Q3 2025 uCloudlink Group Inc Earnings Call

Speaker #1: Hello and welcome to the uCloudlink Group Inc. third Quarter Conference 2020 Earnings Call . All participants will be in the listen only Should mode .

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Speaker #1: Thank you . Investor And over to you .

Speaker #2: Hello , and thank you everyone joining us on uCloudlink Group Inc. third quarter 2024 . 2025 Earnings Call . The earnings release and our earnings presentation are now available on our website .

Speaker #2: As uCloudlink Group Inc. . Joining on today's call are Zhou Mr. me Ping Pong , co-founder and chairman of the board Directors . of Mr. Chaohui Chen , co-founder , director and Executive Officer .

Speaker #2: And Mr. Yimeng Shi , Chief Financial Officer . Mr. will Chen begin with an overview of our recent business . highlights Mr. Xu will then discuss our operational highlights for the quarter financial and .

Speaker #2: They will all be available take your to questions in the Q&A section that follows . Before we proceed , please note this that call may contain forward looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 .

Speaker #2: This forward looking statements are based on management's current expectations and observations that known involve unknown risks , uncertainties and other factors not on the control company's , which may cause results , actual performance or achievements of company to be the different from the results , performance expectations or projected or implied by these forward looking statements .

Speaker #2: All forward looking statements are expressly qualified in their entirety the cautionary statements by , risk factors and details of the company's filings SEC with the .

Speaker #2: The company does not assume any obligation or to reverse or update any forward statements . As a result of new events , changes in information .

Speaker #2: looking conditions or otherwise , except required as law . Please by also note that earnings press and this call include discussions unaudited GAAP financial information and an audit .

Speaker #2: non-GAAP Financial of Measures . You can press release contains or reconciling reconciliation of conference the unaudited Nape measures to the most directly comparable GAAP measures .

Speaker #2: I will now turn the call over to Mr. Chen . Please go ahead .

Speaker #3: Thank you . Daniel , and good morning or evening , everyone . I made a complex macroeconomic trade environment and will remain disciplined in our economic execution while maintaining operational profitability .

Our 3 new product man. Gloomy line gloomy gloomy iot. So remarkable year-over-year now closed during the quarter increasing 382.3% 188.2% and 593.3%. Respectively respectively uh feedback has been overwhelming positive reflecting, how our solution directory address, the market, demand and validating our investment strategy.

I will now review the highlights for each of our key business lines.

I will start with our Global Community Life business.

Now, in the third quarter of the year 2025,

The average monthly active terminal reached. 3,900 03 representing an increase of 400, uh, 8.2% year-over-year.

And Long Park.

Mat.

Grow by 300.

69.3% excluding platform, year over year.

Reflecting strong user adoption across this innovative balance.

Building on this solid foundation of product evidence.

I will now highlight the significant growth. We met with our Flagship product headphone

Designed to bridge the digital device between humans and their pets.

Headphone is already gaining the momentum.

But its initial commercial launch in September 2025, in Hong Kong.

and close the Middle East, where it has already generated orders for a

A product similar play 40,000 units.

as we continue to expand our distribution channels and partners,

at the EA year, 2025 in Berlin headphone was recognized as an

On the need in the communications and connectivity. Catalog, of the inaugural Eva Innovation Awards,

It also received the best of EA year, 2025 distinctions from Young code design, home glucose, and the mark it is reviews.

Following the Showcase of our Solutions at the EA, Bing 2025. We are now in advanced discussions with several major retail channels including 1 key Partners. Furthermore we successfully

Entered into a partnership with a leading online pet retail platform. In North America, where initial product Shipment has have already begun.

With the strategy, foothold in established across Hong Kong the Middle East, North America and Europe. We plan to establish a new operational, structure and raise additional Capital to accelerate the global expansion of our Tech seasons.

We also plan to develop tech tech as a state-owned application that is 10 B, smart hardware, and build a comprehensive, systematic platform. Integrating social

Entertainment.

Uh, living a stream and a comprehensive pet ecosystem.

The initial version of this new app is expected to launch in the first quarter of year 2025.

Our gloomy iot business, maintain a strong growth, uh trajectory with user adoption and revenue contribution showing so uh substantial year-over-year improvements in the third quarter, average demands active terminals. For gloomy iot record, a year of year, increase of 580.3, 583.0, uh, percent we secure order for in car infotainment system,

While our initiatives in the Secretary Kamilla sectors are now fully deploying and entering a phase of expansion, 455 Broad and partnerships across several...

High growth, uh, radicals.

Heaven is Temporaries and initial presence in these key sector. We plan to expand our solution into additional industry in the future.

Turning to our Global Mission business line over the past 9 months gloomy theme has surpassed

Uh, 400,000, uh, cumulative cost sort.

Including Otay theme and eim Trail.

Uh, again, changing Solutions demonstrating, clear technology leadership in the industry.

The ethnic field was named as a best of Eva year 2025 by Mark, it is reviews.

Further highlighting its Innovation and Market recognition.

This momentum has few our goals.

Driving at 269.5% year-over-year increase in average demands active terminal during the third quarters.

Strong tractions following the widest spread distribution of 10,000 trial units on a pilot program. It generally a positive user feedback and at the more than 75% in user registration and the more than 30% inactive engagement

validating both our carrier partnership model and product Market fit.

Our carry code insurance.

Uh, program has also make significant progress.

We have company pilot negotiations with multiple operators and expect to commence, join testing and pilot initiatives in the coming quarters, they in the brown. Work for future largest scale. Carrier Partnerships.

Lastly, our global me mobile 64-band business remains stable, with growing order momentum expected to provide a stable foundation for our future growth.

The launch of our new go G40 Pro and The Cutting Edge. Miracle G50 marks, are expected to serve as a growth engines for the coming quarters.

The M, gold G40 Pro is a revolutionary upgrade and a milestone product enabling users to stay connected through 1, single device, and a 1 account.

The product began deliveries by the end of the quarter and is the world's device to support e-fly Wi-Fi and connect simulates across several, uh, usage, scenarios, such as home. Airports office, and the cafes

With the miracle G40 Pro, we are transforming portable connectivity, from an international travel, Only Solution into a true multi scenario.

Companion.

Powered by our patent. AI. Hypecon technology, is similarly serves users through

1 single intelligent device and 1 account. Regardless of where they are, Capcom, our industry leading solution. Also lay the foundation for larger scale product.

Iteration and the future upgrades.

Further.

Solid, uh solidifying, our in Innovative leadership in a mobile fix for industry.

This device also enhance, Network quality through AI power real-time congestion detection.

Deliver a faster and more reliable user experience.

Looking ahead.

We are entering the next phase of expansion where we will scale our Global user base.

Further diversify, our revenue streams Drive Innovation across our ecosystem and sustain a healthy financial performance.

The launch of Mo g44 and Cutting Edge. M, go G50 marks.

Combining with the launch of the platform, the strong validation of the Eastern Trio, pilot the robust expansion of our iot Solutions uh provides us with several robust growth engines going forward.

Laying a solid foundation for future growth.

Having successfully, uh, navigate his internal Challenger, we are confident in our ability to scare our user base. Expand, our Global partnership and delivery growth in the coming years as we continue to innovate and Bridge digital device for user worldwide.

We are confident that we have the right strategy in place to generate sustainable growth in the coming quarter for the first quarter of year 2025. We expected to Total revenues to be between US dollar 20. Uh, 2 million 2, Us 226 Port 26.5. Million representing, uh, decrease of 15 15.4 to an increase of 1.9 compared to the same period of year 2024.

We currently expected Revenue to be in a range of US dollar. 81.3 to US dollar 85.8 million, the company is revising, its guidance in light of the uh, persistence microeconomic challenges and global trade, headwinds,

Which have set.

Had, and may continue to have, a broader impact across the industry.

I will now turn the call over to Mr.

Thank you, Mr. Chen, and hello everyone. I will go over our operational and financial highlights for the third quarter of 2025.

Average daily active seminar, 50 and average monthly active terminal. Matt are important operating metrics for us are the measures customer usage trains over the periods and are reflective of our business performance.

And third quarter of 2725. Average deities were

332,000 and 674, of which 21.

Thousands and 484 on the company and 311,000 and 1,190. Not owned by the company.

Representative and increase of 3.8% from third quarter of 20124.

During the third quarter of 2025.

37.3% were from Ukraine, 1.0 in the National Data Connectivity Service.

And 42.7% were from Ukraine, 2.0 local data, connectivity service.

In September 2025, the average daily data usage for terminal was 1.57 gigabytes.

In from this quarter, we are disclosing our average daily active users.

In awe, and monthly active users Mao, which represent the average number of units users engaging with our gloomy service on a daily and monthly basis respectively.

We believe this Matrix will better reflect, the progress. We are making in driving user engagement across our different business lines and how we are managing and monetizing our user bases as we scale up.

Growth in average. De use an MAO follow a similar patterns with a strong momentum. Average Mas in third quarter were

70060.

1,586 representing an increase of 11.9% from 680,000 and 6009 in the third quarter of 2024.

Average ma use from Global iot globally, seen and globally. Life business mind. So increase of 593.3% 188.2% and 382.3% respectively from the same period of last year.

Average M, Aus from golija mobile and fixed Broadband. Venus decrease slightly by 28% year-over-year on September 30th 2025. The company had 201 patents with 160 a approved and 33. Pending approved approve of SIM card was from 392 MN O's globally. As of September 3025.

In the same period last year.

The graphically speaking during the third quarter 275 Japan contributed to 33.2%.

And China. Can you build it 35.1%? North America. Can you build? 15.4% and other countries and regions, can you build that remaining 16.3% compared to 46.

6% 27.8 12.8% and 12.8% respectively in the same period. 274 our gross. Profit was 11.3 million in third quarter or 275 compared to 12.2% 24 overall growth margins in the third quarter of 2025 further Rose to 33.6% from 48.4% in same period of 2024 because margins on service was 76.6% in third quarter of 275 compared to 60% in the same period of 2024.

Including share Basics conversations total operating expenses worth 11 billion dollars or 52% of total revenue in the third quarter, 2725 compared to 9.7 million dollars, uh 39% of total revenue in same periods. In 2024, net income in the third quarter of 2015, was 9.3 million in dollars compared to 3.4 million dollars in same period 274. Just give it was 1.4 million in the third quarter, 2725 compared to 4.4 million dollars in same periods. 2724 for the third quarter. 275 we recalled, an operating cash outflow of 0.9 million US dollars compared to an operating cash. Inflow of 2 million US dollars in same periods of 2,724 for the third quarter.

2725. Our Capital expenditures were 0.5 million dollars compared to 1.1 million dollars in the same periods to 724. We maintain a solid balance sheet with a cash, a cash equivalent of 28.5 million dollars as of September 3022,

Compared to 30.1 million dollars as of December, 3, 1.

2024 without operators, let's open up for Q&A.

Thank you.

We will now begin the question after session to ask a question. We press star and then 1 on your telephone keypad,

If you're using a speakerphone, please pick up your handset before pressing the keys.

If at any time your question has been addressed and you would like to withdraw your question, please press star and then zero.

At this time, you'll pause momentarily to assemble a roster.

We have the first question from the line of Vivian Jiang from diamond.

Equity research. Please go ahead.

Hello hello. Hello. Thank you for taking my question.

So firstly, could you share with us the sources of this 9 million in other income and how it was identified? Was it 1 Time payments.

uh, yes as we, uh, disclose the, um,

80 million about 80 million of uh again uh from the affair values, other Investments.

Uh, that's that's the, that's a change. Uh, a change, uh, of your values.

In accounts. Yeah.

Uh, okay. I see so um, next question. Question is that can you elaborate on the reasons for the decline in product sales?

Uh, yeah. Uh, in the third quarter, uh, the sales, uh, sales, uh product, uh, uh,

Related of Titus, uh, which is a very low margins, uh, a product. So, uh, this this, uh, for this third quarters, for this very low margin products, uh, the amount. Uh, they're so amount, uh, quite low compared with the, uh, last years. And the second part is, uh, uh, the sales Terminus, uh, decreasing, uh, 1.1 million, uh, US dollar something. Um, which is, uh, which is, uh, we mentioned is the Japanese customer a delay. Uh, there are 2, uh 2 uh mbbs. Orders 1 is the related to the uh the 5G is portable Wi-Fi. Uh once the related to um the the 4 4G

Uh mobile uh, Wi-Fi hotspot.

And uh, that this order will will be. Uh, we expect will be uh coming in the fourth quarter.

So, uh, that's a delay, a little bit of a delay, uh, in terms of periods. But, uh, as we, um, as we disclose and the MA, the DATS and MATS, DAU, and MAU all increasing, uh, uh, increasing compared with last year's, last means that the number of the terminal, other than the.

Mobile broadband, uh, the volumes of the new business, uh, our gloomy life, our gloomy iot, and gloomy scene and showed increasing, uh, dramatically compared with our last years, um, as this operation metrics shows that a couple times in create growth compared to the the same period last year. But the revenues contributions in terms of proportions are small, uh, a small to account, uh, as we, uh, in terms that the, the pricing the terminal, the life, uh, the life, uh, life series products. The pricing is, uh, quite a small proportions compared with a 5G, uh, portable Wi-Fi. So that that's the quite a much difference. So even we sell more variants of a new, a new product terminal to the market.

But uh, convert to the revenue. The revenue is smaller but our users numbers growth uh, as we disclosed. So we overalls 10% more than 10% of the user number in terms of the Mao increasing compared with last year's. So we believe this will uh can you build our future growth uh, in terms of service? Uh, next year for this growth of users basis

Thank you.

Yeah, in the, uh, some more, sorry. Sorry I have some more comments because the hard that means, uh, the hardware because of, uh, you know, uh, tax and, uh, and and I think the, the trading headwind. So the customer, uh, asking the, uh, I think more to say about the microeconomic and the technician will be

The, the decision maker period will be longer than than normal normally about 30 days. Now, go to the maybe human, that's why I caused the delay, but the others teach is coming. So that's first and the second uh, Hardware. I think is because the high Value Hardware Hardware, like 5G, our ship volume is delayed that cost the impact of the, the total revenue number. But the the the fortunately we have more uh, user number like, for

The hardware cost is lower, it's smaller, but I think the contribution for the uh data so we uh we increase in the future because monthly and yearly, they have to pay the the same usage for the data.

Okay, got it. Thank you. Uh that makes sense. Um and my hello can you hear me? Okay, my last question is that uh

The mainland China, the revenue from Milan, China has increased a lot and become the largest market. So what are the main drivers behind that?

Um, as we disclose the uh, the in the, the ukulele 1.0 Revenue in the National data can be Service. Uh always

Uh, increasing over the over the this years. The main driven is from the, the Chinese outbound traveler. Uh, can you build, uh, use our, uh, roaming man, branding service?

So that that's, uh, that's the main driven for our UK Link, uh, 1.0 business growth in this year's. Um, so and since the pandemic cover line teams and the, the Chinese outbound travel business, uh, is and the recovery, uh, over the past couple years. So, uh, I was, uh, Revenue related to this. Uh, this part is on the recoveries, uh, Trend. So we we believe this, uh, uh, this growth from this traveling, sectors. Uh, we have, uh, uh, is on the growth, uh, truck in the future as well.

so yeah, I'm

Coming to about the Chinese Chinese. Uh Revenue increase, there are 3 reasons. The first is our 5G, mure higher and the 5G, our uh Revenue including the total uh Revenue in China. Our percentage is

Uh, much higher than last last year. That means, uh, our 5G quality and Leadership was a recognized by the users. So here increased because in China 5G is more more popular. Once the people use the 5G, they don't want to use the 4G and we are the leading with power 95, uh, 90 91 countries, and it's far more advanced than the other carrier and speak side also. So we are far more fast and the coverage is much better. So, that's the Mark here for 5G. We are higher uh, growth fast. The the first second. Uh, we have more product available in China, where our first launched our uh traditional 5G. We are in leading a get more market share and a more Tech good technology for 5G but we have more product like live and like uh our uh SIM card and our E3 this new product. So uh

We can cover more, uh, you know, uh, business in the history. We, we, we haven't entered this part, you know, like in for, for the lonely Market. Uh, we only occupy the Wi-Fi currently we have, you seen? We have otaa things, we have, uh, Ethan Trail, uh, this part. I think we are not. We have more product and the more, uh, convenient product. Not only just high quality, but also more convenient product available and we enter this new, uh, segment. So here is, uh, 80% of the new market will never touch before. So we believe in the future, uh, I think our Market here in China, will keep in increase and our SIM card and, uh, is true. We are getting more market share in the 1% of 2% in outbound travel market. And uh, the finally, I think that that's what the last point is about uh, in China, I think.

Uh, we should be more, uh, much here in the more Revenue uh, in a quarter 3. Uh, if without, I think the, I think our, the total, I think the, the Chinese people travel outside, uh, in the, in the summer, still suffer from like, uh, in the Japan, you know, uh, like earthquake, uh, numer and also like some uh, unstable uh, economic situation. So,

Uh, you know, still in the, the September uh, still in July and and and, and June is the most difficult period. I know that trade the world with the us, all these impact. So I I think in the once the this economic situation become more stable. Uh I think the way we get more much here in these part

Okay. That answers my last question because I wanted to ask about the trade tensions that appear to have surfaced recently. So what other potential impacts do you anticipate on the market and the company? Is it likely to contribute to a recovery in sales?

uh,

Yeah, we, um, if, if we look at this, uh, this, uh, the trade war that, I think it will. Um, I think I would believe that is, uh, um, is some a limited impact, uh, for our business, uh, as, as a

Specialist for our new business. They, uh, pay the phone, uh, new launch, will have a new launch, uh, in in US markets, uh, cooperation cooperation with a leading, uh, paid online retailer. Uh, the land is, we know is a big lands. Uh, chewy. So, uh, we, we, we, we are a new, uh, new product Solutions has entered into, uh, a us a big channel, uh, say, um, a warm up, a warm up and, and others are, uh, a famous channels as well. So, uh, when we more more the, uh, the Tier 1 channels has our product on the shaft. Uh, I believe, uh, the US markets map shares. Uh, we sold, uh, more for that.

Into US market. And the US markets has uh uh revenues contribution will will again uh and uh and uh growth uh in the future. And that we uh our belief that us markets will be grow in the future.

Yeah, so yeah, I'm more uh, comment about this, this this questions and of course, our traditional mobile broadband business. So uh, I think we can see, uh, it is suffering from the microeconomic, uh, and also the trade War. Uh, but I think now that is stable and then we, we, we see that the customer now is, uh, I think our custom in Japan in China. So for, for the mobile and business, now, the order is coming or in the first quarter, so we can see now is the, the best period is, is over. It's in from the current situation. We, we, we, we believe in either way we go better. That's for our traditional traditional mobile business for the new business. It's going very well. So, uh, most of our new product launch in the Q3. Uh, for example, our platform launched in the, in the September, in the, in the, in September, and our, uh,

G g, 40 hour, 1 account, 1 device hypercon. I think market purpose, market scenario, device, also the new function. We launched also at the end of the, uh, end of the third quarter. So, majorly in the third quarter, uh, our new product and new solution launched in this quarter. So I believe, but I think the feedback and, uh, from the end user and from channel is quite positive, as our mentioned, uh, it is culture in the, in the, in the information. So, we uh, get a big order, uh, for, uh, platform. So the fourth order, uh, is 40,000 units. So it's much bigger than our expectation. So the first and our SIM card get feedback from the end user is quite very positive. Uh, just mentioned we.

About, uh, 10,000, uh, you know, uh, pilot. We get a very good feedback for the quality and the convenience. And in technology, we prove, we are in a leading position with its Innovation. Uh, super has been for the people, uh,

For it. A permanent second thing we we we prove this concept

And also, uh, we get a very positive and, you know, uh, operation data now registered rate is about, uh, uh, more than, uh, 75 and active rate is about, you know, uh, more than 30% that means, uh, this very high percentage of the user in our, uh, we, we increase in our future data Mao. Uh, we are at more, you know, uh, value to our business.

So I think, uh, also iot, you can see we have faster growth.

Uh, even the smaller, uh, the foundation is smaller, but every month, we have more than a 30% increase. Every company, every month. It is not left.

Take care uh, Tier 1 player. So we believe we will get more, you know, uh, fast growth in the in the in the coming month.

so, uh, I think most for the platform, uh, for a scene and for the, you know, uh,

Our live product and iot or this new 3, new product get a very, uh, good uh potential. So, uh, I believe, uh, in the coming quarter, we will get a better uh, you know, uh Revenue uh than the Q3 and and and and the 22

And this year, we believe, uh, the once we because we have investment in the marketing and R&D. Uh, we spend that's why you can see this year Campaign, which last year, we spent more more than 3 million more in your store than last year in the, in the marketing campaign. And the and this will generate the, I think, the, the food, you know, uh, increase in the future.

Thank you.

Okay, okay, I see. Okay, thank you for the detailed information. That's on my question.

Thank you.

We have the next question from the line of Theodore O'Neal from Litchfield Hills research. Please go ahead.

Very much. Um, I just want

the US.

No. Um, as we, uh,

as we, uh,

Close in, uh, uh, in the pr, uh, amount amongst girls. Uh, 1 1, mid East, uh, Tier 1 Tier 1 channel, uh, who order, uh, 30 million. Sorry, 30,000 units. I paid the phone into the Middle East, the market. Um, that's, that's the, that's the that's the account for 70, 70 70%, something of the 40. Uh 40 40,000 unit. Uh, yeah, the the the remaining is the uh, well, so to the US market, um, but I I believe the more more, uh, more more phones unit will be, uh,

Would be so to US market when we, uh, launched, uh, launched campaigns with the trees and warmer this, uh, this, uh, a tier 1 channels, uh, in the near future.

So we believe that, you know, sorry, uh, yeah, we believe the US is the biggest, you know, P market. And we also believe that I think, uh, we, uh,

I think we uh, preaching the digital gap between the people and the and the pets. These uh, concept, I think is far more than just a Tracker, just a CCTV, just a single direction to Monitor and manage the pet. So we we are provide a mutual call a mutual, communication between the people and pets. But the problems we need to, I think more, uh, education for these uh opportunity like iPhone many years ago, right? We, we believed iPhone change the mobile internet in the world and then I and now people have to convince people and let people know the dog and pet can use the, you know, the phone and the social, like a people. So, and, uh, we, we will, uh, we are very confident about that. But we need to get more, uh, campaign and more marketing spending and, uh, in the US and, and the rest of the world. Uh, that's why we we we we

Try to separate, uh, this business to try, uh, continue because the initial data for the, for the just 1, more than 1 month, get this uh, about 40, uh thousand, uh, order I think. Uh, 30 is come from the Middle East and and another 10,000 come from us. All this data I think is, uh, give us confidence. We want to more and have it invest in and design and also in the marketing campaign in the US and worldwide.

Thank you. Thank you.

Yes. Uh, so in car, infotainment. So uh majorly I think for traditional traditional as an oil car. Uh this this uh, infotainment uh, majoring is come from the Chinese, uh, you know, uh, providers. We almost cover all these provider. Let me is there a new generation or use our

Our solution. We already integrated our solution into the, uh, this provider and they majorly provide in the North American Latin American and also the Middle East and uh and and the Europe market. So I think we almost cover all

The provider from the team from the number 1, number 2, almost number 17. So we already seen is that is initial presence, uh, and in back with them. So we can see the fast growth for in, for like, a couple play. Like a, uh, an income. Uh, uh, uh, uh, uh, in for, uh, 10 minutes. I think, uh, this will give us a huge increase and future Revenue in the future.

Thank you very much.

Thank you.

This concludes the question Association, I would now like to turn the conference back to Daniel GAO for any closing remarks.

Okay, thank you once again for joining us today. If you have further questions please feel free to contact your colleagues in V. Relations through the contact information provided on our website or speak to our investor relations for criticism. Adversary we look forward to speaking with you all again our last quarterly code. Thank you.

Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect

Thank you. Thank you. Bye, bye.