uCloudlink Group, Inc. · NASDAQ:UCL
uCloudlink — Q1 2023 Earnings Presentation
29 slides from uCloudlink's earnings presentation, May 18, 2023
Slide 1: 1Q 2023 Earnings Conference Call Presentation
(Nasdaq: UCL) 1Q 2023 Earnings Conference Call Presentation May 2023
Slide 2: Disclaimer
Disclaimer (Nasdaq: UCL) By viewing, accessing, or participating in this presentation, you agree to be bound by the following limitations. Any failure to comply with these restrictions may constitute a violation of applicable securities laws. This presentation has been prepared by UCLOUDLINK GROUP I
Slide 3: Overview
CG uCloudlink Overview —_—_— i}
Slide 4: Connecting and Sharing without Limitations
Vision and Mission Statement (Nasdaq: UCL) (Nasdaq: UCL) Connecting and Sharing without Limitations Mission Statement To Make the World More Connected with Maximized Network Utility through the Power of Mobile Data Traffic Sharing Founders’ Story: “To enable people to use mobile data traffic freely
Slide 5: The World's First and Leading Mobile Data Traffic Sharing Marketplace
The World’s First and Leading Mobile Data Traffic Sharing Marketplace (Nasdaq: UCL) Data Traffic Sharing back Data Traffic Intelligent Data Traffic Factory International MNOs Travelers MVNOs Repackaging Re- Data Users Local Users Data Suppliers distributing SIM Card Resellers Dynamic Allocation Recy
Slide 6: Operators Face Two Major Challenges: Coverage and Congestion
Operators Face Two Major Challenges: Coverage and Congestion (Nasdaq: UCL) Challenges for Mobile Network Operators Unreliable Indoor Wi-Fi Coverage Reliable data connection Unreliable data connection/weak signal May have Congestion • Poor coverage • May easily have congestion • Capital Intensive for
Slide 7: Our Solution Can Make for a Better Connection
Our Solution Can Make for a Better Connection (Nasdaq: UCL) Better Data Connection for MNOs and Users Effectively help improve networks’ coverage and congestions indoors and outdoors MNO A MNO B MNO C Wi-Fi Operator D Wi-Fi Operator E • Uses existing coverage to create more reliable data connections
Slide 8: Our Rooting Technology Enabling Data Traffic Marketplace (cloud SIM)
Our Rooting Technology Enabling Data Traffic Marketplace (cloud SIM) (Nasdaq: UCL) Two Key Passes: 1 2 Global roaming pass: Seed SIM Local data connectivity pass: SIM Pool 5 Authentication response of 1 Seed-SIM sends initial signal 2 Server identifies SIM in the the remote SIM stored in the to serv
Slide 9: Our Advanced Technology Enabling Secured and Robust Connectivity
Our Advanced Technology Enabling Secured and Robust Connectivity (Hyper-connectivity “HyperConn”) (Nasdaq: UCL) Cloud SIM Developed to HyperConn Stage and HyperConn™ products delivered to various markets during the first quarter of 2023 and more innovative products and services are in the pipeline,
Slide 10: The Evolution of cloud SIM and HyperConn Business Models
The Evolution of cloud SIM and HyperConn Business Models (Nasdaq: UCL) Increasingly Platform-centric B2C Retail B2B2C Wholesale PaaS/SaaS Platform uCloudlink sells or leases GlocalMe uCloudlink sells GlocalMe hardware and uCloudlink’s partners procure customized hardware and data packages to retail
Slide 11: Clear Growth Strategies Across Business Models
Clear Growth Strategies Across Business Models (Nasdaq: UCL) Between Countries Between Carriers Full Marketplace 3.0 1.0 2.0 Capture Local Data Connectivity Data Traffic with Massive User Base Market Opportunity Strengthen Leadership Position Capitalize Scalable user base Single Operator Entry Point
Slide 12: Unique Business Model with High Barriers to Entry
Unique Business Model with High Barriers to Entry (Nasdaq: UCL) Telecom Class Service Quality Operational Strategic Global Proprietary Technology Team & Talent Complex Value Chain Track-record Partnerships (2) Business 139 R&D Staff 177 Patents (1) 132 business development, Across 60 Countries and R
Slide 13: uCloudlink 1.0: Accelerating Post-pandemic Recovery and Growth
uCloudlink 1.0：Accelerating Post-pandemic Recovery and Growth (Nasdaq: UCL) uCloudlink 1.0: International Data Connectivity Services 1.0 Average daily active terminals ➢ Innovative Global 5G Solution incorporates high-quality, low-latency （In thousands） roaming tech and become a leading 5G roaming s
Slide 14: uCloudlink 2.0: Expanding Application Scenarios Supported by Stable Local Demands
uCloudlink 2.0: Expanding Application Scenarios Supported by Stable Local Demands (Nasdaq: UCL) uCloudlink 2.0: Local Data Connectivity Services HyperConn technology supports the further development and growth of our uCloudlink 2.0 Business, solutions and HyperConn enabled products now widely accept
Slide 15: uCloudlink 3.0: To Initiate A One-stop Mobile Data Traffic Sharing Marketplace
uCloudlink 3.0: To Initiate A One-stop Mobile Data Traffic Sharing Marketplace Application (Nasdaq: UCL) One-stop Marketplace within only one APP/D-APP Top up and go MNOs GlocalMe SIM (GlocalMe terminals) Marketplace Repackaging Re- Activation online distributing GlocalMe Inside (eSIM) (Third party
Slide 16: HyperConn Enabled Innovative Products and Services
HyperConn™ Enabled Innovative Products and Services (Nasdaq: UCL) Industrial Wi-Fi Router Terminals / Devices HyperConn™ technology solution supports and applies to further development of our 1.0 and 2.0 businesses as well as continuous development and introduction of innovative products, helping to
Slide 17: Q1 2023 Operating Highlights
Q1 2023 Operating Highlights
Slide 18: Our Business Performance and Operating Highlights
Our Business Performance and Operating Highlights (Nasdaq: UCL) Daily Active Terminals (DAT) (1) DAT Breakdown by uCloudlink 1.0 vs. 2.0 (1) (1) Daily Data Usage per Terminal # Terminals GB Strong uCloudlink 2.0 User Adoption (2) 315,360 297,082 25% 268,798 2.01 57% 1.94 66% 68% 69% 69% 265,800 1.73
Slide 19: Our Business and Revenue Are Increasingly Diversified Globally
Our Business and Revenue Are Increasingly Diversified Globally (Nasdaq: UCL) (1) 95% Non-Mainland China Revenue Contribution 42 49 54 59 56 60 18% 18% 32% 36% 46% 58% 38% 34% 36% 53% 49% 43% 39% 40% 32% 11% 5% 3% 4% 5% 2019 2020 2021 2022 Q1'22 Q1'23 Mainland,China Japan North America Other Countrie
Slide 20: Q1 2023 Financial Highlights
Q1 2023 Financial Highlights
Slide 21: Revenue Segmentation: Increasingly Driven by uCloudlink Services
Revenue Segmentation: Increasingly Driven by uCloudlink Services (Nasdaq: UCL) Revenue Segmentation PaaS and SaaS services PaaS and SaaS services 15.8% 14.2% 2.0 local data connectivity 1.0 international services revenues 1.0 international 2.0 local data connectivity data connectivity 10.2% data con
Slide 22: Revenue Breakdown By Our Two Business Segments
Revenue Breakdown By Our Two Business Segments (Nasdaq: UCL) Revenue, US$MM $158.4 36% 42% 42% $89.6 $73.8 $71.4 48% 58% 35% 49% $18.0 15.3%1 $15.6 28% 37% -12.0%2 52% 51% 65% 36% 38% 63% 72% 62% 31.4%3 2019 2020 2021 2022 Q1'22 Q1'23 Revenue from Services Sales of Products 1. Q1 Total Revenue Year-
Slide 23: Higher Service Gross Margin Over Overall Gross Margin
Higher Service Gross Margin Over Overall Gross Margin (Nasdaq: UCL) Gross Profit US$MM Gross margin 70% 80 70.00% 60.5% $140.0 60.9% 56.0% 60% 70 60.00% 49.0% $120.0 60 47.8% 50.00% 42.8% 43.0% 45.5% 50% 41.0% $100.0 37.4% 40% 50 40.00% 31.6% $80.0 29.6% $64.9 30% 40 30.00% $60.0 20% 30 20.00% 22% $
Slide 24: Improvement of Business Operational Efficiency
Improvement of Business Operational Efficiency (Nasdaq: UCL) Operating expenses(1), $US,MM (3) R&D 20% G&A 40% $70.0 120% 35 120% $59.5 S&M $60.0 100% 40% 30 100% $50.0 $48.2 $47.1 80% 25 80% $40.0 64% $34.4 20 60% 54% 60% 60% $30.0 15 38% 38% 48% 40% $9.3 40% $20.0 10 $6.9 $10.0 20% 5 20% $- 0% 0
Slide 25: Asset Light Business Model
Asset Light Business Model (Nasdaq: UCL) Operating Cash Flow, $US,MM $5.8 $4.4 $1.6 2019 2020 2021 2022 Q1'22 Q1'23 $(2.0) $(4.4) $(21.7) CAPEX, $US,MM 1.9% 4.00 1.8% 2.0% $4.00 3.00 $2.8 1.5% 3.5% 1.2% $3.00 2.2% 2.5% 2.00 $1.7 1.0% $2.00 0.6% 1.5% 1.00 $0.9 0.5% $1.00 0.04% $0.4 0.5% $0.4 $0.006 $
Slide 26: Net Income & Adjusted EBITDA (non-GAAP)
Net Income & Adjusted EBITDA (non-GAAP) (Nasdaq: UCL) $15.0 Net Income/ (Loss) , $US,MM $15.0 (1) $5.2 $5.0 $2.1 $(5.0) 2019 2020 2021 2022 $(5.0) Q1'22 Q1'23 (1) (1) $(25.0) $(19.9) $(7.9) $(15.0) $(45.0) (1) $(25.0) $(46.0) $(65.0) $(63.4) (1) $(35.0) Adjusted EBITDA (non-GAAP), $US,MM $8.9 $2.1 Q
Slide 27: Appendix – Financial Statement
Appendix – Financial Statement (Nasdaq: UCL) 27
Slide 28: Appendix – Financial Statement
Appendix – Financial Statement (Nasdaq: UCL) 28
Slide 29: Q&A
Q&A