GCT Semiconductor (GCTS) investor relations material

Executive summary

• Q1 2026 revenue rose 287% year-over-year to $1.9 million, driven by increased 5G chipset shipments, new service contracts, and LTE sales.

• 5G chipset shipments grew 58% sequentially to 3,000 units, marking the start of a commercial ramp expected to continue through 2026.

• Expanded customer engagements and platform-level collaborations, including a major reference platform and licensing agreement with a leading satellite communication provider.

• Net loss widened to $9.9 million from $7.0 million year-over-year, primarily due to higher interest expense and fair value losses on warrants and convertible notes.

• The company remains dependent on external financing and faces substantial doubt about its ability to continue as a going concern beyond the next 12 months.

Financial highlights

• Net revenues rose 287% year-over-year to $1.9 million, with product revenue increasing by $0.4 million to $0.5 million and service revenue by $1.0 million to $1.4 million.

• Gross margin improved to 49.3% from 17.7% year-over-year, reflecting a favorable revenue mix and higher-margin service offerings.

• Operating expenses decreased by 9.6% to $7.1 million, with R&D expenses down due to lower project-specific costs.

• Interest expense increased by $0.7 million to $1.8 million, driven by penalties on overdue loans.

• Cash used in operating activities was $7.4 million; cash provided by financing activities was $14.1 million, mainly from equity and convertible note issuances.

Outlook and guidance

• Expects continued sequential growth in 5G chipset shipments as commercialization scales through 2026.

• Gross margin is anticipated to normalize in the high 30% to low 40% range as product revenue outpaces service revenue.

• Service revenue recognized in Q1 included a one-time licensing component; future service revenue will depend on milestone achievements and is expected to be lower.

• R&D expenses will ramp up in the second half of 2026 to support the product roadmap.

• Management expects continued significant expenditures for 5G product production and ongoing operating losses.