Diamond Equity Research Releases Update Note on uCloudlink Group Inc. (NASDAQ: UCL)
New York, NY, March 18, 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 March 2025
Highlights from the note include:
•UCL Announced Fourth Quarter and Fiscal Year 2024 Financial Results - uCloudlink reported total revenues of $26.0 million, up 19.5% year over year, compared to our estimate of $25.3 million. The increase was primarily due to a 60.9% YoY increase in product sales from an expanded product offering driven by the surging demand for the company's data-related products. Overall gross margin was 43.0%, compared to 52.0% in Q4 2023. Total operating expenses grew from $12.1 million to $14.1 million, of which S&M expenses increased by 52.6% over the year as the company increased its investment in promotion and brand building in the B2C arena to gain exposure for its newly launched products. UCL's net loss for Q4 2024 was $1.5 million, or $0.04 per basic and diluted ADS, compared to a net loss of $1.8 million, or $0.05 per basic and diluted ADS a year ago. For the fiscal year 2024, UCL continued its growth momentum with total revenues reaching $91.6 million, up 7.1% from $85.6 million in 2023, thanks to increased product sales as the company diversified its product offerings to meet market demand. Overall gross margin for 2024 was 48.4% vs. 49.0% in 2023, while total operating expenses increased from $37.9 million to $42.0 million, leading to a net income of $4.6 million, or $0.12 per basic and diluted ADS. UCL's top-line growth was in line with our expectations. We see the company has the potential to continue this momentum by further diversifying its revenue streams through an expanded product range, while the increased investment in sales and marketing targets improved visibility and market share.
•PetPhone, eSIM TRIO, and Further Innovations – uCloudlink showcased its latest innovations in connectivity at MWC 2025, including PetPhone, eSIM TRIO, CloudSIM Kit, and HyperConn® mobile Wi-Fi hotspot, which represent huge market opportunities. PetPhone, which is considered the world's first pet smartphone, enables 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. eSIM TRIO, combining OTA SIM, eSIM, and CloudSIM provides improved connectivity with global coverage. CloudSIM Kit is a plug-and-play IoT solution delivering connectivity for IoT and smart devices. HyperConn® mobile Wi-Fi hotspot (MeowGo G50 Max), backed by HyperConn® technology, offers connectivity across broadband, Wi-Fi, 4G, 5G, and satellite networks. We view these innovations targeting large markets as potentially unlocking new revenue streams for UCL and driving sales by expanding its user base and strengthening its market presence.
•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 03/18/25 the issuer had paid us $140,000 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 and fourth year of coverage for update notes during the term, which commenced 06/01/2021 and is renewable annually. 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 03/18/2025. 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 the update report attached for the full disclosure page.
Contact:
Diamond Equity Research
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