Good day and welcome to the uCloudlink Link Group, Inc. First quarter 2025 Earnings Conference call. All participants will be in listen-only mode. [Operator Instructions]. Please note today's event is being recorded. I would now like to turn the conference over to Daniel Gao, Director of IR for the company. Please go ahead.

Hello, everyone and thank you for joining us on uCloudlink's first quarter 2025 earnings call. The earnings release on our earnings presentation are now available on our IR website at ir.ucloudlink.com. Joining me on today's call are Mr. Zhiping Peng, Co-Founder and Chairman of the Board of Directors; Mr. Chaohui Chen, Co-Founder, Director and 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 forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and observations that involve known and unknown risks, uncertainties, and other factors not under the company's control, which may cause actual results, performance or achievements of the company to be materially different from the results, performance, or expectations implied by these forward-looking statements. All forward-looking statements are expressly qualified in their entirety by the cautionary statements, risk factors and details of the company's filings with the SEC. The company does not assume any obligation to reverse or update any forward-looking statements as a result of new information, future events, change in market conditions, or otherwise, except as required by law. Please also note that uCloudlink's earnings press release and this conference call include discussions of unaudited GAAP financial information and unaudited non-GAAP financial measures. uCloudlink's press release contains a reconciliation of the unaudited non-GAAP measures to the most directly comparable unaudited GAAP measures. I will now turn the call over to Mr. Chen. Please go ahead.

Thank you, Daniel, and good morning or evening, everyone. We take off 2025 with a sorry performance as our expanding global ecosystem continues to gain traction and build momentum. Total revenues during a quarter was US$18.7 million in-line with guidance, representing an increase of 3.4% year-over-year. Despite significant and increased investments in new product marketing and sales initiatives, we maintain a strong finance position, delivering at adjusted net income of USD0.4 million, and a positive operating cash flow of USD0.2 million. Our 1.0 international data connectivity services business continue its robust growth with the full speed 5G network coverage now available in 90 countries and regions. This expansion further strengthened our market share and reinforces our leading position in roaming market. A notable highlight this quarter was the showcasing of our newest innovative solutions for people, IoT and pets at MWC Barcelona 2025, including the eSIM Trio, CloudSIM Kit, PetPhone, MeowGo G50 Max, and G40 Pro. These new and exciting technologies have been integrated into our broader series of GlocalMe and GlocalMe Inside solutions, driving growth and increasing visibility and interest among consumers, global operators, enterprise customers, and business partners. With these strong tailwinds, starting from the second quarter of this year, our emerging business lines -GlocalMe SIM, GlocalMe Life, and GlocalMe IoT - are all projected to achieve active terminal growth rates exceeding 100%, significantly contributing to our expansion and growth going forward as we build our global mobile data traffic sharing marketplace. Also, we expect that our GlocalMe Mobile/Fixed Broadband business line will steadily grow by approximately 10%. Starting in the third quarter of 2025, we will begin regular disclosure of key metrics, including user account numbers segmented by business lines, to provide greater transparency and allow investors to carefully track our progress in user growth. Following our…

Thank you, Mr. Chen. Hello everyone, I will go over our operational and financial highlights for the first quarter of 2025. Average daily active terminals DATs is an important operating metric for us, as it measures customer usage trends over the period and is reflective of our business performance. In the first quarter of 2025, average DATs were 308,863 of which 17,803 owned by the Company and 291,060 owned by our business partners, representing a decrease of 0.3% from 309,906 in the first quarter of 2024. The average daily active terminals in the first quarter comprised 296,597 from GlocalMe Mobile and fixed broadband business, 621 from GlocalMe Life business, 5,219 from GlocalMe SIM business and 6,426 from GlocalMe IoT business, compared to 308,375, 201, 829 and 501, respectively, in the first quarter of 2024. During the first quarter of 2025, 56.2% of DATs were from uCloudlink 1.0 international data connectivity services and 43.8% were attributed to uCloudlink 2.0 local data connectivity services. In March 2025, the average daily data usage per terminal was 1.59 GB. As of March 31, 2025, the Company had served 2,878 business partners in 63 countries and regions. The Company had 183 patent applications with 169 approved and 14 pending approval, while the pool of SIM cards was from 391 MNOs globally as of March 31, 2025. Total revenues for the first quarter of 2025 were US$18.7 million, representing an increase of 3.4% from US$18.1 million in the same period of 2024. Revenue from services in the first quarter of 2025 was US$14.2 million, representing an increase of 4.9% from US$13.5 million in the same period of 2024. Revenue from services as a percentage of total revenues was 75.7% during the first quarter of 2025, slightly up from 74.7% during the same period last year. Geographically…

[Operator Instructions]. Today's first question comes from Theodore O'Neill with Litchfield Hills Research. Please go ahead.

Thank you and congratulations on the results for the quarter and your outlook. My first question is about the PetPhone product, and if you could give us any highlights into the regions or the demographics of the customers you expect will be the most likely to be early adopters of this product.

Yes, I think we will launch -- speaking of Barcelona exhibition, we first announced we will launch the PetPhone in this industry. It costs a lot of interesting. So since -- we will launch this product in the end of the May for commercial launch, we have many products, there are three main type of users. The fourth one is with wireless channel or public channel, like a pet channel. So, we approach a lot of the pet channel, like in Europe, in Asia, and also in US, like a cherry. So, we already on the commercial progress. So, it's quite up tracking and I think we will be closed recently. So, in Q2, last fourth channel. The second channel is while carrier, while a mobile watch operator or watch mobile operator, operator. So, they, we have them to promote the SIM or SIM card into our platform and have the carrier to acquire pet users. So, it create new, we are, have carrier not only just from the traditional people, IOT now expand to the PET users. So, we already have several carrier nearly finished the contract with us about we reset our platform product. The third is our traditional electronic channel. So, they are also interesting to sell our product. So, I think so far everything's progress and testing is so good. Now waiting for the our commercial line, commercial version available. And this may this mindset.

Oh, that's very helpful. My second question is about sort of the tariffs that are being raised and lowered. I'm wondering if the changes all these tariffs are having any impact on your business?

The question regarding the tariff, so far, we don't have implications by this the tariff barriers between U.S. and China. We have a stock product in U.S., as a channel. So that's available for our sale for a while. And also, we have, we have outsourcing manufacturers in other say, Mainland. We could manufacturers outsourcing other manufacturers terminal device in Mainland and other countries. We are, we have, no targets between the U.S. and in these countries. So, we expect that the U.S. markets is a growing market for our new business lines like pet phone, like it IOT's solutions. So, we prepare this, we prepare these solutions and the place to manufacturers a product to overcome this tariffs barrier between the U.S. and China.

Okay. Thank you very much. That completes my questions.

Thank you. And our next question today comes from Vivian Zhang with Diamond Equity Research. Please go ahead.

Hello. Thank you so much. So firstly, can you explain in detail the reason for the increase in the cost of services and whether you will take any measures to control this costly extension?

you have two relevance. One is regarding the course of service, this reflecting as we disclosed, the service cost margins a little bit lower than the same periods last years. That's because the mixtures sale -- different sales categories across region and country, for instance, in this first quarter of this year, out bounding roaming service for our Chinese outbound travelers in increase significant this Chinese out bounding travelers, rent our terminals, our WiFi hot support terminals for their roaming connections that traveling outbound. So, in that case there's a revenue or service generated by the Chinese outbound traveler have a significant weight in the overall service. So that's something impact our overall service margins a little bit lower than the same periods are last years. There's the first -- there's answer your first questions regarding the cost service. And the second is regarding the expenditures related to expansion and bonus. As we disclose, the first quarter of this year, we spent more expenditure than the first quarter of last year. The extra expenditures on sales margins for this new business. So, we attend quite a lot of market exhibitions across worldwide, and we invest over more than US$1 million compare last year on this marketing and promotions. We believe this is expeditious on the marketing’s will bring more volumes of bonus to our futures periods. So, I think that's the revenues related to the new business line will come into account late this year or next year. So, one other matrix as we disclosed is daily active terminal related, there's new business line, especially for IoT, daily active terminal is increased to our first compares last year's same periods. So, this year, we expect the three new business line IoT same and the live series, their daily determinant number will increase over one-year time compared with last year. So, we are on the right track to deploy our strategies from one business line MBB expansion to four business line to grow. We believe that, I think that we follow the right strategies to support growth.

Okay. I see. That makes sense. My next question is, that is about the partnership you mentioned. Can you please share, like, can you please provide some information on the areas of collaboration you expect to see in the coming month?

So, in the last question, I will be mentioned some partnership where in the past our partnership is more like international data and the local mobile broadband. That's our more, our partner is, in this, in the airport or is not in the airport in the MAMO. So, since we have three new product lines, so our partner become more partner, for example, first is our carrier customer do interesting in our product. And for example, like our mobile virtual operator and tier two, tier three carrier operator. They are now very interesting our SIM case and they think, this is a key application product because we bring the international roaming to mobile virtual operator, let this network happen to the, to this industry for a mobile watch operator first and the second we have tier two, tier three carrier improve their roaming, bonding power and their roaming service quality. Normally compared with the tier one carrier, tier two, tier three carrier, they are longing quality and network, and partner is very, very weak. Now working with us, they can become the superior to the, to number one of the carrier, for the quality of the loaning. And also, that we can have the carrier and tier two and mobile watch operator compromise of their network coverage in local. So normally they have a few investments in the base station. They have poor coverage with our solution now, under their coverage, they can use their original SIM card, original SIM information, but outside their coverage, they can use our, SIM card and data traffic. So, let's quite help them to, you know, improve their quality for loaning and create new revenue that's for our sim trip. But our new product for platform, I think it's very popular, no matter tier…

Thank you. This concludes the question-and-answer session. I would like to turn the conference back over to Daniel Gao for any closing remarks.

Thank you once again for joining us today. If you have further questions, please feel free to contact uCloudlink's Investor Relations through the contact information provided on our website, or speak to our Investor Relations firm, Christensen Advisory. We look forward to speaking to you all again on our next quarterly call. Thank you.

Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.