and marketing model and effectively create awareness of our brand and
products. Word of mouth referrals from the
quality leads for our distributors at relatively little cost.
• Self-sustaining product support. The engaged members of the Ubiquiti
Community have enabled us to foster a large, cost efficient, highly-scalable and, we believe, self-sustaining mechanism for rapid product support and dissemination of information. 39
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By reducing the cost of development, sales, marketing and support we are able to eliminate traditional business model inefficiencies and offer innovative solutions with disruptive price performance characteristics to our customers. For the years ended
June 30, 2013, 2012 and 2011, our revenue was $320.8 million, $353.5 millionand $197.9 million, respectively. In the same periods, we generated a net income of $80.5 million, $102.6 millionand $49.7 million, respectively. In this Annual Report on Form 10-K we refer to the fiscal years ended June 30, 2013, 2012 and 2011 as fiscal 2013, fiscal 2012 and fiscal 2011, respectively. Key Components of Our Results of Operations and Financial Condition Revenues Our revenues are derived principally from the sale of networking hardware and management tools. In addition, while we do not sell maintenance and support separately, because we have historically included it free of charge in many of our arrangements, we attribute a portion of our systems revenues to this implied post-contract customer support ("PCS"). We classify our revenues into three product categories: systems, embedded radios and antennas/other.
• Systems consists of three product categories:
? Our proprietary airMAX platform products for network operators and service providers; ? Our new platform products which include significant platforms introduced in late fiscal 2011 and during 2012 which includes the UniFi, airVision and airFiber, mFi and EdgeMAX platforms; and ? Other 802.11 standard products including base stations, radios, backhaul equipment and Customer Premise Equipment ("CPE").
• Embedded radios consist of more than 25 radio products primarily for OEMs,
including both point to point and point to multipoint radios in the 2.0 to
6.0GHz spectrum, that are offered with a variety of features.
• Antennas/other consist of antenna products in the 2.0 to 6.0GHz spectrum,
as well as miscellaneous products such as mounting brackets, cables and
power over Ethernet adapters. These products include both high performance
sector and directional antennas. This category also includes our allocation
of revenues to PCS.
We sell substantially all of our products through a limited number of distributors and other channel partners, such as resellers and OEMs. Sales to distributors accounted for 98%, 98% and 97% of our revenues in the years ended
June 30, 2013, 2012 and 2011, respectively. Other channel partners, such as resellers and OEMs, largely accounted for the balance of our revenues. We sell our products without any right of return. Cost of Revenues Our cost of revenues is comprised primarily of the costs of procuring finished goods from our contract manufacturers and chipsets that we consign to certain of our contract manufacturers. In addition, cost of revenues includes tooling, labor and other costs associated with engineering, testing and quality assurance, warranty costs, stock-based compensation, logistics related fees and excess and obsolete inventory. In addition to utilizing contract manufacturers, we outsource our logistics warehousing and order fulfillment functions, which are located primarily in China, and to a lesser extent, Taiwan. We also evaluate and utilize other vendors for various portions of our supply chain from time to time. Our operations organization consists of employees and consultants engaged in the management of our contract manufacturers, new product introduction activities, logistical support and engineering. Gross Profit Our gross profit has been, and may in the future be, influenced by several factors including changes in product mix, target end markets for our products, pricing due to competitive pressure, production costs, foreign exchange rates and global demand for electronic components. Although we procure and sell our products in U.S. dollars, our contract manufacturers incur many costs, including labor costs, in other currencies. To the extent that the exchange rates move unfavorably for our contract manufacturers, they may try to pass these additional costs on to us, which could have a material impact on our future average selling prices and unit costs.