Ubiquiti Networks (NASDAQ:UBNT) provides wireless network products to service provides for the underserved markets. Ubiquiti focuses on emerging markets where individual users generally do not have access to broadband networks. The company makes money by selling tools such as antennas and high performance radios which can handle the internet transmission needs for data, voice, and video applications. In order to keep costs low, Ubiquiti has historically relied on the community to spread product awareness. While this helps maintain low costs, it also slows adoption rates.
For the full year 2011, Ubiquiti's total revenues were $197.9M. This compares to $137.0M in 2010. The company reported a net income of $49.7M in 2011. This compares favorably to the net loss of $5.5M the company suffered in 2010. The rise in net income was caused primarily by a combination of increased sales and a drop in research and development costs.
The company's initial public offering of stock on the NASDAQ occurred on October 13, 2011. The company offered 7M shares each for $15. This was at the bottom of the revised $15-$17 price range. The company had originally announced a range of $20-$22. This deal raised $106M. The lead managers of the deal were UBS, Raymond James, and Deutsche.
Because Ubiquiti focuses on developing markets, its potential customers are particularly hard to reach. As a result, Ubiquiti has historically relied on other customers to spread the word about the company's products. While this translates to a low sales and marketing cost, it limits the company's ability to grow rapidly. Furthermore, it is more difficult for Ubiquiti to quickly penetrate a new market. While the company can alter this by developing a sales force, such a change will result in increased costs.