Company: GCTS
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0000950170-25-044438
Chunk: 142

Company: GCT Semiconductor Holding, Inc.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 1B
Chunk 142
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 reduction of $5.0 million of LTE product sales and a decrease of $1.2 million in LTE platform sales. This trend was primarily due to the changing priorities of our largest customers that shifted their focus to the next generation 5G products. Our net revenues are expected to increase with these customers after we launch our 5G products. 

Service revenues decreased by $0.7 million, or 14%, from $5.1 million for the year ended December 31, 2023 to $4.4 million for the year ended December 31, 2024. This decrease was due to the timing and scope of our service projects for LTE products.

Cost of Net Revenues

Cost of net revenues decreased by $5.2 million, or 56%, from $9.3 million for the year ended December 31, 2023 to $4.1 million for the year ended December 31, 2024, driven primarily by the reduction in our product sales. 

Product costs decreased by $4.8 million, or 66%, from $7.3 million for the year ended December 31, 2023 to $2.5 million for the year ended December 31, 2024. This decrease in product costs was driven primarily by the reduction in direct product costs as we sold fewer units. 

Service costs decreased by $0.4 million, or 22%, from $2.0 million for the year ended December 31, 2023 to $1.5 million for the year ended December 31, 2024. This decrease in service costs was driven primarily by the reduction in direct costs as we were engaged in service projects with lower scope.

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Our gross margins increased to 56% for the year ended December 31, 2024 compared to 42% for the year ended December 31, 2023 primarily due to changes in the product and revenue offerings mix. Specifically, we increased the share of reference platform sales and generated higher margins from our service offerings during the year ended December 31, 2024. 

Research and Development Expenses

Research and development expenses increased by $6.6 million, or 62% from $10.7 million for the year ended December 31, 2023 to $17.3 million for the year ended December 31, 2024, primarily in connection with our development projects. This increase reflects our 5G development program launched during 2024 and was primarily