GCT Semiconductor's Q3 2025 Earnings Call: Shifting Narratives on 5G Shipments, Breakeven Timelines, 4G Transition, and Customer Expansion

Date of Call: November 12, 2025

Financials Results

• Revenue: $0.4M, down from $2.6M in the prior-year quarter (≈ -84.6% YOY)
• Gross Margin: Negative gross margin (not quantified); cost of net revenue increased 50% YOY from $1.0M to $1.5M; management expects margins to improve as 5G sales scale beginning Q1 2026.

Guidance:

• Support deliveries in late Q4 2025 for initial 5G units and first-wave aircraft installs.
• Expect 5G product sales to contribute materially beginning Q1 2026, driving margin improvement.
• Additional wafer starts underway to increase supply into Q1 2026 and build backlog for 2026 ramps.
• Secured $10.7M senior secured financing to accelerate production readiness and working capital.
• Target adjusted EBITDA breakeven in Q3 2026 and positive operating cash flow in Q4 2026.

Business Commentary:

• 5G Product Revenue Milestone:
• GCT Semiconductor reported its first 5G product revenue, marking the transition of its next-generation technology into a revenue-generating segment.

• This milestone is a direct result of successful sampling of the 5G chipset and modules to lead customers like Airspan Networks and Orbic, as well as Gogo's plan for full-service activation by year-end.

• Financing and Financial Position Strengthening:

• GCT secured $10.7 million in senior secured debt financing from its largest shareholder, which was used to accelerate production readiness and manage working capital requirements.
• This financing complements an existing $200 million shelf registration, ensuring liquidity for the next stages of 5G commercialization.

• Operational Milestones and Production Ramp:
• The company achieved a 5G air-to-ground call using its chipset, marking an industry first in collaboration with Airspan and Gogo.
• GCT has already exceeded 2,500 units in 5G chipset orders and expects to start supporting deliveries in late Q4 2025, positioning it to scale with additional operator deployments in 2026.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • "we achieved a key milestone by recognizing our first 5G product revenue"; "5G chipset orders have already exceeded 2,500 units"; "secured $10.7 million in debt financing"; "on track to support these deliveries in late Q4 2025" — management emphasizes execution, customer validation and strengthened liquidity.

Q&A:

• Question from Craig Ellis (B. Riley Securities, Inc., Research Division): I think the press release noted orders for 4,500 units. Is that what you'd expect to ship in the fourth quarter, or are you expecting a materially larger amount?
  Response: Management said total orders received so far are ~2,500 units (already shipped plus backlog) and they expect to ship in that range in Q4.

• Question from Craig Ellis (B. Riley Securities, Inc., Research Division): Would you expect to broaden shipments to other customers in 4Q and 1Q and how might the customer base broaden into the first quarter?
  Response: They've started additional wafer runs to boost Q1 supply and expect growing backlog, with continued shipments to Airspan and other sampled customers expanding in Q1.

• Question from Craig Ellis (B. Riley Securities, Inc., Research Division): We had previously been looking for adjusted EBITDA breakeven in 2Q '26 — can you talk about confidence and indicators for reaching that milestone?
  Response: CFO: internal adjusted EBITDA trend stable; still anticipating breakeven in Q3 next year (Q3 2026) and positive operating cash flow in Q4 2026.

• Question from Craig Ellis (B. Riley Securities, Inc., Research Division): As you start shipping to customers, how is pricing holding up — are you seeing ~$40 ASPs or variability?
  Response: Prices vary by customer — some above and some below $40 — but ~$40 remains a reasonable average ASP.

• Question from Craig Ellis (B. Riley Securities, Inc., Research Division): What are the top two or three items you're focused on to ready the supply chain for higher-volume 5G production?
  Response: Priorities are starting wafers early at the fab, establishing testing to ensure yields, and prepping assembly houses/PCB sourcing to manage longer lead times.

Contradiction Point 1

5G Chipset Shipments and Production Capability

It involves differing expectations for the production and shipment of 5G chipsets, which directly impacts company revenue and investor expectations.

What are the expected shipment volumes for 5G chipsets later this year, particularly in Q4? - Craig Ellis (B. Riley Securities, Inc., Research Division)

2025Q3: The total orders received so far are around 2,500 units. This includes what has already been shipped and what is on the backlog for this quarter. The expectation is that around 2,500 units will be shipped in that range this quarter. - John Schlaefer(CEO)

Can you explain the financial results and 4G to 5G transition? - Fong Cheng (CFO, GCT Semiconductor Holding)

2025Q2: We expect volume production and shipments to begin in Q4 2025. - John Schlaefer(CEO)

Contradiction Point 2

Breakeven and Financial Performance

It involves changes in financial forecasts and expectations for achieving breakeven, which are critical indicators for investors.

Can you discuss confidence in achieving adjusted EBITDA breakeven and key indicators to monitor? - Craig Ellis (B. Riley Securities, Inc., Research Division)

2025Q3: With anticipated scale production and sales ramp in the second half of next year, we anticipate adjusted EBITDA breakeven in Q3 next year and more positive cash flow from operations in Q4 next year. - Fong Cheng(CFO)

Can you summarize the financial results and the 4G to 5G transition? - Fong Cheng (CFO, GCT Semiconductor Holding)

2025Q2: We expect operational efficiencies and increased gross margins as we scale 5G product sales. - Fong Cheng(CFO)

Contradiction Point 3

5G Revenue Ramp and Remaining 4G Revenue Ramp

It involves the projected revenue ramp for 5G, a critical growth area for the company, and the expected longevity of 4G revenue, which affects investor expectations and strategic planning.

What are the expected shipment volumes for 5G chipsets in Q4? - Craig Ellis(B. Riley Securities, Inc. Research Division)

2025Q3: We will be converting our 12,000 existing customers of 4G to 5G as well. - John Schlaefer(CEO)

Do you still expect multiyear 4G revenue persistence as 5G ramps, and what is the projected trajectory for 4G revenue this year? - Craig Ellis(B. Riley Securities)

2024Q4: We do expect 4G will continue. And like we've said before, it's really not a large contributor to our growth, but it will be steady revenue source for us through 2025 and 2026. - John Schlaefer(CEO)

Contradiction Point 4

Customer Base Expansion and Demand

It involves the company's strategy and expectations for customer base expansion, which are critical for revenue growth and product adoption.

How will shipments change in Q1 next year, and what about customer base expansion? - Craig Ellis (B. Riley Securities, Inc., Research Division)

2025Q3: We have already started more wafers, which will significantly increase our supply into Q1. We have backlog for Airspan's demand, and we expect to have more backlog by the end of this quarter or within Q1 to support additional customers. - John Schlaefer(CEO)

Can you provide more details on the 5G mobile hotspot and future plans with Orbic? - Craig Ellis (B. Riley Securities)

2025Q1: The partnership will focus on multiple operators globally, and the 5G module will be implemented in Orbic's devices. - John Schlaefer(CEO)