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DATE

  • Thursday, May 29, 2025, at 7:30 a.m. EDT

CALL PARTICIPANTS

  • Chief Executive Officer — Weidong Luo
  • Chief Financial Officer — Shan-Nen Bong

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TAKEAWAYS

  • Total Revenue: 89 million RMB for Q1 2025, representing a 38% increase year over year compared to Q1 2024 and the highest Q1 revenue since the company's transition to a pure SaaS model.
  • Gross Profit: Gross profit increased by 27% year over year in Q1 2025, achieving the highest gross profit level in nine quarters.
  • Gross Margin: Gross margin improved by 520 basis points quarter over quarter in Q1 2025.
  • EngageLab Contract Value: 63 million RMB newly signed in Q1 2025, bringing the total cumulative contract value to over 110 million RMB.
  • EngageLab Recognized Revenue: Grew by 127% year over year for Q1 2025, with customer count up 25% to 848 and operations now spanning more than 40 countries and regions.
  • Developer Services Revenue: Up 39% year over year, but down 12% quarter over quarter; includes Subscription Services and Value-Added Services.
  • Subscription Services Revenue: 53.5 million RMB subscription services revenue, up 26% year over year compared to Q1 2024, down 2% quarter over quarter, with ARPU up 22% year-over-year and both domestic and overseas markets showing growth.
  • Value-Added Services Revenue: 8.9 million RMB, up 269% year over year, but down 46% quarter over quarter; spike attributed to more than 200% increase in advertiser spending compared to Q1 2024 and sequential decline due to seasonality following Q4 online shopping festivals.
  • Vertical Application Revenue: Increased 35% year over year and 20% quarter over quarter, driven primarily by Financial Risk Management.
  • Financial Risk Management Revenue: 22.2 million RMB revenue for Financial Risk Management, up 64% year over year and 36% quarter over quarter, mainly due to 19% customer growth year over year and 38% ARPU growth year-over-year; represents the segment's highest quarterly revenue to date.
  • Market Intelligence Revenue: Decreased by 26% year over year but grew 4% quarter over quarter due to continued weakness in market demand for Chinese app data.
  • Operating Expenses (OpEx): 60.6 million RMB operating expenses, up 14% year over year compared to Q1 2024 and flat quarter over quarter; primary increase came from sales and marketing costs.
  • R&D Expenses: 24.6 million RMB for R&D expenses, up 8% year over year compared to Q1 2024, attributed to staff costs and increased cloud fees.
  • Selling and Marketing Expenses: 23.3 million RMB selling and marketing expenses, up 34% year over year, reflecting higher sales commissions and travel spending in line with revenue growth.
  • General and Administrative (G&A) Expenses: 12.7 million RMB, down 2% year over year due to reduced professional fees.
  • Net Dollar Retention Rate (NDR): 96% net dollar retention rate for the core Developer Subscription business for the trailing 12 months ended March 31, 2025.
  • Deferred Revenue: Deferred revenue reached a record high of 156.9 million RMB as of March 31, 2025.
  • Accounts Receivable Turnover Days: 53 days for accounts receivable turnover as of Q1 2025, marginally higher than Q4 2024 due to slower collections during the Chinese New Year period.
  • Net Total Assets: Net total assets were 376 million RMB as of March 31, 2025, with cash and cash equivalents of 113.6 million RMB and total liabilities of 261.6 million RMB.
  • Adjusted EBITDA: Positive adjusted EBITDA for the seventh consecutive quarter.
  • Share Repurchase: 16,000 American depositary shares (ADS) repurchased in the quarter, bringing total repurchases to 295,000 ADS since program inception.
  • Q2 2025 Revenue Guidance: Projected revenue for Q2 2025 is between 87.5 million RMB and 90.5 million RMB, representing a 10%-14% year-over-year increase compared to Q2 2024.

SUMMARY

Aurora Mobile (JG 1.90%) reported record first-quarter revenue at 89 million RMB, with strong, broad-based year-over-year growth across subscription, value-added, and financial risk management services. EngageLab drove multinational expansion, reaching 848 customers with over 63 million RMB in newly signed contracts, and management highlighted multi-year contracts with customers outside China as supporting future international growth. Despite market intelligence revenue declining 26% year over year amid weak domestic demand, 19% customer growth and 38% ARPU improvement propelled financial risk management revenue to historic highs. Cost discipline was maintained, with OpEx rising less than revenue, and the company delivered its seventh consecutive quarter of positive adjusted EBITDA while continuing share repurchases and projecting sustained double-digit revenue growth into the next quarter.

  • Shan-Nen Bong said, "if you want net profit next quarter, I think we can do that. All we need to do is just to freeze our R&D and marketing expenses. However, this will come at the expense of product development and continuous market spend, and this will certainly hurt our ability to grow our revenue in the near future."
  • Management attributed 269% year-over-year growth in value-added services revenue to a rebound in advertiser spending, specifically noted as "the recovery of the advertiser spending we have seen in Q1."
  • EngageLab's geographic reach now includes over 40 countries and regions, underlining management's position that it is the intended "engine of growth for us in the next 24 months."
  • Deferred revenue balance reached a historical record of 156.9 million RMB, indicating substantial prepaid future revenue commitments.

INDUSTRY GLOSSARY

  • EngageLab: Aurora Mobile Limited's global SaaS communications and engagement platform, providing push notification and messaging services to app developers and enterprises.
  • Net Dollar Retention Rate (NDR): A SaaS key performance indicator representing percentage of recurring revenue retained from existing customers over a period, including revenue expansion via up-sell and cross-sell, minus churn and contraction.
  • Value-Added Services: Additional solutions offered beyond core subscriptions (such as marketing or monetization features) that generate incremental revenue streams.

Full Conference Call Transcript

Weidong Luo: Thanks, Rene. Greetings to all. Welcome to Aurora Mobile's 2025 First Quarter Earnings Call. Before I comment on our Q1 results, I would like to remind everyone that the quarterly earnings desk is available on our IR website. You may refer to the deck as we proceed with the call today. As we did in the past, based on the Q1 numbers, I have a suitable discussion for the first quarter results, which is a quarter of accelerated growth driven by globalization for the following reasons. Firstly, our EngageLab business had a monster quarter, where we closed out more than Chinese yuan renminbi (CNY) 63 million worth of contract value in just one quarter. This is unprecedented in our history.

This brings the total cumulative EngageLab contract value in excess of CNY 110 million by March 31, 2025. Secondly, the group's revenue this quarter of CNY 89 million, achieving a remarkable 38% growth year-over-year. This CNY 89 million was the highest Q1 quarterly revenue we had since transition to pure SaaS. EngageLab's recognized revenue also grew by 127% year-over-year. This Q1 revenue number exceeds what we have previously guided in Q4 of 2024. Thirdly, our Financial Risk Management business had its best quarter in its history, recording highest quarter revenue of CNY 22.2 million, revenue grew by 64% year-over-year. Fourthly, gross profit grew strongly by 27% year-over-year, while achieving the highest gross profit for the past 9 quarters.

Gross margin has also improved 520 basis points quarter-over-quarter. Fifth, we recorded another adjusted EBITDA profit in this quarter. This marks the seventh consecutive quarterly positive adjusted EBITDA we have had. Overall, it was a great quarter where all the business lines have outperformed the targets we have set for them. This is no doubt set a great momentum for the rest of 2025. Equally important, the progress in our performance and our solid financial position enable us to invest more resources into the development of our enterprise AI agent platform and its global expansion. Now let me share more on the individual business performance.

Our total Q1 group revenue has grown 38% year-over-year, driven by the great numbers from Developer Services. Within the group revenue, all business segments, mainly Developer Subscription services, Value-Added Services and Financial Risk Management, all outperformed and record significant year-over-year revenue growth. Developer Services revenues, which consists of Subscription Services and Value-Added Services, increased by a strong 39% year-over-year and decreased 12% quarter-over-quarter. Subscription revenue has been recording a great number, where it increased by 26% year-over-year and decreased 2% quarter over quarter. Value-Added Services revenue grew by an incredible 269% year-over-year and decreased 46% quarter over quarter. Our core business, subscription services revenue of CNY 53.5 million, record growth of 26% year over year and decreased 2% quarter over quarter.

The year-over-year revenue growth was mainly driven by a 22% increase in ARPU, carrying on the great momentum we had in Q4 of 2024. Our subscription revenue record third consecutive quarter of CNY 50 million plus revenue. For Subscription Services, we had recorded year-over-year revenue growth in both the domestic and overseas markets. In particular, our EngageLab revenue grew by 127% year-over-year. This remarkable number was a result of the hard work by team to convert many notable wins in the overseas markets. Both the customer numbers and ARPU have solid growth year-over-year.

With the great products and services we have, I believe we can scale this business globally to get more customers and new wins in many quarters to come. Next, I shall elaborate more on our EngageLab business this quarter. This business always gets me very pump up when sharing with you. Firstly, the total contract value we have signed has broken CNY 110 million milestone in Q1 of 2025. Just to recap, the total contract value was only CNY 10 million at Q3 of 2023. Six quarters later, this amount has grown 10x. This is a remarkable achievement by the team. Secondly, customer acquisition continue to be the driving force of the success of this business.

The customer number has increased by 25%, reaching 848. Thirdly, the revenue recognized for the EngageLab again record great growth of 127% year-over-year. Fourthly, our EngageLab products and services are now sold to customers in more than 40 different countries and regions globally. I'm truly pleased with the team's execution effort, results and the momentum of EngageLab. I believe that it's the engine of growth for us in the next 24 months. Within subscription revenue, some of the notable new and renewable customers in this quarter include, but not limited to, DeepSeek BYD, SF Express, Monsha AI and [ Hangzhou Ben ], just to name a few.

Value-Added Services revenue were CNY 8.9 million, increased by 269% year-over-year but decreased by 46% quarter-over-quarter. The huge revenue year-over-year growth we have seen was mainly due to the recovery of the advertiser spending we have seen in Q1. For the same period, the advertiser spending has increased more than 200%, which fueled the revenue spike year-over-year. The sequential revenue decline was mainly due to the Double 11, Double 12 online shopping festival in Q4 but was not existent in Q1. Let me pass the call over to Shan-Nen, who will share more about the Vertical Applications and other aspects of our financial performance of this quarter.

Shan-Nen Bong: Thanks, Chris. Next, I'll go over the revenue for Vertical Application that includes financial risk management and market intelligence. Overall, Vertical Application had a very strong quarter, where revenue increased by 35% year-over-year and 20% quarter-over-quarter. And within Vertical Application, financial risk management recorded a 64% growth in revenue year-over-year and 36% growth quarter-over-quarter. Financial risk management has its best and biggest quarter ever, recorded Q1 revenue in excess of CNY 22 million. This 64% year-over-year revenue growth was mainly due to the strong 19% customers number growth and 38% ARPU growth. As I mentioned in the prior quarter that our team has fine-tuned and upgraded the service and products. The result is simply stunning to say the least.

The upgraded product and services were in high demand amongst the financial industry vertical. The new and existing licensed financial institution for buying and consuming our product and services. Apart from Developer Subscription revenue that Chris mentioned earlier, financial risk management presented itself as the next growth engine in early 2025. We are certainly very pleased to see the resurgence of this business in this quarter and beyond. The customers that we have signed up or renewed in Q1 include but not limited to [indiscernible], Ningbo Ehang, [indiscernible] and many more license credit and financial institutions throughout China.

Market intelligence revenue, on the other hand, decreased by 26% year-over-year and managed to record a modest 4% growth quarter-over-quarter due to the continued weakness in the market demand for Chinese APP data, and this result is in line with our expectations. Next, I'll go through some of the key expenses and balance sheet items. On to operating expenses. The Q1 operating expenses was at CNY 60.6 million, representing a 14% increase year-over-year and remained flat quarter-over-quarter. The majority of the increase was attributable to our sales and marketing department. In a snapshot, our Q1 revenue grew by 38% year-over-year. Gross profit grew by 27%, while OpEx only grew by 14%.

Overall, we are very pleased to see how OpEx has been trending in view of the revenue and gross profit growth we have achieved. And this is a sustainable growth model for long-term basis. I'll now go over the individual OpEx category. For R&D, expenses increased 8% year-over-year to CNY 24.6 million, mainly due to the increase in staff costs and associated expenses. Cloud cost has also contributed to the year-over-year increase in R&D expenses. Selling and marketing essences increased by 34% year-over-year to CNY 23.3 million, mainly due to the increase in sales commission and traveling expenses in line with our revenue growth and cash collection recorded in this quarter.

G&A expenses decreased by 2% year-over-year to CNY 12.7 million, mainly due to the reduction in professional fees as a result of our continuous disciplined management of expenses. Next, I'll share 3 very important KPIs that we closely monitor. For net dollar retention rate, a commonly used KPI for SaaS company, it stood at 96% for our core Developer Subscription business for the trailing 12 months ended March 31, 2025. And this high NDR percentage, reflecting that we have high customer retention rate, coupled with the ability to increase revenue to upsells through upgrades and expansion. And this is another great quarter with such an impressive number.

Secondly, another financial KPI for tracking the performance of SaaS company is the total deferred revenue, which represents cash collected in advance from customers for future contract performance, which had a record high of CNY 156.9 million, and this is the historical record where our deferred revenue balance has exceeded CNY 150 million. Thirdly, we continue to maintain healthy AR turnover days level at 53 days. And these are slightly higher than what we had in Q4, simply due to the extended holiday during the Chinese New Year period, where collection is typically slower than other quarters.

We will continue to work hard to ensure we collect cash from customer activity and at the same time, mitigating the risk of bad and doubtful debts. On to balance sheet. Net total assets were CNY 376 million as of March 31, 2025. This includes cash and cash equivalents of CNY 113.6 million, accounts receivable of CNY 54.1 million, prepayments and other assets of CNY 17.4 million. Operating expenses -- operating lease right-of-use assets of CNY 15.9 million, fixed assets of CNY 4.3 million, long-term assets of CNY 113.5 million. Goodwill of CNY 37.8 million and intangible assets of CNY 12.8 million resulting from the Zanroo acquisition in March 2022.

And total liabilities were CNY 261.6 million as of March 31, this includes accounts payable of CNY 34.1 million. Current operating lease liability of CNY 4.2 million, deferred revenue of CNY 156.9 million and accrued liabilities of CNY 66.4 million. And now let me take a few minutes here to recap the description, a quarter of accelerated growth driven by globalization that Chris used at the beginning of this call. In this quarter, our revenue year-over-year grew strongly by 38%, reaching CNY 89 million. This was the highest Q1 revenue since the transition into a pure SaaS model. Our Developer Subscription service had another CNY 50 million revenue quarter with CNY 53.5 million.

Secondly, our EngageLab had a very strong quarter. Revenue grew by close to CNY 127 million on a year-over-year basis. And cumulative contract value increased by more than CNY 63 million in Q1 alone, bringing the total signed contract value to exceed CNY 110 million. Both the gross profit and gross margin has improved along with our global expansion efforts. We have a seventh consecutive quarter of positive adjusted EBITDA. And this is no doubt a very strong growth quarter for Aurora Mobile. We started the year with a great quarter 1, and we believe the momentum will carry on to the other quarters of 2025. Now let's turn to the business outlook.

And based on the current available information, the company sees Q2 2025 revenue guidance to be in the range of CNY 87.5 million to CNY 90.5 million, representing a solid 10% to 14% year-over-year compared to same quarter of 2024, and the above outlook is based on the current market conditions and reflects the company's current and preliminary estimate of the market and operating conditions and customer demands, which are all subject to change. Lastly, before I conclude, I'll give a quick update on the share repurchase plan. In the quarter ended March 31, 2025, we repurchased 16,000 ADS. Cumulatively, we have repurchased a total of 295,000 ADS since the start of our repurchase program.

And this concludes our prepared remarks. We're happy to take the questions now. Operator, please proceed.

Operator: [Operator Instructions] We will take our first question and the first question comes from the line of [ Calvin Wong from Spicer Capital ].

Unknown Analyst: I have one question related to the EngageLab. First of all, congrats on the EngageLab business has achieved breakthrough contract value of RMB 110 million in Q1. So if I work back the calculation correctly, so that's the total newly signed contract value was more than RMB 60 million in Q1. So I would be appreciate if management could provide some guidance outlook of the EngageLab business going forward?

Shan-Nen Bong: Okay. Thanks, Calvin. Let me take this call -- take this question. I guess your calculation is spot on. So at the back of achieving this CNY 60 million contract in single quarter, there are a few matters that I'll share with you and everyone on the call. One is the fact that we have proven to have the ability to win big contracts in global stage. Just to clarify, this newly signed CNY 60 million contract in Q1 2025 were from different customers outside of China. And second, our product and services are indeed meeting the needs of global customers.

Customers are willing to sign multi-year contract with us is another testament of the superior quality of our services and product. And this customer have shown great long-term commitment towards our product and services. And if you ask me whether we'll get another CNY 60 million new signed contract in Q2, I guess my frank and honest question (sic) [ answer ] is unlikely at this stage, which is a realistic expectation. But this CNY 60 million a quarter taught us a few very useful lessons to make significant wins going forward. It shows that we have the technical capability and the know-how to win big contracts. Our products are superior to competitors in the market.

So with our growing presence in the global stage, other overseas customers will start to look at EngageLab differently. And maybe this CNY 60 million new contracts a quarter is not too far away after all. I hope this answers your question, Calvin.

Operator: [Operator Instructions] We will take our next question. Your next question comes from the line of [ Marco Zhang from Gelonghui Research ].

Unknown Analyst: This is Marco from Gelonghui Research. Congrats to the company on another strong quarter. I have one question for the management. So this quarter, your revenue grew 38% year-over-year, gross profit grew 27% year-over-year and your adjusted EBITDA is on the seventh consecutive quarter of positive number. However, the company is still recording net loss. So my question is that when do you think we can expect your quarterly net profit?

Shan-Nen Bong: Marco, let me take your question. I think you are right to point out a few key numbers. Let me recap in this quarter, what we have is revenue grew by 38%, gross profit grew by 27% and our OpEx is only grew by 14%. And this business model has a perfect relationship to generate profitability. In short, you may conclude that we earn more than what we spend. But if I peel further deeper beyond the surface, one very important finding that I'll share with you and the others on the call is that there are certain expenses that we need to spend now in order to fill the continuous growth trajectory. Let me explain more.

For example, R&D, and it is vitally important that we continue to research and develop and continue to fine-tune our product. And one great example is the financial risk management, where the business grew by 64% year-over-year. And this is mainly due to product upgrades that we have made. And this upgrade resulted in more customers using and consuming our products. Therefore, we have the 65% revenue growth. On the flip side, if we stand still and with no intention to increase our R&D activities, our product will not have evolved, and we will not get a 65% revenue growth.

And secondly, marketing expenses is another crucial expense for any company needing to spend in order to broaden global reach and expansion. We need to have EngageLab brand name known globally. It was because of the marketing campaign that we had, we were able to grow the business with our borders into 40 countries and region by March 31, 2025. As a matter of fact, if you want net profit next quarter, I think we can do that. All we need to do is just to freeze our R&D and marketing expenses.

However, this will come at the expense of product development and continuous market spend, and this will certainly hurt our ability to grow our revenue in the near future. Therefore, we need to strike a balance between spending diligently enough so that we can have the firepower to fuel our continuous revenue growth in the next 12 or 24 months. And so long as we continue to scale our business, the results will come soon or later. And I hope this answers your question, Marco?

Operator: There are no further questions. I would like to hand back to Rene Vanguestaine for closing remarks. There are no further questions. I'll hand back to Rene Vanguestaine for closing remarks.

Rene Vanguestaine: Thank you, Heidi. Thank you, everyone, for joining our call tonight. If you have any further questions and comments, please don't hesitate to reach out to the IR team. This concludes the call. Have a good night. Thank you.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.