GCT Semiconductor Reports 19% Revenue Decline in Q2 2025, Faces Financial Challenges

GCT Semiconductor Holding, Inc. reported a significant decline in financial performance for the second quarter of 2025, with total net revenues of $1.2 million, down 19% from $1.5 million in the same period last year. The decrease was primarily driven by a 47% drop in service revenues, which fell to $0.8 million, while product sales increased to $0.4 million from a nominal amount in the prior year. For the first half of 2025, the company recorded total net revenues of $1.7 million, a 65% decrease compared to $4.7 million in the first half of 2024, attributed to a $1.9 million decline in product sales and a $1.2 million decrease in service revenues.

The company's cost of net revenues also saw a notable increase, rising 47% to $0.8 million in the second quarter of 2025, primarily due to higher product costs associated with increased sales activity. Gross profit for the quarter was $0.4 million, resulting in a gross margin of 32%, down from 63% in the previous year. Operating expenses remained relatively stable at $8.0 million, with research and development costs decreasing by 16% to $3.5 million, while general and administrative expenses increased by 20% to $3.4 million.

GCT Semiconductor's financial position reflects ongoing challenges, with an accumulated deficit of $582.5 million as of June 30, 2025. The company reported a net loss of $20.5 million for the first half of 2025, compared to a loss of $0.3 million in the same period last year. The company’s liquidity is constrained, with cash and cash equivalents totaling $1.3 million, and it has significant short-term debt obligations amounting to $51.7 million. The company is actively seeking additional financing to sustain operations and meet its debt obligations.

Strategically, GCT Semiconductor is focused on the development and launch of its 5G products, having delivered initial samples to customers in the second quarter of 2025. The company anticipates that the commercial launch of these products will occur in the second half of 2025, which it expects will significantly enhance revenue and gross margins. However, the company faces risks related to market conditions, supply chain disruptions, and the need for ongoing capital to support its operations and product development.

Looking ahead, GCT Semiconductor's management has expressed optimism about the potential for growth driven by the 5G market, but acknowledges the need for substantial additional financing to continue operations. The company has entered into various financing agreements, including a common stock purchase agreement and an at-market issuance sales agreement, to raise capital. However, there remains uncertainty regarding the availability of future financing and the company's ability to achieve profitability in the near term.