UCLOUDLINK GROUP INC. Reports First Quarter 2024 Financial Results

May 15, 2024 by No Comments

HONG KONG, May 15, 2024 — UCLOUDLINK GROUP INC. (“UCLOUDLINK” or the “Company”) (NASDAQ: UCL), the world’s first and leading mobile data traffic sharing marketplace, today announced its unaudited financial results for the three months ended March 31, 2024. Total revenues were US$18.1 million, representing an increase of 0.7% from US$18.0 million in the first quarter of 2023. Gross profit was US$10.0 million, representing an increase of 16.3% from US$8.6 million in the first quarter of 2023. Income from operations was US$0.5 million, compared to US$2.1 million in the first quarter of 2023. Net income was US$0.4 million, compared to US$2.1 million in the first quarter of 2023. Adjusted net income (non-GAAP) was US$1.3 million, compared to US$1.8 million in the first quarter of 2023. Adjusted EBITDA (non-GAAP) was US$1.7 million, compared to US$2.1 million in the first quarter of 2023.

Total data consumed in the first quarter through the Company’s platform was 43,208 terabytes (5,257 terabytes procured by the Company and 37,951 terabytes procured by our business partners), representing a decrease of 1.7% from 43,936 terabytes in the first quarter of 2023. Average daily active terminals in the first quarter were 309,906 (13,622 owned by the Company and 296,284 owned by our business partners), representing an increase of 1.9% from 304,121 in the first quarter of 2023. As a proportion of daily active terminals, 57.9% were from uCloudlink 1.0 international data connectivity services and 42.1% were from uCloudlink 2.0 local data connectivity services during the first quarter of 2024. Average daily data usage per terminal was 1.56 GB in March 2024. As of March 31, 2024, the Company had served 2,595 business partners in 61 countries and regions. The Company had 178 patents with 141 approved and 37 pending approval, while the pool of SIM cards was from 382 MNOs globally as of March 31, 2024.

Mr. Chaohui Chen, Director and Chief Executive Officer of UCLOUDLINK, said, “We had a promising start to the year with total revenues of US$18.1 million during the first quarter, which were in line with our guidance. Growth was primarily driven by the continuous recovery of our 1.0 international data connectivity services business, and in particular our Roamingman brand services, which we believe will continue to rebound strongly. With 5G roaming network coverage expanding from 55 to 60 countries and regions, our full-speed 5G network roaming solution further solidified our leading position in this sector and helped expand our market share. With our business now healthy and back on a growth trajectory, we maintained the profitability we regained last year, achieving a net income of US$0.4 million and generating a net operating cash inflow of US$1.9 million in the first quarter of 2024.”

“We also made significant progress in rolling out an expanded array of comprehensive data connectivity solutions during the quarter to explore opportunities beyond portable Wi-Fi terminals. Recent progress includes the showcasing of our customer premises equipment through GlocalMe mobile/fixed broadband solutions, which provides a highly reliable dual broadband connection. In addition, we soft-launched a smart tracker through our GlocalMe Life solutions, which offers far more accurate and reliable tracking, something that other similar tag or tracker products on the market are unable to do. By offering more intelligent and convenient daily life products that satisfy a wide range of user needs, we are expanding our market reach and establishing a broader market presence to diversify our revenue streams and generate long-term sustainable growth. Furthermore, our newly launched GlocalMe SIM has made solid progress during the quarter, ranking high on a number of e-commerce platforms for travelers heading to destinations such as Japan and Hong Kong.”

“Looking ahead, we have a number of exciting products in the pipeline, which will further strengthen our business. We completed testing our soft cloud SIM technology for consumer IoT devices, which we expect to begin commercializing in the near future. Specifically designed for consumer IoT devices that already have a massive end user base, such as walkie talkies, security cameras, and two-wheeled electric scooters, this turnkey solution is compatible with various chipset platforms and is expected to create significant growth opportunities for us. GlocalMe SIM solutions, including our over-the-air (OTA) SIM and eSIM solutions, will continue to evolve into our innovative “All SIM” solution, allowing us to engage with a broader end user base beyond those in the portable Wi-Fi terminal market. Additionally, GlocalMe Life has an exciting slate of “Easy Life” X series products under development, which will bring seamless connectivity into various high-frequency daily life application scenarios and are expected to begin generating revenues starting in the third quarter of this year. We will unveil three GlocalMe Life products and upgraded GlocalMe App on May 23 at Viva Technology 2024 in Paris. We believe these solutions will allow us to engage with a broader end user base by leveraging our cloud SIM and hyper-connectivity technologies, and ultimately build out our broader GlocalMe ecosystem and global leading mobile data traffic sharing marketplace.”

Revenues Revenues were US$18.1 million, representing an increase of 0.7% from US$18.0 million in the same period of 2023. Revenues from services were US$13.5 million, representing an increase of 4.8% from US$12.9 million in the same period of 2023. This increase was primarily attributable to the increase in revenues from international data connectivity services. Revenues from data connectivity services were US$10.7 million, representing an increase of 6.9% from US$10.0 million in the same period of 2023. This increase was primarily attributable to an increase in revenues from international data connectivity services to US$9.0 million in the first quarter of 2024 from US$7.8 million in the same period of 2023, as the recovery of international travel accelerated, which was partially offset by a decrease in revenues from local data connectivity services to US$1.7 million in the first quarter of 2024 from US$2.2 million in the same period of 2023.Revenues from PaaS and SaaS services were US$2.64 million, representing an increase of 3.4% from US$2.56 million in the same period of 2023. Revenues from sales of products were US$4.6 million, representing a decrease of 9.8% from US$5.1 million in the same period of 2023, primarily due to a decrease in sales of terminals.Geographic DistributionDuring the first quarter of 2024, as a percentage of our total revenues, Japan contributed 40.9%, North America contributed 16.8%, Mainland China contributed 25.3% and other countries and regions contributed the remaining 17.0%, compared to 43.1%, 33.6%, 5.1% and 18.2%, respectively, in the first quarter of 2023.

Cost of Revenues Cost of revenues was US$8.1 million, representing a decrease of 13.6% from US$9.4 million in the same period of 2023. This decrease was attributable to the decrease in both cost of services and cost of products sold. Cost of services was US$4.7 million, representing a decrease