Ubiquiti Inc. 10-Q

Item 1. Financial Statements UBIQUITI INC. Consolidated Balance Sheets (In thousands, except share data) (Unaudited) March 31, 2022 June 30, 2021 Assets Current assets: Cash and cash equivalents $ 144,312 $ 249,418 Investments — short-term 2,251 1,320 Accounts receivable, net of allowance for doubtful accounts of $ 47 and $ 47 at March 31, 2022, and June 30, 2021, respectively 87,481 172,289 Inventories 241,130 233,767 Vendor deposits 49,397 20,013 Prepaid income taxes 6,718 51 Prepaid expenses and other current assets 11,983 17,298 Total current assets 543,272 694,156 Property and equipment, net 80,895 79,061 Operating lease right-of-use assets, net 60,476 40,011 Deferred tax assets — long-term 4,667 4,776 Investments — long-term 600 1,035 Other long-term assets 69,779 71,946 Total assets $ 759,689 $ 890,985 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 102,288 $ 112,071 Taxes payable 8,373 14,496 Debt — short-term 23,865 23,865 Other current liabilities 106,818 125,980 Total current liabilities 241,344 276,412 Income taxes payable — long-term 97,482 104,022 Operating lease liabilities —long-term 51,147 32,258 Debt — long-term 698,725 467,030 Other long-term liabilities 5,988 8,564 Total liabilities 1,094,686 888,286 Commitments and contingencies (Note 10) Stockholders’ equity (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: 60,781,979 and 62,582,858 outstanding as of March 31, 2022 and June 30, 2021, respectively 61 63 Additional paid–in capital — — Accumulated other comprehensive (loss) income ( 432 ) 1 Retained earnings equity (deficit) ( 334,626 ) 2,635 Total stockholders’ equity (deficit) ( 334,997 ) 2,699 Total liabilities and stockholders’ equity $ 759,689 $ 890,985 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, 2022 2021 2022 2021 Revenues 358,068 $ 467,237 $ 1,248,547 $ 1,420,206 Cost of revenues 242,050 244,499 748,369 738,678 Gross profit 116,018 222,738 $ 500,178 $ 681,528 Operating expenses: Research and development 35,261 30,483 100,181 85,208 Sales, general and administrative 18,151 13,255 50,302 36,556 Total operating expenses 53,412 43,738 150,483 121,764 Income from operations 62,606 179,000 349,695 559,764 Interest expense and other, net ( 3,252 ) ( 4,890 ) ( 9,784 ) ( 12,420 ) Income before income taxes 59,354 174,110 339,911 547,344 Provision for income taxes 9,000 28,035 53,758 85,092 Net income $ 50,354 $ 146,075 $ 286,153 $ 462,252 Net income per share of common stock: Basic $ 0.82 $ 2.33 $ 4.61 $ 7.33 Diluted $ 0.82 $ 2.32 $ 4.61 $ 7.32 Weighted average shares used in computing net income per share of common stock: Basic 61,411 62,810 62,089 63,084 Diluted 61,435 62,865 62,125 63,148 Other comprehensive income: Unrealized gain (losses) on available-for-sale securities $ ( 439 ) $ ( 1 ) $ ( 433 ) $ ( 6 ) Other comprehensive loss ( 439 ) ( 1 ) ( 433 ) ( 6 ) Comprehensive income $ 49,915 $ 146,074 $ 285,720 $ 462,246 See notes to consolidated financial statements. 4 UBIQUITI INC. Consolidated Statements of Stockholders’ Equity (Deficit) (In thousands, except per share amounts) (Unaudited) Three and Nine Months Ended March 31, 2022 Common Stock Additional Paid-In Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity (Deficit) Shares Amount Amount Amount Amount Amount Balance at June 30, 2021 62,582,858 $ 63 $ — $ 2,635 $ 1 $ 2,699 Net Income — — — 132,150 — 132,150 Other comprehensive income (loss) — — — ( 1 ) ( 1 ) Stock options exercised 1,605 — 17 — — 17 Restricted stock units issued, net of tax withholdings 7,887 — ( 952 ) — — ( 952 ) Repurchases of Common Stock ( 130,994 ) ( 1 ) 125 ( 39,376 ) — ( 39,252 ) Stock-based compensation expense — — 810 — — 810 Dividends paid on Common Stock ($ 0.60 per share) — — — ( 37,499 ) — ( 37,499 ) Balances at September 30, 2021 62,461,356 $ 62 $ — $ 57,910 $ — $ 57,972 Net Income — — — 103,649 — 103,649 Other comprehensive income (loss) — — — — 7 7 Stock options exercised 2,584 — 36 — — 36 Restricted stock units issued, net of tax withholdings 7,947 — ( 181 ) — — ( 181 ) Repurchases of Common Stock ( 434,271 ) — ( 587 ) ( 128,457 ) — ( 129,044 ) Stock-based compensation expense — — 819 — — 819 Dividends paid on Common Stock ($ 0.60 per share) — — — ( 37,445 ) — ( 37,445 ) Balances at December 31, 2021 62,037,616 $ 62 $ 87 $ ( 4,343 ) $ 7 $ ( 4,187 ) Net Income — — — 50,354 — 50,354 Other comprehensive income (loss) — — — — ( 439 ) ( 439 ) Stock options exercised 2,112 — 23 — — 23 Restricted stock units issued, net of tax withholdings 7,225 — ( 52 ) — — ( 52 ) Repurchases of Common Stock ( 1,264,974 ) ( 1 ) ( 932 ) ( 343,777 ) — ( 344,710 ) Stock-based compensation expense — 874 — — 874 Dividends paid on Common Stock ($ 0.60 per share) — — ( 36,860 ) — ( 36,860 ) Balances at March 31, 2022 60,781,979 $ 61 $ — $ ( 334,626 ) $ ( 432 ) $ ( 334,997 ) See notes to consolidated financial statements. 5 Three and Nine Months Ended March 31, 2021 Common Stock Additional Paid-In Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity (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 ) Repurchases of Common Stock — — — — — — Stock-based compensation expense — — 775 — 775 Dividends paid on Common Stock ($ 0.30 per share) — — — ( 25,124 ) — ( 25,124 ) Balances at March 31, 2021 62,814,126 $ 63 $ 696 $ ( 60,971 ) $ 3 $ ( 60,209 ) See notes to consolidated financial statements. 6 UBIQUITI INC. Consolidated Statements of Cash Flows (In thousands) (Unaudited) Nine Months Ended March 31, 2022 2021 Cash Flows from Operating Activities: Net income $ 286,153 $ 462,252 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 10,110 8,313 Recovery of impaired investment ( 902 ) — Amortization of debt issuance costs 990 1,462 Non-cash lease expense 1,029 226 Premium amortization and (discount accretion), net 35 5 Write off unamortized debt issuance costs — 267 Provision for inventory obsolescence 1,437 569 Provision for sales returns 83 — Provision for loss on vendor deposits and purchase commitments 8,430 7,502 Stock-based compensation 2,503 2,265 Deferred taxes 109 595 Change in unrealized loss on available-for-sale securities ( 407 ) — Other, net — 495 Changes in operating assets and liabilities: Accounts receivable 84,808 ( 45,166 ) Inventories ( 13,520 ) 60,837 Vendor deposits ( 34,844 ) ( 3,554 ) Prepaid income taxes ( 6,667 ) 2 Prepaid expenses and other assets 5,871 ( 27,059 ) Accounts payable ( 9,812 ) ( 91,447 ) Income taxes payable ( 12,663 ) ( 26,224 ) Deferred revenues ( 2,721 ) 8,798 Accrued and other liabilities ( 19,742 ) 87,635 Net cash provided by operating activities $ 300,280 $ 447,773 Cash Flows from Investing Activities: Purchase of property and equipment and other long-term assets ( 11,063 ) ( 16,002 ) Purchase of investments ( 864 ) — Proceeds from maturities of investments 1,209 922 Net cash provided by (used in) investing activities $ ( 10,718 ) $ ( 15,080 ) Cash Flows from Financing Activities: Proceeds from borrowing under the credit facility - Term — 37,500 Proceeds from borrowing under the credit facility- Revolver 250,000 75,000 Repayment against credit facility- Revolver — ( 180,000 ) Repayment against credit facility- Term ( 18,750 ) ( 12,500 ) Debt issuance costs — ( 3,257 ) Repurchases of common stock ( 513,005 ) ( 152,646 ) Payment of common stock cash dividends ( 111,804 ) ( 75,709 ) Proceeds from exercise of stock options 76 91 Tax withholdings related to net share settlements of equity awards — ( 998 ) Net settlement of restricted stock units ( 1,185 ) — Net cash (used in) financing activities $ ( 394,668 ) $ ( 312,519 ) Net increase (decrease) in cash and cash equivalents ( 105,106 ) 120,174 Cash and cash equivalents at beginning of period 249,418 142,617 Cash and cash equivalents at end of period $ 144,312 $ 262,791 Supplemental Disclosure of Cash Flow Information: Income taxes paid, net of refunds $ 72,826 $ 110,766 Interest paid $ 7,403 $ 9,453 Non-Cash Investing and Financing Activities: Right-of-use asset recognized $ 27,524 $ 20,773 Unpaid stock repurchases $ 10,000 $ — Unpaid property and equipment and other long-term assets $ 264 $ 49 Net unsettled investment purchases $ — $ 1,234 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, 2022 is referred to as “fiscal 2022” and the fiscal year ended June 30, 2021 is referred to as “fiscal 2021”. 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, 2021 consolidated balance sheet was derived from the audited consolidated 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, 2021, included in its Annual Report on Form 10-K, as filed with the SEC on August 27, 2021 (the “Annual Report”). The results of operations for the three and nine months ended March 31, 2022 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, 2021, 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 estimates 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. We evaluate our estimates based on historical experience and other assumptions that are believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. 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, “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. Our contract liabilities consist of advance payments (Customer deposits) as well as billing in excess of revenue recognized primarily related to deferred revenue. We classify 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 8 included in other long-term liabilities in our Consolidated Balance Sheets. As of March 31, 2022 and June 30, 2021, the Company’s customer deposits were $ 1.6 million and $ 2.7 million, respectively. As of March 31, 2022, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $ 21.5 million and $ 6.0 million, respectively. As of June 30, 2021, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $ 21.6 million and $ 8.6 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, 2022 and June 30, 2021. The following tables summarize the Company’s financial instruments’ cost, gross unrealized gains and losses, and fair value by significant investment category as of March 31, 2022 and June 30, 2021 (in thousands): March 31, 2022 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 $ 33 $ — $ — $ 33 $ 33 $ — $ — Corporate securities 901 — ( 407 ) 494 — 494 — Subtotal $ 934 $ — $ ( 407 ) $ 527 $ 33 $ 494 $ — Level 2 Corporate securities $ 2,332 $ — $ ( 25 ) $ 2,307 $ — $ 1,757 $ 550 U.S agency securities 20 — — 20 — — 20 US Government Bonds 30 — 30 — — 30 Subtotal $ 2,382 $ — $ ( 25 ) $ 2,357 $ — $ 1,757 $ 600 Total $ 3,316 $ — $ ( 432 ) $ 2,884 $ 33 $ 2,251 $ 600 ( 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. 9 June 30, 2021 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 $ 83 $ — $ — $ 83 $ 83 $ — $ — Subtotal $ 83 $ — $ — $ 83 $ 83 $ — $ — Level 2 Corporate securities $ 2,354 $ 1 $ — $ 2,355 $ — $ 1,320 $ 1,035 Subtotal $ 2,354 $ 1 $ — $ 2,355 $ — $ 1,320 $ 1,035 Total $ 2,437 $ 1 $ — $ 2,438 $ 83 $ 1,320 $ 1,035 (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. During the three and nine months ended March 31, 2022 and March 31, 2021, interest income on the Company's investment securities was immaterial. 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, 2022 (in thousands): Continuous Unrealized Loss Less than 12 Months 12 Months or Greater Total Fair value of marketable securities $ 2,851 $ — $ 2,851 Unrealized loss ( 432 ) — ( 432 ) The Company had no continuous unrealized loss position from marketable securities as of June 30, 2021. The following table represents the costs and fair value of cash equivalents and investments by contractual maturity as of March 31, 2022 (in thousands): Available-For-Sale Cost Fair Value Due within 1 year and money market funds $ 1,805 $ 1,790 Available for sale corporate securities 901 494 Due after 1 year through 5 years 610 600 Total $ 3,316 $ 2,884 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, 2022 and June 30, 2021, 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, 2022 and June 30, 2021, the fair value of the Company’s debt, which is carried at historical cost was $ 725.0 million and $ 493.8 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): 10 Three Months Ended March 31, Nine Months Ended March 31, 2022 2021 2022 2021 Numerator: Net income $ 50,354 $ 146,075 $ 286,153 $ 462,252 Denominator: Weighted-average shares used in computing basic earnings per share 61,411 62,810 62,089 63,084 Add—dilutive potential common shares: Stock options 5 15 7 18 Restricted stock units 19 40 29 46 Weighted-average shares used in computing diluted net income per share 61,435 62,865 62,125 63,148 Net income per share of common stock: Basic $ 0.82 $ 2.33 $ 4.61 $ 7.33 Diluted $ 0.82 $ 2.32 $ 4.61 $ 7.32 The Company does not have any potentially dilutive securities that would have an anti-dilutive effect on the net income per share amounts. NOTE 6— BALANCE SHEET COMPONENTS Inventories Inventories consisted of the following (in thousands): March 31, 2022 June 30, 2021 Finished goods $ 234,242 $ 228,514 Raw materials 6,888 5,253 Total $ 241,130 $ 233,767 Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): March 31, 2022 June 30, 2021 Testing equipment $ 16,499 $ 15,279 Tooling equipment 17,168 15,490 Leasehold improvements 18,472 15,071 Computer and other equipment 10,489 8,966 Software 10,477 7,842 Furniture and fixtures 2,652 2,529 Corporate aircraft 65,807 65,807 Property and equipment, gross 141,564 130,984 Less: Accumulated depreciation ( 60,669 ) ( 51,923 ) Property and equipment, net $ 80,895 $ 79,061 Other Long-term Assets Other long-term assets consisted of the following (in thousands): March 31, 2022 June 30, 2021 Hong Kong Tax deposit (1) 57,119 57,423 Intangible assets, net (2) 7,617 8,684 Other long-term assets, net 5,043 5,839 Total $ 69,779 $ 71,946 (1) . The Company expects the $ 57.1 million of deposits made with the IRD to be refunded upon completion of the audit. The deposit is a Hong Kong dollar denominated deposit. See Note 14 to the consolidated financial statements for additional details regarding this ongoing tax audit. (2) Accumulated amortization was $ 3.9 million and 2.8 million as of March 31, 2022 and June 30, 2021, respectively. 11 Other Current Liabilities Other current liabilities consisted of the following (in thousands): March 31, 2022 June 30, 2021 Deferred revenue — short-term $ 21,472 21,617 Accrued expenses 30,456 21,702 Lease liability— current 11,755 9,149 Warranty accrual 6,097 4,812 Accrued compensation and benefits 4,906 5,273 Customer deposits 1,555 2,693 Reserve for sales returns 2,317 2,242 Unpaid Stock Repurchases 10,000 — Inventory received not billed 9,286 55,548 Other payables 8,974 2,944 Total $ 106,818 $ 125,980 Other Long-Term Liabilities Other long-term liabilities consisted of the following (in thousands): March 31, 2022 June 30, 2021 Deferred Revenue — long-term $ 5,988 $ 8,564 Total $ 5,988 $ 8,564 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 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, 2022 2021 Beginning balance $ 4,812 $ 4,538 Accruals for warranties issued during the period $ 6,342 6,680 Changes in liability for pre-existing warranties during the period $ 790 ( 1,114 ) Settlements made during the period $ ( 5,847 ) ( 5,351 ) Ending balance $ 6,097 $ 4,753 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 prior $ 700 million senior secured revolving facility (the “Prior Revolving Facility”) and $ 500 million senior secured term loan facility (the “Prior Term Facility”, together with the Prior Revolving Facility, the “Prior 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 “Prior Credit Agreement”). The Facilities replace the Company's Prior Facilities under the Prior 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 $ 456.3 million and 12 $ 0.7 million was used to repay the Prior Term Facility under the Prior 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 Prior Revolving Facility under the Prior 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, 2022 June 30, 2021 Term Facility - short term $ 25,000 $ 25,000 Debt issuance costs, net ( 1,135 ) ( 1,135 ) Total debt - short term 23,865 23,865 Term Facility - long term 450,000 468,750 Revolving Facility - long term 250,000 — Debt issuance costs, net ( 1,275 ) ( 1,720 ) Total debt - long term $ 698,725 $ 467,030 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, 2022, $ 475.0 million was outstanding on the Term Facility and the Company borrowed $ 250.0 million balance on the Revolving Facility, leaving $ 450.0 million available on the Revolving Facility. Term Facility: During the nine months ended March 31, 2022, the Company made aggregate payments of $ 24.7 million under the Term Facility, of which $ 18.8 million was repayment of principal and $ 5.9 million was payment of interest. 13 As of March 31, 2022, the interest rate on the term loan was 1.96 %. As of April 29, 2022, the most currently available reset date, the Term Facility has an interest rate of 2.26 %. Revolving Facility: Under the Third Amended and Restated Credit Agreement, during the three months ended March 31, 2022, the Company did not make any aggregate payments under the Revolving Facility. Debt Payment Obligations Interest Rate as of March 31, 2022 Rate Reset Date Reset Rate $ 25 Million Revolver 1.81 % April 8, 2022 1.95 % $ 75 Million Revolver 1.82 % April 11, 2022 1.99 % $ 50 Million Revolver 1.82 % April 11, 2022 1.99 % $ 60 Million Revolver 1.89 % April 14, 2022 2.05 % $ 40 Million Revolver 1.95 % April 25, 2022 2.17 % The following table summarizes the Company’s estimated debt and interest payment obligations as of March 31, 2022, for the remainder of fiscal 2022 and future fiscal years (in thousands): 2022 (remainder) 2023 2024 2025 2026 Thereafter Total Debt payment obligations $ 6,250 $ 25,000 $ 25,000 $ 25,000 $ 643,750 $ — $ 725,000 Interest and other payments on debt payment obligations (1) 3,815 14,992 14,535 13,999 10,146 — 57,487 Total $ 10,065 $ 39,992 $ 39,535 $ 38,999 $ 653,896 $ — $ 782,487 (1) - Interest payments are calculated based on the applicable rates and payment dates as of March 31, 2022. 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 2036. 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, 2022, 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, 2022 and 2021 (in thousands): Financial Statement Classification Three Months Ended March 31, Nine Months Ended March 31, 2022 2021 2022 2021 Operating lease costs: Fixed lease costs Operating expenses $ 2,390 $ 1,994 $ 6,861 $ 5,652 Fixed lease costs Cost of revenues 1,051 507 3,347 1,525 Variable lease costs Operating expenses 230 244 549 639 Variable lease costs Cost of revenues 139 113 468 327 Total lease costs $ 3,810 $ 2,858 $ 11,225 $ 8,143 The operating lease costs in the table above include costs for long-term and short-term leases. Total short-term costs for nine months ended March 31, 2022 and 2021 were $ 0.4 million and immaterial, respectively. 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, 2022, cash paid for amounts associated with the Company’s operating lease liabilities were approximately $ 3.8 million and $ 10.2 million, respectively. 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. 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 14 leases and a reconciliation to the operating lease liabilities as of March 31, 2022: Remainder of Fiscal 2022 $ 3,397 Fiscal 2023 12,578 Fiscal 2024 11,952 Fiscal 2025 11,047 Fiscal 2026 7,322 Thereafter 21,580 Total future fixed operating lease payments $ 67,876 Less: Imputed interest $ 4,974 Total operating lease liabilities $ 62,902 Weighted-average remaining lease term - operating leases 8 years Weighted-average discount rate - operating leases 2.2 % 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, 2022. 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, 2022, the Company recorded a purchase obligation liability of $ 7.8 million related to component purchase commitments. There have been no other significant liabilities for cancellations recorded as of March 31, 2022. 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 $ 185.6 million to $ 1,294.2 million as of March 31, 2022, depending upon the timing of orders placed for these components by its contract manufacturers. Other Obligations As of March 31, 2022, the Company has other obligations of $ 3.1 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 15 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”). 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 (the “Original Action”). According to the operative Second Amended Complaint filed on July 6, 2017, 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. On March 19, 2018, the Company and the remaining defendants in the Original Action moved to stay the case pending completion of certain inter partes review proceedings before the Patent Trial and Appeal Board. On April 11, 2018, the Court stayed the Original Action. The Patent Trial and Appeal Board, in the aforementioned series of inter partes review proceedings, invalidated asserted claims of 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. Following the Federal Circuit's affirmance, the District Court lifted the stay on March 1, 2021 to resume proceedings on the '231 Patent in the Original Action. On June 16, 2021, Vivato filed a new suit against the Company in the Central District of California, alleging that various Company products infringe some of the non-invalidated claims of the ’728 Patent and U.S. Patent No. 10,594,376 (the “New Action”). According to the New Action, the products accused of infringing these patents include Wi-Fi access points and routers supporting MU-MIMO, including without limitation access points and routers utilizing the 802.11ac and 802.11ax protocols. The New Action, as well as four similar new lawsuits filed by Vivato against other defendants in the same jurisdiction, were consolidated into the Original Action. The Company’s response to the New Action was filed on August 11, 2021. On November 24, 2021, the Company and the remaining defendants in the Original Action filed a motion for judgment on the pleadings regarding the ’231 Patent. On January 4, 2022, the Court granted defendants’ motion and dismissed Vivato’s claims based on the ’231 Patent. All claims asserted against the Company in the Original Action have now been dismissed. A claim construction hearing took place on January 18, 2022 before a court-appointed Special Master and, on January 27, 2022, the Special Master issued his Report and Recommendation. On February 17, 2022, the Company and the remaining defendants filed Objections to the Special Master’s Report and Recommendation and a motion for judgement on the pleadings regarding the ‘728 patent. Defendants’ Objection to the Special Master’s Report and Recommendation and the Motion for Judgement on the Pleadings are both pending before the Court Trial in the New Action is currently scheduled for October 11, 2022. 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. In re Ubiquiti Inc. Securities Litigation (SDNY) On May 19, 2021, a purported class action, captioned Nils Molder, Individually and On Behalf of All Others Similarly Situated v. Ubiquiti Inc. et al ., No. 1:21-cv-04520 (the “Securities Action”), was filed in the United States District Court for the Southern District of New York against the Company and certain of its officers. The Securities Action complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making false and/or misleading statements, including purported failure to disclose material facts about a data breach experienced by the Company in January 2021. On July 30, 2021, the Court appointed a lead plaintiff and lead plaintiff’s counsel, and the case was subsequently captioned In re Ubiquiti Inc. Securities Litigation , 21 Civ. 4520 (DLC). Lead plaintiff filed an amended complaint on September 24, 2021. Defendants moved to dismiss the amended complaint on October 22, 2021. On November 12, 2021, lead plaintiff filed a second amended complaint. On January 5, 2022, lead plaintiff voluntarily dismissed the Securities Action. NOTE 11— COMMON STOCK AND TREASURY STOCK Common Stock Repurchases 16 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 three months ended March 31, 2022, under the 2020 May Program, the Company repurchased and retired 509,555 shares of common stock at an average price per share of $ 294.05 for an aggregate amount of $ 149.8 million. As of March 31, 2022, the Company had $ 0.0 million available for share repurchases under the 2020 May Program. On February 1, 2022, the Company's Board of Directors approved a $ 300 million stock repurchase program (the “2022 February Program”). Under the 2022 February Program, the Company may repurchase up to $ 300 million of its common stock. The 2022 February Program expires on June 30, 2023. During the three months ended March 31, 2022, under the 2022 February Program, the Company repurchased and retired 755,419 shares of common stock at an average price per share of $ 257.97 for an aggregate amount of $ 194.9 million. As of March 31, 2022, the Company had $ 105.1 million available for share repurchases under the 2022 February Program. The following table provides information with respect to the Company’s 2020 May Program and 2022 February Program and the activity under the available share repurchase programs during the nine months ended March 31, 2022 (in millions, except share and per share amounts): Date of Publicly Announced Program Amount of Publicly Announced Program Total Number of Shares Purchased 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 May 8, 2020 $ 500 million 1,074,820 $ 295.98 $ 318.1 July 7, 2021 - February 3, 2022 $ — 03/31/2022 February 1, 2022 $ 300 million 755,419 $ 257.97 $ 194.9 February 4, 2022 - March 31, 2022 $ 105.1 6/30/2023 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, 2022 and 2021, the Company’s accumulated other comprehensive income includes net unrealized gains and losses from the Company’s available-for-sale securities, respectively. NOTE 13— STOCK BASED COMPENSATION Stock-Based Compensation Plans The Company’s 2020, 2010 and 2005 Equity Incentive Plan are described in the Company’s Annual Report. As of March 31, 2022, the Company had 4,986,708 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, 2022 and 2021 (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2022 2021 2022 2021 Cost of revenues $ 18 $ 23 $ 63 $ 80 Research and development 629 538 1,786 1,560 Sales, general and administrative 227 214 654 625 $ 874 $ 775 $ 2,503 $ 2,265 Stock Options The following is a summary of option activity for the Company’s stock incentive plans for the nine months ended March 31, 2022: 17 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, 2021 10,525 $ 11.51 1.29 $ 3,165 Exercised ( 6,301 ) $ 12.01 Forfeitures and cancellations — $ — Balance, March 31, 2022 4,224 $ 10.77 0.62 $ 1,200 Vested as of March 31, 2022 4,224 $ 10.77 0.62 $ 1,200 Vested and exercisable as of March 31, 2022 4,224 $ 10.77 0.62 $ 1,200 During the three months ended March 31, 2022 and 2021, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $ 0.5 million and $ 1.4 million, respectively, as determined as of the date of option exercise. During the nine months ended March 31, 2022 and 2021, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $ 1.8 million and $ 2.4 million, respectively, as determined as of the date of option exercise. As of March 31, 2022, the Company had no unrecognized compensation costs related to stock options. The Company did no t grant any employee stock options during the three and nine months ended March 31, 2022 and 2021. 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, 2021 61,533 $ 143.28 RSUs granted 21,600 $ 307.34 RSUs vested ( 26,886 ) $ 116.89 RSUs canceled ( 2,825 ) $ 154.69 Non-vested RSUs, March 31, 2022 53,422 $ 222.29 The intrinsic value of RSUs vested in the three months ended March 31, 2022 and 2021 was $ 2.2 million and $ 3.2 million, respectively. The intrinsic value of RSUs vested in the nine months ended March 31, 2022 and 2021 was $ 8.2 million and $ 7.7 million, respectively. The total intrinsic value of all outstanding RSUs was $ 15.8 million as of March 31, 2022. As of March 31, 2022, there were unrecognized compensation costs related to RSUs of $ 9.1 million which the Company expects to recognize over a weighted average period of 3.5 years. NOTE 14— INCOME TAXES The Company recorded tax provisions of $ 9.0 million and $ 53.8 million for the three and nine months ended March 31, 2022 as compared to $ 28.0 million and $ 85.1 million for the three and nine months ended March 31, 2021. The decrease is primarily related to the reduction in profit before tax and changes in the mix of profit before tax for the nine months ended March 31, 2022 as compared to the nine months ended March 31, 2021. The Company’s estimated fiscal year 2022 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 U.S. tax related to our non-U.S. operations under the Global Intangible Low-Taxes Income (GILTI) rules. As of March 31, 2022, the Company had approximately $ 35.4 million of unrecognized tax benefits, substantially all of which would, if recognized, affect its tax expense. During the three months ended March 31, 2022, the Company recorded an increase of its unrecognized tax benefits of $ 0.9 million. The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying Consolidated Statement of Operations and Comprehensive Income. Accrued interest and penalties are included within the related tax liability line in the Consolidated Balance Sheet. As of March 31, 2022, the Company had $ 4.2 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, 18 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 $ 22.0 million which was remitted on March 26, 2021. The refundable deposits are included within other long-term assets on our 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 we expect the $ 57.1 million (net of foreign currency impact) 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 is 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-U.S. 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 has been moved from the Examination Division to the IRS Appeals Division where a formal review of the facts and the applicable law will take place. There is a scheduled IRS Appeal conference for May 10, 2022. 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. We estimate 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. 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. Revenues by product type are as follows (in thousands, except percentages): Three Months Ended March 31, Nine Months Ended March 31, 2022 2021 2022 2021 Enterprise technology $ 295,043 82 % $ 314,875 67 % $ 972,173 78 % $ 960,507 68 % Service Provider Technology 63,025 18 % 152,362 33 % 276,374 22 % 459,699 32 % Total revenues $ 358,068 100 % $ 467,237 100 % $ 1,248,547 100 % $ 1,420,206 100 % Revenues by geography based on customer’s ship-to destinations were as follows (in thousands, except percentages): 19 20 Three Months Ended March 31, Nine Months Ended March 31, 2022 2021 2022 2021 North America (1) $ 183,575 51 % $ 209,515 45 % $ 579,711 47 % $ 623,835 44 % Europe, the Middle East and Africa (“EMEA”) 135,227 38 % 189,573 41 % 498,836 40 % 587,507 41 % Asia Pacific 26,455 7 % 36,145 8 % 102,152 8 % 115,464 8 % South America 12,811 4 % 32,004 7 % 67,848 5 % 93,400 7 % Total revenues $ 358,068 100 % $ 467,237 100 % $ 1,248,547 100 % $ 1,420,206 100 % (1) Revenue for the United States was $ 173.9 million and $ 193.2 million for the three months ended March 31, 2022 and 2021, respectively. Revenue for the United States was $ 536.8 million and $ 582.1 million for the nine months ended March 31, 2022 and 2021, respectively, For the periods presented, there were no customers with an accounts receivable balance of 10% or greater of total accounts receivable or customers with net revenues of 10% or greater of total revenues . NOTE 16— SUBSEQUENT EVENTS Stock Repurchases Between April 1, 2022 and May 5, 2022, the Company repurchased 363,614 shares of common stock at an average price of $ 289.11 for an aggregate amount of $ 105.1 million. On May 3, 2022, the Company’s Board of Directors approved a new $ 200 million stock repurchase program (the “2022 May Program”). Under the 2022 May Program, the Company is authorized to repurchase up to $ 200 million of common stock. The 2022 May Program expires on September 30, 2023. Dividends On May 3, 2022, the Company's Board of Directors approved a quarterly cash dividend of $ 0.60 per share payable on May 23, 2022 to shareholders of record at the close of business on May 16, 2022. Any future dividends will be subject to the approval of the Company’s Board of Directors.