uCloudlink Group Inc.

Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to the UCloudLink Group Incorporated Third 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. To ask a question, you may press star then 1 on your telephone keypad. And to withdraw your question, please press star then 2. Today's conference call is being recorded. I would now like to turn the conference over to your host today, Mr. Bob Shin, Deputy Investor Relations Director of the company. Please go ahead.

Thanks, everyone, for joining us on our third quarter 2021 earnings call today. The earnings release is now available on our IR website at ir.ucalink.com, as well as via Newswire Services. I will give a brief introduction to our UCALink NASDAQ UCL team. Zhi Ping Peng is our co-founder and chairman of board of directors. Chao Hui Cheng is our co-founder, director, and chief executive officer. Yi Men Shi is our chief financial officer. Zhu Tan 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, Yi-Meng Shi, will then discuss our operation highlights and financial results as presented in Section 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 eCloudLinks Earnings Plus release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. eCloudLinks Plus 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.

Good evening. There are similar contents as the ending presentation of the second quarter of year 2021. During this call, we will outline the major recent developments and highlights. Let's move to the page 13. Euclidean 1.0 is international data connectivity services and has a strong track record of high gross margins and profitability with ongoing growth potential. In the long term, as international travel restrictions continue to abate over time and gradual recovery of international travel benefits our international data connectivity business. Even for the new challenge of the COVID-19 pandemic recently, we still have confidence in the positive trend of international travel because of more and more medicine and vaccines coming to use. With the gradual recovery of international tourism, we saw increase of 1.0 business revenue in the third quarter of year 2021, year over year. And a quarter over quarter with continuous users demand in various markets. For example, our US market has a year of year increase of order demand of 1.0 business during the third quarter of year 2021. We expect our 1.0 business will not just be a simple recovery, but grows with new, with innovative technology and products. We saw positive development of our 1.0 business from our daily active time nodes as international travel users increased quickly in various markets. We intelligently repackaged to minimize data traffic unit cost. Data package cost of single operator or cross mobile network operators, mobile virtual operators have large price difference and we repackage it from wholesale to retail. We have the largest SIM card pool and we acquire data packages at the wholesale local price from operator to partners. Further, we provide high-quality data connection services and elevate user experience of users and business partners through multi-network reselection and combination, which shows our difference. Euclid's one point of business monetization model includes retailing to C, rental or selling to end user, wholesale to B for business partner, and our PaaS and SaaS services, such as CRM, billing management, devices selling, and rental management, et cetera. For wholesale to be, we can be a reseller or provide commission services to our business partners. We allow our business partners share data traffic pools through our PaaS and SaaS platform and change commission fees. We believe the COVID-19 pandemic has negatively impact our 1.0 business. It has create opportunity for potential growth, including increasing demand for mobile data such as traveling, tracking, vaccination digital passports, and the COVID-19 testing reports. Also, we see fewer competitors in the market after COVID-19 pandemic. Let's move to page 14. uClouding 2.0 business is local data connectivity services and become a new driver of growth during year 2020. Our new hypercom technology contributes to the further development and growth of our uClouding 2.0 business. and we expand the business scope of our local data connectivity services. Our HyperCon technology is widely accepted by mobile network operators, business partners in various industries with growth potential, such as with local partners in China, US, and Japan. Our 2.0 business shows greater resilience with proven high demand and growth potential during the pandemic and experienced less negative impact overall. EuroClouding 2.0 business monetization model is similar to that of EuroClouding 1.0, business with a massive potential local user base. We have operators improve services and solve data connection problems through our PaaS and SaaS platform by alliance with more mobile network operators and mobile handset manufacturers, we should be able to embed more global meat inside GMI. In smartphones, such as 5G smartphones, we would accelerate the arrival of the 5G cloud and the applications such as AR, VR, cloud computing, and the autopilot, et cetera. The high quality of 5G application data connection We also bring users high requirement and awareness of data connectivity quality. Further, we make progress through hyper-connectivity solution with the mobile and fixed broadband business, MBB and FBV, under various application scenarios such as home broadband, especially our mobile and fixed broadband business cooperation with one of the major mobile network operators in China has been successful and expanded to more provinces. The increase in total revenues is a strong indication that Euclid is well positioned to grow in the short term due to our continued effort in expanding our platform services business. And in the long term, as we believe that international travel restrictions will be lifted in the future. We have increased in revenue from our 1.0 and 2.0 business in the third quarter of year 2021, compared to the second quarter of year 2021. And we saw faster business development through online and offline channels in our U.S. market. We launched a new branding technology, Hypercom, which allows for us to target IoT opportunities by leveraging 5G mobility to ensure superior network connectivity. Our strategy is to use this technology to introduce innovative products and services into the market. Such new products will accelerate the further development of our 2.0 business Our new tablets equipped with hypercom and cloud-thin technology have been promoted in new industries such as education Our strategy to expand our network and strengthen our core operations with local partners allows our new 5G hypercom products to enter a variety of new industries which require reliable, high-quality data connections, including education, emergency services, live broadcasting e-commerce, Wikitalki, and other IoT applications. Our Hypercom related products and services have been distributed by our offline retail channel and e-commerce platform and our products have received positive feedback and are well recognized and valued by increasing number of users and business partners across a wide spectrum of industries. Let's move to page 15. Based on our innovative cloud theme and hypercom technology, we continue to develop and broaden our scope with new products and services, such as our self-developed terminals and third-party devices. For example, after we unveiled our new Hypercom technology and products in June 2021, we launched our Hypercom technology solutions and products to the market in the third quarter of the year 2021, such as Lumen, the world's first hypercom 5G Wi-Fi device, and Genie, a tablet device. We have positive feedback for our Lumen and Genie, and we continue to cooperate with more business partners. Our IP camera, IPC, has complete testing and is expected to launch for commercial in the near future. Going forward, we will launch more and more innovative products and services with our Hypercom solution. Through embedding our global meet inside GMI, we continue to further expand our PaaS and SaaS ecosystem with users and business partners globally. Our Hypercom technology solution is highly compatible with various application scenarios and smart hardware such as 5G mobile phone, tablets, CPE, etc. Our hypercom technology solution also facilitates us to enter new industries requiring high-quality and reliable data connection, such as online education, emergency response, electric power industry, etc. We believe our PaaS and SaaS ecosystem will continue to expand as we keep investing in R&D and launching innovative products and services to market and elevate data connectivity services such as data connection for Internet of everything. I will now turn it over to our CFO, Yimen Shi, who will go through the business and financial highlights in the section.