uCloudlink Group, Inc. Q1 FY2025 earnings call

• Total revenues in Q1 2025 were US$18.7 million, in-line with guidance, up 3.4% y-o-y. Adjusted net income was USD0.4 million and operating cash flow was USD0.2 million.
• 1.0 international data connectivity services have 5G coverage in 90 countries/regions, strengthening market share. New solutions showcased at MWC Barcelona 2025, including eSIM Trio, CloudSIM Kit, PetPhone, etc.
• Emerging business lines (GlocalMe SIM, GlocalMe Life, GlocalMe IoT) projected to have active terminal growth >100% from Q2 2025; GlocalMe Mobile/Fixed Broadband expected to grow ~10%.
• AI integrated internally for operational efficiency and in solutions; proprietary technologies like HyperConn, CloudSIM, 6-tech positioning drive connectivity. UniCord won 'Best of CES 2025: Breakthrough Award'.
• Subsidiary approved by China's MIIT for pilot value-added telecom services, expanding global footprint.

Total revenues for the first quarter of 2025 were US$18.7 million, an increase of 3.4% year-over-year. Revenue from services was US$14.2 million, up 4.9% from the same period in 2024, making up 75.7% of total revenues. Geographically, Japan contributed 40.4% of total revenues, Mainland China 31.2%, North America 12.9%, and others 15.5%. Average daily active terminals (DATs) in Q1 2025 were 308,863, with 56.2% from uCloudlink 1.0 international data connectivity services and 43.8% from uCloudlink 2.0 local data connectivity services. The GlocalMe Mobile and fixed broadband business contributed 296,597 DATs, GlocalMe Life 621, GlocalMe SIM 5,219, and GlocalMe IoT 6,426.

• For the second quarter of 2025, total revenues are expected to be between US$23.0 million and US$25.0 million, representing a 2.7% to 11.6% increase compared to Q2 2024.
• Starting Q3 2025, regular disclosure of key metrics (user account numbers by business lines) will begin.

• Forward-looking statements involve known and unknown risks, uncertainties, and factors not under the company's control that may materially differ actual results from expectations. Tariff barriers between U.S. and China could potentially impact business, but the company is preparing solutions to overcome such barriers.

Q: Please give highlights into the regions or demographics of the customers most likely to be early adopters of PetPhone.

A: PetPhone will be launched end of May. Main user types include pet channels (Europe, Asia, US), carrier/mobile watch operators, and traditional electronic channels. Progress is good with several carriers near finalizing contracts.

Q: About tariffs being raised/lowered and impact on business.

A: Tariff barriers between U.S. and China don't currently have implications. The company has stock products in U.S. and outsourcing manufacturers in other regions. U.S. market is growing for new business lines like PetPhone, and solutions are being prepared to overcome tariff barriers.

Q: Reason for increase in cost of services and measures to control.

A: Service cost margins are lower due to increased outbound roaming service for Chinese travelers. Extra expenditures on sales/marketing for new business lines (over US$1 million more than last year) are expected to bring future volumes. New business lines (IoT, Life series) are expected to have increased daily active terminals over one year.

Q: Partnerships in coming months.

A: Partners include carriers (mobile virtual operators, tier 2/3 carriers) interested in SIM solutions. Partnerships will help improve roaming quality and create new revenue. Also, traditional mobile broadband product is being enhanced for better connectivity and cost-effectiveness, attracting small enterprise and travel users.