uCloudlink Group (NASDAQ:UCL) returned to year-over-year revenue growth in the third quarter of 2026, as product sales and emerging businesses helped offset weaker demand for its travel connectivity services.
Revenue rose 1.1% to $21.4 million, reaching the high end of the company’s guidance range. The company reported a net loss of $0.3 million and generated $1 million in operating cash inflow, its first positive quarter of the year.
CEO Chaohui Chen said growth came despite macroeconomic headwinds, geopolitical tensions, rising memory chip costs and longer component lead times. The company expects year-over-year revenue growth to accelerate in the fourth quarter.
New businesses drive growth as travel demand softens
Product sales increased 30.8% year over year, supported by demand for premium and local connectivity products. Chen said sales of the MeowGo G50 Max exceeded expectations, while the company’s 4G and 5G customer-premises equipment also recorded strong growth.
CFO Yimeng Shi said the hardware deployments could lead to recurring data connectivity revenue as customers use uCloudlink’s network. Service revenue was $16 million, or 74.9% of total revenue, down from 80.6% a year earlier.
Revenue from GlocalMe IoT rose 496.5% year over year, driven by deployments in smart devices including in-car infotainment systems and security cameras, Chen said. GlocalMe SIM revenue grew 40.3%, GlocalMe Life rose 189.9%, and platform business revenue increased 285%, according to Shi.
Average daily active users climbed 22.4% to 431,245, while average monthly active users rose 14% to 867,935. Growth in emerging businesses offset declines in GlocalMe MeowGo, where daily active users fell 6.4% and monthly active users declined 10.3%. Shi attributed the weaker MeowGo performance in part to softer outbound travel demand from China and broader external pressures.
Margins and spending
Service gross margin improved to 60.3% from 56.6% a year earlier, while overall gross margin was 51.8%. Shi attributed the service margin improvement to premium offerings, cost management and operational efficiencies. Higher supply-chain costs weighed on hardware margins, he said.
Chen added that uCloudlink had redesigned some hardware to reduce memory requirements and limit the impact of higher chip costs.
Operating expenses excluding share-based compensation were broadly flat at $11.5 million. Adjusted EBITDA was negative $0.2 million. Cash and cash equivalents increased to $26 million from $25.2 million in the prior quarter, and capital expenditure was $0.1 million.
During the quarter, uCloudlink reduced headcount by about 30 employees, Shi said. Chen attributed the efficiency gains in part to the use of AI tools in research and development, customer service and sales. Shi said the company continued to invest in marketing and research and development for its PetPhone business.
PetPogo expansion and outlook
Chen said uCloudlink launched a Pet AI Agent on its PetPogo app and device, while a next-generation PetCam was in the final stages of development and was set to launch in the first quarter. PetPhone was added to a regional telecom operator’s retail network in Europe and to the centralized procurement catalogs of three major telecom operators in China, he said.
For the fourth quarter, uCloudlink forecast revenue of $22.5 million to $25.5 million, representing year-over-year growth of 1.8% to 15.4%. It narrowed its full-year 2026 revenue outlook to $79 million to $82 million from a previous range of $75 million to $85 million. Shi cautioned that the estimates are subject to change.
About uCloudlink Group (NASDAQ:UCL)
uCloudlink Group Inc. is a technology company that provides mobile connectivity services through its cloudSIM architecture. The company operates primarily under the GlocalMe brand, using cloud-based SIM technology to enable users to access mobile data networks without relying on a traditional physical SIM card or a single wireless carrier. Its products and services include portable Wi-Fi hotspots, mobile broadband solutions, and connectivity offerings for travelers, businesses, and Internet of Things applications.
