Good afternoon. Thank you for attending GCT Semiconductor Holding, Inc.'s second quarter 2026 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 Schlaefer, GCT's chief executive officer, and Edmund Chung, CFO, to discuss our second quarter 2026 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. 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 Schlaefer. Please, sir, go ahead.

Thank you, and thanks to everyone for joining us today for our second quarter 2026 earnings call. I'll begin by discussing the operational progress we've 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, Edmund Cheng, 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. That 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 We have not seen any change in the underlying level of customer engagement or the long-term demand of our technology. 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. One 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 three strategic growth pillars, terrestrial broadband, satellite and non-terrestrial connectivity, and industrial IoT and specialized networking applications. We believe this and many more. We've been working closely with GCT for a long time. We've been working closely with GCT for a long time. While several customer deployment schedules shifted modestly, These initiatives are moving forward, and we are encouraged by their 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 one of the most compelling long-term opportunities for our technology as terrestrial and satellite networks increasingly converge. Throughout the quarter, we advance 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, Hsueh-Hsueh-Hsueh. During the second quarter, we shipped more than 5,100 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 prepared 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 milestone 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'll turn the call over to Edmund to discuss our second quarter results. Edmund?

Thank you, John. 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. One measure of that progress was the continued run in 5G chipset shipments, with more than 5,100 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 gap results include significant non-cash fair value adjustments associated with our warring liabilities. We believe Adjust 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 10Q that will be on file with the SEC. Net revenues decreased by 0.2 million or 18% from 1.2 million for the three months ended June 30th, 2025 to $1 million for the three months ended June 30th, 2026. The change was due to a decrease of 0.2 million 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 2025. Cost of net revenues increased by 0.4 million or 49% from $0.8 million for the three months ended June 30th, 2025 to $1.2 million for the three months ended June 30th, 2026, largely driven by increased costs from increased unit volume. Our gross margin was 32% for the three months ended June 30th, 2025. Our gross margin for the three months ended June 30th, 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 $0.2 million from $3.5 million for the three months ended June 30th, 2025 to $3.3 million for the three months ended June 30th, 2026, primarily due to the completion of our 5G chip design project, which results in a $0.5 million reduction in professional services from Alpha, as well as a $0.1 million decrease in stock-based compensation expense. This reduction was partially offset by a $0.4 million increase in payroll-related costs. Sales and marketing expenses remain consistent year-over-year, totaling $1.1 million for the three months ended June 30, 2025, compared to $1 million for the three months ended June 30, 2026. General and administrative expenses decreased by $0.6 million from $3.4 million for the three months end of June 30, 2025, compared to $2.8 million for the three months end of June 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 three months ended June 30th, 2025 to $20.4 million for the three months ended June 30th, 2026. Net loss for Q2 2026 also included $12.3 million in losses from change in fair value of common stock warrant liability. driven by increases in our common stock price and the market price of our properly traded warrants during the quarter. Adjusted EBITDA loss decreased by $0.1 million from $6.7 million for the three months ended June 30th, 2025 to $6.6 million for the three months ended June 30th, 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 realm 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 of 2025. During the quarter, we amended the agreement to increase the maximum aggregated gross 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 changed. While customer deployment timelines can progress at various phases, 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 three strategic pillars which John has mentioned. The investment we have made over the past several years positions GCT well for the next phase of growth. With this, I will turn it back to John.

Thanks, Evan. As we've 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 2026 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've 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'd 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.

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

Yeah, thanks for taking the question, guys, and 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 2Q. 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?

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. But because of these things, they've pushed out. So they're still very much alive and very much We believe that we'll see this in the later part of the year.

Good for you. And then understanding the shipments in a little bit more detail, the company shipped 5,100 units. John, how many customers were those shipments to? Was it up from the two that I think we had in the prior quarter?

Yeah, this was to primarily four customers. And these were across, I would say, four different applications. So almost equally across FWA, Aviation, and Mobile Hotspot with an additional application added for like a push-to-talk phone application.

Okay, so it sounds like some of the broadening interests that you talked about was already visible there inside of the second quarter. All right, so I think one of the things that came up a couple 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 2027. Can you provide some more color on how many customer programs we're seeing through 1Q27? 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 1Q27 as well? Yeah.

We're hesitant to provide that sort of guidance at this point, and I think it's reflective of what we've seen so far. It's the front end and the variability on these customer programs, but they're all working feverishly to get their ramps started. We did say that that we had visibility and we were planning the wafer supply so that we've secured that through Q1. And this is in anticipation of what we believe is a relatively large ramp.

Okay, so relatively large. Okay, good to hear. All right, then lastly from me, John, We've identified terrestrial, broadband, satellite, and non-terrestrial and IoT and specialized products as three 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 and maybe contrast that with or specify if it's there too with where you're seeing the greatest breadth of customer interest across those and can you quantify how many customers you're 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. Thank you.

So I would say that right now the The most significant from a revenue uptake is going to be in the terrestrial broadband and the satellite and non-terrestrial connectivity. And that's just because these are applications that we're very mature with in the FWA space and the satellite space that we've been working on for a while. I would say in these two spaces, There's a lot of latent activity that has not ramped yet, and these are the two areas that we have 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. But also for IoT as well, you can imagine too that the ASPs are a little lower than they would be in the FWA and satellite space.

Got it. And can you specify, or maybe I've missed it, Where do you see the highest volume between here and N1Q27 within those three areas? Would it be terrestrial broadband and satellite non-terrestrial?

I would say probably equally in the first two that I mentioned, the terrestrial broadband and the satellite and non-terrestrial connectivity. The IoT and specialized networks, like I said, there's 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're seeing in the other areas.

Got it. Okay. With that, I'll hop back in the queue. Thank you, John. Thank you, Craig.

Thank you. And one 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.

Hi, good afternoon, guys. Thanks for the time. So I think you said earlier that you've already secured required production capacity for the remainder of 26 and through the first quarter of 27. What does that entail in terms of purchase or take or pay obligations? And I guess what I really want to know is what your exposure is if the delayed customer launches continue to slip?

Yeah. What it basically means is we're talking about wafer capacity, which everybody is talking about right now because the fabs are full. The fab capacity is being used for memory and so forth, so having wafer capacity committed to us is very important. With regard to I think we're actually right-sized in our capacity, but if that were to happen, we could slow down our purchases in the future, and there's nothing perishable here that is going to happen. Fortunately, on the wafers that we have right Right now we can produce all the SKUs that we need for all of these applications. So there's nothing that is custom by application until you get to the very, very end. So I think on the front end and having wafer capacity secured and so forth, it really doesn't have any negative effects from a supply standpoint if things were to push out.

Okay, that's very helpful, John. And then my second question, just on liquidity, but more so cash burn. I'm curious, how should we be thinking about quarterly cash burn over the next four to six 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?

Scott, that's 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 foundries are basically full days The production schedule has been all the way scheduled to first quarter of next year. We are actually, in Q2, we have actually paid all the way to the end of this year. From that perspective, that actually In a way, anomaly increases our cash burn for Q2. And if you take a look at it, our Q2 cash burn is affected by $7 to $7.5 million because of that portion of the supply chain situation there. But going forward, we have a six-month rolling and many more. We are looking at it is in Q1 we anticipate our cash burn on a quarterly basis is between $8 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 for the waiver Thank you and one moment for our next question.

Our next question comes from the line of Lisa Thompson with Zach Investment Research. Your line is open. Please go ahead.

Hi. Good afternoon. Hi, Lisa. 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 that 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's, I don't know if you want to call it macro events, but when you've got customers that actually push out by one to two quarters, there's nothing that we can do about that. And so in some cases, it has to do with their own corporate restructuring and refocus, even though they're A product strategy is unchanged, and in some cases it has to do with things outside their control that actually push out their launch schedule.

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 problems?

I wouldn't say they're supply chain problems, no. Okay. Even though each one of them is actually challenged, and they have to manage that on their own. I mean, they're not immune to that, but that's 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 that is in the... We have a UAV space and has applications across consumer and defense applications. Our device is very flexible and very useful for control, telemetry and so forth.

Is that in products they already have announced?

They have not announced, no.

And speaking of that...

Even though they may be announcing something, but I mean, right now they haven't announced.

Okay. All right. 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.

What are we waiting for?

We're waiting for their green light. So, I mean, we have NDAs with them that we have to honor. And I would say that as soon as they launch, that they'll be less sensitive about that.

Okay, great. Thank you. That's all my questions. Okay.

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.

All right. Thank you, Lisa.

Thank you. Thank you for joining us. This concludes our second quarter 2026 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.