Q1 2026 uCloudlink Group Inc Earnings Call

May 13, 2026

Speaker #2: Thank you for standing by and welcome to the uCloudlink Group Inc. first quarter 2026 earnings conference call. All participants are in a listen-only mode.

Speaker #2: There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key.

Speaker #2: Followed by the number one on your telephone keypad. I would now like to hand the call over to Mr. Shi Chaohui Gao, company investor relations.

Speaker #2: Please go ahead.

Daniel Gao: Okay. Thank you, operator. Hello, everyone, and thank you for joining us on uCloudlink Q1 2026 earnings call. The earnings release and our earnings presentation are now available on our IR website at ir.ucloudlink.com. Joining me on today's call are Mr. Zhiping Peng, Co-founder and Chairman of the Board of Directors, Mr. Chaohui Chen, Co-founder, Director, and Chief Executive Officer, and Mr. Yimeng Shi, Chief Financial Officer. Mr. Chen will begin with an overview of our recent business highlights. Mr. Shi will then discuss our financial and operational highlights for the quarter. They will all be available 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 Securities Litigation Reform Act of 1995.

Speaker #3: Okay. Thank you, operator. Hello, everyone. And thank you for joining us on uCloudlink first quarter 2026 earnings call. The earnings release and our earnings presentation are now available on our IR website.

Speaker #3: At IR door uCloudlink dot com. Joining me on today's call are Mr. Zhu Pingpeng, co-founder and chairman of the board of directors. Mr. Chaohui Chen, co-founder director and chief executive officer.

Speaker #3: And Mr. Yimeng Shi, chief financial officer. Mr. Chen will begin with an overview of our recent business highlights. Mr. Shi will then discuss our financial and operational highlights for the quarter.

Speaker #3: They will all be available to take your questions in the QA 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 securities litigation reform act of 1995.

Daniel Gao: 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 company's control, which may cause actual results, performance, or achievements of the company to be materially different from the results, performance or expectations projected or implied by these forward-looking statements. All forward-looking statements are expressly qualified in their entirety by the cautionary statements, risk factors, and details of the company's filings with the SEC. The company does not assume any obligation to revise or update any forward-looking statements as a result of new information, future events, change in market conditions, or otherwise, except as required by law. Please also note that uCloudlink's earning press release and this conference call include discussions of unaudited GAAP financial information and unaudited non-GAAP financial measures.

Speaker #3: These forward-looking statements are based on measurements current expectations and observations that involve known and unknown risks uncertainties and other factors not under companies control.

Speaker #3: Which may cause actual results performance or treatments of the company to be measurably different from the results performance or expectations projected or implied by these forward-looking statements.

Speaker #3: All forward-looking statements are expressly qualified in their entity by their criteria station statements risk factors and details of the company's feelings with the SEC.

Speaker #3: The company does not assume any obligation of reverse or update any forward-looking statements as a result of new information future events change in market conditions or otherwise accept as required by law.

Speaker #3: Please also note that uCloudlink's earning press release and this conference call include discussions of an audit gap financial information and an audit non-gap financial methods.

Daniel Gao: uCloudlink's press release contains the reconciliation of the unaudited non-GAAP measures to the most directly comparable unaudited GAAP measures. I will now turn the call over to Mr. Chen. Please go ahead.

Speaker #3: uCloudlink's press release contains a regulations of the an audit non-gap methods to the most directly comparable an audit gap methods. I will now turn the call over to Mr. Chen.

Speaker #3: Please go ahead.

Chaohui Chen: Thank you, Daniel, good morning or evening. We delivered total revenues of $15.9 million in Q4 2026. This result come despite significant external headwinds, including macroeconomic volatility, weak travel demand, rising energy prices, memory chipset cost increase, and the conflict-related supply chain disruption. More importantly, our new product lines have continued to warm up and scale, gradually offsetting the negative impact on our traditional business for these external headwinds. With the continued ramp-up of new products, such as the PetPhone and the UniCord Pro, revenues from our new business lines are increasing following an initial market warm-up period over the past 2 quarters. Each of these new products continue to make significant strategic progress during the quarter, laying the groundwork for accelerated commercial momentum going forward.

Chaohui Chen: Thank you, Daniel, good morning or evening. We delivered total revenues of $15.9 million in Q4 2026. This result come despite significant external headwinds, including macroeconomic volatility, weak travel demand, rising energy prices, memory chipset cost increase, and the conflict-related supply chain disruption. More importantly, our new product lines have continued to warm up and scale, gradually offsetting the negative impact on our traditional business for these external headwinds. With the continued ramp-up of new products, such as the PetPhone and the UniCord Pro, revenues from our new business lines are increasing following an initial market warm-up period over the past two quarters. Each of these new products continue to make significant strategic progress during the quarter, laying the groundwork for accelerated commercial momentum going forward.

Speaker #2: Thank you, Daniel. And good morning or evening. We deliver total revenues of US dollar 16.9 million in the fourth quarter of 2026. These result come despite significant external headwinds.

Speaker #2: Including microeconomic volatility. Weak travel demand rising energy prices. Memory chipset cost increase. And the conflict related supply chain disruption. More importantly, our new product lines have continued to warm up and scale gradually offsetting the negative impact on our traditional business for these external headwinds.

Speaker #2: With the continued ramp-up of new products, such as the platform and the Unicode Plot, revenues from our new business lines are increasing following an initial market warm-up period over the past two quarters.

Speaker #2: Each of these new product continue to make significant strategic progress during the quarter. Laying the groundwork for accelerated commercial momentum going forward. Overall, our three new growth engine growth coming line growth coming IoT and growth coming scene.

Chaohui Chen: Overall, our three new growth engines, GlocalMe IoT, and GlocalMe Life, deliver remarkable year-over-year revenue growth of over 400%, 300%, and 170% respectively. To accelerate commercialization and capture early market leadership, we strategically increased marketing spending during the quarter on the platform and broader PetPogo ecosystem. While these investments will temper near-term profitability and cash flow, we are confident they will yield substantial long-term payoffs and contribute to sustainable growth going forward. I will now review the highlights for each of our key business lines. I will start with the PetPogo ecosystem. Building on the exceptional global media attention and the market validation we see at MWC 2026 and CES 2026 with the unveiling of our PetPogo ecosystem and the all new PetCam.

Speaker #2: Deliver remarkable year-over-year revenue growth of over 400%, 300%, and 170%. Respectively, to accelerate commercialization and capture early market leadership we strategically increase marketing spending during the quarter on the platform and broader Pepper Gold ecosystem.

Speaker #2: While this investments we attempt near-term profitability and cash flow. We are confident they will yield substantial long-term payoffs and contribute to sustainable growth going forward.

Speaker #2: I will now reveal the highlights for each of our key business lines. I will start with the Pepper Gold ecosystem. Building on the exceptional global media attention and the market validation received at MWC 2026 and the CEX 2026 with the unveiling of our Pepper Gold ecosystem and the all-new Pepcam.

Chaohui Chen: We launched the beta version of the PetGo app during the quarter. This differentiated and the pioneering AI power plus social platform for the pet technology industry leverages AI technologies and the platform to enable pets and their owners to communicate seamlessly. By effectively transforming the pet ownership experience into an interactive, social, and connected community. We are fostering parallel engagement and continuous interaction. PetGo also allow pet owners to manage their pet care journey across three stages, before, during, and after activities. This social platform is expected to complete commercial validation in Q2 2026, and begin driving growth starting in Q3 2026. During the quarter, average monthly active user, MAU, reached 1,397, and the early beta feedback has been overwhelmingly positive, reinforcing our confidence in its user adoption and strong growth potential.

Speaker #2: We launched the beta version of the Pepper Gold app during the quarter. This differentiated and pioneering AI power plus social platform for the pet technology industry leverages AI technologies and the platform to enable pets and their owners to communicate seamlessly.

Speaker #2: By effectively transforming the pet ownership experience into an interactive social and connected community. We are fostering unparalleled engagement and continuous interaction. Pepper Gold also allow pet owners to manage their pet care journey across three stages.

Speaker #2: Before, during, and after activities. This social platform is expected to complete commercial validation in Q2, 2026 and begin driving growth starting in Q3, 2026.

Speaker #2: During the quarter, average monthly active user MAU reached 1,397 and the early beta feedback has been Reinforcing our confidence in its user adoption and strong growth potential.

Chaohui Chen: Moving on to our GlocalMe Life business line, we continue to drive exponential growth with industry-first innovations. Our UniCord Pro gained strong traction during the quarter, with the sales volume and the market adoption accelerating rapidly, enabling a lighter, more convenient lifestyle with secure and reliable connectivity, freeing users from cumbersome device while ensuring seamless protected experience. GlocalMe Life solutions saw average daily activity user, DAU, during the quarter increase 559.9% year-over-year. Turning to GlocalMe Internet of Things, IoT. Our forward-looking strategy is already beginning to generate initial result. The business maintain its strong growth trajectory with user adoption and revenue contribution continuing to expand rapidly year-over-year. We continue to solidify our strategy position to capture the additional market share in high growth sector, such as in-car infotainment and security cameras.

Speaker #2: Moving on to our growth coming live business line, we continue to drive exponential growth with industry-first innovations. Our unicode plot gains strong traction during the quarter.

Speaker #2: With the sales volume and the market adoption accelerating rapidly. By enabling a lighter more convenient lifestyle with secure and reliable connectivity. Freeing users from cumbersome device.

Speaker #2: While ensuring seamless protected experience. Growth coming live solutions solve average daily activity user DAU during the quarter increase 500, 59.9% year over year. Turning to growth coming Internet of Things IoT, our forward-looking strategy is already beginning to generate initial result.

Speaker #2: The business maintain its strong growth trajectory with user adoption and revenue contribution continuing to expand rapidly year over year. We continue to solidify our strategy position to capture additional market share in high growth sector such as in car, infotainment, and security cameras.

Chaohui Chen: Average DAU for GlocalMe IoT increased by 246.5% compared to Q1 of 2025. As of March thirty-first, 2026, our total IoT solutions install base reached 2.93 million. For our GlocalMe SIM business line, our eSIM Trio solution continues to gain strong traction and growth momentum, with average DAU increasing 193.6 year-over-year during the quarter. This validates both our carrier partnership model and its market positioning as a permanent secondary SIM for users. Furthermore, our CarryCo insurance program has gained pilot deployment, providing a highly effective low CapEx solutions for operators that enhance their global roaming capability. This model is gaining strong traction and is welcomed by both operators and users, confirming a robust product market fit.

Speaker #2: Average DAU for growth coming IoT increase by 200, 46.5% compared to the fourth quarter of the year 2025. And as of March 31st, 2026, our total IoT solutions installs based install base reached 2.93 million.

Speaker #2: For our growth coming scene business line, our eSIM trio solution continues to gain strong traction and growth momentum. With average DAU increasing 193.6 year over year during the quarter, this validates both our carrier partnership model and its market positioning as a permanent secondary SIM for users for the more our carry call insurance program has gained pilot deployment providing a highly effective low CAPEX solutions for operators that enhance their global roaming capability this model is gaining strong traction and is welcomed by both operators and users.

Speaker #2: Confirming a robust product-market fit. Lastly, the launch of our cutting-edge near-gold G50 mask, the world's first sky-to-ground integrated mobile connectivity hub, is expected to serve as a powerful growth engine for the coming quarter.

Chaohui Chen: Lastly, the launch of our cutting-edge MeowGo G50 Max, the world-first sky-to-ground integrated mobile connectivity hub, is expected to serve as a powerful growth engine for the coming quarter. The MeowGo G50 Max is redefining the connectivity when it matters most. In conflict-affected markets with disrupted terrestrial network, its resilient connectivity is a critical differentiator. Powered by our AI-driven HyperConn technologies, it seamlessly switches between the terrestrial, in-flight, home Wi-Fi, creating a unique one-hop global freedom experience. It also enables satellite-based two-way messaging and emergency SOS, extending connectivity from ocean to desert. We expect this product to reach commercial deployment in Q2 of 2026. Looking beyond its market potential, the MeowGo G50 Max not only represents our high-end brand aspiration, but also focuses on driving increased sales and elevating our brand across the entire portfolio of mobile connectivity solutions.

Speaker #2: The near-gold G50 mask is redefining the connectivity one imagined most. In conflict-affected market with disrupted terrestrial network, its resilient connectivity is a critical differentiator.

Speaker #2: Powered by our AI-driven hypercon technologies, it seamlessly switch between the terrestrial in-fly home Wi-Fi creating a unique one-hub global freedom. Experience. It also enables satellite-based two-way messaging and the emerging SOS extending connectivity from ocean to desert.

Speaker #2: We expect this product to reach commercial deployment in the second quarter of 2026. Looking behind its market potential, the near-gold G50 mask not only represents our high-end brand aspiration, but also focuses on driving increased sales and elevating our brand across the entire portfolio of mobile connectivity solutions.

Chaohui Chen: Looking ahead, we remain in the early high growth stages of our transformation. Throughout 2026, we will continue investing strategically in our new growth engines. The strong market validation from MWC 2026 and CES 2026, positive PetGo beta feedback, and the sustained momentum in GlocalMe IoT demonstrate how our diversified business strategy remains firmly on track. Looking at the coming quarters, we expect our traditional business to gradually stabilize, reaching a level where further downside is limited. At the same time, our new business line will continue to grow, driven by ongoing product ramp-ups and the market adoption. Together, if these dual momentum, our traditional business stabilizing and our new business scaling up continues as we expect. It is expected to further offset the external headwind that has impact our performance.

Speaker #2: Looking ahead, we remain in the early high-growth stages of our transformation. Throughout 2026, we will continue investing strategically in our new growth engines. The strong market validation from MWC 2026 and the CES 2026 positively Pepper Gold beta feedback and the source tend momentum in growth coming IoT demonstrate how our diversified business strategy remains firmly on track.

Speaker #2: Looking at the coming quarter, we expect our traditional business to gradually stabilize. Reaching a level where further downside is limited. At the same time, our new business line will continue to grow.

Speaker #2: Driven by ongoing product ramp-ups and the market adoption. Together, if this deal momentum our traditional business stabilizing and our new business scaling up continues as we expect it is expected to further offset the external headwind that had impact our performance.

Chaohui Chen: As a result, we believe Q2 2026 will be a turning point in our overall business trajectory with a return to positive year-over-year growth. We are building towards sustainable growth by scaling our user base globally and bridging the digital divide in cross-border connectivities, as well as the emotional distance between people and their pets, while creating long-term value for our shareholders. With that disciplined optimism in mind, we are confident that we have the right strategy in place to drive sustainable growth going forward. For Q2 2026, we expect total revenues to be between $19.5 million and $22.5 million, representing an increase of 0.5% to 16% compared the same period of 2021.

Speaker #2: As a result, we believe the second quarter of 2026 will be a turning point in our overall business trajectory, with a return to positive year-over-year growth.

Speaker #2: We are building towards sustainable growth by scaling our user-based globally, and bridging the digital device in cross-border connectivities as well as the emotional distance between people and their pets.

Speaker #2: While creating long-term value for our shareholders, this brings optimism in mind. We are confident that we have the right strategy in place to drive sustainable growth going forward.

Speaker #2: For the second quarter of the 2026, we expect total revenues to be between US dollar 19.5 million and US dollar 22.5 million. Representing an increase of 0.5% to 16% compared to the same period of year 2025.

Chaohui Chen: I will now turn the call over to Mr. Shi.

Speaker #2: I will now turn the call over to Mr. Shi. Thank you, Mr. Chen. Hello, everyone. I will go over our operational and financial highlights for the first quarter 2026.

Yimeng Shi: Thank you, Mr. Chen. Hello, everyone. I will go over our operational and financial highlights for Q1 2026. Average daily active user, DAU, and monthly active user, MAU, represent the average number of unique users engaging with our GlocalMe service on a daily and a monthly basis, respectively. Those metrics show strong growth momentum in Q1. Average DAU in Q1 was 354,789, representing an increase of 10.2% from 321,836 in Q1 2025. GlocalMe IoT, GlocalMe SIM, and GlocalMe Life all deliver significant gains with average DAU up 246.5%, 293.6%, and 559.9% respectively from the same period last year.

Speaker #2: Average daily active user DAU and monthly active user MAU represents the average number of unique user engaging with our growth coming service on a daily and monthly basis, respectively.

Speaker #2: Both metrics show strong growth momentum in the first quarter. Average DAU in the first quarter was 354,000 and 789. Representing an increase of 10.2% from 321,000 and 836 in the first quarter of the 2025.

Speaker #2: Growth coming IoT SIM and growth coming live all deliver significant gains. With average DAU up 246.5%, 193.6%, and 559.9%, respectively, from the same period last year.

Yimeng Shi: Average DAUs from our GlocalMe MeowGo business declined by 5.8% year over year. Average MAUs were 337,274, representing an increase of 6% from 695,599 in Q1 2025. Average MAUs from our GlocalMe IoT, GlocalMe SIM, and GlocalMe Life business saw increase of 142.1%, 76.8%, and 609% respectively from the same period last year. Average MAUs from our GlocalMe MeowGo business decreased by 7.3% year over year.

Speaker #2: Average DAUs from our growth coming near-gold business declined by 5.8% year over year. Average MAUs were 337,000 and 274. Representing an increase of 6% from 695,000 and 599 in the first quarter of 2025.

Speaker #2: Average MAUs from our growth coming IoT, growth coming SIM, and growth coming live business saw increase of 142.1%. 76.8% and 609%, respectively, from the same period last year.

Speaker #2: Average MAUs from our growth coming near-gold business decreased by 7.3% year over year. In the first quarter of 2026, average DATs were 327,000 and 615, with 13,000 and 414 owned by the company and 314,000 and 201 not owned by the company.

Yimeng Shi: In Q1 2026, average DATs were 327,615, with 13,414 owned by the company and 314,201 not owned by the company, representing an increase of 6.1% from Q1 2025. During the quarters, 58.6% of DATs were from uCloudlink 1.0 international data connectivity service, and 41.4% were from uCloudlink 2.0 local data connectivity service.

Speaker #2: Representing an increase of 6.1% from the first quarter 2025. During the quarters, 58.6% of DATs were from ukulele and 1.0 international data connectivity service.

Speaker #2: And 41.4% were from ukulele and 2.0 local data connectivity service. In March 2026, the average daily data usage per terminal was 1.57 gigabyte. Average MATs in the first quarter were 702,000 and 805, representing an increase of 7.7% from 652,000 and 810 in the first quarter 2025.

Yimeng Shi: In March 2026, the average daily data usage per terminal was 1.57 GB. Average MATs in Q1 were 702,805, representing an increase of 7.7% from 652,810 in Q1 2025. Growth was driven by strong momentum across our three new growth engine, with average MAT for GlocalMe IoT, GlocalMe SIM, and GlocalMe Life increases 135%, 74.1%, and 806.1% respectively. From the same period last year, average MAT from GlocalMe mobile business, which we previously referred to as GlocalMe mobile fixed broadband business, decreased by 4.1% year-over-year.

Speaker #2: Growth was driven by strong momentum across our three new growth engines with average MAT for growth coming IoT, growth coming SIM, and growth coming live increasing 135%.

Speaker #2: 74.1% and 806.1%, respectively. From the same period last year, average MATs from growth coming near-gold business, which we previously referred to as growth coming mobile fixed broadband business, decreased by 4.1% year over year.

Yimeng Shi: As Platform is a newly launched business, we only just begun to see user adoption and engagement grow during the quarters. In Q1, average DAU and MAUs were 101,097 and 1,397 respectively. While average DATs and MATs for Platform reached 368 and 789, reflecting the growing traction of this new offering. As of 31 March 2026, the company had 212 patents with 183 approved and 29 pending approval, and a pool of SIM card from 397 MNOs globally. Total revenue for Q1 2026 were $69.9 million, representing a decrease of 10.1% from $18.7 million in the same period 2025.

Speaker #2: As platform is a newly launched business, we only just begun to see user adoption and engagement grow during the quarters in the first quarter.

Speaker #2: Average DAU and MAUs were 1,097 and 1,397, respectively. While average DATs and MATs for platform reach 368 and 789, reflecting the growing traction of this new offering.

Speaker #2: As of March 31, 2026, the company had 212 patents, with 183 approved and 29 pending approval. And the pool of SIM cards from 397 MNOs globally.

Speaker #2: Total revenue for the first quarter 2026 was 69.9 million dollars, representing a decrease of 10.1% from 18.7 million US dollars in the same period 2025.

Yimeng Shi: Revenue from service was $13.3 million, representing a decrease of 6.3% from $14.2 million in the same period 2025. Revenue from service contributed 79.9% of total revenue during Q1 2026, compared to 75.7% in same period last year. Geographically speaking, during Q1 2026, Japan contributed 32%, Mainland China contributed 30.3%, North America contributed 17.3%, and other country and regions contributed the remaining 20.4% compared to 40.4%, 31.2%, 12.9%, and 13.5% respectively in the same period 2025.

Speaker #2: Revenue from service was 13.3 million US dollars. Representing a decrease of 6.3% from 14.2 million US dollars in the same period 2025. Revenue from service contributed 79.9% of total revenue during the first quarter of 2026, compared to 75.7% in the same period last year.

Speaker #2: Geographically speaking, during the first quarter 2026, Japan contributed 32%. Mainland China contributed 30.3%. North America contributed 17.3%. And other countries and regions contributed their remaining 20.4%, compared to 40.4%, 31.2%, 12.9%, and 15.5%, respectively, in the same period 2025.

Yimeng Shi: Our gross profit was $8.3 million compared to $9.7 million in the same period, 2025. Overall gross margin in Q1 2026 was 49.1% compared to 51.7% in same period 2025. Gross margins on service was 54.5% in Q1 2026 compared to 57.3% in the same period 2025. Excluding share-based compensations, total operating expenses was $10.8 million compared to $9.9 million in the same period 2025.

Speaker #2: Our gross profit was $8.3 million, compared to $9.7 million in the same period of 2025. Overall gross margin in the first quarter of 2026 was 49.1%, compared to 51.7% in the same period of 2025.

Speaker #2: Gross margins on service was 54.5% in the first quarter 2026, compared to 57.3% in the same period 2025. Excluding share-based compositions, total operating expenses was 10.8% millions, compared to 9.9 million US dollars in the same period 2025.

Yimeng Shi: Net loss in Q1 2026 was $3.5 million compared to a net loss of $0.6 million in the same period 2025. Adjusted EBITDA was -$2.0 million in Q1 2026 compared to +$1.4 million in the same period 2025. For Q1 2026, we record an operating cash outflow of $8.7 million compared to an inflow of $0.2 million in same period 2025. For Q1 2026, our capital expenditure were $30,000 compared to $300,000 in the same period, 2025. Turning to balance sheet items.

Speaker #2: Net loss in the first quarter of 2026 was $3.5 million, compared to a net loss of $0.6 million in the same period of 2025.

Speaker #2: Adjusted EBITDA was negative 2.0 million US dollars in the first quarter 2026, compared to a positive 1.4 million US dollars in the same period 2025.

Speaker #2: For the first quarter 2026, we record an operating cash outflow of 8.7 million US dollars, compared to an inflow of 0.2 million US dollars in the same period 2025.

Speaker #2: For the first quarter 2026, our capital expenditure was 30,000 US dollars, compared to 300,000 US dollars in the same period 2025. Turning to balance sheet items, our cash and cash equivalents were 28 million US dollars as of March 31, 2026, compared to 32.8 millions as of 2025.

Yimeng Shi: Our cash and cash equivalents were $28 million as of 31 March 2026 compared to $32.8 million as of 31 December 2025. We continue to strengthen our financial position and believe we are well-positioned to drive continued growth in our business. Operators, please open it up for Q&A. Thanks.

Speaker #2: We continue to strengthen our financial position and believe we are well positioned to drive continued growth in our business. So, operators, let's open up for Q&A.

Speaker #2: Thanks.

Operator: Thank you.

Yimeng Shi: Thank you.

Speaker #1: Thank you.

Operator: We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. If you are on a speakerphone, please pick up the handset to ask your question. Our first question today will come from Theodore O'Neill with Litchfield Hills Research. Please go ahead.

Operator: We will now begin the question-and-answer session. To ask a question, you may press Star then one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press Star then two. If you are on a speakerphone, please pick up the handset to ask your question. Our first question today will come from Theodore O'Neill with Litchfield Hills Research. Please go ahead.

Speaker #3: Thank you.

Speaker #1: We will now begin the question-and-answer session. To ask a question, you may press star than one on your telephone and wait for your name to be announced.

Speaker #1: If you wish to cancel your request, please press star, then two. If you are on a speakerphone, please pick up the handset to ask your question.

Speaker #1: And our first question today: will come from ahead.

Theodore O'Neill: Thank you for taking my questions. My first question is about the G50 Max. In your prepared remarks, you're talking about this being interesting to market it's in conflict zones. I'm hoping that it's a shrinking market, not a growing market. Could you talk about some other markets where G50 Max would be appropriate. I think you mentioned at CES, and I'm thinking perhaps the very remote rural areas as well.

Speaker #4: thank you for taking my questions. my first question is about the G50 Max. And in your prepared remarks, you're talking about this being, interesting to, the market that's in conflict zones.

Speaker #4: And I'm hoping that it's a shrinking market, not a growing market. So could you talk about some other markets where this G50 Max would be appropriate?

Speaker #4: I mean, I think you mentioned at sea, and I'm thinking per-perhaps the very remote rural areas as well.

Chaohui Chen: Yeah. I'm Chaohui Chen. Our MeowGo G50 Max is our high-end product. It's a 5G. We can roll out 5G in over 100 countries. That's most popular we can offer in the 5G in the world. Compare like the other, our competitor like AT&T, maybe just 75. The first advantageous, we can provide the maximize coverage of 5G worldwide. That's first. The second, we can provide about certified air LAN for the in-cabin 4G, 5G connection. The second, that means the business traveler on the in the air cabin, they can serve in. Is about satellite SOS and the and the messaging.

Speaker #3: Yeah. So I'm, Chaohui Chen. So, our G Max is our high-end product. It's a 5G. we can load our, 5G in our 100 countries.

Speaker #3: That's most, popular. We can offer in the 5G in the world. So compare, like, the other our competitor, like, AT&T, maybe just, 75. So the first, advantages we can provide a maximize, coverage of 5G worldwide.

Speaker #3: That's first. And the second, we can provide, about, 35 airline, for the in, in, in cabin, in cabin 5, 4G 5G, connection. The second, that means, the business traveler, on the in the, airc-air cabin, they can surfing.

Speaker #3: And then, it's, about, satellite, SOS and, and the messaging. So no matter you are in the outdoor or, in the conflict area, you can get, you never lost the connection.

Chaohui Chen: No matter you are in the outdoor or in the comfort area, you can get, you never lost the connection. The number 4 is, if you are in the office and at home, you of course you can get Wi-Fi available, but Wi-Fi sometime is not reliable, sometime is unreliable. During this case, we can back up by the 5G and 4G with the multi carrier, that enable your remote work and remote study and remote meeting, never fail down. We balance the best coverage and the best tariff. That's, that means 1 device and 1 account, you can enjoy the global best coverage and the best tariff.

Speaker #3: And the and the number four is, if you are in the office, and, in at home, you of-of course you can get, Wi-Fi available.

Speaker #3: But Wi-Fi sometime is, not reliable. sometime, i-i-it's unreliable. During this, case, you we can, back up by the 5G and 4G with the multi-carrier.

Speaker #3: that enable your, remote work and remote study and remote meeting, enable fa-fell down. So, we balance the best coverage, and the, the, the best, tariff.

Speaker #3: So let's that means one device and, one account, you can enjoy, the global, best coverage and the best tariff. So that's why we, we believe that, one device for every scenario, not only at home, at the office, can solve the people have to bring the multi-device, multi, package at home, Wi-Fi, in cabin Wi-Fi, we have, longing, eSIM or, longing, or local multi-carrier, tariff, then you can get the, the similar, coverage and the s-solution.

Chaohui Chen: That's why we believe that one device for every scenario, not only at home, at office, can solve the people have to bring the multi-device, multi-package, home Wi-Fi, in-cabin Wi-Fi. We have roaming eSIM or roaming or local multi-carrier tariff, then you can get the similar coverage and the solution. Now with our solution, one device, simply the one device, one account, you can get the best coverage and the tariff. That's our purpose.

Speaker #3: And now, with our solution—one device, simply just one device, one account—you can get the best coverage and the tariff. That's our purpose.

Theodore O'Neill: Okay. Thank you. My next question is about the in-car infotainment and security cameras. Can you give us any more detail about the actual market share or the growth of that exposure to that business?

Speaker #4: Okay. Thank you. My next question is about the in-car infotainment and security cameras. Can you give us any more detail about the actual market share or the growth, or the exposure of that business?

Chaohui Chen: Yes. I think that's about our IoT business. We embed our Cloud SIM and HyperConn solution into the, you know, in-car infotainment and that's CarPlay. Majorly CarPlay devices is come from China. Major top 10, this partner all embed our solution. That means, plug our, this car, CarPlay device, not only can get the entertainment in the car, but also can get the network in the car. Almost the top 10, these provider all use our solution. That's for car infotainment. For camera, I think the car now are more and more, you know, 4G camera. In the traditional, they need to plug a SIM card inside.

Speaker #3: Yes. I think that's, about our IoT business. Yeah. We embed our cloud SIM and hypercon solution. Into, you know, in-car infotainment. And, the CarPlay, the majorly, CarPlay, devices, this m-majorly, CarPlay devices is come from China.

Speaker #3: major top 10, this partner, all embed our solution. That means, plug our, this Car-CarPlay device. Not only, can get the entertainment in the car, but also to can, can get the network in the car.

Speaker #3: So, almost the top 10, these, these, provider, all use our solution. So that's for car infotainment. And for the camera, so I think the car now, more and more, you know, 4G camera, they use the in the in the traditional, they need to plug a SIM card inside.

Chaohui Chen: That means if the carrier network has some problem or coverage adjustment, you have to go to the high place to replace SIM card for the camera. It's very inconvenient. With our solutions, because 4G is more popular, the price is similar like Wi-Fi camera. You can see the 4G camera, the volume of the market share in the camera market is bigger and bigger. For the 4G camera, I think that currently, more and more this top from China provider embed our software solution into their camera. That means that user, end user still can use the SIM slot to put into SIM card, but it's expensive and coverage is poor. Use our solution, not only get a benefit from the better tariff, but also can get cross-carrier coverage.

Speaker #3: That means if the carrier network has some problem or coverage adjustment, you have to ch go to the high place to replace SIM card, for the camera.

Speaker #3: It's very inconvenient. But with our solutions, because 4G is more popular, the price is similar to a Wi-Fi camera. You can see that for the 4G camera, the volume of the market share in the camera market is getting bigger and bigger.

Speaker #3: So for this big for the 4G camera, I think the currently, more and more is the top, from China provider, embed our, software solution into their camera.

Speaker #3: That means that user end-user still can use the SIM slot to put into SIM card. But it's expensive and coverage is poor. But use our solution, not only get a benefit from the, better, tariff, but also can get cross-carrier coverage that you can see our, market share in this market, grows dramatically.

Chaohui Chen: You can see our market share in this market grows dramatically. You can see the, our installation volume is about 3.9 million pieces for shipment. In the 6 months later, they will turn into the package and with our in the operation. About from shipment to the user and adopt our solution needs 6 months. You can see 6 months later, we will get more user, far more user than currently.

Speaker #3: So you can see the our installation volume is about, 20, 2. 2.9, 3.9, million, pieces. for, for shipment. In the six year, in the six months later, they will turn into, package and with our, in the operation.

Speaker #3: About from shipment to the user and adopt our solution need six months. So you can see, six months later, we get—we will get more users, far more users than currently.

Theodore O'Neill: Thank you. My last question is about supply chain issues. You mentioned in the prepared remarks about memory prices being a headwind, but I was also wondering, are you seeing any supply chain issues in terms of availability?

Speaker #4: O-thank you. And my last question is about supply chain issues. You mentioned in the prepared remarks about memory prices being a headwind. But I was also wondering, are you seeing any supply chain issues in terms of availability?

Chaohui Chen: Yes. I think, compared last year, memory chip is almost five to 10 times higher. That's a heavy impact, you know, the cost of the device. We think a lot of ways. One side, we have a lot of deficit, we have, you know, but also, so we try to, you know, redesign to reduce the memory size and to lower the cost. Also, we look in the instead of the Chinese local memory. All these, we can overcome some part of the memory price going up, but we can't offset the total because the price is too high. That definitely will have some impact to our selling price.

Speaker #3: yes. I think, compare last year, memory chip is, almost, 5 to 10 times higher. So that's a heavy impact, you know, the, the I think the, the, the, the, the, the cost of the device.

Speaker #3: So we have many, we think a lot of ways. On one side, we have a lot of deposit, we have, you know, but also so we try to, you know, redesign to reduce the memory size and to lower the cost.

Speaker #3: And also, we looking the, the, the instead of the, Chinese local memory. So all these we can overcome some part of the memory price, going up.

Speaker #3: But we can't offset the total. Because the price is too high. That definitely, will some impact to our selling price. You can see our, not only 2B and 2C selling price for the device is higher about 20%, 30% up than compare last year.

Chaohui Chen: You can see our not only 2B and 2C selling price for the device is higher, about 20%, 30% up than compared last year.

Theodore O'Neill: Thank you very much.

Speaker #4: Thank you very much.

Operator: Again, if you have a question, please press star then 1. As there are no further questions at this time, I would like to hand the call back over to Mr. Gao for any closing remarks. Please go ahead.

Operator: Again, if you have a question, please press Star then one. As there are no further questions at this time, I would like to hand the call back over to Mr. Gao for any closing remarks. Please go ahead.

Speaker #2: Again, if you have a question, please press star, then one. As there are no further questions at this time, I would like to hand the call back over to Mr. Gao for any closing remarks.

Speaker #2: Please go ahead.

Daniel Gao: 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 Advisors. We look forward to speaking with you or again on our next quarterly call. Thank you.

Speaker #5: Thank you. Once again, for joining us today. If you have further questions, please feel free to contact uCloudlink Inc. relations through the contact information provided on our website or speak to our investor relations form.

Speaker #5: For assistance advisory, we look forward to speaking with you or again on our next quarterly call. Thank you.

Operator: That does conclude our conference for today. Thank you for your participation. You may now disconnect.

Speaker #2: That does conclude our conference for today. Thank you for your participation. You may now disconnect.

Chaohui Chen: Thank you.

Theodore O'Neill: Thank you. Bye-bye.

Speaker #3: Thank you.

Speaker #4: Thank you.