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iClick Interactive Asia Group Limited (NASDAQ:ICLK)
Q2 2020 Earnings Call
Aug 24, 2020, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Hello, ladies and gentlemen. Thank you for standing by for iClick Interactive Asia Group Limited's Second Quarter 2020 Financial Results Conference Call. [Operator Instructions]. After management's prepared remarks, there will be a question-and-answer session. [Operator Instructions]. I will now turn the call over to your host, Ms. Lisa Li, Senior Manager of Investor Relations.

Lisa, please go ahead.

Lisa Li -- Senior Manager of Investor Relations

Hello, everyone, and welcome to iClick's Second Quarter 2020 Financial Results Conference Call. The Company's results were issued earlier today and are posted online. You can download the earnings press release and sign up for our distribution list by visiting the IR section of our website at, ir.i-click.com.

Jian Tang, TJ, Chief Executive Officer and Co-Founder of iClick will begin the call and provide a high level review of the second quarter results and share insights on our execution strategy followed by our Chief Financial Officer, Terence Li, who will give us more highlights on the financial results and guidance for the rest of 2020.

Then, we will turn the call back over to TJ for closing remarks and open the call for Q&A. Before we continue, please know that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the Company's results may be materially different from the views expressed today.

Further information regarding these and other risks and uncertainties is included in the Company's 20-F, as filed with the U.S. Securities and Exchange Commission. The Company does not assume any obligation to update any forward-looking statements except as required under applicable law.

Please also note that iClick's earnings press release and this conference call includes discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. iClick's press release contains a reconciliation of the unaudited non-GAAP measures to the most directly comparable unaudited GAAP measures.

I will now turn the call over to our Chief Executive Officer and Co-Founder, Jian Tang. TJ, please go ahead.

Jian Tang -- Director, Chief Executive Officer and Co-Founder

Thank you, Lisa, and welcome to the call everyone. Even in the uncertain environment, I am delighted to share with you that iClick reported another record quarter of financial results demonstrating the important role our data analytic services play in quickly understanding the rapidly changing online consumer behaviors here in China.

We reported total revenue of $58 million in the second quarter, an increase of 18% from the second quarter of 2019. We are also happy that we reported record high adjusted EBITDA of $5.2 million, an increase of 322% from the second quarter of 2019. Our adjusted net income for the second quarter was $2.5 million versus a loss of $0.7 million in the second quarter of 2019.

I want to bring to your attention that this is the third consecutive quarter iClick has reported positive adjusted net income. The historical all-time high adjusted EBITDA and adjusted net income we reported here are a confirmation that we have reached an inflection point, and are achieving the economies of scale necessary to maintain consistent profitability.

China's economy has started to rebound after a steep slump in the first quarter caused by the coronavirus. Yet, there are challenges that still lie ahead. Domestic demand is beginning to drive China's recovery forward, but external demand could be at risk given the coronavirus effect overseas. So far, our business has proven resilient as brands are looking to China more than ever to make up for business lost in other areas of the globe still affected by the pandemic.

Many of our brand customers are seeing this as a significant opportunity in the post-pandemic world as China's digitalization is continuing to thrive in the stay at home economy. We along with many of our branded customers believe that the pandemic will change this behavior permanently, and the information our Company provides is an essential part of planning for this new reality.

With this, I would like to share with you an update on the progress of two of our most important goals set at the beginning of this year. Our first important goal for 2020 is to improve the profitability of our Marketing solutions business. As many of you who follow our Company know, our marketing solutions business is the bread and butter of our success. In this area, we see continued healthy and steady growth as our clients shift their marketing budgets to performance-based solutions, especially now, faced with the uncertain environment brought by the pandemic.

Since the outbreak has caused such a dramatic change in consumer online buying habits, brands are shifting the advertising expense to increase online penetration, and we are in the perfect position to monitor and check the rapid evolution. With this dynamic as a backdrop, coupled with our diversified portfolio of over 3,000 customers, we reported revenue of $53 million from marketing solutions. For the second quarter of 2020, an increase of 14% from $46.6 million for the second quarter of 2019. This business continues to scale and contribute to our profitability, and we remain positive about the demand of our performance-driven marketing solutions in the second half of the year.

Our second important goal for 2020 has been to continue to develop our enterprise solutions business. This is, and will remain our key focus for many years to come. We began this business in 2019, and I'm proud of what we have achieved in the past 18 months. For the calendar year of 2019, we generated more than $10 million in revenue from starting -- standing stock.

For the first half of 2020, revenues have already reached $9.5 million. As a reminder, the gross margin profile for this business is almost three times of our marketing solutions. We are confident that this type of success continues to propel our top line and the bottom line results for the foreseeable future. The demand driver here is that large and sophisticated brands have realized the urgent need to analyze and respond to the swift consumer demand shift to online channels caused by the pandemic. They now require a holistic data and the technology strategy that can integrate online and offline data and include social e-commerce to pinpoint where the demand is coming from, and how to capitalize -- how to capitalize or hedge [Phonetic] as this is taking place.

Tencent, with whom we partner with regularly, has continued to make efforts in enhancing its WeChat mini programs ecosystem which will benefit the way we utilize the mini programs as a interface to help brands engage and interact with end consumers. Over the long term, we have shown this collaboration enhances customer loyalty, and it generates more business opportunities.

Our enterprise solutions have helped our brand clients to achieve three core objectives: Managing the customer engagement process, targeting and personalization and the overall management of customer data. As an example of how well we have done with our integrated enterprise and marketing solutions, I want to share a case study of our client, QiaQia Food. For those of you who are not familiar with the Company, QiaQia is the largest producer of roasted seeds and nuts in China. We launched a major initiative for them in April of 2019.

As a result, the cumulative GMV was more than RMB64 million for the 12-months period ending in May of 2020. Also, the number of mini program visitors totaled over 12 million for the same period, while the number of monthly paying users rose by an average of 30% per month. I am truly delighted with the results we achieved with QiaQia, and it's just one of the many successful cases we have developed with our top-tier clients in just our first year of operation in this area.

Overall, I am extremely confident that we are moving toward becoming one of the leading enterprise and marketing Cloud platform in China that help brands acquire traffic, maintain consumers, and optimize customer's lifetime values. In addition to the robust organic growth, we are also continually exploring various partnerships initiatives, collaborative product offerings and M&A opportunities to enhance our long-term growth.

Currently, we are looking for targets that will complement our SaaS product offerings, all with the data and technology that can further enhance algorithm to drive the rapid development of our enterprise and the marketing cloud platform. As part of our effort to continually improve our proprietary market intelligence platform, in July we announced the release of iAudience 2.5, with three key enhancements, including broadened data sources, newly developed pre-defined marketed modules and a recognized brand audience profile display that provides even deeper insights into a brand's positioning and the competitive landscape. We expect these upgrades to help drive future demand for our marketing solutions.

I want to take this opportunity to briefly update everyone on some of the industry awards and the accolades we recently received this quarter: Winner of the Big Data award in the advertising category at Singapore business review, top ten digital marketing solution providers in APAC 2020 by CIO Advisor APAC, Asia Pacific's Leader in Smart Marketing Solutions by Mediazone Group, three accolades in, The Eighth TopDigital China 2020 awards competition. It's always very gratifying to be recognized as an industry leader. These awards complement our fine execution and our tribute to the hard work and the perseverance of our entire organization even in these challenging times.

This concludes my opening remarks. With that, I would now like to turn the call over to our CFO, Terence Li to discuss the second quarter 2020 financials. Terence?

Terence Chi Wai Li -- Chief Financial Officer

Thank you, TJ, and welcome everyone. I'm happy to report that our business model continues to be resilient since being impacted by the pandemic. We continue to experience growth in demand for our marketing and enterprise solutions categories. To reiterate what TJ has said earlier, our data analytics services play a critical role in quickly understanding the rapidly changing online consumer behavior here in China caused by the pandemic.

In this quarter, we continue to report record financial results including total revenues, adjusted EBITDA and adjusted net income. I'm excited to share a few key highlights from the second quarter of 2020. Our revenue for the second quarter of 2020 grew to $58.1 million, an increase of 18% from $49.3 million for the same period of the prior year. These results are attributable to the increased contributions from existing marketing solutions and enterprise solutions, and were partially offset by a 4% decrease in the average exchange rate of Renminbi to the US dollar for the second quarter of 2020 compared to the same period in 2019.

The revenue from marketing solutions grew to $53 million for the second quarter of 2020, an increase of 14% from $46.6 million for the second quarter of 2019, primarily as the result of growing market demand from marketers. The revenue of our core business has steadily increased over time and has given us the ability to improve our platform and branch out into other opportunities. The revenue from enterprise solutions was $5.1 million for the second quarter of 2020, an increase of 87% from $2.8 million we reported for the second quarter of 2019.

The robust growth was driven primarily by the increasing and immediate needs for online and offline consumers' behavior data integration. To reiterate what TJ has said earlier, our data analytics services play a critical role in quickly to increase. The gross profit for the second quarter of 2020 was $16.6 million representing a 22% increase compared with $13.6 million for the second quarter of 2019, mainly due to continued expansions of the Company's marketing solutions and contribution from higher margin enterprise solutions.

As of June 30, 2020, the Company had cash and cash equivalents, fixed deposit and restricted cash of $64.2 million, compared with $61.1 million as of December 31st, 2019. For the rest of my discussion, I will focus on our non-GAAP results. You can find reconciliations of these non-GAAP results in the press release we posted earlier today, and which can be assessed at our Investor Relations website. The adjusted EBITDA for the second quarter of 2020 was an income of $5.2 million, an increase of 322% year-on-year.

The results were primarily due to the increase in gross profit. The adjusted net income for the second quarter of 2020 was $2.5 million, compared with an adjusted net loss of $0.7 million in the second quarter of 2019. This is our third consecutive quarter of positive adjusted net income. We reported gross billing of $132.8 million for the second quarter of 2020, which represents a 6% decrease compared with $140.9 million in the second quarter of 2019. Please note that the Renminbi depreciated against the U.S. dollar by 4% compared with the same period of the prior year. On a currency neutral basis, the gross billing would have been $140.3 million for the same quarter of 2020 relatively unchanged compared with one year ago.

The stable performance reflects our strategic focus in risk management and snatching good-quality clients amid economic uncertainties. For further information, please see the detailed recap of other financial metrics in the press release we issued today. On January 15th, 2020 we announced share purchase -- repurchase program in which we may purchase our own ADS with an aggregate value of up to $10 million over the 12 month period ending on December 29th, 2020. As of June 30, 2020, we purchased an aggregate value of approximately $0.7 million.

Before I issue our guidance, I would like to take this opportunity to elaborate on iClick's current strategic focus from my perspective. In the first half of 2020, we continue to report record high profitability, including [Phonetic] adjusted EBITDA and adjusted net income. I attribute this outstanding financial performance to our relentless cost control efforts through better operating efficiencies after an extensive review of our business we completed in 2019.

Currently, we focus on client's credit quality in an effort to safeguard ourselves from the lingering global economic uncertainty. With these safeguards in place, we feel we are in a solid position to drive profitability, keying in on the high margin business, while managing a cash flow more efficiently than even before in our history.

In past earning calls, we talked about our increasing economies of scale, and how we would eventually hit an infection point in our marketing solution business, achieving profitability. We have reached these levels. And looking ahead, we are confident in our ability to maintain healthy and stable growth rate from the marketing solutions area, especially now as we see the continuation of advertising budgets shifting to online and creating an even greater need for performance-based solutions, as a macro trend in the industry.

Finally, we want to make sure we have enough capital to fund our various strategic initiative. So to that end, we recently completed a $22 million private placement. This process will be used for raising capital to ensure our continued growth as well as comfortably funding our Enterprise Solutions business, which will be our main focus for many years to come. We are gratified to see the organic growth from enterprise solutions increasing, as it is already contributing 9% of total revenues in the first half of the year compared with 5% of the same period last year.

Now, I would like to conclude my remarks with our outlook for the balance of 2020. Please note that our outlook for revenue is based on current market conditions and reflects our preliminary estimates of market and operating conditions taking into account the coronavirus pandemic. These are subject to change. Third quarter 2020 revenue is estimated to be between $66 million and $70 million. Revenue from enterprise solution is estimated to be between $7.5 million and $9.5 million. Please note that, this is the first time we provide a quarterly guidance on revenues from enterprise solutions.

Gross profit is estimated to be between $18 million and $22 million. For full year 2020, revenue is estimated to be between $214 million and $216 million. Gross profit is estimated to be between $70 million and $75 million. Adjusted EBITDA is estimated to be between $9 million and $12 million. Looked [Phonetic] at, this is an upward revision from our prior guidance of $7 million to $10 million released in the first quarter earnings release. Our outlook remain cautiously optimistic with full year guidance remaining unchanged.

We have increased our adjusted EBITDA guidance as we continue to see the effect on the economies of scale for the marketing solutions business. Please note that, there remains the possibility of resurgence in novel COVID-19 cases along with the impact of global economic uncertainty, that may influence our financial performances.

Before I turn the call back over to TJ, I want to congratulate our entire Company for executing and delivering these operational and financial results so far this year. I truly appreciate the efforts and we are excited to move forward, and create more values for our shareholders in the future.

With that, I will now turn the call back over to TJ for closing remarks.

Jian Tang -- Director, Chief Executive Officer and Co-Founder

Thank you, Terence. Since the beginning of this year, the coronavirus pandemic has swept the world disrupting our daily work and our life routines. The outbreak has driven many commercial and social activities online. And for many, the Internet has become a very crucial link to the things they need and want. This all began as a necessity for many, but now, consumers enjoy the convenience and the personalization the online buying experience affords. And online reliance is becoming the new norm.

Many of our several [Phonetic] brand clients view this trend in line with the Chinese idea that every crisis presents an opportunity. Given this micro trends, we remain positive about the momentum in both our business segments going forward. While we expect to see continued stable growth in our marketing solutions segment, we are experiencing strong demand for enterprise solutions as brands seek to understand the end consumers through a full consumer life cycle as we provide a comprehensive solution to better understand online, offline consumer habits.

We believe our Enterprise and the Marketing Cloud platform is proven to fit all these needs in this area, and we are in a solid position to continue to grow in this environment. In closing, we are confident in our full year guidance. As always, we remain committed to long-term value creation for our shareholders and all stakeholders and in protecting the health of our workforce as we see the recovery in China unfold.

This concludes our prepared remarks. Thank you for joining us on today's call. We will now open the call to questions. Operator, please go ahead.

Questions and Answers:

Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions]. Today's first question comes from Thomas Chong with Jefferies. Please go ahead.

Thomas Chong -- Jefferies LLC -- Analyst

Hi, good evening. Thanks management for taking my questions and congratulations on a solid set of results. My question is about our enterprise solution business. Can you comment about the number of customers that we target by the end of this year as well as the customer mix by industries? And on the other hand, can we also talk about our key differentiation for our solutions versus our peers as well as our force penetrating to mid-tier customers together with the new business model on take rate over GMV? Thank you.

Terence Chi Wai Li -- Chief Financial Officer

Thank you, Thomas. This is Terence. So let me first answer the first part about the client's numbers and pipeline first. And in the first half of the year, last year if we -- if you recall it, we basically have completed our target to have 50 key accounts. So going into 2020 in the first half, we did also complete around 50 key accounts. So we see a pretty strong pipe line right now. And going into the third quarter, we probably would add another 30 to 40 key accounts.

So I think that's right now our expectations. And I think I would turn to TJ to answer the rest about more on the questions that you have.

Operator

TJ, this is the operator. I believe your line may be on mute.

Jian Tang -- Director, Chief Executive Officer and Co-Founder

[Foreign Speech]. So, hi, this is TJ. So just like what our CFO said, in 2019, we had already accumulated 50 key accounts and in the first half of 2020 for that clients, we have newly -- we have 50 newly added clients.

[Foreign Speech]. So for the second half of this year, we expect that we are going to add another maybe a few thousand new clients. And for the SaaS Enterprise solution, this year we are going to focus on the sectors related to consumption and industries include [Phonetic] like luxury goods, cosmetics, food and beverage and also FMCG.

[Foreign Speech]. So we think that the SaaS market in China is still at the infancy stage especially in terms of the marketing and the selling area. So we're seeing this market as the blue sea market, and we have seen a lot of different opportunities especially in terms of the trials of the business models.

[Foreign Speech]. So especially services [Technical Issues] [Indecipherable] manage the full cycle of the consumers, including managing the traffic of the consumers to [Technical Issues] converting this customers into our real consumers to buy our goods, to managing the relationships with these consumers and also to improving their loyalty and also to leading down to with purchase the goods. So all of this are included in our services. So we can see that the market that we are trying to serve is quite a bit.

[Foreign Speech]. So, right now our market is -- so the market we're trying to serve is very filled, as I said just now, and a lot of the clients that we are serving is the mid-tier enterprises and also the large tier enterprises. And for the SaaS enterprises that we are serving, which are the 100 enterprises, a lot of -- a lot of this big clients are quite filled in the market. So right now we mainly focus on updating our system. And also we are trying to expand the market. At the same time, we are trying different new business models. And we just tried to satisfy different needs of different customers like some of our clients need the data analysis, so we would try to serve them in terms of this. And other clients might need a service of mini program, management and also other clients might need advice in terms of the operation. So we tried to provide different services to different clients. But overall, we are seeing the data is still being quite wear and filled in the markets and that is the area we are trying to improve.

Operator

[Speech Overlap]. Please proceed.

Jian Tang -- Director, Chief Executive Officer and Co-Founder

[Foreign Speech]. So what we are trying to do right now is that we are trying to provide different business models to different clients, and after we get enough later, we would try to look at what business models work and we will try to expand those business models to the market. Okay?

Operator

Thank you. Our next question today comes from Fawne Jiang with Benchmark. Please go ahead.

Fawne Jiang -- Benchmark Co. -- Analyst

Thanks for taking my question. Hi, TJ, hi, Terence. Wanted to follow-up on your enterprise solutions part. I think as TJ mentioned, the addressable part of market is, seems to be substantial. I just wonder are we -- what's the potential customer base in terms of customer -- number of customers, you're seeing as the underlying market? Are we looking for more addition of the customers or more ARPU growth going forward? And also trying to get a bit more understanding of your economics, particularly for the customers you recruit last year. Are we seeing a healthy level of renewals and potential expansion of their ARPU this year?

And lastly, I wanted to get an understanding of the margin profile for the enterprise solutions right now with the gross margin level you see.

Terence Chi Wai Li -- Chief Financial Officer

Hello, Fawne. This is Terence. So let me first address some of the numbers. And then, TJ can also add on some other comments. As you mentioned, I think right now we're still focusing on growing the client numbers more than the ARPU at this moment. And the renewal percentage because it's just the first year have the [Phonetic] renewal right now is pretty high. More than 90% plus, our clients still come with us. And going into the second half, as I said in the first half, we basically complete the 50 key accounts already.

So we are looking forward for another 50 actually in the third quarter. So that's why we also raise our guidance a bit. And that's the current situation. Margin profile wise is still -- stood at pretty high around 60% with this particular segment. Basically, as we mentioned in our remarks, it was like three times, almost like three times higher than our marketing solutions' gross profit margin.

So I would stop here, and see if TJ has anything to add on.

Jian Tang -- Director, Chief Executive Officer and Co-Founder

[Foreign Speech]. To answer your question, I don't have any further opinions on that question. I think I have offered a lot of details about in terms of that just now.

Operator

Thank you. Our next question today comes from Darren Aftahi with Roth Capital. Please go ahead.

Darren Aftahi -- Roth Capital -- Analyst

Yeah. Thanks for taking my questions and nice quarter. Could you talk about just following up on the last question, the revenue base for your enterprise solutions? What is the growth in existing customers versus growth from new customers?

And then second question maybe for Terence. So, you guided you know, your EBITDA is now $9 million to $12 million for the year. You've already done $7.5 million, so that sort of implies $1.5 million to $4.5 million in the back half of the year. I'm just curious if there is any incremental investments, I know your operating costs came down year-over-year. Maybe that was anomalistic because of COVID. But I'm just kind of curious if there's any large investments in the second half of the year that maybe we're not thinking about. Thank you.

Terence Chi Wai Li -- Chief Financial Officer

Thank you, Darren. Let me answer the second part first, and as you're aware, actually we raised the guidance of the adjusted EBITDA number, and we already complete $7.5 million. So we actually imply that going into the second half. First, we are pretty confident in our bottom line. Second is that we are still controlling very well our operating expenses. The third is that, as you mentioned, we actually be a little bit prudent in terms of the expensing, because of the new business that we are developing on the enterprise side.

So we probably [Indecipherable] for the expenses to grow this business segment further. That may actually erode some of the bottom line's numbers. But we are still pretty confident because the marketing solution would be able to support that growth and with some self-generated cash to help us to build this business further. And that's on your second part. On the first part, I think we -- I basically mentioned some of the growth and some of the numbers.

And right now the growth is mainly coming from new clients and new number of clients adding to our pipe rather than some existing clients. Of course they're renewing the numbers, but that contribution relatively is still like 10%, 15% only. And with our whole pipe coming from new accounts mostly, when we add on new clients, then we basically have more revenue coming from the enterprise solutions.

Operator

And our next question today comes from Brian Kinstlinger with Alliance Global Partners. Please go ahead.

Brian Kinstlinger -- Alliance Global Partners -- Analyst

Hi guys. Great to see the strengthening profitability. First, what percentage of your enterprise revenue comes from US brands or companies. And should President Trump's executive order remain in place regarding Tencent, do you see this impacting demand for your enterprise solutions in any way?

Terence Chi Wai Li -- Chief Financial Officer

Hi, Brian. This is Terence. I do think that, that would have less impact on our enterprise solutions, because right now our enterprise solution is still pretty much only working within China or in the Chinese territory. So I think the President Trump's order -- there's some clarification in this one or two days, and maybe it may not extend to that extreme. And it may be, you know, stopping some of the business in WeChat and TikTok, which are basically the oversea versions of Weixin and Douyin. And we don't have much business actually on the overseas versions. Only 1% to 2% of our business are on that WeChat and TikTok platform. So no matter marketing or enterprise solutions, basically the impact would be minimal. But to be honest, I think we are not in the best position right now to comment until we have further clarifications of what that executive order really mean for the business, for Chinese company or for multinational corporations. So I guess, impact would be minimal at this moment, as we -- basically based on the information available.

Operator

Thank you. Our next question today comes from Colin Liu with China Renaissance. Please go ahead.

Colin Liu -- China Renaissance -- Analyst

Hi, TJ, Terence, thanks for taking the question. I think this one is mainly in regard to your enterprise solution. Since the start of the global pandemic, we've been hearing global SaaS companies talking about structure changes of their clients. Customers or enterprises are accelerating to migrate to a cloud-based services. I just want to ask if you have seen any such trends, you know, any sort of structure changes of your customer behavior among your enterprise installed base? If there are any services or products that used to be undervalued by your customers, but now being highly appreciated, could you just share some examples and colors on this? That will be very helpful.

Jian Tang -- Director, Chief Executive Officer and Co-Founder

[Foreign Speech]. So, hi, this is TJ. As for my understanding, I think your question is to -- is that you want to know about the impact of the pandemic to the need of our clients, right?

Colin Liu -- China Renaissance -- Analyst

[Foreign Speech]. So I just want to ask, you know, in our total different operating environments, what are the changes to customers' behaviors that are key ask [Phonetic] for your products? And what sort of the product features they really value right now?

Jian Tang -- Director, Chief Executive Officer and Co-Founder

[Foreign Speech]. Okay. So, thanks for your question, and let me just answer your question real quick. So before the pandemic, we have already seen a huge demand from our clients in terms of the data analysis and also how to use the offline data to serve the online activities. So after the pandemic, we have seen this demand is getting larger. And for our clients, actually more clients have the need to switch their offline service -- offline activities to online activities. At the same time, they don't want to raise the offline data. They want to use more offline data that they have accumulated in the past to serve their online activities. And because a lot of our brands used to have a lot of offline data before.

So for our enterprise solutions clients, we can just help them to better make the combination of the online data and the offline data, especially to switch the offline data to serve the online services. And for some of our clients, they are especially interested in the services provided by the mini programs stores and also other mini programs services. That's also something we can help them. So we have helped our clients create a better purchasing environment for their consumers. And -- so this is one thing.

And another thing we -- we have also helped them, we have also provided better -- best stage services to them to satisfy their needs. So not only did we satisfy their needs in terms of the data, we are also very mature in operating in this area. So -- yeah, so we can help them expand their market and better deploy their proposals and plans. Okay?

Operator

Thank you. Our next question today comes from Nelson Cheung with Citi. Please go ahead.

Nelson Cheung -- Citi -- Analyst

Hi, management. Thank you for taking my question and congratulations on your solid results. I have a question on your margin. Can management explain more on the drivers behind your saving in the operating expenses? Was it driven by the operating efficiency of the Company? Or is it driven by the synergies between the two businesses? For the enterprise solutions, what would be the biggest cost component of the business? And what would be the trend going forward into the second half of the year? Thank you.

Terence Chi Wai Li -- Chief Financial Officer

Hi, Nelson. This is Terence. Thank you for your questions. In terms of the margin profile, I think our marketing solutions margin profile is always at around 23%, 24% as we already present to the market. And for the enterprise SaaS solution, it's relatively high margin business, but it's not yet really stabilizing, but at around the 60% margin profile, it's pretty much attainable right now.

And you asked about the operating expenses. Our base of the operating expenses, if you look at our recent quarters, even back to 2019, we are sitting at relatively stable operating expenses per quarter around probably you know, $50 million, $60 million kind of numbers, and that's like our base case right now. And to grow our business further, I think that would be quite stable numbers. In terms of the SaaS part of -- or the enterprise solution part, the major cost element is still basically human resources, basically the headcounts and the overheads. And we don't need to pay the media expenses as like the media or the marketing solutions. And I think that's the biggest cost component of enterprise solutions, and I hope this answers your questions.

Operator

And our next question today comes from Bo Pei with Oppenheimer. Please go ahead.

Bo Pei -- Oppenheimer & Co. Inc. -- Analyst

Hi TJ, Terence, Lisa. Thanks for taking my question. Congrats on the solid results. So my first question is about marketing solutions. I noticed even though our gross billing was flattish on RMB basis, our revenue actually increased pretty good. So I think that was due to our increased take rate in that area. So I would like to know with this trend going forward, I noticed we mentioned we focus on the high quality customers. When do you think we can start growing the gross billing?

And then my second question is about enterprise solutions. I think I heard, we are trying to invest more into this business, and then maybe do some merger and acquisitions in this area. So just wondering what kind of investments are the acquisition target that we are considering? Can you give more colors around that? Thank you.

Terence Chi Wai Li -- Chief Financial Officer

Hi, Bo Pei. This is Terence. I'll first answer part one, and then I will let TJ to address your part two. And first of all, our gross billing is still growing. You can look at our first quarter total number. It is still on the 20% plus year-on-year growth for the first half. So the gross billing is still growing, but on the second quarter, and we focus more on the product. And right now, we do have the scale for us to have the capability to basically screen through the best quality clients, particularly under this uncertainty environment.

I think that's pretty important for the Company to ensure the margin profile and some high quality clients. So that's why our take rate is higher, because that we pick the best, you know, clients and that with high margin, and also because they are more preferring the performance driven solutions right now under the COVID.

And during all these so-called specific actions models, or the CPA or CPC models, basically, we will be able to recognize more in terms of the revenue on a gross basis. And that's why you see a slight increase in the take rate, probably around 5% to 10% increase, comparing to the same first half of last year. So that's like the current situation. And going into second half, we believe our market is more normalizing and that some of the branding customer also coming back. We probably will see the gross billing and the gross [Indecipherable] coming back again.

And particular with our strong and strength on in terms of the performance of solutions. So I think, I would now pass to TJ, to answer your questions on some of the M&A initiatives.

Jian Tang -- Director, Chief Executive Officer and Co-Founder

[Foreign Speech]. Hi, this is TJ. Thanks for your question. So as I mentioned earlier, our focus of serving the enterprise, the enterprises, our clients of enterprise solutions right now is to help them manage -- better manage their full cycle, management of their consumers. So to help them acquire the consumers and also control [Phonetic] them, and also lead them to -- guide them to purchase and improve their loyalty. And also, we came down and also increased their repurchasing rate. So based on that, for our strategy of M&A, we mainly, we mainly focused on these four areas. The first, we will focus on the AI for consumer analysis, which centered around, which centers around the consumers. We will put a lot of focus on this. And also for the second area is the creator and KOL platform, end-to-end solution, because as we all know the KOL or livestreaming has been getting more and more popularity globally. And we all now acknowledge that this is a huge business opportunity ahead.

So we believe that being equipped with this technology to empower the creators and KOLs will help bring more traffic, more efficiently and create more business opportunities for our customers. And the third area is the customer experience management, which is also core CEM. So in China, our customers and clients absolutely have higher demands and requirements today. So not only the CRM is very important, CEM is also very important. That's why we've tried to focus on this area too. And the last area is the customer experience -- the last area is the multi-product and services based on WeChat, all right? So...

Operator

And our final question today comes from Kevin Lu [Phonetic] with Bank of America Merrill Lynch. Please go ahead.

Kevin Lu -- Bank of America Merrill Lynch -- Analyst

Thank you very much management for the presentation, it's extremely clear, and also congratulations on the fantastic results. I was wondering, first of all, it's very good to know that you have broken out the SaaS revenue guidance for third quarter. $7.5 million to $9.5 million for third quarter is very strong on a quarter-on-quarter basis, it's up 50% to 90% quarter-on-quarter. And you also Terence, I think you mentioned earlier that you're looking for strategic growth opportunities. I was wondering just mathematically, are those opportunities already included in that guidance? And second of all, in conjunction with that, iClick is trading on my opinion very cheap multiple still on 2.8 times -- 2.8 times, EBITDA revenue. So in -- looking for these opportunities, how value conscious are you?That's the first part, the second part is, with the share repurchase program last year you purchased $4.4 million of stock. This year you've purchased I think $0.7 million. Is that going to be more second half heavy this year? Thank you very much and congratulations again.

Terence Chi Wai Li -- Chief Financial Officer

Thank you, Kevin. And first of all, in your first question to be honest, we haven't yet budgeted some of the merger and acquisitions potential and mostly right now, the guidance is based on our, you know, organic or some small investments and in terms of the business.

And your second question is about our -- our repurchase program. And in the first half, we did open $7 million share purchase. So we have more bullish going into the second half year. We still believe that, that we have undervalue and we probably would trigger. But I [Phonetic] will leave the Board to discuss further. But right now I think to be honest, I think we do see in our operations, our efforts are being recognized more by the market. And hopefully going into the second half of the year, these efforts would be recognized further by the market.

Operator

Thank you, ladies and gentlemen, this concludes our question-and-answer session. I'd like to turn the conference back over to Lisa Li for any closing remarks.

Lisa Li -- Senior Manager of Investor Relations

Thank you once again for joining us today. If you have any further questions, please feel free to contact iClick's Investors Relations department through the contact information provided on our website. Thank you.

Operator

[Operator Closing Remarks].

Duration: 65 minutes

Call participants:

Lisa Li -- Senior Manager of Investor Relations

Jian Tang -- Director, Chief Executive Officer and Co-Founder

Terence Chi Wai Li -- Chief Financial Officer

Thomas Chong -- Jefferies LLC -- Analyst

Fawne Jiang -- Benchmark Co. -- Analyst

Darren Aftahi -- Roth Capital -- Analyst

Brian Kinstlinger -- Alliance Global Partners -- Analyst

Colin Liu -- China Renaissance -- Analyst

Nelson Cheung -- Citi -- Analyst

Bo Pei -- Oppenheimer & Co. Inc. -- Analyst

Kevin Lu -- Bank of America Merrill Lynch -- Analyst

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