What happened

Shares of Ubiquiti Networks Inc. (NASDAQ:UBNT) climbed 15.9% in May, according to data from S&P Global Market Intelligence, after the wireless networking products leader delivered stronger-than-expected quarterly results

The bulk of Ubiquiti Networks' gains last month came on May 10, 2018, the day it announced that revenue in its latest quarter had climbed 14.7% year over year to $250.4 million, which translated to adjusted earnings of $76 million, or $0.98 per share. Both figures arrived near the high end of Ubiquiti's financial guidance ranges provided three months earlier.

Man in suit drawing chart with finger indicating stock-market gains.

IMAGE SOURCE: GETTY IMAGES.

So what

On the one hand, Ubiquiti Networks' growth was driven entirely by its enterprise technology segment -- which includes its UniFi and mFi product lines as well as its consumer-oriented AmpliFi and FrontRow products -- where revenue climbed 31.6% year over year to $149.5 million. On the other hand, Ubiquiti's Service Provider Technology business saw sales decline 3.6% to $100.9 million.

CEO Robert Pera noted that UniFi products have diversified from their core WiFi access point base to include new products like CloudKeys, Security Gateways, PoE Switches, and video products. 

Now what

If that wasn't enough, Ubiquiti also authorized a new $200 million share repurchase plan, and reaffirmed guidance for full fiscal-year (ended June 30, 2018) earnings to arrive at roughly $3.70 per share on revenue of $1.0 billion -- both near the bottom ends of its original outlook provided late last calendar year.

For perspective, leading up to the report Ubiqiuiti stock was still reeling from both a mixed quarter (caused largely by weak sales of FrontRow products) in February, followed by news later that month that it's the subject of an SEC probe on "a range of topics" including its accounting practices and relationships with distributors. On the latter, it's worth noting that Ubiquiti hasn't necessarily done anything wrong and is fully cooperating with the SEC. 

Until more details emerge to that end, however, this encouraging quarter was exactly what Ubiquiti Networks investors had wanted to hear. And it's no surprise to see the stock surging in response.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Ubiquiti Networks. The Motley Fool has a disclosure policy.