GCT Semiconductor Holding, Inc.

Good afternoon. Thank you for attending GCT Semiconductor Holding, Inc.' 's fourth quarter and full year 2025 financial results call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. Joining the call today are John Schlafer, GCT's Chief Executive Officer, and Edmund Chang, CFO, to discuss our fourth quarter and full year 2025 results. During this call, certain statements we make will be forward-looking. These statements are subject to risk and uncertainties, including those set forth in our Safe Harbor provision for forward-looking statements that can be found at the end of our earnings press release and also in our Form 10-K that will be filed today. which provide further detail about the risk related to our business. Additionally, except as required by law, we undertake no obligation to update any forward-looking statement. I will now turn the call over to John Schlafer.

Thank you and thanks to everyone for joining us today for our fourth quarter and full year 2025 earnings call. I'll begin by discussing the operational milestones we achieved during the year as we executed on our strategy to transition the company toward full 5G commercialization. Following my remarks, our CFO, Edmund Chang, will walk through the full year financial results in greater detail. 2025 was a defining year for GCT. as we reached several key milestones in the transition from our development to commercialization of our 5G chipset. Over the past year, we have focused on bringing our 5G chipset technology to commercial readiness while expanding our ecosystem of partners and customers who are preparing to deploy and integrate our 5G platform across a growing set of applications. After the launch of sampling with lead customers in June, in the fourth quarter, we shipped more than 1,900 5G chipsets for commercial use. These shipments represent early commercial volumes that support initial deployments and or customer testing programs and mark the continued progress toward our broader production ramp. While still small in scale relative to long-term opportunities ahead, these shipments demonstrate that our production pipeline is now actively supporting real-world deployment and preparing for high volumes as customers move through their rollouts. We expect this momentum to continue generating sequential growth in 5G chipset shipments throughout 2026. Speaking of customer rollouts, another important milestone was achieved during the quarter by GOGO with their new broadband 5G air-to-ground service powered by GCT's 5G chipset. As our first network operator to bring a live network to market using our technology, this milestone validates the performance and reliability of our 5G platform in one of the most demanding wireless connectivity environments and demonstrates the readiness of our chipset technology to support real-world commercial deployments. The launch also underscores the growing demand for GCT's 5G solutions and reinforces our positioning for broader 5G commercializations and market penetration. As additional customers advance through testing, certification, and deployment phases, we expect the success of GoGo's launch to serve as a strong validation point for other customers evaluating our technology and to support further adoption in 2026 and the years ahead. In parallel with these developments, we continued expanding our strategic partnerships to broaden the applications and markets for our semiconductor solutions. During the quarter, we signed a licensing agreement with one of the world's largest satellite communications providers, under which our 4G and 5G chipsets will integrate into the partners' user equipment to support global, resilient, and high bandwidth connectivity across both satellite and terrestrial networks. This integration will enable direct-to-satellite applications across the partners' rapidly expanding network, creating new 5G tipset sales opportunities for GCT, while positioning us at the intersection of terrestrial wireless infrastructure and satellite connectivity. Chipments for this program are expected to begin as early as the second half of 2026. More broadly, this collaboration places both companies at the forefront of emerging 5G to space networks designed to extend connectivity worldwide, including in underserved regions and supports the industry's transition towards more integrated terrestrial satellite infrastructure. By combining our advanced 5G semiconductor technology with a global satellite footprint, We're helping enable a new era of always-on connectivity that is more resilient, flexible, and accessible than ever before. We also announced a partnership with Skylo to expand seamless global satellite connectivity for next generation cellular to IT devices. As part of this collaboration, our teams are working jointly towards chipset and module certification that will enable ubiquitous connectivity across satellite-enabled networks for a wide range of IoT applications. This initiative further demonstrates the flexibility of our architecture and the growing number of connectivity environments our platform can operate in. Collectively, these partnerships reflect our broader strategy to position GCT at the intersection of several major technology trends, including the expansion of 5G networks, the rapid growth of connected devices, and the increasing integration of satellite connectivity with terrestrial wireless infrastructure. In addition to these commercial developments, we also took steps to strengthen our financial flexibility and ensure we have the resources necessary to support the upcoming production ramp. During the fourth quarter, we entered into a $20 million convertible note facility with an initial $1 million advance. This financing provides us with additional optionality to support working capital requirements, production readiness, and strategic growth initiatives, while minimizing dilution at the current stock price for shareholders. Taken together, the progress we've achieved throughout 2025 reflects a company that has successfully transitioned from the development phase of its 5G program toward the early stages of commercialization and volume production. We expanded our ecosystem of partners, advanced multiple customer programs, through evaluation, design, and optimization phases, and began supporting live network deployment using our chipset platform. As we look ahead, our focus is on scaling operations to support the commercialization of our 5G chipset. This includes aligning our supply chain partners, strengthening production readiness, and continuing to support customers as they move from evaluation to deployment. We believe the groundwork laid over the past year positions us well for the next stage of growth as production volumes increase and additional network operators begin featuring GCT-enabled 5G devices. And with that, I'll turn the call over to Edmund to discuss the full year results. Edmund?

Thank you, John. While 2025 represented a transitional year for our financial performance, It also reflected the deliberate investment required to bring our 5G chipset platform to commercial readiness while managing our capital allocation and optimizing our cash flow. As we have discussed in prior quarters, the shift from our legacy 4G product cycle to our next generation 5G platform created a temporary gap in revenue while customers completing development and integration efforts. We believe this transition reached its trough during the third quarter of 2025. We are now at the inflection point as commercialization progresses. Reflective of this, total revenue in the fourth quarter increased 76% sequentially from the third quarter. demonstrating early momentum as our 5G programs begin contributing to the top line. We expect this sequential improvement to continue into 2026 as additional deployments rolled out and production volumes ran. With that context, I will now reveal our full year 2025 financial results Further details can be found in the 10-K that will be on file with the SEC. Net revenues decreased by $6.3 million, or 69%, from $9.1 million for the year ended December 31, 2024, to $2.9 million for the year ended December 31, 2025. The change was due to a decrease of 3.6 million in product sales and a decrease of 2.6 million in service revenues. The lower product sales were driven by lower 5G reference platform sales as we continued transitioning into 5G while service revenues decreased due to the completion of a substantial service project during the prior year period. Cost of net revenue increased by 0.6 million or 16% from 4.1 million for the year end of December 31st, 2024 to 4.7 million for the year end of December 31st, 2025, largely due to additional production overhead costs. Our growth margin for the year ended December 31st, 2025 was negative. This primarily reflects the current level of product revenue, which is not yet sufficient to fully absorb our production overhead costs. And therefore, it's not fully indicative of the underlying profitability of our products and services. We expect margins to improve as product volume increase, particularly as our 5G chipset sales begin contributing more meaningfully to revenue later in 2026, following the commercial launch in the fourth quarter of 2025. Research and development expenses decreased by 3.3 million or 19% from $17.3 million for the year ended December 31st, 2024 to $14 million for the year ended December 31st, 2025, largely due to the completion of a 5G chip design project, which resulted in a $3.3 million reduction in professional services from Alpha. This reduction was partially offset by a $0.9 million increase in personnel related costs due to our higher engineering headcount. a $0.3 million increase in stock-based compensation expense due to the issuance and wasting of share-based awards, and a $0.4 million increase in pre-production and engineering supplies related to our 5G initiative. Sales and marketing expenses were relatively flat year over year, totaling $3.9 million for the year ended December 31, 2024, compared to $4.2 million for the year ended December 31, 2025. General and administrative expenses increased by $5.7 million, or 53% from $10.8 million for the year ended December 31, 2024, to $16.5 million for the year ended December 31, 2025. The increase was primarily due to changes in our credit loss estimates for receivables, which resulted in a $2.8 million expense in 2025 compared to a $0.4 million benefit in 2024, resulting in a $3.2 million net increase to G&A expenses. Stock-based compensation expense increased by $3.2 million, from $2 million for the year ended December 31, 2024, to $5.2 million for the year ended December 31, 2025. The increase was primarily due to the issuance of equity classified common stock warrants to investors in 2025. Personnel related costs increased by 0.6 million. These increases were partially offset by a 1.2 million decrease in professional services and other costs due to lower transactional activities during the year. Turning briefly to liquidity, We closed the year with cash and cash equivalent of $0.6 million. We also had net accounts receivable of $2.6 million and net inventory of $0.9 million. Subsequent to the year end and as of the end of February 2026, we had cash and cash equivalent of $9.4 million. In addition, we maintain access to our at the market equity program of up to 75 million and have ample capacity on the remaining 125 million of our 200 million shelf registration statement, which was effective since April 1st, 2025. These capital resources provide us with flexibility to support working capital needs and execute on our commercialization strategy as we scale production. Looking ahead, we expect sequential growth in both revenue and 5G chipset shipments throughout 2026 as additional customers move into commercial deployment spaces. As this transition continues, our financial priorities remain focused on maintaining operational discipline, preserving capital flexibility, and supporting the production ramp necessary to convert our growing customer pipeline into meaningful revenue. With this, I will turn it back to John.