uCloudlink Group Inc. Q1 FY2026 earnings call

New Product Commercial Progress

• Launched the beta version of the AI-powered Papago social platform for the pet technology industry, which enables seamless interaction between pets and owners and organizes the full pet care journey. Early beta user feedback was overwhelmingly positive, with MAU reaching 1,397. Commercial validation is expected to complete in Q2 2026, with growth contributions starting in Q3 2026.
• The unicorn plow connected lifestyle product gained strong market traction, with accelerating sales volume and user adoption.
• The Mirgo G50 Max, the world's first sky-to-ground integrated mobile connectivity hub, is expected to launch commercial deployment in Q2 2026. The product supports seamless switching between terrestrial, in-flight, and home Wi-Fi networks, plus satellite two-way messaging and emergency SOS, serving users across multiple scenarios.

Total revenue for Q1 2026 was $16.9 million, a 10.1% year-over-year (YoY) decrease from $18.7 million in Q1 2025. Service revenue was $13.3 million, a 6.3% YoY decrease from $14.2 million, and contributed 79.9% of total revenue (up from 75.7% in Q1 2025). Geographically, Japan contributed 32% of revenue, mainland China contributed 30.3%, North America contributed 17.3%, and other regions contributed 20.4% (compared to 40.4%, 31.2%, 12.9%, and 15.5% respectively in Q1 2025).

The three new growth segments delivered strong triple- and quadruple-digit YoY revenue growth:

• Glowcoming IoT: 300%+ YoY revenue growth, 246.5% YoY average DAU growth, 142.1% YoY average MAU growth, 135% YoY average MAD growth; total IoT solutions install base reached 2.93 million as of March 31, 2026
• Glowcoming Thin (GlobalMe SIM): 170%+ YoY revenue growth, 193.6% YoY average DAU growth, 76.8% YoY average MAU growth, 74.1% YoY average MAD growth
• Glowcoming Live: 400%+ YoY revenue growth, 559.9% YoY average DAU growth, 609% YoY average MAU growth, 806.1% YoY average MAD growth

The legacy GlobalMe mobile business saw a 5.8% YoY decline in average DAU, 7.3% YoY decline in average MAU, and 4.1% YoY decline in average MAD. The new Papago pet platform beta launched in Q1 2026 with average DAU of 1,097 and average MAU of 1,397.

Overall gross profit was $8.3 million, with an overall gross margin of 49.1% (down from 51.7% YoY); service gross margin was 54.5% (down from 57.3% YoY).

• Total revenue for Q2 2026 is projected to be between $19.5 million and $22.5 million, representing 0.5% to 16% YoY growth compared to Q2 2025.
• Management expects the legacy traditional business to gradually stabilize in Q2 2026, with limited further downside, while new growth business lines continue to scale. If this momentum holds, Q2 2026 will be a turning point for the business, returning the company to positive YoY overall revenue growth.
• The company will continue to make strategic investments in its new growth engines throughout 2026 to capture early market leadership and drive long-term sustainable growth.

• The company faced significant external headwinds in Q1 2026, including macroeconomic volatility, weak travel demand, rising energy prices, 5-10x higher memory chip costs, and conflict-related supply chain disruptions that negatively impacted revenue and profitability.
• Increased strategic marketing investments for new product lines have pressured near-term profitability and cash flow, though management expects long-term returns from these investments.
• Memory chip price increases have significantly raised device production costs. While the company has mitigated some impact through redesign, local sourcing, and other measures, it could not fully offset the cost increase, leading to a 20-30% increase in 2B and 2C device selling prices, which may impact future demand.
• Forward-looking statements are subject to unknown risks and uncertainties that could cause actual results to differ materially from projections, including factors outside the company's control.

Q: Theodore O'Neill asked what non-conflict market use cases exist for the Mirgo G50 Max, beyond the conflict zone connectivity highlighted in prepared remarks. / A: Management confirmed the G50 Max is a high-end 5G device with broader use cases: it offers 5G coverage in over 100 countries (more than competitors like AT&T), in-cabin 4G/5G connectivity for 35 airlines for business travelers, satellite SOS and messaging for outdoor/recreational use, and multi-carrier 4G/5G backup for unreliable home/office Wi-Fi to support remote work and study. It consolidates multiple connectivity needs into one device and one account, with optimized coverage and pricing for global users across all daily scenarios.

Q: O'Neill asked for additional detail on market share and growth momentum for the company's in-car infotainment and security camera IoT business lines. / A: For in-car infotainment, the company's cloud connectivity and HyperCon solutions are embedded by all top 10 Chinese aftermarket car-play device providers, adding in-vehicle network connectivity to entertainment features. For 4G security cameras, an increasingly popular product segment, top Chinese manufacturers are rapidly adopting the company's cross-carrier cloud connectivity solution to eliminate the inconvenience of manual SIM card replacement for remote cameras. Shipments of IoT solutions with embedded company technology will activate with end users after a 6-month lag, so far larger user growth is expected in the second half of 2026.

Q: O'Neill asked if the company continues to face supply chain availability issues beyond the documented memory cost increases. / A: Management confirmed memory chip prices are 5-10x higher than last year, which is a major impact on device costs. Mitigation efforts include product redesign to reduce required memory size, switching to Chinese domestic memory chips, and other cost adjustments. These measures only partially offset the extreme price increase, and the company was forced to raise 2B and 2C device selling prices by 20-30% compared to 2025 levels.