uCloudlink Group Inc.

Thank you for standing by and welcome to the uCloud Link Group Incorporated first quarter 2026 earnings conference call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the call over to Mr. Xichao Gao, Company, Investor Relations. Please go ahead.

Okay, thank you. Hello, everyone, and thank you for joining us on EucalLink First Quarter 2026 Earnings Call. The earnings release and our earnings presentation are now available on our IR website at iadoecalllink.com. Joining me on today's call are Mr. Zhi Ping Peng, co-founder and chairman of the Board of Directors, Mr. Chao Hui Chen, co-founder, director, and chief executive officer, and Mr. Yi Mengshi, chief financial officer. Mr. Chen will begin with an overview of our recent business highlights. Mr. Xu will then discuss our financial and operational highlights for the quarter. They will all be available to take your questions in the Q&A section that follows. Before we proceed, please note that this call may contain forelooking statements made pursuant to the safe harbor provisions of the previous securities Litigation Reform Act of 1995. These four looking statements are based on measurements, currents, 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 massively different from the results performance or expectations projected or implied by these forward-looking statements. All forward-looking statements are expressly qualified in their entity by their plenary statements, risk factors, and details of the component's feelings with the SEC. The company does not assume any application of reverse or update any forward-looking statements as a result of new information, future events, change in market conditions, or otherwise, except as required by law. Please also note that UCLogin's earning press release and this conference call include discussions of unaudited gap financial information and unaudited non-gap financial measures. Your calling's press release contains the regulations of the unaudited non-GAAP measures to the most directly comparable unaudited GAAP measures. I will now turn the call over to Mr. Chen. Please go ahead.

Thank you, Daniel, and good morning or evening. It delivers total revenues of U.S. dollar $16.9 million in the first quarter of 2026. These results come despite significant external headwinds, including microeconomic volatility, weak travel demand, rising energy prices, memory chipset cost increase. and the conflict-related supply chain disruption. More importantly, our new product lines have continued to warm up and scale, gradually offsetting the negative impact on our traditional business for these external headwinds. With the continued ramp up of new product, such as the platform and the unicorn plow, revenues from our new business lines are increasing following an initial market one-up period over the past two quarters. Each of these new products continue to make significant strategic progress during the quarter, laying the groundwork for accelerating commercial growth momentum going forward. Overall, our three new growth engines, Glowcoming Line, Glowcoming IoT, and Glowcoming Thin, deliver remarkable year-over-year revenue growth of over 400%, 300%, and 170%, respectively To accelerate commercialization and capture early market leadership, we strategically increase marketing spending during the quarter on the platform and broader Papago ecosystem. While these investments will attempt near-term profitability and cash flow, we are confident they will yield substantial long-term payoffs and contribute to sustainable growth going forward. I will now reveal the highlights for each of our key business lines. I will start with the Papago ecosystem. Building on the exceptional global media attention and the market validation received at NWC 2026 and CEX 2026 with the unveiling of our Papago ecosystem and the all-new pet cam. We launched the beta version of the Papago app during the quarter. This differentiated and pioneered AI power plus social platform for the pet technology industry leverages AI technologies and the platform to enable pets and their owners to communicate seamlessly. by effectively transforming the pet ownership experience into an interactive, social, and connected community. We are fostering parallel engagement and continuous interaction. Pepper Go also allows pet owners to manage their pet care journey across three stages, before, during, and after activities. This social platform is expected to complete commercial validation in Q2 2026 and begin driving growth starting in Q3 2026. During the quarter, average monthly active user MAU reached 1,397, and the early beta feedback has been overwhelmingly positive, reinforcing our confidence in its user adoption and strong growth potential. Moving on to our growth community life business line, we continue to drive exponential growth with industry-first innovations. Our unicorn plow gains strong traction during the quarter. with the sales volume and the market adoption accelerating rapidly, by enabling a lighter, more convenient lifestyle with secure and reliable connectivity, freeing users from cumbersome device, while ensuring seamless protective experience. GoCommune Live solutions solve average daily activity user DAU during the quarter increase 559.9% year-over-year. Turning to Glaucoma Internet of Things IoT, our forward-looking strategy is already beginning to generate initial results. The business maintains its strong growth trajectory with user adoption and revenue contribution continuing to expand rapidly year over year. We continue to solidify our strategy position to capture additional market share in high growth sector, such as in-car, infotainment, and security cameras. Average DAU for global community IoT increased by 246.5%. compared to the first quarter of the year 2025. And as of March 31st, 2026, our total IoT solutions install base reached 2.93 million. For our global missing business line, our ethentria solution continues to gain strong traction and growth momentum. with average DAU increasing 193.6 year-over-year during the quarter. This validates both our carrier partnership model and its market positioning as a permanent secondary theme for users. Furthermore, our carrier core insurance program has gained pilot deployment, providing a highly effective low-capacity solutions for operators that enhance their global roaming capability. This model is gaining strong traction and is welcomed by both operators and users, confirming a robust product market fit. Lastly, the launch of our cutting-edge Mirgo G50 mask, the world's first sky-to-ground integrated mobile connectivity hub. is expected to serve as a powerful growth engine for the coming quarter. The near-goal G50 mark is redefining the connectivity when it matters most. In a conflict-affected market with a disrupted terrestrial network, its resilient connectivity is a critical differentiator. Powered by our AI-driven HyperCon technologies is seamlessly switched between terrestrial, in-flight, home Wi-Fi, creating a unique one-hub global freedom experience. It also enables satellite-based two-way messaging and emerging SOS, extending connectivity from ocean to desert. We expect this product to reach commercial deployment in the second quarter of year 2026. Looking behind its market potential, the Mirgo G50 Max not only represents our high-end brand aspiration, but also focuses on driving increased sales and elevating our brand across the entire portfolio of mobile connectivity solutions. Looking ahead, we remain in the early high growth stages of our transformation. Throughout 2026, we will continue investing strategically in our new flows engines. The strong market validation from MWC 2026 and CES 2026, positive PEPCO beta feedback and a sustained momentum in global mean IoT demonstrate how our diversified business strategy remains firmly on track. Looking at the coming quarter, we expect our traditional business to gradually stabilize, reaching a level where further downside is limited. At the same time, our new business line will continue to grow. driven by ongoing product ramp-ups and market adoption. Together, if this deals momentum, our traditional business stabilizing and our new business scaling up continues as we expect. It is expected to further offset the external headwind that has impacted our performance. As a result, we believe the second quarter of 2026 will be a turning point in our overall business trajectory with a return to positive year-over-year growth. We are building towards sustainable growth by scaling our user base globally and bridging the digital divide. in cross-border connectivities, as well as the emotional distance between people and their past, while creating long-term value for our shareholders. With that discipline optimism in mind, we are confident that we have the right strategy in place to drive sustainable growth going forward. For the second quarter of the 2026 we expect total revenues to be between U.S. dollar 19.5 million and U.S. dollar 22.5 million, representing an increase of 0.5% to 16% compared to the same period of year 2025. I will now turn the call over to Mr. Shi.

Thank you, Mr. Chen. Hello, everyone. I will go over our operational and financial highlights for the first quarter of 2026. Average daily active user, DAU, and monthly active user, MAU, represent the average number of unique users engaging with our global media service on a daily and monthly basis, respectively. Those metrics show strong growth momentum in the first quarter. Average DAU in the first quarter was 354,789, representing an increase of 10.2% from 321,836 in the first quarter of 2025. Glocomi IoT, Glocomi Scene, and Glocomi Live all deliver significant gains. with average DAU up 246.5%, 193.6%, and 559.9%, respectively, from the same period last year. Average DAUs from our global MIRS-GO learners declined by 5.8% year-over-year. Average MAUs were 306.5%. 37,274, representing an increase of 6% from 695,599 in the first quarter of 2025. Average MAUs from our Globembe IoT, Globembe SIEM, and Globembe Live Business saw increase of 142.1% 76.8% and 609% respectively from the same period last year. Average MAUs from our global miracle donors decreased by 7.3% year-over-year. In the first quarter of 2026, average DATs were 327,615 with 13,000 and 414 owned by the company, and 314,201 not owned by the company, representing an increase of 6.1 percent for the first quarter of 2025. During the quarters, 58.6 percent of DATs were from EuclidLink 4.0 International Data Connectivity Service, and 41.4 percent were from equaling 2.0 local data connectivity service. In March, 2026, the average daily data usage per terminal was 1.57 gigabytes. Average M80s in the first quarter were 702,805, representing an increase of 7.7 percent from 652,810 in the first quarter of 2025. Growth was driven by strong momentum across our three new growth engines with average MAD for globally IoT, globally SIM, and globally live increasing 135%, 74.1%, and 806.1% respectively. From the same period last year, average MAU from GlobalMe Miracle business, which we previously referred to as GlobalMe mobile fixed broadband business, decreased by 4.1% year-over-year. Our platform is a newly launched business. We've only just begun to see user adoption and engagement grow during the quarter. In the first quarter, average DAU and MAUs were 100%. 1,097 and 1,397, respectively, while average DATs and MATs for platform reach 368 and 789, reflecting the growing traction of this new offering. As of March 31, 2026, the company had 212 patents. with 183 approved and 29 pending approvals, and approval of SIM cards from 397 MNOs globally. Total revenue for the first quarter of 2026 was $69.9 million, representing a decrease of 10.1% from $18.7 million in the same period of 2025. Revenue from service was $13.3 million. representing a decrease of 6.3 percent from 14.2 million U.S. dollars in the same period, 2025. Revenue from surveys contributed 79.9 percent of total revenue during the first quarter of 2026, compared to 75.7 percent in the same period last year. Geographically speaking, during the first quarter of 2026, Japan contributed 32 percent mainland China contributed 30.3%, North America contributed 70.3%, and other countries and regions contributed the remaining 20.4% compared to 40.4%, 31.2%, 12.9%, and 15.5% respectively in the same period, 2025. Our gross profit was $8.3 million compared to in the same period, 2025. Overall gross margin in the first quarter, 2026, was 49.1 percent compared to 51.7 percent in the same period, 2025. Gross margins on surveys was 54.5 percent in the first quarter, 2026, compared to 57.3 percent in the same period, 2025. Excluding share-based compositions, total operating expenses were $10.8 million compared to $9.9 million in the same period, 2025. Late loss in the first quarter, 2026, was $3.5 million compared to a late loss of $0.6 million in the same period, 2025. Adjusted EBITDA. was negative 2.0 million US dollars in the first quarter, 2026, compared to a positive 1.4 million US dollars in the same period, 2025. For the first quarter, 2026, we recall an operating cash outflow of 8.7 million US dollars compared to an inflow of 0.2 million US dollars in the same period, 2025. For the first quarter of 2026, our capital expenditures were $30,000 compared to $300,000 in the same period, 2025. Turning to balance sheet items, our cash and cash equivalents were $28 million as of March 31, 2026, compared to $32.8 million as of December 31, 2025. We continue to strengthen our financial position and believe we are well positioned to drive continued growth in our business. So operators, please open it up for Q&A. Thanks. Thank you.

Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. If you are on a speakerphone, please pick up the handset to ask your question. And our first question today will come from Theodore O'Neill with Lynchfield Hills Research. Please go ahead.

Thank you for taking my questions. My first question is about the G50 Max. And in your prepared remarks, you're talking about this being interesting to the market. It's in conflict zones. And I'm hoping that it's a shrinking market, not a growing market. So could you talk about some other markets where this G50 Max would be appropriate? And I think you mentioned at sea, and I'm thinking perhaps very remote rural areas as well.

Yeah. So our G Max is our high-end product. It's a 5G system. we can load out 5G in over 100 countries. That's the most popular we can offer in 5G in the world. So compare like the other, our competitor like AT&T, maybe just 75. So the first advantage is we can provide the maximized coverage of 5G worldwide. That's first. And the second, we can provide about 35 airlines for the in-cabin, in-cabin 4G, 5G connection. The second, that means the business traveler in the air cabin, they can serve in. And then it's about the satellite SOS and the messaging. So no matter you are in the outdoor or in a conflict area, you never lost the connection. And the number four is if you are in the office and at home, of course you can get Wi-Fi available, but Wi-Fi sometimes is unreliable. During this case, we can backup by the 5G and 4G with a multi-carrier. enable your remote work and remote study and remote meeting never fell down. So we balance the best coverage and the best tariff. So that means one device and one account, you can enjoy the global best coverage and the best tariff. So that's why we believe that one device for every scenario, not only at home, at the office. Consultant people have to bring the multi-device, multi-package, a home Wi-Fi, in-cabin Wi-Fi. We have long-mean eSIM or long-mean GPS. or local multi-carrier tariff, then you can get the similar coverage and solution. And now with our solution, one device, simply one device, one account, you can get the best coverage and tariff. That's our purpose.

Okay. Thank you. My next question is about the in-car infotainment and security cameras. Can you give us any more detail about about the actual market share or the growth of that exposure to that business?

Yes, I think that's about our IoT business. We embed our cloud theme and the HyperCon solution into the in-car infotainment and the car play. The major car play devices are These major car-play devices come from China. Major top 10, these partners all embed our solution. That means plug this car-play device. Not only can get the entertainment in the car, but also can get the network in the car. So almost the top 10, these providers all use our solution. So that's for car infotainment. And for the camera, so I think the car now, more and more, you know, 4G camera, they use, in the traditional, they need to plug a SIM card inside. That means if the carrier network has some problem or coverage adjustment, you have to go to the high place to replace SIM card for the camera. It's very inconvenient. But with our solutions, Because 4G is more popular, the price is similar like Wi-Fi camera. You can see the 4G camera, the volume of the market share in the camera market is bigger and bigger. So for the 4G camera, I think that currently more and more is the top from China provider embed our software solution into their camera. That means that And you still can use the SIM slot to put into SIM card, but it's expensive and coverage is poor. But use our solution, not only get a benefit from better coverage, but also can get cross-carrier coverage. You can see our market share in this market grows dramatically. So you can see our installation volume is about 2.9, 3.9 million pieces for shipment. In the six months later, they will turn into the package and with our, in the operation. About from shipment to the user and adopt our solution needs six months. So you can see six months later, we will get more user, far more user than currently.

Thank you. And my last question is about supply chain issues. You mentioned in the prepared remarks about memory prices being a headwind, but I was also wondering, are you seeing any supply chain issues in terms of availability?

Yes, I think compared to last year, memory chip is almost five to ten times higher. So that's a heavy impact, you know, I think the cost of the device. So we have many, we think a lot of ways. One side we have a lot of deficit, we have, you know, also we try to, you know, redesign to reduce the memory size and to lower the cost. And also, we look in the instead of the Chinese local memory. So all these, we can overcome some part of the memory price going up, but we can't offset the total because the price is too high. That definitely will have some impact to our selling price. You can see our not only 2B and 2C selling price for the device is higher, about 20%, 30% up, than compared last year.

Thank you very much. Again, if you have a question, please press star, then 1.

As there are no further questions at this time, I would like to hand the call back over to Mr. Gao for any closing remarks. Please go ahead.

Thank you once again for joining us today.

If you have further questions, please feel free to contact your colleague's Investor Relations through the contact information provided on our website or speak to our Investor Relations form. We look forward to speaking with you again on our next quarterly call. Thank you.

That does conclude our conference for today. Thank you for your participation. You may now disconnect.

Thank you.