GCTS

Commercialization Progress & Pipeline Expansion

• 2026 is a focused year of 5G platform commercialization, with customers moving from development and integration to early deployments; while broader macro conditions have shifted near-term customer deployment timing, underlying customer engagement and long-term demand for GCT's technology remain unchanged.
• Management has achieved meaningful progress on its 2026 priority of diversifying beyond single customer/application exposure, building a 5G pipeline across three core strategic growth pillars: terrestrial broadband, satellite and non-terrestrial connectivity, and industrial IoT and specialized networking.
• GCT shipped over 5,100 5G chipsets in Q2 2026, representing 71% sequential growth from Q1 2026, reflecting rising customer engagement across all three target markets as programs advance through development, certification and early deployment.

Strategic Pillar Updates

• Terrestrial broadband: GCT's technology is well positioned to benefit from operator investment in next-generation broadband infrastructure, with partner initiatives progressing despite modest timing shifts.
• Satellite and non-terrestrial connectivity: GCT is expanding partnerships for direct-to-device and hybrid satellite-cellular solutions, a high long-term growth opportunity driven by accelerating terrestrial-satellite network convergence; development and certification activities advanced with multiple partners in Q2 2026.
• Industrial IoT and specialized networking: GCT is expanding its market presence across this segment, which offers the broadest range of applications, though average selling prices are lower than the other two core pillars.

Operational & Financial Preparation

• GCT has secured required production wafer capacity for the remainder of 2026 and through Q1 2027 to prepare for expected commercial demand growth.
• The company amended its at-the-market equity program to increase available gross proceeds from $75 million to $120 million, maintaining the total $200 million shelf registration maximum, providing additional financial flexibility for commercialization scaling.
• Management's near-term financial priorities are disciplined capital allocation, supporting customer production ramps, and converting the growing commercial pipeline into sustained long-term revenue growth.

• Management maintains that total 5G chipset shipments and the number of customers receiving shipments will be higher in the second half of 2026 than in the first half of 2026, as commercialization progresses.
• GCT expects gross margins to improve over time as 5G product sales grow and become a larger contributor to total revenue; Q2 2026's negative gross margin is not representative of expected long-term product profitability.
• Management expects quarterly cash burn to run between $9 million and $9.5 million going forward, slightly elevated from steady state due to current tight supply chain conditions that require upfront payment for secured wafer capacity.
• Management declined to provide specific unit shipment guidance through Q1 2027, citing inherent variability in early-stage customer commercialization programs, but noted secured capacity is planned in anticipation of a relatively large upcoming ramp.

GCT Semiconductor reports combined financial results across its 5G chipset business, with no separate segment-level revenue disclosures provided on the call. For Q2 2026, overall net revenue was $1 million, an 18% ($0.2 million) year-over-year decrease from Q2 2025's $1.2 million. The revenue decline reflected a $0.2 million drop in service revenue due to the transition to 5G service offerings, while 5G product sales grew and total product revenue remained flat year-over-year. First half 2026 total revenue already exceeds full year 2025 total revenue. Cost of net revenues increased 49% ($0.4 million) year-over-year to $1.2 million, driven by higher 5G chipset unit volume, leading to a negative gross margin for Q2 2026 (compared to 32% gross margin in Q2 2025). R&D expenses decreased slightly to $3.3 million from $3.5 million year-over-year, sales and marketing expenses were flat at ~$1 million, and G&A expenses decreased to $2.8 million from $3.4 million year-over-year. GAAP net loss widened to $20.4 million from $13.5 million year-over-year, with $12.3 million of the Q2 2026 loss attributed to non-cash fair value changes in common stock warrant liabilities. Newly reported adjusted EBITDA loss narrowed slightly to $6.6 million from $6.7 million year-over-year. Ending Q2 2026 liquidity was $30.2 million in cash and cash equivalents, with $1.1 million in net accounts receivable and $1.5 million in net inventory.

• Near-term quarter-to-quarter financial and shipment variability is expected, due to ongoing modest shifts in customer deployment timing driven by broader macro conditions and customer corporate restructuring/refocusing.
• The broader semiconductor manufacturing environment faces tight capacity, with fabs prioritizing memory production, creating supply chain constraints that require upfront commitment and payment for wafer capacity.
• Commercial ramp timing depends on customer certification and launch planning, which can shift unexpectedly even when underlying product strategy and customer interest remain unchanged.
• Non-cash fair value volatility in common stock warrant liabilities can create large swings in reported GAAP net income that do not reflect core underlying operating performance.

Q: How large were the customer program delays that impacted Q2 2026 revenue, and how many customers received the 5,100 Q2 shipments? Also, which of the three strategic pillars will see the highest near-term volume, and how broad is current customer interest? / A: Management confirmed the delays were meaningful enough to push expected Q2 revenue into later quarters, but all delayed programs remain active and are expected to contribute revenue in late 2026. The 5,100 Q2 chips were shipped to four different customers across four distinct applications: fixed wireless access, aviation, mobile hotspot, and push-to-talk phones. The highest near-term volume and revenue upside is expected to be split equally between terrestrial broadband and satellite/non-terrestrial connectivity, while industrial IoT has the broadest range of applications but lower average selling prices and earlier-stage activity.

Q: What obligations come with the secured wafer capacity through Q1 2027, and what is GCT's exposure if customer launches continue to slip? / A: The secured capacity is for generic wafers that can be used to produce all of GCT's current SKUs across all application areas, with no custom front-end wafer production per customer or application. Management stated capacity is currently right-sized, and GCT can slow future purchases if launches push out; wafers are not perishable, so there is no material negative supply or financial exposure from secured capacity if timelines shift.

Q: What is the expected quarterly cash burn outlook over the next 1-1.5 years, and will cash burn need to increase significantly to reach the commercialization inflection point? / A: Q2 2026 cash burn was elevated by $7 million to $7.5 million due to required upfront payments for wafer capacity secured through the end of 2026. Excluding this one-time timing impact, management expects steady quarterly cash burn of $9 million to $9.5 million going forward, and can adjust future payments as needed to align with customer ramp timing. No material step-up in burn is required beyond this range to reach commercial inflection.

Q: What caused the customer deployment timing shifts, and when will GCT be able to disclose the name of its major satellite partner? / A: Shifts were driven by customer-side corporate restructuring and refocusing (with unchanged product strategy) or broader external factors pushing out launch timelines, not customer supply chain issues. The satellite partner name will be disclosed as soon as the partner gives approval, which is expected to happen after their public launch, likely between Q4 2026 and Q1 2027, per current expectations.