Operator
Thank you for standing by, and welcome to the UCloudLink second quarter 2026 earnings conference call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will 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. Daniel Gao, Company IR.
Please go ahead. thank you hello everyone and thank you for joining us on your colleague second quarter 2026 earnings call the earnings release and our earnings presentation are now available on our IR website at IR door your calling calm joining me on today's call are mr. chicken pong co-founder and the chairman of the board of directors mr. choppy chen co-founder director and the 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 questions in the Q&A section that follows. Before we proceed, please note that this call may contain full looking statements made pursuit to the safe harbor perversion of the previous security litigation reform act of 1995 this for looking statements are based on management's current expectations and observation that involve known and unknown rigs uncertainties and other factors not not under company's control which may cause actual results performance or achievements of the company to be massively different from the results performed performance or expected expectations projected or implied it by these for looking statements all for looking statements are expressly qualified in their integrity better questionnaire statements risk factors and detail of the company's feelings with the SEC the company does not assume any obligation to reverse or update any false looking statement as a result of new information, future events, change in market conditions or otherwise, except as required by law. Please also note that your colleagues' earnings, press release, and this conference call include discussions of unadopted GAP, financial information, and audited non-cap financial measures your calling press release contents are reclassization of their audio non-game measures to their most directly comparable and audio gap measures I will now turn the call over to mr. Chen please go ahead thank you Daniel good morning or good evening everyone total revenues for the quarter were US dollar 18.2 million reflecting the continued impact of microeconomic headwinds,
geopolitical tensions affecting our bond travel from China, and a significant surge in very cheap costs. Our Ukraine 1.0 international data connectivity services remain under pressure from these factors. However, this impact is increasingly being offset by the rapid scaling of our uCloudLin 2.0 local data connectivity business, which deliver strong growth, particularly from our global IOT business. We expect our uCloudLin 2.0 and the new business lines to fully offset the continued contraction in our 1.0 international business by the third quarter. As we continue to execute on our strategy priorities. We continue to see strong momentum across our new product portfolio during the second quarter. Glocomi IoT and Unicor Pro in particular gain solid traction with revenue contribution similarly increasing as the transition out of the initial market one up phase. Each reached key strategy milestones during the quarter positioning us where for accelerated commercialization going forward. Across our new growth engine, revenues from Glaucomi IoT and seen increase by 392.4% and 78% year-over-year, respectively. To drive early adoption and a few market leadership, we maintain an elevated level of investment in market for the Petfone and PepperGo ecosystem during the quarter. I will now review the highlight for each of our key business names. I will start with the global IOT, which saw its in-store base expand further with monthly order now contributing meaningfully to revenue and the business operating profitability on a consistent basis. In the second quarter, revenue from the Glowcoming IoT grew 392.4% year over year. Our total install base reached 3.34 million units and the NAU grew 210 year over year. user adoption is growing rapidly across key vertical as the further solidify our position in high growth sectors including in-car infotainment and the security camera moving on to our platform ecosystem which has undergone to a comprehensive upgrade into a dedicated pet AI agent. Building on the AI power plus social model, we pioneered in the fourth quarter. These mark a major step forward in functionality and performance with redefining AI power communication between humans and their pets. The agent can precisely sense a pest condition and emotion state and intelligently support owner at every stage of care from prevention through real-time response and engagement delivery a seamless pet care experience this powerful agent creates enormous opportunities across pet health pet healthy veterinary care pet safety and the pet data analytics each of which we see a source of new value creation as we as consumer acceptance of AI pet services tools we expect to view a both valuable data asset and a leading position in pet AI we are now extending our pet AI capabilities across communication safety and the health management on the market front we have met significant progress in branding and a promotional efforts generating substantial external attention with select content pieces reach tens of millions of views in major platforms such as tick-tock Instagram etc we look forward to achieving even greater breakthrough in the second half of the year turning to our goal for me life and the same business land where our strategy is being is beginning to generate results so coming life solutions thought DAU growth is proved increasing by a hundred one point six percent year over a year reflecting strong market adoption of the new product and local local machine continued to steadily expand as well with the AU increasing 132 percent year-over-year our easing solution is gaining strong momentum leading the market in the China and building market across East Asia and the wider Asia-Pacific region. Together, this result shows two product lines at a different stage of maturity, with Glaucomy Life growing rapidly with exceptional triple-digit growth, and Glaucomy seems scaling consistently. Our premium, Mirgo G50 Max, is the world's pioneering sky-to-ground integrating mobile connectivity hub, delivering seamless connectivity across satellite, flight, and ground networks. It offers the broadest 5G countries' coverage in the industry, spanning nearly 100 countries. And the performance, reliable across a wide range of scenario from the urban environment to in-flight travel. Powered by our AI hypercom technology, the G50 Max has built a market leading position in the US dollar 500 plus premium Mi-Fi segment and then has set a new benchmark for premium mobile connectivity solutions while our new clouding 1.0 international data connectivity business has been affected by micro having these same condition has create new opportunities for the g50 max and a premium solution driving demand from the resident reliable connectivity in critical environment we also to make solid progress and create new and strong revenue with our newly launched 4G and 5G CPE products during the second quarter for local connectivity services both have demonstrate stable performance and the successfully passed smaller batch market validation receiving positive market feedback several large order are currently under negotiation and we expect to accelerate market deployment and try stronger growth in the Q3 we also achieve notable recognition during the quarter reading the custom impact award and the MVMOs worth a worth in year 2026 and the finisher to least for leading consumer MVMO staff of brand for the validating our technology leadership and market positioning. Looking ahead we remain focused on strengthening operational management and cost discipline with a clear priority on improving cash flow. Together with the ongoing commercial progress of the Petco AI and the social platform, the ramp up of Mirgo G50 marks, and the continued expansion of Glaucomy IoT, CPE R50 and R55, we believe these efforts will position us to navigate the current market environment and emerging stronger. We remain committed to bridging the digital divide in cross-border connectivity as well as the emotion distance between people and their pets while creating long-term value for our shareholders with less discipline optimism in mind we are confident that we have a right strategy in place to drive sustainable growth going forward I will now turn the call over to mr. she and thank you mr. Chen Hello, everyone.
I will go over our operational and financial highlights for the second quarter of 2026. Average daily active user, DAU, and monthly active users, MAUs, represent average number of unique users engaging with our global media service on a daily and monthly basis, respectively. Those metrics recall robust growth in the second quarter. Average DAUs in the second quarter were 376,000 and 376, representing an increase of 13.3 percent from 332,000 and 323 in the second quarter of 2025. Gloomy IOT, Gloomy Seam and Gloomy Life all achieved substantial growth with average DAUs up 277.3%, 132% and 801.6% respectively from the same period last year. Average DAU from our global meal goal bonus declined by 7.3% years over year. Average MAUs were 744,966, representing an increase of 6.6% from 698,862 in the second quarter of 2025. Average MA yields from our Gologami IoT, Gologami Sim and Gologami Live Burners 9 saw an increase of 210 percent and 53.8 percent and 599.7 percent respectively from the same period last year. Average MAU from our global meal goal business decreased by 10.1% year-over-year. In the second quarter of 2026, average DATs were 341,511, with 12,763 owned by the company and 328,748 not owned by the company, representing an increase of 7.4% from the second quarter During the quarter, 56.3% of DATs were from UKLINK 1.0 International Data Connectivity Service, and 43.7% were from UKLINK 2.0 Local Data Connectivity Service. In June 2026, the average daily data usage per terminal was 1.5 GB. Average MATs in the second quarter were 306,382, representing an increase of 6.5% from 663,197 in the second quarter of 2025. Growth were driven by strong momentum across our three new growth engines with average MATs from Gologami IOT, Gologami Thin, Gologami Life increasing 93.6%, 35.4% and 843.2% respectively from the same period last year. Average MAT from Gologami Mirgo Burnness decreased by 5.7% year over year. Following the stable growth last year, platform continued to gain traction with user adoptions and engagement increasing further during the quarter. In the second quarter, average DAU and MAUs were 1,519 and 1,845 respectively, while average DATs and MITs for platform reach 507 and 1,000 and the 28 reflecting the growing traction of this new offering as of a June 30th 2026 the company has 212 patterns with 184 approved and 28 pending approver and a pool of same car from 398 M&O's globally total revenue from the second quarter to 726 were 18.2 million US dollars representing a decrease of 5.9 percent from 19.4 million US dollars in same period to 725 total revenue across different business and I were as follows go to me me ago goodness 15.5 million US dollars representing a decrease of 13.1% from 17.9 million US dollars in the second quarter 2025. Globamy thin business 1.3 million US dollars representing an increase 78% from 0.7 million US dollars in the second quarter 2025. Globamy IOT business 0.8 million US dollars representing an increase of 392.4% from 0.2 million US dollars in the second quarter of 2025. Global Meet Live business 0.5 million US dollars representing a decrease of 12 1% from the 0.6 million US dollars in the second quarter of 2025. Half-home business 0.2 million dollars representing an increase 1,527.3 percent from point zero one million dollars in the second quarters of 2025 revenue from service were 13.3 million dollars representing a decrease of 9.2 percent from 14.6 million in the same period of 2025 revenue from service contribute to 72.9 percent of total revenue during the second quarter 2026 compared to 75.5 percent in same period last year geographically speaking during the second quarter 2026 Japan can you build it 36 percent mainland China can you build it 30.2 North Americans contributed 13.5% and other country and regions contributed remaining 20.2% compared to 33.6%, 33.2%, 15.3% and 17.9% respectively in the same period of 2025. Our gross profit was $9.2 million compared to $10.2 million in the same period of 2025. Overall gross margins in the second quarter of 2026 was 50.2% compared to 52.8% in same period of 2025. Gross margins on service were 59.1% in second quarter, 2026, compared to 56.6% in same period, 2025. Excluding share-based compensations, total operating expenses were $11.5 million, compared to $10.1 million in same period, 2025. Late loss in the second quarter of 2026 was $3 million, compared to late income of $0.7 million in the same period of 2025. Adjusting EBITDA was negative $1.8 million in the second quarter of 2026, compared to a positive $0.4 million in the same period of 2025. For the second quarter of 2026, we record an operating cash outflow of $3 million compared to an outflow of $0.9 million in the same period of 2025. For the second quarter of 2026, our capital expenditure were $0.04 million compared to $0.2 million in the same period of 2025. Turning to balance sheet items, our cash equivalents were $25.2 million as of June 30, 2026, compared to $28 million as of March 31, 2026. We continue to strengthen our financial position and we believe we are well positioned to drive growth in our balance. Turning our outlook for the third quarter, 2026, we expect total revenue to be between 19 million dollars and 22 million dollars representing a decrease 10.4 percent to an increase of 3.8 percent compared to same period of 2025 for the full year 2026 we now expect total revenue to be in the range of 75 million to 85 million dollars compared with the range of 85 million dollars to one million dollars we previously announced we are revising our four years guidance in line of the persistence micro economic challenge and global trade headwinds which have had any content may continue to have a broader impact for industries this estimates reflect our current view a market and operating conditions and a customer demands which are subject to change with that operator Let's open it for Q&A.
Operator
Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Theodore O'Neill. with Litchfield Hills Research. Please go ahead.
Oh, thank you for taking my questions. I have two questions this morning. The first is about memory chips and sort of the supply chain of semiconductors in general. You cited here, which everyone has been seeing is memory chip cost increases. So what are you doing to ameliorate that? And are you seeing other supply chain issues in the semiconductor area as well?
Yeah, I think there are several impacts because I think the supply chain for chipset and AI volume demand for supply chain in China. For the memory chip, everyone knows, it's almost 5 to 10 times increase. It impacts our sales price for our consumer. customers so in the early quarter we have we increased more storage try to offset the price increasing first that's enough that you can see that's why our cash flow was some some somewhat impact that somehow in that because we increase the memory chip storage first and the second you can see we have to cover some cost in chipset cost increasing I think also cost in a second half years which just about several months later we increase our sale price but we have we have to consider the consider that I think the customer I think acceptance for the price it's number two and number three and also we have R&D you know revise for some large memory and the expensive memory we try to I think that revise our hardware try to minimize the I think to reduce the memory requirement and it's a number three and the finally and also we also Because like PCB, like all these components extend, I think, the period and the cost also going up. I think, indeed, this year is worth inspiration for our product, for like magnify, like our platform and our webcam to the customer.
Thank you. My other question is about GlocalMe Life business. So here in the prepared remarks here, local meat life business revenue decreased year over year, but the average daily active users increased over the same period. Were they spending less money? I was wondering if you could explain why one's down, the other one's up.
Yeah, sure. Yeah, as this second quarter figures, there's live revenues including two parts. One part is the hardware's live delivery to a customer. So that's the volume of hardware delivery in the second quarter is a little bit down a bit. so that account for account for there's a total revenues a little bit a little bit down but we would deliver a life products in a in a pasta a series of quarters on the stable gross volume and this this this a life product the used to the local scenarios local mobile broadband scenarios like our products the charge cable charge cables that's a well a very well welcome in in Japan's local market so the the MAUs figures reflect a cumulative active historical assault hardware of life so that accumulates it may use a matrix is increased dramatically compared with last years so that two figure two metrics once a revenue reflect the second quarter scenarios the MA use reflects the the the communities the whole historical salience stories yeah yeah I have more comment about these because for life I this product II I
think because I just mentioned as you mentioned the supply chain impact by the AI industry because of the memory chip and the PCB etc that's why in the fourth quarter before the price increase we ask our customer give more order and so far I think this is the why in the fourth quarter we get a more bigger order and the second quarter quarter you can see the order is little bit lower that's because of the supply chain impact and the price increase follow the total the first half years we are compared the fourth half last year is increased dramatically okay thank you very much that that answers my questions once
again if you wish to ask a question please press star 1 on your telephone and wait for your name to be announced there are no further questions at this time I'll now hand back to Daniel Gao for closing remarks thank you once again for joining us today if you have further questions please feel free to contact your colleagues investor relations through the contact information provided on our website or speak to our investor relations forum creating some anniversary we look forward to speaking with you again our next colleague call thank you that does conclude our conference for today
Operator
thank you for participating you may now disconnect
