uCloudlink Group (NASDAQ:UCL) said its first-quarter 2026 results were pressured by macroeconomic volatility, weak travel demand, higher energy prices, rising memory chipset costs and supply chain disruptions tied to conflict, while management emphasized rapid growth in newer product lines intended to offset weakness in its traditional business.
Chief Executive Officer Chaohui Chen said total revenue for the quarter was $15.9 million. Chief Financial Officer Yimeng Shi later said total revenue declined 10.1% from $18.7 million in the prior-year period, while service revenue fell 6.3% to $13.3 million. Service revenue accounted for 79.9% of total revenue, up from 75.7% a year earlier.
Profitability pressured by investment and costs
Gross profit was $8.3 million, compared with $9.7 million in the same period of 2025. Overall gross margin was 49.1%, down from 51.7% a year earlier, while service gross margin fell to 54.5% from 57.3%.
Excluding share-based compensation, operating expenses rose to $10.8 million from $9.9 million. The company posted a net loss of $3.5 million, compared with a net loss of $0.6 million a year earlier. Adjusted EBITDA was negative $2.0 million, compared with positive adjusted EBITDA of $1.4 million in the prior-year quarter.
Shi said operating cash flow was an outflow of $8.7 million, compared with an inflow of $0.2 million in the same period last year. Capital expenditures were $30,000, down from $300,000. Cash and cash equivalents totaled $28.0 million as of March 31, compared with $32.8 million at the end of 2025.
PetPogo and new product lines drive user growth
Chen said the company increased marketing spending during the quarter for its PetPogo platform and broader pet-technology ecosystem, a move he said would weigh on near-term profitability and cash flow but could support longer-term growth.
The company launched a beta version of the PetPogo app during the quarter. Chen described it as an AI-powered social platform designed to help pet owners manage pet care before, during and after activities, while enabling communication and interaction between pets and owners. He said the platform is expected to complete commercial validation in the second quarter and begin contributing to growth in the third quarter. Average monthly active users for PetPogo reached 1,397 during the quarter, according to management.
GlocalMe Life also showed strong user growth, with average daily active users rising 559.9% year over year. Chen said the company’s UniCord Pro gained traction during the quarter as sales volume and market adoption accelerated.
For GlocalMe IoT, average daily active users increased 246.5% from the fourth quarter of 2025, and the installed base for IoT solutions reached 2.93 million as of March 31. Chen said the company continues to target applications including in-car infotainment and security cameras.
GlocalMe SIM also continued to grow, with average daily active users up 193.6% year over year. Chen said the company’s eSIM TRIO solution is gaining traction as a permanent secondary SIM, while its carrier co-issuance program has entered pilot deployment.
MeowGo G50 Max expected to launch commercially in Q2
Chen highlighted the MeowGo G50 Max, which he described as a “sky-to-ground integrated mobile connectivity hub,” as a potential growth engine for upcoming quarters. He said the product is designed to switch among terrestrial networks, in-flight connectivity and home Wi-Fi, while also supporting satellite-based two-way messaging and emergency SOS.
The company expects the MeowGo G50 Max to reach commercial deployment in the second quarter of 2026.
During the question-and-answer session, Theodore O’Neill of Litchfield Hills Research asked about use cases for the G50 Max beyond conflict-affected areas. Management said the device is intended for multiple scenarios, including global 5G coverage, airline cabin connectivity, satellite SOS and messaging, and backup connectivity for home or office Wi-Fi.
IoT traction and supply chain pressures discussed
In response to a question about in-car infotainment and security cameras, management said uCloudlink’s Cloud SIM and HyperConn solutions are being embedded into car infotainment and CarPlay devices, with “major top 10” China-based providers using the company’s solution. For 4G security cameras, management said its solution can provide cross-carrier coverage and improved tariffs compared with traditional SIM card use.
Management also addressed supply chain costs, saying memory chip prices have risen sharply from last year and have had a significant impact on device costs. The company said it is redesigning products to reduce memory requirements and evaluating China-based memory alternatives, but it does not expect to fully offset the price increases. Management said selling prices for some business-to-business and consumer devices are up roughly 20% to 30% from last year.
Second-quarter outlook calls for return to growth
Looking ahead, Chen said the company expects its traditional business to stabilize while new business lines continue to scale. He said management views the second quarter of 2026 as a potential turning point, with a return to positive year-over-year growth.
For the second quarter, uCloudlink expects total revenue of $19.5 million to $22.5 million, representing growth of 0.5% to 16% from the same period in 2025.
About uCloudlink Group (NASDAQ:UCL)
uCloudlink Group Inc is a technology company specializing in global mobile data connectivity solutions. The company’s core offering is a cloud SIM virtualization platform that enables seamless roaming for consumers and enterprise users without the need for physical SIM cards. Leveraging proprietary CloudSIM technology, uCloudlink provides portable Wi-Fi hotspot devices, embedded IoT connectivity modules, and eSIM products designed to deliver high-speed data access in multiple countries.
Through its CloudSIM platform, uCloudlink dynamically switches between multiple mobile network operators to optimize coverage and data speeds while controlling costs.
