uCloudlink Group, Inc. · NASDAQ:UCL
uCloudlink — Q2 2023 Earnings Presentation
32 slides from uCloudlink's earnings presentation, Aug 16, 2023
Slide 1: 2Q 2023 Earnings Conference Call Presentation
(Nasdaq: UCL) 2Q 2023 Earnings Conference Call Presentation Aug 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: uCloudlink Overview
G 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: Evolution of Our Business
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 7: 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 7
Slide 8: 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 （In thousands） ➢ Innovative Global 5G Solution incorporates high-quality, low-latency roaming tech and enhance our leading competiti
Slide 9: uCloudlink 2.0: Expanding User Base with Stably Growing Local Demands
uCloudlink 2.0: Expanding User Base with Stably Growing Local Demands (Nasdaq: UCL) uCloudlink 2.0: Local Data Connectivity Services HyperConn Solution supports the further development and growth of our uCloudlink 2.0 Business, solutions and HyperConn enabled products now widely accepted by MNOs & b
Slide 10: From Data Connectivity Services to Beyond: PaaS and SaaS Solution
From Data Connectivity Services to Beyond: PaaS and SaaS Solution (Nasdaq: UCL) Recent Developments uCloudlink 1.0: International Customer Management Data Connectivity Services Hyper-Connectivity Solution ➢ In July 2023, GlocalMe SIM card launched Hyper-Connectivity Data Analysis PaaS and SaaS Solut
Slide 11: 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 12: 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 13: Q2 2023 Operating Highlights
Q2 2023 Operating Highlights
Slide 14: 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 (2) 322,489 25% 297,082 54% 54% 57% 268,798 2.01 66% 68% 68% 69% 1.94 265,800 1.73 (2) 1.59 1.68 196,493 75% 4
Slide 15: Our Business and Revenue Are Increasingly Diversified Globally
Our Business and Revenue Are Increasingly Diversified Globally (Nasdaq: UCL) (1) 88% Non-Mainland China Revenue Contribution 42 49 54 59 60 63 56 63 18% 16% 16% 21% 32% 36% 46% 58% 29% 29% 34% 39% 36% 53% 43% 43% 49% 43% 39% 38% 32% 11% 12% 12% 5% 3% 5% 2% 2019 2020 2021 2022 Q1'23 Q2'23 Q2'22 Q2'23
Slide 16: Q2 2023 Financial Highlights
Q2 2023 Financial Highlights
Slide 17: 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 13.7% 11.8% 2.0 local data connectivity 1.0 international services revenues 1.0 international 2.0 local data connectivity data connectivity 10.0% 2,462.00
Slide 18: 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% $22.0 $22.0 $18.0 21.9%1 $18.0 36% 36% 38% 52% 28% 16.5%2 65% 51% 64% 72% 64% 62% 25.2%3 2019 2020 2021 2022 Q1'23 Q2'23 Q2'22 Q2'23 Revenue from Services Sales of Product
Slide 19: Higher Service Gross Margin Over Overall Gross Margin
Higher Service Gross Margin Over Overall Gross Margin (Nasdaq: UCL) Gross Profit US$MM Gross margin 70% 80 80 70.00% 70.00% 60.5% $140.0 60.9% 58.0% 58.0% 56.2% 56.0% 60% 70 70 60.00% 60.00% $120.0 47.8% 45.5% 50% 60 44.9% 60 50.00% 44.1% 44.9% 50.00% 42.8% 43.0% 41.0% $100.0 40% 50 50 40.00% 40.00%
Slide 20: Improvement of Business Operational Efficiency
Improvement of Business Operational Efficiency (Nasdaq: UCL) (3) Operating expenses(1), $US,MM R&D 20% G&A 38% $70.0 120% 35 100% 35 100% S&M $59.5 42% $60.0 100% 90% 90% 30 30 $48.2 80% 80% $50.0 $47.1 25 80% 70%25 70% $40.0 64% 60% 60% 54% $34.4 20 20 60% 50% 41% 50% $30.0 38% 38% 15 33% 15 33% 4
Slide 21: Asset Light Business Model
Asset Light Business Model (Nasdaq: UCL) Operating Cash Flow, $US,MM $5.8 $4.4 $3.4 $3.4 $2.5 $1.6 2019 2020 2021 2022 Q1'23 Q2'23 Q2'22 Q2'23 $(2.0) $(21.7) CAPEX, $US,MM 1.9% 4.00 1.8% 2.0% 4 $4.00 3.00 $2.8 1.2% 1.5% 3.50% 3.5% 3 2.2% 2.1% $3.00 2.1% 2.50% 2.5% 2.00 $1.7 0.6% 1.0% 2 $2.00 1.3% 1.
Slide 22: Net Income/(Loss) & Adjusted EBITDA (non-GAAP)
Net Income/(Loss) & Adjusted EBITDA (non-GAAP) (Nasdaq: UCL) Net Income/ (Loss) , $US,MM (1) $5.2 $2.1 (5.0) 2019 2020 2021 2022 Q1'23 Q2'23 Q2'22 Q1'23 $(0.9) (1) $(0.9) (1) $(6.3) (1) (1) 25.0) $(19.9) 45.0) (1) $(46.0) (1) 65.0) $(63.4) Adjusted EBITDA (non-GAAP), $US,MM $8.9 $2.1 $2.1 $2.1 2019
Slide 23: Appendix
G uCloudlink Appendix
Slide 24: 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 137 R&D Staff 179 152 business development, Across 63 Countries and Regions (3) K
Slide 25: 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 26: 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 27: 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 369 MNOs (3) Globally 179 Patents (1) Software-based Ready to Support All Three Generations of our Businesses Notes: 1. As of June 30, 2023, with 1
Slide 28: 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 29: 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 30: Financial Statement
Financial Statement (Nasdaq: UCL) 30
Slide 31: Financial Statement
Financial Statement (Nasdaq: UCL) 31
Slide 32: Q&A
Q&A