Strategic Transition from Development to Commercial Scaling

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• Management attributes the 58% sequential growth in 5G chipset shipments to customers moving through final testing into initial deployments.

• The company is pivoting from traditional licensing to deeper platform-level collaborations where their technology serves as the foundation for next-generation user equipment.

• A significant expansion with a global satellite provider involves a reference platform agreement to fast-track converged terrestrial and non-terrestrial network (NTN) solutions.

• Performance in the first quarter was characterized by a shift in revenue mix, with service revenue driven by 5G operations offsetting declining legacy LTE service revenue.

• Operational focus has shifted toward strengthening the supply chain and infrastructure to support anticipated higher volumes as customer demand accelerates.

• Management emphasized that current 5G volumes are modest but represent a critical early step in a long-term product cycle similar to their previous 4G launch trajectory.

Outlook for 5G Scaling and Operational Readiness

• Management expects sequential growth in 5G chipset shipments to continue throughout 2026 as commercialization scales.

• Initial 5G chipset shipments for the major satellite communication partner's next-generation platforms are on track to begin in the second half of 2026.

• Operating expenses are expected to rise to approximately $8 million per quarter starting in Q3 2026 to support the product road map.

• The company plans to introduce segmented revenue reporting for FWA, IoT, and NTN verticals at an appropriate time to reflect the expanding addressable market.

• Future gross margins are expected to normalize in the 35% to low 40% range as product sales eventually outpace high-margin service revenue.

Financial Dynamics and Risk Factors

• Gross margin reached 49% in Q1, primarily due to a one-time recognition of licensing revenue and a higher mix of service offerings.

• R&D expenses decreased 23% year-over-year following the completion of a specific 5G chipset design project in the prior year.

• The company maintains financial flexibility via an at-the-market equity program of up to $75 million and a $125 million remaining shelf registration.

• Management noted that the timing and pace of deployments remain a risk as customers finalize their individual rollout plans.

Q&A Session Insights

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