GCTS

Good afternoon. Thank you for attending GCT Semiconductor Holding, Inc.'s Q1 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 Edmond Cheng, Chief Financial Officer, to discuss our Q1 2026 results. During this 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.

Additionally, except as required by law, we undertake no obligation to update any forward-looking statement. I will now turn the call over to John Schlaefer.

Thank you, and thanks to everyone for joining us today for our first quarter 2026 earnings call. I'll start by discussing the operational progress we've made during the first quarter as we drive commercial expansion of our 5G products. Following my remarks, our Chief Financial Officer, Edmond Cheng, will walk through the financial results for the first quarter in more detail. Building on the groundwork we laid at the end of 2025, our first quarter results reflect the advancements we've made on our 5G acceleration, which is reflected by growing 5G chipset shipments, expanding engagements, and continued early adoption across leading customers. In the first quarter, we delivered 3,000 5G chipsets, a sequential increase of 58% versus Q4.

This growth is an important indicator that customers are continuing to move through the final stages of testing and into initial deployments. While 5G product shipment volume today remains modest relative to the long-term opportunity ahead, we are in an early but critical step of the product cycle. Customer confidence in the performance, reliability, and integration of our 5G chipset is building, and we expect 5G chipset shipments to continue trending upward as customers advance their programs. We are also broadening the scope and depth of our customer relationships and chipset use cases.

We continue to support a growing number of programs across multiple verticals, FWA, IoT, and NTN, and we are working closely with our lead customers as they move through integration, certification, and deployment planning. These engagements often push beyond traditional licensing into deeper platform-level collaboration, where our technology serves as the foundation for next-generation systems and user equipment development. Early design wins and platform integrations remain critical in establishing the framework for future volume shipments and long-term adoption.

Notably, we expanded our previously announced engagement with one of the world's largest satellite communication providers to fast-track global 5G deployment through a reference platform agreement. Under this framework, we will provide a reference design based on our 4G and 5G chipsets to help accelerate the development of our partner's next-generation user equipment, enabling high bandwidth and high-speed communications across satellite and terrestrial networks. This agreement reinforces GCT's role in enabling seamless connectivity across both terrestrial and non-terrestrial networks and broadens the deployment scope of our technology. It also highlights the growing importance of GCT's technology in enabling converged connectivity solutions that span multiple network environments. We view this as a multi-phase opportunity that can drive incremental adoption of our solution over time as next-generation user equipment platforms are introduced.

As these platforms are developed and deployed, we expect our technology to play an increasingly important role in supporting global connectivity use cases. Initial 5G chipset shipments to this partner remain on track to begin in the second half of 2026. Our focus continues to revolve around driving 5G chipset commercial traction by strengthening our supply chain and operational infrastructure to support higher 5G chipset volumes as customer demand accelerates. Supported by increasing activity from our lead customers, we continue to expect sequential growth in 5G chipset shipments as commercialization continues to scale throughout the year. Further, the headway achieved thus far reinforces our expectation and aligns with our previous product launches, such as our 4G chipsets. We believe the work we are doing now will ensure that we are positioned to scale efficiently.

At the same time, we remain mindful that the timing and pace of deployments can vary as customers finalize their rollout plans. As a result, we are maintaining a disciplined approach with a focus on execution and operational readiness moving through this next phase. Overall, we believe that the first quarter represents meaningful progress in our transition from development to commercialization of our 5G chipset. We are encouraged by the momentum we are seeing and believe we are building a strong base for continued growth throughout 2026. With that, I'll turn the call over to Edmond to discuss our first quarter results. Edmond?

Thank you, John. Over the past several quarters, we have noted that our path to 5G commercialization will not be defined by a single event, but rather consistent strides forward like customer sampling, inaugural commercial shipments, real-world customer deployments, and production scaling, all of which will ultimately culminate in significant revenue contribution. In the first quarter, we delivered meaningful improvements across both the top and bottom line results, driven by increased 5G chipset shipments and diligent capital deployment. As John mentioned, there is still work to be done, and these financial results are modest in comparison to the opportunity ahead. We are progressing as expected, and we remain focused on disciplined execution.

Also, in supporting the expanding of the addressable TAM to include NTN, we are considering at the appropriate time to break down our product revenue into these three verticals, FWA, IoT, and NTN. With that context, I will now review our first quarter 2026 financial results. Further details can be found in the 10-Q that will be on file with the SEC. Net revenues increased by $1.4 million or 287% from $0.5 million for the three months ended March 31st, 2025 to $1.9 million for the three months ended March 31st, 2026. The change was due to an increase of $0.4 million in product sales and an increase of $1 million in service revenues.

The growth in product sales was led by both 4G and 5G product sales, while the increase in service revenue was driven by 5G operations, partially offset by lower LTE service revenue as we shift our portfolio to 5G. Cost of net revenue increased by $0.6 million or 138% from $0.4 million for the three months ended March 31st, 2025 to $1 million for the three months ended March 31st, 2026, primarily due to higher costs driven by increased unit volume. Our gross margin increased to 49% for the three months ended March 31st, 2026 from 18% for the three months ended March 31st, 2025, largely due to changes in the revenue mix, especially higher margins from our service offerings and increased share of 5G and product sales during the quarter.

Research and development expenses decreased by $0.9 million or 23% from $4.1 million for the three months ended March 31st, 2025 to $3.2 million for the three months ended March 31st, 2026. The decrease was largely driven by a $0.5 million reduction in project-specific intellectual property expenses and a $0.4 million reduction in professional services provided by Alpha for the completion of a 5G chipset design last year. Sales and marketing expenses remain consistent year-over-year, totaling $1.1 million for the three months ended March 31st, 2025 compared to $1.2 million for the three months ended March 31st, 2026.

General and administrative expenses were relatively flat year-over-year, totaling $2.6 million for the three months ended March 31st, 2025 comparing to $2.7 million for the three months ended March 31st, 2026. Turning to liquidity, we finished the quarter with cash and cash equivalents of $7.2 million. We also had net receivables, accounts receivables of $2.4 million and net inventory of $1.6 million. We have access to our at the market equity program of up to $75 million and ample capacity on the remaining $125 million of our $200 million S-3 self-registration statement, which has been effective since April 1st, 2025. These resources equip us with financial flexibility to support working capital requirements, commercial readiness, and broader production efforts.

Moving further into 2026, our priorities remain consistent. We are focused on maintaining financial flexibility and disciplined capital allocation to support 5G chipset commercial traction and volume production readiness, ensuring that we are well-positioned to capitalize on the expanding 5G opportunity. With this, I will turn it back to John.

Thank you, Edmond. The first quarter reflects sustained execution in driving commercialization. We are seeing increasing 5G chipset shipments activity, continued expansion in our customer engagements, and steady progression as customer programs move toward deployment. While still in the early stages, we are building a sustainable launch pad to position the company for long-term success across both existing and new 5G opportunities as adoption continues to grow.

We believe the framework we've established across our technology, partnerships, and operations positions us well for this next phase of growth, and we look forward to building on this momentum throughout the year. I would like to thank our employees, partners, and shareholders for their continued support. We will update you on our progress in the coming quarters. I will now turn the call back over to the operator, who will assist us in taking your questions.

We have a question from the line of Craig Ellis with B. Riley Securities.

Hello, this is Rebecca Zamsky on for Craig Ellis. Revenue of $1.9 million on increased 5G chipset shipments implies like meaningful service and licensing revenue contribution alongside chipset sales. How should we think about that mix evolving as chipset volume scale through the H2 of the year?

Yeah, that's a good question. The service revenues tend to be aligned with various contracts that we engage in and is recognized as we make actual progress against those contracts. Right now, that's a larger portion of the quarterly sales. As the chipset sales increase, the chipset sales and product revenue will far outpace that service revenue. It'll become a much more meaningful part and a substantial part of the overall revenue, you know, quarter to quarter as we grow. That is our growth. We're not in the service business.

Thank you. In gross margins, the 49.3% margin was well above prior quarters. How much of this is structural, reflecting the higher margin service and licensing mix versus like a one-time in nature? How should we think about gross margins going into the second half of the year?

Yeah. That's a good observation. The margins for the quarter were higher than usual, and they're higher than what we would expect when the products dominate. We've often said that the gross margin coming from the products as we move forward would be in the 35 and growing into the low 40s, and then we still believe that. Because the service revenue was more substantial this quarter, that's actually resulted in a higher gross margin. In the future, because service revenue will be a much smaller portion of overall revenue, it'll contribute less to the gross margin, and we'll see, you know, the margin, you know, stabilizing out in the 35 and then actually growing into the 40s, the low 40 range.

Yeah. Rebecca, in other words, our gross margin, once the chipset sales grows significantly, it would normalize to the high 30s%-low 40s%.

Thank you.

Our next question comes from Lisa Thompson with Zacks Investment Research.

Hi, everyone. Glad to see some progress in getting towards profitability. I just have a few questions about, I guess, the revenue breakdown. First off, on services, I don't know if you answered, is there anything one-time in this quarter, or do we expect numbers over $1 million going forward per quarter?

Yeah. This on the service side, we have the licensing revenue that we have recognized in Q1. That will be considered as a one-time recognition from that sense. Going forward, we are also expecting to have our service contracts as when the milestones is achieved, and we will recognize the revenue accordingly.

Do you have a feel for what the number's gonna be near this quarter?

We do, and it won't be as high as it was in Q1. I mean, we are considering other service contracts and other engagements where that could add into the future. These tend to be, you know, in advance, they tend to be a little bit unpredictable as to when they're gonna start. As we've said, they're We recognize revenue as the milestones are achieved. Hard to predict that in advance.

Okay. Could you just talk a little bit about the product revenue and characterize like where it came from? I think last quarter you had, I don't know, three customers for products and one was a production order. Is that right? What did that look like this quarter?

Let me comment on that. This quarter for products, there was at least five customers, that was between five and seven. Some of this stuff actually goes through distribution and can, you know, actually be multiple customers. At least five, as high as seven.

Okay, good. That's progress.

Yeah.

Oh, yes. What should we expect for the next three quarters? Like, how's the ramp going to work? Is there any one customer that's going to lead the charge?

Well, we see continued distribution and what ends up happening when our product revenue is relatively small is it can be bursty. I mean, you can see one customer come in and have a larger portion of the quarter, and then, you know, they may slow down in the next quarter and someone else picks up. But over time, I think we're gonna have a good distribution. We're seeing that build out now. Once we hit a steady state, I think we'll have a good distribution of the customers.

Okay.

A spread of revenue across them.

All right. Edmond, as far as operating expenses go.

Right.

Come down quite a bit. Do we expect that level to be the same level for this quarter going forward?

Well, this is a good run rate level from that sense. We expect in the second half of this year to ramp up our R&D expenses to match our product roadmap. We expect quarterly operating expenses to be running at about $8 million per quarter level.

Okay. Does that start in Q2?

That will be starting in Q3.

Okay. All right, good. That's helpful. It looks like everything's going well, and you're making progress, and we'll just see what happens. Thank you so much.

Thank you, Lisa.

Thank you for joining us. That concludes our first quarter 2026 conference call. A replay will be available for a limited time on our website later today.

Good afternoon. Thank you for attending GCT Semiconductor Holding, Inc. Fourth Quarter and Full Year 2025 Financial Results Call. All lines will be muted during the presentation portion of the call. Joining the call today are John Schlaefer, GCT Semiconductor Holding, Inc.'s Chief Executive Officer, and Edmond Cheng, Chief Financial Officer, to discuss our fourth quarter and full year 2025 results. During this 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 that will be filed today, which provide further detail about the risks related to our business. Additionally, except as required by law, we undertake no obligation to update any forward-looking statement. I will now turn the call over to John Schlaefer.

Thank you, and thanks everyone for joining us today for our fourth quarter and full year 2025 earnings call. I will begin by discussing the operational milestones we achieved during the year as we executed on our strategy to transition the company toward full 5G commercialization. Following my remarks, our CFO, Edmond Cheng, will walk through the full year financial results in greater detail. 2025 was a defining year for GCT Semiconductor Holding, Inc., as we reached several key milestones in the transition from our development to commercialization of our 5G chipset. Over the past year, we have focused on bringing our 5G chipset technology to commercial readiness while expanding our ecosystem of partners and customers who are preparing to deploy and integrate our 5G platform across a growing set of applications. After the launch of sampling with lead customers in June, in the fourth quarter, we shipped more than 1,900 5G chipsets for commercial use. These shipments represent early commercial volumes that support initial deployments and customer testing programs and mark continued progress toward our broader production ramp. While still small in scale relative to the long-term opportunities ahead, these shipments demonstrate that our production pipeline is now actively supporting real-world deployment and preparing for high volumes as customers move through their rollouts. We expect this momentum to continue generating sequential growth in 5G chipset shipments throughout 2026. Speaking of customer rollouts, another important milestone achieved during the quarter, like Gogo, was their new broadband 5G air-to-ground service powered by GCT Semiconductor Holding, Inc.'s 5G chipset. As our first network operator to bring a live network to market using our technology, this milestone validates the performance and reliability of our 5G platform in one of the most demanding wireless connectivity environments and demonstrates the readiness of our chipset technology to support real-world commercial deployments. The launch also underscores the growing demand for GCT Semiconductor Holding, Inc.'s 5G solutions and reinforces our positioning for broader 5G commercialization and market penetration. As additional customers advance through testing, certification, and deployment phases, we expect the success of Gogo's launch to serve as a strong validation point for other customers evaluating our technology and to support further adoption in 2026 and the years ahead. In parallel with these developments, we continued expanding our strategic partnerships to broaden the applications and markets for our semiconductor solutions. During the quarter, we signed a licensing agreement with one of the world's largest satellite communications providers, under which our 4G and 5G chipsets will integrate into the partner's user equipment to support global, resilient, and high-bandwidth connectivity across both satellite and terrestrial networks. This integration will enable direct-to-satellite applications across the partner's rapidly expanding network, creating new 5G chipset sales opportunities for GCT Semiconductor Holding, Inc. while positioning us at the intersection of terrestrial wireless infrastructure and satellite connectivity. Shipments for this program are expected to begin as early as 2026. More broadly, this collaboration places both companies at the forefront of emerging 5G-to-space networks designed to extend connectivity worldwide, including in underserved regions, and supports the industry's transition towards more integrated terrestrial-satellite infrastructure. By combining our advanced 5G semiconductor technology with a global satellite footprint, we are helping enable a new era of always-on connectivity that is more resilient, flexible, and accessible than ever before. We also announced a partnership with Skylo to expand seamless global satellite connectivity for next-generation cellular-to-IoT devices. As part of this collaboration, our teams are working jointly towards chipset and module certification that will enable ubiquitous connectivity across satellite-enabled networks for a wide range of IoT applications. This initiative further demonstrates the flexibility of our architecture and the growing number of connectivity environments our platform can operate in. Collectively, these partnerships reflect our broader strategy to position GCT Semiconductor Holding, Inc. at the intersection of several major technology trends, including the expansion of 5G networks, the rapid growth of connected devices, and the increasing integration of satellite connectivity with terrestrial wireless infrastructure. In addition to these commercial developments, we also took steps to strengthen our financial flexibility and ensure we have the resources necessary to support the upcoming production ramp. During the fourth quarter, we entered into a $20 million convertible note facility with an initial $1 million advance. This financing provides us with additional optionality to support working capital requirements, production readiness, and strategic growth initiatives while minimizing dilution at the current stock price for shareholders. Taken together, the progress we have achieved throughout 2025 reflects a company that has successfully transitioned from the development phase of its 5G program toward the early stages of commercialization and volume production, expanded our ecosystem of partners, advanced multiple customer programs through evaluation, design, and optimization phases, and began supporting live network deployment using our chipset platform. As we look ahead, our focus is on scaling operations to support the commercialization of our 5G chipset. This includes aligning our supply chain partners, strengthening production readiness, and continuing to support customers as they move from evaluation to deployment. We believe the groundwork laid over the past year positions us well for the next stage of growth as production volumes increase and additional network operators begin featuring GCT Semiconductor Holding, Inc.-enabled 5G devices. I will now turn the call over to Edmond to discuss the full year results. Edmond?

Thank you, John. While 2025 represented a transitional year for our financial performance, it also reflected the deliberate investment required to bring our 5G chipset platform to commercial readiness while managing our capital allocation and optimizing our cash flow. As we have discussed in prior quarters, the transition from our legacy 4G product cycle to our next-generation 5G platform created a temporary gap in revenue while customers completed development and integration efforts. We believe this transition reached its trough during 2025. We are now at the inflection point as commercialization progresses. Reflective of this, total revenue in the fourth quarter increased 76% sequentially from the third quarter, demonstrating early momentum as our 5G programs begin contributing to the top line. We expect this sequential improvement to continue into 2026 as additional deployments roll out and production volumes ramp. With that context, I will now review our full year 2025 financial results. Further details can be found in the 10-Ks that will be on file with the SEC. Net revenues decreased by $6.3 million, or 69%, from $9.1 million for the year ended December 31, 2024, to $2.9 million for the year ended December 31, 2025. The change was due to a decrease of $3.6 million in product sales and a decrease of $2.6 million in service revenues. The lower product sales were driven by lower 5G reference platform sales as we continue transitioning into 5G, while service revenue decreased due to the completion of a substantial service project during the prior year period. Cost of net revenue increased by $0.6 million, or 16%, from $4.1 million for the year ended December 31, 2024, to $4.7 million for the year ended December 31, 2025, largely due to additional production overhead costs. Our gross margin for the year ended December 31, 2025, was negative. This primarily reflects the current level of product revenue, which is not yet sufficient to fully absorb our production overhead cost and therefore is not fully indicative of the underlying profitability of our products and services. We expect margins to improve as product volumes increase, particularly as our 5G chipset sales begin contributing more meaningfully to revenue later in 2026 following the commercial launch in 2025. Research and development expenses decreased by $3.3 million, or 19%, from $17.3 million for the year ended December 31, 2024, to $14.0 million for the year ended December 31, 2025, largely due to the completion of a 5G chip project, which resulted in a $3.3 million reduction in professional services from Alpha. This reduction was partially offset by a $0.9 million increase in personnel-related costs due to our higher engineering headcount, a $0.3 million increase in stock-based compensation expense due to the issuance and vesting of share-based awards, and a $0.4 million increase in preproduction and engineering supplies related to our 5G initiative. Sales and marketing expenses were relatively flat year over year, totaling $3.9 million for the year ended December 31, 2024, compared to $4.2 million for the year ended December 31, 2025. General and administrative expenses increased by $5.7 million, or 53%, from $10.8 million for the year ended December 31, 2024, to $16.5 million for the year ended December 31, 2025. The increase was primarily due to changes in our credit loss estimate for receivables, which resulted in a $2.8 million expense in 2025, compared to a $0.4 million benefit in 2024, resulting in a $3.2 million net increase to G&A expenses. Stock-based compensation expense increased by $3.2 million from $2.0 million for the year ended December 31, 2024, to $5.2 million for the year ended December 31, 2025. The increase was primarily due to the issuance of equity-classified common stock warrants to investors in 2025. Personnel-related costs increased by $0.6 million. These increases were partially offset by a $1.2 million decrease in professional services and other costs due to lower transactional activities during the year. Turning briefly to liquidity, we closed the year with cash and cash equivalents of $0.6 million. We also had net accounts receivable of $2.6 million and net inventory of $0.9 million. Subsequent to the year-end and as of February 2026, we had cash and cash equivalents of $9.4 million. In addition, we maintain access to our at-the-market equity program of up to $75 million and have ample capacity on the remaining $125 million of our $200 million shelf registration statement, which was effective since April 1, 2025. These capital resources provide us with flexibility to support working capital needs and execute on our commercialization strategy as we scale production. Looking ahead, we expect sequential growth in both revenue and 5G chipset shipments throughout 2026 as additional customers move into commercial deployment phases. As this transition continues, our financial priorities remain focused on maintaining operational discipline, preserving capital flexibility, and supporting the production ramp necessary to convert our growing customer pipeline into meaningful revenue. With this, I will turn it back to John. Thanks, John.

2025 represented a pivotal year for GCT Semiconductor Holding, Inc. as we transitioned from development to commercialization of our 5G platform. We began supporting live network deployments, expanded our ecosystem of strategic partners, and initiated commercial 5G chipset shipments that marked the early stages of our production ramp. While our financial results still reflect the transitional nature of this period, we believe the foundation established over the past year positions us well for the next phase of growth. Our focus moving forward is on executing efficiently as we support customer launches, expand production volumes, and convert the growing demand for our technology into sustained revenue growth. I would like to thank our employees, partners, and shareholders for their continued support and commitment. As we enter this important next chapter for the company, we are encouraged by the progress we have made and look forward to building on this momentum during 2026. I will now turn the call over to the operator, who will assist us in taking your questions.

Thank you. To remove yourself from the queue, you may press 11 again. Our first question comes from the line of Craig Ellis of B. Riley Securities. Your line is open, Craig.

Guys, congratulations on getting the 5G chips starting to ship for revenue in the fourth quarter. John, I wanted to start with one with you, and it takes off on that point and some of your comments that you are engaging with more partners and programs and a priority this year is scaling. Can you just talk a little bit on two fronts? First, on fixed wireless access, can you talk a little bit more about the visibility that you have from customers for ramps through the year and how material you think things might be, not looking for guidance, but just help give us a sense for what you are seeing. And then given that there has been so much success with the company and the way you are engaging with satellite and ground-to-air programs, just help us understand as you look at 2026, when revenues there could start to materialize and to what extent? Thank you.

Thank you, Craig. FWA is still a really important vertical for us, and we are focused there strongly. The lead customers that we are working with there are focused on that area, so we expect that we will be shipping more into that market this year. We will have some growing backlog as early as in Q2 for the lead customers. On the satellite front, we already have some product that is shipping for NTN applications. We are expecting that this new partner that we just talked about will be shipping into that in the second half of the year, and we think that is going to be a very important second vertical for us that we have gotten a lot of attention for, for 5G products as well as pairing with some of our 4G products as well.

I will give it a shot, although I am unsure if you can speak to this specifically. But can you help us size the trajectory of revenue as we go through this year, John? I know the company has its eye on $25 million since that is the level where I think it would look for adjusted EBITDA breakeven and profitability. But any sense on how these different contributors add up and layer in for specific revenues as we hit the middle of the year and then the end of the year?

It is a little hard to lay them all in right now because their schedules are still a little vague to us. We are thinking that the point that you just mentioned would be probably in the Q1 period. Q1 next year, so 2027. But we are going to have to see how that actually lays in. It could happen faster, but we are really waiting for some visibility that will come in the Q2 time frame for us as we start seeing some backlog for these programs lay in.

That is helpful. And then, Edmond, I will switch it over to you before I jump back in the queue. First, nice to see gross margins coming in at 32% in the quarter. As you see revenues rising sequentially through the year, how should we think about gross margins? And then as a follow-up, operating expense was a little bit higher in the fourth quarter than what we were looking for, but you also noted some special charges on a calendar year basis. Can you just talk about what drove the sequential increase in operating expense quarter on quarter in addition to gross margin? Thank you.

First of all, related to your question about the gross margin, we do not think that this year's gross margin is representative of what we can achieve in 2026 going forward because of the low volume of our product revenue from that sense. We believe that going forward, our gross margin should be in the range of maybe the high 30s to low 40s when our product becomes more mature and our product revenue ramps up to a level representing the normal level of revenue. In terms of operating expenses, this year, our OpEx is higher as we explained that there are two areas which we feel will be one-off type of situations for this year which will not continue into next year. One is refocusing on cleaning up our balance sheet, looking at some risk management, looking at the receivable part of it. We feel that this part of it is under control. This is cleaned up from that perspective, and we do not expect it to continue into this year. The second portion is that this year we have issued warrants to some investors, which we account for as a G&A expense. We do not expect it to continue into 2026. We expect the G&A running expenses to go back to a normal run-rate level, which is very similar to what you experienced in the 2025 run rate, maybe adjusted to some normal inflation rate. Other than that, it all depends on whether our next development programs continue on our product roadmap and our R&D expenses. That is something that we constantly monitor in terms of the revenue ramp and how much we can afford to spend on the R&D side to continue our product roadmap.

That is really helpful, Edmond. And if I could just jump back for one more for John. John, given that we are at an early stage with 5G and you have a couple of customers that have taken product, can you just help us understand as you interact with those customers, what are you hearing from the customers about the product, its strengths, how they plan to use it, etcetera? Thank you so much, guys.

They are happy with the product, happy that they have been able to roll out their unique solution. They have also been telling us that our level of support for their unique applications is actually very good. It is an enabling device for their particular application, and it gives them options on their future roadmap. It is all positive, and we think that we are going to see additional revenue and volume going forward as their volumes increase.

Thanks, John. Thanks, Edmond.

Thank you. Our next question comes from the line of Lisa Thompson of Zacks Investment Research. Please go ahead, Lisa.

Hi. Thanks for the call. And you have answered a few of the questions I have, but I still have some more. So can we first go back to the satellite communications company that you just signed a license with? Is there some way you can quantify the potential for that business? Have you sized up how much they could possibly take from you?

We think it can be actually quite large. We are talking about in the million-unit-plus type of quantities. We are very optimistic about it, and it will have a large position going forward.

Is that an annual number or a total number?

That is, I would say, the low end of their annual number.

Nice. And are you sole supplier, or are you just one of some others?

For this particular application, it looks like we are the sole supplier, but I would expect that they would have, you know, that volume that I am talking about would be our volume. I would like to be a sole supplier for as long as I can be, but I have to believe that everybody is doing what they can to de-risk their supply chain. We are providing some unique customization that makes the product sticky, and we will try to add as much value as we can as we go forward.

Very nice. So good stuff about the customers. How many customers did you ship to in Q4, and what does it look like in Q1?

The quantities in Q4 were three, but as far as the production or the commercialization part of that, that was one main customer. For Q1, that would be in the range of three to five.

Okay. So it is starting. Let me just clarify what, Ed, what you said about expenses. Are you saying that Q1 G&A would be around $3 million, or is it not coming down that fast?

Lisa, I am looking forward to the OpEx. There are some special charges in Q4. The normal run rate should be around $8 million to $8.5 million per quarter going forward.

Okay. And that includes Q1?

Yep.

Alright. Let us see. What else I have here? At some point, we had a conversation, and you said you were supply limited in Q4. What was that about? Is that still a thing?

In Q4, that was really just where the wafers were and what we could actually produce in the quarter. That is a standard issue we have to deal with when we are ramping anything. In the Q4 time frame, I think it was mainly a result of the fact that testing was not as optimized as it could be and the throughput was lower. In Q1, testing throughput has increased significantly, and that automation, which we will be optimizing going forward even more because we want to squeeze as much yield out of our products as we can, is pretty much in place.

Okay. Great. Well, that is good. I think that is all my questions for now. Thank you.

Thank you, Lisa. Thank you. To ask a question, please follow the prompts. There appear to be no further questions in the queue. Ladies and gentlemen, thank you for joining us. That concludes our fourth quarter and full year 2025 conference call. A replay will be available for a limited time on our website later today.