GCT Semiconductor (NYSE:GCTS) executives highlighted 2025 as a “defining” transition year as the company moved its 5G chipset program from development toward early commercialization, while financial results reflected a revenue gap created by the shift away from legacy 4G cycles and toward next-generation 5G deployments.
Early 5G commercialization milestones
Chief Executive Officer John Schlaefer said the company’s 5G platform reached several operational milestones during 2025, including the start of sampling with lead customers in June and the first meaningful commercial shipments in the fourth quarter. Schlaefer said GCT shipped more than 1,900 5G chipsets for commercial use in Q4, describing the volumes as early-stage but indicative that the production pipeline is supporting real-world deployments and preparing for higher volumes as customers progress through rollouts.
Customer deployments and new partnerships
Schlaefer pointed to Gogo’s launch of a new broadband 5G air-to-ground service powered by GCT’s 5G chipset as a key validation point. He characterized Gogo as the company’s first network operator to bring a live network to market using GCT technology, and said the deployment demonstrates performance and reliability in a demanding wireless connectivity environment.
GCT also discussed two satellite-related initiatives that management framed as expanding the addressable market for its chipsets:
- Licensing agreement with a major satellite communications provider: Schlaefer said GCT’s 4G and 5G chipsets will be integrated into the partner’s user equipment to support connectivity across satellite and terrestrial networks, enabling direct-to-satellite applications. Shipments tied to this program are expected to begin as early as the second half of 2026.
- Partnership with Skylo: The company said the collaboration is aimed at chipset and module certification to enable satellite connectivity for next-generation cellular IoT devices across a range of applications.
During the question-and-answer session, Schlaefer said the newly signed satellite licensing agreement could be “quite large,” describing “million unit plus” quantities and calling that the low end of an annual number. He also said the application “looks like” GCT is the sole supplier, while noting that customers often seek to de-risk supply chains and that GCT is providing customization intended to make the product “sticky.”
Financial results reflect transition year
Chief Financial Officer Edmond Cheng said 2025 required deliberate investment to bring the 5G chipset platform to commercial readiness and that the transition from legacy 4G to 5G created a temporary revenue gap while customers completed development and integration. Cheng said the transition “reached its trough during Q3 of 2025” and described the company as being at an “inflection point” as commercialization progresses.
Cheng noted that total revenue in Q4 increased 76% sequentially from Q3, which he attributed to early momentum as 5G programs begin contributing to the top line. For the full year, the company reported:
- Net revenues: $2.9 million for 2025, down $6.3 million, or 69%, from $9.1 million in 2024. The decline was driven by a $3.6 million decrease in product sales and a $2.6 million decrease in service revenues. Management attributed lower product sales to reduced 5G reference platform sales during the transition, while service revenue fell following completion of a substantial service project in the prior year.
- Cost of net revenue: $4.7 million, up $0.6 million, or 16%, from $4.1 million, largely due to additional production overhead costs.
- Gross margin: Negative for the year, which Cheng said primarily reflected the current level of product revenue being insufficient to absorb production overhead costs. He said the figure is “not fully indicative” of underlying profitability and expects margins to improve as volumes increase, particularly as 5G chipset sales contribute more meaningfully later in 2026.
- R&D expense: $14.0 million, down $3.3 million, or 19%, from $17.3 million. Cheng attributed the decrease primarily to completion of a 5G chip design project, which reduced professional services from Alpha by $3.3 million, partially offset by higher personnel costs, stock-based compensation, and pre-production/engineering supplies tied to 5G initiatives.
- Sales and marketing: $4.2 million, compared with $3.9 million in 2024.
- G&A expense: $16.5 million, up $5.7 million, or 53%, from $10.8 million. Cheng cited changes in the credit loss estimate for receivables, increased stock-based compensation (including warrants issued to investors), and higher personnel-related costs, partially offset by lower professional services and other costs.
Liquidity, financing, and expense commentary
Management said it took steps to strengthen financial flexibility ahead of a production ramp. Schlaefer noted that in Q4 the company entered into a $20 million convertible note facility with an initial $1 million advance, describing it as providing optionality for working capital, production readiness, and growth initiatives while minimizing dilution at the current stock price.
On liquidity, Cheng said GCT ended the year with $0.6 million in cash and cash equivalents, along with net accounts receivable of $2.6 million and net inventory of $0.9 million. He added that subsequent to year-end, as of the end of February 2026, cash and cash equivalents increased to $9.4 million. Cheng also referenced an at-the-market equity program of up to $75 million and remaining capacity on a $200 million shelf registration statement that became effective April 1, 2025.
In response to analyst questions, Cheng said the company does not believe current gross margin performance is representative due to low volume, and suggested that as revenue ramps and products mature, gross margin “should be in the range of maybe high 30s to low 40s.” He also described two areas of operating expenses he viewed as one-off items: efforts to “clean up” the balance sheet and receivables risk management, and warrant-related expenses recorded in G&A that he said are not expected to continue in 2026. In a separate exchange, Cheng said the “normal run rate” for operating expenses should be about $8 million to $8.5 million per quarter going forward.
Schlaefer said fixed wireless access (FWA) remains a key vertical, adding that the company expects more shipments into that market in 2026 and that it could see a growing backlog as early as Q2 for lead customers. He also said GCT is already shipping some product for non-terrestrial network (NTN) applications.
Production readiness and outlook
On manufacturing ramp dynamics, Schlaefer said the company faced supply limitations in Q4 related to wafer positioning and production capacity, and that testing throughput was not yet optimized. He said testing throughput increased significantly in Q1, and that automation to improve throughput and yields is “pretty much in place.”
Looking ahead, management reiterated expectations for sequential growth in both revenue and 5G chipset shipments throughout 2026 as customers move into commercial deployment phases. Schlaefer said the company’s focus is on scaling operations, aligning supply chain partners, strengthening production readiness, and supporting customers as they move from evaluation to deployment.
About GCT Semiconductor (NYSE:GCTS)
GCT Semiconductor Holding, Inc, operates as a fabless semiconductor company, designs, develops, and markets integrated circuits for the wireless semiconductor industry. The company provides RF and modem chipsets based on 4G LTE technology, including 4G LTE, 4.5G LTE Advanced, and 4.75G LTE Advanced-Pro. It also develops and sells cellular IoT chipsets for low-speed mobile networks such as eMTC/NB-IOT/Sigfox, and other network protocols; and 5G solutions. Its products and solutions are used in smartphones, tablets, hotspots, CPEs, USB dongles, routers, and M2M applications.
