0001213900-23-040972.txt : 20230518 0001213900-23-040972.hdr.sgml : 20230518 20230518060446 ACCESSION NUMBER: 0001213900-23-040972 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20230518 FILED AS OF DATE: 20230518 DATE AS OF CHANGE: 20230518 FILER: COMPANY DATA: COMPANY CONFORMED NAME: uCloudlink Group Inc. CENTRAL INDEX KEY: 0001775898 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 000000000 STATE OF INCORPORATION: E9 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-39302 FILM NUMBER: 23933636 BUSINESS ADDRESS: STREET 1: UNIT 2214-RM1, 22/F, MIRA PLACE TOWER A STREET 2: 132 NATHAN ROAD, TSIM SHA TSUI, KOWLOON CITY: HONG KONG STATE: F4 ZIP: 999077 BUSINESS PHONE: 852 31758988 MAIL ADDRESS: STREET 1: UNIT 2214-RM1, 22/F, MIRA PLACE TOWER A STREET 2: 132 NATHAN ROAD, TSIM SHA TSUI, KOWLOON CITY: HONG KONG STATE: F4 ZIP: 999077 6-K 1 ea178799-6k_ucloudlink.htm REPORT OF FOREIGN PRIVATE ISSUER

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 6-K

 

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of May 2023

 

Commission File Number: 001-39302

 

 

 

UCLOUDLINK GROUP INC.

(Registrant’s Name)

 

 

 

Unit 2214-Rm1, 22/F, Mira Place Tower A

132 Nathan Road, Tsim Sha Tsui

Kowloon, Hong Kong

(Address of Principal Executive Offices)

 

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F       Form 40-F 

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

 

 

 

 

 

EXHIBIT INDEX

 

Exhibit No.   Description
99.1   Press Release

 

1

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  UCLOUDLINK GROUP INC.
   
  By: /s/ Chaohui Chen
  Name:  Chaohui Chen
  Title: Director and Chief Executive Officer

 

Date: May 18, 2023

 

2

 

 

EX-99.1 2 ea178799ex99-1_ucloudlink.htm PRESS RELEASE

Exhibit 99.1

 

UCLOUDLINK GROUP INC. Announces Unaudited First Quarter 2023 Financial Results

 

Hong Kong, May 18, 2023 – UCLOUDLINK GROUP INC. (“UCLOUDLINK” or the “Company”) (NASDAQ: UCL), the world’s first and leading mobile data traffic sharing marketplace, today announced its unaudited financial results for the three months ended March 31, 2023.

 

First Quarter 2023 Financial Highlights

 

Total revenues were US$18.0 million, representing an increase of 15.3% from US$15.6 million in the first quarter of 2022.

 

Gross profit was US$8.6 million, representing an increase of 47.4% from US$5.8 million in the first quarter of 2022.

 

Income from operations was US$2.1 million, compared to a loss from operations of US$7.6 million in the first quarter of 2022.

 

Net income was US$2.1 million, compared to a net loss of US$7.9 million in the first quarter of 2022.
   
Adjusted net income (non-GAAP) was US$1.8 million, compared to an adjusted net loss of US$4.3 million in the first quarter of 2022.

 

Adjusted EBITDA (non-GAAP) was US$2.1 million, compared to negative US$3.9 million in the first quarter of 2022.

 

First Quarter 2023 Operational Highlights

 

Total data consumed in the first quarter through the Company’s platform was 43,936 terabytes (5,138 terabytes procured by the Company and 38,798 terabytes procured by our business partners), representing an increase of 4.5% from 42,049 terabytes in the first quarter of 2022.

 

Average daily active terminals in the first quarter were 304,121 (3,483 owned by the Company and 300,638 owned by our business partners), representing an increase of 11.0% from 273,870 in the first quarter of 2022. 57.3% of daily active terminals were from uCloudlink 2.0 local data connectivity services and 42.7% of daily active terminals were from uCloudlink 1.0 international data connectivity services during the first quarter of 2023. Average daily data usage per terminal was 1.62 GB in March 2023.

 

As of March 31, 2023, the Company had served 2,377 business partners in 60 countries and regions. The Company had 177 patents with 139 approved and 38 pending approval, while the pool of SIM cards was from 351 MNOs globally as of March 31, 2023.

 

Executive Commentary

 

“We were pleased to achieve a year-over-year growth of 15.3% on the top line, resulting in US$18.0 million in total revenues during the first quarter of 2023, which was driven by the growth in both international and local data connectivity services, particularly as international travel continued to pick up. We significantly improved our bottom line and were able to keep generating cash inflow from operations and strengthening our financial position. The average daily active terminals continued to be in an upward trend and reached a historical high of over 300,000 in this quarter as we continued to expand our global PaaS and SaaS ecosystem. To initiate our one-stop mobile data traffic sharing marketplace application, we are actively leveraging existing resources in research and development to expand our portfolio of innovative offerings in those markets where we have a strong presence. We remain optimistic about the outlook for the remainder of 2023 as international travel continues to progress toward pre-pandemic levels, and we are well-prepared to take advantage of the peak season of international travel during the summer. Our company continues to serve its existing partners while exploring various opportunities including 5G applications and Internet of Things (‘IoT’) scenarios like Wi-Fi router, IP camera, and electric vehicles, among others. We are committed to redefining and improving the mobile data connectivity experience for our business partners and users, and we believe that we are able to execute our growth strategies while creating long-term value for our shareholders,” said Chaohui Chen, Director and Chief Executive Officer of UCLOUDLINK.

 

 

 

 

First Quarter 2023 Financial Results

 

Revenues

 

Total Revenues were US$18.0 million, representing an increase of 15.3% from US$15.6 million in the same period of 2022.

 

Revenues from services were US$12.9 million, representing an increase of 31.4% from US$9.8 million in the same period of 2022. This increase was primarily attributable to the increase in revenues from data connectivity services.
   
Revenues from data connectivity services were US$10.0 million, representing an increase of 38.2% from US$7.2 million in the same period of 2022. This increase was primarily attributable to an increase in revenues from international data connectivity services to US$7.8 million in the first quarter of 2023 from US$5.6 million in the first quarter of 2022, and an increase in revenues from local data connectivity services to US$2.2 million in the first quarter of 2023 from US$1.6 million in the first quarter of 2022. This increase in revenues from data connectivity services was mainly attributable to the accelerated recovery of international travel and the continuous development of the local data connectivity services.

 

Revenues from PaaS and SaaS services were US$2.6 million, representing an increase of 3.7% from US$2.5 million in the same period of 2022.

 

Revenues from sales of products were US$5.1 million, representing a decrease of 12.0% from US$5.8 million in the same period of 2022, primarily due to the decrease in sales of data related products.

 

Geographic Distribution

 

During the first quarter of 2023, Japan contributed 43.1%, North America contributed 33.6%, Mainland China contributed 5.1% and other countries and regions contributed the remaining 18.2% of the total revenues, compared to 40.2%, 37.9%, 3.9% and 18.0%, respectively, in the first quarter of 2022.

 

Cost of Revenues

 

Cost of revenues was US$9.4 million, representing a decrease of 3.8% from US$9.8 million in the same period of 2022. This decrease was mainly attributable to lower costs associated with the decrease in revenues from sales of products.

 

Cost of services was US$5.1 million, representing an increase of 1.8% from US$5.0 million in the same period of 2022.

 

Cost of products sold was US$4.3 million, representing a decrease of 9.7% from US$4.8 million in the same period of 2022.

 

Gross Profit

 

Overall gross profit was US$8.6 million, compared to US$5.8 million in the same period of 2022. Overall gross margin was 47.8% in the first quarter of 2023, compared to 37.4% in the same period of 2022.

 

Our gross profit on services was US$7.8 million, compared to US$4.8 million in the same period of 2022. Our gross margin on services was 60.5% in the first quarter of 2023, compared to 49.0% in the same period of 2022.

 

Our gross profit on sales of products was US$0.8 million, compared to US$1.0 million in the same period of 2022. Our gross margin on sales of products was 15.5% in the first quarter of 2023, compared to 17.6% in the same period of 2022.

 

Operating Expenses

 

Total operating expenses were US$7.6 million, compared to US$10.1 million in the same period of 2022.

 

Research and development expenses were US$1.3 million, representing a decrease of 51.4% from US$2.7 million in the same period of 2022. This decrease was primarily due to a decrease of US$1.2 million in staff costs related to cost control measures and a decrease of US$0.2 million in testing and certification expenses.

 

Sales and marketing expenses were US$2.9 million, representing an increase of 4.8% from US$2.8 million in the same period of 2022.

 

General and administrative expenses were US$3.4 million, representing a decrease of 25.0% from US$4.6 million in the same period of 2022. This decrease was primarily due to a decrease of US$0.6 million in professional service fees and a decrease of US$0.2 million in staff costs related to cost control measures.

 

2

 

 

Income/(Loss) from Operations

 

Income from operations was US$2.1 million, compared to a loss from operations of US$7.6 million in the same period of 2022.

 

Adjusted EBITDA (Non-GAAP)

 

Adjusted EBITDA (Non-GAAP), which excludes the impact of share-based compensation, fair value gain/loss in other investments, share of profit/loss in equity method investment, net of tax, interest expense, income tax expenses and depreciation and amortization, was US$2.1 million, compared to negative US$3.9 million in the same period of 2022.

 

Net Interest Expenses

 

Net interest expenses were US$0.04 million, compared to net interest expenses of US$0.2 million in the same period of 2022.

 

Net Income/(Loss)

 

Net income was US$2.1 million, compared to a net loss of US$7.9 million in the same period of 2022.

 

Adjusted Net Income/(Loss) (Non-GAAP)

 

Adjusted net income, which excludes the impact of share-based compensation, fair value gain/loss in other investments and share of profit/loss in equity method investment, net of tax, was US$1.8 million, compared to an adjusted net loss of US$4.3 million in the same period of 2022.

 

Basic and Diluted Earnings/(Loss) per ADS

 

Basic and diluted earnings per ADS attributable to ordinary shareholders were US$0.06 in the first quarter of 2023, compared to basic and diluted loss per ADS of US$0.27 in the same period of 2022.

 

Cash and Cash Equivalents, and Short-Term Deposits

 

As of March 31, 2023, the Company had cash and cash equivalents, and short-term deposits of US$16.7 million, compared to US$15.1 million as of December 31, 2022. The increase was primarily attributable to the net inflow of US$1.6 million for operations and proceeds of US$2.6 million from bank borrowings, partially offset by repayments of US$2.4 million for bank and other borrowings.

 

Capital Expenditures (“CAPEX”)

 

CAPEX was US$0.4 million compared to US$6 thousand in the same period of 2022.

 

Business Outlook

 

For the second quarter of 2023, UCLOUDLINK expects total revenues to be between US$21.5 million and US$22.5 million, representing an increase of 19.4% to 25.0% from the same period of 2022.

 

The above outlook is based on current market conditions and reflects the Company’s preliminary estimates of market and operating conditions and customer demand. The global outbreak of COVID-19, which had a severe and negative impact on the global economy since the first quarter of 2020, presents continuous and various global risks with the full impact of the outbreak continuing to evolve. We will continue to carefully monitor COVID-19 related factors.

 

Non-GAAP Financial Measures

 

To supplement the financial measures prepared in accordance with generally accepted accounting principles in the United States, or GAAP, this press release presents, adjusted net income/(loss) and adjusted EBITDA, as supplemental measures to review and assess the Company’s operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. Adjusted net income/(loss) is defined as net income/(loss) excluding share-based compensation, fair value gain/loss in other investments and share of profit/loss in equity method investment, net of tax. Adjusted EBITDA is defined as net income/(loss) excluding share-based compensation, fair value gain/loss in other investments, share of profit/loss in equity method investment, net of tax, interest expense, income tax expenses and depreciation and amortization.

 

The Company believes that adjusted net income/(loss) and adjusted EBITDA help identify underlying trends in its business that could otherwise be distorted by the effect of certain expenses that are included in income/(loss) from operations and net income/(loss). The Company believes that adjusted net income/(loss) and adjusted EBITDA provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.

 

3

 

 

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non- GAAP financial measures have limitations as analytical tools. One of the key limitations of using adjusted net income/(loss) and adjusted EBITDA is that they do not reflect all items of income and expense that affect the Company’s operations. Share-based compensation, fair value gain/loss in other investments and share of profit/loss in equity method investment, net of tax, have been and may continue to be incurred in the Company’s business and is not reflected in the presentation of adjusted net income/(loss). Further, the non-GAAP financial measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.

 

The Company compensate for these limitations by reconciling the non-GAAP financial measure to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating its performance. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

 

Reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP financial measure is set forth at the end of this release.

 

Conference Call

 

UCLOUDLINK will hold a conference call at 8:30 a.m. Eastern Time on Thursday, May 18, 2023 (8:30 p.m. Beijing Time on the same day) to discuss financial results and answer questions from investors and analysts. Listeners may access the call by dialing:

 

International:   +1-412-902-4272
US (Toll Free):   +1-888-346-8982
UK (Toll Free):   0-800-279-9489
UK (Local Toll):   0-207-544-1375
Mainland China (Toll Free):   400-120-1203
Hong Kong (Toll Free):   800-905-945
Hong Kong (Local Toll):   +852-3018-4992
Singapore (Toll Free):   800-120-6157
Australia (Toll Free):   1-800-121301

 

Participants should dial in at least 10 minutes before the scheduled start time and ask to be connected to the call for “UCLOUDLINK GROUP INC.”

 

Additionally, a live and archived webcast of the conference call will be available at https://ir.ucloudlink.com.

 

A telephone replay will be available one hours after the end of the conference until May 25, 2023 by dialing:

 

US (Toll Free):   +1-877-344-7529
International:   +1-412-317-0088
Canada (Toll Free):   855-669-9658
Replay Passcode:   7710485

 

4

 

 

About UCLOUDLINK GROUP INC.

 

UCLOUDLINK is the world’s first and leading mobile data traffic sharing marketplace, pioneering the sharing economy business model for the telecommunications industry. The Company’s products and services deliver unique value propositions to mobile data users, handset and smart-hardware companies, mobile virtual network operators (MVNOs) and mobile network operators (MNOs). Leveraging its innovative cloud SIM technology and architecture, the Company has redefined the mobile data connectivity experience by allowing users to gain access to mobile data traffic allowance shared by network operators on its marketplace, while providing reliable connectivity, high speeds and competitive pricing.

 

Safe Harbor Statement

 

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Among other things, the financial guidance and quotations from management in this announcement, as well as UCLOUDLINK’s strategic and operational plans, contain forward-looking statements. UCLOUDLINK may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about UCLOUDLINK’s beliefs and expectations, are forward-looking statements. Forward looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: UCLOUDLINK’s strategies; UCLOUDLINK’s future business development, financial condition and results of operations; UCLOUDLINK’s ability to increase its user base and usage of its mobile data connectivity services, and improve operational efficiency; competition in the global mobile data connectivity service industry; changes in UCLOUDLINK’s revenues, costs or expenditures; governmental policies and regulations relating to the global mobile data connectivity service industry, general economic and business conditions globally and in China; the impact of the COVID-19 pandemic to UCLOUDLINK’s business operations and the economy in China and elsewhere generally; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company’s filings with the Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of the press release, and UCLOUDLINK undertakes no duty to update such information, except as required under applicable law.

 

For more information, please contact:

 

UCLOUDLINK GROUP INC.
Jillian Zeng
Tel: +852-2180-6111
E-mail: ir@ucloudlink.com
 
Investor Relations:
The Equity Group Inc.
Alice Zhang, Associate
Tel: +1-212-836-9610
E-mail: azhang@equityny.com
 
In China:
Lucy Ma, Associate
Tel: +86 10 5661 7012
E-mail: lma@equityny.com

 

5

 

 

UCLOUDLINK GROUP INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In thousands of US$, except for share and per share data)

 

   As of
December 31,
   As of
March 31,
 
   2022   2023 
ASSETS          
Current assets          
Cash and cash equivalents   14,921    16,524 
Short-term deposit   197    195 
Accounts receivable, net   5,961    6,982 
Inventories   3,624    2,290 
Prepayments and other current assets   4,255    4,269 
Other investments   11,690    12,620 
Amounts due from related parties   698    1,374 
Total current assets   41,346    44,254 
Non-current assets          
Prepayments   688    573 
Long-term investments   1,711    1,802 
Property and equipment, net   1,181    1,419 
Right-of-use assets, net   206    248 
Intangible assets, net   802    777 
Total non-current assets   4,588    4,819 
TOTAL ASSETS   45,934    49,073 
           
LIABILITIES          
Current liabilities          
Short term borrowings   2,876    3,112 
Accrued expenses and other liabilities   24,014    23,736 
Accounts payable   6,832    7,072 
Amounts due to related parties   1,481    1,322 
Contract liabilities   1,052    1,073 
Lease liabilities   184    147 
Total current liabilities   36,439    36,462 
Non-current liabilities          
Lease liabilities   -    51 
Other non-current liabilities   204    189 
Total non-current liabilities   204    240 
TOTAL LIABILITIES   36,643    36,702 
           
SHAREHOLDERS’ EQUITY          
Class A ordinary shares   12    12 
Class B ordinary shares   6    6 
Additional paid-in capital   236,774    237,556 
Accumulated other comprehensive income   1,876    2,100 
Accumulated losses   (229,377)   (227,303)
TOTAL SHAREHOLDERS’ EQUITY   9,291    12,371 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   45,934    49,073 

 

6

 

 

UCLOUDLINK GROUP INC.

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(In thousands of US$, except for share and per share data)

 

   For the three months ended 
   March 31,
2022
   March 31,
2023
 
Revenues   15,613    18,006 
Revenues from services   9,827    12,916 
Sales of products   5,786    5,090 
Cost of revenues   (9,778)   (9,405)
Cost of services   (5,011)   (5,102)
Cost of products sold   (4,767)   (4,303)
Gross profit   5,835    8,601 
Research and development expenses   (2,682)   (1,303)
Sales and marketing expenses   (2,787)   (2,921)
General and administrative expenses   (4,580)   (3,435)
Other (expense)/income, net   (3,336)   1,121 
(Loss)/income from operations   (7,550)   2,063 
Interest income   3    5 
Interest expenses   (162)   (49)
Amortization of beneficial conversion feature   (219)   - 
(Loss)/income before income tax   (7,928)   2,019 
Income tax expenses   (1)   (13)
Share of profit in equity method investment, net of tax   14    68 
Net (loss)/income   (7,915)   2,074 
Attributable to:          
Equity holders of the Company   (7,915)   2,074 
           
(Loss)/earnings per share for Class A and Class B ordinary shares          
Basic   (0.03)   0.01 
Diluted   (0.03)   0.01 
           
(Loss)/earnings per ADS (10 Class A shares equal to 1 ADS)          
Basic   (0.27)   0.06 
Diluted   (0.27)   0.06 
           
Shares used in loss/earnings per Class A and Class B ordinary share computation:          
Basic   289,158,353    369,438,171 
Diluted   289,158,353    369,438,171 
           
Net (loss)/income   (7,915)   2,074 
Other comprehensive (loss)/income, net of tax          
Foreign currency translation adjustment   (48)   224 
Total comprehensive (loss)/income   (7,963)   2,298 

 

7

 

 

UCLOUDLINK GROUP INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of US$)

 

   For the three months ended 
  

March 31,

2022

  

March 31,

2023

 
Net cash (used in)/generated from operating activities   (4,438)   1,644 
Net cash generated from/(used in) investing activities   7    (302)
Net cash generated from financing activities   7,721    197 
Increase in cash, cash equivalents   3,290    1,539 
Cash, cash equivalents at beginning of the period   7,868    14,921 
Effect of exchange rates on cash, cash equivalents   (148)   64 
Cash, cash equivalents at end of the period   11,010    16,524 

 

8

 

 

UCLOUDLINK GROUP INC.

UNAUDITED RECONCILIATIONS OF NON-GAAP AND GAAP RESULTS

(In thousands of US$)

 

   For the three months ended 
  

March 31,

2022

  

March 31,

2023

 
Reconciliation of Net (Loss)/Income to Adjusted Net (Loss)/Income        
Net (loss)/income   (7,915)   2,074 
Add: share-based compensation   700    733 
fair value loss/(gain) in other investments   2,909    (931)
Less: share of profit in equity method investment, net of tax   (14)   (68)
Adjusted net (loss)/income   (4,320)   1,808 

 

   For the three months ended 
  

March 31,

2022

  

March 31,

2023

 
Reconciliation of Net (Loss)/Income to Adjusted EBITDA        
Net (loss)/income   (7,915)   2,074 
Add:          
Interest expense   162    49 
Income tax expenses   1    13 
Depreciation and amortization   294    208 
EBITDA   (7,458)   2,344 
Add: share-based compensation   700    733 
fair value loss/(gain) in other investments   2,909    (931)
Less: share of profit in equity method investment, net of tax   (14)   (68)
Adjusted EBITDA   (3,863)   2,078 

 

 

9