GCT Semiconductor (GCTS) Q2 FY26 earnings call: guidance and Q&A

How significant were the program shifts and headwinds in Q2, from a unit or revenue standpoint?

The program shifts were meaningful, leading to significantly lower revenue than expected in Q2. However, these programs are still viable and are anticipated to contribute in the later part of the year.

“Yes, 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 viable, and we believe that we'll see this in the later part of the year.”

asked by Craig Ellis · answered by John Schlaefer

To how many customers were the 5,100 units shipped in Q2, and was this an increase from the prior quarter?

The 5,100 units were shipped to primarily 4 customers across 4 different applications: FWA, aviation, mobile hotspot, and a push-to-talk phone application.

“Yes, this was to primarily 4 customers. And these were across, I would say, 4 different applications, almost equally across FWA, aviation, and a mobile hotspot with an additional application added for like a push-to-talk phone application.”

asked by Craig Ellis · answered by John Schlaefer

Which of the three strategic growth pillars (terrestrial broadband, satellite/non-terrestrial, IoT/specialized products) shows the greatest near-term volume interest?

The most significant revenue uptake is expected from terrestrial broadband and satellite/non-terrestrial connectivity, as these are more mature applications. IoT and specialized networks have broader applications but lower Average Selling Prices (ASPs).

“So I would say that right now 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.”

asked by Craig Ellis · answered by John Schlaefer

What are the take-or-pay obligations for the secured production capacity through Q1 2027, and what is the exposure if customer launches continue to slip?

Securing wafer capacity is crucial, especially with fabs being full. There are no perishable components, and the wafers can produce all necessary SKUs. If launches slip, the company can slow down future purchases, minimizing negative effects.

“Yes, so what it basically means is we're talking about wafer capacity, which is everybody's talking about right now because if fabs are full, the fab capacity is being used for memory and so forth. So having wafer capacity committed to us is very important. So, and, you know, with regard to slip, I think we're actually right sized in our capacity, but if that were to happen, you know, we could slow down our purchases in the future, and there's nothing perishable here that's going to happen.”

asked by Scott Buck · answered by John Schlaefer

How should investors think about quarterly cash burn over the next 4-6 quarters, and will it increase to hit commercialization inflection?

Q2 cash burn was impacted by $7 million to $7.5 million due to prepaid wafer capacity. Going forward, quarterly cash burn is anticipated to be between $9 million and $9.5 million, up from a previous estimate of $8 million to $8.5 million, but can be adjusted based on inventory and demand.

“Going forward, we have a 6-month rolling type of situation that we will normalize to from that perspective, and that would not have the as severe type of impact as in Q2, and what we are looking at it is, in Q1, we anticipate our cash burn on a quarterly basis is between $8 million to $8.5 million per quarter. Now with this tight supply chain situation, we anticipate our cash burn to be between $9 million 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 plans payment for the wafer depending on our inventory and our demand situation.”

asked by Scott Buck · answered by Edmund Chung

Can you provide more details about the new customer signed after quarter-end, specifically the industry and what GCT is doing for them?

The new customer is in the UAV space, with applications across consumer. GCT's flexible device is used for control telemetry.

“Yes, so I would say that that is in the UAV space and has applications across consumer. So, you know, our device is, you know, very flexible and very useful for, you know, control telemetry and so forth.”

asked by Lisa Thompson · answered by John Schlaefer

Will the name of the satellite communications provider eventually be disclosed?

Yes, the name will be disclosed. The company is waiting for the partner's green light due to NDAs, which is expected once they launch, potentially in Q4 or Q1.

“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. So what that means is it could be Q4, it could be Q1, something like that.”

asked by Lisa Thompson · answered by John Schlaefer