NASDAQ:JG Aurora Mobile Q4 2023 Earnings Report $8.62 +0.18 (+2.07%) Closing price 05/6/2025 03:56 PM EasternExtended Trading$8.75 +0.14 (+1.57%) As of 06:43 AM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings History Aurora Mobile EPS ResultsActual EPS-$0.07Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/AAurora Mobile Revenue ResultsActual Revenue$10.90 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/AAurora Mobile Announcement DetailsQuarterQ4 2023Date3/12/2024TimeN/AConference Call DateTuesday, March 12, 2024Conference Call Time7:30AM ETUpcoming EarningsAurora Mobile's Q1 2025 earnings is scheduled for Thursday, June 5, 2025, with a conference call scheduled at 7:30 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (20-F)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Aurora Mobile Q4 2023 Earnings Call TranscriptProvided by QuartrMarch 12, 2024 ShareLink copied to clipboard.There are 6 speakers on the call. Operator00:00:00Ladies and gentlemen, thank you for standing by, and welcome to the Aurora Mobile 4th Quarter and Fiscal Year 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your host today, Christian Arnell. Thank you. Operator00:00:37Please go ahead, sir. Speaker 100:00:39Thank you. Hello, everyone, and thank you for joining us today. Aurora Malvaux's earnings release was distributed earlier today and is available on its IR website at ir.jiguang.cn. On the call today are Mr. Weidong Luo, Chairman and Chief Executive Officer Mr. Speaker 100:00:55Shannan Bong, Chief Financial Officer and Mr. Guangyan Chen, General Manager. Following their prepared remarks, they will be available to answer your questions during the Q and A session that follows. Before we begin, I'd like to remind you that this conference call contains forward looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended and as defined in the U. S. Speaker 100:01:18Private Securities Litigation Reform Act of 1995. These forward looking statements are based upon management's current expectations and current market and operating conditions, which are difficult to predict and may cause the company's actual results, performance or achievements to differ materially from those in the forward looking statements. Further information regarding these and other risks, uncertainties and or factors are included in the company's filings with the U. S. SEC. Speaker 100:01:45The company does not undertake any obligation to update any forward looking statement as a result of new information, future events or otherwise, except as required under applicable law. With that, I'd now like to turn the conference call over to Mr. Luo. Please go ahead. Speaker 200:02:01Thanks, Chris and good morning and good evening, everyone. Welcome to our Mobile 2030 3 Q4 earnings call. Before I comment on our Q4 results, I would like to remind everyone that the quarterly earnings that is available on our IR website. You may refer to that as we proceed with the call today. Overall, if I were to give a comment for the performance of this quarter, the appropriate A discussion for this quarter is growth, growth and growth. Speaker 200:02:32The reasons are as follows. Firstly, we have record, for the first time in history, consecutive quarters of positive adjusted EBITDA. Secondly, our total revenue grew every single quarter in 2023. Further, eBenefits subscription revenue also record sequential revenue growth in all quarter of 2023. Firstly, our gross profits also grew in every quarter of 2023. Speaker 200:03:00Last but not least, our overseas product in GedgeLab continue to expand globally and record great results this quarter. Next, let me share more lines on the business and revenues. For our total group revenue, we achieved positive growth of 5% quarter over quarter, driven mainly by the growth in developer services revenue. Now let me go through our different revenue streams. Developer services revenue, which consists of subscription services and value add services, decreased 12% year over year, but grew 8% quarter over quarter, mainly due to the weakness seen in the value added services offset by the 5% growth in subscription services. Speaker 200:03:44Next is the detailed discussion of each business line. Subscription service revenue were RMB48.8 million, up 5% year over year and quarter over quarter. This was mainly driven by increase in ARPU both year over year quarter over quarter. Within the year 2023, the subscription services revenue grew sequentially in all four quarters, mainly due to the steady increase in ARPU throughout the year. In Q4 2023, Outing has complete handful of private deployment projects for many customers. Speaker 200:04:21I'm very encouraged by this trend and believe more good results will come. Some of the notable new and renewable customers in this quarter include, but not limited to, 360 Finance, China Telecom, China Pacific Insurance, Everbright Bank Credit Card Center and SFO Express just to name a few. Value added services revenue of RMB6.8 million, decreased 60% year over year but increased by 38% quarter over quarter, which was due to the annual single day and double 12 online shopping festival in Q4, where advertisers increased their spending and made more budget allocation to us. However, no such event in Q3. Next, I would like to share with you on some exciting news and great achievements we have had in Q4 for our EngageLab business. Speaker 200:05:14Firstly, by the end of 2023, we have more than 170 customers signed up to purchase our EngageLab products. This will saw tremendous 70% growth between the quarters. Secondly, the cumulative signed contract value of EngageLab has a CNY15 1,000,000, representing a great 50% growth between the quarters. Further, our EngageLab customers are from 17 different countries around the world. As we shared in our Q3 earnings script, we aim to grow this business every quarter and we achieved great milestones between the quarters for EngageLab Business. Speaker 200:05:59I'm very proud of the hard work that the team has put in over the past quarter in order to record such an impressive customer number and contract value growth. This is by no means any easy task considering the tough overseas market environment and the uncertainty caught in the air. We continue to see strong demand for our EngageLab products overseas. Our EngageLab product is a non store customer engagement platform, enable our customer to use any of all the following messaging channels: appush, webpush, e mail services, SMS service, WhatsApp and WhatsApp Business API. Based on the feedbacks we received, the key major advantage of our EngageLab product is it allows our customer in different countries and regions to engage their own customers in an effective yet cost efficient manner. Speaker 200:06:56We aim to ensure we stay ahead of the game by continuing to trade and fine tune our products on a regular basis. More importantly, for us to meet and exceed our goal, customers expect our global customers' expectations. With that, I will now pass the call over to Shannon, who will share more about the vertical applications and other aspects of our financial performance for this quarter. Speaker 300:07:23Thanks, Chris. Next, I'll go over the revenue for vertical application where it is made up of Financial Risk Management and Market Intelligence. Vertica Application had a tough quarter where revenue recorded single digit decline both year over year and quarter over quarter. However, for Financial Risk Management, revenue grew 17% year over year and stayed pretty much stable quarter over quarter. The 17% year over year revenue growth was positively impacted by a 26% customer number growth. Speaker 300:07:58In particular, one good trend that we have observed is that the fact that customer number has recorded sequential growth in every quarter of 2023. This Q4 customers that we have signed up include but not limited to Meituan, 360 Finance, Weizhou Minghang, Ningbo Minghang and many other licensed financial institution throughout China. As for Market Intelligence, the revenue decreased 40% year over year and 10% quarter over quarter due to the continued rig demand for Chinese based app data as the investment sentiment towards Chinese ADR still remain lackluster. Nevertheless, amidst this slow market condition, we still managed to sign up some well known large customers such as Baidu, iQIYI, Taobao, fifty eight and many top tier global hedge fund and investment funds. I'll now go through some of the key expenses and balance sheet items. Speaker 300:09:04On to operating expenses. The Q4 operating expenses was at RMB61.2 million, representing 36% decrease year over year, but slightly increased 2% quarter over quarter. Overall, we are very pleased with our expense control and monitoring effort between the years. In summary, our Q4 OpEx has decreased year over year by $34,200,000 This is a testament of our commitment to wisely spend every single penny. And if you look at the OpEx on an annual basis, it has decreased by RMB108 1,000,000 between the years, representing a 30% decrease year over year. Speaker 300:09:48This again showed the management determination to effectively execute its cost saving plans as previously announced. I think at this stage, the company is well managed and ready to is ready for the next growth phase cycle. With this relatively low OpEx to run the business, so long as we execute top line growth plan well, I believe the good result will come sooner rather than later. Next, I'll go to the individual OpEx categories. In particular, R and D expenses decreased by 23% year over year to RMB 27,100,000 mainly due to lower headcount that reduced salary cost and associated share based compensation and a decrease in server depreciation expenses due to the growing club initiative. Speaker 300:10:38Selling and marketing expenses decreased by 10% year over year to RMB22,100,000 mainly due to decrease in salary costs resulted from headcount reduction as we further make adjustment to operate at the optimal level. G and A expense decreased by 66% year over year to RMB12.1 million, mainly due to one time non cash impairment loss of RMB22 1,000,000 recognized in last year Q4 of 2022. Further streamline of the headcount also contributed to a decrease in salary cost between the years. And for the quarter ended twelvethirty onetwenty 3, the adjusted EBITDA, which is calculated as EBITDA excluding share based compensation, reduction in force charges, impairment of long term investment and change in fair value of foreign currency swap contract, we recorded another positive adjusted EBITDA in this quarter. And this is a historical event where we have consecutive quarters of positive adjusted EBITDA. Speaker 300:11:42Onto the balance sheet. I'll share 2 very important KPIs that we closely monitor. We continue to maintain a healthy AR turnover days at 38 days, which is a 2 days improvement quarter over quarter. This 2 shortened days is very important as it let us collect cash from customer at an even shorter period of time. We believe this 38 days turnover is leading the industry in terms of collection days. Speaker 300:12:18Secondly, one of the key financial KPIs that we track for performance of SaaS Company is the total revenue, which represent cash collected in advance of customer for future contract performance, continue to be the high balance of RMB141.5 million. This is the 8th consecutive quarter where our deferred revenue balance has exceeded $130,000,000 This is very important as we are collecting more cash in advance from customer. And this greatly improve our cash flow at the same time mitigate risk of bad debt. On the cash flow, we have another great quarter of in Q4 of 2023, where we recorded net operating cash inflow of rmb11 1,000,000 and total cash inflow of rmb16.6 million. And this was a combination of our sales team actively collecting cash from customers and we tightly control our cash spending. Speaker 300:13:13Next, total assets were at rmb349.1 million as of December 31. This includes cash and cash equivalent of $115,000,000 accounts receivable of $34,300,000 dollars prepayments and other current assets of $20,200,000 fixed assets of $1,400,000 long term investment of $112,900,000 goodwill of $37,800,000 and intangible assets of $17,900,000 resulted from the SunTrust acquisition in March 2022. Total current liabilities were $241,300,000 as of December 31, 2023. This includes accounts payable of $21,100,000 current operating lease liability of 4,000,000 dollars deferred revenue of $141,500,000 accrued liabilities of $74,700,000 dollars At this juncture, let me take a few minutes here to summarize the growth quarter that Chris has mentioned earlier. In Q4 of 20.93, our total revenue and developer subscription revenue grew in every single quarter of 2023. Speaker 300:14:26Gross profit has also recorded sequential growth in all quarters of 2023. And for the first time in the history, we have consecutive quarters of positive adjusted EBITDA. Total annual operating expenses decreased by $108,000,000 between the years. And our EngageLab product are flourishing globally, signing up more and more customers and contract every quarter. We have done many things right in this quarter and the result has shown as such. Speaker 300:14:58We are very pleased with the Q4 execution effort and numbers. Nevertheless, we will not sit on our laurels. We will continue to execute our plan and deliver the goods. Lastly, before I conclude, I'll give an update on the share repurchase plan. In the quarter ended December 31, 2023, we have repurchased 53,000 ADS. Speaker 300:15:19Cumulatively, we have repurchased a total of 188,000 ADS since the start of our repurchase program. And this concludes management prepared remarks. We're happy to take your question now. Operator00:15:48Thank you. We will now take our first question. First question is from the line of Calvin Wong from Speakers Capital. Please go ahead. Speaker 400:16:01Good evening. Thank you for taking my questions. First of all, congrats to management for consecutive quarters of positive adjusted EBITDA. This is a great result. Well done. Speaker 400:16:13I would like to have 2 questions, if I may. The first one, a follow-up on this adjusted EBITDA, just want to hear from management how you see this adjusted EBITDA will trend going forward in 2024? That's the first question. And second question, again on EngageLab, we've been tracking your EngageLab business every quarter. So it seems that it has been doing great with better than our expectation results in terms of customer number and contract value every quarter. Speaker 400:16:50So we would like to know 2 things. A, are you expecting such explosive growth every quarter going forward? And B, what is the revenue contribution by EngageLab in this quarter? Thanks. Speaker 300:17:06Okay. Thanks, Kevin. Let me take a minute to recap your question. So I have 2 questions. 1 is on positive adjusted EBITDA and the other one is on EngageLab. Speaker 300:17:16Yes, let me take this question. Yes, I guess, yes, we are very pleased with the fact that we delivered another quarter of positive adjusted EBITDA in Q4 2023. And as I say, this is a historical event for us since IPO to have a 2 quarters of positive adjusted EBITDA. This is possible through the hard work that we have put in every day, day in and day out. And I believe besides the fact that you, our shareholders and investors, are really true to see this positive adjusted EBITDA that we have recorded. Speaker 300:17:49And if you peel through, the most important thing that I think we'd like to deliver the message is the OpEx numbers over the 4 quarters, you see one good trend I have mentioned. Between the years, the annual OpEx of between 2023 2022 has actually decreased by $108,000,000 So in summary, we have saved or trimmed our more than $100,000,000 expenses in 2023 to various cost cutting initiatives that we have undertaken from headcount reduction and then we review all the expenses. We even reduced our office rental space. So we have been working hard over the past year to seriously reduce our OpEx in the past 12 months. So what this means is really, really important. Speaker 300:18:37With this much lower OpEx, we're in a good position for 2024. As I say, so long as we continue to grow our top line domestically or through EngageLab globally, I believe sooner or later, the positive adjusted EBITDA will come as a natural cost of event. So this is the answer to your first question. And second question is on EnglishLab. Yes, I think we are very true. Speaker 300:19:02And as mentioned by Chris, he's really happy to see that things have been trending well. I guess the fact that this is no fluke is a result of, again, our commitment and our investment by the company and the dedication by the team to expand overseas. And let me recap the great achievement in Q4 for EnglishLab that Chris has mentioned. Firstly, the contract value has grown 50% between the quarters, achieving cumulative up to rmb15 million by Q4. And secondly, the customers number has grown 70% to 170 between the quarters. Speaker 300:19:40And this 70% revenue customer number growth is simply impressive. And thirdly, our customer has come from 17 different countries around the world. So in summary, we do have high hopes for this business to grow every single quarter. As I mentioned in the previous quarter, in addition to using ISB, independent software vendor arrangement that I talked about last quarter, we have started sending teams to overseas market to further solidify our position there. And just last week, we have started a team, a small team in Singapore to kick off our expansion plan. Speaker 300:20:17And we believe the overseas market, especially Southeast Asia, is where we can first grab more market share due to the proximity, the cultural familiarity and the high penetration of Chinese cell phone there. So this is the English step. And for the revenue contribution that you talked you asked, it is not still not material. This is simply the fact that as you're aware, we recognize revenue based on amortization depending on the length of the contract, be it 1 year or 2 years. So the $15,000,000 contract that I mentioned earlier will make its way to the books over the years. Speaker 300:20:54However, one number that I can share with you is that the recognized EnglishLab revenue, which is overseas revenue, has grown 8x from Q1 of 2023 to Q4, which means that revenue recognized is on the exclusive growth. So if I may summarize, I would like to leave this message with you and all the callers in today's call is the fact that our EnglishLab business is doing great. We will continue to invest in the necessary infrastructure to ensure great service delivery and quality service, and we'll continue to explore every single market in Southeast Asia every quarter. Kevin, hope this answers your question. Speaker 400:21:37Okay. That's very clear. Thank you. Operator00:21:42Thank you. We will now take our next question. This is from the line of Brian Kinstlinger from Allianz Global Partners. Speaker 500:22:00I have a whole bunch. Subscriptions are growing nicely, you mentioned, due to the higher ARPU. Can you talk about new customer accounts? I think I heard 26 in the quarter. But generally, what are new business trends like? Speaker 500:22:14What industries are driving this recovery? And maybe discuss your ability to continue to grow subscriptions and the impact the Chinese economy might have on this service offering or is having? Speaker 300:22:28Okay. Yes. Thanks, Brian. This is Shannon. I guess for Industry for Subscription, we don't see any particular concentration. Speaker 300:22:36I think it's across the board. As we mentioned a couple of quarters ago, for the past few years, we have seen the change in terms of how people look at push notification investment rather than investing in their own infrastructure, employing employees, engineers to do this work, they now are more than willing to outsource to company like us. So we see this in change of in terms of mentality by companies. That's where we pick up all the new customers, be it private cloud or public cloud. So this we do not see any concentration in terms of where the new customers are from. Speaker 500:23:17And then can you just speak to the Chinese economy? Is it neutral right now to the impact on your revenue? Is it offsetting the strength in demand and you could do much better on the recovery? Just kind of take us through the impact the economy is having on your subscriptions in China. Speaker 300:23:35Sure. If you compare domestic and overseas, I'm sure you can sense that overseas market is where the growth is from. Yes, domestically, we do not see such exclusive growth, but we still we think that it will go through a stable but relatively low growth domestically. Speaker 500:23:55But Engage Live is not having a big impact on your revenue. So I assume still the growth and recovery is coming in China, no? Speaker 300:24:02Yes, yes. But the growth is much slower compared to EnglishLab. Speaker 500:24:09And then can you quantify the change in ARPU for subscription that's driving this? And is there still opportunity to grow ARPU even more? And if so, what gives you that confidence? Speaker 300:24:23Sure. If you look at the ARPU from Q1 of 10,033 is around RMB8000. And come Q4, it's RMB11,000, okay? So this is we have seen a 17% growth year over year. And we do see this to continue to grow but at a much slower pace, probably about single digit 5% growth. Speaker 300:24:50And partly of this is the fact that we are able to complete some of the private cloud project as well, which is of much bigger contract value. So yes, so this is what is driving the ARPU growth. On an annual basis, the same customers, we are not able to increase the price too much. Speaker 500:25:10Got it. Thank you. That's helpful. And then in terms of non subscription revenue such as vertical applications, I know this includes market intelligence and other services. It seems like that revenue base is stabilized. Speaker 500:25:24What has to happen in terms of market conditions to begin to get confident that revenue line will begin to recover and grow even more? Speaker 300:25:36Yes. If you look at the advertising business, in a way we do not invest as much in it. So we let it run on its natural cost. So this very much fluctuate depends on the overall sentiment, right? If you look at how the 4 quarter pan out every single year, the advertising market will peak in Q2 and Q4. Speaker 300:25:58Q2 being the 6/18 online festival. And then the Q4 is just what Chris has mentioned, we got double 11, double 12. So these are the 2 peaks. So that is for value added service. And for vertical application, I think in overall, the Market Intelligence is still a bit slow in terms of the demand for Chinese ADR, APP numbers. Speaker 300:26:23But what we've seen is the financial risk management is doing well. It's doing well. It's increasing 17% year over year. So this is where we earn money to the credit companies or the banks who are trying to get the credit worthiness of individual lenders or the borrowers of their credit cards. So we see this trending up in terms of the inquiries each bank is buying our services. Speaker 300:26:52So if you look at the 3 non subscription business, Financial Risk Management is something that we have higher hopes in terms of continued growth. Speaker 500:27:02Got it. And then just to the balance sheet, it looks like quarter to quarter you increased cash by CAD4 1,000,000 dollars I think I heard cash flow, if I did a quick calculation from operations was up $1,000,000 and change. So what were the other sources of cash that increased $4,000,000 compared to the cash flow of 1,300,000 sequentially. Speaker 300:27:28Sure. Sure. In Q4, we divested one of the investment that we have made. So we make some we received some additional cash based on that. So those are that is under investing activities. Speaker 500:27:43But that divestiture doesn't have any impact on revenue? Speaker 300:27:47No, no, not at all. It's pure divestiture of investment. Speaker 500:27:53And then lastly, on seasonality, I assume the Q1 is your weakest quarter given holidays. Correct me if I'm wrong. Yes, please. Speaker 300:28:03And just help us Speaker 500:28:04with any other seasonality. I think you said the second and the 4th quarter you're strongest for I just want to make sure that I understand completely the seasonality. Speaker 300:28:14Sure. If you look at overall in terms of business, even the entire China, if I may, the Q1 will be slow simply with the fact that you had Chinese New Year, February is a shorter month, so everybody is on the way. So the last thing they want is to sign contract and do everything else. So Q1 will definitely be a slow season. But for non subscription business, I think only the value added service, which is the ad service, will pick in Q4 and Q2. Speaker 300:28:43The others, assuming if the economy is doing as it should be, we should see an uptrend every single quarter from Q1. Speaker 500:28:53And to the previous caller's question, given the seasonal weakness in the Q1, I assume you won't be EBITDA positive, but in quarters following that you will be. Is that how I am I reading it right or am I not reading that right? Speaker 300:29:12Yes. I think it will be pretty much what you say. Q1 will be it will be difficult to get positive adjusted EBITDA. Speaker 500:29:21But do you think you'll be around breakeven after? Speaker 300:29:26Yes, that's a goal. That's a goal, yes. Speaker 500:29:29Okay. Thank you so much and nice work on the recovery over the year. Speaker 300:29:33Thank you, sir. Operator00:29:37Thank you. There are no further questions at this time. So I will now hand the conference back to Christian Arnell for closing remarks. Thank you. Speaker 100:30:08Thank you everyone for joining the call tonight. If you have any further questions or comments, please don't hesitate to reach out to the IR team. That concludes the call. Thank you and have a good evening. Operator00:30:19Thank you. This concludes today's conference call. Thank you for participating and you may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallAurora Mobile Q4 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Annual report(20-F) Aurora Mobile Earnings HeadlinesGPTBots Integrates Alibaba's Qwen3 Model to Continuously Deliver Cutting-Edge AI for EnterprisesApril 30, 2025 | globenewswire.comAurora Mobile's GPTBots.ai Integrates Alibaba's Qwen3 Model to Continuously Deliver Cutting-Edge AI for EnterprisesApril 30, 2025 | globenewswire.comBuffett’s favorite chart just hit 209% – here’s what that means for goldA Historic Gold Announcement Is About to Rock Wall Street For months, sharp-eyed analysts have watched the quiet buildup behind the scenes. Now, in just days, the floodgates are set to open. 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Sign up for Earnings360's daily newsletter to receive timely earnings updates on Aurora Mobile and other key companies, straight to your email. Email Address About Aurora MobileAurora Mobile (NASDAQ:JG), through its subsidiaries, provides a range of developer services in China. The company provides push notification, instant messaging, analytics, sharing and short message service, one-click verification, and other services. The company offers real-time market intelligence solutions, such as product iApp, which provides analysis and statistical results on the usage and trends of mobile apps to investment funds and corporations. It also provides financial risk management solutions to assist financial institutions, licensed lenders, and credit card companies in making informed lending and credit decisions; and location-based intelligence services. In addition, the company offers application programming interfaces that create connectivity and automate the process of message exchange between the mobile apps and its backend network; an interactive web-based service dashboard that allows app developers to utilize and monitor its services through controls on an ongoing basis; and value added services, such as Advertisement SAAS, a data management platform service, which provides tagged and de-identified population data package; JG Alliance, an integrated marketing campaign services to advertising customers; and AD Mediation Platform to help mobile app developers access other mainstream advertising platforms. It primarily serves mobile app developers in a range of industries, such as media, entertainment, gaming, financial services, tourism, ecommerce, education, and healthcare. Aurora Mobile Limited was founded in 2011 and is headquartered in Shenzhen, the People's Republic of China.View Aurora Mobile ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Palantir Stock Drops Despite Stellar Earnings: What's Next?Is Eli Lilly a Buy After Weak Earnings and CVS-Novo Partnership?Is Reddit Stock a Buy, Sell, or Hold After Earnings Release?Warning or Opportunity After Super Micro Computer's EarningsAmazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousRocket Lab Braces for Q1 Earnings Amid Soaring ExpectationsMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2 Upcoming Earnings Monster Beverage (5/8/2025)Coinbase Global (5/8/2025)Brookfield (5/8/2025)Anheuser-Busch InBev SA/NV (5/8/2025)ConocoPhillips (5/8/2025)Shopify (5/8/2025)Cheniere Energy (5/8/2025)McKesson (5/8/2025)Enbridge (5/9/2025)Petróleo Brasileiro S.A. - Petrobras (5/12/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 6 speakers on the call. Operator00:00:00Ladies and gentlemen, thank you for standing by, and welcome to the Aurora Mobile 4th Quarter and Fiscal Year 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your host today, Christian Arnell. Thank you. Operator00:00:37Please go ahead, sir. Speaker 100:00:39Thank you. Hello, everyone, and thank you for joining us today. Aurora Malvaux's earnings release was distributed earlier today and is available on its IR website at ir.jiguang.cn. On the call today are Mr. Weidong Luo, Chairman and Chief Executive Officer Mr. Speaker 100:00:55Shannan Bong, Chief Financial Officer and Mr. Guangyan Chen, General Manager. Following their prepared remarks, they will be available to answer your questions during the Q and A session that follows. Before we begin, I'd like to remind you that this conference call contains forward looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended and as defined in the U. S. Speaker 100:01:18Private Securities Litigation Reform Act of 1995. These forward looking statements are based upon management's current expectations and current market and operating conditions, which are difficult to predict and may cause the company's actual results, performance or achievements to differ materially from those in the forward looking statements. Further information regarding these and other risks, uncertainties and or factors are included in the company's filings with the U. S. SEC. Speaker 100:01:45The company does not undertake any obligation to update any forward looking statement as a result of new information, future events or otherwise, except as required under applicable law. With that, I'd now like to turn the conference call over to Mr. Luo. Please go ahead. Speaker 200:02:01Thanks, Chris and good morning and good evening, everyone. Welcome to our Mobile 2030 3 Q4 earnings call. Before I comment on our Q4 results, I would like to remind everyone that the quarterly earnings that is available on our IR website. You may refer to that as we proceed with the call today. Overall, if I were to give a comment for the performance of this quarter, the appropriate A discussion for this quarter is growth, growth and growth. Speaker 200:02:32The reasons are as follows. Firstly, we have record, for the first time in history, consecutive quarters of positive adjusted EBITDA. Secondly, our total revenue grew every single quarter in 2023. Further, eBenefits subscription revenue also record sequential revenue growth in all quarter of 2023. Firstly, our gross profits also grew in every quarter of 2023. Speaker 200:03:00Last but not least, our overseas product in GedgeLab continue to expand globally and record great results this quarter. Next, let me share more lines on the business and revenues. For our total group revenue, we achieved positive growth of 5% quarter over quarter, driven mainly by the growth in developer services revenue. Now let me go through our different revenue streams. Developer services revenue, which consists of subscription services and value add services, decreased 12% year over year, but grew 8% quarter over quarter, mainly due to the weakness seen in the value added services offset by the 5% growth in subscription services. Speaker 200:03:44Next is the detailed discussion of each business line. Subscription service revenue were RMB48.8 million, up 5% year over year and quarter over quarter. This was mainly driven by increase in ARPU both year over year quarter over quarter. Within the year 2023, the subscription services revenue grew sequentially in all four quarters, mainly due to the steady increase in ARPU throughout the year. In Q4 2023, Outing has complete handful of private deployment projects for many customers. Speaker 200:04:21I'm very encouraged by this trend and believe more good results will come. Some of the notable new and renewable customers in this quarter include, but not limited to, 360 Finance, China Telecom, China Pacific Insurance, Everbright Bank Credit Card Center and SFO Express just to name a few. Value added services revenue of RMB6.8 million, decreased 60% year over year but increased by 38% quarter over quarter, which was due to the annual single day and double 12 online shopping festival in Q4, where advertisers increased their spending and made more budget allocation to us. However, no such event in Q3. Next, I would like to share with you on some exciting news and great achievements we have had in Q4 for our EngageLab business. Speaker 200:05:14Firstly, by the end of 2023, we have more than 170 customers signed up to purchase our EngageLab products. This will saw tremendous 70% growth between the quarters. Secondly, the cumulative signed contract value of EngageLab has a CNY15 1,000,000, representing a great 50% growth between the quarters. Further, our EngageLab customers are from 17 different countries around the world. As we shared in our Q3 earnings script, we aim to grow this business every quarter and we achieved great milestones between the quarters for EngageLab Business. Speaker 200:05:59I'm very proud of the hard work that the team has put in over the past quarter in order to record such an impressive customer number and contract value growth. This is by no means any easy task considering the tough overseas market environment and the uncertainty caught in the air. We continue to see strong demand for our EngageLab products overseas. Our EngageLab product is a non store customer engagement platform, enable our customer to use any of all the following messaging channels: appush, webpush, e mail services, SMS service, WhatsApp and WhatsApp Business API. Based on the feedbacks we received, the key major advantage of our EngageLab product is it allows our customer in different countries and regions to engage their own customers in an effective yet cost efficient manner. Speaker 200:06:56We aim to ensure we stay ahead of the game by continuing to trade and fine tune our products on a regular basis. More importantly, for us to meet and exceed our goal, customers expect our global customers' expectations. With that, I will now pass the call over to Shannon, who will share more about the vertical applications and other aspects of our financial performance for this quarter. Speaker 300:07:23Thanks, Chris. Next, I'll go over the revenue for vertical application where it is made up of Financial Risk Management and Market Intelligence. Vertica Application had a tough quarter where revenue recorded single digit decline both year over year and quarter over quarter. However, for Financial Risk Management, revenue grew 17% year over year and stayed pretty much stable quarter over quarter. The 17% year over year revenue growth was positively impacted by a 26% customer number growth. Speaker 300:07:58In particular, one good trend that we have observed is that the fact that customer number has recorded sequential growth in every quarter of 2023. This Q4 customers that we have signed up include but not limited to Meituan, 360 Finance, Weizhou Minghang, Ningbo Minghang and many other licensed financial institution throughout China. As for Market Intelligence, the revenue decreased 40% year over year and 10% quarter over quarter due to the continued rig demand for Chinese based app data as the investment sentiment towards Chinese ADR still remain lackluster. Nevertheless, amidst this slow market condition, we still managed to sign up some well known large customers such as Baidu, iQIYI, Taobao, fifty eight and many top tier global hedge fund and investment funds. I'll now go through some of the key expenses and balance sheet items. Speaker 300:09:04On to operating expenses. The Q4 operating expenses was at RMB61.2 million, representing 36% decrease year over year, but slightly increased 2% quarter over quarter. Overall, we are very pleased with our expense control and monitoring effort between the years. In summary, our Q4 OpEx has decreased year over year by $34,200,000 This is a testament of our commitment to wisely spend every single penny. And if you look at the OpEx on an annual basis, it has decreased by RMB108 1,000,000 between the years, representing a 30% decrease year over year. Speaker 300:09:48This again showed the management determination to effectively execute its cost saving plans as previously announced. I think at this stage, the company is well managed and ready to is ready for the next growth phase cycle. With this relatively low OpEx to run the business, so long as we execute top line growth plan well, I believe the good result will come sooner rather than later. Next, I'll go to the individual OpEx categories. In particular, R and D expenses decreased by 23% year over year to RMB 27,100,000 mainly due to lower headcount that reduced salary cost and associated share based compensation and a decrease in server depreciation expenses due to the growing club initiative. Speaker 300:10:38Selling and marketing expenses decreased by 10% year over year to RMB22,100,000 mainly due to decrease in salary costs resulted from headcount reduction as we further make adjustment to operate at the optimal level. G and A expense decreased by 66% year over year to RMB12.1 million, mainly due to one time non cash impairment loss of RMB22 1,000,000 recognized in last year Q4 of 2022. Further streamline of the headcount also contributed to a decrease in salary cost between the years. And for the quarter ended twelvethirty onetwenty 3, the adjusted EBITDA, which is calculated as EBITDA excluding share based compensation, reduction in force charges, impairment of long term investment and change in fair value of foreign currency swap contract, we recorded another positive adjusted EBITDA in this quarter. And this is a historical event where we have consecutive quarters of positive adjusted EBITDA. Speaker 300:11:42Onto the balance sheet. I'll share 2 very important KPIs that we closely monitor. We continue to maintain a healthy AR turnover days at 38 days, which is a 2 days improvement quarter over quarter. This 2 shortened days is very important as it let us collect cash from customer at an even shorter period of time. We believe this 38 days turnover is leading the industry in terms of collection days. Speaker 300:12:18Secondly, one of the key financial KPIs that we track for performance of SaaS Company is the total revenue, which represent cash collected in advance of customer for future contract performance, continue to be the high balance of RMB141.5 million. This is the 8th consecutive quarter where our deferred revenue balance has exceeded $130,000,000 This is very important as we are collecting more cash in advance from customer. And this greatly improve our cash flow at the same time mitigate risk of bad debt. On the cash flow, we have another great quarter of in Q4 of 2023, where we recorded net operating cash inflow of rmb11 1,000,000 and total cash inflow of rmb16.6 million. And this was a combination of our sales team actively collecting cash from customers and we tightly control our cash spending. Speaker 300:13:13Next, total assets were at rmb349.1 million as of December 31. This includes cash and cash equivalent of $115,000,000 accounts receivable of $34,300,000 dollars prepayments and other current assets of $20,200,000 fixed assets of $1,400,000 long term investment of $112,900,000 goodwill of $37,800,000 and intangible assets of $17,900,000 resulted from the SunTrust acquisition in March 2022. Total current liabilities were $241,300,000 as of December 31, 2023. This includes accounts payable of $21,100,000 current operating lease liability of 4,000,000 dollars deferred revenue of $141,500,000 accrued liabilities of $74,700,000 dollars At this juncture, let me take a few minutes here to summarize the growth quarter that Chris has mentioned earlier. In Q4 of 20.93, our total revenue and developer subscription revenue grew in every single quarter of 2023. Speaker 300:14:26Gross profit has also recorded sequential growth in all quarters of 2023. And for the first time in the history, we have consecutive quarters of positive adjusted EBITDA. Total annual operating expenses decreased by $108,000,000 between the years. And our EngageLab product are flourishing globally, signing up more and more customers and contract every quarter. We have done many things right in this quarter and the result has shown as such. Speaker 300:14:58We are very pleased with the Q4 execution effort and numbers. Nevertheless, we will not sit on our laurels. We will continue to execute our plan and deliver the goods. Lastly, before I conclude, I'll give an update on the share repurchase plan. In the quarter ended December 31, 2023, we have repurchased 53,000 ADS. Speaker 300:15:19Cumulatively, we have repurchased a total of 188,000 ADS since the start of our repurchase program. And this concludes management prepared remarks. We're happy to take your question now. Operator00:15:48Thank you. We will now take our first question. First question is from the line of Calvin Wong from Speakers Capital. Please go ahead. Speaker 400:16:01Good evening. Thank you for taking my questions. First of all, congrats to management for consecutive quarters of positive adjusted EBITDA. This is a great result. Well done. Speaker 400:16:13I would like to have 2 questions, if I may. The first one, a follow-up on this adjusted EBITDA, just want to hear from management how you see this adjusted EBITDA will trend going forward in 2024? That's the first question. And second question, again on EngageLab, we've been tracking your EngageLab business every quarter. So it seems that it has been doing great with better than our expectation results in terms of customer number and contract value every quarter. Speaker 400:16:50So we would like to know 2 things. A, are you expecting such explosive growth every quarter going forward? And B, what is the revenue contribution by EngageLab in this quarter? Thanks. Speaker 300:17:06Okay. Thanks, Kevin. Let me take a minute to recap your question. So I have 2 questions. 1 is on positive adjusted EBITDA and the other one is on EngageLab. Speaker 300:17:16Yes, let me take this question. Yes, I guess, yes, we are very pleased with the fact that we delivered another quarter of positive adjusted EBITDA in Q4 2023. And as I say, this is a historical event for us since IPO to have a 2 quarters of positive adjusted EBITDA. This is possible through the hard work that we have put in every day, day in and day out. And I believe besides the fact that you, our shareholders and investors, are really true to see this positive adjusted EBITDA that we have recorded. Speaker 300:17:49And if you peel through, the most important thing that I think we'd like to deliver the message is the OpEx numbers over the 4 quarters, you see one good trend I have mentioned. Between the years, the annual OpEx of between 2023 2022 has actually decreased by $108,000,000 So in summary, we have saved or trimmed our more than $100,000,000 expenses in 2023 to various cost cutting initiatives that we have undertaken from headcount reduction and then we review all the expenses. We even reduced our office rental space. So we have been working hard over the past year to seriously reduce our OpEx in the past 12 months. So what this means is really, really important. Speaker 300:18:37With this much lower OpEx, we're in a good position for 2024. As I say, so long as we continue to grow our top line domestically or through EngageLab globally, I believe sooner or later, the positive adjusted EBITDA will come as a natural cost of event. So this is the answer to your first question. And second question is on EnglishLab. Yes, I think we are very true. Speaker 300:19:02And as mentioned by Chris, he's really happy to see that things have been trending well. I guess the fact that this is no fluke is a result of, again, our commitment and our investment by the company and the dedication by the team to expand overseas. And let me recap the great achievement in Q4 for EnglishLab that Chris has mentioned. Firstly, the contract value has grown 50% between the quarters, achieving cumulative up to rmb15 million by Q4. And secondly, the customers number has grown 70% to 170 between the quarters. Speaker 300:19:40And this 70% revenue customer number growth is simply impressive. And thirdly, our customer has come from 17 different countries around the world. So in summary, we do have high hopes for this business to grow every single quarter. As I mentioned in the previous quarter, in addition to using ISB, independent software vendor arrangement that I talked about last quarter, we have started sending teams to overseas market to further solidify our position there. And just last week, we have started a team, a small team in Singapore to kick off our expansion plan. Speaker 300:20:17And we believe the overseas market, especially Southeast Asia, is where we can first grab more market share due to the proximity, the cultural familiarity and the high penetration of Chinese cell phone there. So this is the English step. And for the revenue contribution that you talked you asked, it is not still not material. This is simply the fact that as you're aware, we recognize revenue based on amortization depending on the length of the contract, be it 1 year or 2 years. So the $15,000,000 contract that I mentioned earlier will make its way to the books over the years. Speaker 300:20:54However, one number that I can share with you is that the recognized EnglishLab revenue, which is overseas revenue, has grown 8x from Q1 of 2023 to Q4, which means that revenue recognized is on the exclusive growth. So if I may summarize, I would like to leave this message with you and all the callers in today's call is the fact that our EnglishLab business is doing great. We will continue to invest in the necessary infrastructure to ensure great service delivery and quality service, and we'll continue to explore every single market in Southeast Asia every quarter. Kevin, hope this answers your question. Speaker 400:21:37Okay. That's very clear. Thank you. Operator00:21:42Thank you. We will now take our next question. This is from the line of Brian Kinstlinger from Allianz Global Partners. Speaker 500:22:00I have a whole bunch. Subscriptions are growing nicely, you mentioned, due to the higher ARPU. Can you talk about new customer accounts? I think I heard 26 in the quarter. But generally, what are new business trends like? Speaker 500:22:14What industries are driving this recovery? And maybe discuss your ability to continue to grow subscriptions and the impact the Chinese economy might have on this service offering or is having? Speaker 300:22:28Okay. Yes. Thanks, Brian. This is Shannon. I guess for Industry for Subscription, we don't see any particular concentration. Speaker 300:22:36I think it's across the board. As we mentioned a couple of quarters ago, for the past few years, we have seen the change in terms of how people look at push notification investment rather than investing in their own infrastructure, employing employees, engineers to do this work, they now are more than willing to outsource to company like us. So we see this in change of in terms of mentality by companies. That's where we pick up all the new customers, be it private cloud or public cloud. So this we do not see any concentration in terms of where the new customers are from. Speaker 500:23:17And then can you just speak to the Chinese economy? Is it neutral right now to the impact on your revenue? Is it offsetting the strength in demand and you could do much better on the recovery? Just kind of take us through the impact the economy is having on your subscriptions in China. Speaker 300:23:35Sure. If you compare domestic and overseas, I'm sure you can sense that overseas market is where the growth is from. Yes, domestically, we do not see such exclusive growth, but we still we think that it will go through a stable but relatively low growth domestically. Speaker 500:23:55But Engage Live is not having a big impact on your revenue. So I assume still the growth and recovery is coming in China, no? Speaker 300:24:02Yes, yes. But the growth is much slower compared to EnglishLab. Speaker 500:24:09And then can you quantify the change in ARPU for subscription that's driving this? And is there still opportunity to grow ARPU even more? And if so, what gives you that confidence? Speaker 300:24:23Sure. If you look at the ARPU from Q1 of 10,033 is around RMB8000. And come Q4, it's RMB11,000, okay? So this is we have seen a 17% growth year over year. And we do see this to continue to grow but at a much slower pace, probably about single digit 5% growth. Speaker 300:24:50And partly of this is the fact that we are able to complete some of the private cloud project as well, which is of much bigger contract value. So yes, so this is what is driving the ARPU growth. On an annual basis, the same customers, we are not able to increase the price too much. Speaker 500:25:10Got it. Thank you. That's helpful. And then in terms of non subscription revenue such as vertical applications, I know this includes market intelligence and other services. It seems like that revenue base is stabilized. Speaker 500:25:24What has to happen in terms of market conditions to begin to get confident that revenue line will begin to recover and grow even more? Speaker 300:25:36Yes. If you look at the advertising business, in a way we do not invest as much in it. So we let it run on its natural cost. So this very much fluctuate depends on the overall sentiment, right? If you look at how the 4 quarter pan out every single year, the advertising market will peak in Q2 and Q4. Speaker 300:25:58Q2 being the 6/18 online festival. And then the Q4 is just what Chris has mentioned, we got double 11, double 12. So these are the 2 peaks. So that is for value added service. And for vertical application, I think in overall, the Market Intelligence is still a bit slow in terms of the demand for Chinese ADR, APP numbers. Speaker 300:26:23But what we've seen is the financial risk management is doing well. It's doing well. It's increasing 17% year over year. So this is where we earn money to the credit companies or the banks who are trying to get the credit worthiness of individual lenders or the borrowers of their credit cards. So we see this trending up in terms of the inquiries each bank is buying our services. Speaker 300:26:52So if you look at the 3 non subscription business, Financial Risk Management is something that we have higher hopes in terms of continued growth. Speaker 500:27:02Got it. And then just to the balance sheet, it looks like quarter to quarter you increased cash by CAD4 1,000,000 dollars I think I heard cash flow, if I did a quick calculation from operations was up $1,000,000 and change. So what were the other sources of cash that increased $4,000,000 compared to the cash flow of 1,300,000 sequentially. Speaker 300:27:28Sure. Sure. In Q4, we divested one of the investment that we have made. So we make some we received some additional cash based on that. So those are that is under investing activities. Speaker 500:27:43But that divestiture doesn't have any impact on revenue? Speaker 300:27:47No, no, not at all. It's pure divestiture of investment. Speaker 500:27:53And then lastly, on seasonality, I assume the Q1 is your weakest quarter given holidays. Correct me if I'm wrong. Yes, please. Speaker 300:28:03And just help us Speaker 500:28:04with any other seasonality. I think you said the second and the 4th quarter you're strongest for I just want to make sure that I understand completely the seasonality. Speaker 300:28:14Sure. If you look at overall in terms of business, even the entire China, if I may, the Q1 will be slow simply with the fact that you had Chinese New Year, February is a shorter month, so everybody is on the way. So the last thing they want is to sign contract and do everything else. So Q1 will definitely be a slow season. But for non subscription business, I think only the value added service, which is the ad service, will pick in Q4 and Q2. Speaker 300:28:43The others, assuming if the economy is doing as it should be, we should see an uptrend every single quarter from Q1. Speaker 500:28:53And to the previous caller's question, given the seasonal weakness in the Q1, I assume you won't be EBITDA positive, but in quarters following that you will be. Is that how I am I reading it right or am I not reading that right? Speaker 300:29:12Yes. I think it will be pretty much what you say. Q1 will be it will be difficult to get positive adjusted EBITDA. Speaker 500:29:21But do you think you'll be around breakeven after? Speaker 300:29:26Yes, that's a goal. That's a goal, yes. Speaker 500:29:29Okay. Thank you so much and nice work on the recovery over the year. Speaker 300:29:33Thank you, sir. Operator00:29:37Thank you. There are no further questions at this time. So I will now hand the conference back to Christian Arnell for closing remarks. Thank you. Speaker 100:30:08Thank you everyone for joining the call tonight. If you have any further questions or comments, please don't hesitate to reach out to the IR team. That concludes the call. Thank you and have a good evening. Operator00:30:19Thank you. This concludes today's conference call. Thank you for participating and you may now disconnect.Read morePowered by