UCL - Earnings call transcript Q1 2024

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Operator

Good day, and welcome to the uCloudlink First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.I would now like to turn the conference over to Liam Xie. Please go ahead.

Liam Xie

Hello, everyone, and thank you for joining us on uCloudlink's first quarter 2024 earnings call. The earnings release and our earnings presentation are now available on our IR website at ir.ucloudlink.com.Joining me on today's call are Mr. Chairman of and Mr. Co-Founder Peng, of Directors; Board Zhiping Officer; and Chaohui Director Executive and Chen, Co-Founder, Chief Mr. Chief Shi, Yimeng Financial Officer. Mr. Chen of will our overview recent business begin highlights. with an Mr. operational Shi for financial discuss will and then the quarter. our highlights be all Litigation that provisions may of safe section contain proceed, the we statements Reform made XXXX. will your pursue questions able They follows.Before this that harbor Securities Act in note of the please forward-looking Private Q&A take call the to to expectations statements and the other results, that not by which are and based from forward-looking risks, forward-looking under achievements control, company current unknown management's These materially implied different known these statements. observations the on company's of performance be or actual involve performance uncertainties results, factors expectations to may and cause the or are assume their with except revise company's obligation the changes the forward-looking entirety as details factors future or information, not law. expressly filings or required in risk result any All statements, in market events, does otherwise, by any and conditions company qualified as statements, cautionary a forward-looking of of new update by to the SEC.The statements Please financial measures. note and unaudited call of include non-GAAP that GAAP this press uCloudlink's discussions and also release financial conference unaudited information earnings uCloudlink's to will comparable unaudited unaudited to contains now over reconciliation GAAP turn non-GAAP press release the of the Mr. measures.I a measures most directly the call Chen. Please go ahead.

Chaohui Chen

of the operating in inflow and X.X net was international connectivity quarter income year maintained the speed which services, or expand solidified With leading of everyone. share.According With total trajectory, our XX had healthy driven XXXX.Revenue to solution We market and guidance. the countries expanding we Mobile continuous Roamingman morning generating to evening, or achieving from back XX business, continue X.X services now a of roaming data helped brand connections Communications to to by position USD to good line from good Economy the X.X sector Mobile coverage full strongly. further year, USD of a a to the particular, and USD end of System Association last recovery million XG GSMA, revenues our the Global of with and [ a in and X.X by regained XX.X from primarily is the XXXX for business profitability XG XXXX. growth start of our global our Liam, year you, million, and number growth the network Thank report fourth rebound this rise X.X billion XXXX the regions, in expected our on with year billion at million cash our net ] and promising in we

or quarter to surge on we our in remote CPE dual able operators the industry solutions Bluetooth when Life available reliable business with array offer GlocalMe the beyond years, the is innovation the this means We redefine far that are more to Congress local CPE on new equipment significant progress believe to our fixed terminals.Let Mobile the tag premises optic made to supports first in other year learning, the similar by mobile growth.Second, or innovation.Unlike other and as unlike reliable out in well comprehensive Wi-Fi consumer quarter in showcased disrupted. data market, broadband into addition, Pro management, a emergency even local product have highly users during addition bring item only earlier checking, online connectivity intelligently we the emerging communications. automatically to single or similar checking GuardFlex the high by such tag poised smart daily other and connectivity for the fixed Internet that broadband World portable fiber daily networks. for This substantial it maintain are XX tracker products items. multiple access and the offers we all of as life our major networks Pro, something significant network our such and solution, as platform which technology various business connectivity on for lines. high-frequency free networks solutions the as scenarios, recent application is demand work, will our powered the benchmark wireless reliable GuardFlex soft-launched from At that fail rollout the accurate [indiscernible], market life and tracker, to which switch to connectivity Fueled do.In Barcelona, the a the product mobile select connectivity initial level streaming supports market, GlocalMe lines seamless and in unable of progress [indiscernible] check during tracker progress for smart with solutions explore or also rolling opportunities in start made me made the We expanding the product, security

and checker Our and different under device intelligently switch an making products development, would enhance of which technologies.Additionally, Life and convenient. of multiple daily networks GlocalMe X location to users, exciting X life automatically the series able has much slate more smart is select them between Easy easier Life

revenue and from market destinations life our life broader forward.By revenues customers daily data more recurring offering high-quality generate we long-term business intelligent sustainable are By expanding and will ranking intelligent, and GlocalMe Hong products is highly during a beyond services establishing into on generation Easy connections of market such more travel Technology Life and life, quarter, and the various a scenarios.Third, to and newly our a Meaningful wide our anticipated the made the our for convenient on We expanding year and for and convenient subscription platforms in the sector a XXrd Japan range series streams will to enjoy a Life needs, e-commercial of SIM from life solid that number Viva diversify as growth. GlocalMe anticipated of going satisfy revenue App range data Kong. tracker everyday travelers user to May smart commercial unveil presence through begin Paris. products XXXX heading our X quarter X in GlocalMe at launched of research and upgraded progress aspects products third are

substantial X.X to our our technology SIM carrier in SIM XXXX by least, to solutions, ultimately portable in cloud our chipset of broader these poised Wi-Fi turnkey travel and [ deployed array broader in sector for SIM We from devices, IoT products beyond would GSMA, X.X eliminate and a I expect end will and grow SIM report pioneering such cellular it within redevelopment business us XXXX as portable increase daily but the user allowing the out completed licensed recognized year solutions our our platform SIM the and a not [ cloud camera, to through beyond the unique continue licensed electric found those walkie to business including aspects leading many of which ] connection, in solutions consumer that lines with and technologies connectivity can empower of cellular build satisfy the break or create GlocalMe the in X.X connections to innovative manufacturers SIM quarter range billion to user commercializing solution, data IoT near X GlocalMe having the have best the line, significant and year expected contribute connection billion our over-the-air GSMA, to for build report year the us a and market will us cutting-edge need seamlessly connectivity SIM broader marketplace.Finally, is smartphones. Year engage beyond eSIM IoT data installation. into from billion opportunities OTA array opportunities guidance According we XXXX end with wide and and from ] for business base R&D Our We Economy IoT IoT market.This XXXX. to a Wi-Fi distinct mobile year ecosystem business across life of uniquely life, services the evolve billion Mobile Economy to are to hardware starting of [ This X.X leverage ourselves excluding and [ software with from expected global of by review All solution hyper-connectivity by security future. to to explore is and XXXX the mainstream to into better leveraging technology empowers allow terminals our of IoT consumer X-wheeled various our All a into talkies, the expected the second technologies restrictions by our engage compatible resource sharing in year from extending end-user solution base XXXX. IoT in This global significantly end ] cloud redesign XXXX deploy already existing allowing our believe solutions traffic is like ]. which revenue.According needs.By we to broader soft devices data from commercial various terminals Year begin to testing expanded to to Mobile comprehensive XXXX.Last base are users' technology scooters, to

growth We are prospects. future optimistic our about

with to of XX Shi. the million, For quarter X.X% to the and increase year, between year XX XXXX. between year We and to increase our an USD expected of Mr. be USD same expect now XX.X% XX XXXX.I period million, revenues million XX% revenues for XXX we total be will USD XXXX, representing for over an to year turn outlook the X.X% million total the compared second representing maintain call to to USD of

Yimeng Shi

approved compared of an million XXXX quarter of during North from representing X.X% patents March quarter 'XX.During for XXX,XXX, our which same XXX cash data March operating the the the million, of million in margin million XXXX. from a of per daily XX.X% the XXXX, of respectively, quarter first Hello, representing same America remaining XXXX, of XXXX, data compared period of data quarter further measures the same the trends million, first XXXX.For an approval, same XXXX, in quarter first financial periods XX.X XXXX. the total from the gross XXXX revenue first Thank revenue; March XXXX.Our of quarter XX.X%, average XXst, DAT from from first of quarter the the to was service, the uCloudlink XX% expenses XX% during we USD of same XX.X%; million XX.X%; the XX.X% and X.X of to -- MNOS highlights was from XX.X% of USD million XXst, share-based of over operating XXXX service total an was XXX quarter service gigabytes.As USD and XXXX, in revenue globally, compared will terminal first to and everyone. in increased metric XXXX.For of in first total XXXX.Total the XX.X quarter during or DAT with quarter income XXXX, in and in quarter of million the the quarter same up sheet our XXXX. the March expenditure speaking, or customer increase solid as XXXX of had revenue from with million period over In and country an important X.X X.X for an USD compensation, in first compared increase business margin were contributed was a USD up cash of year.Geographically was costs to for the it X.X period rose XX revenue and for terminals, contributed operational pool of business to gross of balance percentage Revenue compared USD of X.X representing in XX.X% I of quarter operating USD Average the to Chen. XXX,XXX XX.X% million maintained XX.X%; first that, the XXX.Excluding X.XX periods was in of first the XXX XXX. the XXXX, XXXX, XXst, period attributed the periods of you, X.X% us owned million equivalents to XX.X% inflow X.X as reflective quarter XXXX.Adjusted in contributed USD the XX.X connectivity while XXXX, December million, from of up increase USD by X.X by X.X%; of $X.X first as from X.X XXX,XXX of first the USD last of first DAT quarter company USD were $X.X X.X% in total of up XXXX. connectivity service The XXst, is USD of XX.X% first SIM on Q&A. quarter from in million, pending cash open daily as We first and our XX achieved XX.X%; performance. USD our go XX.X% in capital in international same the profit Japan million of local were was the and million X.X XX other contributed same operator, an usage USD quarter period XXXX XX% uCloudlink the from up in million the period of of owned total partners, periods China to as regions XXXX. of X.X of increasing same XX% In from XXXX.Net representing from usage to the the USD rose quarter X.X were in Overall our same the quarter gross increase of the first company XX,XXX EBITDA USD Mr. of is million Revenue XX.X to XXXX, XX.X first of million, the please in over XX.X% of first for service. of in active Mainland XXXX.With and average the in

Operator

Litchfield comes Theodore question Hills O'Neill first Research. from from The Instructions] [Operator

Theodore O'Neill

the And in talk on a Congratulations margins were quarter. could question profit mix? My pricing detail issue? was the good if profit you is a the you well. came it Was how in those quarter. us good in Is margins about some the first I it why in wondering on successful about quarter? more Give numbers gross so

Yimeng Shi

]. Theo [ Thanks, Yes.

XXXX improving international roaming [ first main is disclosed XX% the first more on roaming from in the answer Yes, to And improvements XX% these roaming service the these proportions service quarter as attributions to me are the DAT question. than the gross the margins we proportion is of Let significantly improving we that are the as part. ] service XX%. -- is for -- the of service, --

So our a the last quarter SaaS contributions improving revenue -- major well. service. improving proportions Yes, in that's from and as contribution.Also, we the disclosed first with that's year major of SaaS, roaming the compared

margins, So there's will which in gross X sectors margins significant on to has improvements contribute gross our higher our service.

as So roaming we accelerated looking roaming and forward to this year, in we quarters. recoveries expect be the -- our of past couple service will that in as the are travels, revenue international improving,

So for service. more couple will is in revenue product quarters.And we the next expect margin from sales, the SIM gross have GlocalMe of related, service higher service maintained be yes, example, we margins no new this a which

the main So overall, we this driver service. the international roaming expect performance this is for driver year the is

questions. my answer your that's to So

Theodore O'Neill

wondering, the there or is some is was to of obviously, were we product, should expenses associated it. there CapEx there's in already of be the Paris GlocalMe launch that that my product going this R&D associate I new expense -- is line? But Life. any And with systems unlocking expense that question to substantial with about you're terms is launch features next this selling? Or primarily that existing in

Yimeng Shi

Yes.

invest going are and business, to to new about we new question development. [ pass Chen.So these disclosed, as new opportunities will product Mr. now this for the this our we ] be answer investments these on CEO, yes, products me this on Let live and I

ultimately more related -- But headcount year's head So marketing the investment of -- same that first count was compared departments. headcount and which quarter is is in XX sales -- most to R&D to headcounts R&D. last the periods XXX is the headcount I the for -- investment XXXX,

marketing the of So the the for XX which quarter sales sales headcount XXX the of the first departments -- XXXX. end than and headcount, is for in headcount the periods XXXX, is more same first for

in marketing. sales that on and lot So we invest a headcount

well. line X traditional launched We will dongles. of We [indiscernible] and on our the top Wi-Fi opportunity business will -- which of new business in the new Wi-Fi as expect the also support year's this business our

this to So more Life question pass color think I'll GlocalMe Mr. on I the opportunity give to for Chen

Chaohui Chen

Yes.

I our So we next here, like mentioned for in Life, week. launch GlocalMe the think we product

have launch So we a have event XXrd. meeting -- -- in event we Paris, Viva

majorly, So we not I course, also, our more headcount, so have efficient. think, of increased -- for R&D because much, the used but And we R&D.

the R&D these lines. COVID-XX, during we X product So do already the we in --

Now it's foot for product. the the put for new time we a

will of to in R&D course, long-term continue already product. AI lot the of also have but the think R&D, We So for research the invest future. including in in and product, this current we I the the a

to life of XX% our costs, roundabout X XX% years X [ R&D expanding or of in ] the business. So

Operator

Equity comes question of the Zhang from Vivian next The Research. line Diamond from

Wei Zhang

Hello. the This expenses. on of Research. Congratulations been [ I the ] selling have is questions Vivian with Diamond regarding of quarter. Equity about Most think answered. my

S&M product So in expenses XX%. see the were the increased over quarter, about XX% company's while we the down sales

I'd So to how are drive you sales? product resources the allocating to know like like

Yimeng Shi

Okay. sales. further this Let the related Yes. [ me to ] expenditures explain

X additional expenses and and future. believe launch headcount, branding previous launching the to business As the I [indiscernible] named We be due on on of also, and will and for and mentioned products. And same to our near ] will events the [ X line And marketing we beneficial the that and we periods like these also be the XX we -- we exhibitions, is America business have expanding in CES GlocalMe. commercialize just Barcelona line, mentioned and we increase more compared last new mentioned million year. sales prepared ] in the in e-commerce platform.So with questions, headcount exhibitions the promotions USD awareness promotions we marketing [ we increase X.X promotions invest is

guidance we guidance this maintain year our for CEO, for we Mr. Chen. the is So by our whole revenue this expect as mentioned year,

when the of improving in the So in will OpEx quarters, our -- with and of believe year's. couple next you. the increase margin I be lower Thank this the quarter compared revenues first

Chaohui Chen

me color. add some Let

it's points. So that totally I think X

in the marketing prepared just are our our point, the China had and campaign recovery because [ with in and for in in worldwide, headcount the the because is first.Second, quarter countries coming. prepare new a sales these ]. marketing totally prepare business, spending for after sales different team ] the side worldwide and first for spending resource the [indiscernible] card the the increased product early resource Life season to We all for and team preparation.Number that's COVID-XX, for market and This we market The a for sales on eSIM, the a GlocalMe the new for three is, and need like to us summer [ product is business some event more and and regions. and we new is and SIM also consumer

to you. prepare Thank marketing Yes. this for So campaign. we need

Operator

[Operator China Securities. from next Instructions] of Great Liu Wall the Xuan is ] line from The question [

Xuan Liu

also the positive a Xuan we to And have got revenue million XX whole ] [ expect want quarter, Securities. in have ] between very before. USD we first and Liu a like many more I is like XX like from answered details [ for also This USD because Yes. questions to China XX have expectation. get million been we have the Great million. Wall And USD to the year, it question and

you new like -- want I for orders any sales to So have know, or the products. like foreseeable our stable do

Yimeng Shi

period we second million last compared for guidance outlook me same significant. years, the of XX -- small will is quarter the million. of the the this let -- summertime, me a third peak the is, with the show a growth not selling range very bit the for time let first, is quarters. But which we answer quarter USD the but -- the this -- second to XX -- Yes, for USD of For

new -- -- also, And launches this have in and product so -- have we we May. launch

products We in GlocalMe we'll products, in Life related event Paris Paris, these this month. have where an launch new

will quarter quarter and expect well. fourth into generate we all in third account product So revenue the sales new as

this -- we which is So XXX year's, whole overall maintained to this million. USD the guidance, XX USD million

Chaohui Chen

Yes.

some more So some -- comments. add

Japan Wi-Fi portable is in growth traditional the can years, half stable very Our market. see business that and China first major we are because

the is the expected. growth, as the we think growth. expectation. It's lower I is recovery a It's So growth, travel, speed travel but slightly the global continued than no our

launched the this So quarter, big that's QX, product, the one second reasons.And QX. and they new come potential. the generated QX, we new a just of we Because in majorly, from are for think the I product, from of revenue so

So the has some that's why we same we that's why -- keep also, still so there forecast. uncertainty,

Operator

no this for has presentation. Thank now attending further and there The today's Thank are gentlemen, you. time. Ladies you questions at concluded. conference

You may now disconnect.

Liam Xie

for Thank us you once again joining today.

Thank our further the questions, feel We to forward call. to firm, Christensen speaking speak Relations contact our you on quarterly you. information have Advisory. to free to or Investor contact uCloudlink's If through website on look next Relations you please all provided Investor again our

Operator

Thank you.

uCloudlink (UCL) 15 May 242024 Q1 Earnings call transcript