(416,219)	$ (3)	(191)	(416,025)
Stock-based compensation expense	689		689
Dividends Paid on Common Stock	(20,669)			(20,669)
Ending balance (in shares) at Sep. 30, 2019		65,847,455
Ending balance at Sep. 30, 2019	(239,427)	$ 66		(239,733)	240
Beginning balance (in shares) at Jun. 30, 2019		69,472,568
Beginning balance at Jun. 30, 2019	99,277	$ 69		98,815	393
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	287,679
Other comprehensive income (loss)	(415)
Ending balance (in shares) at Mar. 31, 2020		63,783,333
Ending balance at Mar. 31, 2020	(355,986)	$ 64		(356,028)	(22)
Beginning balance (in shares) at Sep. 30, 2019		65,847,455
Beginning balance at Sep. 30, 2019	(239,427)	$ 66		(239,733)	240
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	85,811			85,811
Other comprehensive income (loss)	(172)				(172)
Stock options exercised (in shares)		17,192
Stock options exercised	124		124
Restricted stock units issued, net of tax withholdings (in shares)		7,935
Restricted stock units issued, net of tax withholdings	(139)		(139)
Repurchases of Common Stock (in shares)		(995,495)
Repurchases of Common Stock	(119,572)	$ (1)	(250)	(119,321)
Stock-based compensation expense	730		730
Dividends Paid on Common Stock	(19,460)			(19,460)
Ending balance (in shares) at Dec. 31, 2019		64,877,087
Ending balance at Dec. 31, 2019	(292,105)	$ 65	465	(292,703)	68
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	103,722			103,722
Other comprehensive income (loss)	(90)				(90)
Stock options exercised (in shares)		2,478
Stock options exercised	25		25
Restricted stock units issued, net of tax withholdings (in shares)		16,374
Restricted stock units issued, net of tax withholdings	(416)		(416)
Repurchases of Common Stock (in shares)		(1,112,606)
Repurchases of Common Stock	(148,400)	$ (1)	(799)	(147,600)
Stock-based compensation expense	725		725
Dividends Paid on Common Stock	(19,447)			(19,447)
Ending balance (in shares) at Mar. 31, 2020		63,783,333
Ending balance at Mar. 31, 2020	$ (355,986)	$ 64		(356,028)	(22)
Beginning balance (in shares) at Jun. 30, 2020	63,687,891	63,687,891
Beginning balance at Jun. 30, 2020	$ (295,458)	$ 64	447	(295,978)	9
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	156,509			156,509
Other comprehensive income (loss)	(1)				(1)
Stock options exercised (in shares)		2,194
Stock options exercised	21		21
Restricted stock units issued, net of tax withholdings (in shares)		8,768
Restricted stock units issued, net of tax withholdings	(615)		(615)
Repurchases of Common Stock (in shares)		(602,003)
Repurchases of Common Stock	(97,588)	$ (1)	(593)	(96,994)
Stock-based compensation expense	740		740
Dividends Paid on Common Stock	(25,470)			(25,470)
Ending balance (in shares) at Sep. 30, 2020		63,096,850
Ending balance at Sep. 30, 2020	$ (261,862)	$ 63		(261,933)	8
Beginning balance (in shares) at Jun. 30, 2020	63,687,891	63,687,891
Beginning balance at Jun. 30, 2020	$ (295,458)	$ 64	447	(295,978)	9
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	462,252
Other comprehensive income (loss)	$ (6)
Stock options exercised (in shares)	8,950
Repurchases of Common Stock (in shares)		(911,136)
Repurchases of Common Stock		$ (152,600)
Ending balance (in shares) at Mar. 31, 2021	62,814,126	62,814,126
Ending balance at Mar. 31, 2021	$ (60,209)	$ 63	696	(60,971)	3
Beginning balance (in shares) at Sep. 30, 2020		63,096,850
Beginning balance at Sep. 30, 2020	(261,862)	$ 63		(261,933)	8
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	159,668			159,668
Other comprehensive income (loss)	(4)				(4)
Stock options exercised (in shares)		2,384
Stock options exercised	22		22
Restricted stock units issued, net of tax withholdings (in shares)		8,141
Restricted stock units issued, net of tax withholdings	(201)		(201)
Repurchases of Common Stock (in shares)		(309,133)
Repurchases of Common Stock	(55,058)		(516)	(54,542)
Stock-based compensation expense	750		750
Dividends Paid on Common Stock	(25,115)			(25,115)
Ending balance (in shares) at Dec. 31, 2020		62,798,242
Ending balance at Dec. 31, 2020	(181,800)	$ 63	55	(181,922)	4
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	146,075			146,075
Other comprehensive income (loss)	(1)				(1)
Stock options exercised (in shares)		4,372
Stock options exercised	48		48
Restricted stock units issued, net of tax withholdings (in shares)		11,512
Restricted stock units issued, net of tax withholdings	(182)		(182)
Stock-based compensation expense	775		775
Dividends Paid on Common Stock	$ (25,124)			(25,124)
Ending balance (in shares) at Mar. 31, 2021	62,814,126	62,814,126
Ending balance at Mar. 31, 2021	$ (60,209)	$ 63	$ 696	$ (60,971)	$ 3

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash Flows from Operating Activities:
Net income	$ 462,252	$ 287,679
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	8,313	5,098
Impairment of equity investment	0	5,000
Amortization of debt issuance costs	1,462	1,308
Non-cash lease expense	226	1,085
Premium amortization and (discount accretion), net	5	(56)
Write off unamortized debt issuance costs	267	105
Provision for inventory obsolescence	569	5,823
Provision for loss on vendor deposits and purchase commitments	7,502	1,587
Stock-based compensation	2,265	2,144
Deferred taxes	595	126
Other, net	495	102
Changes in operating assets and liabilities:
Accounts receivable	(45,166)	(17,839)
Inventories	60,837	53,293
Vendor deposits	(3,554)	2,442
Prepaid income taxes	2	4
Prepaid expenses and other assets	(27,059)	3,399
Accounts payable	(91,447)	22,715
Income taxes payable	(26,224)	(25,413)
Deferred revenues	8,798	1,093
Accrued and other liabilities	87,635	(14,365)
Net cash provided by operating activities	447,773	335,330
Cash Flows from Investing Activities:
Purchase of property and equipment and other long-term assets	(16,002)	(28,786)
Purchase of investments	0	(27,957)
Proceeds from sale of investments	0	103,848
Proceeds from maturities of investments	922	13,272
Net cash provided by (used in) investing activities	(15,080)	60,377
Cash Flows from Financing Activities:
Debt issuance costs	(3,257)	(3,138)
Repurchases of common stock	(152,646)	(681,205)
Payment of common stock cash dividends	(75,709)	(59,576)
Proceeds from exercise of stock options	91	152
Tax withholdings related to net share settlements of restricted stock units	(998)	(1,056)
Net cash (used in) financing activities	(312,519)	(556,073)
Net increase (decrease) in cash and cash equivalents	120,174	(160,366)
Cash and cash equivalents at beginning of period	142,617	238,147
Cash and cash equivalents at end of period	262,791	77,781
Term loan facility
Cash Flows from Financing Activities:
Proceeds from borrowing	37,500	37,500
Repayments of debt	(12,500)	(18,750)
Revolving credit facility
Cash Flows from Financing Activities:
Proceeds from borrowing	75,000	340,000
Repayments of debt	$ (180,000)	$ (170,000)

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Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Supplemental Disclosure of Cash Flow Information:
Income taxes paid, net of refunds	$ 110,766	$ 74,465
Interest paid	9,453	17,513
Non-Cash Investing and Financing Activities:
Right-of-use asset recognized	20,773	5,665
Unpaid stock repurchases	0	5,210
Unpaid property and equipment and other long-term assets	49	19
Net unsettled investment purchases	$ 1,234	$ 117

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Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019
Statement of Stockholders' Equity [Abstract]
Dividends per share (in dollars per share)	$ 0.40	$ 0.40	$ 0.40	$ 0.30	$ 0.30	$ 0.30

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BUSINESS AND BASIS OF PRESENTATION

9 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BUSINESS AND BASIS OF PRESENTATION

BUSINESS AND BASIS OF PRESENTATION

Business— Ubiquiti Inc. and its wholly owned subsidiaries (collectively, “Ubiquiti” or the “Company”) develop high performance networking technology for service providers, enterprises, and consumers globally.

The Company operates on a fiscal year ending June 30. In this Quarterly Report, the fiscal year ending June 30, 2021 is referred to as “fiscal 2021” and the fiscal year ended June 30, 2020 is referred to as “fiscal 2020”.

Basis of Presentation— The Company’s consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) related to interim financial statements based on applicable Securities and Exchange Commission (“SEC”) rules and regulations. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. These consolidated financial statements reflect all adjustments, which are, in the opinion of the Company, of a normal and recurring nature and those necessary to state fairly the statements of financial position, results of operations and cash flows for the dates and periods presented. The June 30, 2020 balance sheet was derived from the audited financial statements as of that date. All significant intercompany transactions and balances have been eliminated.

These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended June 30, 2020, included in its Annual Report on Form 10-K, as filed with the SEC on August 21, 2020 (the “Annual Report”). The results of operations for the three and nine months ended March 31, 2021 are not necessarily indicative of the results to be expected for any future periods.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies are disclosed in its audited consolidated financial statements for the year ended June 30, 2020, included in the Annual Report on Form 10-K. Except as noted below, there have been no other changes to the Company’s significant accounting policies as discussed in the Annual Report.

Use of Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and the accompanying notes. Those estimated assumptions include, but are not limited to, revenue recognition and deferred revenue; allowance for doubtful accounts and sales return reserves; inventory valuation and vendor deposits; accounting for income taxes, including the valuation allowance on deferred tax assets and reserves for uncertain tax positions; determinations of fair value for stock-based awards; estimate of incremental borrowing rate for determining the present value of future lease payments; and valuation of warranty accruals. The Company evaluates its estimates and assumptions based on historical experience and other assumptions that are believed to be reasonable under the circumstances. Actual results could differ materially from those estimates.

Recently Adopted Accounting Pronouncements

Credit Losses on Financial Instruments

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 replaces the existing incurred loss impairment model with a forward-looking expected credit loss model which will result in earlier recognition of credit losses for certain financial instruments and financial assets. For trade receivables, we are required to estimate lifetime expected credit losses. For available-for-sale debt securities, the Company will recognize an allowance for credit losses rather than a reduction to the carrying value of the asset. ASU 2016-13 is effective for the Company’s fiscal year beginning July 1, 2020 on a modified retrospective basis.

As of July 1, 2020, the Company adopted the new standard, including identifying, evaluating and quantifying the impact on its consolidated financial statements. The Company concluded that the expected credit loss impact to the opening balance of fiscal 2021 retained earnings was deemed immaterial, and as a result the adoption did not have a material impact the Company's consolidated financial position, results of operations, or cash flow.

Recent Accounting Pronouncements Not Yet Effective

Income Taxes

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740), which amends the existing guidance relating to the accounting for income taxes. ASU 2019-12 is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes and to improve the consistent application of GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. ASU 2019-12 is effective for the Company’s fiscal year beginning July 1, 2021. The Company is currently evaluating the impact of this new standard on its consolidated financial statements

and related disclosures.

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REVENUES

9 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

REVENUES

REVENUES

Revenue is primarily generated from the sale of hardware as well as the related implied post contract services (“PCS”). Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Revenue is recognized when obligations under the terms of a contract with customers are satisfied; generally, this occurs with the transfer of control of the Company’s products and PCS to its customers. Transfer of control to the customer for products generally occurs at the point in time when products have been shipped to customers as this represents the point in time when the customer has a present obligation to pay and physical possession including title and risk of loss have been transferred to the customer. Revenue for PCS is recognized ratably over time over the estimated period for which implied PCS services will be delivered.

Disaggregation of Revenue

See Note 15 of Notes to Consolidated Financial Statements “Segment Information” for disaggregation of revenue by product category and geography.

Contract Balances

The timing of revenue recognition, billing and cash collections results in billed accounts receivable, deferred revenue primarily attributable to PCS and customer deposits on the Consolidated Balance Sheets. Accounts receivable are recognized in the period the Company’s right to the consideration is unconditional. The Company’s contract liabilities consist of advance payments (Customer deposits) as well as billing in excess of revenue recognized primarily related to deferred revenue. The Company classifies customer deposits as a current liability, and deferred revenue as a current or non-current liability based on the timing of when we expect to fulfill these remaining performance obligations. The current portion of deferred revenue is included in other current liabilities and the non-current portion is included in other long-term liabilities in the Company’s consolidated balance sheets.

As of March 31, 2021 and June 30, 2020, the Company’s customer deposits were $4.3 million and $2.1 million, respectively.

As of March 31, 2021, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $22.2 million and $9.3 million, respectively.

As of June 30, 2020, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $16.5 million and $6.3 million, respectively.

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FAIR VALUE OF FINANCIAL INSTRUMENTS

9 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

Pursuant to the accounting guidance for fair value measurements and its subsequent updates, fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The accounting guidance establishes a three-tier fair value hierarchy that requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:

Level 1—Quoted prices in active markets for identical assets or liabilities;

Level 2—Inputs other than the quoted prices in active markets, that are observable either directly or indirectly;

Level 3—Unobservable inputs based on the Company’s own assumption.

The Company records securities available-for-sale at fair value on a recurring basis. The Company classifies its investments within Level 1 or 2 because they are valued using either quoted market prices or inputs other than quoted prices which are directly or indirectly observable in the market, including readily-available pricing sources for the identical underlying security which may not be actively traded.

The Company’s fixed income available-for-sale securities consist of high-quality investment grade securities from diverse issuers. The valuation techniques used to measure the fair value of the Company’s marketable securities incorporate bond terms and conditions, current performance data, proprietary pricing models, real time quotes from contributing dealers, trade prices and other market data.

The Company held no Level 3 financial instruments as of March 31, 2021 and June 30, 2020.

The following tables summarize the Company’s financial instruments’ adjusted cost, gross unrealized gains and losses, and fair value by significant investment category as of March 31, 2021 and June 30, 2020 (in thousands):

	March 31, 2021
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents (1)		Short-Term Investments		Long-Term Investments
Level 1
Money market funds	$	724	$	—	$	—	$	724	$	724	$	—	$	—
Subtotal	$	724	$	—	$	—	$	724	$	724	$	—	$	—
Level 2
Corporate securities	$	1,736	$	4	$	(1)	$	1,739	$	—	$	1,013	$	726
Subtotal	$	1,736	$	4	$	(1)	$	1,739	$	—	$	1,013	$	726
Total	$	2,460	$	4	$	(1)	$	2,463	$	724	$	1,013	$	726

(1) Cash and cash equivalents on the consolidated balance sheets includes securities that have a maturity of three months or less at the date of purchase. The carrying amount approximates fair value, primarily due to the short maturity of cash equivalent instruments.

	June 30, 2020
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents (1)		Short-Term Investments		Long-Term Investments
Level 1
Money market funds	$	1,055	$	—	$	—	$	1,055	$	1,055	$	—	$	—
Subtotal	$	1,055	$	—	$	—	$	1,055	$	1,055	$	—	$	—
Level 2
Corporate securities	$	1,429	$	9	$	—	$	1,438	$	—	$	925	$	513
Subtotal	$	1,429	$	9	$	—	$	1,438	$	—	$	925	$	513
Total	$	2,484	$	9	$	—	$	2,493	$	1,055	$	925	$	513

(1) Cash and cash equivalents on the consolidated balance sheets includes securities that have a maturity of three months or less at the date of purchase. The carrying amount approximates fair value, primarily due to the short maturity of cash equivalent instruments.

For the three and nine months ended March 31, 2021 the Company did not recognize any net gains or losses from accumulated other comprehensive income related to unrealized gains or losses. For the three months ended March 31, 2020, the Company's reclassified realized net loss to earnings from accumulated other comprehensive income related to unrealized gains or losses, was immaterial.

For the nine months ended March 31, 2020, the Company reclassified realized net gain of $0.4 million to earnings from accumulated other comprehensive income related to unrealized gains or losses.

During the three and nine months ended March 31, 2021, interest income on the Company’s investment securities was immaterial.

During the three and nine months ended March 31, 2020, the Company had $0.2 million and $1.0 million interest income on the Company's investment securities.

The following table represents the Company's marketable securities that had been in continuous unrealized loss position for less than 12 months and for 12 months or greater as of March 31, 2021 (in thousands):

	Continuous Unrealized Loss
	Less than 12 Months		12 Months or Greater		Total
Fair Value of marketable securities	$	1,133	$	—	$	1,133
Unrealized Loss	(1)		—		(1)

The Company had no continuous unrealized loss position from marketable securities as of June 30, 2020.

The following table represents the adjusted costs and fair value of cash equivalents and investments by contractual maturity as of March 31, 2021 (in thousands):

	Available-For-Sale
	Adjusted Cost		Fair Value
Due within 1 year and money market funds	$	1,734	$	1,737
Due after 1 year through 5 years	726		726
Total	$	2,460	$	2,463

For certain of the Company’s financial instruments, other than those presented in the disclosures above, including cash, accounts receivable, accounts payable and other current liabilities, the carrying amounts approximate fair value due to their short maturities.

As of March 31, 2021 and June 30, 2020, the Company had outstanding loans associated with its credit facilities, which are carried at historical cost. The fair value of the Company’s debt disclosed below was estimated based on the current rates offered to the Company for debt with similar terms and remaining maturities and was a Level 2 measurement. As of March 31, 2021 and June 30, 2020, the fair value of the Company’s debt, which is carried at historical cost was $575.0 million and $655.0 million, respectively.

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EARNINGS PER SHARE

9 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share for the periods indicated (in thousands, except per share data):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2021		2020		2021		2020
Numerator:
Net income	$	146,075	$	103,722	$	462,252	$	287,679
Denominator:
Weighted-average shares used in computing basic earnings per share	62,810		64,630		63,084		66,003
Add—dilutive potential common shares:
Stock options	15		24		18		33
Restricted stock units	40		45		46		58
Weighted-average shares used in computing diluted net income per share	62,865		64,699		63,148		66,094
Net income per share of common stock:
Basic	$	2.33	$	1.60	$	7.33	$	4.36
Diluted	$	2.32	$	1.60	$	7.32	$	4.35

The Company excludes potentially dilutive securities from its diluted net income per share calculation when their effect would be anti-dilutive to net income per share amounts. The following table summarizes the total potential shares of common stock that were excluded from the diluted per share calculation, because to include them would have been anti-dilutive for the period (in thousands):

	Three Months Ended March 31,		Nine Months Ended March 31,
	2021	2020	2021	2020
Restricted stock units	—	11	4	4

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BALANCE SHEET COMPONENTS

9 Months Ended

Mar. 31, 2021

Balance Sheet Related Disclosures [Abstract]

BALANCE SHEET COMPONENTS

BALANCE SHEET COMPONENTS

Inventories

Inventories consisted of the following (in thousands):

	March 31, 2021		June 30, 2020
Finished goods	$	221,307	$	282,381
Raw materials	3,623		3,562
Total	$	224,930	$	285,943

Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

	March 31, 2021		June 30, 2020
Testing equipment	$	14,985	$	12,476
Tooling equipment	15,387		13,601
Leasehold improvements	14,781		12,944
Computer and other equipment	8,401		7,676
Software	7,818		7,266
Furniture and fixtures	2,384		2,147
Corporate aircraft	65,807		64,659
Property and equipment, gross	129,563		120,769
Less: Accumulated depreciation	(49,674)		(42,247)
Property and equipment, net	$	79,889	$	78,522

Other Long-term Assets

Other long-term assets consisted of the following (in thousands):

	March 31, 2021		June 30, 2020
Hong Kong Tax deposit (1)	57,423		35,495
Intangible assets, net (2)	9,021		3,063
Other long-term assets, net	5,752		4,665
Total	$	72,196	$	43,223

(1) The Company made a total of $57.4 million of deposits with the Hong Kong Inland Revenue Department (“IRD”) in connection with extending the statute of limitation for income tax examinations currently under audit for the 2010-2014 tax years. These deposits were made during fiscal years 2021, 2020, 2019, and 2018 in the amounts of $21.9 million, $15.5 million, $13.4 million and $6.6 million, respectively. The Company expects the $57.4 million of deposits made with the IRD to be refunded upon completion of the audit. See Note 14 to the consolidated financial statements for additional details regarding this ongoing tax audit.

(2) Accumulated amortization was $2.4 million and $1.8 million as of March 31, 2021 and June 30, 2020, respectively.

Other Current Liabilities

Other current liabilities consisted of the following (in thousands):

	March 31, 2021		June 30, 2020
Deferred revenue — short-term	$	22,193	16,464
Accrued expenses	22,788		12,148
Lease liability— current	8,593		7,056
Warranty accrual	4,753		4,538
Accrued compensation and benefits	4,178		4,084
Customer deposits	4,280		2,061
Reserve for sales returns	2,153		1,275
Inventory received not billed	82,105		1,607
Other payables	5,483		4,489
Total	$	156,526	$	53,722

Other Long-Term Liabilities

Other long-term liabilities consisted of the following (in thousands):

	March 31, 2021		June 30, 2020
Deferred Revenue — long-term	$	9,323	$	6,254
Other long-term liabilities	40		58
Total	$	9,363	$	6,312

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ACCRUED WARRANTY

9 Months Ended

Mar. 31, 2021

Product Warranties Disclosures [Abstract]

ACCRUED WARRANTY

ACCRUED WARRANTYThe Company offers warranties on certain products, generally a period of one to two years and records a liability for the estimated

future costs associated with potential warranty claims. The warranty costs are reflected in the Company’s consolidated statements of operations and comprehensive income within cost of revenues. The warranties are typically in effect for one year for distributors from the date of shipment and two years for direct sales from the date of delivery. The Company assesses the adequacy of its accrued warranty liabilities and adjusts the amounts as necessary based on historical experience factors and changes in future estimates. Historical factors include product failure rates, material usage and service delivery costs incurred in correcting product failures. In certain circumstances, the Company may have recourse from its contract manufacturers for replacement cost of defective products, which it also factors into its warranty liability assessment.

Warranty obligations, included in other current liabilities, were as follows (in thousands):

	Nine Months Ended March 31,
	2021		2020
Beginning balance	$	4,538	$	4,518
Accruals for warranties issued during the period	6,680		5,828
Changes in liability for pre-existing warranties during the period	(1,114)		408
Settlements made during the period	(5,351)		(6,210)
Ending balance	$	4,753	$	4,544

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DEBT

9 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

DEBT

DEBT

On March 30, 2021, the Company, as borrower and certain domestic subsidiaries entered into an amended and restated credit agreement (the “Third Amended and Restated Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”), the other financial institutions named as lenders therein, and Wells Fargo as administrative agent and collateral agent for the lenders, that extended the $700 million senior secured revolving credit facility (the “Revolving Facility”) and provided a new $500 million senior secured term loan facility (the “Term Facility”, together with the Revolving Facility, the “Facilities”), and extended the maturity of the Facilities to March 30, 2026. In addition, the Facilities include an option to request increases in the amounts of such credit facilities by up to an additional $500 million in the aggregate.

The Third Amended and Restated Credit Agreement replaced the Company's existing $700 million senior secured revolving facility (the “Existing Revolving Facility”) and $500 million senior secured term loan facility (the “Existing Term Facility”, together with the Existing Revolving Facility, the “Existing Facilities”) under the Second Amended & Restated Credit Agreement, dated as of January 17, 2018 (as amended by the First Amendment, dated as of June 29, 2018, the Second Amendment, dated as of March 15, and the Third Amendment, dated as of September 9, 2019, the “Existing Credit Agreement”). The Facilities replace the Company's Existing Facilities under the Existing Credit Agreement, which has been terminated in connection with the Third Amended and Restated Credit Agreement.

At the closing of the Third Amended and Restated Credit Agreement, the Term facility was fully drawn, of which $462.5 million and $0.7 million was used to repay the Existing Term Facility under the Existing Credit Agreement for principal and interest, respectively.

Additionally, at closing of the Third Amended and Restated Credit Agreement, $75.0 million and $0.4 million of the Existing Revolving Facility under the Existing Credit Agreement was repaid for principal and interest, respectively. The Company then borrowed $75.0 million under the Revolving Facility under the Third Amended and Restated Credit Agreement.

The Company incurred $3.3 million of debt issuance costs which are capitalized and amortized as interest expense over the life of the facilities.

The Company’s Debt consisted of the following (in thousands):

	March 31, 2021		June 30, 2020
Term Loan - short term	$	25,000	$	25,000
Debt issuance costs, net	(1,135)		(933)
Total Debt - short term	23,865		24,067
Term Loan - long term	475,000		450,000
Revolver - long term	75,000		180,000
Debt issuance costs, net	(1,867)		(1,563)
Total Debt - long term	$	548,133	$	628,437

The Revolving Facility includes a sub-limit of $25.0 million for letters of credit and a sub-limit of $25.0 million for swingline loans. The Facilities are available for working capital and general corporate purposes that comply with the terms of the Third Amended and Restated Credit Agreement, including to finance the repurchase of the Company’s common stock or to make dividends to the holders

of the Company’s common stock. Under the Third Amended and Restated Credit Agreement, revolving loans and swingline loans may be borrowed, repaid and reborrowed until March 30, 2026, at which time all amounts borrowed must be repaid. The term loan is payable in quarterly installments of 1.25% of the original principal amount of the term loan, commencing with the quarter ending June 30, 2021. Revolving, swingline and term loans may be prepaid at any time without penalty. Revolving and term loans bear interest, at the Company’s option, at either (i) a floating rate per annum equal to the base rate plus a margin of between 0.50% and 1.25%, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter or (ii) a floating per annum rate equal to the applicable LIBOR rate (or replacement rate) for a specified period, plus a margin of between 1.50% and 2.25%, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter. Swingline loans bear interest at a floating rate per annum equal to the base rate plus a margin of between 0.50% and 1.25%, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter. Base rate is defined as the greatest of (A) Wells Fargo’s prime rate, (B) the federal funds rate plus 0.50% or (C) the applicable LIBOR rate (or replacement rate) for a period of one month plus 1.00%. A default interest rate shall apply on all obligations during certain events of default under the Third Amended and Restated Credit Agreement at a rate per annum equal to 2.00% above the applicable interest rate. The Company will pay to each lender a facility fee on a quarterly basis based on the unused amount of each lender’s commitment to make revolving loans, of between 0.20% and 0.35%, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter. The Company will also pay to the applicable lenders on a quarterly basis certain fees based on the daily amount available to be drawn under each outstanding letter of credit, including aggregate letter of credit commissions of between 1.50% and 2.25%, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter, and issuance fees of 0.125% per annum. The Company is also obligated to pay Wells Fargo, as agent, fees customary for a credit facility of this size and type.

The Third Amended and Restated Credit Agreement requires the Company to maintain during the term of the Facilities a maximum consolidated total leverage ratio of 3.50 to 1.00 and a minimum consolidated interest coverage ratio of 3.5 to 1.00. In addition, the Third Amended and Restated Credit Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the ability of the Company and its subsidiaries to, among other things, grant liens or enter into agreements restricting their ability to grant liens on property, enter into mergers, dispose of assets, change their accounting or reporting policies, change their business and incur indebtedness, in each case subject to customary exceptions for a credit facility of this size and type. The Third Amended and Restated Credit Agreement includes customary events of default that include, among other things, non-payment of principal, interest or fees, inaccuracy of representations and warranties, violation of covenants, cross default to certain other indebtedness, bankruptcy and insolvency events, material judgments, change of control and certain ERISA events. The occurrence of an event of default could result in the acceleration of the obligations under the Third Amended and Restated Credit Agreement.

The Facilities

As of March 31, 2021, $500.0 million was outstanding on the Term Facility and $75.0 million on the Revolving Facility, leaving $625.0 million available on the Revolving Facility.

Term Facility:

Under the Existing Credit Agreement, during the three months ended March 31, 2021, the Company made no principal payments against the Existing Term Facility, however, made $2.0 million payment of interest. During the nine months ended March 31, 2021, the Company made aggregate payments of $19.1 million under the Existing Term Facility, of which $12.5 million was repayment of principal and $6.6 million was payment of interest.

As of March 31, 2021, the interest rate on the term loan was 1.61%. As of April 30, 2021, the most currently available reset date, the Term Facility has an interest rate of 1.6%.

Revolving Facility:

Under the Existing Credit Agreement, during the three months ended March 31, 2021, the Company made aggregate payments of $71.0 million under the Existing Revolving Facility, of which $70.0 million was repayment of principal and $1.0 million was payment of interest. During the nine months ended March 31, 2021, the Company made aggregate payments of $182.9 million under the Existing Revolving Facility, of which $180.0 million was repayment of principal and $2.9 million was payment of interest.

The table below shows the respective interest rates as of March 31, 2021, in addition to the interest rate reset dates as available for each revolver draw.

Debt Payment Obligations	Interest Rate as of March 31, 2021		Rate Reset Date	Reset Rate
$75 Million Revolver	1.61	%	April 30, 2021	1.61%

The following table summarizes the Company’s estimated debt and interest payment obligations as of March 31, 2021, for the remainder of fiscal 2021 and future fiscal years (in thousands):

	2021 (remainder)		2022		2023		2024		2025		Thereafter		Total
Debt payment obligations	$	6,250	$	25,000	$	25,000	$	25,000	$	25,000	$	468,750	$	575,000
Interest and other payments on debt payment obligations (1)	2,654		10,391		9,983		9,601		9,167		6,590		48,386
Total	$	8,904	$	35,391	$	34,983	$	34,601	$	34,167	$	475,340	$	623,386

(1) - Interest payments are calculated based on the applicable rates and payment dates as of March 31, 2021. Although the Company’s interest rates on our debt obligations may vary, the Company has assumed the most recent available interest rates for all periods presented.

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LEASES

9 Months Ended

Mar. 31, 2021

Leases [Abstract]

LEASES

LEASES

The Company enters into agreements under which it leases various real estate spaces in North America, Europe and Asia Pacific, under non-cancellable leases that expire on various dates through fiscal 2029. Some of the Company’s leases include options to extend the term of such leases for a period from 12 months to 60 months, and/or have options to early terminate the lease. As of March 31, 2021, the Company included such options in determining the lease terms for certain of the Company’s leases because the Company was reasonably certain that it would exercise the extension options. Most of the Company’s leases require it to pay certain operating expenses in addition to base rent, such as taxes, insurance and maintenance costs.

The following table summarizes the Company’s lease costs for the three and nine months ended March 31, 2021 and 2020 (in thousands):

	Financial Statement Classification	Three Months Ended March 31,				Nine Months Ended March 31,
		2021		2020		2021		2020
Operating lease costs:
Fixed lease costs	Operating expenses	$	1,994	$	1,568	$	5,652	$	4,415
Fixed lease costs	Cost of revenues	507		515		1,525		1,553
Variable lease costs	Operating expenses	244		81		639		256
Variable lease costs	Cost of revenues	113		107		327		309
Total lease costs		$	2,858	$	2,271	$	8,143	$	6,533

The operating lease costs in the table above include costs for long-term and short-term leases. Total short-term costs for the three and nine months ended March 31, 2021 and 2020 were immaterial. Variable lease costs primarily include maintenance, utilities and operating expenses that are incremental to the fixed base rent payments and are excluded from the calculation of operating lease liabilities and ROU assets. For the three and nine months ended March 31, 2021, cash paid for amounts associated with the Company’s operating lease liabilities were approximately $2.8 million and $8.2 million, respectively. For the three and nine months ended March 31, 2020, cash paid for amounts associated with the Company’s operating lease liabilities were approximately $2.3 million and $6.6 million, respectively. Cash paid for amounts associated with the Company’s operating lease liabilities were classified as operating activities in the consolidated statement of cash flows.

The following table shows the Company’s undiscounted future fixed payment obligations under the Company’s recognized operating leases and a reconciliation to the operating lease liabilities as of March 31, 2021:

Remainder of Fiscal 2021	$	2,466
Fiscal 2022	9,343
Fiscal 2023	8,258
Fiscal 2024	7,820
Fiscal 2025	7,265
Thereafter	8,020
Total future fixed operating lease payments	$	43,172
Less: Imputed interest	$	3,099
Total operating lease liabilities	$	40,073
Weighted-average remaining lease term - operating leases	5 years
Weighted-average discount rate - operating leases	2.8		%

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Operating Leases

See Note 9- Leases for future minimum lease payments under non-cancelable operating leases as of March 31, 2021.

Purchase Obligations

The Company subcontracts with third parties to manufacture its products and has purchase commitments with key component suppliers. During the normal course of business, the Company’s contract manufacturers procure components and manufacture products based upon orders placed by the Company. If the Company cancels all or part of the orders, the Company may still be liable to the contract manufacturers for the cost of the components purchased by the subcontractors to manufacture the Company's products. The Company periodically reviews the potential liability, and as of March 31, 2021, the Company recorded a purchase obligation liability of $8.3 million related to component purchase commitments. There have been no other significant liabilities for cancellations recorded as of March 31, 2021. The Company’s consolidated financial position and results of operations could be negatively impacted if it were required to compensate the contract manufacturers for any unrecorded liabilities incurred. The Company may be subject to additional purchase obligations for supply agreements and components ordered by its contract manufacturers based on manufacturing forecasts it provides them each month. The Company estimates the amount of these additional purchase obligations to range from $150.3 million to $756.5 million as of March 31, 2021, depending upon the timing of orders placed for these components by its contract manufacturers.

Other Obligations

As of March 31, 2021, the Company has other obligations of $52.9 million which consisted primarily of commitments related to raw materials and research and development projects.

Indemnification Obligations

The Company enters into standard indemnification agreements with many of its business partners in the ordinary course of business. These agreements include provisions for indemnifying the business partner against any claim brought by a third-party to the extent any such claim alleges that a Company product infringes a patent, copyright or trademark, or violates any other proprietary rights of that third-party. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is not estimable and the Company has not incurred any material costs to defend lawsuits or settle claims related to these indemnification agreements to date.

Legal Matters

The Company may be involved, from time to time, in a variety of claims, lawsuits, investigations, and proceedings relating to contractual disputes, intellectual property rights, employment matters, regulatory compliance matters and other litigation matters relating to various claims that arise in the normal course of business. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. The Company assesses its potential liability by analyzing specific litigation and regulatory matters using available information. The Company develops its views on estimated losses in consultation with inside and outside counsel, which involves a subjective analysis of potential results and outcomes, assuming various combinations of appropriate litigation and settlement strategies. Taking all of the above factors into account, the Company records an amount where it is probable that the Company will incur a loss and where that loss can be reasonably estimated. However, the Company’s estimates may be incorrect and the Company could ultimately incur more or less than the amounts initially recorded. The Company may also incur significant legal fees, which are expensed as incurred, in defending against these claims. The Company is not currently aware of any pending or threatened litigation that would have a material adverse effect on the Company’s financial statements.

Vivato/XR

On April 19, 2017, XR Communications, LLC, d/b/a Vivato Technologies (“Vivato”), filed a complaint against the Company in the United States District Court for the Central District of California, alleging that at least one of the Company’s products infringes United States Patent Numbers 7,062,296 (the “‘296 Patent”), 7,729,728 (the “‘728 Patent”), and 6,611,231 (the “‘231 Patent” and, collectively, the “Patents-in-Suit”). The ‘296 and ‘728 Patents are entitled “Forced Beam Switching in Wireless Communication Systems Having Smart Antennas.” The ‘231 Patent is entitled “Wireless Packet Switched Communications Systems and Networks Using Adaptively Steered Antenna Arrays.” Vivato amended its complaint on June 23, 2017 and again on July 6, 2017. According to the complaint, the products accused of infringing the Patents-in-Suit include Wi-Fi access points and routers supporting MU-MIMO, including without limitation access points and routers utilizing the IEEE 802.11ac-2013 standard. Vivato has also filed nine other lawsuits asserting the same patents against other defendants in the Central District of California. On October 2, 2017, the ten cases were consolidated into a single action for all purposes except trial. On March 19, 2018, the Company and the remaining defendants in the consolidated action moved to stay the case (the “Motion to Stay”) pending completion of certain inter partes review proceedings before the Patent Trial and Appeal Board. On April 9, 2018, the Court held a hearing on the Motion to Stay, and, on April 11, 2018, the Court granted the motion. On February 11, 2019, the Court maintained the stay pending a status conference scheduled for

December 2, 2019. The Court maintained the stay in full pending a further status conference, which was originally scheduled for March 17, 2020 and subsequently rescheduled for February 22, 2021 and was postponed pending submission and approval of a scheduling order as described below.

The Patent Trial and Appeal Board, in the aforementioned series of inter partes review proceedings, invalidated two of the three patents-in-suit, but it rejected the challenge to the ‘231 Patent. That decision was appealed, and on November 25, 2020, the Federal Circuit Court of Appeals affirmed the Patent Trial and Appeal Board decision.

On February 16, 2021, the parties submitted a joint status report to the Court seeking to lift the stay. On February 17, 2021, the Court ordered the parties to submit a further report by March 1, 2021, at which time the stay would be lifted. The parties submitted their joint report and proposals for a case schedule, and the Court has not yet issued a schedule in this matter.

The Company plans to vigorously defend itself against these claims; however, there can be no assurance that the Company will prevail in the lawsuit. The Company cannot currently estimate the possible loss or range of losses, if any, that it may experience in connection with this litigation.

Ubiquiti Inc. v. National Union National Union Fire Insurance Company of Pittsburgh, Pa. (“National Union”)

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COMMON STOCK AND TREASURY STOCK

9 Months Ended

Mar. 31, 2021

Equity [Abstract]

COMMON STOCK AND TREASURY STOCK

COMMON STOCK AND TREASURY STOCK

Common Stock Repurchases

On November 6, 2019, the Company’s Board of Directors approved a $200 million stock repurchase program (the “2019 November Program”). Under the 2019 November Program, the Company is authorized to repurchase up to $200 million of common stock. The 2019 November Program expires on December 31, 2021. During the three months ended September 30, 2020, under the 2019 November Program, the Company repurchased and retired 228,180 shares of common stock at an average price per share of $166.05 for an aggregate amount of $37.9 million. As of September 15, 2020, the Company had no remaining balance available for share repurchase under the 2019 November Program.

On May 5, 2020, the Company's Board of Directors approved a $500 million stock repurchase program (the “2020 May Program”). Under the 2020 May Program, the Company may repurchase up to $500 million of its common stock. The 2020 May Program expires on March 31, 2022. During the six months ended December 31, 2020, under the 2020 May Program, the Company repurchased and retired 682,956 shares of common stock at an average price per share of $168.03 for an aggregate amount of $114.8 million. The Company made no repurchases during the three months ended March 31, 2021.

Under both programs, for the nine months ended March 31, 2021, the Company repurchased and retired 911,136 shares of common stock at an average price per share of $167.53 for an aggregate amount of $152.6 million.

As of March 31, 2021, the Company had $385.2 million available for share repurchases under the 2020 May Program.

The following table provides information with respect to the Company’s Share Repurchase programs and the activity under the available share repurchase programs during the nine months ended March 31, 2021 (in millions, except share and per share amounts):

Date of Publicly Announced Program	Amount of Publicly Announced Program	Total Number of Shares Purchased as Part of Publicly Announced Programs	Average Price Paid per Share		Total Aggregate Amount Paid		Period of Purchases	Estimated Remaining Balance Available for Share Repurchases under the Program		Expiration date of Program
November 8, 2019	$200 million	228,180	$	166.05	$	37.9	August 21, 2020 - September 15, 2020	$	—	12/31/2021
May 8, 2020	$500 million	682,956	$	168.03	$	114.8	September 15, 2020 - November 2, 2020	$	385.2	3/31/2022

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ACCUMULATED OTHER COMPREHENSIVE INCOME	9 Months Ended
	Mar. 31, 2021
Stockholders' Equity Note [Abstract]
ACCUMULATED OTHER COMPREHENSIVE INCOME	ACCUMULATED OTHER COMPREHENSIVE INCOMEComprehensive income consists of two components, net income and other comprehensive income. Other comprehensive income refers to unrealized gains and losses that are recorded as an element of stockholders’ equity but are excluded from net income pursuant to GAAP. For the three and nine months ended March 31, 2021 and 2020, the Company’s accumulated other comprehensive income includes net unrealized gains and losses from the Company’s available-for-sale securities, respectively.

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STOCK BASED COMPENSATION

9 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

STOCK BASED COMPENSATION

STOCK BASED COMPENSATION

Stock-Based Compensation Plans

The Company’s 2010 Equity Incentive Plan and 2005 Equity Incentive Plan are described in the Company’s Annual Report.

In December 2020, the Company's stockholders approved the Ubiquiti Inc. 2020 Omnibus Incentive Plan (the “2020 Equity Plan”) that will succeed the Company's 2010 Equity Incentive Plan (the “Prior Plan”), and no additional awards will be granted under the Prior Plan following January 31, 2021. Under the terms of the 2020 Equity Plan, the Company is authorized to grant awards for up to five million shares of common stock over the term of the 2020 Equity Plan. Outstanding awards under the Prior Plan remain in effect pursuant to the terms of the Prior Plan.

As of March 31, 2021, the Company had 4,989,876 authorized shares available for future issuance under all of its stock incentive plans.

Stock-Based Compensation

The following table shows total stock-based compensation expense included in the Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2021		2020		2021		2020
Cost of revenues	$	23	$	29	$	80	$	94
Research and development	538		499		1,560		1,507
Sales, general and administrative	214		197		625		543
	$	775	$	725	$	2,265	$	2,144

Stock Options

The following is a summary of option activity for the Company’s stock incentive plans for the nine months ended March 31, 2021:

	Common Stock Options Outstanding
	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (In thousands)
Balance, June 30, 2020	22,265	$	11.07	2.16	$	3,640
Exercised	(8,950)	$	10.20
Forfeitures and cancellations	(6)	$	2.90
Balance, March 31, 2021	13,309	$	11.65	1.56	$	3,815
Vested as of March 31, 2021	13,309	$	11.65	1.56	$	3,815
Vested and exercisable as of March 31, 2021	13,309	$	11.65	1.56	$	3,815

During the three months ended March 31, 2021 and 2020, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $1.4 million and $0.3 million, respectively, as determined as of the date of option exercise.

During the nine months ended March 31, 2021 and 2020, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $2.4 million and $3.5 million, respectively, as determined as of the date of options exercise.

As of March 31, 2021, the Company had no unrecognized compensation costs related to stock options.

The Company did not grant any employee stock options during the three and nine months ended March 31, 2021 and 2020.

Restricted Stock Units (“RSUs”)

The following table summarizes the activity of the RSUs made by the Company:

	Number of Shares	Weighted Average Grant Date Fair Value Per Share
Non-vested RSUs, June 30, 2020	82,571	$	99.57
RSUs granted	14,880	$	249.02
RSUs vested	(33,335)	$	86.07
RSUs canceled	(2,001)	$	105.82
Non-vested RSUs, March 31, 2021	62,115	$	142.42

The intrinsic value of RSUs vested in the three months ended March 31, 2021 and 2020 was $3.2 million and $3.3 million, respectively.

The intrinsic value of RSUs vested in the nine months ended March 31, 2021 and 2020 was $7.7 million and $6.7 million, respectively.

The total intrinsic value of all outstanding RSUs was $18.5 million as of March 31, 2021.

As of March 31, 2021, there were unrecognized compensation costs related to RSUs of $6.6 million which the Company expects to recognize over a weighted average period of 3.4 years.

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INCOME TAXES

9 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company recorded tax provisions of $28.0 million and $85.1 million for the three and nine months ended March 31, 2021 as compared to $17.0 million and $49.1 million for the three and nine months ended March 31, 2020. The increase is primarily related to an increase in profit before tax for the three and nine months ended March 31, 2021 as compared to the three and nine months ended March 31, 2020.

The Company’s estimated fiscal year 2021 effective tax rate, before discrete items, differs from the U.S. statutory rate primarily due to profits earned in jurisdictions where the tax rate is lower than the U.S. tax rate, partially offset by additional US tax related to the Company’s non-U.S. operations under Global Intangible Low-Taxes Income (“GILTI”) provision.

As of March 31, 2021, the Company had approximately $34.0 million of unrecognized tax benefits, substantially all of which would, if recognized, affect its tax expense. During the nine months ended March 31, 2021, the Company recorded an increase of its unrecognized tax benefits of $1.5 million. The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying Consolidated Statements of Operations and Comprehensive Income. Accrued interest and penalties are included within the related tax liability line in the Consolidated Balance Sheets. As of March 31, 2021, the Company had $4.6 million accrued interest related to uncertain tax matters.

The Company and one or more of its subsidiaries, files income tax returns in the United States federal jurisdiction, and various state, local, and foreign jurisdictions and is currently undergoing income tax examinations by the U.S. Internal Revenue Service and the Hong Kong IRD. All material consolidated federal, state and local income tax matters have been concluded for years through 2014. The majority of the Company’s foreign jurisdictions have been concluded through 2014, with the exception of Hong Kong which has been reviewed through 2009 and is currently under audit for the 2010-2016 tax years.

During fiscal years 2020, 2019, and 2018, the Company made a total of $15.5 million, $13.4 million, and $6.6 million of deposits with the Hong Kong IRD in connection with extending the statute of limitation for income tax examinations currently under audit for 2010-2015 tax years. On December 30, 2020, the Company received notification that the Hong Kong IRD is seeking an additional $67.8 million deposit covering the 2015 tax year. The Company has filed a formal protest in response to this notice and the Assessor's office agreed to a reduced deposit of $21.9 million which was remitted on March 26, 2021. These refundable deposits totaling $57.4 million are included within other long-term assets on the Company’s Consolidated Balance Sheets. The IRD is examining the Company’s claims that its revenue is generated through activities performed wholly outside of the Hong Kong tax jurisdiction and are therefore exempt from Hong Kong tax. The Company is fully cooperating with the examination including submitting documentation in support of its position. The Company continues to believe that its tax positions filed with IRD are more likely than not to be sustained based on their technical merits and therefore no reserve has been provided for this tax uncertainty and the Company expects the $57.4 million of deposits made with IRD to be refunded upon completion of the audit. However, there can be no assurance that this matter will be resolved in the Company’s favor and therefore it's possible that an adverse outcome of the matter could have a material effect on the Company’s results of operations and financial condition.

In July 2018, the Company received a draft Notice of Proposed Adjustment (“Draft NOPA”) from the Internal Revenue Service (“IRS”) proposing an adjustment to income for the fiscal 2015 and fiscal 2016 tax years based on its interpretation of certain obligations of the non-US entities under the credit facility. This Draft NOPA was superseded by an Acknowledgement of Facts (“AOF”) issued to the Company by the IRS on January 17, 2020. The IRS in its AOF continued to propose an adjustment to the Company’s income for its fiscal 2015 and fiscal 2016 tax years based on the IRS’ interpretation of certain obligations of the Company’s foreign subsidiaries under the Company’s credit facilities. On May 12, 2020, the IRS issued a final Notice of Proposed Adjustment to the Company with respect to the 2015/2016 tax years. The Company has formally protested the adjustment and the case is expected to be moved from the Examination Division to the IRS Appeals Division where a formal review of the facts and the applicable law will take place. The timing of when the case will be scheduled to be reviewed by the Appeals Division is uncertain at this time due in large part to an existing backlog of cases awaiting review by the Division. The Company strongly believes the position of the IRS with regard to this matter is without merit. However, there can be no assurance that this matter will be resolved in the Company’s favor. Regardless of whether the matter is resolved in the Company’s favor, the final resolution of this matter could be expensive and time-consuming to defend and/or settle. The Company estimates the incremental tax liability associated with the income adjustment proposed in the AOF would be approximately $50.0 million, excluding potential interest and penalties, after adjusting for the impact of an adjustment on the amount of transition tax payable in future years by the Company. As the Company believes that the tax originally paid in fiscal 2015 and fiscal 2016 is correct, it has not provided a reserve for this tax uncertainty. However, an adverse outcome may have a material and adverse effect on the Company’s results of operations and financial condition.

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SEGMENT INFORMATION, REVENUES BY GEOGRAPHY AND SIGNIFICANT CUSTOMERS

9 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

SEGMENT INFORMATION, REVENUES BY GEOGRAPHY AND SIGNIFICANT CUSTOMERS

SEGMENT INFORMATION, REVENUES BY GEOGRAPHY AND SIGNIFICANT CUSTOMERS

Management has determined that the Company operates as one reportable and operating segment as it only reports financial information on an aggregate and consolidated basis to its Chief Executive Officer, who is the Company’s Chief Operating Decision Maker. Furthermore, the Company does not organize or report its costs on a segment basis. The Company presents its revenues by product type in two primary categories: Service Provider Technology and Enterprise Technology.

•Service Provider Technology includes the Company’s airMAX, EdgeMAX, UFiber, and airFiber platforms, as well as embedded radio products and other 802.11 standard products including base stations, radios, backhaul equipment and CPE. Additionally, Service Provider Technology includes antennas and other products primarily in the 0.9 to 6.0 GHz spectrum and miscellaneous products such as mounting brackets, cables and power over Ethernet adapters.

•Enterprise Technology includes the Company’s UniFi platform, including UniFi enterprise Wi-Fi, UniFi Protect, UniFi Access, UniFi switching and routing solutions and the Company’s AmpliFi platform.

Revenues by product type are as follows (in thousands, except percentages):

	Three Months Ended March 31,								Nine Months Ended March 31,
	2021				2020				2021				2020
Service Provider Technology	$	152,362	33	%	$	106,439	32	%	$	459,699	32	%	$	320,081	33	%
Enterprise Technology	314,875		67	%	230,978		68	%	960,507		68	%	648,897		67	%
Total revenues	$	467,237	100	%	$	337,417	100	%	$	1,420,206	100	%	$	968,978	100	%

Revenues by geography based on customer’s ship-to destinations were as follows (in thousands, except percentages):

	Three Months Ended March 31,								Nine Months Ended March 31,
	2021				2020				2021				2020
North America (1)	$	209,515	45	%	$	133,917	40	%	$	623,835	44	%	$	411,834	43	%
Europe, the Middle East and Africa ("EMEA")	189,573		41	%	159,436		47	%	587,507		41	%	405,883		42	%
Asia Pacific	36,145		8	%	26,232		8	%	115,464		8	%	88,753		9	%
South America	32,004		7	%	17,832		5	%	93,400		7	%	62,508		6	%
Total revenues	$	467,237	100	%	$	337,417	100	%	$	1,420,206	100	%	$	968,978	100	%

 (1) Revenue for the United States was $193.2 million and $125.4 million for the three months ended March 31, 2021 and 2020, respectively. Revenue for the United States was $582.1 million and $389.0 million for the nine months ended March 31, 2021 and 2020, respectively.

Customers with an accounts receivable balance of 10% or greater of total accounts receivable and customers with net revenues of 10% or greater of total revenues are presented below for the periods indicated:

	Percentage of Revenues				Percentage of Accounts Receivable
	Three Months Ended March 31,		Nine Months Ended March 31,		March 31,	June 30,
	2021	2020	2021	2020	2021	2020
Customer A	*	*	*	*	10%	*
Customer B	*	10%	*	12%	*	17%

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RELATED PARTY TRANSACTIONS AND CERTAIN OTHER TRANSACTIONS

9 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS AND CERTAIN OTHER TRANSACTIONS

RELATED PARTY TRANSACTIONS AND CERTAIN OTHER TRANSACTIONS

Aircraft Lease Agreement

On November 13, 2013, the Company entered into an aircraft lease agreement (the “Aircraft Lease Agreement”) with RJP Manageco LLC (the “Lessor”), a limited liability company owned by the Company’s CEO, Robert J. Pera. Pursuant to the Aircraft Lease Agreement, the Company may lease an aircraft owned by the Lessor for Company business purposes. Under the Aircraft Lease Agreement, the aircraft may be leased at a rate of $5,000 per flight hour. This hourly rate does not include the cost of flight crew or

on-board services, which the Company purchases from a third-party provider. Pursuant to the Aircraft Lease Agreement, the Company had no expense during the three and nine months ended March 31, 2021 and recognized a total of approximately $0.4 million and $1.3 million in expenses during the three and nine months ended March 31, 2020, respectively. All expenses pursuant to the Aircraft Lease Agreement have been included in the Company’s sales, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income.

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SUBSEQUENT EVENTS

9 Months Ended

Mar. 31, 2021

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

Dividends

On May 6, 2021, the Company's Board of Directors had approved a quarterly cash dividend of $0.40 per share payable on May 24, 2021 to shareholders of record at the close of business on May 17, 2021. Any future dividends will be subject to the approval of the Company’s Board of Directors.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation— The Company’s consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) related to interim financial statements based on applicable Securities and Exchange Commission (“SEC”) rules and regulations. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. These consolidated financial statements reflect all adjustments, which are, in the opinion of the Company, of a normal and recurring nature and those necessary to state fairly the statements of financial position, results of operations and cash flows for the dates and periods presented. The June 30, 2020 balance sheet was derived from the audited financial statements as of that date. All significant intercompany transactions and balances have been eliminated.

These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended June 30, 2020, included in its Annual Report on Form 10-K, as filed with the SEC on August 21, 2020 (the “Annual Report”). The results of operations for the three and nine months ended March 31, 2021 are not necessarily indicative of the results to be expected for any future periods.

Use of Accounting Estimates

Use of Accounting EstimatesThe preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and the accompanying notes. Those estimated assumptions include, but are not limited to, revenue recognition and deferred revenue; allowance for doubtful accounts and sales return reserves; inventory valuation and vendor deposits; accounting for income taxes, including the valuation allowance on deferred tax assets and reserves for uncertain tax positions; determinations of fair value for stock-based awards; estimate of incremental borrowing rate for determining the present value of future lease payments; and valuation of warranty accruals. The Company evaluates its estimates and assumptions based on historical experience and other assumptions that are believed to be reasonable under the circumstances. Actual results could differ materially from those estimates.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Credit Losses on Financial Instruments

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 replaces the existing incurred loss impairment model with a forward-looking expected credit loss model which will result in earlier recognition of credit losses for certain financial instruments and financial assets. For trade receivables, we are required to estimate lifetime expected credit losses. For available-for-sale debt securities, the Company will recognize an allowance for credit losses rather than a reduction to the carrying value of the asset. ASU 2016-13 is effective for the Company’s fiscal year beginning July 1, 2020 on a modified retrospective basis.

As of July 1, 2020, the Company adopted the new standard, including identifying, evaluating and quantifying the impact on its consolidated financial statements. The Company concluded that the expected credit loss impact to the opening balance of fiscal 2021 retained earnings was deemed immaterial, and as a result the adoption did not have a material impact the Company's consolidated financial position, results of operations, or cash flow.

Recent Accounting Pronouncements Not Yet Effective

Income Taxes

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740), which amends the existing guidance relating to the accounting for income taxes. ASU 2019-12 is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes and to improve the consistent application of GAAP for other areas of accounting for income taxes by clarifying and amending existing guidance. ASU 2019-12 is effective for the Company’s fiscal year beginning July 1, 2021. The Company is currently evaluating the impact of this new standard on its consolidated financial statements

and related disclosures.

Revenues

Revenue is primarily generated from the sale of hardware as well as the related implied post contract services (“PCS”). Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Revenue is recognized when obligations under the terms of a contract with customers are satisfied; generally, this occurs with the transfer of control of the Company’s products and PCS to its customers. Transfer of control to the customer for products generally occurs at the point in time when products have been shipped to customers as this represents the point in time when the customer has a present obligation to pay and physical possession including title and risk of loss have been transferred to the customer. Revenue for PCS is recognized ratably over time over the estimated period for which implied PCS services will be delivered.

Disaggregation of Revenue

See Note 15 of Notes to Consolidated Financial Statements “Segment Information” for disaggregation of revenue by product category and geography.

Contract Balances

The timing of revenue recognition, billing and cash collections results in billed accounts receivable, deferred revenue primarily attributable to PCS and customer deposits on the Consolidated Balance Sheets. Accounts receivable are recognized in the period the Company’s right to the consideration is unconditional. The Company’s contract liabilities consist of advance payments (Customer deposits) as well as billing in excess of revenue recognized primarily related to deferred revenue. The Company classifies customer deposits as a current liability, and deferred revenue as a current or non-current liability based on the timing of when we expect to fulfill these remaining performance obligations. The current portion of deferred revenue is included in other current liabilities and the non-current portion is included in other long-term liabilities in the Company’s consolidated balance sheets.

Accrued Warranty

The Company offers warranties on certain products, generally a period of one to two years and records a liability for the estimated future costs associated with potential warranty claims. The warranty costs are reflected in the Company’s consolidated statements of operations and comprehensive income within cost of revenues. The warranties are typically in effect for one year for distributors from the date of shipment and two years for direct sales from the date of delivery. The Company assesses the adequacy of its accrued warranty liabilities and adjusts the amounts as necessary based on historical experience factors and changes in future estimates. Historical factors include product failure rates, material usage and service delivery costs incurred in correcting product failures. In certain circumstances, the Company may have recourse from its contract manufacturers for replacement cost of defective products, which it also factors into its warranty liability assessment.

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Financial instruments' amortized cost, gross unrealized gains and losses, and fair value

The following tables summarize the Company’s financial instruments’ adjusted cost, gross unrealized gains and losses, and fair value by significant investment category as of March 31, 2021 and June 30, 2020 (in thousands):

	March 31, 2021
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents (1)		Short-Term Investments		Long-Term Investments
Level 1
Money market funds	$	724	$	—	$	—	$	724	$	724	$	—	$	—
Subtotal	$	724	$	—	$	—	$	724	$	724	$	—	$	—
Level 2
Corporate securities	$	1,736	$	4	$	(1)	$	1,739	$	—	$	1,013	$	726
Subtotal	$	1,736	$	4	$	(1)	$	1,739	$	—	$	1,013	$	726
Total	$	2,460	$	4	$	(1)	$	2,463	$	724	$	1,013	$	726

(1) Cash and cash equivalents on the consolidated balance sheets includes securities that have a maturity of three months or less at the date of purchase. The carrying amount approximates fair value, primarily due to the short maturity of cash equivalent instruments.

	June 30, 2020
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents (1)		Short-Term Investments		Long-Term Investments
Level 1
Money market funds	$	1,055	$	—	$	—	$	1,055	$	1,055	$	—	$	—
Subtotal	$	1,055	$	—	$	—	$	1,055	$	1,055	$	—	$	—
Level 2
Corporate securities	$	1,429	$	9	$	—	$	1,438	$	—	$	925	$	513
Subtotal	$	1,429	$	9	$	—	$	1,438	$	—	$	925	$	513
Total	$	2,484	$	9	$	—	$	2,493	$	1,055	$	925	$	513

(1) Cash and cash equivalents on the consolidated balance sheets includes securities that have a maturity of three months or less at the date of purchase. The carrying amount approximates fair value, primarily due to the short maturity of cash equivalent instruments.

Marketable securities in continuous unrealized loss position

The following table represents the Company's marketable securities that had been in continuous unrealized loss position for less than 12 months and for 12 months or greater as of March 31, 2021 (in thousands):

	Continuous Unrealized Loss
	Less than 12 Months		12 Months or Greater		Total
Fair Value of marketable securities	$	1,133	$	—	$	1,133
Unrealized Loss	(1)		—		(1)

Amortized costs and fair value of investment securities by contractual maturity

The following table represents the adjusted costs and fair value of cash equivalents and investments by contractual maturity as of March 31, 2021 (in thousands):

	Available-For-Sale
	Adjusted Cost		Fair Value
Due within 1 year and money market funds	$	1,734	$	1,737
Due after 1 year through 5 years	726		726
Total	$	2,460	$	2,463

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EARNINGS PER SHARE (Tables)

9 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Computation of basic and diluted earnings per share

The following table sets forth the computation of basic and diluted earnings per share for the periods indicated (in thousands, except per share data):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2021		2020		2021		2020
Numerator:
Net income	$	146,075	$	103,722	$	462,252	$	287,679
Denominator:
Weighted-average shares used in computing basic earnings per share	62,810		64,630		63,084		66,003
Add—dilutive potential common shares:
Stock options	15		24		18		33
Restricted stock units	40		45		46		58
Weighted-average shares used in computing diluted net income per share	62,865		64,699		63,148		66,094
Net income per share of common stock:
Basic	$	2.33	$	1.60	$	7.33	$	4.36
Diluted	$	2.32	$	1.60	$	7.32	$	4.35

Potential shares of common stock excluded from diluted per share calculation

The following table summarizes the total potential shares of common stock that were excluded from the diluted per share calculation, because to include them would have been anti-dilutive for the period (in thousands):

	Three Months Ended March 31,		Nine Months Ended March 31,
	2021	2020	2021	2020
Restricted stock units	—	11	4	4

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BALANCE SHEET COMPONENTS (Tables)

9 Months Ended

Mar. 31, 2021

Balance Sheet Related Disclosures [Abstract]

Inventories

Inventories consisted of the following (in thousands):

	March 31, 2021		June 30, 2020
Finished goods	$	221,307	$	282,381
Raw materials	3,623		3,562
Total	$	224,930	$	285,943

Property and equipment, net

Property and equipment, net consisted of the following (in thousands):

	March 31, 2021		June 30, 2020
Testing equipment	$	14,985	$	12,476
Tooling equipment	15,387		13,601
Leasehold improvements	14,781		12,944
Computer and other equipment	8,401		7,676
Software	7,818		7,266
Furniture and fixtures	2,384		2,147
Corporate aircraft	65,807		64,659
Property and equipment, gross	129,563		120,769
Less: Accumulated depreciation	(49,674)		(42,247)
Property and equipment, net	$	79,889	$	78,522

Other long-term assets

Other long-term assets consisted of the following (in thousands):

	March 31, 2021		June 30, 2020
Hong Kong Tax deposit (1)	57,423		35,495
Intangible assets, net (2)	9,021		3,063
Other long-term assets, net	5,752		4,665
Total	$	72,196	$	43,223

(1) The Company made a total of $57.4 million of deposits with the Hong Kong Inland Revenue Department (“IRD”) in connection with extending the statute of limitation for income tax examinations currently under audit for the 2010-2014 tax years. These deposits were made during fiscal years 2021, 2020, 2019, and 2018 in the amounts of $21.9 million, $15.5 million, $13.4 million and $6.6 million, respectively. The Company expects the $57.4 million of deposits made with the IRD to be refunded upon completion of the audit. See Note 14 to the consolidated financial statements for additional details regarding this ongoing tax audit.

(2) Accumulated amortization was $2.4 million and $1.8 million as of March 31, 2021 and June 30, 2020, respectively.

Other current liabilities

Other current liabilities consisted of the following (in thousands):

	March 31, 2021		June 30, 2020
Deferred revenue — short-term	$	22,193	16,464
Accrued expenses	22,788		12,148
Lease liability— current	8,593		7,056
Warranty accrual	4,753		4,538
Accrued compensation and benefits	4,178		4,084
Customer deposits	4,280		2,061
Reserve for sales returns	2,153		1,275
Inventory received not billed	82,105		1,607
Other payables	5,483		4,489
Total	$	156,526	$	53,722

Other long-term liabilities

Other long-term liabilities consisted of the following (in thousands):

	March 31, 2021		June 30, 2020
Deferred Revenue — long-term	$	9,323	$	6,254
Other long-term liabilities	40		58
Total	$	9,363	$	6,312

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ACCRUED WARRANTY (Tables)

9 Months Ended

Mar. 31, 2021

Product Warranties Disclosures [Abstract]

Warranty obligations

Warranty obligations, included in other current liabilities, were as follows (in thousands):

	Nine Months Ended March 31,
	2021		2020
Beginning balance	$	4,538	$	4,518
Accruals for warranties issued during the period	6,680		5,828
Changes in liability for pre-existing warranties during the period	(1,114)		408
Settlements made during the period	(5,351)		(6,210)
Ending balance	$	4,753	$	4,544

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DEBT (Tables)

9 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Schedule of debt

The Company’s Debt consisted of the following (in thousands):

	March 31, 2021		June 30, 2020
Term Loan - short term	$	25,000	$	25,000
Debt issuance costs, net	(1,135)		(933)
Total Debt - short term	23,865		24,067
Term Loan - long term	475,000		450,000
Revolver - long term	75,000		180,000
Debt issuance costs, net	(1,867)		(1,563)
Total Debt - long term	$	548,133	$	628,437

Schedule of respective interest rates

The table below shows the respective interest rates as of March 31, 2021, in addition to the interest rate reset dates as available for each revolver draw.

Debt Payment Obligations	Interest Rate as of March 31, 2021		Rate Reset Date	Reset Rate
$75 Million Revolver	1.61	%	April 30, 2021	1.61%

Schedule of estimated debt and interest payment obligations

The following table summarizes the Company’s estimated debt and interest payment obligations as of March 31, 2021, for the remainder of fiscal 2021 and future fiscal years (in thousands):

	2021 (remainder)		2022		2023		2024		2025		Thereafter		Total
Debt payment obligations	$	6,250	$	25,000	$	25,000	$	25,000	$	25,000	$	468,750	$	575,000
Interest and other payments on debt payment obligations (1)	2,654		10,391		9,983		9,601		9,167		6,590		48,386
Total	$	8,904	$	35,391	$	34,983	$	34,601	$	34,167	$	475,340	$	623,386

(1) - Interest payments are calculated based on the applicable rates and payment dates as of March 31, 2021. Although the Company’s interest rates on our debt obligations may vary, the Company has assumed the most recent available interest rates for all periods presented.

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LEASES (Tables)

9 Months Ended

Mar. 31, 2021

Leases [Abstract]

Lease costs

The following table summarizes the Company’s lease costs for the three and nine months ended March 31, 2021 and 2020 (in thousands):

	Financial Statement Classification	Three Months Ended March 31,				Nine Months Ended March 31,
		2021		2020		2021		2020
Operating lease costs:
Fixed lease costs	Operating expenses	$	1,994	$	1,568	$	5,652	$	4,415
Fixed lease costs	Cost of revenues	507		515		1,525		1,553
Variable lease costs	Operating expenses	244		81		639		256
Variable lease costs	Cost of revenues	113		107		327		309
Total lease costs		$	2,858	$	2,271	$	8,143	$	6,533

Undiscounted future fixed payment obligations under recognized operating leases and reconciliation of operating lease liabilities

The following table shows the Company’s undiscounted future fixed payment obligations under the Company’s recognized operating leases and a reconciliation to the operating lease liabilities as of March 31, 2021:

Remainder of Fiscal 2021	$	2,466
Fiscal 2022	9,343
Fiscal 2023	8,258
Fiscal 2024	7,820
Fiscal 2025	7,265
Thereafter	8,020
Total future fixed operating lease payments	$	43,172
Less: Imputed interest	$	3,099
Total operating lease liabilities	$	40,073
Weighted-average remaining lease term - operating leases	5 years
Weighted-average discount rate - operating leases	2.8		%

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COMMON STOCK AND TREASURY STOCK (Tables)

9 Months Ended

Mar. 31, 2021

Equity [Abstract]

Share repurchase programs and activity under available share repurchase programs

The following table provides information with respect to the Company’s Share Repurchase programs and the activity under the available share repurchase programs during the nine months ended March 31, 2021 (in millions, except share and per share amounts):

Date of Publicly Announced Program	Amount of Publicly Announced Program	Total Number of Shares Purchased as Part of Publicly Announced Programs	Average Price Paid per Share		Total Aggregate Amount Paid		Period of Purchases	Estimated Remaining Balance Available for Share Repurchases under the Program		Expiration date of Program
November 8, 2019	$200 million	228,180	$	166.05	$	37.9	August 21, 2020 - September 15, 2020	$	—	12/31/2021
May 8, 2020	$500 million	682,956	$	168.03	$	114.8	September 15, 2020 - November 2, 2020	$	385.2	3/31/2022

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STOCK BASED COMPENSATION (Tables)

9 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Stock-based compensation expense

The following table shows total stock-based compensation expense included in the Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended March 31, 2021 and 2020 (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2021		2020		2021		2020
Cost of revenues	$	23	$	29	$	80	$	94
Research and development	538		499		1,560		1,507
Sales, general and administrative	214		197		625		543
	$	775	$	725	$	2,265	$	2,144

Summary of option activity for the company's stock incentive plans

The following is a summary of option activity for the Company’s stock incentive plans for the nine months ended March 31, 2021:

	Common Stock Options Outstanding
	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (In thousands)
Balance, June 30, 2020	22,265	$	11.07	2.16	$	3,640
Exercised	(8,950)	$	10.20
Forfeitures and cancellations	(6)	$	2.90
Balance, March 31, 2021	13,309	$	11.65	1.56	$	3,815
Vested as of March 31, 2021	13,309	$	11.65	1.56	$	3,815
Vested and exercisable as of March 31, 2021	13,309	$	11.65	1.56	$	3,815

Activity of RSUs

The following table summarizes the activity of the RSUs made by the Company:

	Number of Shares	Weighted Average Grant Date Fair Value Per Share
Non-vested RSUs, June 30, 2020	82,571	$	99.57
RSUs granted	14,880	$	249.02
RSUs vested	(33,335)	$	86.07
RSUs canceled	(2,001)	$	105.82
Non-vested RSUs, March 31, 2021	62,115	$	142.42

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SEGMENT INFORMATION, REVENUES BY GEOGRAPHY AND SIGNIFICANT CUSTOMERS (Tables)

9 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Revenues by product

Revenues by product type are as follows (in thousands, except percentages):

	Three Months Ended March 31,								Nine Months Ended March 31,
	2021				2020				2021				2020
Service Provider Technology	$	152,362	33	%	$	106,439	32	%	$	459,699	32	%	$	320,081	33	%
Enterprise Technology	314,875		67	%	230,978		68	%	960,507		68	%	648,897		67	%
Total revenues	$	467,237	100	%	$	337,417	100	%	$	1,420,206	100	%	$	968,978	100	%

Revenues by geography

Revenues by geography based on customer’s ship-to destinations were as follows (in thousands, except percentages):

	Three Months Ended March 31,								Nine Months Ended March 31,
	2021				2020				2021				2020
North America (1)	$	209,515	45	%	$	133,917	40	%	$	623,835	44	%	$	411,834	43	%
Europe, the Middle East and Africa ("EMEA")	189,573		41	%	159,436		47	%	587,507		41	%	405,883		42	%
Asia Pacific	36,145		8	%	26,232		8	%	115,464		8	%	88,753		9	%
South America	32,004		7	%	17,832		5	%	93,400		7	%	62,508		6	%
Total revenues	$	467,237	100	%	$	337,417	100	%	$	1,420,206	100	%	$	968,978	100	%

 (1) Revenue for the United States was $193.2 million and $125.4 million for the three months ended March 31, 2021 and 2020, respectively. Revenue for the United States was $582.1 million and $389.0 million for the nine months ended March 31, 2021 and 2020, respectively.

Percentage of revenue and accounts receivable

Customers with an accounts receivable balance of 10% or greater of total accounts receivable and customers with net revenues of 10% or greater of total revenues are presented below for the periods indicated:

	Percentage of Revenues				Percentage of Accounts Receivable
	Three Months Ended March 31,		Nine Months Ended March 31,		March 31,	June 30,
	2021	2020	2021	2020	2021	2020
Customer A	*	*	*	*	10%	*
Customer B	*	10%	*	12%	*	17%

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REVENUES (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Jun. 30, 2020
Revenue from Contract with Customer [Abstract]
Customer deposits	$ 4,280	$ 2,061
Deferred revenue, current	22,193	16,464
Deferred revenue, noncurrent	$ 9,323	$ 6,254

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FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Jun. 30, 2020
Marketable Securities [Line Items]
Adjusted Cost	$ 2,460
Available-for-sale, fair value, total	2,463
Level 3
Marketable Securities [Line Items]
Adjusted Cost	0	$ 0
Fair value, measurements, recurring
Marketable Securities [Line Items]
Adjusted Cost	2,460	2,484
Gross Unrealized Gains	4	9
Gross Unrealized Losses	(1)	0
Available-for-sale, fair value, total	2,463	2,493
Cash and Cash Equivalents	724	1,055
Short-Term Investments	1,013	925
Long-Term Investments	726	513
Fair value, measurements, recurring | Level 1
Marketable Securities [Line Items]
Adjusted Cost	724	1,055
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Available-for-sale, fair value, total	724	1,055
Cash and Cash Equivalents	724	1,055
Short-Term Investments	0	0
Long-Term Investments	0	0
Fair value, measurements, recurring | Level 2
Marketable Securities [Line Items]
Adjusted Cost	1,736	1,429
Gross Unrealized Gains	4	9
Gross Unrealized Losses	(1)	0
Available-for-sale, fair value, total	1,739	1,438
Cash and Cash Equivalents	0	0
Short-Term Investments	1,013	925
Long-Term Investments	726	513
Fair value, measurements, recurring | Money market funds | Level 1
Marketable Securities [Line Items]
Adjusted Cost	724	1,055
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Available-for-sale, fair value, total	724	1,055
Cash and Cash Equivalents	724	1,055
Short-Term Investments	0	0
Long-Term Investments	0	0
Fair value, measurements, recurring | Corporate securities | Level 2
Marketable Securities [Line Items]
Adjusted Cost	1,736	1,429
Gross Unrealized Gains	4	9
Gross Unrealized Losses	(1)	0
Available-for-sale, fair value, total	1,739	1,438
Cash and Cash Equivalents	0	0
Short-Term Investments	1,013	925
Long-Term Investments	$ 726	$ 513

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FAIR VALUE OF FINANCIAL INSTRUMENTS - Narrative (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Unrealized gain (loss), realized and reclassified to earnings from AOCI	$ 0		$ 0	$ 400,000
Investment security, interest income		$ 200,000		$ 1,000,000.0
Fair value of marketable securities, continuous unrealized losses	1,133,000		1,133,000		$ 0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt	$ 575,000,000.0		$ 575,000,000.0		$ 655,000,000.0

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FAIR VALUE OF FINANCIAL INSTRUMENTS - Continuous Loss Position (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Jun. 30, 2020
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract]
Fair value of marketable securities, continuous unrealized losses, less than 12 months	$ 1,133
Fair value of marketable securities, continuous unrealized losses, 12 months or greater	0
Fair value of marketable securities, continuous unrealized losses	1,133	$ 0
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract]
Unrealized loss, continuous unrealized losses, less than 12 months	(1)
Unrealized loss, continuous unrealized losses, 12 months or greater	0
Unrealized loss, continuous unrealized losses	$ (1)

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FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Investment Security by Contract Maturity (Details) $ in Thousands	Mar. 31, 2021 USD ($)
Debt Securities, Available-for-sale, Amortized Cost, Fiscal Year Maturity [Abstract]
Available-for-sale, amortized cost, due within 1 year and money market funds	$ 1,734
Available-for-sale, amortized cost, due after 1 year through 5 years	726
Adjusted Cost	2,460
Debt Securities, Available-for-sale, Fair Value, Fiscal Year Maturity [Abstract]
Available-for-sale, fair value, due within 1 year and money market funds	1,737
Available-for-sale, fair value, due after 1 year through 5 years	726
Available-for-sale, fair value, total	$ 2,463

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EARNINGS PER SHARE - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended
	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Mar. 31, 2021	Mar. 31, 2020
Numerator:
Net Income	$ 146,075	$ 159,668	$ 156,509	$ 103,722	$ 85,811	$ 98,146	$ 462,252	$ 287,679
Denominator:
Weighted-average shares used in computing basic net income per share (in shares)	62,810			64,630			63,084	66,003
Add—dilutive potential common shares:
Weighted-average shares used in computing diluted net income per share (in shares)	62,865			64,699			63,148	66,094
Net income per share of common stock:
Basic (in usd per share)	$ 2.33			$ 1.60			$ 7.33	$ 4.36
Diluted (in usd per share)	$ 2.32			$ 1.60			$ 7.32	$ 4.35
Stock options
Add—dilutive potential common shares:
Dilutive potential common shares (in shares)	15			24			18	33
Restricted stock units
Add—dilutive potential common shares:
Dilutive potential common shares (in shares)	40			45			46	58

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EARNINGS PER SHARE - Anti-dilutive Securities (Detail) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential shares of common stock excluded from the diluted per share calculation (in shares)	0	11	4	4

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BALANCE SHEET COMPONENTS - Inventories (Detail) - USD ($) $ in Thousands	Mar. 31, 2021	Jun. 30, 2020
Inventories [Abstract]
Finished goods	$ 221,307	$ 282,381
Raw materials	3,623	3,562
Total	$ 224,930	$ 285,943

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BALANCE SHEET COMPONENTS - Property and Equipment, Net (Detail) - USD ($) $ in Thousands	Mar. 31, 2021	Jun. 30, 2020
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 129,563	$ 120,769
Less: Accumulated depreciation	(49,674)	(42,247)
Property and equipment, net	79,889	78,522
Testing equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	14,985	12,476
Tooling equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	15,387	13,601
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	14,781	12,944
Computer and other equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	8,401	7,676
Software
Property, Plant and Equipment [Line Items]
Property and equipment, gross	7,818	7,266
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	2,384	2,147
Corporate aircraft
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 65,807	$ 64,659

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BALANCE SHEET COMPONENTS - Other Long-term Assets (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2018
Other Long-term Debt [Abstract]
Hong Kong Tax deposit	$ 57,423	$ 35,495
Intangible assets, net	9,021	3,063
Other long-term assets, net	5,752	4,665
Total	72,196	43,223
Accumulated amortization, intangible assets	2,400	1,800
Income Tax Examination [Line Items]
Hong Kong Tax deposit	57,423	35,495
Hong Kong Inland Revenue Department
Other Long-term Debt [Abstract]
Hong Kong Tax deposit	57,400
Income Tax Examination [Line Items]
Hong Kong Tax deposit	57,400
Payment for tax deposit	21,900	$ 15,500	$ 13,400	$ 6,600
Hong Kong Inland Revenue Department | Tax year 2010 - 2014
Other Long-term Debt [Abstract]
Hong Kong Tax deposit	57,400
Income Tax Examination [Line Items]
Hong Kong Tax deposit	$ 57,400

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BALANCE SHEET COMPONENTS - Other Current Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019
Other Current Liabilities [Abstract]
Deferred revenue — short-term	$ 22,193	$ 16,464
Accrued expenses	22,788	12,148
Lease liability— current	8,593	7,056
Warranty accrual	4,753	4,538	$ 4,544	$ 4,518
Accrued compensation and benefits	4,178	4,084
Customer deposits	4,280	2,061
Reserve for sales returns	2,153	1,275
Inventory received not billed	82,105	1,607
Other payables	5,483	4,489
Total	$ 156,526	$ 53,722

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BALANCE SHEET COMPONENTS - Other Long Term Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Jun. 30, 2020
Other Long-Term Liabilities [Abstract]
Deferred Revenue — long-term	$ 9,323	$ 6,254
Other long-term liabilities	40	58
Total	$ 9,363	$ 6,312

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ACCRUED WARRANTY - Narrative (Detail)	9 Months Ended
	Mar. 31, 2021
Distributors
Product Warranty Liability [Line Items]
Warranty period	1 year
Direct Sales
Product Warranty Liability [Line Items]
Warranty period	2 years
Minimum
Product Warranty Liability [Line Items]
Warranty period	1 year
Maximum
Product Warranty Liability [Line Items]
Warranty period	2 years

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ACCRUED WARRANTY - Warranty Obligations (Detail) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward]
Warranty accrual, beginning balance	$ 4,538	$ 4,518
Accruals for warranties issued during the period	6,680	5,828
Changes in liability for pre-existing warranties during the period	(1,114)	408
Settlements made during the period	(5,351)	(6,210)
Warranty accrual, ending balance	$ 4,753	$ 4,544

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DEBT - Narrative (Detail) - USD ($)				3 Months Ended	9 Months Ended
	Apr. 30, 2021	Mar. 31, 2021	Mar. 30, 2021	Mar. 31, 2021	Mar. 31, 2021	Mar. 31, 2020	Sep. 09, 2019
Revolving credit facility
Debt Instrument [Line Items]
Principal payment					$ 180,000,000	$ 170,000,000
Revolving credit facility | Amended and Restated Credit Agreement
Debt Instrument [Line Items]
Credit facility			$ 700,000,000
Additional borrowing capacity			500,000,000
Interest payment				$ 1,000,000.0	2,900,000
Borrowings under lines of credit			75,000,000.0
Debt issuance costs			$ 3,300,000
Issuance fees per annum			0.125%
Maximum leverage ratio			3.50
Minimum consolidated interest coverage ratio			3.5
Outstanding borrowing		$ 75,000,000.0		75,000,000.0	75,000,000.0
Available borrowing capacity		625,000,000.0		625,000,000.0	625,000,000.0
Repayment of outstanding balance				71,000,000.0	182,900,000
Principal payment				70,000,000.0	180,000,000.0
Revolving credit facility | Amended and Restated Credit Agreement | Minimum
Debt Instrument [Line Items]
Commitment fee percentage of unused borrowings			0.20%
Revolving credit facility | Amended and Restated Credit Agreement | Maximum
Debt Instrument [Line Items]
Commitment fee percentage of unused borrowings			0.35%
Revolving credit facility | Amended and Restated Credit Agreement | Base rate | Minimum
Debt Instrument [Line Items]
Debt basis spread on variable rate			0.50%
Revolving credit facility | Amended and Restated Credit Agreement | Base rate | Maximum
Debt Instrument [Line Items]
Debt basis spread on variable rate			1.25%
Revolving credit facility | Amended and Restated Credit Agreement | LIBOR
Debt Instrument [Line Items]
Debt basis spread on variable rate			1.00%
Revolving credit facility | Amended and Restated Credit Agreement | LIBOR | Minimum
Debt Instrument [Line Items]
Debt basis spread on variable rate			1.50%
Revolving credit facility | Amended and Restated Credit Agreement | LIBOR | Maximum
Debt Instrument [Line Items]
Debt basis spread on variable rate			2.25%
Revolving credit facility | Amended and Restated Credit Agreement | Federal funds rate
Debt Instrument [Line Items]
Debt basis spread on variable rate			0.50%
Revolving credit facility | Amended and Restated Credit Agreement | Applicable interest rate
Debt Instrument [Line Items]
Debt basis spread over applicable interest rate			2.00%
Revolving credit facility | Third Amendment Credit Agreement
Debt Instrument [Line Items]
Credit facility							$ 700,000,000
Interest payment			$ 400,000
Repayment of outstanding balance			75,000,000.0
Term loan facility
Debt Instrument [Line Items]
Principal payment					12,500,000	$ 18,750,000
Term loan facility | Amended and Restated Credit Agreement
Debt Instrument [Line Items]
Credit facility			$ 500,000,000
Interest payment				2,000,000.0	6,600,000
Percentage of principal due quarterly			1.25%
Outstanding borrowing		$ 500,000,000.0		500,000,000.0	500,000,000.0
Repayment of outstanding balance					19,100,000
Principal payment				$ 0	$ 12,500,000
Interest rate		1.61%
Term loan facility | Amended and Restated Credit Agreement | Subsequent event
Debt Instrument [Line Items]
Interest rate	1.60%
Term loan facility | Third Amendment Credit Agreement
Debt Instrument [Line Items]
Credit facility							$ 500,000,000
Repayment of term facility			$ 462,500,000
Interest payment			700,000
Letters of credit | Amended and Restated Credit Agreement
Debt Instrument [Line Items]
Credit facility			$ 25,000,000.0
Letters of credit | Amended and Restated Credit Agreement | Minimum
Debt Instrument [Line Items]
Commitment fee percentage of unused borrowings			1.50%
Letters of credit | Amended and Restated Credit Agreement | Maximum
Debt Instrument [Line Items]
Commitment fee percentage of unused borrowings			2.25%
Sublimit for swingline loan advances | Amended and Restated Credit Agreement
Debt Instrument [Line Items]
Credit facility			$ 25,000,000.0
Sublimit for swingline loan advances | Amended and Restated Credit Agreement | Base rate | Minimum
Debt Instrument [Line Items]
Debt basis spread on variable rate			0.50%
Sublimit for swingline loan advances | Amended and Restated Credit Agreement | Base rate | Maximum
Debt Instrument [Line Items]
Debt basis spread on variable rate			1.25%

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DEBT - Summary of Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Jun. 30, 2020
Debt Instrument [Line Items]
Debt — short-term	$ 23,865	$ 24,067
Debt issuance costs, net	(1,135)	(933)
Debt — long-term	548,133	628,437
Debt issuance costs, net	(1,867)	(1,563)
Term loan facility
Debt Instrument [Line Items]
Debt — short-term	25,000	25,000
Debt — long-term	475,000	450,000
Revolving credit facility
Debt Instrument [Line Items]
Debt — long-term	$ 75,000	$ 180,000

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DEBT - Debt Payment Obligations (Details) - Term loan facility - $75 Million Revolver - USD ($)	Apr. 30, 2021	Mar. 31, 2021
Debt Instrument [Line Items]
Interest rate		1.61%
Outstanding borrowing		$ 75,000,000
Subsequent event
Debt Instrument [Line Items]
Interest rate	1.61%

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DEBT - Summary of Debt and Interest Payment Obligations (Detail) $ in Thousands	Mar. 31, 2021 USD ($)
Debt payment obligations
Debt payment obligations, 2021 (remainder)	$ 6,250
Debt payment obligations, 2022	25,000
Debt payment obligations, 2023	25,000
Debt payment obligations, 2024	25,000
Debt payment obligations, 2025	25,000
Debt payment obligations, thereafter	468,750
Debt payment obligations, total	575,000
Interest and other payments on debt payment obligations
Interest and other payments on debt payment obligations, 2021 (remainder)	2,654
Interest and other payments on debt payment obligations, 2022	10,391
Interest and other payments on debt payment obligations, 2023	9,983
Interest and other payments on debt payment obligations, 2024	9,601
Interest and other payments on debt payment obligations, 2025	9,167
Interest and other payments on debt payment obligations, thereafter	6,590
Interest and other payments on debt payment obligations, total	48,386
Total
Debt and interest payment obligations, 2021 (remainder)	8,904
Debt and interest payment obligations, 2022	35,391
Debt and interest payment obligations, 2023	34,983
Debt and interest payment obligations, 2024	34,601
Debt and interest payment obligations, 2025	34,167
Debt and interest payment obligations, thereafter	475,340
Debt and interest payment obligations, total	$ 623,386

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LEASES - Narrative (Details)	Mar. 31, 2021
Minimum
Lessee, Lease, Description [Line Items]
Lease, extension of terms	12 months
Maximum
Lessee, Lease, Description [Line Items]
Lease, extension of terms	60 months

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LEASES - Lease Costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Lease, Cost [Abstract]
Total lease costs	$ 2,858	$ 2,271	$ 8,143	$ 6,533
Operating lease payments	2,800	2,300	8,200	6,600
Operating expenses
Lease, Cost [Abstract]
Fixed lease costs	1,994	1,568	5,652	4,415
Variable lease costs	244	81	639	256
Cost of revenues
Lease, Cost [Abstract]
Fixed lease costs	507	515	1,525	1,553
Variable lease costs	$ 113	$ 107	$ 327	$ 309

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LEASES - Operating Leases Future Payment Obligations (Details) $ in Thousands	Mar. 31, 2021 USD ($)
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
Remainder of Fiscal 2021	$ 2,466
Fiscal 2022	9,343
Fiscal 2023	8,258
Fiscal 2024	7,820
Fiscal 2025	7,265
Thereafter	8,020
Total future fixed operating lease payments	43,172
Less: Imputed interest	3,099
Total operating lease liabilities	$ 40,073

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LEASES - Weighted-Average Term and Discount Rate (Details)	Mar. 31, 2021
Leases [Abstract]
Weighted-average remaining lease term - operating leases	5 years
Weighted-average discount rate - operating leases	2.80%

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COMMITMENTS AND CONTINGENCIES (Details) $ in Millions	9 Months Ended
	Mar. 31, 2021 USD ($) lawsuit	Oct. 02, 2017 lawsuit
Property Subject to or Available for Operating Lease [Line Items]
Other obligations | $	$ 52.9
XR Communications, LLC, d/b/a Vivato Technologies
Loss Contingencies [Line Items]
Other lawsuits filed | lawsuit	9
Number of lawsuits | lawsuit		10
Patent Trial and Appeal Boart, Patents-in-Suit
Loss Contingencies [Line Items]
Number of lawsuits | lawsuit	3
Number of Lawsuits Invalidated | lawsuit	2
Component purchase commitments
Property Subject to or Available for Operating Lease [Line Items]
Purchase obligation | $	$ 8.3
Components | Minimum
Property Subject to or Available for Operating Lease [Line Items]
Purchase obligation | $	150.3
Components | Maximum
Property Subject to or Available for Operating Lease [Line Items]
Purchase obligation | $	$ 756.5

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COMMON STOCK AND TREASURY STOCK - Narrative (Detail) - USD ($)	3 Months Ended						9 Months Ended
	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Mar. 31, 2021	Sep. 15, 2020	May 05, 2020	Nov. 06, 2019
Equity, Class of Treasury Stock [Line Items]
Value of total number of shares purchased		$ 55,058,000	$ 97,588,000	$ 148,400,000	$ 119,572,000	$ 416,219,000
2019 November Program
Equity, Class of Treasury Stock [Line Items]
Amount of Publicly Announced Program										$ 200,000,000
2020 May Program
Equity, Class of Treasury Stock [Line Items]
Amount of Publicly Announced Program									$ 500,000,000
Common Stock
Equity, Class of Treasury Stock [Line Items]
Stock repurchased and retired (in shares)		309,133	602,003	1,112,606	995,495	3,635,534	911,136
Shares repurchased and retired, average cost per share (in dollars per share)							$ 167.53
Value of total number of shares purchased			$ 1,000	$ 1,000	$ 1,000	$ 3,000	$ 152,600,000
Common Stock | 2019 November Program
Equity, Class of Treasury Stock [Line Items]
Amount of Publicly Announced Program										$ 200,000,000
Estimated Remaining Balance Available for Share Repurchases under the Program								$ 0
Common Stock | 2020 May Program
Equity, Class of Treasury Stock [Line Items]
Amount of Publicly Announced Program									$ 500,000,000
Stock repurchased and retired (in shares)	0	682,956
Shares repurchased and retired, average cost per share (in dollars per share)		$ 168.03
Value of total number of shares purchased		$ 114,800,000
Estimated Remaining Balance Available for Share Repurchases under the Program	$ 385,200,000						$ 385,200,000

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COMMON STOCK AND TREASURY STOCK - Repurchase Programs (Detail) - USD ($)	3 Months Ended					9 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Mar. 31, 2021
Equity, Class of Treasury Stock [Line Items]
Total Aggregate Amount Paid	$ 55,058,000	$ 97,588,000	$ 148,400,000	$ 119,572,000	$ 416,219,000
Common Stock
Equity, Class of Treasury Stock [Line Items]
Total Number of Shares Purchased as Part of Publicly Announced Programs (in shares)	309,133	602,003	1,112,606	995,495	3,635,534	911,136
Total Aggregate Amount Paid		$ 1,000	$ 1,000	$ 1,000	$ 3,000	$ 152,600,000
Common Stock | November 2019 Repurchase Program
Equity, Class of Treasury Stock [Line Items]
Amount of Publicly Announced Program						200,000,000
Total Number of Shares Purchased as Part of Publicly Announced Programs (in shares)		228,180
Average Price Paid per Share (in usd per share)		$ 166.05
Total Aggregate Amount Paid		$ 37,900,000
Estimated Remaining Balance Available for Share Repurchases under the Program						0
Common Stock | May 2020 Repurchase Program
Equity, Class of Treasury Stock [Line Items]
Amount of Publicly Announced Program						$ 500,000,000
Total Number of Shares Purchased as Part of Publicly Announced Programs (in shares)						682,956
Average Price Paid per Share (in usd per share)						$ 168.03
Total Aggregate Amount Paid						$ 114,800,000
Estimated Remaining Balance Available for Share Repurchases under the Program						$ 385,200,000

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STOCK BASED COMPENSATION - Narrative (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized shares, stock incentive plans (in shares)	4,989,876		4,989,876
Options granted (in shares)	0	0	0	0
2020 Equity Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized shares, stock incentive plans (in shares)	5,000,000		5,000,000
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate intrinsic value of options exercised	$ 1,400,000	$ 300,000	$ 2,400,000	$ 3,500,000
Unrecognized compensation costs	0		0
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Intrinsic value of RSUs vested	3,200,000	$ 3,300,000	7,700,000	$ 6,700,000
Intrinsic value of RSUs outstanding	18,500,000		18,500,000
Unrecognized compensation costs, RSUs	$ 6,600,000		$ 6,600,000
Weighted-average period recognized (in years)			3 years 4 months 24 days

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STOCK BASED COMPENSATION - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 775	$ 725	$ 2,265	$ 2,144
Cost of revenues
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	23	29	80	94
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	538	499	1,560	1,507
Sales, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 214	$ 197	$ 625	$ 543

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STOCK BASED COMPENSATION - Option Activity for Company's Stock Incentive Plans (Detail) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Mar. 31, 2021 USD ($) $ / shares shares	Jun. 30, 2020 USD ($) $ / shares shares
Number of Shares
Beginning balance (in shares) | shares	22,265
Exercised (in shares) | shares	(8,950)
Forfeitures and cancellations (in shares) | shares	(6)
Ending balance (in shares) | shares	13,309	22,265
Weighted Average Exercise Price
Beginning balance (in usd per share) | $ / shares	$ 11.07
Exercised (in usd per share) | $ / shares	10.20
Forfeitures and cancellations (in usd per share) | $ / shares	2.90
Ending balance (in usd per share) | $ / shares	$ 11.65	$ 11.07
Options outstanding, weighted average remaining contractual life	1 year 6 months 21 days	2 years 1 month 28 days
Options outstanding, aggregate intrinsic value | $	$ 3,815	$ 3,640
Number of shares, vested (in shares) | shares	13,309
Options, weighted average exercise price, vested (in usd per share) | $ / shares	$ 11.65
Options, remaining contractual term, vested (years)	1 year 6 months 21 days
Options, aggregate intrinsic value, vested | $	$ 3,815
Number of shares, vested and exercisable (in shares) | shares	13,309
Options, weighted average exercise price, vested and exercisable (in usd per share) | $ / shares	$ 11.65
Options, weighted average remaining contractual life, vested and exercisable (years)	1 year 6 months 21 days
Options, aggregate intrinsic value, vested and exercisable | $	$ 3,815

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STOCK BASED COMPENSATION - Summary of RSU Activity (Detail) - Restricted stock units	9 Months Ended
	Mar. 31, 2021 $ / shares shares
Number of Shares
Non-vested RSUs, beginning balance (in shares) | shares	82,571
RSUs granted (in shares) | shares	14,880
RSUs vested (in shares) | shares	(33,335)
RSUs canceled (in shares) | shares	(2,001)
Non-vested RSUs, ending balance (in shares) | shares	62,115
Weighted Average Grant Date Fair Value Per Share
Non-vested RSUs, weighted average grant date fair value, beginning balance (in usd per share) | $ / shares	$ 99.57
RSUs granted, weighted average grant date fair value (in usd per share) | $ / shares	249.02
RSUs vested, weighted average grant date fair value (in usd per share) | $ / shares	86.07
RSUs canceled, weighted average grant date fair value (in usd per share) | $ / shares	105.82
Non-vested RSUs, weighted average grant date fair value, ending balance (in usd per share) | $ / shares	$ 142.42

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INCOME TAXES (Detail) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 26, 2021	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2018	Dec. 30, 2020
Income Tax Disclosure [Abstract]
Provision for income taxes		$ 28,035	$ 17,017	$ 85,092	$ 49,059
Unrecognized tax benefits		34,000		34,000
Net increase (decrease) in unrecognized tax benefits				1,500
Interest accrued related to uncertain tax matters		4,600		4,600
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Hong Kong Tax deposit		57,423		57,423		$ 35,495
IRS
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Loss contingency, estimate of possible loss		50,000		50,000
Hong Kong Inland Revenue Department
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Payment for tax deposit				21,900		15,500	$ 13,400	$ 6,600
Hong Kong Tax deposit		$ 57,400		$ 57,400
Hong Kong Inland Revenue Department | Tax Year 2010 - 2015
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Payment for tax deposit	$ 21,900					$ 15,500	$ 13,400	$ 6,600
Hong Kong Inland Revenue Department | Tax year 2015
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Additional tax deposit requested									$ 67,800

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SEGMENT INFORMATION, REVENUES BY GEOGRAPHY AND SIGNIFICANT CUSTOMERS - Narrative (Detail)	9 Months Ended
	Mar. 31, 2021 segment product
Segment Reporting [Abstract]
Number of operating segments	1
Number of reportable segments	1
Number of product types | product	2

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SEGMENT INFORMATION, REVENUES BY GEOGRAPHY AND SIGNIFICANT CUSTOMERS - Revenues by Product (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Segment Reporting Information [Line Items]
Total revenues	$ 467,237	$ 337,417	$ 1,420,206	$ 968,978
Revenue percentage	100.00%	100.00%	100.00%	100.00%
Revenues
Segment Reporting Information [Line Items]
Revenue percentage	100.00%	100.00%	100.00%	100.00%
Product concentration risk | Service Provider Technology
Segment Reporting Information [Line Items]
Total revenues	$ 152,362	$ 106,439	$ 459,699	$ 320,081
Product concentration risk | Service Provider Technology | Revenues
Segment Reporting Information [Line Items]
Revenue percentage	33.00%	32.00%	32.00%	33.00%
Product concentration risk | Enterprise Technology
Segment Reporting Information [Line Items]
Total revenues	$ 314,875	$ 230,978	$ 960,507	$ 648,897
Product concentration risk | Enterprise Technology | Revenues
Segment Reporting Information [Line Items]
Revenue percentage	67.00%	68.00%	68.00%	67.00%

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SEGMENT INFORMATION, REVENUES BY GEOGRAPHY AND SIGNIFICANT CUSTOMERS - Revenues by Geography (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Segment Reporting Information [Line Items]
Revenues	$ 467,237	$ 337,417	$ 1,420,206	$ 968,978
Revenue percentage	100.00%	100.00%	100.00%	100.00%
United States
Segment Reporting Information [Line Items]
Revenues	$ 193,200	$ 125,400	$ 582,100	$ 389,000
Geographic concentration risk | North America
Segment Reporting Information [Line Items]
Revenues	$ 209,515	$ 133,917	$ 623,835	$ 411,834
Revenue percentage	45.00%	40.00%	44.00%	43.00%
Geographic concentration risk | Europe, the Middle East and Africa ("EMEA")
Segment Reporting Information [Line Items]
Revenues	$ 189,573	$ 159,436	$ 587,507	$ 405,883
Revenue percentage	41.00%	47.00%	41.00%	42.00%
Geographic concentration risk | Asia Pacific
Segment Reporting Information [Line Items]
Revenues	$ 36,145	$ 26,232	$ 115,464	$ 88,753
Revenue percentage	8.00%	8.00%	8.00%	9.00%
Geographic concentration risk | South America
Segment Reporting Information [Line Items]
Revenues	$ 32,004	$ 17,832	$ 93,400	$ 62,508
Revenue percentage	7.00%	5.00%	7.00%	6.00%

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SEGMENT INFORMATION, REVENUES BY GEOGRAPHY AND SIGNIFICANT CUSTOMERS - Percentage of Revenues, Accounts Receivable (Detail)			3 Months Ended		9 Months Ended
	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Revenue, Major Customer [Line Items]
Concentration percentage			100.00%	100.00%	100.00%	100.00%
Revenues
Revenue, Major Customer [Line Items]
Concentration percentage			100.00%	100.00%	100.00%	100.00%
Customer concentration risk | Revenues | Customer B
Revenue, Major Customer [Line Items]
Concentration percentage				10.00%		12.00%
Customer concentration risk | Accounts Receivable | Customer A
Revenue, Major Customer [Line Items]
Concentration percentage	10.00%
Customer concentration risk | Accounts Receivable | Customer B
Revenue, Major Customer [Line Items]
Concentration percentage		17.00%

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RELATED PARTY TRANSACTIONS AND CERTAIN OTHER TRANSACTIONS (Details) - Chief Executive Officer - USD ($)		3 Months Ended		9 Months Ended
	Nov. 13, 2013	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Sales, general and administrative
Related Party Transaction [Line Items]
Aircraft leasing expenses		$ 0	$ 400,000	$ 0	$ 1,300,000
Aircraft lease agreement
Related Party Transaction [Line Items]
Rate to lease aircraft	$ 5,000

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SUBSEQUENT EVENTS (Details)	May 06, 2021 $ / shares
Subsequent event
Repurchase Agreement Counterparty [Line Items]
Dividends declared per share (in dollars per share)	$ 0.40