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DATE

Monday, Aug. 10, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer - John Brian Schlaefer
• CFO - Fong Ting Cheng

TAKEAWAYS

• Net Revenues -- $1 million, representing a 17.9% decrease from $1.2 million for the three months ended June 30, 2025.
• 5G Chipset Shipments -- 5,100 units, reflecting 71% sequential growth as programs moved from development into early deployment phases.
• Net Loss -- $20.4 million, increasing from $13.5 million due to non-cash fair value adjustments on warrant liabilities.
• Warrant Liability Impact -- $12.3 million loss, resulting from increases in common stock and publicly traded warrant prices during the quarter.
• Adjusted EBITDA Loss -- $6.6 million, a decrease from $6.7 million in the prior-year period as underlying performance stabilized.
• Product Revenue -- $402,000, remaining consistent with the $408,000 reported in the second quarter of 2025.
• Service Revenue -- $569,000, declining from $774,000 due to a strategic shift toward 5G service offerings.
• Cost of Net Revenues -- $1.2 million, a 49% increase from $800,000 driven by higher unit volume.
• Gross Margin -- Negative for the quarter, compared to 32% in the prior year, as product revenue levels were insufficient to absorb production overhead.
• Research and Development Expenses -- $3.3 million, a $200,000 decrease following the completion of a 5G chip design project.
• General and Administrative Expenses -- $2.8 million, down from $3.4 million primarily due to lower allowances for credit losses.
• Sales and Marketing Expenses -- $1.1 million, which management reported as consistent with the prior-year quarter.
• Cash and Cash Equivalents -- $30.2 million at quarter-end, which the company reported as providing flexibility for commercial production ramps.
• Accounts Receivable -- $1.1 million, representing net receivables as of June 30, 2026.
• Inventory -- $1.5 million, reflecting net inventory levels held at the end of the second quarter.
• ATM Equity Program -- $120 million maximum aggregate proceeds, increased from $75 million during the quarter to support commercialization.
• Production Capacity -- Secured for the remainder of 2026 to the first quarter of 2027 in anticipation of 5G chip demand.
• 5G Outlook -- Second half 2026 shipments are expected to exceed first half levels as commercialization accelerates.
• Quarterly Cash Burn -- $9 million to $9.5 million expected per quarter under current tight supply chain conditions, compared to a baseline of $8 million to $8.5 million.
• Customer Base -- Shipments were delivered to four primary customers across applications including FWA, aviation, and mobile hotspots.
• New Customer Acquisition -- Signed subsequent to the quarter end for unmanned aerial vehicle (UAV) and defense-related connectivity.
• Total Operating Expenses -- $7.2 million, representing a 9.8% decrease from $8 million in the prior-year quarter.
• Stock-Based Compensation -- $344,000, decreasing from $512,000 in the second quarter of 2025.
• Warrant Liabilities Balance -- $18.3 million at quarter-end, compared to $2.9 million as of Dec. 31, 2025.

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RISKS

• Schlaefer stated, "While the broader macro environment of several of our customers has influenced the timing of certain deployment schedules, we have not seen any change in the level of customer engagement," noting that external factors delayed expected quarterly revenue.
• Schlaefer stated, "While broader market dynamics, including industry consolidation, restructuring activities and shifting customer deployment schedules, have impacted the timing of certain programs," highlighting risks to near-term commercialization timelines.

SUMMARY

GCT Semiconductor Holding, Inc. (GCTS -3.92%) reported a sequential increase in 5G chipset shipments as customers progressed through integration and early deployment phases. Management identified three strategic growth pillars for the company: terrestrial broadband, satellite/non-terrestrial connectivity, and industrial IoT. Although year-over-year revenue declined, the company reached 5G shipments across four distinct application areas and secured manufacturing capacity for the coming three quarters. Financial results were impacted by non-cash valuation adjustments, leading management to introduce adjusted EBITDA as a primary indicator of underlying operating performance.

• CEO Schlaefer indicated that the company is transitioning from development to commercialization, noting that 5G revenue for the first half of 2026 has already exceeded the full year of 2025.
• The company reported a $7 million to $7.5 million impact on second-quarter cash burn due to prepayments for wafer capacity required by a tight foundry environment.
• Management noted that while revenue was lower than internal projections due to program shifts, those projects remain "very much alive and very much viable" for the later part of the year.
• The company reported a new strategic collaboration for UAV control and communications, which CEO Schlaefer stated "highlights the versatility of our technology platform" for commercial and defense applications.
• CFO Cheng confirmed that GCT has secured required production capacity through the first quarter of 2027 to mitigate risks from high fab utilization levels.
• The company amended its ATM equity program to increase the maximum aggregate offering amount from $75 million to $120 million, providing additional liquidity for scaling production.

INDUSTRY GLOSSARY

• FWA: Fixed Wireless Access, a method of providing wireless internet access to homes or businesses without a wired connection.
• CPE: Customer Premises Equipment, hardware located at a subscriber's home or business, such as routers or terminals.
• UAV: Unmanned Aerial Vehicle, commonly referred to as a drone.
• Non-GAAP Adjusted EBITDA: A financial measure that excludes non-cash items like warrant liability changes and stock-based compensation to reflect core operational performance.
• PNT: Positioning, Navigation, and Timing services.
• ATM Program: At-the-market equity program, allowing a company to sell shares into the open market over time.

Full Conference Call Transcript

Operator: Good afternoon. Thank you for attending. GCT Semiconductor Holdings Inc. Second Quarter 2020 Financial Results Call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. Joining the call today are John Brian Schlaefer, GCT's chief executive officer and Fong Ting Cheng, CFO, to discuss our second quarter 2020 results. During the call, certain statements we make will be forward looking. These statements are subject to risks and uncertainties, including those set forth in our safe harbor provision for forward looking statements that can be found at the end of our earnings press release and also in our Form 10 Q that will be filed today.

Which provide further detail about the risks related to our business. Additionally, we additionally-- accepted as by law, we undertake no obligation to update any forward looking statements. Our call and earnings release include presentation of non GAAP financial measures We use non GAAP measures because we believe they provide useful information about our operating performance that should be considered with investors in conjunction with the GAAP measures, a reconciliation of these non GAAP measures to comparable GAAP measures is included in our earnings release. I would now like to turn the conference over to John Brian Schlaefer, Please sir, go ahead.

John Brian Schlaefer: Thank you, and thanks to everyone for joining us today for our second quarter 2020 earnings call. I will begin by discussing the operational progress we have made during the second quarter and provide an update on where we stand in the commercialization of our 5G platform. Following my remarks, our chief financial officer, Fong Ting Cheng, will review our second quarter financial results in more detail. When we spoke with you last quarter, we highlighted that 2026 would be a year of continued commercialization as our customers progress from development and integration into early deployments of our 5G chipset.

Progression has continued, and the second quarter demonstrates the importance of working closely with customers as they advance through their respective commercialization milestones. While the broader macro environment of several of our customers has influenced the timing of certain deployment schedules, we have not seen any change in the level of customer engagement or the long term demand of our technology. So rather than viewing the second quarter through the lens of financial performance, we believe it is more meaningful to view it as another important step forward in building a diversified pipeline for the anticipated 5G commercialization ramp. 1 of our priorities entering 2026 was to broaden the opportunity at hand beyond any single customer application or end market.

Today, we believe we have made meaningful progress toward that objective. Our 5G pipeline now spans 3 strategic growth pillars. Terrestrial broadband, satellite, and nontarrestrial connectivity, and industrial IoT and specialized networking applications. We believe this diversification strengthens the long term opportunity for GCT, while reducing our dependence on any individual customer deployment. Beginning with terrestrial broadband, the year, we have advanced multiple FWA and CPE programs with carrier OEM and ODM partners. Engineering activities, product integration, and certification efforts progressed across these programs. While several customer deployment schedules shifted modestly, these initiatives are moving forward. And we are encouraged by the progress across our partner ecosystem.

As operators invest in next generation broadband infrastructure, we believe our technology is well positioned to support these deployments and participate in the long term growth of this market. Next, within satellite and non terrestrial connectivity, we continue expanding our engagement with partners developing direct to device and hybrid satellite cellular solutions. We believe this is 1 of the most compelling long term opportunities for our technology as terrestrial and satellite networks increasingly converge. Throughout the quarter, we advanced development and certification activities with several partners and remain confident in the role our modem technology can play in enabling seamless connectivity across multiple network environments.

Our third strategic growth pillar is IoT and specialized networking applications, where we are expanding our presence across industrial positioning, aviation, and defense related markets. Subsequent to the quarter end, we signed a new customer supporting UAV and defense related connectivity. While confidentiality provisions prevent us from naming that customer today, we believe this relationship further validates the flexibility and scalability of our while extending our reach into another attractive vertical. These efforts are translating into measurable progress as customers advance through their respective commercialization phases.

During the second quarter, we shipped more than 5.1 thousand 5G chipsets, representing approximately 71% sequential growth compared to the first quarter This growth reflects increasing customer engagement across our targeted markets, as programs progress through development, certification, and early deployment phases. While the timing of our individual customer ramps can vary, we believe the momentum behind our platform and growing adoption of our technology provides a strong foundation as we continue scaling 5G chipset commercialization. Across each of these markets, the common theme remains the same. Customer engagement continues to increase, our pipeline continues to broaden, and the underlying demand environment remains healthy. The primary variable today is deployment timing. Rather than customer interest.

As customers complete certification activities and finalize deployment schedules, the timing of commercial production may shift modestly from quarter to quarter but we remain confident in the long term opportunity ahead. Our focus continues to be on execution. We are investing in our manufacturing readiness, strengthening our supply chain, supporting customer deployments, and ensuring we are to scale production as commercialization accelerates. While there will inevitably be quarter to quarter variability as customers complete their deployment plans, we believe the work we are doing today positions GCT for sustained long term growth. Overall, we believe the second quarter represents another meaningful in our transition from development to commercialization.

The foundations we have built across our technology, customer relationships, and strategic partnerships continues to strengthen, and we are excited about the opportunity ahead. With that, I will turn the call over to Fong Ting Cheng to discuss our second quarter results. Fong Ting Cheng?

Fong Ting Cheng: Thank you, John Brian Schlaefer. As John discussed, we view the second quarter as another important step in our commercialization journey. While our reported financial results continue to reflect a business in the early stages of transitioning from development into commercialization The progress we are making with customers continues to reinforce our confidence in the significant long term opportunity ahead. 1 measure of that progress was the continued run-in of 5G chipset shipments. With more than 5.1 thousand units shipped during the second quarter. Representing approximately 71% sequential growth. This growth reflects ongoing advancement of customer programs, through integration, certification, and early deployment activities.

Before reviewing our financial results, I would like to note that starting from this quarter, we are introducing adjusted EBITDA. As an additional supplemental performance metric. Because our reported GAAP results include significant noncash fair value adjustments associated with our warrant liability, we believe adjusted EBITDA provides investors with a more meaningful view of the underlying operating performance of the business as we continue investing in commercialization. With that, I will now review our second quarter 2026 financial results. Further details can be found in the 10 Q that will be on file with the SEC. Net revenues decreased by $200 thousand or 8% from $1.2 million for the 3 months ended 06/30/2025.

To $1 million for the 3 months ended 06/30/2026. The change was due to a decrease of $200 thousand in service revenues reflecting the shift to 5G service offerings. Product sales were consistent year over year with growth in 5G product sales. Also, our revenue for the first half of this year slightly exceeds the revenue for the full year of 2020. Cost of net revenues increased by $400 thousand or 49% from $800 thousand for the 3 months ended 06/30/2025 to $1.2 million for the 3 months ended June 2026. Largely driven by increased cost from increased unit volume.

Our gross margin was 32% for the 3 months ended 06/30/2025, Our gross margin for the 3 months ended 06/30/2026 was negative. And not representative of our expectations regarding profitability of our products, and services in future reporting periods. We expect gross margins to improve as 5G product sales increases and contribute more significantly to the overall revenue. Research and development expenses decreased by $200 thousand from $3.5 million for the 3 months ended 06/30/2025 to $3.3 million for the 3 months ended 06/30/2026. Primarily due to the completion of our 5G chip design project, which results in a $500 thousand reduction in professional services from Alpha as well as a $100 thousand decrease in stock based compensation expense.

This reduction was partially offset by a $400 thousand increase in payroll related costs. Sales and marketing expenses remain consistent year over year totaling $1.1 million for the 3 months ended 06/30/2025 compared to $1 million for the 3 months ended 06/30/2026. General and administrative expenses decreased by $600 thousand from $3.4 million for the 3 months ended 06/30/2025 compared to $2.8 thousand for the 3 months ended 06/30/2026. The decrease was primarily due to a lower loss resulting from changes in the allowance for credit losses on accounts receivable. Net loss increased by $8.1 million from $13.5 million for the 3 months ended 06/30/2025 to $20.4 million for the 3 months ended 06/30/2026.

Net loss for Q2 2026 also included $12.3 million in losses from change in fair value of common stock warrant liabilities. Driven by increases in our common stock price and the market price of our publicly traded warrants during the quarter. Adjusted EBITDA loss decreased by $100 thousand from $6.7 million for the 3 months ended 06/30/2025. to $6.6 million for the 3 months ended 06/30/2026. While we have not previously reported adjusted EBITDA, we see our stabilized performance here as an important indicator. Shifting to liquidity. We finished the quarter with cash and cash equivalent of $30.2 million With this improved liquidity, we have the financial flexibility and resources to support the commercial ramp of our customer programs.

And by now, we have already secured the required production capacity for the remainder of 2026, and through the first quarter of 2027. In anticipation of the expected chip demand, We also have access to our at the market equity program which we initiated in April 2025. During the quarter, we amended the agreement to increase the max aggregated growth proceeds available under the program from $75 million to $120 million while the total shelf registration maximum capacity remains unchanged at $200 million. These resources provide us with flexibility to support and execute our commercialization strategy as we scale production of our 5G chips. We also have net accounts receivable of $1.1 million and net inventory of $1.5 million.

Entering the second half of the year, our financial priorities are unchanged. While customer deployment timelines can progress at various paces. We continue to expect second half shipments to exceed first half levels as commercialization progresses. Our focus is on disciplined capital allocation supporting customer production ramps, and converting our growing commercial pipeline into sustainable long term revenue growth. Although the timing of customer deployments may continue to fluctuate, in the near term, we believe the long term opportunity remains significant. Especially in the 3 strategic pillars which John has mentioned. The investment we have made over the past several years position GCT well for the next phase of growth.

With this, I will turn it back to John Brian Schlaefer.

John Brian Schlaefer: Thanks, Fong Ting Cheng. As we have discussed today, the second quarter was another important step in advancing our commercialization strategy. While the pace of customer deployments continues to evolve, the breadth of our customer engagements technology platform, and strategic partnerships continues to expand, reinforcing our confidence in the long term opportunity ahead. We continue to expect to ship more and more 5G chipsets with the second half of 2020 surpassing the first half in quantity of chips and customers we are shipping to. We remain focused on execution. We are supporting customer launch preparation, expanding manufacturing readiness, strengthening our strategic partnerships, and positioning the business to convert our growing pipeline into meaningful long term revenue growth.

We believe the foundation we have built over the past several years places GCT in a strong position as 5G chipset commercialization continues to accelerate and we remain excited about the opportunities in front of us. I would like to thank our employees for their continued dedication, our customers and partners for their collaboration, and our shareholders for their continued support and confidence in GCT. I will now turn the call back over to the operator, who will assist us in taking your questions.

Operator: Thank you. To ask a question, please press 1-1 on your telephone and wait for your name to be announced. Please standby while we compile our Q&A roster. Our first question is going to come from the line of Craig Ellis with B. Riley Securities. Your line is open. Please go ahead.

Craig Ellis: Nice to see the broadening interest in the 5G solutions. I wanted to start just by understanding some of the dynamics that were at play. As we look back at Q2. You mentioned that there were program shifts and a few other headwinds. Is it possible to size how big those were either from a unit standpoint or a revenue standpoint?

John Brian Schlaefer: Yeah. I would say that all we can really say right now is that they were meaningful in the quarter, and we thought that we would have significantly higher revenue in the quarter. Because of these things, they have pushed out. So they are still very much alive and very much viable. And we believe that we will we will see this in the later part of the year.

Craig Ellis: Good for you.

John Brian Schlaefer: And then under understanding the shipments in a little bit more detail, The company shipped 5.1 thousand units. John, how many customers were those shipments to? Was it up from the 2 that I think we had in the prior quarter?

Craig Ellis: Yeah.

John Brian Schlaefer: This was to primarily 4 customers. And these were across, I would say, 4 different applications. So almost equally across FWA, aviation, and mobile hotspot with an additional application added for, like, a push to talk phone application.

Craig Ellis: Okay. So it sounds like some of the broadening interest that you talked about was already visible there inside of the second quarter. Alright. So I think 1 of the things that came up a couple of times in the comments was that the units underpinning customer programs or something you now have line of sight to through the first quarter of 2020. Can you provide some more color on how many customer programs we are seeing through Q1 2027. And I know you expect units to be up in the second half of this calendar year. Half on half. Can you help us with what the unit optics look like when we look out to 1Q 2027 as well?

John Brian Schlaefer: Yeah. So we are hesitant to provide, you know, that sort of guidance at this point. And I think it is it is reflective of you know, what we have seen so far. So it is the-- you know, the front end and the, you know, the variability on these customer programs, but they are all working feverishly to get their ramps, started. We did say that, we had visibility, and we were planning the wafer supply so that we have secured that, you know, through Q1. And this is in anticipation of what we believe is a relatively large ramp. Okay.

Craig Ellis: Okay. So relatively large. Okay. Good to hear. Alright.

John Brian Schlaefer: Then lastly for me, John, we have identified terrestrial broadband satellite and nonterrestrial and IoT and specialized products as 3 vectors where there are degrees of customer interest in solution uptake. Can you talk more about where you see the greatest near term volume interest and maybe contrast that with or specify if it is there too with where you are seeing the greatest breadth of customer interest across those. And can you quantify how many customers you are seeing across all of those and maybe compare it to what you saw at Mobile World Congress where I think you met with over 50 different potential customers.

Craig Ellis: Right.

John Brian Schlaefer: So I would say that right now, the most significant from a revenue uptake is going to be in the terrestrial broadband and the satellite and non-terrestrial connectivity. And that is just because these are applications that we are very mature with in the FWA space and the satellite space that we have been working on for a while. I would say in these 2 spaces, there is a lot of you know, latent activity that has not ramped yet and these are the 2 areas that we have, you know, high expectations for.

In the IoT and specialized network, that has probably the most breadth in it and actually breadth of applications As you can imagine for IoT, I mean, all those machine to machine applications that are very vast in quantity. And but also for IoT as well, you can imagine too that the that the ASPs are a little lower than they would be in the FWA and satellite space.

Craig Ellis: Got it. And can you specify or maybe I have missed it, where you see the highest volume between here and Q1 2027 within those, 3 areas. Would it be terrestrial broadband and satellite non terrestrial?

John Brian Schlaefer: I would say probably equally in the first 2 that I mentioned. The terrestrial broadband and the satellite and nontarrestrial connectivity. The IoT and specialized networks, like I said, there is a lot of breadth there. And a lot of activities that have just begun. And the ASPs there will be a little lower than we are seeing in the other areas. Got it.

Craig Ellis: Okay. With that, I will hop back in the queue. Thank you, John Brian Schlaefer.

John Brian Schlaefer: Thank you, Craig.

Operator: Thank you. And 1 moment for our next question. Our next question is going to come from the line of Scott Buck with Titan Partners. Your line is open. Please go ahead.

Analyst: Hi. Good afternoon, guys. Thanks for the time. So I think you said earlier that you have already secured required production capacity for the remainder of 20 sixth and through the first quarter of 27. What does that entail in terms of purchase or take- or pay obligations? And I guess what-- well, I guess, I really want to know is what your exposure is if the delayed customer launches continue to slip.

John Brian Schlaefer: Yeah. So it basically means we are talking about wafer capacity. Which is everybody is talking about right now because the fabs are full. You know, the fab capacity is being used for memory and so forth. So, you know, having wafer capacity committed to us is very important. So, you know, with regard to slip, I think we are actually right sized in our in our capacity, but if that were to happen, you know, we would-- we could slow down our purchases in the, you know, in the future. And there is nothing perishable here that is going to happen.

And, you know, fortunately, you know, on the wafers that we have right now, we can produce all the SKUs that we need. For all of these applications. So there is nothing that is custom by application until you get to the very, very end. So I think on the front end and having, you know, wafer capacity secured and so forth, it really does not have any negative effects from a supply standpoint if things were to push out.

Analyst: Okay. that is that is very helpful, John. And then my second question, just on liquidity but more so cash burn. I am curious, Do you how should we be thinking about quarterly cash burn over the next 4 to 6 quarters? And at some point, do you have to spend more here or burn more here in the near term to hit that inflection point, I guess, on the commercialization front or should we expect, you know, kind of steady burn trends from here until we start to see a real ramp in the top line?

Fong Ting Cheng: Scott, that is a very good question. At the current moment, there is a supply chain very tight environment from that sense as John has alluded to from that perspective. The fundaries are basically full. They their production schedule has been all the way scheduled to first quarter of next year. We are actually in Q2, we have actually prepaid all the way to end of this year from that perspective. That actually in a way, normally, it increases our cash Burn for Q2. And if you take a look at it, it our Q2 cash burn is affected by $7 million to $7.5 million because of that portion of the supply chain situation there.

But going forward, we have a 6-month rolling type of situation that we would normalize to from that perspective. And that would not have the as severe type of impact as in Q2 And what we are looking at it is in Q1, we anticipate our cash burn on a quarterly basis is between $8 million to $8.5 million per quarter. Now with this tight supply chain situation, we anticipate our cash burn to be between $9 to $9.5 million per quarter from that sense.

And we are managing it from that perspective as you also have alluded to is we can adjust our future payment to for the waiver depending on our inventory and our demand situation we can either ramp up or ramp down depending on our inventory and demand situation. We can rebalance that also including our cash flow as well.

Analyst: Okay. Perfect. that is very helpful, Fong Ting Cheng. I appreciate that. that is all I had, guys. I appreciate the extra time.

John Brian Schlaefer: Thank you, Scott. Thank you, Scott.

Operator: Thank you. And 1 moment for our next question. Our next question comes from the line of Thompson with Zacks Investment Research. Your line is open. Please go ahead.

Analyst: Hi. Good afternoon.

John Brian Schlaefer: Hi, Lisa. We covered a hi there. We covered a lot. But I still have a few more questions here. Sure. Okay. Can you just expand a little about on the sentence, you said customer restructuring and evolving deployment schedules. Shifted the timing. Can you kind of describe what happened there? Yeah. I would say that there is I do not know if you wanna call it, macro events, but when you have got, you know, customers that actually push out by 1 to 2 quarters, there is nothing that we can do about that. And so in some cases, it has to do with their own, you know, corporate restructuring.

Refocus even though, you know, their product strategy is unchanged. And in some cases, it has to do with you know, things outside their control that actually push out their launch schedule. Is that having to do Yeah. Liz, I would characterize it as not as a restructuring, but more like the deployment plan. Okay. And does that have anything to do with their own supply chain? Problem? I would not say they are supply chain problems. No. Okay. Even though each 1 of them is actually challenged, and they have to manage that on their own. I mean, they are not immune to that, but that is not what this is related to. Okay.

And could you just talk a little bit more about the new customer you signed after the quarter ended? Like what industry? What are you doing for them? Yeah. So I would say that is in the UAV space and has, you know, applications across the consumer and defense applications. So, you know, our device is, you know, very flexible and very useful for control telemetry, and so forth. Okay. And is that in products they already have announced? They have not announced. No. Okay. And speaking of that, Even though they may be announcing something, but, I mean, right now, they have not announced. Okay. Alright.

And I guess my last question is, are we ever going to know the name of the satellite communications provider? We will. Yes. We will. Well, We have to-- what are we waiting for? We are waiting for their green light. So, I mean, we have we have NDAs with them that we have to honor. And I would say that as soon as they launch, that they will be less sensitive about that. Okay. Great. Thank you. that is all my questions. Oh, go ahead. Yeah. So what that means is it could be Q4. It could be Q1. You know, something like that. Okay. Good. Sooner than I thought. Thank you. Yep. Alright. Thank you, Lisa.

Operator: Thank you. Thank you for joining us. This concludes our second quarter 2020 conference call. A replay will be available for a limited time on our website later today. Thank you for joining. You may now disconnect. Everyone, have a great day. Okay. Thank you.