What changed in this filing

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Item 1. Financial Statements

2022-11-04 compared with 2022-05-06 · 152 added, 282 removed, 390 unchanged (53% of the section changed)

3 unchanged sentences

(In thousands, except share data)

March 31, 2022 June 30, 2021

September 30, 2022 June 30, 2022

Current assets:

1 unchanged sentence

Investments — short-term 378 427

Accounts receivable, net of allowance for doubtful accounts of $ 47 and $ 47 at March 31, 2022, and June 30, 2021, respectively

Accounts receivable, net of allowance for doubtful accounts of $ 55 and $ 52 at September 30, 2022 and June 30, 2022, respectively

147,567 119,627

1 unchanged sentence

Vendor deposits 58,369 89,661

Prepaid income taxes 6,718 51

Prepaid expenses and other current assets 14,067 13,193

2 unchanged sentences

Operating lease right-of-use assets, net 61,626 64,231

Deferred tax assets — long-term 4,667 4,776

Investments — long-term 600 1,035

Deferred tax assets 6,483 6,618

Other long-term assets 72,398 72,058

Total assets $ 937,239 $ 844,712

Liabilities and Stockholders’ Equity

Liabilities and Stockholders’ Deficit

Current liabilities:

Accounts payable $ 93,987 $ 83,663

Taxes payable 8,373 14,496

Income taxes payable 35,133 14,061

Debt — short-term 24,410 23,865

7 unchanged sentences

Commitments and contingencies (Note 10)

Stockholders’ equity (deficit):

Stockholders’ deficit:

Preferred stock—$ 0.001 par value;

2 unchanged sentences

500,000,000 shares authorized:

60,781,979 and 62,582,858 outstanding as of March 31, 2022 and June 30, 2021, respectively

60,428,811 and 60,420,525 outstanding as of September 30, 2022 and June 30, 2022, respectively

Additional paid–in capital 1,177 650

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

Accumulated other comprehensive (loss) ( 523 ) ( 474 )

Retained (deficit) ( 326,186 ) ( 383,112 )

Total stockholders’ (deficit) ( 325,472 ) ( 382,876 )

Total liabilities and stockholders’ deficit $ 937,239 $ 844,712

See notes to consolidated financial statements.

2 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended March 31, Nine Months Ended March 31,

2022 2021 2022 2021

Three Months Ended September 30,

Revenues $ 498,083 $ 458,914

17 unchanged sentences

Other comprehensive income:

Unrealized gain (losses) on available-for-sale securities $ ( 439 ) $ ( 1 ) $ ( 433 ) $ ( 6 )

Unrealized losses on available-for-sale securities $ ( 49 ) $ ( 1 )

Other comprehensive loss ( 49 ) ( 1 )

4 unchanged sentences

(In thousands, except per share amounts)

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)

Three Months Ended September 30, 2022

Common Stock Additional Paid-In Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity

Shares Amount Amount Amount Amount Amount

4 unchanged sentences

Restricted stock units issued, net of tax withholdings 6,174 — ( 544 ) — — ( 544 )

Repurchases of Common Stock ( 130,994 ) ( 1 ) 125 ( 39,376 ) — ( 39,252 )

Stock-based compensation expense — — 1,048 — — 1,048

1 unchanged sentence

— — — ( 36,256 ) — ( 36,256 )

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.

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)

Balance at September 30, 2022 60,428,811 $ 60 $ 1,177 $ ( 326,186 ) $ ( 523 ) $ ( 325,472 )

Three Months Ended September 30, 2021

Common Stock Additional Paid-In Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity

Shares Amount Amount Amount Amount Amount

1 unchanged sentence

Net Income — — — 132,150 — 132,150

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 )

Other comprehensive (loss) — — — — ( 1 ) ( 1 )

Stock options exercised 1,605 — 17 — — 17

4 unchanged sentences

— $ — $ — $ ( 37,499 ) $ — $ ( 37,499 )

Balances at March 31, 2021 62,814,126 $ 63 $ 696 $ ( 60,971 ) $ 3 $ ( 60,209 )

Balance at September 30, 2021 62,461,356 $ 62 $ — $ 57,910 $ — $ 57,972

See notes to consolidated financial statements.

2 unchanged sentences

(In thousands) (Unaudited)

Nine Months Ended March 31,

Three Months Ended September 30,

Cash Flows from Operating Activities:

2 unchanged sentences

Depreciation and amortization 3,686 3,244

Recovery of impaired investment ( 902 ) —

Amortization of debt issuance costs 321 332

Non-cash lease expense 172 609

Premium amortization and (discount accretion), net 35 5

Write off unamortized debt issuance costs — 267

Provision for inventory obsolescence 1,576 64

Provision for sales returns 83 —

Provision for loss on vendor deposits and purchase commitments ( 2,090 ) 2,252

1 unchanged sentence

Deferred taxes 135 23

Change in unrealized loss on available-for-sale securities ( 407 ) —

Other, net 564 123

14 unchanged sentences

Proceeds from maturities of investments — 550

Net cash provided by (used in) investing activities $ ( 10,718 ) $ ( 15,080 )

Net cash (used in) investing activities ( 8,662 ) ( 2,990 )

Cash Flows from Financing Activities:

Proceeds from borrowing under the credit facility - Term — 37,500

Proceeds from borrowing under the credit facility- Revolver 50,000 —

1 unchanged sentence

Repayment against credit facility- Term ( 6,250 ) ( 6,250 )

Debt issuance costs — ( 3,257 )

Repurchases of common stock — ( 36,752 )

1 unchanged sentence

Proceeds from exercise of stock options 23 —

Tax withholdings related to net share settlements of equity awards — ( 998 )

Net settlement of restricted stock units ( 1,185 ) —

Tax withholdings related to net share settlements of restricted stock units ( 544 ) ( 935 )

Net cash (used in) financing activities ( 33,027 ) ( 81,436 )

Net increase (decrease) in cash and cash equivalents ( 105,106 ) 120,174

Net increase in cash and cash equivalents 295 16,512

Cash and cash equivalents at beginning of period 136,224 249,418

7 unchanged sentences

Unpaid property and equipment and other long-term assets $ 421 $ 580

Net unsettled investment purchases $ — $ 1,234

See notes to consolidated financial statements.

5 unchanged sentences

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.

In these notes, Ubiquiti refers to the fiscal years ending June 30, 2023 and 2022, as fiscal 2023 and fiscal 2022 respectively.

Basis of Presentation — The Company’s consolidated financial statements and accompanying notes are prepared in accordance with U.S.

generally accepted accounting principles (“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 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.

The June 30, 2022 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, 2022, included in its Annual Report on Form 10-K, as filed with the SEC on August 26, 2022 (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.

The results of operations for the three months ended September 30, 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.

The Company’s significant accounting policies are disclosed in its audited consolidated financial statements for the fiscal year ended June 30, 2022, 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;

The preparation of financial statements in conformity with 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;

9 unchanged sentences

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 is recognized when obligations under the terms of a contract with our customers are satisfied;

generally, this occurs with the transfer of control of our products and PCS to our customers.

Transfer of control to the customer for products generally occurs at the point in time when products have been shipped to our customer 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.

3 unchanged sentences

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.

Accounts receivable are recognized in the period our 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

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.

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 our consolidated balance sheets.

As of September 30, 2022 and June 30, 2022, the Company’s customer deposits were $ 1.8 million and $ 1.1 million, respectively.

As of September 30, 2022, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $ 18.9 million and $ 6.0 million, respectively.

As of June 30, 2022, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $ 20.8 million and $ 5.8 million, respectively.

12 unchanged sentences

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

Money market funds $ 33 $ — $ — $ 33 $ 33 $ — $ —

Corporate securities 901 — ( 407 ) 494 — 494 —

Subtotal $ 934 $ — $ ( 407 ) $ 527 $ 33 $ 494 $ —

The Company held no Level 3 financial instruments as of September 30, 2022 and June 30, 2022.

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 September 30, 2022 and June 30, 2022 (in thousands):

September 30, 2022

Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents (1) Short-Term Investments Long-Term Investments

Corporate Securities $ 901 $ — $ ( 523 ) $ 378 $ — $ 378 $ —

U.S agency securities 20 — — 20 — — 20

US Government Bonds 30 — 30 — — 30

Subtotal $ 2,382 $ — $ ( 25 ) $ 2,357 $ — $ 1,757 $ 600

Total $ 901 $ — $ ( 523 ) $ 378 $ — $ 378 $ —

2 unchanged sentences

June 30, 2022

Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents (1) Short-Term Investments Long-Term Investments

Money market funds $ 83 $ — $ — $ 83 $ 83 $ — $ —

Subtotal $ 83 $ — $ — $ 83 $ 83 $ — $ —

Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents (1) Short-Term Investments Long-Term Investments

Corporate securities $ 901 $ — $ ( 474 ) $ 427 $ — $ 427 $ —

Subtotal $ 2,354 $ 1 $ — $ 2,355 $ — $ 1,320 $ 1,035

Total $ 901 $ — $ ( 474 ) $ 427 $ — $ 427 $ —

1 unchanged sentence

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):

For the three months ended September 30, 2022, the Company did no t recognize any material net gains or losses from accumulated other comprehensive income related to realized gains or losses.

During the three months ended September 30, 2022 and 2021, interest income on the Company’s investment securities was immaterial.

The Company had no continuous unrealized loss position from corporate securities as of September 30, 2022 .

The following table represents the adjusted costs and fair value of cash equivalents and investments by contractual maturity as of September 30, 2022 (in thousands):

Available-For-Sale

Cost Fair Value

Adjusted Cost Fair Value

Due within 1 year and money market funds $ 901 $ 378

Available for sale corporate securities 901 494

Due after 1 year through 5 years 610 600

Total $ 901 $ 378

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.

As of September 30, 2022 and June 30, 2022, 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.

As of September 30, 2022 and June 30, 2022, the fair value of the Company’s debt, which is carried at historical cost was $ 792.5 million and $ 788.8 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):

Three Months Ended March 31, Nine Months Ended March 31,

2022 2021 2022 2021

Three Months Ended September 30,

Net income $ 93,182 $ 132,150

7 unchanged sentences

Diluted $ 1.54 $ 2.11

The Company does not have any potentially dilutive securities that would have an anti-dilutive effect on the net income per share amounts.

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.

NOTE 6— BALANCE SHEET COMPONENTS

Inventories consisted of the following (in thousands):

March 31, 2022 June 30, 2021

September 30, 2022 June 30, 2022

Finished goods $ 344,349 $ 253,260

3 unchanged sentences

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

March 31, 2022 June 30, 2021

September 30, 2022 June 30, 2022

Testing equipment $ 19,260 $ 16,999

10 unchanged sentences

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

March 31, 2022 June 30, 2021

September 30, 2022 June 30, 2022

Hong Kong Tax deposit (1)

3 unchanged sentences

Total $ 72,398 $ 72,058

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.

(1) The Company expects the deposits made with the Hong Kong Inland Revenue Department (“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 $ 3.9 million and 2.8 million as of March 31, 2022 and June 30, 2021, respectively.

(2) Accumulated amortization was $ 4.7 million and $ 4.3 million as of September 30, 2022, and June 30, 2022, respectively.

Other Current Liabilities

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

March 31, 2022 June 30, 2021

September 30, 2022 June 30, 2022

Deferred revenue — short-term $ 18,938 20,766

5 unchanged sentences

Reserve for sales returns 4,104 4,297

Unpaid Stock Repurchases 10,000 —

Inventory received not billed 116,493 86,953

3 unchanged sentences

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

March 31, 2022 June 30, 2021

September 30, 2022 June 30, 2022

Deferred Revenue — long-term $ 6,002 $ 5,822

Total $ 5,988 $ 8,564

NOTE 7— ACCRUED WARRANTY

6 unchanged sentences

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

Nine Months Ended March 31,

Three Months Ended September 30,

Beginning balance $ 6,394 $ 4,812

5 unchanged sentences

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

$ 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 has $ 2.1 million of debt issuance costs which are capitalized and are being amortized as interest expense over the remaining life of the facilities.

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

March 31, 2022 June 30, 2021

September 30, 2022 June 30, 2022

Term Facility - short term $ 25,000 $ 25,000

8 unchanged sentences

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.

The Term Facility is payable in quarterly installments of 1.25 % of the original principal amount of the Term Facility, commencing with the quarter ending June 30, 2021.

The Facilities may be prepaid at any time without penalty.

Revolving and Term facilities 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.

9 unchanged sentences

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.

As of September 30, 2022, $ 462.5 million was outstanding on the Term Facility and $ 330 million outstanding on the Revolving Facility, leaving $ 370 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.

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 %.

During the three months ended September 30, 2022, the Company made aggregate payments of $ 10.7 million under the Term Facility, of which $ 6.3 million was repayment of principal and $ 4.4 million was payment of interest.

As of September 30, 2022, the interest rate on the Term Facility was 4.87 %.

This interest rate will reset on October 31, 2022.

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):

Under the Third Amended and Restated Credit Agreement, during the three months ended September 30, 2022, the Company made aggregate payments of $ 42.8 million under the Revolving Facility, of which $ 40 million was a repayment of principal and $ 2.8 million was a payment of interest.

As at September 30, 2022 , the interest rates on the Revolving Facility were 4.45 % - 4.87 %.

The following table summarizes the Company’s estimated debt and interest payment obligations as of September 30, 2022, for the remainder of fiscal 2023 and future fiscal years (in thousands):

2023 (remainder) 2024 2025 2026 2027 Thereafter Total

3 unchanged sentences

Total $ 48,461 $ 63,751 $ 62,412 $ 750,926 $ — $ — $ 925,550

(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.

(1) - Interest payments are calculated based on the applicable rates and payment dates as of September 30, 2022 and assumes the outstanding revolver balance remains at $ 330 million.

Although the Company’s interest rates on 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

The Company enters into agreements under which we lease 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 our 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 September 30, 2022, we included such options in determining the lease terms for certain of our leases because we were reasonably certain that we would exercise the extension options.

Most of our leases require us to pay certain operating expenses in addition to base rent, such as taxes, insurance and maintenance costs.

The following table summarizes our lease costs for the three months ended September 30, 2022 and 2021 (in thousands):

Financial Statement Classification Three Months Ended September 30,

Operating lease costs:

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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.

Total short-term costs for three months ended September 30, 2022 and 2021 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, 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.

For the three months ended September 30, 2022 and 2021, cash paid for amounts associated with the Company’s operating lease liabilities were approximately $ 3.6 million and $ 3.0 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, 2022:

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 September 30, 2022:

Remainder of Fiscal 2023 $ 10,591

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Operating Leases

See Note 9- Leases for future minimum lease payments under non-cancelable operating leases as of March 31, 2022.

See Note 9 - Leases for future minimum lease payments under non-cancelable operating leases as of September 30, 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.

We subcontract with third parties to manufacture our products and have 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 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 September 30, 2022, we have recorded a purchase obligation liability of $ 7.7 million related to component purchase commitments.

There have been no other significant liabilities for cancellations recorded as of September 30, 2022.

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 $ 1,697.7 million to $ 2,362.8 million as of September 30, 2022, depending upon the timing of orders placed for these components by our 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.

As of September 30, 2022, the Company has other obligations of $ 6.7 million which consisted primarily of commitments related to research and development projects.

Indemnification Obligations

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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.

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 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.

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 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 7,062,29 6 (the “’296 Patent”), 7,729,728 (the “’728 Patent”), and 6,611,231 (the “’231 Patent” and, collectively, the “Patents-in-Suit”), (the “Original Action”).

On April 11, 2018, the Court stayed the Original Action pending completion of certain inter partes review (“IPR”) proce edings before the Patent Trial and Appeal Board (“PTO”).

The PTO invalidated asserted claims of two of the three Patents-in-Suit.

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.

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.

That ruling is now on appeal.

All claims asserted against the Company in the Original Action have been dismissed.

On April 18, 2022, the court granted in part the motion for judgment on the pleadings with respect to the ’728 patent, dismissing one of the four remaining claims.

On July 28, 2022, Vivato voluntarily dismissed, with prejudice, its remaining claims related to the ’728 patent, as well as claims 22-31 of the ‘376 Patent.

On October 20, 2022, an IPR was instituted with respect to the asserted claims of the ’376 Patent.

On October 26, 2022, the court stayed the case pending completion of the IPR.

The Company plans to vigorously defend itself against these claims;

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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.

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.

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

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

On May 3, 2022, the Board of Directors of the Company approved a $ 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.

The Company did not make any repurchases under the 2022 May Program during the three months ended September 30, 2022.

As of September 30, 2022 , the Company had $ 200 million available for share purchase under the 2022 May Program.

NOTE 12— ACCUMULATED OTHER COMPREHENSIVE INCOME

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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.

For the three months ended September 30, 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

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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.

As of September 30, 2022, the Company had 4,959,923 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

The following table shows total stock-based compensation expense included in the consolidated statements of operations and comprehensive income for the three months ended September 30, 2022 and 2021 (in thousands):

Three Months Ended September 30,

Cost of revenues $ 11 $ 22

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Sales, general and administrative 268 218

$ 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:

The following is a summary of option activity for the Company’s stock incentive plans for the three months ended September 30, 2022:

Common Stock Options Outstanding

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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.

Balance, September 30, 2022 — $ — — $ —

Vested as of September 30, 2022 — $ — — $ —

Vested and exercisable as of September 30, 2022 — $ — — $ —

During the three months ended September 30, 2022 and 2021, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $ 0.6 million and $ 0.5 million, respectively, as determined as of the date of option exercise.

As of September 30, 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 months ended September 30, 2022, and 2021.

Restricted Stock Units (“RSUs”)

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RSUs canceled ( 230 ) $ 206.58

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.

Non-vested RSUs, September 30, 2022 53,854 $ 245.11

The intrinsic value of RSUs vested in the three months ended September 30, 2022 and 2021 was $ 2.1 million and $ 3.4 million, respectively.

The total intrinsic value of all outstanding RSUs was $ 15.8 million as of September 30, 2022.

As of September 30, 2022, there were unrecognized compensation costs related to RSUs of $ 9.4 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 $ 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 recorded tax provisions of $ 18.2 million for the three months ended September 30, 2022 as compared to $ 25.7 million for the three months ended September 30, 2021.

The decrease is primarily related to the reduction in profit before tax and changes in the mix of profit before tax for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021.

The Company’s estimated fiscal year 2023 effective tax rate, before discrete items, differs from the U.S.

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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.

operations under Global Intangible Low-Taxes Income (GILTI) rules.

As of September 30, 2022, the Company had approximately $ 33.4 million of unrecognized tax benefits, substantially all of which would, if recognized, affect its tax expense.

During the three months ended September 30, 2022, the Company recorded an increase of its unrecognized tax benefits of $ 1.1 million and a release of $( 0.4 ) million of its unrecognized tax benefits due to the lapse of the application statute of limitations for the quarter ended September 30, 2022 .

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,

local, and foreign jurisdictions and is currently undergoing income tax examinations by the U.S.

Internal Revenue Service and the Hong Kong IRD.

Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheets.

As of September 30, 2022, the Company had $ 3.6 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 Inland Revenue Department (“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.

During fiscal years 2022, 2021, 2020, 2019, and 2018, the Company made a total of $ 3.0 million, $ 21.9 million, $ 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 2010-2016 tax years.

On March 2, 2022, the Company received notification that the Hong Kong IRD is seeking an additional $ 23.5 million deposit covering the 2016 tax year.

The Company filed a formal protest in response to this notice and the Assessor's office agreed to a reduced deposit of $ 3.0 million which was remitted on May 23, 2022.

The refundable deposits are included within other long-term assets on our consolidated balance sheets.

2 unchanged sentences

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 $ 60.0 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.

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.

This Draft NOPA was superseded by an Acknowledgement of Facts (“AOF”) issued to the Company by the IRS on January 17, 2020.

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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 formally protested the adjustment and the case was moved from the Examination Division to the IRS Appeals Division where a formal review of the facts and the applicable law took place on May 9, 2022.

The Appeals Officer issued a Notice of Deficiency on August 3, 2022, which upheld the position of the Examination Division.

The Company has filed a petition with the United States Tax Court seeking to have the Notice of Deficiency reversed.

The Company strongly believes the position of the IRS with regard to this matter is without merit.

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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.

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.

Management has determined that the Company operates as one reportable and operating segment as the Company’s Chief Executive Officer, who is the Company’s chief operating decision maker, does not make decisions about resources to be allocated or assess performance on a segment basis.

Furthermore, the Company does not organize or report its costs on a segment basis.

2 unchanged sentences

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

Three Months Ended September 30,

Enterprise technology $ 426,298 86 % $ 346,773 76 %

2 unchanged sentences

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,

2022 2021 2022 2021

Three Months Ended September 30,

North America (1)

4 unchanged sentences

Total revenues $ 498,083 100 % $ 458,914 100 %

(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,

(1) Revenue for the United States was $ 210.3 million and $ 190.6 million for the three months ended September 30, 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.

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.

On November 4, 2022, the Company's Board of Directors had approved a quarterly cash dividend of $ 0.60 per share payable on November 21, 2022 to shareholders of record at the close of business on November 14, 2022.

Any future dividends will be subject to the approval of the Company’s Board of Directors.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements