Cover Page
Cover Page - shares | 6 Months Ended | |
Dec. 31, 2023 | Feb. 08, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Focus | Dec. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-35300 | |
Entity Registrant Name | UBIQUITI INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 32-0097377 | |
Entity Address, Address Line One | 685 Third Avenue | |
Entity Address, Address Line Two | 27th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10017 | |
City Area Code | 646 | |
Local Phone Number | 780-7958 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | UI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 60,461,192 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001511737 | |
Current Fiscal Year End Date | --06-30 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Jun. 30, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 97,601 | $ 114,826 |
Investments — short-term | 61 | 109 |
Accounts receivable, net of allowance for doubtful accounts of $225 and $92 at December 31, 2023 and June 30, 2023, respectively | 171,417 | 167,787 |
Inventories | 683,593 | 737,121 |
Vendor deposits | 134,496 | 125,227 |
Prepaid expenses and other current assets | 18,565 | 21,974 |
Total current assets | 1,105,733 | 1,167,044 |
Property and equipment, net | 84,486 | 86,845 |
Operating lease right-of-use assets, net | 50,953 | 57,485 |
Deferred tax assets | 23,459 | 23,701 |
Other long-term assets | 70,282 | 71,324 |
Total assets | 1,334,913 | 1,406,399 |
Current liabilities: | ||
Accounts payable | 92,297 | 154,157 |
Income taxes payable | 9,765 | 19,309 |
Debt — short-term | 36,508 | 36,508 |
Other current liabilities | 149,217 | 141,845 |
Total current liabilities | 287,787 | 351,819 |
Income taxes payable — long-term | 55,091 | 74,880 |
Operating lease liabilities — long-term | 39,657 | 46,052 |
Debt — long-term | 958,132 | 1,041,381 |
Deferred tax liability — long-term | 226 | 226 |
Other long-term liabilities | 9,742 | 7,774 |
Total liabilities | 1,350,635 | 1,522,132 |
Commitments and Contingencies | ||
Stockholders’ deficit: | ||
Preferred stock—$0.001 par value; 50,000,000 shares authorized; none issued | 0 | 0 |
Common stock—$0.001 par value; 500,000,000 shares authorized: 60,448,287 and 60,441,896 issued and outstanding as of December 31, 2023 and June 30, 2023, respectively | 60 | 60 |
Additional paid–in capital | 7,403 | 4,721 |
Accumulated deficit | (23,185) | (120,514) |
Total stockholders’ (deficit) | (15,722) | (115,733) |
Total liabilities and stockholders’ deficit | $ 1,334,913 | $ 1,406,399 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Jun. 30, 2023 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 225 | $ 92 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued (in shares) | 60,448,287 | 60,441,896 |
Common stock, shares outstanding (in shares) | 60,448,287 | 60,441,896 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||||
Revenues | $ 464,954 | $ 493,571 | $ 928,032 | $ 991,654 |
Cost of revenues | 287,307 | 296,010 | 566,510 | 622,725 |
Gross profit | 177,647 | 197,561 | 361,522 | 368,929 |
Operating expenses: | ||||
Research and development | 36,911 | 33,765 | 73,194 | 66,424 |
Sales, general and administrative | 19,634 | 18,643 | 38,923 | 35,339 |
Total operating expenses | 56,545 | 52,408 | 112,117 | 101,763 |
Income from operations | 121,102 | 145,153 | 249,405 | 267,166 |
Interest expense and other, net | 18,262 | 11,272 | 39,486 | 21,923 |
Income before income taxes | 102,840 | 133,881 | 209,919 | 245,243 |
Provision for income taxes | 20,724 | 21,676 | 40,053 | 39,856 |
Net income | 82,116 | 112,205 | 169,866 | 205,387 |
Comprehensive income | $ 82,116 | $ 112,205 | $ 169,866 | $ 205,387 |
Net income per share of common stock: | ||||
Basic (in dollar per share) | $ 1.36 | $ 1.86 | $ 2.81 | $ 3.40 |
Diluted (in dollar per share) | $ 1.36 | $ 1.86 | $ 2.81 | $ 3.40 |
Weighted average shares used in computing net income per share of common stock: | ||||
Basic (in dollar per shares) | 60,448 | 60,429 | 60,447 | 60,428 |
Diluted (in dollar per shares) | 60,451 | 60,448 | 60,451 | 60,448 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Deficit) | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Jun. 30, 2022 | 60,420,525 | ||||
Beginning balance at Jun. 30, 2022 | $ (382,876) | $ 60 | $ 650 | $ (383,112) | $ (474) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 93,182 | 93,182 | |||
Other comprehensive (loss) | (49) | (49) | |||
Stock options exercised (in shares) | 2,112 | ||||
Stock options exercised | 23 | 23 | |||
Restricted stock units issued, net of tax withholdings (in shares) | 6,174 | ||||
Restricted stock units issued, net of tax withholdings | (544) | (544) | |||
Share-based compensation expense | 1,048 | 1,048 | |||
Dividends paid on Common Stock | (36,256) | (36,256) | |||
Ending balance (in shares) at Sep. 30, 2022 | 60,428,811 | ||||
Ending balance at Sep. 30, 2022 | (325,472) | $ 60 | 1,177 | (326,186) | (523) |
Beginning balance (in shares) at Jun. 30, 2022 | 60,420,525 | ||||
Beginning balance at Jun. 30, 2022 | (382,876) | $ 60 | 650 | (383,112) | (474) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 205,387 | ||||
Ending balance (in shares) at Dec. 31, 2022 | 60,430,958 | ||||
Ending balance at Dec. 31, 2022 | (247,950) | $ 60 | 2,228 | (250,238) | 0 |
Beginning balance (in shares) at Sep. 30, 2022 | 60,428,811 | ||||
Beginning balance at Sep. 30, 2022 | (325,472) | $ 60 | 1,177 | (326,186) | (523) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 112,205 | 112,205 | |||
Restricted stock units issued, net of tax withholdings (in shares) | 2,147 | ||||
Restricted stock units issued, net of tax withholdings | (50) | (50) | |||
Share-based compensation expense | 1,101 | 1,101 | |||
Dividends paid on Common Stock | (36,257) | (36,257) | |||
Reclassification adjustment for loss on investments included in net income | 523 | 523 | |||
Ending balance (in shares) at Dec. 31, 2022 | 60,430,958 | ||||
Ending balance at Dec. 31, 2022 | $ (247,950) | $ 60 | 2,228 | (250,238) | $ 0 |
Beginning balance (in shares) at Jun. 30, 2023 | 60,441,896 | 60,441,896 | |||
Beginning balance at Jun. 30, 2023 | $ (115,733) | $ 60 | 4,721 | (120,514) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 87,750 | 87,750 | |||
Restricted stock units issued, net of tax withholdings (in shares) | 5,660 | ||||
Restricted stock units issued, net of tax withholdings | (313) | (313) | |||
Share-based compensation expense | 1,500 | 1,500 | |||
Dividends paid on Common Stock | (36,268) | (36,268) | |||
Ending balance (in shares) at Sep. 30, 2023 | 60,447,556 | ||||
Ending balance at Sep. 30, 2023 | $ (63,064) | $ 60 | 5,908 | (69,032) | |
Beginning balance (in shares) at Jun. 30, 2023 | 60,441,896 | 60,441,896 | |||
Beginning balance at Jun. 30, 2023 | $ (115,733) | $ 60 | 4,721 | (120,514) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | $ 169,866 | ||||
Ending balance (in shares) at Dec. 31, 2023 | 60,448,287 | 60,448,287 | |||
Ending balance at Dec. 31, 2023 | $ (15,722) | $ 60 | 7,403 | (23,185) | |
Beginning balance (in shares) at Sep. 30, 2023 | 60,447,556 | ||||
Beginning balance at Sep. 30, 2023 | (63,064) | $ 60 | 5,908 | (69,032) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 82,116 | 82,116 | |||
Restricted stock units issued, net of tax withholdings (in shares) | 731 | ||||
Restricted stock units issued, net of tax withholdings | (11) | (11) | |||
Share-based compensation expense | 1,506 | 1,506 | |||
Dividends paid on Common Stock | $ (36,269) | (36,269) | |||
Ending balance (in shares) at Dec. 31, 2023 | 60,448,287 | 60,448,287 | |||
Ending balance at Dec. 31, 2023 | $ (15,722) | $ 60 | $ 7,403 | $ (23,185) |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Deficit) (Parenthetical) - $ / shares | 3 Months Ended | |||
Dec. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends paid on Common Stock (in dollars per share) | $ 0.6 | $ 0.6 | $ 0.6 | $ 0.6 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash Flows from Operating Activities: | ||
Net income | $ 169,866 | $ 205,387 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 9,641 | 7,636 |
Amortization of debt issuance costs | 867 | 654 |
Non-cash lease expense | 220 | 342 |
Provision for inventory obsolescence | 3,283 | 5,619 |
Provision for loss on vendor deposits | 7,750 | (1,165) |
Share-based compensation | 3,006 | 2,148 |
Deferred taxes | 242 | 131 |
Other, net | (31) | 636 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,763) | (32,315) |
Inventories | 50,138 | (388,144) |
Vendor deposits | (17,019) | 15,027 |
Prepaid expenses and other assets | 3,333 | (8,946) |
Accounts payable | (61,511) | 161,186 |
Income taxes payable | (29,333) | (24,353) |
Deferred revenues | 1,631 | (1,843) |
Accrued and other liabilities | 7,943 | 60,333 |
Net cash provided by operating activities | 146,263 | 2,333 |
Cash Flows from Investing Activities: | ||
Purchase of property and equipment and other long-term assets | (6,877) | (13,468) |
Net cash used in investing activities | (6,877) | (13,468) |
Cash Flows from Financing Activities: | ||
Payment of common stock cash dividends | (72,537) | (72,513) |
Proceeds from exercise of stock options | 0 | 23 |
Tax withholdings related to net share settlements of restricted stock units | (324) | (594) |
Net cash (used in) provided by financing activities | (156,611) | 34,416 |
Net (decrease) increase in cash and cash equivalents | (17,225) | 23,281 |
Cash and cash equivalents at beginning of period | 114,826 | 136,224 |
Cash and cash equivalents at end of period | 97,601 | 159,505 |
Supplemental Disclosure of Cash Flow Information: | ||
Income taxes paid, net of refunds | 68,211 | 64,285 |
Interest paid | 41,099 | 18,482 |
Non-Cash Investing and Financing Activities: | ||
Right-of-use asset recognized | 1,067 | 1,826 |
Unpaid property and equipment and other long-term assets | 927 | 357 |
Revolving credit facility | ||
Cash Flows from Financing Activities: | ||
Proceeds from borrowing under the credit facility- Revolver | 0 | 180,000 |
Repayments of debt | (65,000) | (60,000) |
Term Loan | ||
Cash Flows from Financing Activities: | ||
Repayments of debt | $ (18,750) | $ (12,500) |
BUSINESS AND BASIS OF PRESENTAT
BUSINESS AND BASIS OF PRESENTATION | 6 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS AND BASIS OF PRESENTATION | BUSINESS AND BASIS OF PRESENTATION Business — Ubiquiti Inc. and its wholly owned subsidiaries (collectively, “Ubiquiti” or the “Company”) develop high performance networking technology for service providers, enterprises, and consumers globally. The Company operates on a fiscal year ending June 30. In these notes, Ubiquiti refers to the fiscal years ending June 30, 2024 and 2023, as fiscal 2024 and fiscal 2023, 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, 2023 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, 2023, included in its Annual Report on Form 10-K, as filed with the SEC on August 25, 2023 (the “Annual Report”). The results of operations for the three and six months ended December 31, 2023 are not necessarily indicative of the results to be expected for any future periods. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company’s significant accounting policies are disclosed in its audited consolidated financial statements for the fiscal year ended June 30, 2023, included in the Annual Report on Form 10-K. There have been no 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 and assumptions include, but are not limited to, revenue recognition and deferred revenue; 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. We evaluate our estimates and assumptions based on historical experience and other assumptions that are believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. Recent Accounting Pronouncements Not Yet Effective Segment Reporting In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting ( Topic 280 ) (“ASU 2023-07”), which enhances the segment disclosure requirements for public entities on an annual and interim basis. Under this proposal, public entities will be required to disclose significant segment expenses that are regularly provided to the chief operating decision maker (the “CODM”) and included within each reported measure of segment profit or loss. Additionally, current annual disclosures about a reportable segment’s profit or loss and assets will be required on an interim basis. Entities will also be required to disclose information about the CODM’s title and position at the Company along with an explanation of how the CODM uses the reported measures of segment profit or loss in their assessment of segment performance and deciding whether how to allocate resources. Finally, ASU 2023-07 requires all segment disclosures for public entities, even those with a single reportable segment. The amendments in ASU 2023-07 will become effective on a retrospective basis for annual disclosures in the Company's fiscal year beginning July 1, 2024, with interim period disclosures required effective with the Company's fiscal year beginning July 1, 2025. Early adoption of ASU 2023-07 is permitted. We do not expect this ASU to have a significant impact on our disclosures or results of operations, cash flows, and financial condition. Income Taxes In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) ("ASU 2023-09"), which amends the existing guidance relating to the annual disclosures for accounting for income taxes. ASU 2023-09 requires a public business entity to disclose a tabular rate reconciliation using specified categories and providing additional information for reconciling items that exceed a quantitative threshold. In addition, ASU 2023-09 requires the disaggregation of federal, state and foreign income taxes paid (net of funds received), with further disaggregation required for individual jurisdictions in which the income taxes paid exceed five percent of the Company's total income taxes paid. The provision for income taxes in the Company's statement of operations will also be required to be disaggregated by federal, state and foreign. The amendments in ASU 2023-09 will become effective for annual disclosures in the Company's fiscal year beginning July 1, 2025, with early adoption permitted. The FASB indicated ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. We expect this ASU to only impact our disclosures with no impact to our results of operations, cash flows, and financial condition. |
REVENUES
REVENUES | 6 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES Revenue is primarily generated from the sale of hardware as well as the related implied post contract services ("PCS"). Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Revenue is recognized when obligations under the terms of a contract with 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. Disaggregation of Revenue See Note 13, "Segment Information, Revenues by Geography and Significant Customers" 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 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 December 31, 2023 and June 30, 2023, the Company’s customer deposits were $2.6 million and $1.2 million, respectively. As of December 31, 2023, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $18.2 million and $9.7 million, respectively. As of June 30, 2023, the Company’s deferred revenue, included in other current liabilities and other long-term liabilities, was $17.9 million and $7.8 million, respectively. We expect the majority of our deferred revenue to convert to revenue in two years. For the three and six months ended December 31, 2023 we recognized revenues amounting to $4.3 million and $11.0 million respectively from the deferred revenue balance as of June 30, 2023. For the three and six ended December 31, 2022, we recognized revenues amounting to $5.0 million and $13.6 million respectively from the deferred revenue balance as of June 30, 2022. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share for the periods indicated (in thousands, except per share data): Three Months Ended December 31, Six Months Ended December 31, 2023 2022 2023 2022 Numerator: Net income $ 82,116 $ 112,205 $ 169,866 $ 205,387 Denominator: Weighted-average shares used in computing basic earnings per share 60,448 60,429 60,447 60,428 Add—dilutive potential common shares: Stock options — — — 1 Restricted stock units 3 19 4 19 Weighted-average shares used in computing diluted net income per share 60,451 60,448 60,451 60,448 Net income per share of common stock: Basic $ 1.36 $ 1.86 $ 2.81 $ 3.40 Diluted $ 1.36 $ 1.86 $ 2.81 $ 3.40 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. |
BALANCE SHEET COMPONENTS
BALANCE SHEET COMPONENTS | 6 Months Ended |
Dec. 31, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
BALANCE SHEET COMPONENTS | BALANCE SHEET COMPONENTS Inventories Inventories consisted of the following (in thousands): December 31, 2023 June 30, 2023 Finished goods $ 587,134 $ 643,499 Raw materials 96,459 93,622 Total $ 683,593 $ 737,121 Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): December 31, 2023 June 30, 2023 Testing equipment $ 18,546 $ 18,265 Tooling equipment 25,488 22,687 Leasehold improvements 25,749 24,968 Computer and other equipment 10,588 10,860 Software 9,582 9,421 Furniture and fixtures 1,843 1,716 Corporate aircraft 65,807 65,807 Property and equipment, gross 157,603 153,724 Less: Accumulated depreciation and amortization (73,117) (66,879) Property and equipment, net $ 84,486 $ 86,845 Other Long-term Assets Other long-term assets consisted of the following (in thousands): December 31, 2023 June 30, 2023 Hong Kong Tax deposit (1) $ 60,321 $ 60,106 Intangible assets, net (2) 4,945 5,695 Other long-term assets, net 5,016 5,523 Total $ 70,282 $ 71,324 (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 12, "Income Taxes" to the consolidated financial statements for additional details regarding this ongoing tax audit. (2) Accumulated amortization was $6.7 million and $5.9 million as of December 31, 2023, and June 30, 2023, respectively. Other Current Liabilities Other current liabilities consisted of the following (in thousands): December 31, 2023 June 30, 2023 Deferred revenue — short-term $ 18,207 17,911 Accrued expenses 22,492 23,426 Lease liability— current 14,417 14,333 Warranty accrual 9,907 8,745 Accrued compensation and benefits 9,985 7,330 Customer deposits 2,626 1,211 Reserve for sales returns 4,680 4,999 Inventory received not billed 57,413 56,862 Other payables 9,490 7,028 Total $ 149,217 $ 141,845 Other Long-Term Liabilities Other long-term liabilities consisted of the following (in thousands): December 31, 2023 June 30, 2023 Deferred revenue — long-term $ 9,742 $ 7,774 |
ACCRUED WARRANTY
ACCRUED WARRANTY | 6 Months Ended |
Dec. 31, 2023 | |
Product Warranties Disclosures [Abstract] | |
ACCRUED WARRANTY | ACCRUED WARRANTY The Company offers warranties on certain products, generally a period of one Warranty obligations, included in other current liabilities, were as follows (in thousands): Six Months Ended December 31, 2023 2022 Beginning balance $ 8,745 $ 6,394 Accruals for warranties issued during the period 6,232 5,822 Changes in liability for pre-existing warranties during the period 687 222 Settlements made during the period (5,757) (4,586) Ending balance $ 9,907 $ 7,852 |
DEBT
DEBT | 6 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT On March 30, 2021, the Company, as borrower and certain domestic subsidiaries, as guarantors (the "Domestic Guarantors"), 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,” together with the Term Loan Facilities, as defined below, the "Facilities") and provided a $500 million senior secured term loan facility (the “Initial Term Loan Facility”), 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. On April 3, 2023, the Company as borrower and the Domestic Guarantors entered into a first amendment (the “First Amendment”) to the Third Amended and Restated Credit Agreement (as amended, the “Amended Credit Agreement”) with the financial institutions named as lenders therein and Wells Fargo. The First Amendment added a new term loan facility in an aggregate principal amount of $250 million (the “First Amendment Term Loan Facility,” together with the Initial Term Loan Facility, the "Term Loan Facilities") which is payable in quarterly installments equal to $3.125 million, commencing with the quarter ended June 30, 2023, and has a maturity date of March 30, 2026. The obligations of the Company and certain domestic subsidiaries under the Amended Credit Agreement are required to be guaranteed by the Domestic Guarantors and are collateralized by substantially all assets (excluding intellectual property) of the Company and the Domestic Guarantors. The Company's unamortized balance of debt issuance costs are $2.2 million as of December 31, 2023, which are amortized as interest expense over the life of the Facilities. The Company's debt consisted of the following (in thousands): December 31, 2023 June 30, 2023 Initial Term Loan Facility - short term $ 25,000 $ 25,000 First Amendment Term Loan Facility - short-term 12,500 12,500 Debt issuance costs, net (992) (992) Total Debt - short term 36,508 36,508 Initial Term Loan Facility - long term 406,250 418,750 First Amendment Term Loan Facility - long-term 228,125 234,375 Revolving Facility - long term 325,000 390,000 Debt issuance costs, net (1,243) (1,744) Total Debt - long term $ 958,132 $ 1,041,381 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 Amended 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 Amended 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 loans under the Initial Term Loan Facility are payable in quarterly installments of $6.25 million per quarter, commencing with the quarter ending June 30, 2021. Loans under the Facilities may be prepaid at any time without penalty. The revolving loans and term loans under the Initial Term Loan Facility bear interest, at the Company’s option, at either (i) a floating rate per annum equal to the Base Rate (as defined below) 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 Adjusted Term SOFR (as defined below) 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 be tween 0.50% and 1.25%, depending on the Company’s consolidated total leverage ratio as of the most recently ended fiscal quarter. The loans under the First Amendment Term Loan Facility bear interest, at the Company's option, at either (i) a floating rate per annum equal to Base Rate plus a margin of between 1.00% and 1.75%, 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 Adjusted Term SOFR rate for a specified period, plus a margin between 2.00% and 2.75%, depending on the Company's consolidated total leverage ratio as of the most recently ended fiscal quarter. Base Rate is defined in the Amended Credit Agreement as the highest of (a) the Prime Rate (as defined in the Amended Credit Agreement), (b) the Federal Funds Rate (as defined in the Amended Credit Agreement) plus 0.50% and (c) Adjusted Term SOFR for a one-month tenor in effect on such day plus 1.00%; each change in the Base Rate shall take effect simultaneously with the corresponding change or changes in the Prime Rate, the Federal Funds Rate or Adjusted Term SOFR, as applicable (provided that clause (c) shall not be applicable during any period in which Adjusted Term SOFR is unavailable or unascertainable). The Base Rate shall not be less than 1.00%. Adjusted Term SOFR is Term SOFR (as defined in the Amended Credit Agreement) plus 0.10% per annum; provided that Adjusted Term SOFR shall in no event be less than 0.00%. A default interest rate shall apply on all obligations during certain events of default under the Amended 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 Amended 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 3.50 to 1.00. In addition, the Amended 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 Amended 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 Amended Credit Agreement. The Facilities As of December 31, 2023, $431.3 million was outstanding on the Initial Term Loan Facility, $240.6 million was outstanding on the First Amendment Term Loan Facility, and $325 million was outstanding on the Revolving Facility, leaving $375 million available on the Revolving Facility. Term Loan Facilities During the six months ended December 31, 2023, the Company made aggregate payments of $45.9 million under the Term Loan Facilities, of which $18.8 million was repayment of principal and $27.1 million was payment of interest. Revolving Facility Under the Amended Credit Agreement, during the six months ended December 31, 2023, the Company made aggregate payments of $79.0 million under the Revolving Facility, of which $65 million was repayment of principal and $14.0 million was payment of interest. The following table summarizes the Company’s estimated debt and interest payment obligations as of December 31, 2023, for the remainder of fiscal 2024 and future fiscal years (in thousands): 2024 (remainder) 2025 2026 2027 2028 Thereafter Total Debt payment obligations $ 18,750 $ 37,500 $ 940,625 $ — $ — $ — $ 996,875 Interest and other payments on debt payment obligations (1) 36,619 71,390 51,605 — — — 159,614 Total $ 55,369 $ 108,890 $ 992,230 $ — $ — $ — $ 1,156,489 (1) Interest payments are calculated based on the applicable rates and payment dates as of December 31, 2023. Although our interest rates on our debt obligations may vary, we have assumed the most recent available interest rates for all periods presented. |
LEASES
LEASES | 6 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
LEASES | LEASES The Company has entered 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 December 31, 2023, 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 and six months ended December 31, 2023 and 2022 (in thousands): Financial Statement Classification Three Months Ended December 31, Six Months Ended December 31, 2023 2022 2023 2022 Operating lease costs: Fixed lease costs Operating expenses $ 2,927 $ 2,722 $ 5,863 $ 5,526 Fixed lease costs Cost of revenues 1,073 962 1,754 1,965 Variable lease costs Operating expenses 128 153 326 154 Variable lease costs Cost of revenues 187 142 468 157 Total lease costs $ 4,315 $ 3,979 $ 8,411 $ 7,802 The operating lease costs in the table above include costs for long-term and short-term leases. Total short-term costs for the three and six months ended December 31, 2023 and 2022, 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 months ended December 31, 2023 and 2022, cash paid for amounts associated with the Company's operating lease liabilities were approximately $4.3 million and $4.0 million, respectively. For the six months ended December 31, 2023 and 2022, cash paid for amounts associated with the Company's operating lease liabilities were approximately $8.6 million and $7.6 million, respectively. Cash paid for amounts associated with the Company’s operating lease liabilities were classified as operating activities in the consolidated statement of cash flows. The following table shows the Company’s undiscounted future fixed payment obligations under the Company’s recognized operating leases and a reconciliation to the operating lease liabilities as of December 31, 2023: Remainder of Fiscal 2024 $ 8,095 Fiscal 2025 14,482 Fiscal 2026 10,092 Fiscal 2027 6,000 Fiscal 2028 4,606 Thereafter 15,231 Total future fixed operating lease payments $ 58,506 Less: Imputed interest $ 4,432 Total operating lease liabilities $ 54,074 Weighted-average remaining lease term - operating leases 6 years Weighted-average discount rate - operating leases 3.2 % |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating Leases See Note 8, "Leases" for future minimum lease payments under non-cancelable operating leases as of December 31, 2023. Purchase Obligations We subcontract with third parties to manufacture our products and supply key components. As of December 31, 2023, we had $1,045.0 million of purchase commitments with these third parties. 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. There have been no significant liabilities for current or anticipated cancellations recorded as of December 31, 2023. Our consolidated financial position and results of operations could be negatively impacted if we were required to compensate these third parties. In addition, we may be subject to additional purchase obligations to our contract manufacturers for supply agreements and components ordered by them based on manufacturing forecasts we provide them each month. Transition Tax We have obligations of $50.6 million as of December 31, 2023, related to the mandatory transition tax on accumulated foreign earnings from the 2017 Tax Cuts and Jobs Act. Payment of these obligations are expected to be $22.5 million for fiscal 2025 and $28.1 million for fiscal 2026. These obligations are included within Income tax payable and Long-term taxes payable on our consolidated balance sheets. Other Obligations As of December 31, 2023, the Company has other obligations of $5.5 million which consisted primarily of commitments related to research and development projects. Indemnification Obligations The Company enters into standard indemnification agreements with many of its business partners in the ordinary course of business. These agreements include provisions for indemnifying the business partner against any claim brought by a third-party to the extent any such claim alleges that a Company product infringes a patent, copyright or trademark, or violates any other proprietary rights of that third-party. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is not estimable and the Company has not incurred any material costs to defend lawsuits or settle claims related to these indemnification agreements to date. Legal Matters The Company may be involved, from time to time, in a variety of claims, lawsuits, investigations, and proceedings relating to contractual disputes, intellectual property rights, employment matters, regulatory compliance matters and other litigation matters relating to various claims that arise in the normal course of business. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. The Company assesses its potential liability by analyzing specific litigation and regulatory matters using available information. The Company develops its views on estimated losses in consultation with inside and outside counsel, which involves a subjective analysis of potential results and outcomes, assuming various combinations of appropriate litigation and settlement strategies. Taking all of the above factors into account, the Company records an amount where it is probable that the Company will incur a loss and where that loss can be reasonably estimated. However, the Company’s estimates may be incorrect and the Company could ultimately incur more or less than the amounts initially recorded. The Company may also incur significant legal fees, which are expensed as incurred, in defending against these claims. The Company is not currently aware of any pending or threatened litigation that would have a material adverse effect on the Company’s financial statements. Vivato/XR On April 19, 2017, XR Communications, LLC, d/b/a Vivato Technologies (“Vivato”), filed a complaint against the Company in the United States District Court for the Central District of California, alleging that at least one of the Company’s products infringes United States Patent Numbers 7,062,29 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. 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”). 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. The Federal Circuit Court of Appeals affirmed the invalidity of the '231 Patent on May 18, 2023. All claims asserted against the Company in the Original Action have been dismissed. 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. On October 3, 2023, the IPR with respect to the '376 Patent was terminated after the petitioners entered into a settlement agreement with Vivato. On November 10, 2023, the Company filed a new IPR petition with respect to the '376 Patent and a motion to reopen the prior IPR proceeding, which remains pending. On December 4, 2023, the court lifted the stay. Trial is currently scheduled for June 25, 2024. 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. Network-1 Technologies, Inc. On October 5, 2022, Network-1 Technologies, Inc. ("Network-1") filed a patent infringement lawsuit against the Company in the District of Delaware, alleging that various Company products infringe United States Patent Number 6,218,930, which relates to 802.3af and 802.3at “ Power over Ethernet ” standards. Network-1 seeks compensatory and enhanced damages, attorneys' fees and costs, and pre- and post-judgment interest. 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. Intellectual Ventures I LLC v. Ubiquiti Inc. On August 8, 2023, Intellectual Ventures I LLC ("IV") filed a patent infringement lawsuit against the Company in the District of Delaware, alleging that various Company products infringe United States Patent Number 8,594,122, which relates to 802.11ac “ Beamforming ” standards. IV seeks compensatory and enhanced damages, attorneys' fees and costs, and pre- and post-judgment interest. 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. |
COMMON STOCK AND TREASURY STOCK
COMMON STOCK AND TREASURY STOCK | 6 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
COMMON STOCK AND TREASURY STOCK | COMMON STOCK AND TREASURY STOCK Common Stock Repurchases |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Share-Based Compensation Plans The Company’s 2020 and 2010 Equity Incentive Plans are described in the Company’s Annual Report. As of December 31, 2023, the Company had 4,921,319 authorized shares available for future issuance under all of its stock incentive plans. Share-Based Compensation The following table shows total share-based compensation expense included in the consolidated statements of operations and comprehensive income for the three and six months ended December 31, 2023 and 2022 (in thousands): Three Months Ended December 31, Six Months Ended December 31, 2023 2022 2023 2022 Cost of revenues $ 35 $ 13 $ 69 $ 24 Research and development 1,161 813 2,295 1,581 Sales, general and administrative 310 275 642 543 1,506 1,101 $ 3,006 $ 2,148 Stock Options There were no options exercised under the Company’s stock incentive plans during the three months ended December 31, 2023 and 2022. During the six months ended December 31, 2023 and 2022, the aggregate intrinsic value of options exercised under the Company’s stock incentive plans was $0.0 million and $0.6 million, respectively, as determined as of the date of option exercise. As of December 31, 2023, the Company had no unrecognized compensation costs related to stock options, and the Company did not grant any employee stock options during the three and six months ended December 31, 2023, and 2022. 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, 2023 62,948 $ 256.78 RSUs granted 17,678 $ 174.92 RSUs vested (8,264) $ 182.19 RSUs canceled (630) $ 290.47 Non-vested RSUs, December 31, 2023 71,732 $ 244.90 The intrinsic value of RSUs vested in the three months ended December 31, 2023 and 2022 was $0.1 million and $0.6 million, respectively. The intrinsic value of RSUs vested in the six months ended December 31, 2023 and 2022 was $1.4 million and $2.7 million, respectively. The total intrinsic value of all outstanding RSUs was $10.0 million as of December 31, 2023. As of December 31, 2023, there were unrecognized compensation costs related to RSUs of $11.4 million which the Company expects to recognize over a weighted average period of 3.0 years. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recorded tax provisions of $20.7 million and $40.1 million for the three and six months ended December 31, 2023 as compared to $21.7 million and $39.9 million for the three and six months ended December 31, 2022. Our effective tax rate increased to 20.2% for the three months ended December 31, 2023 as compared to 16.2% for the three months ended December 31, 2022. Our effective tax rate increased from 16.3% for the six months ended December 31, 2022 to 19.1% for the six months ended December 31, 2023. The change in effective tax rates for the three and six months ended December 31, 2023, as compared to the same period in the prior year, was primarily driven by a combination of changes in the mix of the income earned in various tax jurisdictions and a one-time release of a reserve for unrecognized tax benefit due to statute of limitation during the three and six months ended December 31, 2022. The Company’s estimated fiscal year 2024 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 December 31, 2023, the Company had approximately $34.7 million of unrecognized tax benefits, substantially all of which would, if recognized, affect its tax expense. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheets. As of December 31, 2023, the Company had $4.3 million accrued interest related to uncertain tax matters. The Company and one or more of its subsidiaries, file 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 ("IRS") 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 2010-2017 tax years. In July 2018, the Company received a draft Notice of Proposed Adjustment (“Draft NOPA”) from the IRS proposing an adjustment to income for the fiscal 2015 and fiscal 2016 tax years based on its interpretation of certain obligations of the non-US entities under the credit facility. This Draft NOPA was superseded by an Acknowledgement of Facts (“AOF”) issued to the Company by the IRS on January 17, 2020. The IRS in its AOF continued to propose an adjustment to the Company’s income for its fiscal 2015 and fiscal 2016 tax years based on the IRS’ interpretation of certain obligations of the Company’s foreign subsidiaries under the Company’s credit facilities. On May 12, 2020, the IRS issued a final Notice of Proposed Adjustment to the Company with respect to the 2015/2016 tax years. The Company 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 filed a petition with the United States Tax Court seeking to have the Notice of Deficiency reversed. On November 8, 2023, the Company filed a Motion for Summary Judgment. The IRS responded to our Motion on December 26, 2023 and filed a Cross-Motion for Summary Judgment. On January 22, 2024, the judge assigned to this case rejected both Motions for Summary Judgment. As such, the Company is awaiting a trial date to be set which it currently expects to receive by the end of December 2024. 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. 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, respectively, 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 30, 2023, the Company received notification that the Hong Kong IRD is seeking an additional $0.3 million deposit covering the 2017 tax year. The Company filed a formal protest in response to this notice and the Assessor's office agreed to a reduced deposit of under $0.1 million, which was remitted on May 18, 2023. 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 $60.3 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's possible that an adverse outcome of the matter could have a material effect on the Company’s results of operations and financial condition. |
SEGMENT INFORMATION, REVENUES B
SEGMENT INFORMATION, REVENUES BY GEOGRAPHY AND SIGNIFICANT CUSTOMERS | 6 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION, REVENUES BY GEOGRAPHY AND SIGNIFICANT CUSTOMERS | SEGMENT INFORMATION, REVENUES BY GEOGRAPHY AND SIGNIFICANT CUSTOMERS Management has determined that the Company operates as one reportable and operating segment as 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. 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 December 31, Six Months Ended December 31, 2023 2022 2023 2022 Enterprise technology $ 391,492 84 % $ 417,408 85 % $ 771,586 83 % $ 843,706 85 % Service provider technology 73,462 16 % 76,163 15 % 156,446 17 % 147,948 15 % Total revenues $ 464,954 100 % $ 493,571 100 % $ 928,032 100 % $ 991,654 100 % Revenues by geography based on customer’s ship-to destinations were as follows (in thousands, except percentages): Three Months Ended December 31, Six Months Ended December 31, 2023 2022 2023 2022 North America (1) $ 225,858 49 % $ 227,452 46 % $ 450,642 49 % $ 453,165 46 % Europe, the Middle East and Africa (“EMEA”) 172,951 37 % 195,098 40 % 345,345 37 % 395,241 40 % Asia Pacific 33,270 7 % 43,946 9 % 69,356 7 % 89,278 9 % South America 32,875 7 % 27,075 5 % 62,689 7 % 53,970 5 % Total revenues $ 464,954 100 % $ 493,571 100 % $ 928,032 100 % $ 991,654 100 % (1) Revenue for the United States was $210.4 million and $209.4 million for the three months ended December 31, 2023 and 2022, respectively. Revenue for the United States was $419.6 million and $419.7 million for the six months ended December 31, 2023 and 2022, 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. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Dividends On February 5, 2024, the Company's Board of Directors approved a quarterly cash dividend of $0.60 per share payable on February 26, 2024 to shareholders of record at the close of business on February 20, 2024. Any future dividends will be subject to the approval of the Company’s Board of Directors. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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, 2023 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, 2023, included in its Annual Report on Form 10-K, as filed with the SEC on August 25, 2023 (the “Annual Report”). The results of operations for the three and six months ended December 31, 2023 are not necessarily indicative of the results to be expected for any future periods. |
Use of Accounting Estimates | Use of Accounting Estimates |
Recently Adopted Accounting Pronouncements | Recent Accounting Pronouncements Not Yet Effective Segment Reporting In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting ( Topic 280 ) (“ASU 2023-07”), which enhances the segment disclosure requirements for public entities on an annual and interim basis. Under this proposal, public entities will be required to disclose significant segment expenses that are regularly provided to the chief operating decision maker (the “CODM”) and included within each reported measure of segment profit or loss. Additionally, current annual disclosures about a reportable segment’s profit or loss and assets will be required on an interim basis. Entities will also be required to disclose information about the CODM’s title and position at the Company along with an explanation of how the CODM uses the reported measures of segment profit or loss in their assessment of segment performance and deciding whether how to allocate resources. Finally, ASU 2023-07 requires all segment disclosures for public entities, even those with a single reportable segment. The amendments in ASU 2023-07 will become effective on a retrospective basis for annual disclosures in the Company's fiscal year beginning July 1, 2024, with interim period disclosures required effective with the Company's fiscal year beginning July 1, 2025. Early adoption of ASU 2023-07 is permitted. We do not expect this ASU to have a significant impact on our disclosures or results of operations, cash flows, and financial condition. Income Taxes In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) ("ASU 2023-09"), which amends the existing guidance relating to the annual disclosures for accounting for income taxes. ASU 2023-09 requires a public business entity to disclose a tabular rate reconciliation using specified categories and providing additional information for reconciling items that exceed a quantitative threshold. In addition, ASU 2023-09 requires the disaggregation of federal, state and foreign income taxes paid (net of funds received), with further disaggregation required for individual jurisdictions in which the income taxes paid exceed five percent of the Company's total income taxes paid. The provision for income taxes in the Company's statement of operations will also be required to be disaggregated by federal, state and foreign. The amendments in ASU 2023-09 will become effective for annual disclosures in the Company's fiscal year beginning July 1, 2025, with early adoption permitted. The FASB indicated ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. We expect this ASU to only impact our disclosures with no impact to our results of operations, cash flows, and financial condition. |
Revenues | Disaggregation of Revenue See Note 13, "Segment Information, Revenues by Geography and Significant Customers" 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 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. |
Accrued Warranty | The Company offers warranties on certain products, generally a period of one |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share for the periods indicated (in thousands, except per share data): Three Months Ended December 31, Six Months Ended December 31, 2023 2022 2023 2022 Numerator: Net income $ 82,116 $ 112,205 $ 169,866 $ 205,387 Denominator: Weighted-average shares used in computing basic earnings per share 60,448 60,429 60,447 60,428 Add—dilutive potential common shares: Stock options — — — 1 Restricted stock units 3 19 4 19 Weighted-average shares used in computing diluted net income per share 60,451 60,448 60,451 60,448 Net income per share of common stock: Basic $ 1.36 $ 1.86 $ 2.81 $ 3.40 Diluted $ 1.36 $ 1.86 $ 2.81 $ 3.40 |
BALANCE SHEET COMPONENTS (Table
BALANCE SHEET COMPONENTS (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Inventories | Inventories consisted of the following (in thousands): December 31, 2023 June 30, 2023 Finished goods $ 587,134 $ 643,499 Raw materials 96,459 93,622 Total $ 683,593 $ 737,121 |
Schedule of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): December 31, 2023 June 30, 2023 Testing equipment $ 18,546 $ 18,265 Tooling equipment 25,488 22,687 Leasehold improvements 25,749 24,968 Computer and other equipment 10,588 10,860 Software 9,582 9,421 Furniture and fixtures 1,843 1,716 Corporate aircraft 65,807 65,807 Property and equipment, gross 157,603 153,724 Less: Accumulated depreciation and amortization (73,117) (66,879) Property and equipment, net $ 84,486 $ 86,845 |
Schedule of Other Long-Term Assets | Other long-term assets consisted of the following (in thousands): December 31, 2023 June 30, 2023 Hong Kong Tax deposit (1) $ 60,321 $ 60,106 Intangible assets, net (2) 4,945 5,695 Other long-term assets, net 5,016 5,523 Total $ 70,282 $ 71,324 (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 12, "Income Taxes" to the consolidated financial statements for additional details regarding this ongoing tax audit. (2) Accumulated amortization was $6.7 million and $5.9 million as of December 31, 2023, and June 30, 2023, respectively. |
Schedule of Other Current Liabilities | Other current liabilities consisted of the following (in thousands): December 31, 2023 June 30, 2023 Deferred revenue — short-term $ 18,207 17,911 Accrued expenses 22,492 23,426 Lease liability— current 14,417 14,333 Warranty accrual 9,907 8,745 Accrued compensation and benefits 9,985 7,330 Customer deposits 2,626 1,211 Reserve for sales returns 4,680 4,999 Inventory received not billed 57,413 56,862 Other payables 9,490 7,028 Total $ 149,217 $ 141,845 |
Schedule of Other Long-Term Liabilities | Other long-term liabilities consisted of the following (in thousands): December 31, 2023 June 30, 2023 Deferred revenue — long-term $ 9,742 $ 7,774 |
ACCRUED WARRANTY (Tables)
ACCRUED WARRANTY (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Warranty Obligations | Warranty obligations, included in other current liabilities, were as follows (in thousands): Six Months Ended December 31, 2023 2022 Beginning balance $ 8,745 $ 6,394 Accruals for warranties issued during the period 6,232 5,822 Changes in liability for pre-existing warranties during the period 687 222 Settlements made during the period (5,757) (4,586) Ending balance $ 9,907 $ 7,852 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company's debt consisted of the following (in thousands): December 31, 2023 June 30, 2023 Initial Term Loan Facility - short term $ 25,000 $ 25,000 First Amendment Term Loan Facility - short-term 12,500 12,500 Debt issuance costs, net (992) (992) Total Debt - short term 36,508 36,508 Initial Term Loan Facility - long term 406,250 418,750 First Amendment Term Loan Facility - long-term 228,125 234,375 Revolving Facility - long term 325,000 390,000 Debt issuance costs, net (1,243) (1,744) Total Debt - long term $ 958,132 $ 1,041,381 |
Schedule of Estimated Debt and Interest Payment Obligations | The following table summarizes the Company’s estimated debt and interest payment obligations as of December 31, 2023, for the remainder of fiscal 2024 and future fiscal years (in thousands): 2024 (remainder) 2025 2026 2027 2028 Thereafter Total Debt payment obligations $ 18,750 $ 37,500 $ 940,625 $ — $ — $ — $ 996,875 Interest and other payments on debt payment obligations (1) 36,619 71,390 51,605 — — — 159,614 Total $ 55,369 $ 108,890 $ 992,230 $ — $ — $ — $ 1,156,489 (1) Interest payments are calculated based on the applicable rates and payment dates as of December 31, 2023. Although our interest rates on our debt obligations may vary, we have assumed the most recent available interest rates for all periods presented. |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Lease Costs | The following table summarizes our lease costs for the three and six months ended December 31, 2023 and 2022 (in thousands): Financial Statement Classification Three Months Ended December 31, Six Months Ended December 31, 2023 2022 2023 2022 Operating lease costs: Fixed lease costs Operating expenses $ 2,927 $ 2,722 $ 5,863 $ 5,526 Fixed lease costs Cost of revenues 1,073 962 1,754 1,965 Variable lease costs Operating expenses 128 153 326 154 Variable lease costs Cost of revenues 187 142 468 157 Total lease costs $ 4,315 $ 3,979 $ 8,411 $ 7,802 |
Schedule of Undiscounted Future Fixed Payment Obligations Under Recognized Operating Leases and Reconciliation of Operating Lease Liabilities | The following table shows the Company’s undiscounted future fixed payment obligations under the Company’s recognized operating leases and a reconciliation to the operating lease liabilities as of December 31, 2023: Remainder of Fiscal 2024 $ 8,095 Fiscal 2025 14,482 Fiscal 2026 10,092 Fiscal 2027 6,000 Fiscal 2028 4,606 Thereafter 15,231 Total future fixed operating lease payments $ 58,506 Less: Imputed interest $ 4,432 Total operating lease liabilities $ 54,074 Weighted-average remaining lease term - operating leases 6 years Weighted-average discount rate - operating leases 3.2 % |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-Based Compensation Expense | The following table shows total share-based compensation expense included in the consolidated statements of operations and comprehensive income for the three and six months ended December 31, 2023 and 2022 (in thousands): Three Months Ended December 31, Six Months Ended December 31, 2023 2022 2023 2022 Cost of revenues $ 35 $ 13 $ 69 $ 24 Research and development 1,161 813 2,295 1,581 Sales, general and administrative 310 275 642 543 1,506 1,101 $ 3,006 $ 2,148 |
Schedule of Activity of RSUs | The following table summarizes the activity of the RSUs made by the Company: Number of Shares Weighted Average Grant Date Fair Value Per Share Non-vested RSUs, June 30, 2023 62,948 $ 256.78 RSUs granted 17,678 $ 174.92 RSUs vested (8,264) $ 182.19 RSUs canceled (630) $ 290.47 Non-vested RSUs, December 31, 2023 71,732 $ 244.90 |
SEGMENT INFORMATION, REVENUES_2
SEGMENT INFORMATION, REVENUES BY GEOGRAPHY AND SIGNIFICANT CUSTOMERS (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Revenues by Product | Revenues by product type are as follows (in thousands, except percentages): Three Months Ended December 31, Six Months Ended December 31, 2023 2022 2023 2022 Enterprise technology $ 391,492 84 % $ 417,408 85 % $ 771,586 83 % $ 843,706 85 % Service provider technology 73,462 16 % 76,163 15 % 156,446 17 % 147,948 15 % Total revenues $ 464,954 100 % $ 493,571 100 % $ 928,032 100 % $ 991,654 100 % |
Schedule of Revenues by Geography | Revenues by geography based on customer’s ship-to destinations were as follows (in thousands, except percentages): Three Months Ended December 31, Six Months Ended December 31, 2023 2022 2023 2022 North America (1) $ 225,858 49 % $ 227,452 46 % $ 450,642 49 % $ 453,165 46 % Europe, the Middle East and Africa (“EMEA”) 172,951 37 % 195,098 40 % 345,345 37 % 395,241 40 % Asia Pacific 33,270 7 % 43,946 9 % 69,356 7 % 89,278 9 % South America 32,875 7 % 27,075 5 % 62,689 7 % 53,970 5 % Total revenues $ 464,954 100 % $ 493,571 100 % $ 928,032 100 % $ 991,654 100 % (1) Revenue for the United States was $210.4 million and $209.4 million for the three months ended December 31, 2023 and 2022, respectively. Revenue for the United States was $419.6 million and $419.7 million for the six months ended December 31, 2023 and 2022, respectively. |
REVENUES - Narrative (Details)
REVENUES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |||||
Customer deposits | $ 2,626 | $ 2,626 | $ 1,211 | ||
Deferred revenue, current | 18,200 | 18,200 | 17,900 | ||
Deferred revenue — long-term | 9,700 | 9,700 | $ 7,800 | ||
Deferred revenue recognized | $ 4,300 | $ 5,000 | $ 11,000 | $ 13,600 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Deferred revenue recognition period | 2 years | 2 years |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Numerator: | ||||||
Net Income | $ 82,116 | $ 87,750 | $ 112,205 | $ 93,182 | $ 169,866 | $ 205,387 |
Denominator: | ||||||
Weighted-average shares used in computing basic earnings per share (in shares) | 60,448 | 60,429 | 60,447 | 60,428 | ||
Add—dilutive potential common shares: | ||||||
Weighted-average shares used in computing diluted net income per share (in shares) | 60,451 | 60,448 | 60,451 | 60,448 | ||
Net income per share of common stock: | ||||||
Basic (in usd per share) | $ 1.36 | $ 1.86 | $ 2.81 | $ 3.40 | ||
Diluted (in usd per share) | $ 1.36 | $ 1.86 | $ 2.81 | $ 3.40 | ||
Stock options | ||||||
Add—dilutive potential common shares: | ||||||
Dilutive potential common shares (in shares) | 0 | 0 | 0 | 1 | ||
Restricted stock units | ||||||
Add—dilutive potential common shares: | ||||||
Dilutive potential common shares (in shares) | 3 | 19 | 4 | 19 |
BALANCE SHEET COMPONENTS - Sche
BALANCE SHEET COMPONENTS - Schedule of Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jun. 30, 2023 |
Inventories [Abstract] | ||
Finished goods | $ 587,134 | $ 643,499 |
Raw materials | 96,459 | 93,622 |
Total | $ 683,593 | $ 737,121 |
BALANCE SHEET COMPONENTS - Sc_2
BALANCE SHEET COMPONENTS - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jun. 30, 2023 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 157,603 | $ 153,724 |
Less: Accumulated depreciation and amortization | (73,117) | (66,879) |
Property and equipment, net | 84,486 | 86,845 |
Testing equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 18,546 | 18,265 |
Tooling equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 25,488 | 22,687 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 25,749 | 24,968 |
Computer and other equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 10,588 | 10,860 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 9,582 | 9,421 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,843 | 1,716 |
Corporate aircraft | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 65,807 | $ 65,807 |
BALANCE SHEET COMPONENTS - Sc_3
BALANCE SHEET COMPONENTS - Schedule of Other Long-term Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jun. 30, 2023 |
Other Long-term Debt [Abstract] | ||
Hong Kong Tax deposit | $ 60,321 | $ 60,106 |
Intangible assets, net | 4,945 | 5,695 |
Other long-term assets, net | 5,016 | 5,523 |
Total | 70,282 | 71,324 |
Accumulated amortization, intangible assets | $ 6,700 | $ 5,900 |
BALANCE SHEET COMPONENTS - Sc_4
BALANCE SHEET COMPONENTS - Schedule of Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Other Current Liabilities [Abstract] | ||||
Deferred revenue — short-term | $ 18,207 | $ 17,911 | ||
Accrued expenses | 22,492 | 23,426 | ||
Lease liability— current | 14,417 | 14,333 | ||
Warranty accrual | 9,907 | 8,745 | $ 7,852 | $ 6,394 |
Accrued compensation and benefits | 9,985 | 7,330 | ||
Customer deposits | 2,626 | 1,211 | ||
Reserve for sales returns | 4,680 | 4,999 | ||
Inventory received not billed | 57,413 | 56,862 | ||
Other payables | 9,490 | 7,028 | ||
Total | $ 149,217 | $ 141,845 |
BALANCE SHEET COMPONENTS - Sc_5
BALANCE SHEET COMPONENTS - Schedule of Other Long Term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jun. 30, 2023 |
Other Long-Term Liabilities [Abstract] | ||
Deferred revenue — long-term | $ 9,742 | $ 7,774 |
ACCRUED WARRANTY - Narrative (D
ACCRUED WARRANTY - Narrative (Details) | 6 Months Ended |
Dec. 31, 2023 | |
Distributors | |
Product Warranty Liability [Line Items] | |
Warranty period | 1 year |
Direct Sales | |
Product Warranty Liability [Line Items] | |
Warranty period | 2 years |
Minimum | |
Product Warranty Liability [Line Items] | |
Warranty period | 1 year |
Maximum | |
Product Warranty Liability [Line Items] | |
Warranty period | 2 years |
ACCRUED WARRANTY - Schedule of
ACCRUED WARRANTY - Schedule of Warranty Obligations (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Warranty accrual, beginning balance | $ 8,745 | $ 6,394 |
Accruals for warranties issued during the period | 6,232 | 5,822 |
Changes in liability for pre-existing warranties during the period | 687 | 222 |
Settlements made during the period | (5,757) | (4,586) |
Warranty accrual, ending balance | $ 9,907 | $ 7,852 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) | 6 Months Ended | |||
Apr. 03, 2023 | Mar. 30, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | |
Amended and Restated Credit Agreement | Federal funds rate | ||||
Debt Instrument [Line Items] | ||||
Debt basis spread on variable rate | 0.50% | |||
Amended and Restated Credit Agreement | Minimum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Debt basis spread on variable rate | 1% | |||
Amended and Restated Credit Agreement | Minimum | SOFR | ||||
Debt Instrument [Line Items] | ||||
Debt basis spread on variable rate | 2% | |||
Amended and Restated Credit Agreement | Maximum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Debt basis spread on variable rate | 1.75% | |||
Amended and Restated Credit Agreement | Maximum | SOFR | ||||
Debt Instrument [Line Items] | ||||
Debt basis spread on variable rate | 2.75% | |||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 250,000,000 | |||
Periodic payment | $ 3,125,000 | |||
Term Loan | SOFR | ||||
Debt Instrument [Line Items] | ||||
Debt basis spread on variable rate | 0.10% | |||
Term Loan | Minimum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 1% | |||
Term Loan | Minimum | SOFR | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 0% | |||
Revolving credit facility | ||||
Debt Instrument [Line Items] | ||||
Outstanding borrowing | $ 325,000,000 | |||
Principal payment | 65,000,000 | $ 60,000,000 | ||
Revolving credit facility | Amended and Restated Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility | $ 700,000,000 | |||
Debt issuance costs | 2,200,000 | |||
Issuance fees per annum | 0.125% | |||
Maximum leverage ratio | 3.5 | |||
Minimum consolidated interest coverage ratio | 3.5 | |||
Available borrowing capacity | 375,000,000 | |||
Repayment of outstanding balance | 79,000,000 | |||
Principal payment | 65,000,000 | |||
Interest payment | 14,000,000 | |||
Revolving credit facility | Amended and Restated Credit Agreement | Applicable interest rate | ||||
Debt Instrument [Line Items] | ||||
Debt basis spread over applicable interest rate | 2% | |||
Revolving credit facility | Amended and Restated Credit Agreement | Minimum | ||||
Debt Instrument [Line Items] | ||||
Commitment fee percentage of unused borrowings | 0.20% | |||
Revolving credit facility | Amended and Restated Credit Agreement | Maximum | ||||
Debt Instrument [Line Items] | ||||
Commitment fee percentage of unused borrowings | 0.35% | |||
Initial Term Loan | Amended and Restated Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility | $ 500,000,000 | |||
Additional borrowing capacity | 500,000,000 | |||
Outstanding borrowing | 431,300,000 | |||
Initial Term Loan | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Periodic payment | $ 6,250,000 | |||
Initial Term Loan | Term Loan | Minimum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Debt basis spread on variable rate | 0.50% | |||
Initial Term Loan | Term Loan | Minimum | SOFR | ||||
Debt Instrument [Line Items] | ||||
Debt basis spread on variable rate | 1.50% | |||
Initial Term Loan | Term Loan | Maximum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Debt basis spread on variable rate | 1.25% | |||
Initial Term Loan | Term Loan | Maximum | SOFR | ||||
Debt Instrument [Line Items] | ||||
Debt basis spread on variable rate | 2.25% | |||
Letters of credit | Amended and Restated Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility | $ 25,000,000 | |||
Letters of credit | Amended and Restated Credit Agreement | Minimum | ||||
Debt Instrument [Line Items] | ||||
Commitment fee percentage of unused borrowings | 1.50% | |||
Letters of credit | Amended and Restated Credit Agreement | Maximum | ||||
Debt Instrument [Line Items] | ||||
Commitment fee percentage of unused borrowings | 2.25% | |||
Sublimit for swingline loan advances | Amended and Restated Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility | $ 25,000,000 | |||
Sublimit for swingline loan advances | Amended and Restated Credit Agreement | SOFR, One Month Rate | ||||
Debt Instrument [Line Items] | ||||
Debt basis spread on variable rate | 1% | |||
Sublimit for swingline loan advances | Term Loan | Minimum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Debt basis spread on variable rate | 0.50% | |||
Sublimit for swingline loan advances | Term Loan | Maximum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Debt basis spread on variable rate | 1.25% | |||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Principal payment | 18,750,000 | $ 12,500,000 | ||
Term Loan | Amended and Restated Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Repayment of outstanding balance | 45,900,000 | |||
Principal payment | 18,800,000 | |||
Interest payment | 27,100,000 | |||
First Amendment Term Facility | Amended and Restated Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Outstanding borrowing | $ 240,600,000 |
DEBT - Schedule of Debt (Detail
DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Jun. 30, 2023 |
Debt Instrument [Line Items] | ||
Total Debt - short term | $ 36,508 | $ 36,508 |
Debt issuance costs, net | (992) | (992) |
Total Debt - long term | 958,132 | 1,041,381 |
Debt issuance costs, net | (1,243) | (1,744) |
Initial Term Loan | ||
Debt Instrument [Line Items] | ||
Total Debt - short term | 25,000 | 25,000 |
Total Debt - long term | 406,250 | 418,750 |
First Amendment Term Loan | ||
Debt Instrument [Line Items] | ||
Total Debt - short term | 12,500 | 12,500 |
Total Debt - long term | 228,125 | 234,375 |
Revolving Facility | ||
Debt Instrument [Line Items] | ||
Total Debt - long term | $ 325,000 | $ 390,000 |
DEBT - Schedule of Debt and Int
DEBT - Schedule of Debt and Interest Payment Obligations (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Debt payment obligations | |
Debt payment obligations, 2024 (remainder) | $ 18,750 |
Debt payment obligations, 2025 | 37,500 |
Debt payment obligations, 2026 | 940,625 |
Debt payment obligations, 2027 | 0 |
Debt payment obligations, 2028 | 0 |
Debt payment obligations, thereafter | 0 |
Debt payment obligations, total | 996,875 |
Interest and other payments on debt payment obligations | |
Interest and other payments on debt payment obligations, 2024 (remainder) | 36,619 |
Interest and other payments on debt payment obligations, 2025 | 71,390 |
Interest and other payments on debt payment obligations, 2026 | 51,605 |
Interest and other payments on debt payment obligations, 2027 | 0 |
Interest and other payments on debt payment obligations, 2028 | 0 |
Interest and other payments on debt payment obligations, thereafter | 0 |
Interest and other payments on debt payment obligations, total | 159,614 |
Total | |
Debt and interest payment obligations, 2024 (remainder) | 55,369 |
Debt and interest payment obligations, 2025 | 108,890 |
Debt and interest payment obligations, 2026 | 992,230 |
Debt and interest payment obligations, 2027 | 0 |
Debt and interest payment obligations, 2028 | 0 |
Debt and interest payment obligations, thereafter | 0 |
Debt and interest payment obligations, total | $ 1,156,489 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | Dec. 31, 2023 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lease, extension of terms | 12 months |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lease, extension of terms | 60 months |
LEASES - Schedule of Lease Cost
LEASES - Schedule of Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Lease, Cost [Abstract] | ||||
Total lease costs | $ 4,315 | $ 3,979 | $ 8,411 | $ 7,802 |
Operating lease payments | 4,300 | 4,000 | 8,600 | 7,600 |
Operating expenses | ||||
Lease, Cost [Abstract] | ||||
Fixed lease costs | 2,927 | 2,722 | 5,863 | 5,526 |
Variable lease costs | 128 | 153 | 326 | 154 |
Cost of revenues | ||||
Lease, Cost [Abstract] | ||||
Fixed lease costs | 1,073 | 962 | 1,754 | 1,965 |
Variable lease costs | $ 187 | $ 142 | $ 468 | $ 157 |
LEASES - Schedule of Operating
LEASES - Schedule of Operating Leases Future Payment Obligations (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
Remainder of Fiscal 2024 | $ 8,095 |
Fiscal 2025 | 14,482 |
Fiscal 2026 | 10,092 |
Fiscal 2027 | 6,000 |
Fiscal 2028 | 4,606 |
Thereafter | 15,231 |
Total future fixed operating lease payments | 58,506 |
Less: Imputed interest | 4,432 |
Total operating lease liabilities | $ 54,074 |
LEASES - Schedule of Weighted-A
LEASES - Schedule of Weighted-Average Term and Discount Rate (Details) | Dec. 31, 2023 |
Leases [Abstract] | |
Weighted-average remaining lease term - operating leases | 6 years |
Weighted-average discount rate - operating leases | 3.20% |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Millions | Apr. 19, 2017 patent | Dec. 31, 2023 USD ($) | Apr. 11, 2018 claim |
Loss Contingencies [Line Items] | |||
Purchase obligation | $ 1,045 | ||
Other obligations | 5.5 | ||
Transition Tax Obligation | |||
Loss Contingencies [Line Items] | |||
Transition tax obligation | 50.6 | ||
Transition tax obligation for fiscal 2025 | 22.5 | ||
Transition tax obligation for fiscal 2026 | $ 28.1 | ||
Vivato X R | |||
Loss Contingencies [Line Items] | |||
Infringed number | patent | 1 | ||
Number of lawsuits invalidated | claim | 2 | ||
Number of lawsuits | claim | 3 |
COMMON STOCK AND TREASURY STO_2
COMMON STOCK AND TREASURY STOCK - Narrative (Details) | May 03, 2022 USD ($) |
Common Stock | 2022 May Program | |
Equity, Class of Treasury Stock [Line Items] | |
Stock repurchase program, authorized amount | $ 200,000,000 |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Authorized shares, stock incentive plans (in shares) | 4,921,319 | 4,921,319 | ||
Options granted (in shares) | 0 | 0 | ||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate intrinsic value of options exercised | $ 0 | $ 0 | $ 600,000 | |
Unrecognized compensation costs | 0 | 0 | ||
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation costs | 11,400,000 | 11,400,000 | ||
Intrinsic value of RSUs vested | 100,000 | $ 600,000 | 1,400,000 | $ 2,700,000 |
Intrinsic value of RSUs outstanding | $ 10,000,000 | $ 10,000,000 | ||
Weighted-average period recognized (in years) | 3 years |
SHARE-BASED COMPENSATION - Sche
SHARE-BASED COMPENSATION - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 1,506 | $ 1,101 | $ 3,006 | $ 2,148 |
Cost of revenues | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 35 | 13 | 69 | 24 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 1,161 | 813 | 2,295 | 1,581 |
Sales, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 310 | $ 275 | $ 642 | $ 543 |
SHARE-BASED COMPENSATION -Sched
SHARE-BASED COMPENSATION -Schedule of RSU Activity (Details) - Restricted stock units | 6 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Number of Shares | |
Non-vested RSUs, beginning balance (in shares) | shares | 62,948 |
RSUs granted (in shares) | shares | 17,678 |
RSUs vested (in shares) | shares | (8,264) |
RSUs canceled (in shares) | shares | (630) |
Non-vested RSUs, ending balance (in shares) | shares | 71,732 |
Weighted Average Grant Date Fair Value Per Share | |
Non-vested RSUs, beginning balance (in usd per share) | $ / shares | $ 256.78 |
RSUs granted (in usd per share) | $ / shares | 174.92 |
RSUs vested (in usd per share) | $ / shares | 182.19 |
RSUs canceled (in usd per share) | $ / shares | 290.47 |
Non-vested RSUs, ending balance (in usd per share) | $ / shares | $ 244.90 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
May 18, 2023 USD ($) | Dec. 31, 2023 USD ($) subsidiary | Dec. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) subsidiary | Dec. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2020 USD ($) | Jun. 30, 2019 USD ($) | Jun. 30, 2018 USD ($) | Mar. 30, 2023 USD ($) | |
Income Tax Disclosure [Abstract] | |||||||||||
Provision for income taxes | $ 20,724,000 | $ 21,676,000 | $ 40,053,000 | $ 39,856,000 | |||||||
Effective income tax rate | 20.20% | 16.20% | 19.10% | 16.30% | |||||||
Unrecognized tax benefits | $ 34,700,000 | $ 34,700,000 | |||||||||
Interest accrued related to uncertain tax matters | $ 4,300,000 | $ 4,300,000 | |||||||||
Number of subsidiaries (or more) | subsidiary | 1 | 1 | |||||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||||||||||
Reserve for tax uncertainty | $ 0 | $ 0 | |||||||||
Hong Kong Inland Revenue Department | |||||||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||||||||||
Payment for tax deposit | 60,300,000 | ||||||||||
Hong Kong Inland Revenue Department | Tax Year 2010 - 2016 | |||||||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||||||||||
Payment for tax deposit | $ 3,000,000 | $ 21,900,000 | $ 15,500,000 | $ 13,400,000 | $ 6,600,000 | ||||||
Hong Kong Inland Revenue Department | Tax Year 2017 | |||||||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||||||||||
Payment for tax deposit | $ 100,000 | ||||||||||
Additional tax deposit requested | $ 300,000 | ||||||||||
IRS | |||||||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||||||||||
Loss contingency, estimate of possible loss | $ 50,000,000 | $ 50,000,000 |
SEGMENT INFORMATION, REVENUES_3
SEGMENT INFORMATION, REVENUES BY GEOGRAPHY AND SIGNIFICANT CUSTOMERS - Narrative (Details) | 6 Months Ended |
Dec. 31, 2023 segment product | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Number of product types | product | 2 |
SEGMENT INFORMATION, REVENUES_4
SEGMENT INFORMATION, REVENUES BY GEOGRAPHY AND SIGNIFICANT CUSTOMERS - Schedule of Revenues by Product (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 464,954 | $ 493,571 | $ 928,032 | $ 991,654 |
Enterprise technology | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 391,492 | 417,408 | 771,586 | 843,706 |
Service provider technology | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 73,462 | $ 76,163 | $ 156,446 | $ 147,948 |
Product concentration risk | Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenue percentage | 100% | 100% | 100% | 100% |
Product concentration risk | Enterprise technology | Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenue percentage | 84% | 85% | 83% | 85% |
Product concentration risk | Service provider technology | Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenue percentage | 16% | 15% | 17% | 15% |
SEGMENT INFORMATION, REVENUES_5
SEGMENT INFORMATION, REVENUES BY GEOGRAPHY AND SIGNIFICANT CUSTOMERS - Schedule of Revenues by Geography (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 464,954 | $ 493,571 | $ 928,032 | $ 991,654 |
North America | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 225,858 | 227,452 | 450,642 | 453,165 |
Europe, the Middle East and Africa (“EMEA”) | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 172,951 | 195,098 | 345,345 | 395,241 |
Asia Pacific | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 33,270 | 43,946 | 69,356 | 89,278 |
South America | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 32,875 | 27,075 | 62,689 | 53,970 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 210,400 | $ 209,400 | $ 419,600 | $ 419,700 |
Geographic concentration risk | Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenue percentage | 100% | 100% | 100% | 100% |
Geographic concentration risk | Revenues | North America | ||||
Segment Reporting Information [Line Items] | ||||
Revenue percentage | 49% | 46% | 49% | 46% |
Geographic concentration risk | Revenues | Europe, the Middle East and Africa (“EMEA”) | ||||
Segment Reporting Information [Line Items] | ||||
Revenue percentage | 37% | 40% | 37% | 40% |
Geographic concentration risk | Revenues | Asia Pacific | ||||
Segment Reporting Information [Line Items] | ||||
Revenue percentage | 7% | 9% | 7% | 9% |
Geographic concentration risk | Revenues | South America | ||||
Segment Reporting Information [Line Items] | ||||
Revenue percentage | 7% | 5% | 7% | 5% |
SUBSEQUENT EVENTS - Narrative (
SUBSEQUENT EVENTS - Narrative (Details) | Feb. 05, 2024 $ / shares |
Subsequent Event | |
Subsequent Event [Line Items] | |
Dividends declared per share (in dollars per share) | $ 0.6 |