Universal Electronics Reports Financial Results for the Second Quarter 2025

Universal Electronics Inc. (UEI) (NASDAQ:UEIC) reported financial results for the three and six months ended June 30, 2025.

"In the second quarter of 2025, our product development and footprint optimization efforts delivered 46% revenue growth in the connected home, which drove strong gross margins and operating cash flow," said Chief Operating Officer and Interim Chief Executive Officer Richard Carnifax. "Focused on attractive long-term market opportunities, we are allocating investment to profitable growth areas, particularly in connected home. We are securing new customers and scaling existing accounts in Europe and North America with the understanding that customer product demand in this channel can be inconsistent across quarters. That said, our foundation of innovation and creating value for customers, which is essential to growth, is fortified by our strong balance sheet, with improvements this year resulting in a net cash position for the first time since December 2021. Repeatedly, we have demonstrated our ability to proactively adapt to the environment. Having achieved strong productivity at our facility in Vietnam and with the current trends in home entertainment resulting in lower volume, we have decided to optimize our footprint further and close our facility in Mexico.

"We are actively engaged with the Board of Directors and our Operational Review Committee of the Board on nurturing long-term profitable growth while continuously evaluating and improving our operating model to materially improve profitability and strengthen the balance sheet which creates value for customers and generates a positive return for our stockholders."

Financial Results for the Three Months Ended June 30: 2025 Compared to 2024

• GAAP net sales were $97.7 million, compared to $90.5 million.
  • GAAP net sales in connected home were $34.1 million, compared to $23.3 million.
  • GAAP net sales in home entertainment were $63.6 million, compared to $67.2 million.
• GAAP gross margins were 29.9%, compared to 28.7%; Adjusted Non-GAAP gross margins were 29.9%, compared to 28.7%.
• GAAP operating income was $1.0 million, compared to GAAP operating loss of $4.5 million; Adjusted Non-GAAP operating income was $2.9 million, compared to Adjusted Non-GAAP operating loss $1.1 million.
• GAAP net loss was $2.9 million, or $0.22 per share, compared to $8.2 million, or $0.63 per share; Adjusted Non-GAAP net income was $2.4 million, or $0.18 per diluted share, compared to Adjusted Non-GAAP net loss of $1.2 million, or $0.09 per share.
• At June 30, 2025, cash and cash equivalents were $34.3 million.

Financial Results for the Six Months Ended June 30: 2025 Compared to 2024

• GAAP net sales were $190.0 million, compared to $182.4 million.
  • GAAP net sales in connected home were $65.8 million, compared to $47.5 million.
  • GAAP net sales in home entertainment were $124.2 million, compared to $134.9 million.
• GAAP gross margins were 29.1%, compared to 28.5%; Adjusted Non-GAAP gross margins were 29.1%, compared to 28.5%.
• GAAP operating loss was $2.7 million, compared to $11.4 million; Adjusted Non-GAAP operating income was $1.4 million, compared to Adjusted Non-GAAP operating loss of $4.6 million.
• GAAP net loss was $9.2 million, or $0.70 per share, compared to $16.8 million, or $1.30 per share; Adjusted Non-GAAP net income was $0.8 million, or $0.06 per diluted share, compared to Adjusted Non-GAAP net loss of $4.6 million, or $0.36 per share.

Financial Outlook

For the third quarter of 2025, the company expects GAAP net sales to range from $92.0 million to $102.0 million, compared to $102.1 million in the third quarter of 2024. GAAP net sales in connected home are expected to range from $30.0 million to $34.0 million, compared to $26.4 million in the third quarter of 2024. GAAP net sales in home entertainment are expected to range from $62.0 million to $68.0 million, compared to $75.7 million in the third quarter of 2024.

GAAP loss per share for the third quarter of 2025 is expected to range from $0.39 to $0.29, compared to GAAP loss per share of $0.20 in the third quarter of 2024. Adjusted Non-GAAP earnings per diluted share are expected to range from $0.08 to $0.18 per share, compared to Adjusted Non-GAAP earnings per diluted share of $0.10 in the third quarter of 2024. The third quarter 2025 Adjusted Non-GAAP earnings per diluted share estimate excludes $0.47 per share related to, among other things, stock-based compensation, amortization of acquired intangible assets, factory restructuring costs, impairment, foreign currency gains and losses and the related tax impact of these adjustments. For a more detailed explanation of Non-GAAP measures, please see the Use of Non-GAAP Financial Metrics and Additional Financial Information discussion, the Reconciliation of Adjusted Non-GAAP Financial Results and Adjusted Non-GAAP Financial Outlook and Financial Results, each located elsewhere in this press release.

Conference Call Information

UEI's management team will hold a conference call today, Thursday, August 7, 2025 at 4:30 p.m. ET / 1:30 p.m. PT, to discuss its second quarter 2025 earnings results, review recent activity and answer questions. To attend the call please register at https://register-conf.media-server.com/register/BI451ff6a969ea45fdbaa16b0263f5607d to receive a computer-generated dial-in number and a unique pin number. The conference call will also be broadcast live on the investor section of the UEI website where it will be available for replay for 90 days.

Forward-looking Statements

This press release and accompanying schedules contain "forward-looking statements" within the meaning of federal securities laws, including net sales, profit margin and earnings trends, estimates and assumptions; our goals, focus, strategies and operating model; our expectations about new product introductions and market opportunities; expected benefits from the closure of our Mexico facility; and similar statements concerning anticipated future events and expectations that are not historical facts. We caution you that these statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including those we identify below and other risk factors that we identify in our annual report on Form 10-K for the year ended December 31, 2024 and the periodic and current reports filed and furnished since then.

Risks that could affect forward-looking statements in this press release include: our continued ability to timely develop and deliver innovative control solutions and technologies that are accepted by our customers, both near- and long-term; our ability to attract new customers and to successfully capture new sales in all markets we serve, including new product and customer wins in the connected home markets as anticipated by management; our ability to continue optimizing our manufacturing footprint and realize the lower concentration risks as expected by management; our ability to maintain our market share in the traditional subscription broadcast market; our ability to manage through the worldwide inflationary pressures and macroeconomic conditions, including the continued strength of the U.S. Dollar as compared to the functional currencies in countries where we conduct our operations; our ability to continue to manage our business, inventories and cash flows to achieve our net sales, margins and earnings through financial discipline, operational efficiency, product line management, liquidity requirements, capital expenditures and other investment spending expectations; our continued ability to successfully enforce our patented technology, including with respect to our litigation against Roku; our continued ability to strategically enhance, expand, and monetize our intellectual property portfolios; the continued fluctuation in our market capitalization and the effects our currently announced stock repurchase program may have; the use of artificial intelligence applications which could result in cybersecurity incidents that implicate the personal data of end users or other unintended ethical, reputational, competitive harm or legal liability; our ability to mitigate the effects that tariffs could have on our profitability through price increases and other efforts; the direct and indirect impact we may experience with respect to our business and financial results and management's ability to anticipate and mitigate the impact stemming from the continued economic uncertainty affecting consumers' confidence and spending, natural disasters or other events beyond our control, public health crises (including an outbreak of infectious disease), governmental actions, including the changes in or enhanced use of laws, regulations and policies may have on our business including the impact of decreased governmental incentive programs worldwide or of enhanced or expanded trade regulations, including the expanded use of domestic and retaliatory tariffs, the effects of political unrest, war, terrorist activities, or other hostilities; the effects and uncertainties and other factors more fully described in our reports filed with the Securities and Exchange Commission. Since it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results, the above list should not be considered a complete list. Further, any of these factors could cause actual results to differ materially from the expectations we express or imply in this press release. We make these forward-looking statements as of the date hereof, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Use of Non-GAAP Financial Metrics and Additional Financial Information

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, UEI provides Adjusted Non-GAAP information as additional information for its operating results. References to Adjusted Non-GAAP information are to non-GAAP financial measures. These measures are not required by, in accordance with, or an alternative for, GAAP and may be different from non-GAAP financial measures used by other companies. UEI's management uses these measures for reviewing the financial results of UEI for budget planning purposes and for making operational and financial decisions. Management believes that providing these non-GAAP financial measures to investors, as a supplement to GAAP financial measures, help investors evaluate UEI's core operating and financial performance and business trends consistent with how management evaluates such performance and trends. Additionally, management believes these measures facilitate comparisons with the core operating and financial results and business trends of competitors and other companies.

Adjusted Non-GAAP gross profit is defined as gross profit excluding stock-based compensation expense. Adjusted Non-GAAP operating expenses are defined as operating expenses excluding stock-based compensation expense, amortization of acquired intangibles assets, severance, factory restructuring costs and costs associated with certain litigation efforts. Adjusted Non-GAAP net income (loss) is defined as net loss excluding the aforementioned items, foreign currency gains and losses, as well as the related tax effects of all adjustments. Adjusted Non-GAAP income (loss) per diluted share is calculated using Adjusted Non-GAAP net income (loss). A reconciliation of these financial measures to the most directly comparable GAAP financial measures is included at the end of this press release.

About Universal Electronics

Universal Electronics Inc. (NASDAQ:UEIC) is the global leader in wireless universal control solutions for the home. The company brings to life millions of innovative control products each year that focus on a user-centric approach to building control products and applications that simplify user interaction with highly complex technologies in the home, removing interoperability challenges as a roadblock for user adoption, with privacy first and a secure by design approach to today's smart devices. Our solutions are trusted by the world's leading brands in home entertainment and the connected home markets, including Fortune 500 customers Daikin, Carrier, Comcast, Vivint Smart Home, Samsung, Sony, Hunter Douglas and Somfy. The company's pioneering breakthrough innovations include its award-winning voice control entertainment remote controls and QuickSet Cloud, the world's leading platform for automated device and service discovery, set-up and control, and user experience personalization for the home. For more information, visit www.uei.com.

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UEI: Bryan Hackworth, CFO, UEI, [email protected] 480-530-3000

Investors: Kirsten Chapman, Alliance Advisors, [email protected], 415-433-3777