uCloudlink Group Inc.

Good morning and welcome to the uCloud Link Group Inc. Fourth Quarter and Full Year 2022 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press store then two. Please note this event is being recorded. I would now like to turn the conference over to Jillian Zhang of Investor Relations. Please go ahead.

Thanks, everyone, for joining us on our first quarter and full year 2022 earnings call today. The earliest release is now available on our IR website at ir.euclolink.com, as well as our Newswire service. I will give a brief introduction to our Euclolink management team. Ji Tingpeng is our co-founder and chairman of board of directors. Chao Huichen is our co-founder, director, and chief executive officer. Yi Mengshi is our chief financial officer. Zhu Tan is our advance president of marketing and sales. Our CEO, Chao-Hui Chen, will begin with an overview of the company's recent business highlights and EuclidLink's 2023 business outlook, which will cover the earnings presentation posted on our IR website. Our CFO, Yi-Meng Xu, will then discuss company's operation highlights and financial results. Before we proceed, please note that this court may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Security Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and observations that involve known and unknown ways uncertain 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 the forward-looking statement. All forward-looking statements are expressly qualified in their entity by the contrary risk factors, and the details of the company's filings 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 know that EuclidLink's earning press release And this conference call includes discussions of the non-audited gap financial information as well as non-audited non-gap measures. Euclid Link's press release contains a reconciliation of non-audited non-gap measures to the non-audited most directly comparable gap measures. I will now turn the call over to our co-founder and CEO. Mr. Cha-Hui Chen, please go ahead.

Thank you. and good morning, everyone. Thank you for joining us on our year-end 2022 earnings call today. We appreciate everyone's time. Year 2022 was truly a pivotal year for uClouding, characterized by achieving great success and overcoming tremendous challenges. we are pleased to have achieved positive operating cash flow of US dollar 4.4 million for the year and December 31st, 2022, a significant milestone for our company, as this is the first time we have done since the COVID-19 pandemic. Having overcome the difficulties we face during the COVID-19 pandemic and working to strengthen the diversity of our business, as well as increasing its resilience with new growth opportunities. We are excited about the company's long-term growth prospects and believe we are well positioned to be an industry leader. uClouding 1.0 is our international data connectivity services business, which tends to be a higher margin lines of business and the one which we believe will continue to be a key growth driver for the company. During the first quarter of year 2022, uCloud in 1.0 business revenues increased 48.2% year-over-year to U.S. dollar 7.7 million. For 2022, Ukraine 1.0 business revenues increased 29.6% year-over-year to U.S. dollar 28.1 million. This improvement is a reflection of international travelers recovering across our major markets over the course of the year. This was accompanied by an increase in average daily active terminals for uClouding 1.0 business during the fourth quarter and four years in 2022. Average daily active terminal increased 20.5% year-over-year in 2022. In 2022, we have become a leading 5G non-means solution provider in the wireless network industry and have continued to provide reliable and high quality international data connectivity services in more than 140 countries enabling single operator entry point to access more than 300 global mobile network operators available networks. uClouding 2.0 is our local data connectivity services business which has been a significant driver of revenue growth since the year 2020. Over the past two years, we have continued to strengthen our presence in markets like Japan, North America, Southeast Asia, where we have helped operators and business partners improve their data connectivity services and resolve data connection problems. through our PaaS and SaaS platforms based on our patent technology, including CloudSync and HyperCon technology solutions. Our uClouding 2.0 business reported US$7.4 million in revenues, up 55.5% in year 2022, from US$4.7 million in year 2021. On the Internet of Things IoT side, our customers were able to realize reduced operating costs and improve data connectivity experience through these cutting-edge IoT solutions, and we continue to explore opportunities where we can broaden the applications of our technologies for partners with IoT needs. covering application scenarios like Wi-Fi loader, IP camera, and electric vehicles. We continue working to close our uCloud in 1.0 business, strengthening our leading global position in the international data long-term solutions market since the beginning of the year 2023. We have observed an accelerated recovery in international travel. The United Nations World Travel Organization expects 2023 international tourist arrival number will recover about 80 to 95 percent of pre-pandemic levels, which presents a significant opportunity for us. away from the zero-COVID-19 policy and the subsequent opening of the national borders, we act quickly to establish provided data solutions coverage at many of our partner airports, airlines, and travel agents, allowing us to meet the recovering demand for UCLOUDIN 1.0 long-main business in China, Malaysia, and Singapore. We believe that improving macro environment represents a greater upside for uClouding 1.0 business in year 2023 and we will continue strengthening our leading position as a 5G domain solution provider and launch uClouding 1.0 products and solutions such as the eSIM solutions to satisfy the various needs of our customers and users in multi-industries. For the uClouding 2.0 business, we have gained more industry recognition and have continued to expand our PaaS and SaaS platform ecosystem, while continuing to establish a natural customer relationship for the uClouding 2.0 business in existing key markets like Japan and North America. We have gotten more industry recognition in China, which is expected to accelerate uCloud in two points of business growth. In January year 2023, our wireless marketing network Intelligent Connection Engineering Technology Research Center was approved as one of the Guangdong Province Engineering Technology Research Center by the Department of Science and Technology of Guangdong Province. We believe this recognition serves as a testament to our continued technology advancement in mobile and data connectivity technologies and brings a new momentum for uClouding to expand our presence in the mainland China market and beyond. In the IoT side, the company continues to serve existing partners with our superior, more reliable mobile network solutions, while proactively exploring opportunities in new industries and new application scenarios, including augmented reality and virtual reality VR, electric vehicles, etc. We expect to make a breakthrough in Japan market where we have a strong presence, helping business partners to further improve their data connectivity experience in the IoT field. We remain on track in the long-term development of our PaaS and SaaS platform ecosystem. which we believe is key to the success of our mobile data sharing marketplace. With that, I would like to touch on UCLOUDIN's Nielsen initiative, UCLOUDIN 3.0, to initiate a mobile data traffic sharing marketplace application based on our efforts in building a scalable user-based through our uClouding 1.0 and 2.0 models. This marketplace enables a user's device to connect to any available network anytime and anywhere utilizing the Global Meet app. The Global Meet app is designed to support various application scenarios without a limitation of the device. including top-up and goal Glocom-E terminals, active and goal eSIM, Glocom-E data application-only solution, Glocom-E theme, Glocom-E inside the third-party device, mobile Wi-Fi rental, et cetera. Backed by our cloud theme, Hypercom and Web 2.0 technologies, we aim to build a data traffic marketplace for operators, customers and users, where data traffic can be shared simply and efficiently via day-to-day market behavior. Once this marketplace application launches in the near future, we expect to continue to make investments into optimizing the system on an ongoing basis, incorporating more state-of-the-art technologies such as blockchain technology. We are committed to continuous development of innovative solutions and plan to expand our cloud and technology solutions to various application scenarios including media, video conference, outdoor live broadcasting, etc. Based on these innovative clouding and hyper-con technology solutions, we expect to launch more innovative products catering to the needs of diverse sets of enterprise and individual customers in year 2023, one of which is the one-step data connectivity solutions application I mentioned earlier, the on various smart hardware supporting various types of things. Finally, I will briefly discuss guidance for year 2023. For 2023, we expect total revenues of between US dollar 85 million and US 100 million US representing an increase of 90 percent to 40.1 percent compared to year 2022. We expect to build a more solid financial and operational position to feel better results in the future. We are pleased with our achievements in 2022, and I would like to extend a heartfelt thank you to all the uClouding team members for their efforts and delegations to strengthening our company. We feel confident in the opportunities and challenges ahead of us in 2023. leveraging our portfolio of advanced technology offerings and more mature commercial experience, and look forward to continuing to serve our customers and partners throughout our global market. uClouding remains focused on scaling our user base and constantly improving the technology and business operation model to build a mobile data traffic sharing marketplace, which will fuel the company's long-term growth. I will now turn the call over to our CFO, Yi-Meng Shi.