UTStarcom Reports Unaudited Financial Results for Second Half and Full Year 2024

Rhea-AI Summary

UTStarcom (NASDAQ: UTSI) reported its unaudited financial results for 2H and full year 2024. The company secured a significant multi-million dollar RFP win from China Telecom Research Institute for manufacturing 5G transport network routers. Despite this milestone, financial results showed declining performance.

Key financial metrics for FY2024:

• Total revenues decreased 31.0% to $10.9 million
• Net equipment sales fell 69.4% to $1.4 million
• Services revenue declined 15.1% to $9.5 million
• Gross profit margin decreased to 26.7%
• Operating loss widened to $7.3 million
• Net loss increased to $4.4 million ($0.48 per share)

The company ended 2024 with $53.1 million in cash, cash equivalents and restricted cash. Frame agreements for the China Telecom project were signed in early 2025, with purchase orders expected throughout 2025.

Positive

• Won major multi-million dollar RFP from China Telecom Research Institute for 5G transport network routers
• Strong cash position of $53.1 million
• Completed development of customized NetRing TN704ES product for European mobile operator
• Net interest income increased to $2.8 million from $2.2 million

Negative

• Total revenues declined 31.0% to $10.9 million in 2024
• Net equipment sales dropped 69.4% to $1.4 million
• Operating loss widened to $7.3 million from $6.8 million
• Net loss increased to $4.4 million ($0.48 per share) from $3.9 million
• Gross profit margin decreased to 26.7% from 27.9%

Insights

Financial Analyst

UTStarcom's financial results show serious deterioration with total revenues dropping 31% to $10.9 million for full-year 2024. The decline spans both equipment sales (down 69.4%) and services revenue (down 15.1%), primarily due to decreased activity in India. This resulted in widening losses with operating loss at $7.3 million versus $6.8 million in 2023, and net loss increasing to $4.4 million from $3.9 million.

Gross margins have deteriorated across both business segments, with equipment gross margin falling to 13% from 20.2% and service gross margin declining to 28.7% from 31%. The company has reduced R&D spending by $0.8 million, which reflects different development stages but may impact future competitiveness.

The silver lining is UTStarcom's solid cash position of $53.1 million. At the current operating loss rate, this provides substantial runway for the company to execute its turnaround strategy. The multi-million dollar China Telecom Research Institute contract win for 5G transport network equipment offers potential revenue improvement, with frame agreements already signed and purchase orders expected throughout 2025. However, until these materialize into significant revenue, the financial trajectory remains concerning.

Telecommunications Infrastructure Specialist

UTStarcom's win with China Telecom Research Institute represents a strategic breakthrough for their 5G transport network portfolio. The contract for manufacturing carrier-grade disaggregated routers for China Telecom's STN (metropolitan area network) positions them in a critical infrastructure segment supporting 5G mobile services, enterprise connectivity, and cloud services.

The disaggregated router approach is particularly noteworthy as it aligns with the industry shift toward more flexible network architectures. With frame agreements already signed and orders expected throughout 2025, this represents a meaningful validation of UTStarcom's technology development efforts after what appears to be years of R&D investment in next-generation products.

Their progress with European telecom operators through the customized NetRing TN704ES product shows potential geographic diversification beyond their traditional Asian markets. However, the company's declining activity in India – previously a key market – raises concerns about their ability to maintain existing customer relationships while pursuing new opportunities.

The 31% revenue decline reflects both market challenges and UTStarcom's transition period between legacy products and next-generation offerings. While the China Telecom win demonstrates product-market fit for their 5G portfolio, the company must accelerate commercialization efforts to reverse the concerning financial trends before their cash reserves diminish.

HANGZHOU, China, March 24, 2025 (GLOBE NEWSWIRE) -- UTStarcom (the Company) (NASDAQ: UTSI), a global telecommunications infrastructure provider, today reported its unaudited financial results for the six months and full year ended December 31, 2024, and provided a business update.

Business Update

• China Telecom Research Institute RFP win. The second half of 2024 marked a major milestone for UTStarcom's 5G transport network portfolio. The Company’s commitment to the development of a next generation disaggregated 5G transport network solution and our cooperation with some of the major mobile operators in China, culminated in a significant win of a multi-million dollar China Telecom Research Institute RFP for manufacturing 5G transport network routers. The equipment is intended for use on China Telecom’s STN network – China Telecom’s metropolitan area network, which is crucial for supporting its 5G mobile network services, as well as enterprise, broadband, cloud and other services. The RFP covers the manufacturing of a substantial quantity of carrier-grade disaggregated routers hardware. The related frame agreements were signed in early 2025. Specific product quantities will be defined in purchase orders expected throughout 2025.
• Cooperation with a Mobile Network Operator customer in Europe. UTStarcom completed the development of a customized version of the NG-PTN product, NetRing TN704ES, specifically tailored to better support the customer's future network expansion plans. Samples of the product have been provided to the customer for testing. We anticipate receiving orders for this product in 2025.
• Post-sale support services to customers globally. The Company continued to provide support to its customers around the world in accordance with existing support and maintenance contracts for products such as NetRing PTN, SyncRing, IMS, SSTP, etc. Furthermore, in 2H 2024, the Company also received renewal orders for post-sale support pertaining to NG-PTN and MSAN products.

UTStarcom’s Chief Executive Officer Mr. Hua Li commented, “We have made important progresses by winning RFP from one of the major telecom operators in China; and we are also enhancing our co-operations with other business partners to expand the deployment of our products. We expect these progresses will bring improvements to our business.”

Second Half and Full Year 2024 Financial Results (Unaudited)

Summary of 2H 2024 Key Financials (Unaudited)

	2H 2024		2H 2023		Y/Y Change
Revenue	$5.2		$9.2		-43.5%
Gross Profit	$1.2		$2.6		-53.8%
Operating Expenses	$4.9		$5.4		-9.3%
Operating Loss	($3.7)		($2.8)		($0.9)
Net Loss	($2.4)		($1.8)		($0.6)
Basic EPS	($0.26)		($0.20)		($0.06)
Cash Balance (including Restricted Cash)	$53.1		$59.6		-10.9%

Summary of Full Year 2024 Key Financials (Unaudited)

	2024	2023	Y/Y Change
Revenue	$10.9	$15.8	-31.0%
Gross Profit	$2.9	$4.4	-34.1%
Operating Expenses	$10.2	$11.2	-8.9%
Operating Loss	($7.3)	($6.8)	($0.5)
Net Loss	($4.4)	($3.9)	($0.5)
Basic EPS	($0.48)	($0.42)	($0.06)
Cash Balance (including Restricted Cash)	$53.1	$59.6	-10.9%

^* Dollar comparisons are used where percentage comparisons are not meaningful.
^* All amounts are in U.S. Dollars millions except for Earnings Per Share (EPS)

Total Revenues

Six months ended December 31, 2024

Total revenues for the second half of 2024 were $5.2 million, compared to $9.2 million in the corresponding period in 2023.

• Net equipment sales for the second half of 2024 were $0.6 million, a decrease of 82.9% from $3.6 million in the corresponding period in 2023. The decrease was mainly due to decreased revenue from customers in India.
• Net services sales for the second half of 2024 were $4.6 million, a decrease of 19.4% from $5.6 million in the corresponding period in 2023. The decrease was mainly due to the completion of current projects and no new major projects in India.

Twelve months ended December 31, 2024

2024 total revenues were $10.9 million, a decrease of 31.0% from $15.8 million in 2023.

• 2024 net equipment sales were $1.4 million, a decrease of 69.4% from $4.6 million in the corresponding period in 2023. The decrease was mainly due to decreased revenue from customers in India. 
• 2024 net services sales were $9.5 million, a decrease of 15.1% from $11.2 million in 2023. The decrease was mainly due to the completion of current projects and no new major projects in India.

Gross Profit

Six months ended December 31, 2024

Gross profit was $1.2 million, or 23.1% of net sales, for the second half of 2024, compared to $2.6 million, or 27.8% of net sales, in the corresponding period in 2023.

• Equipment gross profit for the second half of 2024 was $0.1 million, compared to $0.8 million in the corresponding period in 2023. Equipment gross margin for the second half of 2024 was 16.2%, compared to 21.0% for the corresponding period in 2023. The decrease in gross margin was attributed to a lower equipment revenue in 2024.
• Service gross profit for the second half of 2024 was $1.1 million, compared to $1.8 million in the corresponding period in 2023. Service gross margin for the second half of 2024 was 24.0%, compared to 32.2% for the corresponding period in 2023, due to decreased activity with the major customers in India and China.

Twelve months ended December 31, 2024

2024 gross profit was $2.9 million, or 26.7% of net sales, compared to $4.4 million, or 27.9% of net sales, in 2023.

• 2024 equipment gross profit was $0.2 million, compared to $0.9 million in 2023. 2024 equipment gross margin was 13.0%, compared to 20.2% in 2023. The decrease in gross margin was attributed to a lower equipment revenue in 2024. 
• 2024 service gross profit was $2.7 million, compared to $3.5 million in 2023. 2024 service gross margin was 28.7%, compared to 31.0% in 2023, due to decreased activity with the major customers in India and China.

Operating Expenses

Six months ended December 31, 2024

Operating expenses for the second half of 2024 were $4.9 million, compared to $5.4 million in the corresponding period in 2023.

• Selling, general and administrative (“SG&A”) expenses for the second half of 2024 were $2.4 million, compared to $2.4 million in the corresponding period in 2023. 
• Research and development (“R&D”) expenses for the second half of 2024 were $2.5 million, compared to $3.0 million in the corresponding period in 2023. The decrease reflected the different stages of 5G product development.

Twelve months ended December 31, 2024

2024 operating expenses were $10.2 million, compared to $11.2 million in 2023.

• 2024 SG&A expenses were $5.1 million, compared to $5.3 million in 2023. The decrease was mainly attributable to decreased personnel cost as a result of the reduction of personnel. 
• 2024 R&D expenses were $5.1 million, compared to $5.9 million in 2023. The decrease reflected the different stages of 5G product development.

Operating Loss

Operating loss for the second half of 2024 was $3.7 million, compared to $2.8 million in the corresponding period in 2023.

Full year 2024 operating loss was $7.3 million, compared to $6.8 million in 2023.

Interest Income, Net

Net interest income for the second half of 2024 was $1.5 million, compared to $1.3 million in the corresponding period in 2023.

Full year 2024 net interest income was $2.8 million, compared to $2.2 million in 2023. The increase was mainly due to higher interest income in China.

Other Income (Expenses), Net

Net other income for the second half of 2024 was $0.1 million, compared to net other income of $0.1 million in the corresponding period in 2023.

Full year 2024 net other income was $0.9 million, compared to net other income of $2.0 million in 2023. Other income for 2024 was mainly a foreign exchange gain resulting from appreciation of the U.S. dollar against the Renminbi.

Net Loss

Net loss attributable to shareholders for the second half of 2024 was $2.4 million, compared to $1.8 million in the corresponding period in 2023. Basic net loss per share for the second half of 2024 was $0.26, compared to $0.20 for the corresponding period in 2023.

Full year 2024 net loss attributable to shareholders was $4.4 million, compared to $3.9 million in 2023. 2024 basic net loss per share was $0.48, compared to $0.42 in 2023.

Cash Flow

Cash used in operating activities in the second half of 2024 was $2.0 million, cash used in investing activities was $0.1 million, and cash provided by financing activities was nil. As of December 31, 2024, UTStarcom had cash, cash equivalents and restricted cash of $53.1 million.

About UTStarcom Holdings Corp.

UTStarcom is committed to helping network operators offer their customers the most innovative, reliable and cost-effective communication services. UTStarcom offers high performance advanced equipment optimized for the most rapidly growing network functions, such as mobile backhaul, metro aggregation and broadband access. UTStarcom has operations and customers around the world, with a special focus on Japan, India and China. UTStarcom was founded in 1991 and listed its shares on the Nasdaq Market in 2000 (symbol: UTSI). For more information about UTStarcom, please visit http://www.utstar.com.

Forward-Looking Statements

This press release includes forward-looking statements, including statements regarding the Company’s strategic initiatives and the Company’s business outlook. These statements are forward-looking in nature and subject to risks and uncertainties that may cause actual results to differ materially and adversely from the Company’s current expectations. These include risks and uncertainties related to, among other things, the effect of the COVID-19 pandemic on the Company’s business, changes in the financial condition and cash position of the Company, changes in the composition of the Company’s management and their effect on the Company, the Company’s ability to realize anticipated results of operational improvements and benefits of the divestiture transaction, the ability to successfully identify and acquire appropriate technologies and businesses for inorganic growth and to integrate such acquisitions, the ability to internally innovate and develop new products, assumptions the Company makes regarding the growth of the market and the success of the Company’s offerings in the market and the Company’s ability to execute its business plan and manage regulatory matters. The risks and uncertainties also include the risk factors identified in the Company’s latest annual report on Form 20-F and current reports on Form 6-K as filed with the Securities and Exchange Commission. The Company is in a period of strategic transition and the conduct of its business is exposed to additional risks as a result. All forward-looking statements included in this press release are based upon information available to the Company as of the date of this press release, which may change and the Company assumes no obligation to update any such forward-looking statements.

For investor and media inquiries, please contact:

UTStarcom Holdings Corp.
Tel: +86 571 8192 8888
Ms. Shelley Jiang, Investor Relations
Email: utsi-ir@utstar.com/ Shelleyjiang@utstar.com /

UTStarcom Holdings Corp. Unaudited Condensed Consolidated Balance Sheets
		December 31,				December 31,
		2024				2023
		(In thousands)
ASSETS
Current assets:
Cash and cash equivalents		$	43,913			$	49,968
Notes receivable, net			659				490
Short-term investments			165				—
Accounts receivable, net			4,849				8,380
Inventories and deferred costs			2,156				886
Short-term restricted cash			6,824				7,117
Prepaid and other current assets			4,454				3,755
Total current assets			63,020				70,596
Long-term assets:
Property, plant and equipment, net			476				610
Operating lease right-of-use assets, net			1,399				2,649
Long-term restricted cash			2,406				2,562
Other long-term assets			848				1,063
Total long-term assets			5,129				6,884
Total assets		$	68,149			$	77,480
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable		$	6,957			$	7,959
Customer advances			769				226
Deferred revenue			62				72
Income tax payable			8,163				8,509
Operating lease liabilities, current			1,084				1,184
Other current liabilities			4,342				5,438
Total current liabilities			21,377				23,388
Long-term liabilities:
Operating lease liabilities, non-current			504				1,660
Long-term deferred revenue and other liabilities			1,042				1,049
Total liabilities			22,923				26,097
Total equity			45,226				51,383
Total liabilities and equity		$	68,149			$	77,480

UTStarcom Holdings Corp. Unaudited Condensed Consolidated Statements of Operations
		Six months ended December 31,								Twelve months ended December 31,
		2024				2023				2024				2023
		(In thousands, except per share data)
Net sales		$	5,159			$	9,239			$	10,878			$	15,753
Cost of net sales			3,968				6,670				7,972				11,363
Gross profit			1,191				2,569				2,906				4,390
			23.1	%			27.8	%			26.7	%			27.9	%
Operating expenses:
Selling, general and administrative			2,412				2,426				5,152				5,318
Research and development			2,510				3,007				5,085				5,881
Total operating expenses			4,922				5,433				10,237				11,199
Operating loss			(3,731	)			(2,864	)			(7,331	)			(6,809	)
Interest income, net			1,459				1,342				2,791				2,208
Other income (expense), net			49				112				855				2,024
Loss before income taxes			(2,223	)			(1,410	)			(3,685	)			(2,577	)
Income tax expense			(129	)			(430	)			(683	)			(1,274	)
Net loss attributable to UTStarcom Holdings Corp.		$	(2,352	)		$	(1,840	)		$	(4,368	)		$	(3,851	)
Net loss per share attributable to UTStarcom Holdings Corp.—Basic		$	(0.26	)		$	(0.20	)		$	(0.48	)		$	(0.42	)
Weighted average shares outstanding—Basic			9,179				9,116				9,150				9,113

UTStarcom Holdings Corp. Unaudited Condensed Consolidated Statements of Cash Flows
		Six months ended December 31,								Twelve months ended December 31,
		2024				2023				2024				2023
		(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(2,352	)		$	(1,840	)		$	(4,368	)		$	(3,851	)
Depreciation			138				114				275				230
Recovery of credit losses			(37	)			(317	)			(39	)			(1,315	)
Stock-based compensation expense			56				110				117				293
Net gain on disposal of assets			—				—				—				(25	)
Gain on release of tax liability due to expiration of the statute of limitations			(10	)			(10	)			(21	)			(21	)
Lease amortization			544				584				1,123				1,200
Deferred income taxes			154				275				154				275
Changes in fair value for trading securities investment			204				—				(165	)			—
Changes in operating assets and liabilities			(667	)			423				(1,533	)			(1,264	)
Net cash used in operating activities			(1,970	)			(661	)			(4,457	)			(4,478	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment			(86	)			(73	)			(192	)			(255	)
Net cash used in investing activities			(86	)			(73	)			(192	)			(255	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options			—				—				—				4
Net cash provided by financing activities			—				—				—				4
Effect of exchange rate changes on cash and cash equivalents			(839	)			(180	)			(1,855	)			(2,483	)
Net decrease in cash and cash equivalents			(2,895	)			(914	)			(6,504	)			(7,212	)
Cash, cash equivalents and restricted cash at beginning of period			56,038				60,561				59,647				66,859
Cash, cash equivalents and restricted cash at end of period		$	53,143			$	59,647			$	53,143			$	59,647

FAQ

What caused UTStarcom (UTSI) revenue decline in 2024?

UTSI's revenue decline was mainly due to decreased revenue from customers in India, including completion of current projects and no new major projects in the region.

How significant was UTSI's China Telecom Research Institute RFP win?

The win was a major milestone for UTSI's 5G transport network portfolio, securing a multi-million dollar contract to manufacture 5G transport network routers for China Telecom's STN network.

What is UTStarcom's (UTSI) financial position as of December 31, 2024?

UTSI maintained $53.1 million in cash, cash equivalents and restricted cash, despite reporting a net loss of $4.4 million for 2024.

How did UTSI's gross profit margin change in 2024 compared to 2023?

Gross profit margin decreased to 26.7% in 2024 from 27.9% in 2023, primarily due to lower equipment revenue and decreased activity with major customers in India and China.