Q2 2026 uCloudlink Group Inc Earnings Call

August 18, 2026

Operator: Thank you for standing by, and welcome to the uCloudlink Q2 2026 earnings conference call. All participants are in a listen-only mode. 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 followed by the number on your telephone keypad. I would now like to hand the conference over to Mr. Daniel Gao, Company IR. Please go ahead.

Speaker #1: If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Daniel Gao, company IR.

Speaker #1: Please go ahead.

Speaker #2: Thank you. Hello, everyone, and thank you for joining us on uCloudlink's second quarter 2026 earnings call. The earnings release and our earnings presentation are now available on our IR website at ir.ucloudlink.com.

Daniel Gao: Thank you. Hello, everyone. Thank you for joining us on uCloudlink's Q2 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 the 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 #2: 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; and Mr. Yimeng Shi, Chief Financial Officer.

Speaker #2: 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 #2: 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 provision of the Private Securities Litigation Reform Act of 1995.

Speaker #2: 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.

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 the 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 statement as a result of new information, future events, changes 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 audited GAAP financial information and unaudited non-GAAP financial measures.

Speaker #2: Which may cause actual results, performance, or achievements of the company to be materially different from the results performed, or expectations projected or implied by these forward-looking statements.

Speaker #2: 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 statement as a result of new information, future events, changes in market conditions, or otherwise.

Speaker #2: Except as required by law. Please also note that uCloudlink’s earnings press release and this conference call include discussions of unaudited GAAP financial information and unaudited non-GAAP financial measures.

Speaker #2: uCloudlink's press release contains a reconciliation of their unaudited non-GAAP measures to their most directly comparable unaudited GAAP measures. I will now turn the call over to Mr. Chen.

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

Speaker #2: Please go ahead.

Speaker #3: Thank you, Daniel. Good morning or good evening, everyone. Total revenues for the quarter were $18.2 million. Reflecting the continual impact of microeconomic headwinds, geopolitical tensions affecting outbound travel from China, and a significant surge in memory chip costs, our uCloudlink 1.0 international data connectivity services remain under pressure from these factors.

Chaohui Chen: Thank you, Daniel. Good morning or good evening, everyone. Total revenues for the quarter were USD 18.2 million, reflecting the continued impact of macroeconomic headwinds, geopolitical tensions affecting outbound travel from China, and a significant surge in memory chip costs. Our uCloudlink 1.0 international data connectivity services remain under pressure from these factors. However, this impact is increasingly being offset by the rapid scaling of our uCloudlink 2.0 local data connectivity business, which delivered strong growth, particularly from our GlocalMe IoT business. We expect our uCloudlink 2.0 and new business lines to fully offset the continued contraction in our 1.0 international business by the Q3 as we continue to execute on our strategic priorities. We continue to see strong momentum across our new product portfolio during the Q2.

Speaker #3: However, this impact is increasingly being offset by the rapid scaling of our uCloudlink 2.0 local data connectivity business, which is delivering strong growth, particularly from our local mIoT business.

Speaker #3: We expect our uCloudlink 2.0 and new business lines to fully offset the continued contraction in our 1.0 international business by the third quarter. As we continue to execute on our strategic priorities, we continue to see strong momentum across our new product portfolio.

Speaker #3: During the second quarter, local mIoT and Unicore Pro, in particular, gained solid traction, with revenue contribution steadily increasing as the transition out of the initial market went up phase.

Chaohui Chen: GlocalMe IoT and UniCord Pro, in particular, gained solid traction with revenue contribution steadily increasing as the transition out of the initial market wind-up phase. Each reached key strategic milestones during the quarter, positioning us well for accelerated commercialization going forward. Across our new growth engine, revenues from GlocalMe IoT and SIM increased by 392.4% and 78% year over year respectively. To drive early adoption and fuel market leadership, we maintained an elevated level of investment in market for the platform and technical ecosystem during the quarter. I will now review the highlights for each of our key business lines. I will start with the GlocalMe IoT, which saw its install base expand further with monthly orders now contributing meaningfully to revenue and the business operating profitability on a consistent basis.

Speaker #3: Each key strategic milestone during the quarter positioned us well for accelerated commercialization going forward. Across our new growth engine, revenues from local mIoT and SIEM M increased by 392.4% and 78% year over year.

Speaker #3: Respectively, to drive early adoption and build market leadership, we maintained an elevated level of investment in market for the platform and Paper Goal ecosystem during the quarter.

Speaker #3: I will now reveal the highlights for each of our key business lines. I will start with the local mIoT, which saw its install base expand further with monthly orders now contributing meaningfully to revenue and the business operating profitably on a consistent basis.

Speaker #3: In the second quarter, revenue from local mIoT grew 392.4% year over year. Our total installed base reached 3.34 million units, and MAU grew 210% year over year.

Chaohui Chen: In Q2, revenue from the GlocalMe IoT grew 392.4% year over year. Our total install base reached 3.34 million units, and the MAU grew 210% year over year. User adoption is growing rapidly across key verticals as we further solidify our position in high-growth sectors, including in-car infotainment and security cameras. Moving on to our platform ecosystem, which has undergone a comprehensive upgrade into a dedicated PetPogo AI agent. Building on the AI power plus social model, we pioneered in Q4. This marks a major step forward in functionality and performance, redefining AI-powered communication between humans and their pets. The agent can precisely sense a pet's condition and emotion state, and intelligently support owner at every stage of care, from prevention through real-time response and engagement, delivering a seamless pet care experience.

Speaker #3: User adoption is growing rapidly, further solidifying our position in high-growth sectors, including in-car infotainment and security cameras. Moving on to our platform ecosystem, which has undergone a comprehensive upgrade into a dedicated pet AI agent.

Speaker #3: Building on the AI-powered plus social model, we pioneered in the fourth quarter. This marked a major step forward in functionality and performance, redefining AI-powered communication between humans and their pets.

Speaker #3: The agent can precisely sense a pet's condition and emotional state, and then intelligently support the owner at every stage of care—from prevention through real-time response and engagement—delivering a seamless pet care experience.

Chaohui Chen: This powerful agent creates enormous opportunities across pet health, veterinary care, pet safety, and pet data analytics, each of which we see a source of new value creation. As consumer acceptance of AI pet services grows, we expect to build both a valuable data asset and a leading position in pet AI. We are now extending our pet AI capabilities across communication, safety, and health management. On the market front, we have made significant progress in branding and promotional efforts, generating substantial external attention, with select content pieces reaching tens of millions of views in major platforms such as TikTok, Instagram, et cetera. We look forward to achieving even greater breakthrough in the H2 of the year. Turning to our GlocalMe Life and SIM business line, where our strategy is beginning to generate results.

Speaker #3: This powerful agent creates enormous opportunities across pet health, veterinary care, pet safety, and pet data analytics, each of which we see as a source of new value creation.

Speaker #3: As we see consumer acceptance of AI pet services grow, we expect to build both a valuable data asset and a leading position in pet AI.

Speaker #3: We are now extending our pet AI capabilities across communication, safety, and health management. On the market front, we have made significant progress in branding and promotional efforts, generating substantial external attention.

Speaker #3: With select content pieces reaching tens of millions of views on major platforms such as TikTok and Instagram, we look forward to achieving even greater breakthroughs in the second half of the year.

Speaker #3: Turning to our local mLive and SIEM business line, where our strategy is beginning to generate results. Local mLive solutions saw DAU growth explode, increasing by 801.6% year over year.

Chaohui Chen: GlocalMe Life solutions saw DAU growth explode, increasing by 801.6% year over year, reflecting strong market adoption of the new product line. GlocalMe SIM continued to steadily expand as well, with DAU increasing 132% year over year. Our eSIM solution is gaining strong momentum, leading the market in China and building market share steadily across East Asia and the wider Asia Pacific region. Together, this result shows two product lines at a different stage of maturity, with GlocalMe Life growing rapidly with exceptional triple-digit growth and GlocalMe SIM scaling consistently. Our premium MeowGo G50 Max is the world's pioneering sky-to-ground integrated mobile connectivity hub, delivering seamless connectivity across satellite, flight, and ground networks. It offers the broadest 5G country coverage in the industry, spanning nearly 100 countries, and the performance, reliable across a wide range of scenarios from the urban environment to in-flight travel.

Speaker #3: Reflecting strong market adoption of the new product line, local mSIEM continues to steadily expand as well, with DAU increasing 132% year over year. Our eSIEM solution is gaining strong momentum.

Speaker #3: Leading the market in China and building market share steadily across East Asia and the wider Asia-Pacific region. Together, these results show two product lines at different stages of maturity.

Speaker #3: With local mLive growing rapidly, with exceptional triple-digit growth, and local mSIEMs scaling consistently, our premium mGoal G50 Max is the world-pioneering sky-to-ground integrating mobile connectivity hub, delivering seamless connectivity across satellite, flight, and ground networks.

Chaohui Chen: Our premium MeowGo G50 Max is the world's pioneering sky-to-ground integrated mobile connectivity hub, delivering seamless connectivity across satellite, flight, and ground networks. It offers the broadest 5G country coverage in the industry, spanning nearly 100 countries, and the performance, reliable across a wide range of scenarios from the urban environment to in-flight travel.

Speaker #3: It offers the broadest 5G country coverage in the industry, spanning nearly 100 countries. And the performance is reliable across a wide range of scenarios, from the urban environment to inflight travel.

Speaker #3: Powered by our AI Hypercon technology, the G50 Max has built a market-leading position in the US$500-plus premium MFi segment and has set a new benchmark for premium mobile connectivity solutions.

Chaohui Chen: Powered by our AI HyperConn technology, the G50 Max has built a market-leading position in the USD 500 plus premium MiFi segment, and has set a new benchmark for premium mobile connectivity solutions. While our uCloudlink 1.0 international data connectivity business has been affected by micro-halving, this same condition has created new opportunities for the G50 Max and the premium solution, driving demand from the resilient, reliable connectivity in critical environments. We also have made solid progress and created new and strong revenue with our newly launched 4G and 5G CPE products during Q2 for local connectivity services. Both have demonstrated stable performance and have successfully passed smaller batch market validation, receiving positive market feedback. Several large orders are currently under negotiation, and we expect to accelerate market deployment and drive stronger growth in Q3. We also achieved notable recognition during the quarter.

Speaker #3: While our uCloudlink 1.0 international data connectivity business has been affected by macro headwinds, this same condition has created new opportunities for the G50 Max and the Premium Solution.

Speaker #3: Driving demand from the resilient, reliable connectivity in critical environments. We also made solid progress and created new and strong revenue with our newly launched 4G and 5G CPE products during the second quarter for local connectivity services.

Speaker #3: Both have demonstrated stable performance and have successfully passed smaller batch market validation, receiving positive market feedback. Several large orders are currently under negotiation, and we expect to accelerate market deployment and drive stronger growth in Q3.

Chaohui Chen: Both have demonstrated stable performance and have successfully passed smaller batch market validation, receiving positive market feedback. Several large orders are currently under negotiation, and we expect to accelerate market deployment and drive stronger growth in Q3. We also achieved notable recognition during the quarter.

Speaker #3: We also achieved notable recognition during the quarter, winning the Customer Impact Award and the MVNOs Worth award for the year 2026, and being shortlisted for Leading Consumer MVNO Stock Brand, further validating our technology leadership and market positioning.

Chaohui Chen: Winning the Customer Impact Award at the MVNOs World Awards in 2026 and have been shortlisted for Leading Consumer MVNO/Sub-Brand, further validating our technology leadership and market positioning. Looking ahead, we remain focused on strengthening operational management and cost discipline, with a clear priority on improving cash flow. Together with the ongoing commercial progress of the PetPogo AI agent and the social platform, the ramp-up of MeowGo G50 Max and the continued expansion of GlocalMe IoT, CPE R50, and R55. With these efforts, we have positioned us to navigate the current market environment and emerge stronger. We remain committed to bridging the digital divide in cross-border connectivity, as well as the emotion distance between people and their pets, while creating long-term value for our shareholders. With disciplined optimism in mind, we are confident that we have the right strategies in place to drive sustainable growth going forward.

Speaker #3: Looking ahead, we'll remain focused on strengthening operational management and cost discipline, with a clear priority on improving cash flow. Together with the ongoing commercial progress of PetGo AI and the social platform, the ramp-up of mGoal G50 Max, and the continued expansion of local mIoT CPE R50 and R55, these efforts will position us to navigate the current market environment and emerge stronger.

Speaker #3: We remain committed to bridging the digital divide in cross-border connectivity, as well as the emotional distance between people and their pets, while creating long-term value for our shareholders.

Chaohui Chen: We remain committed to bridging the digital divide in cross-border connectivity, as well as the emotion distance between people and their pets, while creating long-term value for our shareholders. With disciplined optimism in mind, we are confident that we have the right strategies in place to drive sustainable growth going forward.

Speaker #3: With less disciplined optimism in mind, we are confident that we have the right strategy in place to drive sustainable growth going forward. I will now turn the call over to Mr. Shi.

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

Yimeng Shi: Thank you, Mr. Chen. Hello, everyone. I will go over our operational and financial highlights for Q2 2026. Average Daily Active User, DAU, and Monthly Active Users, MAUs, represent average number of unique users engaging with our GlocalMe service on a daily and monthly basis, respectively. Both metrics record robust growth in Q2. Average DAUs in Q2 were 376,376, representing an increase of 13.3% from 332,323 in Q2 2025. GlocalMe IoT, GlocalMe SIM, and GlocalMe Life all achieved substantial growth, with average DAUs up 277.3%, 132%, and 801.6% respectively from the same period last year. Average DAU from our GlocalMe MeowGo business declined by 7.3% year-over-year. Average MAUs were 744,966, representing an increase of 6.6% from 698,862 in Q2 2025.

Speaker #4: Thank you, Mr. Chen. Hello, everyone. I will go over our operational and financial highlights for the second quarter of 2026. Average daily active users (DAUs) and monthly active users (MAUs) represent the average number of unique users engaging with our GlocalMe service on a daily and monthly basis, respectively.

Speaker #4: Those metrics record robust growth in the second quarter. Average DAUs in the second quarter were 376,000 and 376, representing an increase of 13.3% from 332,000 and 323 in the second quarter of 2025.

Speaker #4: GlobalMe IoT, GlobalMe SIEM, and GlobalMe Live all achieved substantial growth, with average DAUs up 277.3%, 132%, and 801.6%, respectively, from the same period last year.

Speaker #4: Average DAU from our global me mGoal business declined by 7.3% year over year. Average MAUs were 744,000 and 966, representing an increase of 6.6% from 698,000 and 862 in the second quarter of 2025.

Speaker #4: Average MAUs from our Global ME IoT, Global ME SIEM, and Global ME Live business lines saw increases of 210%, 53.8%, and 599.7% respectively, from the same period last year.

Yimeng Shi: Average MAUs from our GlocalMe IoT, GlocalMe SIM, and GlocalMe Life business line saw increase of 210%, 53.8%, and 599.7% respectively from the same period last year. Average MAU from our GlocalMe MeowGo business decreased by 10.1% year over year. In Q2 2026, average MATs were 341,511, with 12,763 owned by the company and 328,748 not owned by the company, representing an increase of 7.4% from Q2 2025. During the quarter, 56.3% of MATs were from uCloudlink 1.0 International Data Connectivity service, and 43.7% were from uCloudlink 2.0 Local Data Connectivity service. In June 2026, the average daily data usage per terminal was 1.5 gigabytes. Average MATs in the second quarter were 306,382, representing an increase of 6.5% from 663,197 in Q2 2025.

Speaker #4: Average MAU from our global me mGoal business decreased by 10.1% year over year. In the second quarter of 2026, average DATs were 341,000 and 511, with 12,000 and 763 owned by the company, and 328,000 and 748 lot owned by the company.

Speaker #4: Representing an increase of 7.4% from the second quarter of 2025. During the quarter, 56.3% of DATs were from uCloudlink 1.0 international data connectivity service, and 43.7% were from uCloudlink 2.0 local data connectivity service in June 2026.

Speaker #4: The average daily data usage per terminal was 1.5 gigabytes. Average MATs in the second quarter were 306,000 and 382, representing an increase of 6.5% from 663,000 and 197 in the second quarter of 2025.

Speaker #4: Growth was driven by strong momentum across our three new growth engines, with average MATs from Global ME IoT, Global ME SIEM, and Global ME Live increasing 93.6%, 35.4%, and 843.2% respectively, from the same period last year.

Yimeng Shi: Growth was driven by strong momentum across our three new growth engines, with average MATs from GlocalMe IoT, GlocalMe SIM, GlocalMe Life increasing 93.6%, 35.4%, and 843.2% respectively from the same period last year. Average MAT from GlocalMe MeowGo business decreased by 5.7% year over year. Following the stable growth last year, Platform continued to gain traction with user adoptions and engagement increasing further during the quarter. In the second quarter, average DAU and MAUs were 1,519 and 1,845 respectively. While average DATs and MATs for Platform reached 507 and 1,028, reflecting the growing traction of this new offering. As of 30 June 2026, the company had 212 patents with 184 approved and 28 pending approval, and approval SIM cards from 398 MNOs globally. Total revenues from Q2 2026 were $18.2 million, representing a decrease of 5.9% from $19.4 million in the same period 2025.

Speaker #4: Average MAT from global ME mGoal business decreased by 5.7% year over year. Following this stable growth last year, the platform continued to gain traction, with user adoption and engagement increasing further during the quarter.

Speaker #4: In the second quarter, average DAUs and MAUs were 1,519 and 1,845, respectively, while average DATs and MATs for the platform reached 507 and 1,028, reflecting the growing traction of this new offering.

Speaker #4: As of June 30, 2026, the company had 212 patents, with 184 approved and 28 pending approval, and approved SIEM call from 398 MNOs globally.

Yimeng Shi: As of 30 June 2026, the company had 212 patents with 184 approved and 28 pending approval, and approval SIM cards from 398 MNOs globally. Total revenues from Q2 2026 were $18.2 million, representing a decrease of 5.9% from $19.4 million in the same period 2025.

Speaker #4: Total revenue for the second quarter of 2026 was $18.2 million, representing a decrease of 5.9% from $19.4 million in the same period of 2025.

Speaker #4: Total revenue across different business line were as follows. Global me mGoal business 15.5 million US dollars, representing a decrease of 13.1% from 17.9 million US dollars in the second quarter of 2025.

Yimeng Shi: Total revenue across different business lines were as follows: GlocalMe MeowGo business, $15.5 million, representing a decrease of 13.1% from $17.9 million in Q2 2025. GlocalMe SIM business, $1.3 million, representing an increase of 78% from $0.7 million in Q2 2025. GlocalMe IoT business, $0.8 million, representing an increase of 392.4% from $0.2 million in Q2 2025. GlocalMe Life business, $0.5 million, representing a decrease of 12.1% from the $0.6 million in Q2 2025. Platform business, $0.2 million, representing an increase of 1,527.3% from $0.01 million in Q2 2025. Revenue from service were $13.3 million, representing a decrease of 9.2% from $14.6 million in the same period of 2025. Revenue from service contribute to 72.9% of total revenue during Q2 2026, compared to 75.5% in the same period last year.

Speaker #4: Global me SIEM business 1.3 million US dollars, representing an increase 78% from 0.7 million US dollars in the second quarter of 2025. Global me IoT business 0.8 million US dollars, representing an increase of 392.4% from 0.2 million US dollars in the second quarter of 2025.

Speaker #4: Global me live business 0.5 million US dollars, representing a decrease of 12.1% from the 0.6 million US dollars in the second quarter of 2025.

Speaker #4: Platform business was $0.2 million, representing an increase of 1,527.3% from $0.01 million in the second quarter of 2025. Revenue from services was $13.3 million, representing a decrease of 9.2% from $14.6 million in the same period of 2025.

Speaker #4: Revenue from services contributed 72.9% of total revenue during the second quarter of 2026, compared to 75.5% in the same period last year. Geographically speaking, during the second quarter of 2026, Japan contributed 36%, Mainland China contributed 30.23%, North America contributed 13.5%, and other countries and regions contributed the remaining 20.2%, compared to 33.6%, 33.2%, 15.3%, and 17.9% respectively in the same period of 2025.

Yimeng Shi: Geographically speaking, during Q2 2026, Japan contributed 36%, Mainland China contributed 30.3%, North America contributed 13.5%, and other country or regions contributed the remaining 20.2%, compared to 33.6%, 33.2%, 15.3%, and 17.9%, respectively, in the same period, 2025. Our gross profit was $9.2 million, compared to $10.2 million in the same period of 2025. Overall gross margins in Q2 2026 was 50.2%, compared to 52.8% in the same period, 2025. Gross margins on service were 39.1% in Q2 2026, compared to 56.6% in the same period, 2025. Excluding share-based compensations, total operating expenses were $11.5 million, compared to $10.1 million in the same period, 2025. Net loss in Q2 2026 was $3 million, compared to net income of $0.7 million in the same period, 2025.

Speaker #4: Our gross profit was $9.2 million, compared to $10.2 million in the same period of 2025. Overall gross margins in the second quarter of 2026 were 50.2%, compared to 52.8% in the same period of 2025.

Speaker #4: Gross margins on services were 59.1% in the second quarter of 2026, compared to 56.6% in the same period of 2025. Excluding share-based compensation, total operating expenses were $11.5 million, compared to $10.1 million in the same period of 2025.

Speaker #4: Net loss in the second quarter of 2026 was $3 million, compared to net income of $0.7 million in the same period of 2025.

Speaker #4: Adjusted EBITDA was negative $1.8 million in the second quarter of 2026, compared to a positive $0.4 million in the same period of 2025.

Yimeng Shi: Adjusted EBITDA was -USD 1.8 million in Q2 2026, compared to +USD 0.4 million in the same period of 2025. For Q2 2026, we recorded an operating cash outflow of USD 3 million, compared to an outflow of USD 0.9 million in the same period, 2025. For Q2 2026, our capital expenditure was USD 0.04 million, compared to USD 0.2 million in the same period, 2025. Turning to balance sheet items, our cash equivalents were USD 25.2 million as of 30 June 2026, compared to USD 28 million as of 31 March 2026. We continue stressing our financial position, and we believe we are well-positioned to drive growth in our business.

Speaker #4: For the second quarter of 2026, we recorded an operating cash outflow of $3 million, compared to an outflow of $0.9 million in the same period of 2025.

Speaker #4: For the same period, the second quarter of 2026, our capital expenditure was $0.04 million, compared to $0.2 million in the same period of 2025.

Speaker #4: Turning to the balance sheet items, our cash and cash equivalents were $25.2 million as of June 30, 2026, compared to $28 million as of March 31, 2026.

Speaker #4: We continued strengthening our financial position, and we believe we're well-positioned to drive growth in our business. Turning to our outlook for the third quarter of 2026, we expect total revenue to be between $19 million and $22 million, representing a decrease of 10.4% to an increase of 3.8% compared to the same period of 2025.

Yimeng Shi: Turning our outlook for Q3 2026, we expect total revenue to be between USD 19 million and USD 22 million, representing a decrease of 10.4% to an increase of 3.8% compared to the same period of 2025. For the full year 2026, we now expect total revenue to be in the range of USD 75 million to USD 85 million, compared with the range of USD 85 million to USD 100 million we previously announced. We are revising our full-year guidance in line of the persistent macroeconomic challenge and global trade headwinds, which have had and may continue to have a broader impact for industries. This estimate reflects our current view on market and operating conditions and customer demands, which are subject to change. With that, operator, let's open it up for Q&A.

Speaker #4: For the full year 2026, we now expect total revenue to be in the range of 75 million to 85 million US dollars, compared with the range of 85 million US dollars to 100 million US dollars we previously announced.

Speaker #4: We are revising our full-year guidance in light of the persistent microeconomic challenges and global trade headwinds, which have had and may continue to have a broader impact across industries. This estimate reflects our current view of market and operating conditions and customer demands, which are subject to change.

Speaker #4: With that, operator, let's open up for Q&A.

Speaker #1: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two.

Operator: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speaker phone, please pick up the handset to ask your question. Your first question comes from Theodore O'Neill with Litchfield Hills Research. Please go ahead.

Speaker #1: If you are a speaker, or if you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Theodore O'Neill with Litchfield Hills Research.

Speaker #1: Please go ahead.

Speaker #5: Oh, thank you for taking my questions. I have two questions this morning. The first is about memory chips and, and sort of the supply chain of semiconductors in general.

Theodore O'Neill: Oh, thank you for taking my questions. I have two questions this morning. The first is about memory chips and sort of the supply chain of semiconductors in general. You cited here, which everyone has been seeing, is memory chip cost increases. What are you doing to ameliorate that, and are you seeing other supply chain issues in the semiconductor area as well?

Speaker #5: You cited here, whichever one has been seen as memory chip cost increases. So, what are you doing to ameliorate that? And are you seeing other issues in other supply chain areas in the semiconductor area as well?

Speaker #3: Yeah, I think there are several impacts because I think the supply chain for chipsets and the AI volume demand for supply chain in China.

Chaohui Chen: Yeah, I think there are several impacts because I think the supply chain for chipset and the AI volume demand for supply chain in China. For the memory chip, everyone knows it's almost 5 to 10 times increase. It impacts our sales price for our customer. So, in the early quarter, we increased more storage, try to offset the price increasing first. You can see that's why our cash flow was somewhat impacted, somehow impacted, because we increased the memory chip storage first. The second, you can see we have to cover some chipset cost increasing. I think also, in the H2, we just about several months later, we increase our sale price. But we have to consider, I think, the customer acceptance for the price. That's number 2. Number 3, also, we have R&D revise.

Speaker #3: For the memory chip, everyone knows it's almost a 5 to 10 times increase. It impacts our sales price, you know, for the—for our consumer.

Speaker #3: Our customer. So, in the early quarter, we have we, we increased the, more storage, try to offset, the, the price, increasing first. That's, the that's you can see that's why our cash flow was some, some, some, somewhat impact that, somehow impact because the we increase the memory, chip, storage first.

Speaker #3: And the second, you can see we have to cover some cost in chipset cost increasing. I suppose the cost in the second half years, we just, about several months later, we increase our sale price.

Speaker #3: But we have we have to consider the consider the, I think, the customer, I think, acceptance for the price. That's number two. And the number three, and also we have R&D, you know, ad revised.

Speaker #3: For some large memory and the expensive memory, we try to, I think, revise our hardware, try to minimize the, I think, to reduce the memory requirement.

Chaohui Chen: For some large memory and expensive memory, we try to revise our hardware, try to minimize, I think, to reduce the memory requirement. That is number 3. Finally, also, like PCB, all these components extend the period, and the cost also is going up. I think indeed this year is worse in supply chain for our product, for like MiFi, like our PetPogo phone and our PetPogo cam to the customer.

Speaker #3: And this is number three. And the, the, the finally, and also we, also, like, PCB, like all the all these, these, these component, extend the, the, I think, the period and the cost also is going up.

Speaker #3: I think, indeed, this year is worse in the supply chain for our product—for things like Magnify, like our pet phone and our pet cam—to the customer.

Speaker #5: thank you. My, my other question is about, global me life the global me life business. The i here in the, prepared, remarks here, global me life business, revenue decreased in year over year, but the average daily active users increased, over the same period.

Theodore O'Neill: Thank you. My other question is about GlocalMe Life business. Here in the prepared remarks here, GlocalMe Life business revenue decreased year-over-year, but the average daily active users increased over the same period. So were they spending less money? I was wondering if you could explain why one's down, the other one's up.

Speaker #5: So, were they spending less money? I was wondering if you could explain why one is down, and the other one is up.

Speaker #3: Yeah, sure. Yeah, as this second quarter's figures, there's life revenues increase in two parts. One part is hardware's life delivery to our customer. So, the hardware's volume—hardware delivery in the second quarter—is a little bit down a bit.

Chaohui Chen: Yeah, sure. As this Q2's figures, the GlocalMe Life revenues include two parts. One part is hardware of GlocalMe Life delivery to our customer. So, the volume hardware delivery in Q2 is a little bit down a bit. So that accounts for there's a total revenues, a little bit down. But we deliver GlocalMe Life products in the past series of quarters on a stable gross volume. This GlocalMe Life product used to the local scenarios, local mobile broadband scenarios, like our product, charger cables. That's very well welcome in Japan's local market. So, the MAUs figures reflect a cumulative active historical sold hardware of GlocalMe Life. So that cumulative MAUs matrix is increased dramatically compared with last year's. So there are two figures, two metrics. One's revenue reflects the Q2 scenarios. The MAUs reflects the cumulative, the whole historical sales stories. Yeah, I have more comment about this.

Speaker #3: So that, account for account for this total revenues, a little bit, a little bit down. but, we, we deliver life, products in the in the past, a series of quarters, on a stables, growth, volume.

Speaker #3: And, it's this, this, this, life, products, used to the, local, scenarios, local mobile broadband scenarios. Like our, products, charge cable, charge cables. That's a well, a very well, welcome.

Speaker #3: In Japan's local market, the MAUs figures reflect accumulated active historicals, such as hardware's life. So that accumulated MAUs metric has increased dramatically compared with last year's.

Chaohui Chen: So, the MAUs figures reflect a cumulative active historical sold hardware of GlocalMe Life. So that cumulative MAUs matrix is increased dramatically compared with last year's. So there are two figures, two metrics. One's revenue reflects the Q2 scenarios. The MAUs reflects the cumulative, the whole historical sales stories. Yeah, I have more comment about this.

Speaker #3: So, there are two figures, two metrics. One is revenue, which reflects the second quarter scenarios. The MAUs reflect the accumulative whole historical selling stories.

Speaker #3: Yeah.

Speaker #2: Yeah, I have more comment about this. Because for life, at least product, I think, because I just mentioned, as you mentioned, the supply chain impacted by the AI industry—because of the memory chip and the PCB, etc.—that's why in the fourth quarter, before the price increase, we asked our customer to give more orders.

Chaohui Chen: Because for Life, this product, I think, because I just mentioned, as you mentioned, the supply chain impact by the AI industry because of the memory chip and the PCB, et cetera. That is why in Q1, before the price increased, we asked our customer to give more order. So far, I think this is why in Q1, we get a bigger order, and the Q2 order is a little bit lower. In Q2, you can see the order is a little bit lower. That is because of the supply chain impact and the price increase. But the total H1, we compare the H1 last year, is increased dramatically.

Speaker #2: And, so far, I think that's, that's the why in the fourth quarter we get, more bigger order. And the second quarter, order is a little bit, a little bit lower.

Speaker #2: In the second quarter, you can see the order is a little bit lower. That's because of the supply chain impact and the price increase. But, the total for the first half of the year, compared to the first half of last year, has increased dramatically.

Speaker #5: Okay, thank you very much. That answers my questions.

Theodore O'Neill: Okay. Thank you very much. That answers my questions.

Speaker #1: Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. There are no further questions at this time.

Operator: Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. There are no further questions at this time. I will now hand back to Daniel Gao for closing remarks.

Speaker #1: I'll now hand back to Daniel Gao for closing remarks.

Speaker #4: Okay, thank you once again for joining us today. If you have further questions, please feel free to contact your colleagues in Investor Relations through the contact information provided.

Daniel Gao: Okay. 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 & Associates. We look forward to speaking with you again on our next quarterly call. Thank you.

Speaker #4: Provide it on our website, or reach out to us through our investor relations form. Quick, instant advice. We look forward to speaking with you again on our next colleague call.

Speaker #4: Thank you.

Speaker #1: That does conclude our conference for today. Thank you for participating. You may now disconnect.

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

Speaker #3: Thank you.

Chaohui Chen: Thank you.

Daniel Gao: Thank you.