Hello, and welcome to the uCloudlink Group Inc. second quarter 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note, today's event is being recorded. Now I would like to turn the conference over to Jillian Zeng, Investor Relations. Ms. Zeng, please go ahead.
Thanks everyone for joining us on our second quarter 2022 earnings call today. The earnings release is now available on our IR website at ir.ucloudlink.com, as well as via Newswire service. I will give a brief introduction to our uCloudlink management team. Zhiping Peng is our Co-founder and Chairman of the Board of Directors. Chaohui Chen is our Co-founder, Director, and Chief Executive Officer. Yimeng Shi is our Chief Financial Officer. Zhu Tan is our Vice President of Marketing and Sales. Our CEO will begin with an overview of our company and the business highlights, which will cover section 1 of the earnings presentation posted on our IR website. Our CFO, Yimeng Shi, will then discuss our operational highlights and the financial results as presented in sections 2 and 3.
Before we proceed, please note that this call may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and observations that involve the known and unknown risks, uncertainties, and other factors not under the company's control, which may cause actual results, performance, or achievements of the company to be materially different from the results, performance, or expectations implied by these forward-looking statements. All forward-looking statements expressly qualified in their entirety by the cautionary statements with factors and details of the company's filings with the SEC. The company does not assume any obligation to revise or update any forward-looking statements as a result of new information, future events, change in the market conditions, or otherwise, except as required by law.
Please also note that uCloudlink earnings press release and this conference call include discussions of the unaudited GAAP financial information, as well as unaudited non-GAAP financial measures. uCloudlink press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. I will now turn the call over to our Co-founder and CEO, Mr. Chaohui Chen. Please go ahead.
Yes. Thank you, Jilian. Page 4 to page 12 are similar contents as the earnings presentation of the first quarter of 2022. We still encourage you to review the second quarter of 2022 earnings presentation uploaded to our investor relations website with some latest updates. Hence, I will now elaborate on the part similar to the first quarter of 2022 earnings release. We instead focus on our most recent developments in the second quarter. Let's move to page 13. uCloudlink 1.0 is our international data connectivity services business, which has had a strong track record of high growth margins and profitability with ongoing growth potential.
During the second quarter of 2022, our 1.0 business revenues has increased by 40.1% compared to the same period in 2021. As international travel restrictions around the world continue abate over time, the number of average daily active terminal for the 1.0 business has increased during the second quarter of 2022. Compared to the second quarter of 2021, average daily device terminal has increased by 23.6%. A testament to the faster recovery of our 1.0 business, which indicates that more and more customers are using our products and services.
With our innovative global 5G roaming solution, we hope to strengthen our leading technology position in providing reliable, high-quality international data connectivity services in more than 140 countries, powered by our PaaS and SaaS platform, enabling single operator entry point to access more than 300 global mobile network operators around the world. We remain positive about the ongoing recovery and growth of global tourism demands and expect revenue from 1.0 business to steadily grow and exceed pre-COVID-19 level in the future. Let's move to page 14. uCloudlink 2.0 is our local data connectivity services business, and has become a new driver of revenue growth since the year 2020.
Its growth is built upon our efforts in exploring market opportunities, such as the post-pandemic new normal lifestyle, that people are getting more and more used to. The development of 5G applications and in the IoT area, our abilities to improve network connections, data connections, cooperation with intelligent hardware manufacturers to implement growth insight, et cetera. In the past quarters, we have continued to strengthen our presence in our existing markets, including Japan, North America, Southeast Asia, where we help operators and business partners improve their data connectivity services and solve data connection problems through our PaaS and SaaS platform based on our patent technologies, including CloudSIM and HyperConn technology solution. We adapt ourselves to the evolving market by introducing and upgrading innovative products to address various 2.0 business application scenarios.
During the second quarter of 2022, our various IoT solutions, such as industrial Wi-Fi router, IP camera, have gained increasing recognition in various markets, actively extending our footprint into more industries, including power, emergency services, autopilot, et cetera. This is reflected by a 52.6% increase in the 2.0 revenue during the second quarter of 2022 compared to the same period in the prior year. Our customers were able to realize reduced operating costs and improve data connectivity experience through these cutting-edge IoT solutions, and we continue to focus on exploring new business prospects to serve a broader spectrum of partners with IoT needs. We expect our 2.0 business to grow with the support of our innovative CloudSIM and the HyperConn technology.
As we continue to introduce our solutions, services, and products to the market and strengthen our collaborations with local partners. Let's move to page 15. Based on our innovative CloudSIM and HyperConn technology solution, we continue to develop and broaden our portfolio of offering with new products and services, such as our self-developed terminals and third-party devices. In the second quarter of 2022, we continue to promote our existing portfolio of innovative 5G products in countries and regions such as the U.S., Japan, and Europe. We are now one of the few companies that could provide 5G products with a global radio band.
In terms of the IoT side, the IP camera, which was applied with our CMI solution, that we launched commercially in the fourth quarter of 2022, has now been promoted in the international market and received global recognition with the innovative technologies that ensure a reliable, high quality, and innovative mobile data connection for the devices. Going forward, we plan to launch and provide more of this type of innovative products and services. uCloudlink positions itself as the pioneer technology solution provider in the data connectivity market. Based on the mature 1.0 business and newer 2.0 business, we promote a long-term development of our PaaS and SaaS ecosystem, which has been recognized by various business partners. We remain confident in our business development teams to empower the building of our PaaS and SaaS ecosystem.
In our research and development teams to address diversifying needs our customers pose to us. In the coming quarters, we expect PaaS and SaaS platform revenues to grow into a more significant drive of our business and continue to enlarge its marginal effect and improve margin profiles. We are more than pleased to announce that our total revenue reached $80 million during the second quarter of 2022, which has slightly exceeded our previous projection range due to a faster-than-expected recovery of international data connectivity services and development of local data connectivity services. We successfully achieved a positive operating cash flow in the first quarter since the second quarter of 2020 during the COVID-19 pandemic. We are confident in our financial and operational position to fuel a better result in the future.
We believe that from connected to better connection, uCloudlink is a significant driving force in the transformation of the increasingly advanced information era. We are committed to building a more connected future and for more customers and users. We strive to make a positive impact in serving a global user community. I will now turn it over to our CFO, Yimeng Shi, who will go through the business and financial highlights.
Thank you, Mr. Chen. Hello, everyone. I will quickly go over our business highlights for the quarter ending June 30, 2022. Average daily active terminal for the second quarter were 292,432, including 1,223 owned by the company, and 291,209 owned by our business partners. Representing an increase of 23.6% from 236,553 in the second quarter of 2021. Now, uCloudlink 2.0 service accounted for around 68% of our total DAT during the second quarter of 2022. Average daily data usage per terminal was 1.58 GB in June 2022. Let's now turn to page 18, which show global diversification of our business.
We had around 99% of total revenue from outside mainland China. During the second quarter of 2022, Japan contributed to around 38.1% of total revenue. For other countries' revenue, the U.S. market had the largest contribution to our business with further development of our U.S. business. We will continue to expand other markets such as Europe and Southeast Asia, et cetera. During the second quarter of 2021, we had 8.3% of the total revenue coming from mainland China. 32.6% of total revenue came in from Japan, and 39.1% of total revenue came in from other countries and the regions. Let's now turn to page 20. I will go through our financial highlights of the second quarter of 2022.
Service related revenue as a percentage of total revenue was 62.5% during the second quarter of 2022, compared with 48.5% during the second quarter of 2021. Revenue from international data connectivity service and local data connectivity service increased by 40.1% and 52.6% year-over-year, respectively. This increase in revenues from data connectivity service was mainly attributable to our gradual recovery of international travel and the continuous development of our local data connectivity service business. Let's now move to page 21, which shows the revenue breakdown of our 2 business segments, namely revenue from service and sales products. Our total revenue decreased by 6.3% from $90.2 million in the second quarter of 2021 to $18 million in the second quarter of 2022.
Primarily due to a decrease in sales of data related products and others. Revenue from service were $11.2 million, representing an increase of 20.7% from $9.3 million for the same periods of 2021. The increase was primarily attributable to the increase in revenue from international data connectivity service and local data connectivity service. Let's now turn to page 22 for gross margins of our business. Our service gross margin increased to 56.2% in the second quarter of 2022, compared to 45.4% in the same period of 2021. Our overall gross margins was 44.1% in the second quarter of 2022. Increase from 28.1% during the same period of 2021.
The increase of our service gross margins during the second quarter of 2022 was primarily attributable to highest margin profile from international data connectivity service. Let's now move to page 23, which show the breakdown of our operating expenses, excluding share-based compensations and others. Excluding share-based compensation, operating expenses as a percentage of total revenue was 41% in the second quarter of 2022, compared with 61% during the same period of 2021. We have further streamlined our business operation, including optimizing labor cost. Our total operating expenses, excluding share-based compensation, decreased to $7.3 million in the second quarter of 2022, compared to $11.8 million in the same period of 2021. Let's now turn to page 24.
Operating cash flow turned positive during the second quarter of 2022, and it was $2.5 million compared to negative $6.1 million during the same period of 2021. This is primarily a result of our ongoing efforts to improve margins profile and to control operating expenses. Our cash and cash equivalents and short-term deposits were $12.2 million as at June 30, 2022. Our CapEx was $0.2 million compared to $0.3 million in the same period, 2021. Let's move to page 25. The net loss during the second quarter of 2022 was $6.3 million compared to $8.2 million during the second quarter of 2021.
Adjusted EBITDA was negative $1 million during the second quarter of 2022 compared to negative $5.5 million during the second quarter of 2021. The company is working towards improving its bottom line results and financial position. With that, let me conclude today's presentation. Thank you, and we'll start our Q&A session.
Yes, thank you. As mentioned, at this time, we will begin the question-and-answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, press star then two. At this time, we will pause momentarily to assemble the roster. Today's first question comes from Vivian Zhang with Diamond Equity.
Good evening. This is Vivian Zhang from Diamond Equity Research. Thanks for taking my question, and congrats on the progress you made this quarter. My first question will be about the gross margin. We saw the gross margin on both services and sales of products increase significantly this quarter. I would like to know what the reason for the increase. Will you continue to maintain the gross margin at this level in future quarters? Thank you.
Yeah. Thanks, Vivian. Regarding the gross margins improvement in the second quarter. First of all, there's the gross margin on service. That's a massive improvement compared with the same period of last year. As we explained in the earnings release, our revenue generated from the international data connectivity service increased a lot compared with last year. The gross margins related to the international data connectivity service is much higher than like a local data connectivity service. That's a major contribution to our improvement on gross service gross margins.
We expect the international travel is in the recovery and the most countries, more and more countries open the door to the traveler. We expect in the future we have generated more revenue from international data connectivity service. We expect our service gross margin will keep this similar level and will improve in the future once we have more revenue came from international data connectivity service. The second contribution related to the product. Yes, our products gross margins are improving as well.
That's mainly due to the mixed product sales related to high-end product selling like 5G-related products to the market. This quarter we deliver massive 5G-related products to the market. We expect that this trend will carry on in the following quarter and this year. Thanks.
Yeah. I have some more comments about.
Okay.
Sorry.
Mm-hmm.
I have more comment about this point because I know in the R&D side, we also put a lot of effort to improve our margin, improve our algorithm and the efficiency of our data, you know, usage and the combination, and this part also increase our margin capability. Another factor is we are now at some new design and some replacement, you know, to optimize the hardware to improve our profitability of our hardware and the data connection together.
Okay. I see. Thanks for that. My second question is that can you elaborate on the partnership you published in the second quarter and how shareholders should view this development?
I mean, the partnership with Tuya Inc. and Trip.com Group Limited.
Which two partner? Yeah.
Yes. I mean, yeah. Partnership with,
Ctrip.
Tuya Inc. and Trip.com Group Limited, you published.
Okay. Yeah.
In the second quarter. Yes.
Last year, we have signed you know a framework contract with Tuya about use our technology to improve you know the efficiency and the connectivity quality in the IoT area. It just a framework contract, and it just a starting point. We believe in the future, we have more partner because recognize our technology. Because you know our HyperConn technology not only improve the coverage of the IoT device, but also lower the cost of the operation costs because multi-network can enhance the reliability of the IoT network connectivity. That's very useful to an IoT area.
We hope in the future we have more this kind of partners can work with us. For example, as you understand in our presentation, we already embed our service into the IP camera, IP router, and also now apply into the autopilot. We believe the basic need for better connection and lower the operation cost is the basic need of IoT application. That's for cooperation partners similar like Tuya, this kind of partner. That's just a start point. Now we have more partners in this area. That's for first one. For second one, we're working with the Ctrip because you can see now the global tourism travel is recovering.
Before the COVID-19, we already is a big partner working with the Ctrip. Because we are their biggest channel and for mobile Wi-Fi hotspot rental in China via their channel. Now we are prepared for, you know, recovery of COVID-19. Now we are not only prepared for recovery in China, but in U.S., in the Southeast Asia, we have more deep cooperation to prepare for the people recovery from the global travel this scenario.
Okay. Got it. That helps. Thank you. Okay, that's all my questions. Again, congrats on the quarter.
Thank you. Once again, please press Star and then one if you would like to ask a question. All right, at this time, I would like to return the conference to Jillian Zeng for any closing comments.
Okay. There are no further questions. Okay. Thank you once again for joining us. If you have further questions, yeah, please contact our investor relations or contact our investor relations firm, The Equity Group.
Thank you. The conference has now concluded. Thank you for attending today's presentation.