Diamond Equity Research Releases Update Note on uCloudlink Group Inc. (NASDAQ: UCL)
New York, May 27, 2025 (GLOBE NEWSWIRE) -- Diamond Equity Research, a leading equity research firm with a focus on small capitalization public companies has released update note on uCloudlink Group Inc. (NASDAQ:UCL). The update note includes information on uCloudlink Group Inc.'s financial results, management commentary, recent developments, outlook, risks, and our revised valuation estimates.
The update note is available below.
uCloudlink Group Update Note May 2025
Highlights from the note include:
• Q1 Results Exceed Expectations - uCloudlink reported its financial results for Q1 2025, with total revenues of $18.7 million, up 3.4% year over year, exceeding our estimate of $18.5 million, including service revenue of $14.2 million and product sales of $4.5 million. The growth was primarily due to higher revenues from international data connectivity services, which was driven by the continued recovery of international travel. The overall gross margin was 51.7% versus 55.2% in Q1 2024, of which the service gross margin was 57.3% and the product sales gross margin was 34.3%. Total operating expenses were $10.2 million compared with $9.0 million a year ago, mainly due to an increase of $1.6 million in S&M expenses as the company continued to invest more in promoting its newest and upcoming products. uCloudlink's net loss for Q1 2025 was $0.6 million, or $0.02 per basic and diluted ADS, versus a net income of $0.4 million, or $0.01 per basic and diluted ADS in the year-ago period. uCloudlink continued its growth momentum with higher revenues and positive operating cash flows, which was in line with our expectations. Although the increased marketing expenses due to the promotion of new products to be launched temporarily affected its net profit, we believe that this move could ultimately help the company establish brand awareness and gain exposure, thereby expanding sales in the global market and supporting its growth and long-term sustainable development.
• PetPhone With Additional Innovative Products Targeted For Second Quarter – uCloudlink just announced the commercial launch of its latest solutions, including PetPhone, eSIM Trio, CloudSIM Kit, and MeowGo G50 Max, in May and June this year, which were showcased at MWC Barcelona 2025, attracting the attention of the market and potential partners. The company's pet connectivity solution, PetPhone, is considered the world's first pet smartphone and has gained exposure in the pet care market, enabling pet communication through AI-powered live calls, advanced safety through 6-tech global positioning, and tracking through AI health monitoring to achieve interaction between pets and their owners. As well as delivering further innovation, new products such as PetPhone seek to provide the company the opportunity to reach and engage new categories of users, including pet owners, which represents huge growth potential given their large base and the growing pet population worldwide. According to the company, it plans to start mass production in the third quarter of this year and has been in cooperation discussions with major operators and channels, with several partnerships expected to be finalized in the coming months. We believe the company can leverage the opportunities presented by these new products and potential partnerships to expand its product portfolio and create additional revenue streams for further growth.
• Valuation Update – Our valuation for UCL remains $10.00, combining discounted cash flow and comparable company analysis, which is contingent on the company maintaining its successful execution.
About uCloudlink Group Inc.
uCloudlink operates as an innovative mobile technology company that offers the world's first and leading mobile data traffic sharing marketplace to users globally, with aggregated mobile data allowances from over 391 MNOs (mobile network operator) globally. Leveraging its integral cloud SIM technology, it allows users to enjoy a smooth mobile connectivity experience without limitation to one MNO. uCloudlink was incorporated in 2014 and is headquartered in Hong Kong.
For more information, visit https://ucloudlink.gcs-web.com.
About Diamond Equity Research
Diamond Equity Research is a leading equity research and corporate access firm focused on small capitalization companies. Diamond Equity Research is an approved sell-side provider on major institutional investor platforms.
For more information, visit https://www.diamondequityresearch.com.
Disclosures:
Diamond Equity Research LLC is being compensated by uCloudlink Group Inc. for producing research materials regarding uCloudlink Group Inc. and its securities, which is meant to subsidize the high cost of creating the report and monitoring the security, however the views in the report reflect that of Diamond Equity Research. All payments are received upfront and are billed for research engagement. As of 5/27/25 the issuer had paid us $175,000 for our research services, consisting of $20,000 for an initiation report and $15,000 for six update notes in the first year of coverage and $35,000 in the second, third, fourth year and fifth year of coverage for update notes during the term, which commenced 06/01/2021. Diamond Equity Research LLC may be compensated for non-research related services, including presenting at Diamond Equity Research investment conferences, press releases and other additional services. The non-research related service cost is dependent on the company, but usually do not exceed $5,000. The issuer has not paid us for non-research related services as of 05/27/2025. Issuers are not required to engage us for these additional services. Additional fees may have accrued since then. Although Diamond Equity Research company sponsored reports are based on publicly available information and although no investment recommendations are made within our company sponsored research reports, given the small capitalization nature of the companies we cover we have adopted an internal trading procedure around the public companies by whom we are engaged, with investors able to find such policy on our website public disclosures page. This report and press release do not consider individual circumstances and does not take into consideration individual investor preferences. Statements within this report may constitute forward-looking statements, these statements involve many risk factors and general uncertainties around the business, industry, and macroeconomic environment. Investors need to be aware of the high degree of risk in small capitalization equities including the complete loss of their investment. Investors can find various risk factors in the initiation report and in the respective financial filings for uCloudlink Group Inc. Please review update report attached for full disclosure page.
Contact:
Diamond Equity Research
[email protected]
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