Q4 2023 uCloudlink Group Inc Earnings Call
[music].
Operator: Good day, and welcome to the Ucloudlink Group Inc. fourth quarter and full year 2023 earnings conference call. All participants will be in a listen-only mode.
Good day and welcome to the Q Cloud Link Group, Inc, fourth quarter and full year 2023 earnings conference call.
All participants will be in a listen only mode.
Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on a touch-tone phone. To withdraw your question, please press star then 2.
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Actually followed by zero.
After todays presentation, there will be an opportunity to ask questions.
To ask a question you May press Star then one on a touchtone phone.
To withdraw your question. Please press Star then two.
Operator: Please note, this event is being recorded. I would now like to turn the conference over to Jillian Zeng. Please go ahead.
This event is being recorded.
I would now like to turn the conference over to Julien Zhang. Please go ahead.
Jillian Zeng: Hello, everyone, and thank you for joining us on Ucloudlink's fourth quarter and full year 2023 earnings call. The earnings release and our earnings presentation are now available on our IR website, ir.ucloudlink.com. Joining me on today's call are Mr. Zhiping Peng, our co founder and the chairman of the board of directors. Mr. Chaohui Chen, our co founder, director, and chief executive officer, and Mr. Yimeng Shi, our Chief Financial Officer.
Okay.
Hello, everyone and thank you for joining us all you're calling for fourth quarter and full year 2023 earnings call. The earnings release and our earnings presentation are now available Oh, well I have X sight I had though your closings dot com joining me on today's call May start Chipping, Paul our co founder and the.
Chairman of board of Directors, Mr. Chao Chen our co founder director and Chief Executive Officer, and amidst the email Shea our Chief Financial Officer, Mr. Chen will begin with an overview of our recent business highlights Mr. Hu will then discuss our financial and.
Jillian Zeng: Mr. Chen will begin with an overview of our recent business highlights. Mr. Shi will then discuss our financial and operational highlights for the fourth quarter and fall year 2023. They will all be able to take your questions in the Q&A section that follows. Before we proceed, please note that this call may contain forward-looking statements made pursuant to the Safe Harbor Provisions of the Private Security Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and observations that involve known and unknown risks, uncertainties, and other factors not under the company's control, which may cause actual results, performance, or achievements of the companies to be materially different from the results, performance, or expectations implied by this forward-looking statement. All forward-looking statements are expressly qualified in their entirety by the customary statements, risk factors, and details of the company's filings The company does not have any obligation to revise or update any forward-looking statements as a result of new information.
Operational highlights for fourth quarter, and full year 'twenty 'twenty slate.
They will all be able to take your questions in the Q&A section that follows before they proceed. Please note that this call may contain forward looking statements made to pursue choose the safe Harbor provisions of the present, so clarity and litigation Reform Act of the 1995.
These forward looking statements are based on management's current expectations and observations, that's a well known and unknown risks.
I'm certain tastes and other factors not under the company's control, which may cause actual results couple of most all achievements of the company to be materially different from the results of almost all expectations implied by these forward looking statements all forward looking statements.
Properly qualify either entity by the Cosmo raise statements risk factors and details of the Companys filings with the FCC.
The company does not cause you any obligation to revise or update any forward looking statements as a result of new information.
Jillian Zeng: Future events can't be predicted in market conditions or otherwise except as required by law. Please also note that Ucloudlink's earnings press release and this conference call include discussions of non-audited gap financial information and non-audited non-gap financial measures. Ucloudlink's press release contains a reconciliation of the audited non-GAAP measures to the most directly comparable audited GAAP measures. I will now turn the call over to Mr. Chen. Please go ahead. Thank you, Jillian.
Future events tense in market conditions or otherwise, except as required by law. Please also note that you called links are nice press release and this conference call include discussions of non audited GAAP financial information and the minority to the non-GAAP financial measures you called.
<unk> press release contains a REIT constellation after a multitude of non-GAAP measures to the most directly comparable nor did take GAAP measures.
I'll now turn the call over to Mr. Chen. Please go ahead.
Thank you Julien.
Chaohui Chen: And good morning, everyone. Thank you for joining us. We appreciate everyone taking time out of your busy day. We are very pleased to report another strong set of results for the year 2023, highlighting a 19.8% increase in four years' revenues to US$85.6 million. 2023 was a milestone in the turnaround of our business following the COVID-19 pandemic, with operating cash flow cash inflow of US dollar 6.5 million and net income of US dollar 2.8 million. Our 1.0 International Data Connectivity Services business continued to recover in the year 2023. In our major markets, China and Japan, we are seeing the early signs of a recovery in outbound tourism and business travel following the COVID-19 pandemic, with more Chinese tourists beginning to use our long membrane services again. Canning, gaining momentum.
Good morning, everyone. Thank you for joining us.
Appreciate everyone taking time off.
We are very pleased to report and not a strong set of results.
Our 2023 highlights.
No I can point to 8% increase in four years revenues to U S dollar $55 6 million.
Totally a 2023 was a milestone in hello, everyone.
Business following the COVID-19 pandemic.
With operating cash flow testing.
Testing for all U S dollar.
And net income of U S dollar $2 8 million.
Oh, well at one point.
As a nation of data connectivity services.
Things continue to recover and get to a thousand.
And history in all our major markets, China and Japan.
We are seeing the early signs of a recovery in outbound tourism is basically following the COVID-19 pandemic with small Chinese tourists.
To use our loan demand branded services again and the recovery in Japan.
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Chaohui Chen: Our market share in these major markets is growing, which will create significant growth opportunities for us going forward with one of the most extensive 5G low-mean networks in the world that covers 55 countries and regions. Our competitive local full-speed 5G low-mean solutions not only offer extensive coverage but also significantly enhance the user experience, which further expands our user space and cements our leading positions in the low-mean market, while working to turn around our business. In the past years, we leverage our existing research and development resources and cutting-edge technologies to explore business opportunities beyond portable Wi-Fi terminals and build and expand the array of comprehensive data connectivity solutions to satisfy a wide In addition to significantly enhancing the travel experience by catering to the diverse data connectivity needs of various users, we will also offer more intelligent and convenient live applications like item tracking, path management, and emergent communication, among others, through our global midlife solution business.
Market share in these major Monte is growing.
Which we have.
Significant growth opportunities for us.
Going forward.
With one of the most expensive private Shilo mean, there the work in the world.
Over 55 countries and Ricky.
Videotape local Forespeak Hello, Mr. Louis Hsieh.
The only offer extensive coverage, but also significantly enhance the user experience which is.
Our use of space.
The Siemens and Siemens, our leading positions in the loan market.
While working to roll out.
All of our business.
For years, we leverage our 15 research and development resources.
Cutting edge technologies to explore business opportunities beyond portable Wi Fi temenos.
And is pending.
Oh comprehends the data connectivity solutions to satisfy a wide range of users.
Yeah addition to a significant degree.
This is trevor.
By covering two diverse data connectivity needs.
Whereas we also offer more intelligent and Corinthian life applications like Turkey, passive management and imagine how many patient.
So they'll call me live solution business.
Chaohui Chen: We believe that these solutions will expand our market, reach, and help us establish a broader market presence. Our Better Connections Empower Better Life mission is leading us to extend our business beyond the travel sectors to various aspects of daily life, thereby generating long-term sustainable growth. To drive this transformation, we plan to reorganize ourselves into four distinct product lines in the year 2024: glucomy-morbid 6-orbin, the first; the second, glucomy-thin; the third, Internet of Things, IoT; and the final, Global Meal Life Solution.
We believe that these solutions.
Our market reach.
If purpose a broader market prices.
Oh, I better emission empower that's a lie.
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Thereby gender 19 molten salts tend to close.
So outside of these transformation, we plan to organize all of it.
Into 48 proton not.
In year 2024.
So don't call me more pathway all being the first to say Ken critical me feeling.
The third internet of things Iot.
And I find that.
Call me like solutions, we believe these basically all new.
Chaohui Chen: We believe this business reorganization will allow us to operate in a more agile fashion, take tech advantage of emerging opportunities, and enable us to engage with a broader user base with a robust set of our products and solutions coming in the future. So, please allow me to tell you more about what's happening and what's to come at Ucloudlink. Let me go into a little more detail about the new array of product lines we have planned for the future. We will continue to strengthen the foundation of our business, GlobalMe's mobile and face broadband with an expanding offering of innovative cloud-themed technology, hyperconnectivity solutions, and additional value-added services that improve the user experience. We believe that we are uniquely positioned to expand our share in the long-term market. In addition, we plan to introduce a commercial-grade dual-band Customer Premise Equipment, CPE, which supports local fixed networks as well as multiple mobile networks from all major operators. It will be able to maintain connectivity even when fiber optic lines fail or are disrupted.
In the organization will allow us to operate in a more agile fashion.
Talking about the one page of emerging opportunities.
US to engage with a broader user base with a low pass this.
Oh Wow.
She is coming in the future so.
Please allow me to tell you more about what's happening and what's to come as a new cloud region.
Let me go into at least the multi pad and the new rate of closeout, none we have planned for the future.
Yes.
We have continued to strengthen the foundation of all basically what I'll call me mobile baseball bat with an expanded offering innovation cloud has been tech knowledge hub.
He would see solutions and additional value added services led improving the user experience.
We believe that.
We are uniquely position to expand our share in the lonely market. In addition, we plan to introduce a commercial grade you've been.
Customer premise equipment, CPE, which is suppose no co fixed NASA work as well as marquee Pope more power networks from all major operators.
Is it will be able to maintain connectivity.
Fiber optical Lan fare all are lumpy.
Chaohui Chen: Our 5G CPE will be large-scale and commercial and will unlock additional opportunities in a more biosecure urban space. Second, Glocal Meet Theme Solutions, including our Over-the-Air OTA Theme and eTheme Solutions, we are involved in the innovative All Things solution, which will allow us to engage with a broader end user base beyond those in the possible Wi-Fi terminal market. Our pioneer All Things solution is promised to break out of cross carrier restrictions and empower every smart phone.
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Pioneer all Siem solution is probably me.
Two breath of clause carrier restrictions empower every month Paul.
Third.
Chaohui Chen: Our global midlife solutions business has exciting product announcements planned for the future, which will bring seamless connectivity into various high-frequency daily life application scenarios, as I mentioned earlier, such as path management, item checking, as well as emergent communication. Last but not least, we will also integrate these cloud-themed technology and hypercon connectivity solutions into our IoT business, leveraging both property and the third-party smart module compatible with mainstream chipset platforms. Our IoT business will empower terminals and third-party devices, allowing them to intelligently select and dynamically switch between multiple local carrier networks worldwide. This diversity of solutions, we believe, will help expand our business beyond portable Wi-Fi terminals and drive growth in the future because of the changes we have made.
Our local me life solutions basically have sighting.
So.
Oh, Wow proton and now sometimes play in the future, which we have previously seamless connectivity into various high expectancy daily life application scenarios.
Earlier.
Pest management I've been checking as well as emerging communications.
No Lisa we will also integrate these cloud technology and high pump.
Connectivity solutions into our Iot business leveraging those.
Property and the third party market molecule compatible with mainstream chipset platform.
Our Iot business, where empowered temenos and third party devices, allowing them to intelligently select and dynamically the wage bill.
Between multiple local carrier.
Or what.
These diverse.
That rate of solutions, we believe.
We are happy to pay the hour basis beyond portable Wi Fi Temenos and drive growth in the future.
Because the opportunities we have in banking.
Chaohui Chen: Our customers will enjoy a more intelligent and convenient life through our high-quality data connections for a range of everyday scenarios. Finally, I would like to review our guidance for the fourth quarter and four years of 2024. We are optimistic about our future growth prospects following this business reorganization. However, we also recognize that we are only just beginning this transformative journey. And these initiatives will take time to mature. For the fourth quarter of year 2024, we expect total revenues to be between US dollar 17.5 million and US dollar 18.5 million, representing a decrease of 2.8% to an increase of 2.8% compared to the same period of year 2023. For the year 2024, total revenues are expected to be between US dollar 95 million and US dollar 112 million, representing an increase of 11% to 30% from the late of the year 20 I will now turn the call over to Mr. Shi. Thank you, Mr. Chen. Hello everyone.
Our customers, that's the way of enjoying more intelligent and convenient life through our high quality data pernicious for a wide range of everyday scenarios.
Finally, I will I would like to review all of our guidance after our fourth quarter and full years, albeit with Hudson plentiful. We are all pretty nice about our future growth prospect flow in these basically reorganization. However.
Oh so.
That's a nice lead we are only just beginning this fall 19th journey and these initiatives will take time to mature.
The fourth quarter of year 2024.
Total.
Revenues to between U S. Dollar so it was important to $5 million and the U F 18 point of 5 million.
Page 17.
Decrease of two point.
Pertain to.
Two an increase of two 8% compared to the same period a year 2023.
For year 2024, we expect total revenues.
Toby between U S. Dollar 19, 5 million and U S dollar Wow.
Twitter.
Median right.
An increase of.
Yeah that was 10% to 30% flow latter half of the year towards solid 23.
I will now turn the call Oh, what's not me.
Okay.
Thank you Mr. Chen.
Everyone I will go over our operational and financial highlights for the fourth quarter and full year 2023.
Yimeng Shi: I will go over our operational and financial highlights for the fourth quarter and the two years of 2023. Average daily active terminus is an important operating metric for us as it measures customer usage trends over each period, which is reflective of our burn-out performance. In the fourth quarter of 2023, average daily active terminals were 316,207, of which 10,075 were owned by the company and 306,132 owned by our business partners, representing an increase of 6.2% from 297,884 in the fourth quarter of 2022. During the first quarter of 2023, 47% of the daily active terminals were from Ucloudlink 2.0 local data connectivity service, and 53% of daily active terminals were from Ucloudlink Our daily data usage per terminal was 1.55GB in December 2023.
Average daily active terminals.
Important operating metric for us.
It may shift customer usage trends for each period.
Which is reflective of our business performance.
In the fourth quarter continues three however, if theyre active terminals where.
$316200 savings of which 10075, Oh by the company and 306000 and 132 owned by our Fintech partners, representing an increase of.
Six 2% from 297000 and 884 in the fourth quarter of 22 during.
During the first quarter of 23 47.
Active turning that were from Q2.
2.0, No code data connectivity service and 53% a very effective terminal or from you crowding one point, though international that's a connectivity services.
30 day test usage co terming up was one point 55 gigabytes in December 2023.
Yimeng Shi: Total revenue for the fourth quarter of 2023 was $21.7 million, representing an increase of 10.8% from $19.6 million in the same period of 2022. Revenue from service was $14.9 million, representing an increase of 19.1% from $12.5 million in the same period of 2022. Revenue from service as a percentage of revenue was 68.7% during the fourth quarter of 2023, up from 63.9% during the same period of 2022. During the first quarter of 2023, as a percentage of total revenue, Japan contributed 43.1 percent, North America contributed 24.3 percent, mainland China contributed 15.5 percent, and other countries and regions contributed the remaining 16.1 percent, compared to 43.7 percent, 33.9 percent, 3 percent, and 90.4 percent, respectively, for the same period in 2022.
Total revenue for the fourth quarter of.
2023 were $21 $7 billion, representing an increase of 10, 8% from $19 $6 million in the same period of 2020 to read.
Revenue from services was $14 $9 million, representing an increase of 19 point or 1% from California 5 million just started up in the same periods of 2022.
Revenues from services as a person.
Send it to the revenue was 68.
A point of 7% during the first quarter of country history.
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Three 9% during the same period of 2022.
During the fourth quarter of 'twenty three as a percentage of total revenue, Japan contributed 43 reporting a 1% loss Americas contributed 24, 3% mainland China contributed 16.5% and all the countries and the regions contributing.
The remaining 16, 1% compared to 43, 7% 33, 9%, 3% and 94.
And 4% respectively for the same periods for 2022.
Yimeng Shi: Overall gross margin improved to 52% in the fourth quarter of 2023 from 51.3% for the same period of 2022, while gross margins on service increased to 60.1% in the fourth quarter from 59.4% for the same period of 2022. Excluding share basis conversations, total operating expenses increased to 11.6 million US dollars, or 53% of total revenue, in the fourth quarter of 2023 compared to 10.4 million US dollars, or 53% of total revenue, in the same period in 2022. The led loss was $1.8 million in the fourth quarter of 2003 compared to a late loss of $1.1 million in the same period in 2022. Just EBITDA was $1.5 million in the fourth quarter of 2023 compared to $1.6 million for the same period of 2023, moving to 2023 full year's financial results.
Overall gross margin improved to 52% in the fourth quarter of contract is three from 51, 3% for the same period 10 22, why our gross margin on services increased to 64, 1% in the fourth quarter from 59, 4% for San Pierre.
It sounds like 2022.
Excluding share based compensation total operating expenses increased to $11 6 million U S dollars or 53% of total revenue in the fourth quarter it turned into a three compared to $10 $4 million or 53%.
Total revenue in the same period in 2022.
Net loss was 1.8 million U S dollar in the fourth quarter of 2003 compared to a loss of one point or 1 million startup. It's been curious 'twenty to 'twenty two.
EBITDA was $1 5 million against all that.
In the fourth quarter, <unk> 23, compared to $1 $6 million for the same period a country there too.
Moving to 'twenty or 'twenty, three full years financial results.
Yimeng Shi: Total revenue for 2023 rose to $85.6 million from $71.4 million in 2022, driven primarily by an increase in revenue from data connectivity services. Revenue from data connectivity services was $46.7 billion, an increase of 31.7% from $35.5 billion in 2022. Within data connectivity services, revenue from international data connectivity services rose to $33.9 million from $28.1 million in 2022 as the recovery in international travel accelerated. Overall gross margin improved to 49% in 2023 from 45.5% in 2020, and our gross margin on service is increasing to 58.5% from 56%. This increase in gross margin on service in 2023 was primarily attributable to a more favorable business mix, with a larger proportion of revenue coming from international data connectivity services, which tend to have higher margins.
Total revenue for 10, 23 rose to $85 6 million start up from 71 4 million you saw that in 2022.
Driven program.
Really by increase in revenue from data connectivity services revenue from data connectivity services were $46 7 billion his daughter.
Kris 61, 7% from $35 5 million you saw that in 2022 within that connectivity services revenue from international data connectivity services Rose to 37.9 billion you saw that from.
28 point of 1 billion in 2022 other recovery International traveler celebrated.
Overall gross margin improved to 49% in countries three throw them 45, 5% in Trenton, New Jersey.
And our gross margin on services, increasing to 58 820.
5% from 56%.
This increase in gross margin on service in 2023.
Primarily attributable to a more favorable business mix with a larger proportion of revenue coming from international.
Activity services, which tend to have higher margins.
Yimeng Shi: For the full year 2023, excluding share-based conversations, total operating expenses decreased to $34.6 million, or 40% of total revenue in 2023, compared to 34.4 million US dollars, or 48% of total revenue in 2022. We achieved a net income of $2.8 million in 2023, improving from a net loss of $19.9 million in 2022. Adjusted EBITDA was $9.8 million in 2023, compared to a loss of $2.3 million in 2022, according to the same measurement.
For the full year 'twenty finished three excluding share based compensation total operating expenses decreased to $34 6 million or 40% of total revenue in 2023 compared to.
34.4 million, you start ups or 48% of total revenue in 2022.
Chief Bean com.
And maybe I can start us in 2023, improving from a net loss of $19 9 billion in 2022, adjusted EBITDA was $9 8 million startup in <unk> three compared to a loss of $2 3 million start up in 2020 to court.
To the same measurement.
Operator: For the full year 2023, our capital expenditure was $2.1 million compared to $0.4 million in 2022. For the full year 2023, we will achieve positive operating cash flow of $6.5 million, up from $4.4 million in 2022. Moving on to our balance sheet items, our cash and cash equivalents increased to $23.4 million as of December 31, 2023, compared to $20.3 million as of September 30, 2023. We are pleased to have strengthened the company's financial position over the course of years and are well-positioned to continue growing our business. Now, with that operator, let's open up for Q&A. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the key.
For the full year 'twenty three capital expenditures were $2 1 billion compared to <unk>.
Point 4 million you start out in 'twenty two for the full year 'twenty three.
<unk> positive operating cash flow of six point of time.
It's solid.
From $4 4 million you saw that in 2022.
Moving onto our balance sheet items, our cash cash equivalents increased to 23 and 24 million dollar.
Since December 31st 2023.
Compared to 20 or 43 million as of September 30, 10, 23, we are pleased to have Australia in the company's financial position over the course of the years and are well positioned to continue growing our business.
With that operator, let's open.
For Q&A.
We will now begin the question and answer session.
To ask a question you May Press Star then one on your Touchtone phone.
If you are using a speakerphone please pick up your handset before pressing the keys.
Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our. The first question today comes from Theodore O'Neill with Litchfield Hill Research. Please go ahead.
If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
The first question today comes from Theodore O'neill with Litchfield Hills Research. Please go ahead.
Theodore O'Neill: Thank you very much. I have two questions this morning. My first question is about revenues from data connectivity services of $11.8 million in the quarter. That's down from $13.8 million in the third quarter. And I was wondering if you could give us some insight into that and if it was driven by any particular geographic region.
Thank you very much I have two questions. This morning. My first question is about our revenues from data connectivity services.
$11 8 million in the quarter, that's down from $13 8 million in the third quarter and I was wondering if you could give us some insight into that and if it was driven by any particular geographic region that was down sequentially more than more so than others.
Yimeng Shi: Hi Theo, thanks for your question regarding this data connectivity service for the quarterless change. You mentioned the two quarters, the third quarter compared with the fourth quarter. Yes, as you know in our disclosures, the international roaming service is the main difference for our growth in service. And the seasonal reasons, the third quarter is peak time for the summer vacation.
Yes.
Hi, Thanks for your question regarding this there that can it be.
Service a tour that's called out as a change.
Yeah, you mentioned that two quarters or so quarters.
Compared with the fourth quarters, yes.
As you know in our set.
Disclosures.
And we are the international roaming service as a main stream.
Vince for our growth in service and then the season. The reason so the third quarter is a big time is a summer vacation.
Yimeng Shi: So that's the peak time for the roaming service. And in the fourth quarter, it's a little bit down for this roaming service. That's a part of the seasonal change. Is it across all geographies, or is it in any particular geography?
So that's a peak time for for the realm is Oh goodness and then in the first thing in the less it's a little bit down. So for this realm is a service that's that's a part of our patents.
Susan.
Change I've done this.
Yeah.
And it is it across all geographies or is it any particular geography.
Yimeng Shi: And that's the overall seasonal change; in the first quarter of the year, it's only a short period, like Christmas and the Christmas holidays, but in the third quarter, it's the long summer vacations. So that's the overall seasonal change, not particularly to some particular regions. Okay, understood. Thank you very much. My other question is about G&A expenses of 6 million in the quarter. I noticed also last year that G&A expenses rose sequentially from the third quarter to the fourth quarter. And this year, the same thing; it went from 3.8 million in the third quarter to 6 million in the fourth quarter.
And just the overall season, there's a chance that the in the fourth quarter. So yes, it's the only that show a short Jerry like Christmas Our Christmas holidays in the third quarter is a long summer vacations. So that's the overall, let's say the season that.
A change not particularly to some particular regions.
Okay got it understood. Thank you very much my my other question is about our G&A expenses of 6 million in the quarter I noticed also last year. The G&A expenses rise sequentially from third quarter to the fourth quarter and this year. The same thing that went from $3 8 million in the third quarter to 6 million in the fourth quarter.
Yimeng Shi: And I was wondering, what drives that change sequentially from 3Q to 4Q in, Yeah, from our understanding, that's a good incentive plan for our employees. We have, as we disclosed, performance turnaround positions in terms of revenue growth, and also net income tends to be positive compared with the huge loss in the year 2022. So we, the management, decided to pay a significant increase in earnings bonuses for the whole company's employees. So that's specifically driven by a pay rise in terms of earnings bonuses. So I think that's very good motivation for our employees, and we have tight controls on the headcount numbers during the course of years of growth.
And I was wondering what was what drives that change sequentially from three Q4 Q in G&A.
Yeah.
From a from the our understanding is that's a.
This incentive plan for.
For our employees and we.
I said, we disclose we performance.
I turned around and said it positions.
In terms of the revenues gross and also letting comp turned to a positive compared with a loss a year trying to paint too. So are we are the management decide to to pay a significant increase for annual spend is for the for the whole.
Our company employees employees, so that that's a especially driven by a pay rise in terms of honest apprentice. So I think that's a very good and motivations to our employees and we we have a tight controls on the headcount numbers.
In this in the course of a year of grills and this year is that all the whole companies and employees have well motivated to support our growth for this year.
Yimeng Shi: And this year, the whole company's employees have been well motivated to support our growth for this year. Thank you very much. That explains it to me. Thank you very much. The next question comes from Vivian Zhang with Diamond Equity Research. Please go ahead.
Thank you very much that explains it to me. Thank you very much.
Yeah.
Yeah.
Your next question comes from the Xinjiang with Diamond equity Research. Please go ahead.
Yeah.
Vivian Zhang: Vivian Zhang, Unknown Executive, Chaohui Chen, Yimeng Shi, Wei Zhang, Ucloudlink Group My first question would also be about the fourth quarter revenue, which didn't meet your guidance of $22 million to $26 million. So we'd like to know the reason for not meeting these expectations for the fourth quarter and each other. I, this is Yimeng.
Hello, Hello this.
They said that they've been dealt with sound monopoly. My first question would also be about the fourth quarter revenue, which didn't meet your guidance of 22 meetings you attended $6 million. So we'd like to know the reason we're not meeting this east back patients for the fourth quarter.
Yeah.
Uh huh.
Yeah.
Yimeng Shi: I will answer the questions first and then Mr. Chen will add some color on this fourth quarter's revenues. A little bit low then this guidance. We disclose this guidance is $22 million at the bottom. Yeah, just a small amount. We achieved $21.7 million in the fourth quarter at $22.3 million, just a little bit lower than our guidance.
Uh huh.
This is a man humans I ask a question first and then Mr. Chang will add some color on this fourth quarter as our.
Revenues are a little bit lower.
Then just a guidance that we just go to the Sky.
Guidance, there's a.
$22 million at the bottom so at that time.
Yeah, just a small.
We achieved $201 $7 billion in the first quarter 'twenty, three just a little bit lower than ours.
That's not guidance that's just that's.
Yimeng Shi: That's, It's still on our business patents; we just have some hardware orders; we defer some hardware orders to later periods because we have some commercial terms that need to be agreed by the customers before we deliver this hardware to customers. So that our business, if we take into consideration this hardware's deliveries in the normal course, we will meet this guidance. So that's technically a change in the final week of the month, December.
Uh huh.
It is still on this on this I'll answer them all up and it's our patents are we just have some some hardware orders are we we differ with some hardware orders.
To a later period, because we have we have some some commercial terms.
It's a neat agreed.
Our customers before we deliver this hardware to customers so that that business is.
Taking the one taking taking into consideration this how do we deliver race.
The loan loss cost.
We will we will meet this guidance yeah. So that that's the that's taking place there.
<unk> in the in the fine that's the final week of the month of December.
Chaohui Chen: Yeah, by the way, we have another reason that costs a little bit less than our expectations. That's because our new product is a little bit delayed, just for our R&D purposes. So that's another reason that costs a little bit less than our expectations.
Yeah, but we have another reason to cost less than our expectation, that's because our new pull down a little bit he likes to just for well for a lot of good reason. So that's another not a reason that caused a you know a slower.
A little bit slow.
A little bit less than our expectation.
[noise], Okay understand so madden NYC clouds or any of that can you share more information about.
Chaohui Chen: Okay, understand. So, the next question is that, can you share more information about your newly announced Glowcomi Live Solution business? Because like you mentioned, any products or services can be launched or expected to boost revenue this year in 2021. Yes, so you know in the traditional we are majorly before year 2023 we are majorly rely on our portable Wi-Fi to create the major revenue and from the last years and a third quarter we are start to launch our new product such as you know OTA SIM card such as you know our Glock midnight product so for the smaller business early early business trial so this year we will officially launch our Glock midnight product that means we are create people who need better connection because better connection what aspect we can we can create a revenue from the data another expectation another aspect we can create a better life for people for example if we get the best network when when the old people they falling down they can they are there as OS message can send to the you know rescue center the old man normally is easy to falling down in the in the bathroom and the kitchen most of these two area the signal is very poor our product can, provide not only the local Wi-Fi connection, home Wi-Fi connection, but also cross-carrier auto signal, then can help send out this critical, you know, SOS message, and then can enable these old people get the help, get saved. And another reason, another similar product I mentioned is about a tracker. Our tracker can find something that a normal tracker and the AirTag could not find. Because with the GPS scenario, our tracker can, you know, send the GPS location data via the market network. Because in a rural area, in the corner of the building, normally coverage is very poor.
Your annuity announced that local me my production business.
Cause I mean like any like like you mentioned like any products or services can be launched or are expected to revenue. This year in 'twenty 'twenty four.
Oh, yes, so you know in the traditional way a major ER before your 2023, where a major redo that Oh portable Wi Fi to create a lot of the major major revenue.
And last year's third quarter, we are start to launch our new products such as the Otas seem calm saatchi.
As.
You know our clock midnight proton so for a smaller business to us.
Oh, the Pcs trial. So this year, we will officially launch all our critical many life the ninth Cuda, let me as we are creating.
People, who need a better condition.
Cause basic condition.
One is by the way can we can create revenue from their data and know that expectation.
So that we can create a better life for people for example, if we can get that back to network when when the old people when they are falling down.
Yeah, Yeah, Oh, Essent message Ken Sill.
And to let you know rescue center now.
The old man normally is it.
Easy to 40 now in the in the bathroom and kitchen.
Most of these two area the signal is where he pools.
Our quota I can.
Pretty wide I know the only the low code a wildfire Commission home Wifi condition proposals cross carrier all this thinking.
And then can help sent all of these are critical.
S message and then can enable these old people get to help get the set.
And another reason another thing in our proton I'm Asia is about attack Oh, I'll check out Ken.
Five something that's in our normal check huh.
A R Tech Ueno flight because all of us are with the TPS scenario.
Check or can you know send a GPS location data why on the marquee network because in the Lula area in a in a in a corner building normally courage is pretty poor so marking their network of course can have police messages are sent.
Chaohui Chen: So the market network, of course, can help this message get out more than just single carrier network. That's why we call our new generation, you know, tracker with the better connection can find out something that the traditional tracker and the AirTag could not find. And that's one reason.
Let just single carrier network this Hawaii.
Our new generation you know tracker.
With the better condition can fly or something that the traditional tech and our AD.
No fine.
Chaohui Chen: The second reason is about, you know, without GPS scenario, our multi-carrier, you know, our multi-carrier tracking location capability while at carrier base station. We have a multi-carrier base station. Normally, one carrier, three base stations, you can locate your product, your items. But with multi-carrier, we can provide maybe 20, 30, no, 20 base stations so we can get more high-accuracy location data. And also, we have a multi-network can send out this location data.
One reason and the second reason is about.
Without TPS scenario, our multi carrier.
Our multi carrier are checking no patient capability, while our carrier base station, we have multi carrier base station no money one carrier three base station you can knock location your product.
But we used a multi carrier we can provide maybe 20 or 30 I'm not turnkey base station. So we can get them more.
High accuracy location data and also as a way of marketing there to walk consent audis location data and that's why our checkout can help us.
Chaohui Chen: And that's why our tracker can help users find out more possibilities for these items. The final one, our product has, you know, radar technology for the last 100 meters. It's extremely difficult for people to find out the items in the last 100 meters.
While the more possibility for these items and a final one I'll put that has you know no without technology.
Last 100 matter.
Difficult for people, who fly out of the.
The items in the last hundred met her but with our solution and you can read I only 100 active radar to find out where that where you thought the wise. That's why we call. We added new creation generation, new generation creation, a checker shoppertrak, which can fight.
Chaohui Chen: But with our solution, you can rely on this 100 active radar to find out where the device is. That's why we call it the new generation creation tracker, super tracker, which can find the other trackers and all tech could not find. A similar concept is about the healthy emerging communication I just mentioned before. So, in this scenario, one by one, we will launch the product in the second quarter. And the fourth quarter is for pilot projects, and the second quarter for volume launch.
The other chicken OPEC Crinone fine if suddenly the consensus is about.
Healthy imagine are in communication.
As I mentioned before so this scenario one by one we are launching a product in the second quarter and the fourth quarter is for a pilot a second quarter for awarding constant audience business a whole lot.
Lunch, so I've been in the following quarter. We believe these new pro that we create or generate more revenue for us.
Chaohui Chen: So, I think in the following quarter, we believe this new product will create or generate more revenue for us. As you understand, we have an all-SIM solution, including OTA SIM and eSIM. This also will generate more easy sales than our traditional portable Wi-Fi, and can access more customers for travel worldwide.
So you understand we have Oh, siem solution, including the Oh casing and he's seen.
Also we are generally this is the more easy sailing than a lot.
Traditional portable Wi Fi can essentially more customer for travel worldwide. So I believe all of these the new product we have created in the fourth quarter, a more customer base and the more revenue base for our business.
Chaohui Chen: So I believe all these new products will create in the following quarter a more customer base and a more revenue base for our business. Thank you. Oh, okay. I've got it. Thank you. Thank you so much. This concludes our question and answer session. I would like to turn the conference back over to Jillian Zeng for any closing remarks. Well, thank you once again for joining us today. If you have further questions, please feel free to contact Ucloudlink's investor relations through the contact information provided on our website or speak to our investor relations firm, Christensen Advisory.
Yes.
Thank you.
Okay I got it. Thank you. Thank you so much that's all my question.
Okay.
This concludes our question and answer session.
I turn the conference back over to Julien Zhang for any closing remarks.
Well. Thank you once again for joining I forget if you have no questions at least feel free to contact you calling for Investor Relations.
Information for lapping our backs that I'll speak to our Investor Relations Sun Christianson, Although that's the way we look forward to speaking to you all again, our next quarterly call. Thank you.
Jillian Zeng: We look forward to speaking to you all again on our next quarterly call. Thank you. Thank you, bye-bye. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. Since 2012, Zhang is actively working with Ph??an.
Thank you bye Bye the conference.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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