uCloudlink Group, Inc. · NASDAQ:UCL
uCloudlink — Q3 2023 Earnings Presentation
30 slides from uCloudlink's earnings presentation, Nov 15, 2023
Slide 1: 3Q 2023 Earnings Conference Call Presentation
(Nasdaq: UCL) 3Q 2023 Earnings Conference Call Presentation Nov 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: Strong Set of Results in the Third Quarter of 2023
Strong Set of Results in the Third Quarter of 2023 (Nasdaq: UCL) Sixth Total Revenues consecutive Average DAT reached a new increased 31% quarter of high over YoY positive cash flow (1) from operations 320,000 Note: DAT: Daily Active Terminals in Q3 2023 3
Slide 4: uCloudlink 1.0 Business: Continuous Consolidation and Development
uCloudlink 1.0 business : Continuous Consolidation and Development (Nasdaq: UCL) Business Performance Key Drivers Revenues from uCloudlink 1.0 business (in US$MM) $11.4 $8.0 ➢ Innovative Global 5G Solutions enhance our YOY leading competitive position within the global 42.7% roaming market Q3'22 Q3'
Slide 5: Expand "Always Better Connection" to More Application Scenarios
Expand “Always Better Connection” to More Application Scenarios (Nasdaq: UCL) Recent Developments Internet of Things Made significant progress in expanding the number of third-party devices utilizing our cloud SIM technology- powered IoT solutions in Japan International Roaming Internet of Things Fi
Slide 6: Operating Highlights
Operating Highlights (Nasdaq: UCL) Daily Active Terminals (DAT) (1) DAT Breakdown: uCloudlink 1.0 vs. 2.0 (1) (1) Daily Data Usage per Terminal # Terminals GB (2) 320,377 25% 297,082 50% 50% 54% 57% 268,798 2.01 65% 66% 68% 69% 1.94 265,800 1.73 (2) 1.56 1.68 196,493 75% 50% 50% 46% 43% 35% 34% 32%
Slide 7: Increasingly Diversified Globally
Increasingly Diversified Globally (Nasdaq: UCL) (1) 83% Non-Mainland China Revenues Contribution 42 49 54 59 60 63 63 58 63 16% 13% 13% 18% 21% 32% 36% 46% 26% 26% 58% 29% 34% 42% 36% 44% 44% 53% 43% 49% 43% 39% 35% 32% 17% 17% 11% 12% 5% 3% 5% 2% 2019 2020 2021 2022 Q1'23 Q2'23 Q3'23 Q3'22 Q3'23 Ma
Slide 8: Revenue Segmentation: Increasingly Driven by uCloudlink Services
Revenue Segmentation: Increasingly Driven by uCloudlink Services (Nasdaq: UCL) Revenues Segmentation PaaS and SaaS services PaaS and SaaS services revenues revenues 13.1% 9.8% 2.0 local data connectivity 1.0 international services revenues 1.0 international 2.0 local data connectivity data connectiv
Slide 9: Revenues Breakdown By Our Two Business Segments
Revenues Breakdown By Our Two Business Segments (Nasdaq: UCL) Revenues, US$MM $158.4 36% 42% 42% $89.6 $73.8 $71.4 48% 58% 49% 35% $22.0 $23.9 $23.9 $18.2 31.0%1 $18.0 30% 30% 36% 52% 28% 31% 29.0%2 51% 65% 64% 70% 70% 72% 69% 31.9%3 2019 2020 2021 2022 Q1'23 Q2'23 Q3'23 Q3'22 Q3'23 Revenues from Se
Slide 10: Services Gross Margin Exceeds Overall Gross Margin
Services Gross Margin Exceeds Overall Gross Margin (Nasdaq: UCL) Gross Profit US$MM Gross margin 70% 70% 70% $140.0 60.9% 140 60.5% 140 58.0% 57.9% 56.0% 60% 55.9% 60% 55.9% 60% $120.0 120 120 42.8% 43.0% 45.5% 50% 47.8% 44.9% 50% 51.2% 50% 51.2% 41.0% $100.0 100 100 47.7% 40% 40% 40% 31.6% $80.0 80
Slide 11: Improving Operational Efficiency
Improving Operational Efficiency (Nasdaq: UCL) (3) Operating expenses(1), $US,MM R&D 18% G&A 39% $70.0 120% 35 100% 35 S&M 100% $59.5 43% $60.0 100% 30 90% 90% 30 $48.2 80% 80% $50.0 $47.1 80% 25 70% 25 70% $40.0 64% 60% 60% 54% $34.4 20 20 60% 50% 40% 50% $30.0 38% 36% 38% 15 33% 36% 15 40% 40% 48
Slide 12: Asset Light Business Model
Asset Light Business Model (Nasdaq: UCL) Operating Cash Flow, $US,MM $5.8 $4.4 $3.4 $2.8 $2.8 $1.6 $1.2 2019 2020 2021 2022 Q1'23 Q2'23 Q3'23 Q3'22 Q3'23 $(2.0) $(21.7) CAPEX, $US,MM 1.9% 4.00 1.8% 2.0% 3.5% 3.5% 4 $4.00 3.00 $2.8 1.2% 1.5% 3.50% 3.5% 3 2.2% 2.1% $3.00 2.50% 2.5% 2.00 $1.7 0.6% 1.0%
Slide 13: Net Income & Adjusted EBITDA (non-GAAP)
Net Income & Adjusted EBITDA (non-GAAP) (Nasdaq: UCL) Net Income/ (Loss) , $US,MM (1) (1) (1) $3.5 $3.5 $5.2 $2.1 (5.0) 2019 2020 2021 2022 Q1'23 Q2'23 Q3'23 Q3'22 Q3'23 (1) (1) $(0.9) $(4.6) (1) 25.0) $(19.9) 45.0) (1) $(46.0) (1) 65.0) $(63.4) Adjusted EBITDA (non-GAAP), $US,MM $8.9 $4.1 $4.1 $2.1
Slide 14: Appendix
G uCloudlink Appendix
Slide 15: Connecting and Sharing without Limitations
Vision and Mission Statement (Nasdaq: UCL) (Nasdaq: UCL) Connecting and Sharing without Limitations Mission Statement To Make the World Better Connected with Maximized Network Utility through the Power of Mobile Data Traffic Sharing Founders’ Story: “To enable people to use mobile data traffic freel
Slide 16: 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 17: Marketplace Evolution
Evolution of Our Business (Nasdaq: UCL) Phase I Phase II Phase III Startup Marketplace One-Stop Marketplace Sharing Marketplace 2014-2023 2023- Next MNO A MNO B MNO C uCloudlink 1.0 uCloudlink 2.0 uCloudlink 3.0 Between Countries Between Carriers Between Users Roaming Services Local Services Full Ma
Slide 18: From Connected To Better Connection
From Connected To Better Connection (Nasdaq: UCL) uCloudlink’s Unique Position in the Market to Address These Demands Peer-to-Peer Data Traffic Sharing 18
Slide 19: Beyond Data Connectivity Services: PaaS and SaaS Solution
Beyond Data Connectivity Services: PaaS and SaaS Solution uCloudlink 1.0: International Customer Management Data Connectivity Services Enable everyone to enjoy Hyper-Connectivity Data Analysis Solution a more intelligent and PaaS and SaaS Solution convenient life through reliable and high-quality GP
Slide 20: One-stop Mobile Data Traffic Sharing Marketplace Application
One-stop Mobile Data Traffic Sharing Marketplace Application (Nasdaq: UCL) One-stop Marketplace Within One APP Top up and go MNOs GlocalMe SIM (GlocalMe terminals) Marketplace Repackaging Re- Activation online distributing GlocalMe Inside (eSIM) (Third party devices) MVNOs Service Providers Dynamic
Slide 21: 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 22: 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 145 R&D Staff 181 172 business development, Across 63 Countries and Regions (3) K
Slide 23: 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 24: Our Solution Makes for a Better Connection
Our Solution Makes for a Better Connection 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; Offers Better 5
Slide 25: Our Advanced Technology and Solutions Enable Secure and Robust Connectivity
Our Advanced Technology and Solutions Enable Secure and Robust Connectivity Cloud SIM Technology HyperConn Solutions Seed SIM Pool of SIM Cards (2) from 367 MNOs (3) Globally 181 Patents (1) Software-based Ready to Support All Three Generations of our Businesses Notes: 1. As of September 30, 2023, w
Slide 26: 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 27: Ecosystem Powered by Our PaaS and SaaS Platform
Ecosystem Powered by Our PaaS and SaaS Platform PaaS Platform Industrial SaaS Platform Wi-Fi Router Terminals / Devices Full Business Software Solutions Hosting Partners’ SIM cards Hyperconn™ Customer Management and Billing Intelligent Selection of Best- performing Network Internet of Everything Tra
Slide 28: Financial Statement
Financial Statement (Nasdaq: UCL) 28
Slide 29: Financial Statement
Financial Statement (Nasdaq: UCL) 29
Slide 30: Q&A
Q&A