GCT Semiconductor Holding, Inc. Q2 FY2025 earnings call

• John Schlaefer highlighted the delivery of initial 5G chipset samples to lead customers like Orbic North America and Airspan Networks with testing underway. Anticipates additional samples in coming weeks, Q3 production start for finalized 5G chipset, and Q4 volume production. - Collaboration with Iridium Communications to integrate NTN Direct satellite service into GDM7243SL chipset and partnership with G+D for embedded eSIM solutions for IoT. - Edmond Cheng noted financial results reflect transition from 4G to 5G, expect stronger end of year as 5G chipset sales commence, and 5G chipset ASP is expected to be roughly 4x that of traditional 4G products.

Net revenues decreased by $0.3 million or 19% from $1.5 million in Q2 2024 to $1.2 million in Q2 2025. The reduction was largely due to a $0.7 million decrease in service revenue, partially offset by a $0.4 million increase in product sales (driven by 4G chipset sales). Cost of net revenues increased by $0.3 million or 47% from $0.5 million in Q2 2024 to $0.8 million in Q2 2025, driven by product sales activity. Gross margin decreased to 32% in Q2 2025 from 63% in Q2 2024. Service business gross margin was 71.3% and product sales gross margin was negative 42.6%. R&D expenses decreased by $0.7 million or 16% from $4.2 million in Q2 2024 to $3.5 million in Q2 2025. Sales and marketing expenses remained at $1 million. General and administrative expenses increased by $0.6 million or 20% from $2.9 million in Q2 2024 to $3.4 million in Q2 2025. Ended the quarter with cash and cash equivalents of $1.3 million, net accounts receivable of $3.8 million, and net inventory of $3 million.

• Anticipate a stronger end of the year as 5G chipset sales commence soon. - Expect operational efficiencies to kick in as revenue increases when 5G product sales contribute to overall revenue in H2 2025, particularly in Q4.

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