Aurora Mobile Q2 2026 Earnings Call Transcript

Quartr
Provided by Quartr
August 20, 2026

Key Takeaways

  • Positive Sentiment: Revenue surpassed RMB 100 million in Q2, rising 13% year over year, while Developer Subscription Services reached a record RMB 70.7 million, up 32% year over year.
  • Positive Sentiment: EngageLab continued its rapid global expansion, with June ARR reaching a record US$14.6 million, up 170% year over year; recognized revenue grew 186% and customers exceeded 2,100.
  • Positive Sentiment: Profitability and cash generation strengthened, with gross profit up 16%, gross margin improving 197 basis points, a fifth consecutive quarter of GAAP net profit, and RMB 23.3 million of operating cash inflow.
  • Negative Sentiment: Vertical applications revenue declined 16% year over year, including a 17% drop in Financial Risk Management and a 12% decline in Market Intelligence amid weak demand for Chinese app data.
  • Positive Sentiment: Management is expanding its platform through Silent Auth, Modellix, and upgraded GPTBots.ai, aiming to increase customer stickiness, upselling, global reach, and enterprise adoption of production-grade AI agents.
AI Generated. May Contain Errors.
Earnings Conference Call
Aurora Mobile Q2 2026
00:00 / 00:00

Transcript Sections

Skip to Participants
Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Aurora Mobile second quarter 2026 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you would need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would like now to hand the conference over to your host today, Christian Arnell. Please go ahead.

Christian Arnell
Managing Director at Christensen

Thank you. Hello, everyone, and thank you for joining us today. Aurora Mobile's earnings release was distributed early today and is available on its IR website at ir.aurora-mobile.com. On the call today are Mr. Weidong Luo, Chairman and Chief Executive Officer, Mr. Shan-Nen 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&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. Private Securities Litigation Reform Act of 1995.

Christian Arnell
Managing Director at Christensen

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 factors are included in the company's filings with the U.S. SEC. The 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.

Weidong Luo
Weidong Luo
Chairman and CEO at Aurora Mobile

Thanks, Christian. Hi, everyone. Welcome to Aurora Mobile's 2026 second quarter earnings call. Before I comment on our Q2 results, I would like to remind everyone that we have uploaded the quarterly earnings deck on our IR website. You may refer to the deck as we proceed with the call today. As we've done in the past, the suitable description that I would give to the second quarter of 2026 is our RMB 100 million revenue quarter. The reason for this narrative is obvious. Our achievements in the second quarter of 2026 are as follows. Firstly, for the third time in our history, we recorded SaaS business revenue in excess of RMB 100 million in a single quarter. This was fueled by the highest Developer Services revenue in history of RMB 79.9 million in this quarter. Secondly, our global flagship product, EngageLab, has its best quarter yet.

Weidong Luo
Weidong Luo
Chairman and CEO at Aurora Mobile

The EngageLab's ARR for June 2026 has scaled to a record high of $14.6 million, representing 170% year-over-year growth. Thirdly, gross profit grew by 16% year-over-year. Gross margin improved by 197 basis points between the years. Having top-line growth alone is not enough. In this quarter, we delivered the fifth consecutive quarters of US GAAP net profit. Last but not least, operationally, we brought in net cash inflow of RMB 23.3 million this quarter. This marks a strong second quarter performance building on our Q1 results released in May. Taken together, the first two quarters of 2026 validate our robust growth momentum, and we remain on track to deliver against our target for a highly promising full year 2026. Let me now share more on the business aspects. RMB 100 million revenue a quarter. Yes, we made it again. This milestone came one quarter earlier than what we previously anticipated.

Weidong Luo
Weidong Luo
Chairman and CEO at Aurora Mobile

We are very pleased with this early pleasant surprise. Our total Q2 group revenue reached RMB 101.2 million, representing a strong 13% year-over-year growth. This RMB 100 million of quarter revenue is a very important milestone for us. It signifies a few key messages that I think are important that I share with you all today. Firstly, the RMB 100 million quarterly revenue milestone marks a landmark validation of Aurora Mobile's pure SaaS strategic transformation, forming a durable, larger revenue foundation. Secondly, top-line expansion is anchored by high-margin recurring Developer Subscription Services revenue supported by solid customer retention and rising enterprise demand. Thirdly, dual growth engines, domestic developer ecosystem, and fast-growing global EngageLab business jointly drive scalable cross-market revenue expansion. Fourthly, greater revenue scale improves operating leverage, underpinning our consistent profitability trend and long-term path of sustainable shareholder returns.

Weidong Luo
Weidong Luo
Chairman and CEO at Aurora Mobile

In this quarter, Developer Services recorded a great 24% revenue growth year-over-year, but vertical applications revenue decreased 16% year-over-year. Developer Services revenues, which consist of subscription service and Value-Added Services, delivered excellent performance in this quarter. Our core business, Developer Subscription Services, delivered another historic high quarterly revenue number of RMB 70.7 million, representing growth of 32% year-over-year and 9% quarter-over-quarter. The year-over-year and quarter-over-quarter revenue growth was mainly driven by increases in both customer number and ARPU. In short, the momentum of this business is very strong, and I do have high hope of the continued growth in many more quarters to come. Now, let's move on to the update on our global flagship product, EngageLab. EngageLab, being the jewel of Aurora Mobile's growth engine, has again brought in excellent numbers every quarter since its launch.

Weidong Luo
Weidong Luo
Chairman and CEO at Aurora Mobile

In this quarter, the highlights include, firstly, EngageLab recorded another quarter of tremendous growth where the ARR reached a new milestone of $14.6 million as of June 2026. This represents a 170% year-over-year growth. Secondly, EngageLab broke another record where the cumulative signed contract value has exceeded RMB 200 million by the end of Q2 of 2026. This speaks volume in terms of the market acceptance and total addressable market for this product. For sure, we are very pleased with this achievement. Nevertheless, we will continue to work hard and smart to conquer more markets and winning more contracts. In Q2 alone, we inked more than RMB 27.4 million worth of new contracts. Certainly, more and more new global customers are being converted and switched to EngageLab. The EngageLab customer number has exceeded 2,100 as of the 30th of June 2026.

Weidong Luo
Weidong Luo
Chairman and CEO at Aurora Mobile

The expansion of EngageLab across the globe has been very successful. Fourthly, the recognized revenue for EngageLab in Q2 of 2026 reached RMB 27.5 million, representing an outstanding 186% growth year-over-year. Also, in this quarter, there was a new addition to the EngageLab family where we officially launched Silent Auth, an advanced password-less authentication solution designed to complement existing SMS OTP services and elevate identity verification for the global market. Silent Auth provides a more dependable approach to phone-based authentication across three key use cases, namely firstly, faster registration and login. Secondly, secure verification for high-risk operations. And thirdly, marketing fraud prevention. We view the launch of Silent Auth not only enriches EngageLab's omni-channel customer engagement portfolio, but also reinforces Aurora Mobile's commitment to providing global enterprises with stable, efficient, and intelligent solutions.

Weidong Luo
Weidong Luo
Chairman and CEO at Aurora Mobile

Going forward, it is my goal that EngageLab will continue to leverage advanced technologies to help businesses build stronger trust-based customer relationships and accelerate global growth. Within subscription revenue, some of the notable wins in this quarter include, but are not limited to, Bank of China (Hong Kong), CXMT, DeepSeek, Mingshun Zhenzhen, and HashKey. Value-Added Services revenues were RMB 9.2 million, up 36% quarter-over-quarter, but down 15% year-over-year. The quarter-over-quarter spike was mainly attributable to the traditional quarterly online shopping of 618 in Q2. I think it is also time for me to provide an update on the progress and updates we have on our enterprise AI agent platform, GPTBots.ai. Recently, we released a major production-grade upgrade to GPTBots.ai, tackling the key industrial limitations whereby conventional AI agents only support conversations and demos, lacking deep business system integrations and end-to-end task execution.

Weidong Luo
Weidong Luo
Chairman and CEO at Aurora Mobile

The upgrade centers on three pillars. A graph-enhanced knowledge base for context-aware business analysis, autonomous workflow automation across 14 communication channels via agent collaboration, and robust enterprise governance with audit trails, runtime safeguards, and mandatory human validation for live deployments. This product advancement supports GPTBots global expansion through the following. Firstly, transforms the platform into a production-ready solution to improve overseas sales conversion. Secondly, native compatibility with global channels, including WhatsApp, Slack, and Microsoft Teams, extends market reach across North America, Europe, and Southeast Asia. Thirdly, strengthened governance satisfies international data compliance requirements, enabling deals with multinationals and regulated sectors. Fourthly, optimized knowledge processing reduces customization and onboarding costs for global clients and improves project gross margins. We believe the upgrade puts Aurora Mobile in a strong position to capture market share as enterprises worldwide transition from AI testing to large-scale deployment of agentic AI.

Weidong Luo
Weidong Luo
Chairman and CEO at Aurora Mobile

As you can see, besides growing the business globally, we have been busy on the R&D fronts. Our team has not taken our eyes off the need to continue to upgrade and create new products and services to supplement our entire suite of service to our customers. This is important because we will not rest on our laurels amidst our achievements to date. We must remain attuned to the latest developments across global markets and implement necessary product upgrades, adjustments, and innovations as circumstances demand. Only by doing so can we stay relevant and meet the evolving needs of our global customer base. Collectively, these efforts form critical building blocks to sustain ongoing revenue growth and advance our path toward improved profitability. Now, let me pass the call over to Shan-Nen Bong, who will take you through the metrics on vertical applications and financial performance for this quarter.

Shan-Nen Bong
Shan-Nen Bong
CFO at Aurora Mobile

Okay. Thanks, Chris. For vertical application, that includes Financial Risk Management and Market Intelligence. Overall, vertical application revenue decreased year-over-year and quarter-over-quarter. Within vertical application, Financial Risk Management revenue decreased 17% year-over-year and pretty much remained flat quarter-over-quarter. We are still operating in a tough business environment, and we are making the necessary adjustment on go-to-market and various strategies. The customers that we sign up or renew in Q2 include, but not limited to, Shanghai Pudong Development Bank, Ping An, WeBank, and many more licensed credit or financial institutions throughout China. Market Intelligence revenue decreased 11% quarter-over-quarter and 12% year-over-year due to the continued weak market demand for Chinese APP data. This result is in line with our expectation. Coming to the other P&L items.

Shan-Nen Bong
Shan-Nen Bong
CFO at Aurora Mobile

Our gross profit recorded another strong Q2 quarter with 16% year-over-year growth to RMB 69.2 million. Our gross margin has also recorded significant improvement by 197 basis points year-over-year. This improvement reflects better product mix and tighter operating control discipline. Higher gross profit give us greater flexibility to invest in growth while absorbing external cost pressures. Most importantly, it proves that we can convert business scale into sustainable profit generation, which is critical to driving shareholders' return over time. On net profit. Following the great momentum we had in Q1 of 2026, we recorded yet another GAAP net profit quarter, making it fifth consecutive quarter of GAAP net profit. We are well pleased with how this quarter has played out financially, from top-line growth to bottom-line profitability. On to operating expenses. Q2 OPEX was at RMB 67.6 million, up 2% quarter-over-quarter and up 11% year-over-year.

Shan-Nen Bong
Shan-Nen Bong
CFO at Aurora Mobile

The OPEX is within our forecast, and we are happy at the level where they are. I will now dive deeper into the individual OPEX category. R&D expenses increased by 13% year-over-year to RMB 29.3 million, mainly due to the higher staff cost and associated expenses. Technical service fees also contributed to the year-over-year increase. Selling and marketing expenses increased by 25% year-over-year to RMB 28.3 million, mainly due to the higher staff costs driven by overseas business expansion. G&A expenses decreased by 18% year-over-year to RMB 10 million, mainly due to the decrease in bad debt provision resulting from improved collection efficiency. Besides, there was no loss on disposal on property and equipment in Q2 of 2026, while such a loss was incurred in the same quarter last year. Next, I will share four other very important KPI that we closely monitor.

Shan-Nen Bong
Shan-Nen Bong
CFO at Aurora Mobile

Our net dollar retention rate, a commonly used KPI for SaaS company, stood at 106% for our core Developer Subscription Services business for the trailing 12-month period ended June 2026. This is the highest NDR number that we have recorded to date. This is an important signal of existing customer health. This record NDR speaks to strong product stickiness, expanded usage from our install base, and a success up-sell and cross-selling activity within our current client. While NDR can fluctuate quarter-over-quarter, given customer-specific renewal dynamics, but we are very encouraged by this peak result, and we are focused on sustaining healthy retention trends ahead. Secondly, another financial KPI for tracking the performance of SaaS company is total deferred revenue. This represent cash collected in advance from customers for future contract performance, and it stood at RMB 181.9 million as of June 30th, 2026. This is also a historic high balance.

Shan-Nen Bong
Shan-Nen Bong
CFO at Aurora Mobile

This balance acts as a high-quality leading indicator. It gives us good visibility into the near-term revenue stream and strengthens our operating cash flow profile by bringing cash collection forward relative to the income statement recognition. Thirdly, we continue to maintain a healthy level of AR turnover days of 37. This low AR turnover days ensure we have great cash liquidity while mitigating the risk of bad and doubtful debts. On to cash flow, another important financial KPI for us to manage the business. For the quarter ended June 30, 2026, we recorded net operating cash inflow of RMB 23.3 million. Having operating net cash inflow is very important, as it validates our earning quality and gives investors and shareholders greater confidence in the sustainability of the reported profit. Let us now recap on Chris' comment on our RMB 100 million revenue quarter.

Shan-Nen Bong
Shan-Nen Bong
CFO at Aurora Mobile

In the second quarter of 2026, we achieved another quarter of GAAP net profit in 2026. This marks our fifth consecutive quarters of net profit, a great trend for healthy, profitable, and sustainable business. Two, our core Developer Subscription Services business has outdone itself again by recording another historical high of RMB 70.7 million revenue in this quarter. The jewel of Aurora Mobile, EngageLab, continues to scale rapidly across the globe. Our EngageLab business exceeded its past record in this quarter. The ARR in June 2026 reached US$14.6 million. This represents a stunning 170% year-over-year growth. Fourth, our gross margin grew by 197 basis points year-over-year, and gross profit grew by 16% year-over-year. Number five, our net dollar retention for core Developer Services stood strongly at 106%, another historic high. Number six, equally important was the net cash inflow that I mentioned of RMB 23.3 million we brought in from operating activities.

Shan-Nen Bong
Shan-Nen Bong
CFO at Aurora Mobile

As I have alluded in the last quarter's earnings call, Q1 numbers we have recorded paved the way for a great financial year of 2026, and this momentum we built in Q2 of 2026 was truly phenomenal. The quarterly operating and financial results that Chris and I shared during the call today reflect the considerable strength across our business. We will continue to execute against our established strategic priorities. As we deliver on our execution roadmap, we are confident these operational wins will translate into sustained improvement in our financial statement. Lastly, before I conclude, I will give a quick update on the share repurchase plan. In the quarter ended June 30, 2006, we repurchased 44,000 ADS. Cumulatively, we have repurchased a total of 485,000 ADS since the start of our repurchase program. This concludes our prepared remarks. We are happy to take your question now. Operator, please proceed.

Operator

Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced, and to withdraw your question, please press star 1 1 again. The first question comes from Calvin Wong with Spica Capital. Your line is now open.

Calvin Wong
Analyst at Spica Capital

Good evening, management. Thank you for taking my question. Based on the numbers released today, we note that you have a very strong Q2 quarter. Can I get the management to shed some light on the Q2 quarter and perhaps maybe some hints on how Q3 and Q4 will fare for 2026?

Shan-Nen Bong
Shan-Nen Bong
CFO at Aurora Mobile

Hi, Calvin. Thanks for your question. Let me take your question today. You are right. The Q2 numbers that we just had was a good quarter for us. If I may take a few minutes or just probably just one minute to summarize here, the three key highlights for Q2 of 2026 would be, number one, our quarterly revenue exceeded RMB 100 million mark. Number two, we recorded the fifth consecutive quarters of US GAAP profit. And number three, operating activities brought in net cash inflow of RMB 23.3 million. Hitting all these three milestones in one quarter is significant. It reflects a thriving business where revenue is at a high level. We are delivering GAAP profitability while we also generate net cash inflow, which is very important. Chris and I are very pleased with how this quarter has unfolded.

Shan-Nen Bong
Shan-Nen Bong
CFO at Aurora Mobile

As we look into the rest of 2026, our stance remains cautiously optimistic. We are encouraged by the business growth trajectory with the global EngageLab business delivering standout momentum. Meanwhile, we will continue to exercise strict cost discipline. Even so, we will still allocate resources selectively to high-priority initiatives that we believe are critical to driving durable and long-term sustainable growth. Hope this answered your question, Calvin.

Calvin Wong
Analyst at Spica Capital

Very clear. Thank you.

Operator

Thank you. Our next question is going to come from Jack Sun with Gelonghui Research. Your line is open.

Jack Sun
Analyst at Gelonghui Research

Thanks management for taking my question. I am Jack Sun from Gelonghui Research. I noticed from the press release by the company and the commentary made by Chris during the call, we are launching various new services such as Silent Auth and Modellix, together with some upgrades to GPTBots. My question is, are they necessary? How do they benefit the company as a whole?

Shan-Nen Bong
Shan-Nen Bong
CFO at Aurora Mobile

Hi, Jack. Good to hear from you. Let me take this question. Those services and upgrades that you mentioned are purpose-built upgrades built upon our existing customers' engagement and AI platforms. They are not disconnected new ventures. This is an important differentiator when compared to others in the space. We are not building all these new tools or services just to follow the flavor of the month trend. Instead, every single new capability ties back to our core business. Take, for example, Silent Auth. They expand EngageLab value proposition beyond traditional messaging. It reduces user login drop-off, it strengthens the fraud defense, and gives us high-value authentication revenue from our existing global enterprise client. For Modellix that you mentioned also, it addressed the fragmentation enterprise face juggling different AI model vendors.

Shan-Nen Bong
Shan-Nen Bong
CFO at Aurora Mobile

It acts as our unified AI model gateway, cutting integration overheads for customers, and it simplifies billing and operation and feeding multi-model capability directly into the GPTBots to make our AI agent more powerful for end user. Just to share, even our own internal IR team, we use Modellix to prepare the Q2 ER deck that we uploaded to the IR website today. It is simply because Modellix has so many different large language model that we can pick and choose from within one single platform. There is no need to switch between different large language model accounts for different companies. It is also very easy to use. So I will sincerely encourage everyone on this call to try out Modellix too. As for our GPTBots platform upgrades, it advances our enterprise AI agent offering. It expands multi-agent orchestration, multi-model workflow, and no-code tooling.

Shan-Nen Bong
Shan-Nen Bong
CFO at Aurora Mobile

This drive upsell among our large existing customer base and attract new clients seeking production-ready AI automation, and not just AI prototypes. If I may summarize, collectively, I believe these upgrades or new product that you mentioned, they reinforce our integrated platform strategy where deeper stickiness within our current account, it helps higher our average contract value, and also this represent a new venture, a new revenue stream, while leveraging our existing global sales compliance and infrastructure footprint. Hope this answer your question, Jack.

Jack Sun
Analyst at Gelonghui Research

Yeah. That's very clear. Thanks a lot. Operator, I have no more question.

Shan-Nen Bong
Shan-Nen Bong
CFO at Aurora Mobile

Thank you.

Operator

Thank you. As a reminder to ask a question, please press star 1 1 on your telephone. I am showing no further questions at this time. I will now turn the call back over to Christian for closing remarks.

Christian Arnell
Managing Director at Christensen

Thank 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. This concludes the call. Have a good evening. Thank you very much.

Operator

Thank you. This does conclude today's conference call. Thank you for participating, and you may now disconnect.

Executives
    • Weidong Luo
      Weidong Luo
      Chairman and CEO
    • Shan-Nen Bong
      Shan-Nen Bong
      CFO
Analysts
    • Christian Arnell
      Managing Director at Christensen
    • Calvin Wong
      Analyst at Spica Capital
    • Jack Sun
      Analyst at Gelonghui Research
Powered by Quartr