Q4 2020 Aurora Mobile Ltd Earnings Call
Today's conference call will begin in three minutes until such time. Your line will remain on music hold please continue to standby. We thank you for your patience, ladies and gentlemen, todays conference call will begin in three minutes until such time. Your line will remain on music hold please continue to standby. We thank you for your patience.
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Ladies and gentlemen, thank you for standing by and welcome to Aurora Mobile fourth quarter and fiscal year to tell from 'twenty earnings Conference 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 answer questions. Today, you need to press star one on your telephone. Please be advised that today's conference is being recorded on.
I'd like to hand, the conference over to your host today rainy vantage thing. Thank you. Please go ahead.
Okay.
Thank you Andrew Hello, everyone and thank you for joining us today.
Although on earnings release was distributed yesterday and is available on the IR website.
I, Oh Gee Guang Dong.
On the call today, So we don't rule, Chairman and Chief Executive Officer.
Mr Fei Chen President and Mr. Shan Nen Bong Chief Financial Officer.
Following their prepared remarks, all true we'd be here available to answer your restaurants during the Q&A session from homes.
Before we begin I'd like to remind you the discomfort on school contains forward looking statements within the meaning of section 21 E of the Securities Exchange Act of 1934 as amended and as defined in.
The U S Private Securities Litigation Reform Act from 1995.
These forward looking statements on based upon management's current expectations and current market and the Caribbean conditions.
Which are difficult to predict and may cause the company's actual results performance or achieve.
These months to differ materially from those in the forward looking statements.
Shuja information regarding these and other risks uncertainties and factors.
Included in the company's filings with the U S Securities and Exchange Commission.
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 comfort around sort of up to Mr.
Please go ahead.
Thanks, guys.
Good morning, and good evening, everyone on the call.
Welcome to Aurora Mobile's fourth quarter and full year 2020 on this call.
But yes, 2000 pardon me for not surpass anniversary.
Our other mobile looking back.
We are on the terminated proud of what we have achieved in the top of the cash and having a mobile app customers from China put in for Dale optioned artificial he helping each and every one of them into a day on option.
And now Mike.
ICL anybody remember everybody first on <unk> called out when we get that full mobile App you better price the way that aim.
Toward that 2011, and we have called on wasteful.
All of this.
Good day, pet food innovation technical progress and especially on the etc.
We haven't reached many milestones.
We started with one day plus product being put out the 11th and.
And all of that yes, we get that additional products for mobile at the better price meeting there were different and evolving optionality.
Coming out to be at December 31st 2000 times.
Rick I walked away from more than 591000 ft, better price representing more than one place say letting me to ask in total.
I'll get back from our survey SDK, helping and so on more than.
46 plus statement.
In the fourth quarter of 2020 on.
L a mouse.
They were more than.
17000, new mobile apps, joining and using one or more of our AC battery plus other things.
I would actually you'll see the opportunity to thank our older mobile App developers, who help me out on a day.
Chocolate and cooperate at all.
10 years.
I believe the next 10 years will be even greater for our customers things toward a new exciting I you know that day.
Part of our service operating for all Aurora mobile.
So he has with other time he was a very extraordinary items.
And it's that day that that may have shut the wall and change how people already with their lives and how companies conduct their facing us in so many ways.
They are in the pricing.
We consistently carry all of our cost strategy to serve all day about about customers. If I haven't done the sales business operations, you'll start growth and amortization all stages a day based.
Based on on a solid business Foundation.
Ill developer subscription services.
Ventured into new territories.
Every day, it's territory by creating.
18 hour Daiichi ally on spacing basis.
It is half of our developer customer list that on balance.
They will use our profit.
That's H a lineup of great with that as we actually with the up and coming down 15 times growth year over year.
Avenue, a Dia hills grow Rep study from the old tool.
For a day median in nearly five plus range.
Meanwhile, we completed the wind down of our talking about the golf business.
Despite being the largest revenue contributor being from Joy 19 with out of pocket market increases the last day with our company's long term by Russia.
I am proud to announce that by the end of the first quarter of 2020, obviously.
With each transaction was 100% complete and we have successfully transitioned all.
Company to a pure play a piece of the model.
During the year, we also put greater emphasis on product development and innovation.
Weighted that's prelaunch spring you heavy weighted part of that.
So it greatly enhance our J J allowance product portfolio by adding on new message quota.
I'll develop a subscription basis, we launched on any medications message messages surveys all your map on your math.
Video ads on surface.
Product will put us to attract new critical niche market of Africa.
On the come from a fall.
From a partnership with numerous well known and can't cost almost across almost every industry vertical as you'll have seen from the price of it is what you should have on times on time.
Corporation.
K a customers has helped us better penetrate into different industries.
Taxes on new energy.
Volume coal sector for example.
After our corporation with a walking with the world's leading new energy vehicle manufacturer.
As of this week, we now have 39 customers within the auto industry also reached 19 three P M.
We are replicating the success of the EV market expansion model you know other industries, such as short video education gaming financing Telecom E Commerce and <unk>.
For the Domino effect, where we leverage our existing operational relationship based on market leaders of each industry with video weekend and we'll go quickly on off more customers to rent market increase our market share.
For the year, we also upgrade our tight on pool by hiring a number I'll just see if that's true.
It's active across R&D sales operations and HR.
Which management experience accumulated from Tencent Papa items and quality.
We optimize all business operations. So we kind of on the beach on some more efficiently and create education puts and takes.
Continue to pay it on acquisition targets with Viper from US based on incentive scheme put in place and fine tuning the way we manage all organizations will lay a solid foundation for our field trial assessed their busiest growth ex FX.
Before I comment on our wholesale results.
I'd like to take this opportunity to remind everyone that we have uploaded culturally or and is that all I all got page for your reference.
You made reference to that that absolutely proceeding with the call today.
Let me continue with all key operating highlights for the fourth quarter after that on time to your other on both I have mentioned the audio.
The number of monthly activity on their mobile devices. We cover will continue to grow which one timeframe on site at December 2021 times adjusted.
In December 2019 over 90% of mobile devices in China to have at least one on multiple on SBA installer.
Second.
During the quarter based on the number of paying customer growth two.
200 <unk>.
Total 1424, 2001 hundred and.
What do you want a year ago.
I would like to focus the discussion on all topics, which.
Which include on either the medical services and growth application business, we have officially ethically.
I forget the traditional I'm talking about simply sales on December 2020, therefore, starting from January one 2000, and I'm talking for it.
All of our revenue will be country built with the idea of Sotheby's income.
I'll start speaking continuing to record impressive results this quarter are we.
Revenue of RMB $76 6 million.
It was at the higher end of our guidance range, representing representing 17% growth year over year on 18% growth quarter on quarter and gross profit of renminbi, $58 5 million growing 39% year over year and 20 per se on calls of quota.
Our net auspicious basis, the total revenue growth, 70% year over year, many due to the strong.
36% growth, India benefits of interest, partially offset by the decline in vertical applications, which are which have been impacted by the COVID-19.
The day its revenue from vertical application Havent seen solid sequential sequential growth for three consecutive quarters as customer demand in this segment continued to recover.
On a total of quota basis, that's based on its revenue a record stretch the quintessential sequential growth of 18% for renminbi.
76, plus 6% seven plus so but $76 6 million.
In Q4, 2000, and tied to our tax basis can contribute a 72% of total revenue up from 50% in carefully put us on hunting going for a walk subspecies real countries, 100% of our revenue.
On the autopsy business basically gross profit has also shown strong growth I'll touch on 8% year over year to Renminbi 58 on say the median for the quota India 2020.
You too.
But the revenue growth of 17% year over year margin expansion from 70% to 76% year over year weighted our gross margin in 2021st will remain above 70% for outer year for Q4, 2020 is thought pieces kind of country beauty 19, 8% of the gross profit.
Ah from 19, 6% in two free put us on party going forward, that's basically it will contribute 100% of gross profit.
Yeah, I would also like to take on more than and share with you on your products and your strategy there.
Yeah listen todays off the launch of both the C. G O M. S. N D G boss product after conducting a thorough.
Americas, with our MTI, better price and customers to understand their needs and pinpoints.
Employees J G U M S.
Sales for unification messaging system, and neighbors pacings totally engaged with their target customers more efficiently and cost effectively through one integrated message many true purport. Therefore.
Therefore, improving optional simpler cte while reducing cost with flexible routing strategy management.
In the past two years with the proliferation of many user engagement channel such as meaningful way reach our puppet accounts thinking is there.
So it was like it was like engagement has become much more complex than ever before.
Sales for comes to the marquee ex the right product at the right time to address such pinpoints.
I imagine, it's not on any sort of bolt for at the better price, but also showed up on for patients that do not even have on mobile apps.
In March the business in China, we don't need this product as long as they have a sizable customer base and utilizing multiple channels to reach they on top of the money.
C G boss, which stemmed from all video edge on surface on the other hand enable mobile app developers to provide relevant user friendly short video content.
Therefore, improving the user experience increasing user engagement and stickiness.
How does the monetization capability.
It is Easter build your way for users to come on shortly deal any kind of any way rather than have to go to a dedication video apps to be to be able show videos in centralized patient.
But for U M S N loss operating subscription fee based on model.
Our customers pay us on your free based on the features they like to enjoy.
We've been able to both products and greatly expand on a paying customer base and also.
Develop a subscription basis all the time.
We anticipate it is true products will start generating revenues in the second quarter of 2000 on your two.
2020 for it.
Now I'd like to know how to say who will discuss our Q4 performance in greater detail.
Thank you, Chris let me start with discussing different revenue streams within the SaaS business at all.
Our star performer developer services signed continuously from the first quarter to the fourth quarter of 2020 and it wasn't the biggest day revenue contributor within our SaaS businesses in fourth quarter of 2020.
For the quarter ended December 31st 2020, we recorded RMB 52, 5 million in revenue for developer services, which represented 46% growth on a year over year basis.
The significant revenue growth in developer services was fueled by 28% and 14% growth in customer numbers and op who respectively.
For subscription services within the developer services, we continue to see more customers signing up to our suite of developer services.
New and the renewal of our customers in crude among others in Cook Farfetch Secondly on boat Hydro brokers proof, our bank and the Ping an bank.
Subscription and services revenue was RMB $35 1 million, an increase of 6% year over year, and 16% quarter over quarter, primarily driven by the increase in customer numbers.
Value added services within developer services, which include revenues from JG Alliance services and the advertisements fast recorded another strong quarter as revenues grew by 28, 29% quarter over quarter, and a 432% year over year.
The value added services full year revenue grew from RMB $3 3 million in financial year, 2019 to RMB 52 5 million.
The 15th ex any revenue growth demonstrates the large potential market opportunity and the growing demand for our value added services.
In the fourth quarter the revenue from value added services was RMB $17 4 million compared to RMB three 2 million in the same quarter a year ago. This 432% year over year revenue growth is attributable to the growth in both the supply and the demand.
Sites of the JD Alliance.
On the supply side, we continue to see many ask joining our J D Alliance traffic network.
On a number of apps and the day you within our natural exceeded 200 apps in the 130 million to you in the fourth quarter.
Presenting on 100% and 30% of the growth from the third quarter of 2020, respectively.
The notable new members of the alliance on the traffic side.
They include large in the popular mobile apps from different industry sectors, such as utilities education and financial.
Continued growth in the number of apps and the day of youth is proof of the strong market demand for J D Alliance products.
On the demand side mini program developers continue to play a pivotal role as traffic consumer of GG Alliance by contributing 39% of revenue in the quarter notable customers of D. G Alliance included but not limited to Weibo J D can go to champion trigger made.
Hi.
On any of the old travel go and Baidu has to sit on my financial on.
JJ alliance ever increasing traffic, a pool resources and the innovative and a unique advertising formats have giving our customers a brand new effective and a different media for you the acquisition needs and dormant user targeting needs.
I would now like to provide a brief update on the legacy targeted marketing business the revenue and the gross profit contribution from target marketing, having both declined from 40% in Q3 22, 28% in <unk>.
And from 4% in third quarter or 22, 2% in fourth quarter 'twenty, respectively. The fourth quarter of 2020 is the last quarter, where we recognized revenues from target marketing.
This business has ceased.
Entirety by December 31st 2020 day.
Therefore, starting from first quarter 2021 revenues will be 100% from our SaaS businesses, which include the only developer services and political application now.
Now, let's move on to the discussion on a vertical applications.
Combined net revenue from vertical applications.
Which include the market intelligence financial risk management, and I don't increase it by 10 percentage sequentially from RMB $21 9 billion in the third quarter of this year to RMB $24 1 million revenue from vertical applications recorded sequential growth every quarter in 2020.
Revenues from our market intelligence product increased by 16% year over year, we continue to see strong growth from corporates with more than 60% of revenue contributed by corporate accounts.
Operator customers included story about how we like Baidu.
In the financial risk and management segment revenue increased by 23% quarter over quarter as demand for this business has recovered strongly from the impact of COVID-19, since the first half of 2020 solid and the continued demand from banks and the licensed financial institutions has pushed the both of the <unk>.
And a customer number two grow by 15% and 7% respectively sequentially.
And then lastly, our eyes on business is still facing challenges as a result of COVID-19 impacting on the demand for location based products.
Business unit is still undergoing a number of new initiatives in product transitions. We recently launched a joined the product with country Garden, It's called a true corridor. This product will not only provide the foot traffic analysis for properties for sale, but also how property developers to identify and target potential property buyers.
We expect such product could help renew the growth in Iceland overtime.
With that I'll now pass the call to Shannon.
Thanks Fay.
Since keeping people when you talk about our top line numbers for this quarter I'll go through some of the other P&L and balance sheet items.
And let me summarize the key takeaways and highlights for on the P&L items for this quarter.
The SaaS businesses revenue and gross profit contribution record it.
Solid double digit year over year growth in all four quarters.
27.
Second the value added services achieved revenue growth of 432% year over year in Q4 2020.
Recorded yet another high growth gross margin of 56% in Q4 2020 up from 47% in Q3 'twenty.
If the business, becoming pure subs base, we anticipate our gross margin to be above 70% in 2020 one.
98% on our current quarter gross profit was contributed by the sauce businesses last week.
Good day marketing business has completely wound down by 12 31 2020.
And we are now beginning a new chapter in the Aurora mobile slowly.
From January 'twenty, 'twenty, one or our revenue will be 100% contributed by the sorts of businesses.
We are demonstrating that operationally and financially.
That does that this transition is beneficial and helped me to our financial performance as a whole.
Onto operating expenses.
Total operating expenses increased by 3% year over year, 205 hundred $6 5 million wouldn't be.
In particular.
R&D expenses decreased by 8% to really be $40 6 million, mainly due to decrease in staff costs as a result of lower head count and most evidenced payment in Q4 2020.
The reduction was due to the restructuring that took place.
In Q4 2019.
Selling and marketing expenses decreased by 27% will it be $22 3 million.
Mainly due to the reduction in salary cost as a result of lower head count and offline marketing expenses due to the Kobe.
Restriction.
G&A expenses increased by 51% you wouldn't be $43 5 million.
Mainly due to the limited $10 9 million impairment charge related to fixed assets due to our green project in 2021.
Under the U S. GAAP, we booked the impairment charge for the Star Wars to be retired on mute redundant on.
Other factors contributing to the increase including increase in professional fees and bad debt provision.
Adjusted EBITDA improved 22% to negative $17 1 million from negative $22 million in Q2 2020.
In addition, Q4.
Q4, 'twenty 'twenty it was a quarter, where we achieved the best quarterly adjusted EBITDA results in 2020.
We will continue working hard to improve this number going forward.
Onto the balance sheet items, Apollo receivable turnover days continue to improve and show great results.
It decreased significantly from 70 days in Q4, 2019, and 45 days in Q2 2022 47.
Day in Q4 2020, this was attributable to management greater emphasis on stringent customer credit granting policy.
Outstanding accounts receivable monitoring along with aggressive and timely collection during the quarter.
Furthermore, the decline.
Positive marketing business during the quarter also contributed to the sharpening of the ultimate would be.
The deferred revenue balance, which represents cash collected in our bonds from customer increased significantly by 41% year over year 209 million wouldn't be as of December 31st 2020.
This is in line with our shift to the sauce businesses, where most customers are reported to prepay the annual contract fee upon commencement of service.
In the fourth quarter of 2020, our operating cash flow was a gate was once again positive.
This is the third consecutive quarter since Q2, 2020 that we have recorded net operating cash inflow.
All of the above keeping issue that our transition to focusing on Fox business is generating more cash and granting fewer credit base that we have had under the positive marketing L O.
The improvement in each of these balance sheet items were primarily driven by our shift to.
<unk> business model.
We are very pleased with this improvement over the quarters.
Next total FX would be $787 million as of December 31st 2020.
This includes cash and cash equivalent of 436 million accounts receivables of 44 million prepayments of $12 million on EP fixed assets.
73 million long term investment of $168 5 million.
Total current liabilities will.
The $460 million as of December 31st 2020, UCP accounts receivable offering be $16 6 million deferred revenue of wouldn't be hungry and 9 million true.
Liabilities of 109 million convertible notes of $2 5 million.
And for the financial year ending December 31st.
'twenty one the company expect total revenue to be between RMB three.
$380 million.
400 million wouldn't be representing a year over year growth of approximately 47% to 55 percentage and a gross margin to be above 70% for the full year 2021.
However, cash no debt for a meaningful comparison purposes. The prior year revenue numbers used to calculate the growth percentage share S. P.
Revenue from targeted marketing business.
And your growth outlook is based on the color on market condition and reflects the company's current and preliminary estimate of market and operating conditions and customer demand, which are subject to change.
<unk>.
Lastly, before I conclude on people quick update on the share repurchase plan.
In the quarter ended December 31st 2020, we did not repurchase any shares as of December 31st 10, you can see cumulatively, we have repurchased a total of 921000 ETS since the start of our program.
And this concludes the management people moving.
And we are happy to take the question now operator. Please proceed.
Thank you ladies and gentlemen, we will now begin the question and answer session.
If you wish to ask a question. Please press star one on your telephone on like for your name to be announced if you wish to cancel your request. Please press the pounds on a housekeeping one.
Once again star one for questions.
Our first question comes from the line of Brian Kids Lingers from E. G. P. Please ask your question.
Great. Thanks for taking my questions.
Ill remind listeners the benefits mini program is joining the G. G Alliance and then maybe which verticals are you seeing the greatest adoption.
Which verticals, maybe I'm, taking a little bit longer.
Two to adopt technology.
Hey, Hey, Hey, Brian how are you.
Are you asking about the G. G Alliance network right on the on.
The demand side.
Okay right yeah, yeah. So so so yeah yeah.
The mini programs has been properly.
Profit duration over the past couple of years right. So many many mini program developers.
Once the Butte the mini program.
On the accounts that are many prevents the need to acquire users. So currently.
The most of them can only rely on.
The wechat in tune with topic right for the users to search to find to find dmitry programs and and.
The topics within the Wechat is limited so if they want to continue to grow they have to look for additional resources on these traditional additional traffic so.
That's why we come into into the into the pace.
Because for.
For the day the alliance.
Network on a product.
We have two products right now.
The messages as well as the line pushing messages. These two actually media formats.
We worked very well true direct the traffic to the Wechat mini program.
That's why over the over the past year on this mini program developers the demand from many different proof on mini program developers have been very strong for four hours for our traffic and.
And the last quarter, we had over 30 about 39% of the revenue that's generated by these mini program.
Developers and for example, you know like a like a Uh huh.
In terms of the in terms of the vertical actually actually on.
Can you comment like that.
Travel also also also the financial these factors actually currently.
The demand is coming from.
Great.
My follow up is in terms of the subscription services.
Talk about how fast you're able to convert.
Premium into paid customers and what has been the biggest obstacle to converting these customers right now.
Yeah, so actually.
In terms of the conversion right. So currently we have we have about 60000 premium.
Forgive me on customers, who actually enjoy a free service and the paying ratio is relatively low about three left.
It'll be less down 4% right. So so that's still you know a room for four to increase the conversion.
So what we are trying to do you know basically basically we need to.
Put a few a few mechanism in place we need to have to have the sales organization. You know basically to go through go through the list of the of the premium customers and and have our engagement with them and basically to educate them.
The difference between the paying and nonpaying the benefits they.
They can't get by by paying a little bit months' defeat right. So so so this is a this is an ongoing and and ended this efforts are actually you know this year we.
Basically intensified.
On the grid efforts into into this effort right.
And the second second is we also we also look at basically to do to do the current paying customers the profile analysis.
Two identify you know on the common features of these paying customers why why they like to pay right now.
How big is that to you how many messages they typically fang right. So we come to basically you know basically except for like a doing a user profile right. So based on this profile, we can more accurately select.
With those premium customers, who are more likely to be converted right. So so this and this work is being done by the R&D operation and also and also sales operation right. So so so that's when the sales go talk to the talk to the Doctor the female customer on you know.
They can be more effective yeah. So these other approaches that we are currently undertaking.
Great. Thanks for your thanks for answering my question.
Thank you.
Your next question comes from Ryan Roberts from <unk> capital. Please ask your question.
Yeah.
Good evening couple from me, maybe they send them.
But could you I'm just I'm curious what the.
The bad debt provision is a kind of you saw on this quarter and also the breakdown on the impairment on a little bit I think there was an error in the.
Slide deck, you guys mentioned going cloud and I'm kind of curious what the maybe more of that project because I think around the IPO time, one of the really kind of the point the positive points with your network of servers across the country and how quickly you could you could perform the push services personnel.
Which is kind of a differentiating factor and somebody from wondering context that'd be going cloud.
That means for your infrastructure and service level. So I guess I'll just start with that.
Hey, Thanks, Ryan Okay I'll take your question on the bad debt.
We will not go into specific on.
But overall those are the debt.
Turning to the on legacy.
Our retail marketing business.
We are winding down so those are the one that has been.
And going with us for a couple of them.
<unk> orders that we are thinking that it's no longer able to recover the debt. So those are the one day, we had provisioned, 100% provision so meaning that going forward in Q1, 2021 we have to.
On page of the.
On a concert so going forward.
And secondly, the question you asked about the impairment, yes that was in relation to the green.
Project that we had so based on our current projections we expect.
Acting to complete this group.
<unk> project by <unk>.
Sometime in second quarter of 2021.
And the reason why we do this is through the years.
<unk> managed to see besides the fact that we are able to bill on infrastructure. We are taking advantage of the clinical advancement of this call service provider because they have the ability.
Help us to languish on their infrastructure trying to stay on.
Help us to improve our service delivery and stability going forward for developers.
Are you going to replace a lot of infrastructure a lot of your surface with from a club.
No no no sales.
Right.
Let me answer so it's actually we are not replacing everything we are just replacing a part of okay, which we think will benefit from the Golden Colorado. Okay. So basically you know those those those service you know might be better manage tonight by the cloud service provider instead of so we can focus on the past passed level instead of we put through.
On the data Center management right Silver management, you know dose of ice level type of Dirty Dirty work right. So so that's the hope.
Okay, and then maybe just kind of a M on the numbers and the last one I see a pretty pretty chunky impairment on a long term investment.
It could be about 44 44 million I'm kind of curious what that is true.
Yeah again these are the investments that we have made.
In the past pertaining to.
A few investees again, both on the one day, we have made the investment we made with the intention of helping us in the positive marketing era on.
We thought on the fact that we'd be able to have some synergy through this investees.
And the fact that now we are winding down the targeted marketing business. So we didn't there's no longer any value for them.
To keep on going forward and in fact some of them all on.
Non performing well operationally so based on the U S. GAAP on the graph conservatism. So we make a provision for a couple of them.
Above them.
Okay. So it sounds like.
It's mostly targeted marketing related okay. Okay.
And then maybe a maybe it's kind of just we get a sense. It on a new product side. I think you guys have launched from new kind of new products recently I'm. Just wondering if you can maybe share some early kind of feedback from from customers and clients I think it sounds like there's a lot of R&D effort.
So you've got to develop these fees you can solve these pain points are.
In developing these packages.
Curious so far how has the reception been and also.
How does that factor into your outlook kind of per year.
So I think that the guidance was 380 400, which is.
Percent somewhere around there Y O Y I'm curious if you're expecting a lot on contribution from new products were all principally that's mostly reflecting kind of Judy line I'm going to get a sense of what maybe some of your assumptions are there.
Okay. All right. Let me take your question so regarding the new product the progress with the new product go into market right. So first of all you know on day, two new products on the U S in Nevada.
<unk> in the later part of fourth quarter. So so after Chinese new year and that you know starting from beginning of this year and also you know how quickly it is Chinese new year, So actually right. After Chinese new year actually you know the real the sales work started kick it off and and.
A very short period of time about a month, we actually already built on very good pipeline, yeah. So for the U S actually we already you know.
Have a 19 incredible pipeline.
And and and the customers we are in the in a constant dialogue with the with the customers and these 19 customers.
Represents.
On a few million dollars M D.
And and actually on and tell you good news actually.
We speak actually yesterday, you know when I when asked on our sales hat and she told me.
She just signed one contract you on that contract and that we have already received at the money, So which is great right and for the us actually.
Actually it's in a very similar situation and.
After Chinese new year, you know, we mobilized our sales force country already built 12 very credible.
On the pipelines and again.
These pipelines.
Accounts for a few a few million RMB.
Based on this initial feedback, but we're very encouraged and we are in the based on the analysis. We also think on these two products will have a higher higher output on actually a much higher <unk>.
Now our traditional past business such as the day push right. So we believe.
Overtime over the course of a year. We think we think on these two businesses will become the new growth growth.
Actually lags for our for our subscription business.
And and and Oh, we also actually put the Kpis on these two products to our sales organization. So it's not that they are not encouraged to sell actually they are very incentivized to.
Push these two products out and the market reaction.
As I, just mentioned, it's very positive and and and the promising okay. So next quarter, maybe I can't give you more data more progress on these two new tool product and also you ask about you asked about.
Our overall guidance right.
We guided $380 million to $400 million.
This represents a 47% to 55% year over year growth and you are right actually the most of the growth is not it's going to be driven by the <unk> Alliance.
We talk about last time, and and before actually J J line has the characteristics that can have on explosive growth right. So so so we are expecting on P.
July is to continue to have a triple digit growth this year.
And for the subscription business as I, just mentioned, which typically is going to be around 30% ish.
This is a.
Same thing is true for the for the vertical applications.
So net net.
You will see about.
55% growth for the entire year.
Yes.
Okay, and then maybe if I could.
One last one on with you if you'll allow me one of the things we can kind of talk about in the previous call. I mean, one of the one prior or kind of the efforts to kind of bring back some of the targeted marketing clients to the new kind of J D. On lines that net product that kind of you got the new advertising inventory and you had.
Companies that need advertising I.
I guess the.
COVID-19 situation on the side. It sounds like you have you seen advertising service you could sell to people that you already have a relationship with.
If I recall I think you were trying to do something on that.
And I'm just kind of curious if you can share any updates on how it's going to bring back some of those old accounts too.
Spend on your new car.
Yeah.
The new JV line Sparks.
Hey, Ryan actually went up.
When I compare the customer base right actually and they are very different.
The customers, who currently use our our Gigi Elias on network actually are very very a very fundamentally different from from those customers, who use who used our.
Our target marketing business, so for the target marketing actually before you know most of the our advertising customers.
From the financial sectors like are those.
So lenders okay.
Per se, but for these and these are mini programs actually.
As I mentioned in the press release, if you if you recall those names right does that you know very large internet companies and regardless, whether they are trying to go through our <unk> network to.
Reactivated their domain customers or they are trying to you know.
Increase.
Our user base for their mini programs actually most of them are very well known you know on Internet and Internet lead us. So so so so the nature of these catalysts.
Do you have a basically one.
Very credit worthy right on that.
The digital channel that can be defaults right Dan.
When compared to the Tiger marketing customers right.
And the second they have a deep pockets and the budget is not an issue as long as we have enough traffic.
Okay.
It ought to me okay. So.
So so so so that's a that's a good thing so so so and also to share with you a data I look at the day cohort analysis right now we're starting from not lost on after July for every every month.
The new customers joined our G D clients as the demand side.
When I look at their revenue contribution for.
For the second half for the third month for the fourth month in a following and so on and it's all above 100%. Okay. So so so which which means the customer retention. If you know the stickiness is very very high it's unlike the target marketing business before if I show you. This.
It's going to be below 100%, maybe 50% and ex months. Okay. So that's the drastic difference. So this is it gives us so much confidence that this product really really shine.
He has a strong value proposition and gives customers. They are happy with the performance we are able to deliver it gives customers. They are happy with the volume we are able to deliver so yeah. That's that's why we are so confident about the growth trajectory of <unk> Alliance in 2021.
Understood. Thank you very much because its very helpful. I appreciate it.
Sure.
Just a reminder, ladies and gentlemen to ask a question. Please press star one on your telephone keypad.
Yeah.
Alright, there are no further question on I'll turn the call back to Rene for closing remarks.
Thank you Amber.
Thank you everyone for joining our call Tonight.
If you have any further questions and comments, please don't hesitate to reach out to be on.
This concludes the call and have a good night. Thank you.
Ladies and gentlemen that does conclude our conference for today. Thank you for participating.
Connect.
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