uCloudlink Group Q4 2025 Earnings Report

uCloudlink Group EPS Results

• Actual EPS: -$0.08
• Consensus EPS: -$0.06
• Beat/Miss: Missed by -$0.02
• One Year Ago EPS: N/A

uCloudlink Group Revenue Results

• Actual Revenue: $22.17 million
• Expected Revenue: $23.00 million
• Beat/Miss: Missed by -$830.00 thousand
• YoY Revenue Growth: N/A

uCloudlink Group Announcement Details

• Quarter: Q4 2025
• Date: 3/18/2026
• Time: Before Market Opens
• Conference Call Date: Wednesday, March 18, 2026
• Conference Call Time: 8:30AM ET

uCloudlink Group (NASDAQ:UCL) Inc. is a technology company specializing in global mobile data connectivity solutions. The company’s core offering is a cloud SIM virtualization platform that enables seamless roaming for consumers and enterprise users without the need for physical SIM cards. Leveraging proprietary CloudSIM technology, uCloudlink provides portable Wi-Fi hotspot devices, embedded IoT connectivity modules, and eSIM products designed to deliver high-speed data access in multiple countries.

Through its CloudSIM platform, uCloudlink dynamically switches between multiple mobile network operators to optimize coverage and data speeds while controlling costs. Its product lineup includes MiFi devices for individual travelers, enterprise connectivity solutions for corporate customers, and integrated data management services for Internet of Things applications. The company also offers a software-as-a-service model that allows partners to white-label its connectivity solutions under their own brands.

Since its founding in 2014, uCloudlink has expanded its footprint to serve users in more than 100 countries and regions across Asia, Europe, North America and the Middle East. It has established strategic partnerships with major telecommunications operators and device manufacturers to integrate its CloudSIM technology into a wide range of consumer electronics and industrial products. The company maintains headquarters in Hong Kong, with research and development facilities in mainland China and business offices in key international markets.

uCloudlink went public on the Nasdaq Stock Market in early 2018 and is led by founder and Chief Executive Officer Song Wei. Under his leadership, the company has grown from a start-up roaming technology provider into a diversified connectivity solutions firm, driving innovation in global mobile data services and Internet of Things connectivity management.

uCloudlink Group Q4 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Profitability improved — Net income rose 38.2% to $6.3M and adjusted EBITDA expanded to $17.2M for 2025, while gross margin increased to 52.4%, supported by positive operating cash flow.
• Positive Sentiment: Rapid user and usage growth — Early traction across new lines: massive year‑over‑year increases in DAT/MAT/DAU/MAU (e.g., GlocalMe Life DAT +897.9% Q1; IoT, SIM, Life MATs up triple‑ and quadruple‑digits), indicating strong engagement that could convert to recurring revenue.
• Positive Sentiment: Product and partnership momentum — New offerings (PetPogo ecosystem, PetPhone/PetCam, MeowGo G50 Max, eSIM Trio, UniCord series) drew strong CES/MWC interest, growing purchase orders and pilot carrier co‑issuance programs that management says will support 2026 commercialization.
• Negative Sentiment: Revenue decline and guidance uncertainty — Total revenue fell to $81.4M in 2025 from $91.6M in 2024, Q1 2026 guidance implies a decline, and FY2026 guidance is a very wide $85M–$200M range, reflecting continued legacy hardware weakness and macro/geopolitical headwinds that add execution risk.

Presentation

[Operator]

Thank you for standing by, and welcome to the uCloudlink Group Inc Fourth Quarter and Full Year 2025 Earnings Conference Call. All participants are in listen-only mode. There will be a presentation followed by a question and answer session. If you would like to ask a question, you'll need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Shichao Gao at Company IR. Please go ahead.

[Shichao Gao, Director of Investor Relations at uCloudlink Group Inc]

Okay. Hello, everyone, and thank you for joining us on uCloudlink's fourth quarter and the full year 2025 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. Zhiping Peng, Co-founder and Chairman of the Board of Directors, Mr. Chaohui Chen, Co-founder, Director, and Chief Executive Officer, and Mr. Yimeng Shi, Chief Financial Officer. Mr. Chen will begin with an overview of our recent business highlights. Mr. Shi will then discuss our financial and operational highlights for the quarter. They will all be available to take your question in the Q&A section that follows. Before we proceed, please note that this call may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

[Shichao Gao, Director of Investor Relations at uCloudlink Group Inc]

These forward-looking statements are based on management's current expectations and observations that involve known and unknown risks, uncertainties and other factors not under company's control, which may cause actual results, performance, or achievements of the company to be materially different from the results, performance or expectations projected or implied by these forward-looking statements. All forward-looking statements are expressly qualified in their entirety by the cautionary statements, risk factors, and details of the company's filings with the SEC. The company does not assume any obligation to revise 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 uCloudlink's earnings press release on this conference call includes discussions of audited GAAP financial information and audited non-GAAP financial measures.

[Shichao Gao, Director of Investor Relations at uCloudlink Group Inc]

uCloudlink's press release contains a reconciliation of the audited non-GAAP measures to the most directly comparable audited GAAP measures. I will now turn the call over to Mr. Chen. Please go ahead.

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

Thank you, Daniel, and good morning or evening, everyone. Despite significant macroeconomic headwinds through 2025, including tariff, we remained steadfast in strategically investing across our three new business lines. Against this challenging backdrop, we maintain our financial health and deliver stable performance. Net income for the year increased 38.2% year-over-year to $6.3 million, with the net cash inflow from the operations reaching $3.2 million. Total revenues from Mainland China surged 16.5% from last year, underscoring how our uCloudlink 1.0 international data connectivity solutions are accelerating broader consumer adoption and further solidifying our leadership in the global roaming market. This robust performance demonstrates the resilience of our core strategy.

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

The strategic impact of the investments we made in our three new growth engines. This new product launch has diversified our business and allow us to successfully navigate a persistently challenging macroeconomic and trade environment. Through strict operational discipline and focus, we have laid a solid foundation to build upon and accelerate growth in 2026. Moreover, our smart hardware and data are emerging as a key gateway to AI and big data connectivity. While our heavy investment in the pet AI, analyzing pet languages, health, behavior and send data continues to strengthen our industry leadership. We remain highly focused on overcoming the worst three fundamental digital divide through transformative connectivity solutions. We continue to dismantle the global connectivity divide by breaking down international roaming barriers to ensure our users maintain seamless network access anywhere in the world.

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

At the same time, we are tackling the single multi-network device through our proprietary CloudSIM and the HyperConn technologies, which are setting industry standards for intelligent multi-network connectivity and reliability. Lastly, and the most innovatively, we are bridging the emotional digital divide with our AI-powered pet ecosystem, creating entirely new and meaningful connections between humans and their pets. I will now review the highlights for each of our key business lines. I will start with our GlocalMe Life business, which continue to generate solid growth momentum. Average daily active terminal during the first quarter surged 897.9% year-over-year, while average daily active users, which exclude pet phones, increased 409.1% year-over-year.

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

Within our broader GlocalMe Life portfolio, our industry's first UniCord Plus and UniCord Pro series remain highly competitive and continue to differentiate themselves with their seamless connectivity across multiple networks, SafeTap, global positioning, and faster charging capabilities. This is further strengthening our competitive edge in the travel, automotive, and the secure networking markets. At the same time, PetPhone orders continue to scale and accelerated since its initial launch last quarter, reflecting strong market traction across the board. We kick off 2026 with a powerful showcase of our latest innovations at the CES in Las Vegas and MWC in Barcelona. As a highlight, we outlined our vision to eliminate the pet-people divide through the PetPogo ecosystem and the introduction of the all new PetCam that complement the PetPhone.

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

This revolutionary AI-powered ecosystem will transform how we connect with and care for our pets and transcends a basic pet tracking function by interpreting a comprehensive safety awareness emotion connection loop that enable owners to see, hear, and interact with their pets in real time from anywhere in the world. The market response has been exceptional, generating significant global attention and validating our product domain. Purchase orders are growing alongside strong consumer feedback, laying solid foundation for us to drive scale commercialization in 2026. Also making its debut at the CES was the MeowGo G50 Max, an AI-powered connectivity hub with sky-to-ground 5G satellite and Wi-Fi integration that creates mobile Wi-Fi hotspot anywhere.

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

This solution provides a critical safety net with two-way messaging and emergency SOS via satellite networks, ensuring connectivity even when terrestrial networks are beyond reach. Powered by our patented AI HyperConn technology, it can intelligently switch between terrestrial 5G networks and Wi-Fi networks to deliver a frictionless one device, one account roaming experience. At its core, it creates a reliable mobile Wi-Fi hotspot, ensuring unmatched coverage and truly seamless connection. Moving on to our GlocalMe IoT business, we maintain a robust growth trajectory with user adoption and revenue contribution increasing strongly on a year-over-year basis during the quarter. In the first quarter, average daily active terminals record a year-over-year increase of 434.8%, highlighting a strategic positioning and traction we are getting in high growth sectors such as in-car infotainment and the security cameras.

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

Having established a strong initial presence in this key sector, we plan to scale these solutions into additional industry verticals in the future to drive to further expansion of our ecosystem. Turning to our GlocalMe SIM business line, our eSIM Trio solution continues to gain a strong traction following its pilot programs last quarter, with a cumulative SIM card sales now surpassing several hundred thousand units as growth momentum accelerates. This is creating a strong growth momentum with our average daily active terminals increasing 180.8% year-over-year during the quarter, validating both our carrier's partnership model and its market positioning as a permanent secondary SIM card for users. More importantly, our carrier co-issuance program has begun pilot deployment and is expanding fast, providing a highly effective low CapEx solution for operators that enhance their global roaming capabilities.

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

This form of SaaS model is gaining strong traction and is welcomed by both operators and users, confirming robust product market fit. Looking ahead, 2026 will be pivotal years of execution and the transformation for us. We closed 2025 with a streamlined organizational structure. Having integrated our branding, online and offline sales, and e-commerce teams to better align with our evolving strategy. Building on this foundation, we kick off the new year by onboarding highly experienced leaders with deep IoT customer expertise to strengthen our capabilities for next phase of growth. At the same time, we are actively forging partnerships with world-renowned universities and leading global technology companies, integrating resources and laying a solid foundation for long-term success.

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

The strong market feedback from the CES 2026, combined with accelerating sales of new solution, provide us with a multiple powerful growth engine. We are confident in our ability to scale our user base globally, further diversify our revenue streams, and bridging critical digital divides for cross-border connectivities and emotional distances between people and their pets. With the disciplined optimism in mind, we are confident that we have the right strategy in place to drive sustainable growth going forward. For the first quarter of year 2026, we expect total revenue to be between $15 million-$17 million, representing a decrease of 9.1%-14.4% compared to the same period of year 2025.

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

For year 2026, we expect total revenues to be between $85 million and $200 million, representing an increase of 4.4%-22.9% from year 2025. I will now turn the call over to Mr. Shi.

[Yimeng Shi, CFO at uCloudlink Group Inc]

Thank you, Mr. Chen. Hello, everyone. I will go over our operational and financial highlights for the fourth quarter and full year of 2025. Average daily active terminals, DATs, and average monthly active terminal, MATs, are important operating metrics for us as they measure customer usage trend over the periods and are reflective of our business performance. In the first quarter of 2025, average DAT was 328,847, of which 15,636 owned by the company, and 313,211 not owned by the companies, representing an increase of 6.6% from the fourth quarter of 2024.

[Yimeng Shi, CFO at uCloudlink Group Inc]

During the quarter, 57.1% of DAT were from uCloudlink 1.0's international data connectivity service, and 42.9% was from uCloudlink 2.0 local data connectivity service. In December 2025, the average daily data usage per terminal was 1.59 GB. Average MATs in the first quarter were 704,393, representing an increase of 11.1% from 634,245 in the first quarter of 2024.

[Yimeng Shi, CFO at uCloudlink Group Inc]

Growth was driven by strong momentum across our three new growth engines, with average MATs for GlocalMe IoT, GlocalMe SIM, and GlocalMe Life increasing 127.5%, 133.8%, and 616.9% respectively from the same period last year. Average MATs from GlocalMe MeowGo business, which were previously referred to as GlocalMe mobile/fixed broadband business, decreased slightly by 0.5% year-over-year, reflecting a relatively stable user base in this segment. Average daily active user, DAU, and monthly active user, MAU, represent the average number of unique users engaging with our GlocalMe service on a daily and monthly basis, respectively. Those metrics show strong growth momentum in the fourth quarter.

[Yimeng Shi, CFO at uCloudlink Group Inc]

Average DAU in the fourth quarter were 353,278, representing an increase of 10.4% from 320,037 in the fourth quarter of 2024. GlocalMe IoT, GlocalMe SIM, and GlocalMe Live all deliver significant gains with average DAU up 558.7%, 349.8%, and 409.1% respectively from the same period last year. Average DAU from GlocalMe MeowGo business declined slightly by 4% year-over-year. Average MAUs were 738,777, representing 9.2% increase from 676,610 in the fourth quarter 2024.

[Yimeng Shi, CFO at uCloudlink Group Inc]

Average MAUs from GlocalMe IoT, GlocalMe SIM, GlocalMe Live business line saw increase of 66%, 453.3%, and 460.2% respectively from the same period last year. Average MAU from GlocalMe MeowGo business decreased slightly by 2.2% year-over-year. As Platform is a newly launched business, we are beginning to see early user adoption during the quarter. In the first quarter, average DAT and MAT for Platform reached 257% and 571% respectively, while average DAU and MAU were 745% and 977%, reflecting the initial traction of this new offering.

[Yimeng Shi, CFO at uCloudlink Group Inc]

As of December 31, 2025, the company had 206 patents with 181 approved and 25 pending, and approved SIM cards from 398 MNOs globally. Total revenue for the fourth quarter 2025 was $22.1 million, representing a decrease of 14.6% from $26 million in the same period of 2024. Revenue from service was $15.2 million, representing 1.1% increase from $15 million in the same period 2025. Revenue from service contributed 68.5% of total revenues during the fourth quarter 2025, compared to 57.8% in same period last year.

[Yimeng Shi, CFO at uCloudlink Group Inc]

Geographically speaking, during the fourth quarter of 2025, Japan contributed 43.6%, Mainland China contributed 26.8%, North America contributed 11.2%, and other countries and regions contributed the remaining 18.4% compared to 33.6%, 20%, 12.1% and 14.3% respectively in the same period of 2024. Our gross profit was $11.4 million in the fourth quarter of 2025, compared to $11.2 million in the same period of 2024. Overall gross margin in the fourth quarter of 2025 increased to 51.6% from 43% in the same period of 2024.

[Yimeng Shi, CFO at uCloudlink Group Inc]

The gross margins on service were 61.6% in the fourth quarter 2025, compared to 58.6% in the same quarter, 2024. Excluding share-based compensations, total operating expenses were $9.4 million compared with $13.9 million in the fourth quarter 2024. Net loss in the fourth quarter 2025 was $3.1 million compared with a net loss of $1.5 million in same period, 2024. Adjusted EBITDA was positive $3.1 million in the fourth quarter of 2025, compared with -$2.3 million in the same period of 2025.

[Yimeng Shi, CFO at uCloudlink Group Inc]

For the fourth quarter of 2025, we recorded operating cash inflows of $4.7 million compared to $0.5 million in same period of 2024. For the first quarter 2025, our capital expenditure were $20,000 compared to $0.6 million in same period, 2024. Moving to 2025 full year's financial results. Average DATs and MATs show similar patterns to those observed in the fourth quarters. For the full years, average DATs were 322,169, of which 18,449 owned by the company, and 303,720 owned by business partner.

[Yimeng Shi, CFO at uCloudlink Group Inc]

Representing an increase 1.7% from 316,688 in 2024. In 2025, 56.3% DATs were from uCloudlink 1.0 international data connectivity service, and 43.7% of DAT were from uCloudlink 2.0 local data connectivity service. Average MATs in 2025 were 681,672, representing an increase of 8% from 631,137 in 2024. Growth was primarily driven by our three new growth engines, with average MATs from GlocalMe IoT, GlocalMe SIM, GlocalMe Life, increasing 360.7%, 190.8%, and 356.0% year-over-year respectively.

[Yimeng Shi, CFO at uCloudlink Group Inc]

Average DAU in 2025 were 340,036, representing an increase of 4.2% from 326,412 in 2024. This growth was supported by strong expansions in GlocalMe IoT, GlocalMe SIM, and GlocalMe Life, where average DAT is increasing 737.3%, 321.5%, and 349.1% year-over-year respectively. Average MAU in 2025 were 723,706, representing increase of 8.9% from 664,815 in 2024. Average MAU from GlocalMe IoT, GlocalMe SIM and GlocalMe Life, increasing 251.2%, 167.5%, and 413% year-over-year respectively.

[Yimeng Shi, CFO at uCloudlink Group Inc]

Total revenue for 2025 reached $81.4 million, compared with $91.6 million in 2024. Revenue from service was $61 million, representing a 1.8% year-over-year increase from $60 million in 2024. Revenue from data connectivity service were $47.8 million, a slight increase from $47.6 million in 2024. Within the segment, international data connectivity service remained the largest contributor, rising from $39.5 million in 2024 to $41.41 million in 2025, representing a 4% year-over-year increase. Overall, gross margins was 52.4% in 2025, an increase when compared with 48.4% in 2024.

[Yimeng Shi, CFO at uCloudlink Group Inc]

Gross margin for service was 58% in 2025, compared with 6.8% in 2024. For the full year 2025, excluding share-based compensation, total operating expenses was $40.4 million compared to $40.8 million in 2024. Net income was $6.3 million in 2025, compared with $4.6 million in 2024, representing 38.2% increase from 2024. Adjusted EBITDA was $17.2 million in 2025, compared to $7.1 million in 2024.

[Yimeng Shi, CFO at uCloudlink Group Inc]

For the full years, our capital expenditure were $1.0 million compared to $4 million in 2024, which generated positive operating cash inflow of $3.2 million compared to $9.2 million in 2024. Turning to balance sheet items, our cash and cash equivalents increased to $32.8 million as of December 31, 2025, compared to $28.5 million as of September 30, 2025. We remain fixed on strengthening our financial position and believe we are well positioned to drive continuous growth in our business. With operator, please open up for Q&A.

[Operator]

Thank you. If you would like to ask a question, please press star one on your telephone and wait for your name to be announced. If you would like to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question today comes from Theodore O'Neill from Litchfield Hills Research. Please go ahead.

[Theodore O'Neill, CEO at Litchfield Hills Research]

Thank you very much. Looking at your guidance for 2026 implies a fairly strong second half of the year. I was wondering if you could talk about that growth in terms of what product lines or geographic areas you expect to see participate the most in that growth?

[Yimeng Shi, CFO at uCloudlink Group Inc]

Thanks, Theo. Yes. The outlook for the year 2026, we expect a growth.

[Yimeng Shi, CFO at uCloudlink Group Inc]

A robust growth trend for our overall business. The main growth driver, as we disclose in 2025, the three new business line main growth driver, which are GlocalMe IoT, GlocalMe SIM, and GlocalMe Life, as well as a new business line, PetPhone, separated from the GlocalMe Life business line. This year is a separate business line for PetPhone business. All of the four now the four business line will drive our main business growth in terms of revenue.

[Yimeng Shi, CFO at uCloudlink Group Inc]

Our legacy business, Wi-Fi mobile broadband Wi-Fi, has kept a stable business, which will contribute a solid cash flow to support our investment on our four new businesses. As we disclosed last year, in the year 2025, we invested massively on four new business lines. All these investments came from the cash inflow generated from our legacy business, mobile broadband business. Last year, as in the year 2025, the operational metrics have told us the growth driver will come into revenue for the year 2026.

[Yimeng Shi, CFO at uCloudlink Group Inc]

As we have disclosed the DAU, MAU, the metrics for this three new businesses, IoT, SIM and Life, they grow massively a couple of times more than the previous year, 2024. This will carry on as this driver for our growth in year 2026.

[Theodore O'Neill, CEO at Litchfield Hills Research]

Thank you. Could you give us some more information about GlocalMe IoT? Are there particular industries that, where you see growth for the IoT part of the business, or is it very broad-based?

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

Yeah. Our IoT business, because we not just invest, last year, we are almost invest nearly 10 years. From last year, we finished our IoT product embed into the industry, you know, IoT leaders. We finished all the trial. That's why we can see a large increase because they already embed our IoT CloudSIM solution into their, like a camera, like a car infotainment. These even the battery, you know, monitoring. These because you know, all the Chinese manufacturer and this smart device more and more go to outside China and go to worldwide. We would just embed enable them to cross the, you know, networks in each country easily.

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

This helps us gain a volume customer increase. I, all these our partner, give us the forecast this year, their IoT product like security camera, like a CarPlay, like you know the power monitoring and battery monitor, et cetera. They will have a large volume deployed with our solution. Before that we just finished the test before last year. From the second half of last year, we see more and more this industry player embed our solution because our solution is much better than currently just practicing inside. That's why we get, we have more confidence. In the next couple of years, we can get millions of connections and the revenues from these partners.

[Theodore O'Neill, CEO at Litchfield Hills Research]

Okay. All right. Thank you very much.

[Operator]

Thank you. Once again, if you would like to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Vivian Zhang from Diamond Equity Research. Please go ahead.

[Vivian Zhang, Equity Research Analyst at Diamond Equity Research]

Hello. This is Vivian Zhang with Diamond Equity Research. Congratulations on the results achieved. I got several questions. Firstly, can you provide more details about the recently introduced PetPogo ecosystem and the PetCam? How do you expect them to drive the growth of sales and profit margins?

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

Okay. At last quarter, so 2025, the first quarter, in October we newly launched our PetPhone product in Asia area then to U.S. area. I think that we already start the solution, the PetPhone bridging the digital gap between the people and the pets. Also we got very popular during the CES exhibition and also MWC in Barcelona. Like CBS, Reuters and even a Chinese Xinhua, they all give a very focused report about our new product. Last CES, we also launch a new PetCam.

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

Also the PetCam, I think, is integrate the PetPhone and the PetCam. Now we can provide not only just the voice connection with the people and the pet, but also we can provide the camera, I think the video connection with the pet. That means we can provide the connection through the pet, you know, the pet view we call it for FPV. Also we can use this PetCam as a CCTV to monitor to understand the pet, you know, the mood, the behavior and their security, et cetera.

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

That's why we are not only just stop at the voice for PetPhone, but we have more device and more function coming like a PetCam. This is first PetCam can, I think, can do the live broadcast, live video, also can be add as a CCTV. It's very useful to improve the safety and the communication effect with the pet. And also our PetGo, this is hardware, it's PetCam and the PetPhone. Our ecosystem, our app, we call the pet and digital world is our PetGo. In the international version, we call the PetGo. For Chinese version, we call it PetPogo. It's separated because of data security arrangement.

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

I think for this PetGo, we can provide. We can solve it. I think first is the communication between the pet and the people. We can provide an AI translation for the multiple languages. That's the first part. The second we can sort it end-to-end for pet safety, including the tracking and the training. We can provide the health care for the pet is end-to-end. We can see that once the PetGo launch end of this month, we can see the PetPhone significantly different with the current tracker and the current pet training device. The PetPhone finally, we understand it can sort it in three major anxieties. First, it's about communication.

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

The second is about safety, and the third is about the health. Unlike just a single function device, PetPhone and the PetGo can provide more effective, you know, pinpoint anxiety solutions. PetGo, I think, we mentioned, will include not only just PetPhone. PetPhone, we believe it will be like a iPhone with app inside first. The second, PetGo with a community and with a more, you know, functional and even AI agent inside. Like a translation, like a video camera, health AI, et cetera, all put into here.

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

We also have a community with all the people and the pet, and they live together, and they share together, and they talk together. That's like pet worlds like a WeChat that we call the Pet WeChat and the Pet TikTok. We integrate more and more functions in the PetGo. The initial version is quite different because we have now a community for pet owners. We are more understanding each other. I believe in the future, PetGo will grow up become a social digital society for pets and the people. That's all. Thank you.

[Vivian Zhang, Equity Research Analyst at Diamond Equity Research]

Okay. Got it. My next question will be about the R&D expenses declining a lot in the fourth quarter. We would like to know if this will impact the company's ability of researching and developing new products.

[Yimeng Shi, CFO at uCloudlink Group Inc]

The percentages. Now, the figures, the expenditures related to R&D tell us we improve our R&D's efficiency via investment in more efficiency in program management and also AI tools. Some like AI coding, AI coded program. All this improve our R&D efficiency, improving. We invest R&D resource more on a new business line, as we say, the more R&D research invest on platform business. Yeah. I mean, last investments on these is not enough. This year we will carry on investments on R&D for new business. As we filing the 6-K in the last years, I think in October, we spin off platform business as a separate subsidiary. We have start to a new financings, a raise finance for platform business.

[Yimeng Shi, CFO at uCloudlink Group Inc]

The platform business will have a new fundraising deal in this year sometime. We will invest this new fund on new business like platform business, typical. We will still invest, increase investment on R&D for new business, invest on our new features.

[Vivian Zhang, Equity Research Analyst at Diamond Equity Research]

Okay. I see.

[Yimeng Shi, CFO at uCloudlink Group Inc]

Yeah. I think we are more.

[Vivian Zhang, Equity Research Analyst at Diamond Equity Research]

Mm-hmm.

[Yimeng Shi, CFO at uCloudlink Group Inc]

Yeah. We are spending more on rather than just traditional business.

[Vivian Zhang, Equity Research Analyst at Diamond Equity Research]

Oh, okay. Got it. My last question is that can you elaborate on the reasons for the decline in product sales? Do you think this decline will continue?

[Yimeng Shi, CFO at uCloudlink Group Inc]

Sorry, which one?

[Vivian Zhang, Equity Research Analyst at Diamond Equity Research]

Yes. Can you elaborate on the reasons for the decline in product sales? Do you think this decline will continue?

[Yimeng Shi, CFO at uCloudlink Group Inc]

Decline means, mobile broadband business decline?

[Vivian Zhang, Equity Research Analyst at Diamond Equity Research]

No, I mean.

[Yimeng Shi, CFO at uCloudlink Group Inc]

Which business are you?

[Vivian Zhang, Equity Research Analyst at Diamond Equity Research]

Decline in product sales. Yes.

[Yimeng Shi, CFO at uCloudlink Group Inc]

Sorry. Can you say again?

[Vivian Zhang, Equity Research Analyst at Diamond Equity Research]

Can you explain why the product sales declined? Like, do you think this decline will continue?

[Yimeng Shi, CFO at uCloudlink Group Inc]

We disclosed a little bit the revenues generated from mobile Wi-Fi mobile broadband's hardware deliveries was a little bit declined a lot last year. The service revenues was increasing a little bit over the year 2024. As we disclosed the MAUs the metrics was increasing about 10% over the last year, which will show our service revenue related to this active user will come back to our account on recurring basis in the year 2026 and over.

[Yimeng Shi, CFO at uCloudlink Group Inc]

The new growth engines came from the four new business line, as I mentioned, IoT, platform, SIM, Live service. The mobile Wi-Fi, the legacy business as a contributor of a cash flow for us to invest on our new business. That's.

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

Yeah. More comment because our current legacy product are from international part is heavily impacted by the, I think, the economic and tariff. For example, last year, so we can see in the last summer, it's our, I think, that the travel is our good season, but at the moment, we suffer from the, you know, earthquake and rumors in Japan. That's the first. The second, and also, we can see the Sino-U.S. trade war during the middle of last year, around June.

[Chaohui Chen, Co-founder, Director, and CEO at uCloudlink Group Inc]

You can see the fourth quarter, we suffer from the Sino-U.S. and Sino-Japan relationship, and this year it is the same. The fourth quarter we suffer from the Middle East war. All this is having impact about the traveler this part. For the domestic part, it will still a stable growth. We have to overcome the traveler business that's very heavy by the economic and the political situation worldwide. If the worldwide situation getting better, I think this will regain the benefit we gain from this part.

[Vivian Zhang, Equity Research Analyst at Diamond Equity Research]

Oh, okay. That helps a lot. Thanks for sharing the details. That's all. Thank you.

[Yimeng Shi, CFO at uCloudlink Group Inc]

Thank you.

[Operator]

Okay. There are no further questions at this time. I'll now hand back for any closing remarks.

[Shichao Gao, Director of Investor Relations at uCloudlink Group Inc]

Okay. Thank you once again for joining us today. If you have further questions, please feel free to contact uCloudlink Investor Relations through the contact information provided on our website or speak to our investor relations firm, Christensen Advisory. We look forward to speaking with you again on our next quarterly call. Thank you.

[Operator]

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

Participants

Executives

• Chaohui Chen, Co-founder, Director, and CEO
• Shichao Gao, Director of Investor Relations
• Yimeng Shi, CFO

Analysts

• Theodore O'Neill, CEO at Litchfield Hills Research
• Vivian Zhang, Equity Research Analyst at Diamond Equity Research