Gct Semiconductor Holding, Inc. Class A ((GCTS)) has held its Q3 earnings call. Read on for the main highlights of the call.
TipRanks Black Friday Sale
- Claim 60% off TipRanks Premium for the data-backed insights and research tools you need to invest with confidence.
- Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off
GCT Semiconductor’s recent earnings call painted a mixed picture of progress and challenges. While the company celebrated significant strides in 5G technology commercialization, including its first 5G product revenue and strong customer engagement, these achievements were tempered by financial hurdles such as a sharp revenue decline, negative gross margins, and rising expenses, raising concerns about its financial health.
First 5G Product Revenue Recognition
GCT Semiconductor marked a significant milestone by recognizing its first 5G product revenue this quarter. This achievement signals the early adoption of its next-generation technology and marks a crucial step in its commercialization journey.
Successful 5G Chipset Sampling and Customer Engagement
The company successfully completed the sampling of its 5G chipsets and modules to leading customers, including Airspan Networks and Orbit. The positive feedback received from these engagements reflects growing confidence in the commercial readiness of GCT’s 5G solutions.
Gogo’s 5G Deployment Plan
Gogo, the first 5G network operator, plans to activate full service using GCT’s 5G chipset before the end of 2025. This marks the first planned commercial deployment of GCT’s chipset, showcasing its performance in a demanding airborne environment.
Strengthened Financial Position
To support production readiness and future growth, GCT Semiconductor secured $10.7 million in debt financing. This move strengthens the company’s balance sheet, positioning it for upcoming growth phases.
Significant Revenue Decline
GCT faced a significant revenue decline, with net revenues dropping from $2.6 million in Q3 2024 to $400,000 in Q3 2025. This decrease was primarily due to a $1.6 million reduction in product sales and a $600,000 decline in service revenues.
Negative Gross Margin
The company reported a negative gross margin in Q3 2025, as lower product revenue was insufficient to cover production overhead costs, highlighting challenges in achieving profitability.
Increased Costs Associated with 4Gs LTE Inventory
GCT incurred a $500,000 incremental write-down related to slow-moving 4Gs LTE inventory, contributing to the increased cost of net revenue.
Increase in General and Administrative Expenses
General and administrative expenses rose by 64%, from $2.4 million in Q3 2024 to $3.9 million in Q3 2025. This increase was driven by rising stock-based compensation and personnel-related costs.
Forward-Looking Guidance
Looking ahead, GCT Semiconductor outlined several key metrics and guidance for the coming quarters. The company plans to scale production as additional operators and network partners begin deployments in 2026. They anticipate improved margins and positive cash flow by late 2026, with a focus on ramping up production capacity and achieving adjusted EBITDA breakeven by Q3 2026.
In summary, while GCT Semiconductor has made notable advancements in 5G technology commercialization and customer engagement, the company faces significant financial challenges. The earnings call highlighted both the potential for future growth and the hurdles that must be overcome to achieve financial stability.