GCT Semiconductor Q2 2025 Earnings Report

GCT Semiconductor EPS Results

• Actual EPS: -$0.26
• Consensus EPS: -$0.14
• Beat/Miss: Missed by -$0.12
• One Year Ago EPS: N/A

GCT Semiconductor Revenue Results

• Actual Revenue: $1.18 million
• Expected Revenue: $2.26 million
• Beat/Miss: Missed by -$1.08 million
• YoY Revenue Growth: N/A

GCT Semiconductor Announcement Details

• Quarter: Q2 2025
• Date: 8/12/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, August 12, 2025
• Conference Call Time: 4:30PM ET

GCT Semiconductor (NYSE:GCTS), operates as a fabless semiconductor company, designs, develops, and markets integrated circuits for the wireless semiconductor industry. The company provides RF and modem chipsets based on 4G LTE technology, including 4G LTE, 4.5G LTE Advanced, and 4.75G LTE Advanced-Pro. It also develops and sells cellular IoT chipsets for low-speed mobile networks such as eMTC/NB-IOT/Sigfox, and other network protocols; and 5G solutions. Its products and solutions are used in smartphones, tablets, hotspots, CPEs, USB dongles, routers, and M2M applications. The company sells its products directly or indirectly through distributors to original equipment manufacturers and original design manufacturers primarily in Taiwan, China, Korea and Japan, Europe, North America and South America. The company was formerly known as Global Communication Technology, Inc. GCT Semiconductor Holding, Inc. was founded in 1998 and is headquartered in San Jose, California.

GCT Semiconductor Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: We have delivered initial 5G chipset samples to lead customers, including Orbit North America and Airspan Networks, with production slated to start in Q3 and volume shipments in Q4.
• Positive Sentiment: New partnerships with Iridium Communications for NTN satellite service and G + D for embedded eSIM solutions expand our ecosystem and unlock opportunities in remote and IoT markets.
• Negative Sentiment: Q2 net revenues declined 19% year-over-year to $1.2 million and gross margin fell to 32% from 63%, reflecting the shift from 4G to 5G products in this transitional phase.
• Neutral Sentiment: We ended the quarter with $1.3 million in cash and raised $11 million via a registered direct offering to fund 5G sampling, debt repayment, and enhance financial flexibility.

Presentation

[Operator]

Good afternoon. Thank you for attending GCT Semiconductor Holdings, Inc. Second Quarter twenty twenty five Financial Results Call. All lines will be muted during the presentation portion of the call with an opportunity for questions at the end. Joining the call today are John Schleifer, GTC's Chief Executive Officer and Edmund Ching, CFO, to discuss our second quarter twenty twenty five results.

[Operator]

During the call, certain statements we make will be forward looking. These statements are subject to risks 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 Q that will be filed today, which provide further detail about the risks related to our business. Additionally, except as required by law, we undertake no obligation to update any forward looking statements. I will now turn the call over to John Slaver.

[John Schlaefer, Director & CEO at GCT Semiconductor Holding]

Thank you, and thanks for everyone for joining us today for our second quarter twenty twenty five earnings call. I'll focus my remarks on the exciting progress we've made as part of our 2025 GCT year of five gs program, and Edmund, our CFO, will provide details for our second quarter financial disclosure. This quarter marked another significant milestone in what we've debuted as the 2025 GCT year of five gs. Our team has worked relentlessly to ensure the five g chipset performance, stability, and integration readiness. I'm thrilled to share that we have officially delivered the initial samples of our five g chipset to lead customers, including Orbit North America and Airspan networks with successful testing already underway.

[John Schlaefer, Director & CEO at GCT Semiconductor Holding]

Highlighted by our partners Gogo in June and Airspan in July via their own press releases, this marks a major leap forward and allows us to begin the transition of our focus towards mass production and the imminent commercial launch of our five gs chipset. As it pertains to the highly anticipated next steps, we expect additional samples to be delivered in the coming weeks, expect to commence production of the finalized initial five gs chipset during the third quarter, and are preparing for volume production and shipments in the fourth quarter of this year. We are very pleased with the progress we are making with our five gs chipsets. In parallel, we continue to expand our customer ecosystem. We recently announced collaboration with Iridium Communications to integrate their NTN direct satellite service into our advanced GDM7243SL chipset.

[John Schlaefer, Director & CEO at GCT Semiconductor Holding]

This opens up a new dimension for our technology, enabling connectivity in remote and underserved regions and broadens our reach into the non terrestrial network space. We've also partnered with G plus D to deliver embedded eSIM solutions for IoT applications. These are early but critical building blocks that enhance the long term value of our five g platform and help define how GCT participates in the future of global connectivity. Looking forward, we remain laser focused on scaling our five gs platform, ensuring readiness across our supply chain, and executing against demand that we expect to materialize as our customers launch their own next generation products. And with that, I'll turn the call over to Edmund to discuss our Q2 results. Edmund?

[Edmond Cheng, CFO at GCT Semiconductor Holding]

Thank you, John. We are encouraged by the operational progress made during the second quarter, especially as we prepare for the commercialization of our five gs chipset. While our financial results reflect the continued shift from four gs towards five gs, they are consistent with the transitional phase we are currently in. We anticipate a stronger end of the year as five gs chipset sales to commence soon. As I have mentioned before, the average selling price of this five gs chipset is expected to be roughly four times that of our traditional four gs products.

[Edmond Cheng, CFO at GCT Semiconductor Holding]

With that, I will now turn to our second quarter twenty twenty five financial results. Further details can be found in the 10 Q that will be on file with the SEC. Net revenues decreased by $300,000 or 19% from $1,500,000 for the three months ended 06/30/2024 to $1,200,000 for the three months ended 06/30/2025. The reduction was largely attributable to a decrease of $700,000 in service revenue, partially offset by an increase of $400,000 in product sales, which were driven by our four gs chipset sales. Cost of net revenues increased by $300,000 or 47% from $500,000 for the three months ended 06/30/2024 to 2,800,000.0 for the three months ended 06/30/2025.

[Edmond Cheng, CFO at GCT Semiconductor Holding]

This increase in the cost of net revenues was driven by product sales activity, partially offset by the lower costs associated with service products. Our gross margin decreased to 32% for the three months ended 06/30/2025, from 63% for the three months ended 06/30/2024. The gross margin of our service business and product sales were 71.3% and negative 42.6%, respectively. Our current gross margin, particularly for product sales, are still distorted by the lower product revenue, which makes it less indicative of the underlying profitability of our products when we transition to scale our new five gs product sales. We expect operational efficiencies to kick in as revenue increase, which will begin when five gs product sales start contributing to our overall revenue in the 2025, and particularly in Q4 this year.

[Edmond Cheng, CFO at GCT Semiconductor Holding]

Research and development expenses decreased by $700,000 or 16% from $4,200,000 for the three months ended 06/30/2024, to $3,500,000 for the three months ended 06/30/2025. The decrease was primarily attributable to a $900,000 reduction in professional services related to the design of five gs chip products and partially offset by a $300,000 increase in personnel related costs. Sales and marketing expenses remained consistent at $1,000,000 for both the three months ended June 2024. General and administrative expenses increased by $600,000 or 20% from $2,900,000 for the three months ended 06/30/2024 to $3,400,000 for the three months ended 06/30/2025. The increase was largely due to increases in expected credit loss estimate by $300,000 to $1,100,000 loss in Q2 twenty twenty five, compared to $800,000 in our expected credit loss estimate in the prior year period.

[Edmond Cheng, CFO at GCT Semiconductor Holding]

The increase was partially offset by lower professional services and other costs driven by reduced transactional activity during the 2025. We ended the quarter with cash and cash equivalent of $1,300,000 We also had net accounts receivable of $3,800,000 and net inventory of 3,000,000 During the quarter, we received 11,000,000 in gross proceeds from a registered direct offering, which was made under our shelf registration we filed in April. These funds were primarily used for five gs chipset sampling, debt retirement, and expanding the company's financial flexibility. As a reminder, this shelf registration offers up to $200,000,000 in capacity, with $114,000,000 of remaining availability, excluding the $75,000,000 at the market facility. With this, I will turn the call back over to John.

[John Schlaefer, Director & CEO at GCT Semiconductor Holding]

Thanks, Edmund. To close, I want to emphasize just how far we've come this year alone. The delivery of our initial five gs chipsets to lead customers, the validation successes we're seeing, and now the preparation for volume shipments all point to one thing, GCT is on the verge of a meaningful inflection. We expect this transition to become more visible in the coming quarters as customer announcements, production ramp ups, and initial five gs revenue begins to materialize. I want to thank again our employees for their commitment, our partners for their collaboration, and our shareholders for their continued support.

[John Schlaefer, Director & CEO at GCT Semiconductor Holding]

We're incredibly proud of how far we've come and even more energized by what's ahead. The 2025 is shaping up to be transformational for GCT, and we're excited to have you with us. I will now turn the call back over to the operator who will assist us in taking your questions.

[Operator]

Thank you. At this time, if you would like to ask a question, please press star on one on your telephone. You will then hear an automated message advising your hand is raised. If you would like to remove yourself from the queue, please press star on one again. We also ask that you wait for your name and company to be announced before proceeding with your questions.

[Operator]

One moment, please. At this time, I don't see any questions in the queue. This concludes our meeting for today. Thank you all for joining the conference call. You may now

Participants

Executives

• John Schlaefer, Director & CEO
• Edmond Cheng, CFO