GCT Semiconductor Holding, Inc. Q1 FY2025 earnings call

• John Schlaefer announces officially beginning the 5G product era, with finalized 5G chipset being evaluated in labs, moving to customer sampling this month and volume shipments in Q3 and beyond. - Accelerated and prioritized 5G partnerships, including with Globalstar, Aramco Digital, Samsung, Kyocera, and signed LOI with Orbic North America for 5G mobile hotspot and FWA gateway. - Edmond Cheng discusses Q1 financials: net revenues decrease due to no 5G platform shipments in Q1 2025 vs. 2 in Q1 2024, cost of net revenues decrease, gross margin details, R&D, sales and marketing, G&A expenses, cash position, and shelf registration for financing.

Net revenues decreased from $3.3 million for Q1 2024 to $0.5 million for Q1 2025, a decrease of $2.8 million or 85%. Cost of net revenues decreased from $1.3 million to $0.4 million, a decrease of $0.9 million or 69%. Gross margin was 18% in Q1 2025 vs. 60% in Q1 2024; service business gross margin was 50.4% and product sales was negative 120%. R&D expenses decreased from $5.5 million to $4.1 million, a decrease of $1.4 million or 26%. Sales and marketing expenses increased from $1 million to $1.1 million, an increase of $0.1 million or 12%. General and administrative expenses decreased from $2.8 million to $2.6 million, a decrease of $0.2 million or 8%.

• Expect 5G revenue benefit from higher global market demand and prices. - 5G chipset average selling price expected to be 4x higher than 4G offerings. - Moving to customer sampling this month, volume shipments in Q3 and beyond.

• Forward-looking statements subject to risks and uncertainties outlined in the earnings press release and Form 10-Q.

Q: Congratulations on continued 5G progress. Can you talk more about the Orbic 5G mobile hotspot partnership and what to expect for the second half of '25 and '26?

A: Yes, excited about the Orbic relationship. Plan to sample them this quarter, working on module-based 5G mobile hotspot and FWA gateway for multiple operators, moving step by step into second half of year and 2026.

Q: Can you talk about 5G sampling commencing in the second half of this quarter and the breadth of activity?

A: Been working with alpha customers, sampling first six customers this month, with others to follow, each with their own product focus and schedule.

Q: How is the supply chain's capability for volume production around the corner?

A: Supply partners are ready, as this is on the same supply line as 4G.

Q: Any OpEx eye on in 2Q or second half as we move into more intensive sampling and volume shipments?

A: Don't expect OpEx to run up same scale as revenue in second half; major R&D investment in 5G chips done, tight cost control in place