uCloudlink (UCL) 26 Nov 242024 Q3 Earnings call transcript

Hello, and welcome to the UCLOUDLINK Group Inc.

Third Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Daniel Gao, Investor Relations of uCloudlink. Please go ahead.

you call. us thank quarter uCloudlink's and earnings XXXX everyone, for on joining third Hello, release our earnings IR The and website on now at our available ir.ucloudlink.com. earnings presentation are

Co-Founder Directors; Mr. Mr. Chen, quarter. today's Shi Mr. call and They overview Joining that of Executive both and Chen Chaohui Chairman the Chief Mr. me highlights of Zhiping our will Yimeng then Co-Founder, Mr. on discuss an highlights. Shi, operational in Peng, Board of our and Chief with are Officer; Director to the Officer. begin for follows. available business the will be questions take and financial recent Financial your section Q&A

harbor uncertainties proceed, call management's Securities that control, of this actual previous factors please performance and XXXX. other statements Litigation may not by unknown known Reform we Act made and or company forward-looking expectations expectations note on to company's of the the based provisions performance risks, results, statements are from of the forward-looking be statements. Before materially that safe observations implied These under the involve forward-looking current different cause contain results, pursuant and to and may these which achievements

a obligation their any are law. to in statements does as the reverse of required with otherwise, expressly market except of update information, All result forward-looking conditions, the filings new changes assume in by risk their or cautionary forward-looking entirety qualified factors by statements, company's detail future company as or statements and SEC. not events, any The

measures. press most measures unaudited of unaudited of reconciliation this and press released unaudited discussions contains note GAAP directly non-GAAP GAAP non-GAAP include that a and also Please earnings unaudited measures. their call release uCloudlink's financial comparable to uCloudlink's information financial the conference

call Mr. to ahead. the Please now will Chen. go turn I over

Daniel, you, and morning everyone. evening, good Thank or

during million, gain line to expectations. growth momentum USD XX.X revenue the in year-over-year with X.X% with to our continued quarter We increasing

USD reached positive X.X from income USD net cash inflow with of solid, remains operations net a million position financial Our and million. X.X

our enhanced During the presence. we actively market quarter,

to the continues of GlobalMe solutions ecosystem and aspects are business our into sector connection various life. GlobalMe offering Life, travel our the that GlobalMe Supported GlobalMe fixed us driving allowing cater lines, the IoT daily GlobalMe is strive expansion data format, leading SIM by comprehensive a of user and consolidation beyond market diverse Our in including solutions broadening to further through in expanding portfolio roaming of position wider this of Mobile needs. variety our ecosystem to

GlobalMe line. me the let our First, broadband fixed have in with business start met Mobile progress we

international X.X recovery coverage full markets. from key countries services to continued XX regions fueled of and XXXX, connectivity the XX increasing travel the international by demand with the business year across the Our quarter data grow speed increasing second network in of and XG from

We roaming data further highlights the leading the of growth our expanded segment This and Japan. mainland market Chinese market an international our consolidate expanding the position from season, during performance services. of our our in travelers service reflecting summer connectivity travel peak and share in China strong

HyperConn Economic expected with the XXXX the GSMA, or year in future. the number solutions from X.X XXXX. the to will According from XXXX XG global integrates the of Our product year at connections of Mobile Association, by rise the X.X be System next-generation Global portable WiFi Communication Mobile the is end billion to launched for Report near to billion

promising will extensive [indiscernible] developed tracker going and We market which [indiscernible] we [indiscernible] of revenue solutions, new include what distribution channels launch, building our stream the actively Second, be Unicord significant the X first to and forward. during content progress made GlobalMe new believe support quarter. a key their

by XXXX, we attending GlobalMe Technology other May, launch Expo market exposure in Viva product the expos & the Pet Travel cetera. in the enhanced our XXXX, Vet IFA serious of commercial Berlin global Life and Meet introduction et leading at such July as the our Following Asia, series further

in make products, Additionally, at U.S. breakthroughs KeyTracker, retail signing RoamPlug we among largest American to Unicord, channels the made available channels, and airports of across developing other repair airport with X

other We will coming and key channel across develop the partners strategic U.S. quarters. in partnerships Europe with the

development, the forward solutions we're the new With other already to more quarters. in launching looking in coming products

expected the paving the resubscribed SIM and we our pioneer continue in third, solution, GlobalMe This to which more ALL service, technology SIM, SIM users our commercial The presence is of OTA within cloud solution. our to and consolidates innovative our data SIM market near as eSIM, launch the business, future. way for commercially to under testing over-the-air the plan expand SIM which is

various ALL to pioneer empower smartphones position new and and for convenience. mobile break uniquely industry Our SIM set a solution benchmark restrictions, cross-carrier connectivity is

compatible with audience Leveraging Lastly, we device industry. application, additional related IoT commercial various to smaller-scale the with manufacturers cloud with business and as to advance our technology continued We that better believe sectors. several leading already demonstrating products security engage conditions application -- are embedded dashboard in and of IoT GlobalMe technology SIM broader in exploring empower camera our chipset the our line better several leading IoT in the life. we platform, scenarios a things IP camera, capabilities of solutions several our soft a strengths

our partner [indiscernible] GlobalMe integrated and innovative We to to SIM SIM, through GlobalMe channel presence IoT and will expand GlobalMe solutions Life, globally. the and global continue their cloud leverage business

GlobalMe Mobile user the millions terminal, active has past business XXX,XXX. third daily base of in the quarter the broadband over XX,XXX to accumulated DAT, years, XX leverage which Over

to a broader expect base will XX over million. We the GlobalMe business Life accumulate user

each integrated beyond to our lines solutions base bring of of allow user traffic and provider user comprehensive GlobalMe million future. the have business GlobalMe With sector into both in to IoT grow these going and us forward. substantially we the data mobile us -- which base potential marketplace, full the a to business Furthermore, [indiscernible] marketplace. from transition will an this and XXX expect SIM a of diversify of to travel the both of

have to that quarters. we in strategy coming place confident are sustainable right the in generate growth the We

XX For XX.X% the total representing the fourth and quarter between compared XXXX. to XX year we period XX.X% be of million USD USD to XXXX, increase million, of same to year expect an of revenue

now the call will Mr. over to Shi. I turn

connectivity you, Thank financial over trends as our and operational go hello, third us will which I a usage for Mr. reflective our terminal period, of of important an and everyone. customer active is the highlights metric over Chen, daily for quarter we is DAT, measure daily XXXX. Average operating per quarter X.X terminal uCloudlink XXX,XXX, were business usage active Average daily data performance. and service terminal, were international connectivity data gigabytes which Average from September X.XX XXXX. data XX.X% the was in X.X of from XX.X% uCloudlink third in or service. local

and of company September XXXX, SIM cards was XXXX. regions. as from of partners As globally the with XX The XX, served company patents approved in XXX had MNOs pending approval, pool and XX XXX X,XXX countries September XXX business while of had the XX,

revenue year. XX.X% Revenue during revenue remain from XX.X increase in representing X.X% the was increase Total percentage in stable of service XXXX. USD from compared XXXX, last during as to from same third the third XX.X the of XX.X% an of the XX.X of a service USD million, was million, relatively period USD same million quarter Revenue XX.X was of representing quarter X.X% from million when total an USD of period XXXX.

China other the Geographically XXXX. quarter contributed contributed XX.X%; of X% XX.X%; and America and the remaining North XX.X%; contributed the XX.X%, regions mainland period XXXX, Japan countries XX.X%, respectively, contributed compared XX.X%, XX.X%; third in speaking, to XX during to and same

quarter in XX.XX XX.XX profit was XXXX. same same Gross in compared in was USD on million third XXXX, USD in of XX.X% decreased Overall margins million period to on from in XXXX. the the to to to the increased of Overall XX% third XXXX of in period margin Gross third gross in margins quarter service compared same gross period XXXX. from same the period quarter XX.X% XXXX. the of XXXX product XX.X% XX.X% the XX.X%

total same share-based XX% XX% third revenue of XXXX, the expenses compared the X.X to total Excluding or in were revenue million period compensation, total in $X.X of quarter or XXXX. operating USD million

quarter million compared of million, Net X.X income in million X.X EBITDA period the XXXX. USD for third X.X Adjusted same XXXX, to was USD same the to of the was USD million period in $X.X XXXX. compared

XXXX, quarter compared generated we million X same third the to period in operating cash of million, USD of inflow of USD X.X the For XXXX.

For the to XXXX, of compared to were million the USD XX, USD XXXX, XXXX. We expenditures from up X.X cash third sheet million period XX, equivalents quarter million solid XX.X June a with as of XX.X cash as XXXX. $X.X balance in September same of capital maintained increasing million and

operator, open With for Q&A. let's up that, it

first with Research. Instructions] from [Operator question Hills The O'Neill Theodore Litchfield comes

expectation your milestones first launch stage? you to near of My have on order get that couple about -- results commercial you to the an launch ALL the I will of Can questions. the idea solution Congratulations in in just give SIM sort and meet to what a in the question is us launch it the future. have commercially quarter. of

Yes.

so from nearly card around So cards. experience the already XXX,XXX already about We SIM the uCloudlink, beginning SIM year, ALL first, we get of SIM, this [indiscernible] said at business. OTA

understand now industry. we So to how this play in

will Trio SIM name ] ALL eSIM fourth the is at and the our solution, another official be So quarter. of name is end [ also launched

the that's So first milestone.

the who the card, the for for I for SIM Also congestion limitation call card this SIM SIM choice the already domestic card the issue. best the primarily the card SIM data is card, are best and first the will of and connectivity we we your product, launch SIM because roaming, currently for -- So for we is think, product. overcome people flexibility overcome package. we coverage second data And the also we for have

the [indiscernible] we also, eSIM fully are about handset. challenge So

So or challenge handsets. to a adapt some the eSIM old bigger handset for has

can -- can handsets, handset, new handsets. handset our style can only eSIM new we can all can [indiscernible] not support Also, to So eSIM adapt handset we SIM support in all which a that. support just that's ALL the a

that's our think advantage. I

OTA our So physical eSIM. we the SIM, cloud SIM ALL and compatible SIM SIM, with call is

this that's industry. our quite unique So solution, in

in in a So this position industry. leading I think quite

get promotion working with and the carrier third hope worldwide the we the tier local mobile we partner watch we next year understand, tier will more with So or like carrier a more and can in operator. second market and

announce new solution. So attend about to think, this news MWC we this will, I

the around will progress have the That's Okay? future. we in

come historically, that higher QX? growth QX, end the near of from What to you of QX, some the come could will in have guidance the Okay. And range gives at guidance have QX of at end QX much the -- confidence in you sequential the sequentially, to in revenue here had QX. that quarters of better regards the And -- for the than been some lower than is into range that your you've past. than in the growth higher high your your QX quarters your

Yes.

our year, the lower higher past fourth this than to million. third range is than quarter, is legacy million that from the But third That's XX between portable normally of revenue. for attention fourth USD guidance the is little Your USD you the revenue in pattern a past guidance quarter years, bit revenues quarter to revenue the this is the a XX stream revenue. which Yes, quarter year, fourth the WiFi. the quarter's in say

has think also more product chance some launched growth as terminal. our WiFi series We portable than And quarter again, that's new well. gain And the in with Life to revenues market. products just GlobalMe fourth like a with been

these think significant streams revenue total I will be this WiFi as in will -- more various than next the trends years. trend

X grow strategy account business to quarters to from fourth shows the line So lines, quarter following our and that this come our will X year. next that from be business

will sense. that makes whether and product in expense for That not quarter. launch. Understood. the in expenses the expenses understand you somewhat Okay. forward? about the question trade expect and at talk is marketing Can that sales sales level, will down expense and you is going the about I or come My there shows last QX were some marketing or continue

Yes, we spend will more.

biggest And on -- Japan ] as the [ we airport spend channel more a market cooperation have will retail and more the have market, in also We and And cooperation the disclosed, European market. ] [ marketing X like we channel. with U.S. and ] invest [ U.S. and we support with different countries will a European.

our launched will SIM marketing is the new to enhanced innovative we GlobalMe like also, be the solution ALL And have will market. when GlobalMe the our product Life. for to market, solution SIM, exposure that So

product, our to the we market more need So our of to the on and invest awareness market. to value get

and So market and need time, invest we positions that's we absolutely But at growth. will on will balance we do support expenditures, to invest more when the that. the on financial we same

with increased profit flow. be marketing operating balance, -- expenditures the positive maybe So gross maintained the maintain we will have cash still and

Equity question Research. Vivian Zhang from Diamond with next comes The

This is on another and congratulations Zhang quarter. Equity Research, strong is Vivian Diamond

be with channel. first my So retail about question U.S. the mentioned you airport just will the partnership

more cooperation product provide sales? the some it impact So future and can you us color this how on will

We in the July. were end we quarter, will -- Yes. we just U.S. quarter And a -- channel in ever, of X with Life announced X -- And contract progress second QX, we we so largest launch launched the a May, the signed after GlobalMe of products airport [indiscernible] we partners. in product. new the we the we

advanced already find in so in our KeyTracker. products X airports, U.S. -- see in and can Unicord, XX So you I tracker can the the think shop, shop, RoamPlug for our you airport

So you see these can products. X

November mid this product launched So of think I they just they in November. -- --

product. and November. the contract in the middle shop reached We've the the product can see the So the signed end of QX of in you

I can in also already signed some guidance. American And give we QX, channel. big the So another

big in QX. the the with airport next -- second the QX, in we progress the And U.S. the airport in contract So one That's biggest. [indiscernible] product that's reach channel, and the progress all total X our ] for in the be [ X channels U.S. will coverage.

continue think will some accepted I in U.S. channel, big other X to continue following efforts buyers. had our our by in Also, the we the channel we quarter, these breakthrough be top we QX. efforts in

some Europe, big in So channels.

progress. successfully and we the sign So contract, already to a that's

channel top-tier airports. can Just think in we some months, I through in X break or X

channel next year, hope break with we the of I few through top-tier years. pets channel the more can in consumer next So

it. Got Okay.

question like like is sustainable? on quarter? So significantly, my why why elaborate over in the next that, is you increased can this -- third services [indiscernible] XX% And revenues growth

you past global past in me? our with Yes. Yes, revenues, hear And revenues various partners this have we model, business ways. can cooperate our --

Yes.

Yes.

future increased quarter a platform third fee significantly improvement. The the past pay some more business partners for because revenues willing to efficiencies operation

business our package buy that's can service. partner's different choice, our you So platform for

the to question-and-answer concludes closing session. turn to Daniel conference our This back like remarks. any I would Gao for over

us Okay. joining once you Thank for today. again

on our please have speaking Thank provided Investor firm, next our the again contact you further Relations quarterly information free our uCloudlink's through to on We contact forward or Relations to to If feel call. Christensen you. questions, Investor look all website, to Advisory. speak you

presentation. Thank today's has conference The concluded. attending now you for

You may now disconnect.