uCloudlink Group Inc. (UCL) posted a second-quarter 2026 revenue decline of 5.9% year-over-year to $18.2 million, missing Wall Street expectations by $3.3 million and triggering a 19.29% pre-market stock drop to $0.549. The company’s adjusted earnings per share came in at negative $0.01, missing the break-even consensus by $0.01.
Net loss widened to $3.0 million from a $0.7 million profit in the same period last year, while adjusted EBITDA turned negative at $1.8 million compared with a positive $0.4 million a year earlier. Gross profit fell to $9.2 million from $10.2 million, with gross margin compressing to 50.2% from 52.8%. Service revenue, which accounted for 72.9% of total revenue, declined 9.2% to $13.3 million, and service gross margin dropped sharply to 39.1% from 56.6%.
Operating expenses, excluding share-based compensation, rose to $11.5 million from $10.1 million, while cash and equivalents fell to $25.2 million as of June 30, 2026, down from $28.0 million at the end of the prior quarter. Operating cash outflow increased to $3.0 million from $0.9 million in Q2 2025.
Revenue by business line showed mixed performance. The GlocalMe MeowGo segment, the company’s largest, declined 13.1% to $15.5 million, while the GlocalMe SIM and IoT units grew 78% and 392.4% year-over-year to $1.3 million and $0.8 million, respectively. The PetPhone business surged 1,527.3% to $0.2 million, though it remains a small contributor. Geographically, Japan accounted for 36% of revenue, followed by Mainland China at 30.3%, North America at 13.5%, and other regions at 20.2%.
User metrics reflected growth in newer segments. Average daily active users rose 13.3% year-over-year to 376,376, with GlocalMe IoT, SIM, and Life segments posting triple-digit percentage gains. However, the core MeowGo business saw declines in both daily and monthly active users. The company’s total installed base of GlocalMe IoT units reached 3.34 million, while daily data usage per terminal averaged 1.5 gigabytes in June.
Management cited macroeconomic headwinds, geopolitical tensions affecting outbound travel from China, and rising chip costs as key pressures. CEO Chaohui Chen highlighted the MeowGo G50 Max as a strategic product, describing it as a sky-to-ground integrated connectivity hub spanning nearly 100 countries. CFO Yimeng Shi revised full-year 2026 revenue guidance to a range of $75 million to $85 million, down from the prior $85 million to $100 million range, citing persistent global trade headwinds.
The company also provided third-quarter 2026 revenue guidance of $19 million to $22 million, implying a year-over-year change of between a 10.4% decrease and a 3.8% increase.
