uCloudlink Group, Inc. · NASDAQ:UCL
uCloudlink — FY2021 Earnings Presentation
28 slides from uCloudlink's earnings presentation, March 2022
Slide 1: 4Q and Full Year 2021 Earnings Conference Call Presentation
(Nasdaq: UCL) 4Q and Full Year 2021 Earnings Conference Call Presentation March 2022
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: uCloudlink Overview
CG uCloudlink Overview —_—_— i}
Slide 4: Vision and Mission Statement
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 fourth quarter of 2021 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 2.0 3.0 1.0 Capture Local Data Connectivity Data Traffic with Massive User Base Market Opportunity Strengthen Leadership Position Single Operator Entry Point to Capitalize Scalable user b
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 Business 237 R&D Staff (2) Across 54 Countries and 179 Patents (1) 160 business development, R
Slide 13: uCloudlink 1.0: Expect Recovery Post COVID-19 Pandemic
uCloudlink 1.0：Expect Recovery Post COVID-19 Pandemic with More Growth Potential (Nasdaq: UCL) uCloudlink 1.0: International Data Connectivity Services Established track record and global leading position in the A positive trend in the daily active terminal (DAT) of 1.0 business international data c
Slide 14: uCloudlink 2.0: Rapid Growth Track Record of Local Demand
uCloudlink 2.0: Rapid Growth Track Record of Local Demand and Massive Opportunities (Nasdaq: UCL) Our New HyperConn Technology Contributes to the Further Development and Growth of Our uCloudlink 2.0 Business; We Expanded the Business Scope of Our Local Data Connectivity Services; Our HyperConn Techn
Slide 15: 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, leading to
Slide 16: 4Q 2021 Operating Highlights
4Q 2021 Operating Highlights
Slide 17: Our Business Performance and Operating Highlights
Our Business Performance and Operating Highlights (Nasdaq: UCL) Daily Active Terminals (DAT) (2) DAT Breakdown by uCloudlink 1.0 vs. 2.0 (2) (2) Daily Data Usage per Terminal # Terminals % GB Strong uCloudlink 2.0 User Adoption (1) 13% 15% 9% 268,798 265,800 2.01 50% 64% 66% 67% 67% 68% 1.94 69% 196
Slide 18: Our Business and Revenue Are Increasingly Diversified Globally
Our Business and Revenue Are Increasingly Diversified Globally (Nasdaq: UCL) 97% Non-Mainland China Revenue Contribution 38 42 48 49 49 49 50 52 52 54 32% 32% 28% 36% 39% 36% 39% 48% 49% 60% 19% 36% 53% 56% 58% 53% 56% 47% 47% 49% 37% 32% 19% 8% 5% 5% 6% 8% 4% 3% 2018 2019 2020Q1 2020Q2 2020Q3 2020Q
Slide 19: 4Q 2021 Financial Highlights
4Q 2021 Financial Highlights
Slide 20: Percentage of Our Service-Related Revenues and COVID-19 Impact
Percentage of Our Service-Related Revenues and COVID-19 Impact (Nasdaq: UCL) Revenue segmentation based on product & services PaaS and SaaS services 10.9% PaaS and SaaS services 15.2% 2.0 local data connectivity services revenues 1.0 international 1.0 international 7.3% data connectivity 2.0 local d
Slide 21: Revenue Breakdown By Our Two Business Segments
Revenue Breakdown By Our Two Business Segments (Nasdaq: UCL) 47% $53.7 $44.1 Revenue, US$’MM 54% $35.9 43% $33.5 41% $24.7 48% $21.0 18% $19.3 $18.0 $17.7 $19.2 $17.6 $17.0 3.2%1 57% 46% 53% 46% 59% 45% 47% 53% 52% 45% 82% 52% -0.8%2 47% 55% 53% 54% 55% 47% 48% 6.8%3 2019Q1 2019Q2 2019Q3 2019Q4 2020
Slide 22: Higher Service Gross Margin Over Overall Gross Margin
Higher Service Gross Margin Over Overall Gross Margin (Nasdaq: UCL) • Gross Profit, US$’MM $40.0 63% 66% 70% 58% $35.0 55% 60% 51% $30.0 49% 45% 44% 46% 50% 43% 41% 37% $25.0 42% 35% 35% 36% 40% 31% 31% 31% 31% 28% $20.0 $18.9 $18.9 35% 26% 28% 30% $15.2 $15.0 20% $12.0 $11.8 $10.0 10% $5.5 $5.6 $5.
Slide 23: Controlled Operating Expenses During Pandemic of COVID-19
Controlled Operating Expenses During Pandemic of COVID-19 (Nasdaq: UCL) (3) R&D G&A Operating expenses(1), $US,MM 30% 40% $18.0 S&M 90% $16.6 30% 83% $16.0 $15.3 80% $14.3 $14.2 71% $14.0 $13.5 65% 70% $12.6 61% 61% 62% $12.0 $11.8 $12.0 60% $11.8 $11.8 $10.9 55% $10.2 $10.0 50% 49% $8.0 40% 43% $6
Slide 24: Asset Light Business Model
Asset Light Business Model (Nasdaq: UCL) Operating Cash Flow, $US,MM $6.3 $6.7 $1.1 $0.3 $(0.4) $(1.9) $(2.8) $(3.2) $(5.5) $(5.7) $(6.1) $(6.7) 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 CAPEX, $US,MM $2.00 2.7% 3.0% 3.5% 2.2% $1.50 $1.2 1.7% 2.5% 1.3% 1.4%
Slide 25: Net Income & Adjusted EBITDA
Net Income & Adjusted EBITDA (Nasdaq: UCL) Net Income/ (Loss) , $US,MM $3.8 $2.1 $0.3 $0.2 $(2.0) 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 $(0.9) (1) (1) $(7.0) $(12.0) $(9.7) (1) (1) $(8.2) $(12.4) (1) (1) $(15.4) $(15.5) $(22.0) $(32.0) $4.6 $(42.0) $(41.
Slide 26: Appendix – Financial Statement
Appendix – Financial Statement (Nasdaq: UCL) 26
Slide 27: Appendix – Financial Statement
Appendix – Financial Statement (Nasdaq: UCL) 27
Slide 28: WG uClod -
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