uCloudlink Group Inc.

Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to UCloudLink Group, Inc. second quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After prepared remarks by the management team, there will be a question and answer session. Today's conference call is being recorded. I would now like to turn the conference Over to your host today, Mr. Bob Shen, Deputy Investor Relations Director of the company. Please go ahead.

Thanks everyone for joining us on our second quarter 2021 earnings call today. The earnings release is now available on our IR website at ir.ucloudink.com as well as via Newswire services. I will give a brief introduction to our EucalLink team. Zhi Ping Peng is our co-founder and chairman of board of directors. Chao Hui Chen is our co-founder, director, and chief executive officer. Yi Men Shi is our chief financial officer. Zhu Tang is our vice president of marketing and sales. Our CEO will begin with an overview of our company and business highlights, which will cover Section 1 of the earnings presentation posted on our IR website. Our CFO, Yimeng Shi, will then discuss our operation highlights and financial results as presented in Sections 2 and 3. Before we proceed, Please note that this call may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and observations that involve known and unknown risks, uncertainties, and other factors. not under the company's control, which may cause actual results, performance, or achievements of the company to be materially different from the results, performance, or expectations implied by these forward-looking statements. All forward-looking statements are expressly qualified in their entirety by the cautionary statements, risk factors, and the details of the company's filing with the SEC. The company does not assume any obligation to revise or update any forward-looking statements as a result of new information, future events, changes in market conditions, or otherwise, except as required by law. Please also note that uCloud Link's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. uCloud Link's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. I will now turn the call over to our co-founder and CEO, Mr. Chao-Hui Chen. Please go ahead.

Thank you, Bob. I will for the company overview section. There are similar contents as the earning presentation of the first quarter of year 2021. I will focus on our technology update and recent development. Let's move to the page six, which shows the coverage and congestion are two major challenges of various network phase. On the left-hand side, the wide coverage circle on the left-hand side chart are reliable data connection areas, and the shadow areas, that's weak signal. are unreliable data connection. Even for good coverage, it is easy to have a network congestion during the peak times. On the right-hand side, you can see Wi-Fi and mobile signals are severely weakened when penetrating walls. This is often the cause of indoor pool coverage. Operators could not guarantee good indoor coverage, why a user has strong demand of high-quality indoor data connection. To improve unbalanced indoor and outdoor coverage for Wi-Fi and mobile data connection, operators need very high CapEx and could not solve all data connection problems. Through our technology, we can help operators solve the two major challenges which bring great opportunities. Let us move to page 7, which shows our solution for such problems. While our cloud-themed technology through our PaaS and SaaS platform on the HyperCon solution, we can help change unreliable data connection to more reliable data connection. similar to installing navigation plus electronic toll path for traffic. Navigation can automatically identify network congestion and actively choose a better route. An electronic toll path allows users to avoid long queues when switching between the mobile networks intelligently, and awaiting data connectivity user experience. We are able to provide seamless coverage for end users, solve standpoints such as roaming, coverage, and congestion. We improve our network efficiency and access to all available networks worldwide. By bringing reliable connections to formerly unreliable connection areas, we have operators elevate users' mobile broadband and fixed broadband, such as home broadband data connectivity experience, lowering chain rate, and improving overall network efficiency. Let us move to page nine. Our CloudSIM technology has been developed to the hyper-comm stage. The definition of hyper-connectivity basically includes Level 1, which is the evaluation of the connection quality of various wireless access networks, including Wi-Fi and all mobile operators. Level 2, which is the network selection and optimization based on the CloudSIM technology. and a level three, which is optimizing and acceleration of application routing. After one year development, HyperCon products are highly compatible with fast development of 2.0 business, TMI, mobile broadband and fixed broadband, education, autopilot, et cetera. Our hyper-connectivity solution would redefine the mobile network and Wi-Fi user experience and facilitate data traffic marketplace. Users' data connectivity experience is affected by various factors such as signal interference and routing, bandwidth and delay, and server location. uCloud's hyper-connectivity would aim to connect cross-networks and technology systems various themes form factors such as e-themes and software themes or physical themes, cross various physical boundaries such as Wi-Fi, various radio technology, etc. By countries and regions, we plan to achieve the global by identification, monitoring, and optimizing to further elevate user experience in a data connectivity market. In June year 2021, we unveiled our new Hypercom technology and products, such as Lumen, the world's first Hypercom 5G mobile Wi-Fi, and Genie, a Hypercom tablet device. In an official virtual product conference during the Mobile World Congress Barcelona, MWC Barcelona, Going forward, we will launch more innovative products and services. Let's move to page 13. U-Clouding 1.0 has a strong track record of high growth margins and profitability with ongoing growth potential. According to the publication of the World Tourism Organization, UNWTO, in March year 2021. International tourism is expected to recover gradually during the year 2021 compared with the year 2020. We expect that the recovery of international tourism will benefit our 1.0 business. We intelligently repackaging to minimize data traffic unicode. Data packages of single operator all across the mobile network operators, mobile virtual operators has a large price difference and we repackage from wholesale to repair. We have the largest SIM card pool and we acquire data package at the wholesale price at the local price. for operators from operators to partners. Further, we provide high-quality data connection service and elevate user experience of users and business partners through multi-network reselection and combination, which shows our difference. uClouding 1.0 business monetization model includes retailing to see, rental or selling to end-user, wholesale 2B for business partners and our PaaS and SaaS service, such as CRM bidding management, device selling, and rental management, et cetera. For wholesale 2B, we can be reseller or provide commission service to our business partners. We allow our business partners to share data traffic pool through our PaaS and SaaS platform and charge commission fees. We believe while the COVID-19 pandemic has negatively impacted our 1.0 business, it has also created opportunities for potential growth, including increased demand for mobile data such as traveling, tracking, resignation, digital passport, and the COVID-19 testing report. Also, we see fewer competitors in the market after COVID-19 pandemic. We expect recovery of the international traveler will benefit to our 1.0 business, such as the U.S. market during the second quarter of year 2021. We expect our 1.0 business will not just be a simple recovery, but growth with new development with innovative technology and products. Let's move to page 14. UCloud in two point of business become a new driver of growth during year 2020. Our two point of business shows greater resilience with proven high demand and growth potential during the pandemic and experience less U-Clouding 2.0 business monetization model is similar to that of U-Clouding 1.0 business with the massively potential local user base. We have operators improve service and solve data connection problems through our PaaS and SaaS platforms. During the COVID-19 pandemic, for example, remote work and learning also require high-quality, reliable data connection services. By alliance with more mobile network operators and mobile handset manufacturers, we should be able to embed more local needs inside GMI in smartphones, such as 5G smartphones. 5G also brings us great opportunities. We would accelerate the arrival of the 5G cloud era. and applications such as AR, VR, cloud computing, and autopilot, etc. The high quality of 5G application data connection will also bring users high requirements and awareness of data connectivity quality. Further, we make progress through hyper-connectivity solutions with mobile and fixed broadband under various application scenarios such as home broadband. We also intend to proactively explore opportunities in new industries and various IoT application scenarios. Despite the continued impact of the COVID-19 pandemic over the global economy, we demonstrate commercial resilience and business vitality in the second quarter of year 2021, generating revenue of U.S. dollar 19.2 million, above the top end of our guidance range, with the revenue mainly coming from the Japan-U.S. and mainland China market. In the Japanese market, We successfully launched and started to ship a new tablet targeted at the education industry. The new tablet comes equipped with CloudSIM technology enabling it to seamlessly connect to better available mobile and fixed orbit at all times. In the U.S. market, we continue to extend and deepen cooperation with online and offline distributors and record a new 12-month high for sales via Amazon in the quarter. We also saw a significant year-over-year increase in order demand for international data connectivity service in the U.S. market compared with the second quarter of year 2020. In the Chinese market, we steadily increase our number of mobile broadband and fixed broadband-related product installations through cooperation with major mobile network operators in Shenzhen. These installations serve to elevate user experience and scale up our potential user base in areas such as home broadband services, giving us a good reference case for further business development with the mobile network operators across other cities in China. Thank you, everyone. Let us turn to page four of the earning presentation, which shows our vision and vision. We have redefined the mobile data connectivity experiences allowing users to gain access to mobile data traffic allowance shared by network operators on our marketplace. Our technology facilitates carriers and users' single operator entry point to access all available local and global networks and would enable people to use mobile data traffic freely anytime, anywhere, like We expect to eventually cover all available networks from operators globally with the recovery of COVID-19 pandemic and development of 2.0 business and eventually build a full global marketplace of mobile data traffic. We believe that from connectivity to better connectivity, is the trend of the information era, and we would enable all business partners and users to have a better data connectivity. Our innovative technology facilitates us to establish a leading technology position of our PaaS and SaaS platform in the early stage of 5G, and we dedicate to promoting better connection to everyone. I will now turn it over to our CFO, Yi-Meng Shi, who will go through the business and financial highlight section.