What happened

Shares of Ubiquiti (UI -3.85%) popped as much as 13% this morning after the company reported fiscal second-quarter earnings that easily beat analyst expectations. As of 11:15 a.m. EST, the stock had given back some of those gains but was still up 6%.

So what

Revenue in the fiscal second quarter increased 56% to $479.4 million, well above the consensus estimate of $364 million. That resulted in adjusted earnings per share of $2.53, while Wall Street analysts were modeling for just $1.77. The networking technology company also repurchased $55 million worth of its stock during the quarter.

Green stock chart going up

Image source: Getty Images.

Ubiquiti said that revenue growth was primarily attributable to an increase in direct sales through the company's online store. Gross margin expanded thanks to a favorable shift in product mix, which was somewhat offset by higher logistics costs, such as shipping.

Now what

The company has been impacted in recent years by former President Donald Trump's tariffs on China, which have been declining. President Joe Biden has said that he won't immediately lift those tariffs, so it remains unclear how the new administration may approach them as they relate to Ubiquiti's business. Biden is reportedly evaluating the tariffs.

Ubiquiti imports its products from China and warned that its results will continue to be impacted as long as the tariffs remain. The company did not provide guidance for the current quarter or host a conference call to discuss the results.