Q1 2021 Aurora Mobile Ltd Earnings Call
[music].
Ladies and gentlemen.
And welcome to the mobile first quarter 2021 earnings conference call at this time.
Cash.
And after the Speakers' presentation there.
And that's a session.
During the session you will need to press on that.
Telephone piece of advice.
And recorded.
I would now like to hand the conference.
And so.
And so Hudson.
Thank you Annie.
Hello, everyone and thank you for joining.
Once per day.
All lines and earnings release was distributed earlier and is available on on the IR website.
And Don Jaguar and don't see and.
On the call today on me, So we don't rule, Chairman and Chief Executive Officer.
Mr Fei Chen President and Mr.
And on.
Chief Financial Officer.
Following their prepared remarks, all 3 will be available to answer your questions. During the Q&A session that follows.
Before we begin I'd like to remind you that discomfort and school and contains forward looking statements and within the meaning of section 21 E.
Sure and Securities Exchange Act of 1930 full and.
And as amended and as defined in the U S. Private Securities Litigation Reform Act of 1995.
These forward looking statements on based upon management's current expectations and current market condition.
Conditions.
Difficult to predict and may cause the company's actual results performance or achievements to differ materially from those in the forward looking statements.
Further information regarding these and other risks and certainties and other factors.
And I included in the company's filings with the.
With Securities and Exchange Commission.
The company does not undertake any obligation to update any forward looking statements and stuff.
Out of new information future events or otherwise.
Except as required under applicable law.
With that and I would like to turn to confirm on silver.
The U S. Their Louisville Pease go ahead.
Okay.
Alright.
Good morning, and go even need to everyone on the call.
And we're going into Aurora mobile is for.
First quarter 2000.
But in principle, and these car Ts and CS the French quarter.
Well on all financial results and refresh on me all SaaS place on it.
Is it are they fully exit our legacy target marketing basis, and up 2000 and hygiene.
We go and put it on a.
New chapter.
And I'll, let you cited about I'll say, which based on its purpose.
Before I comment on.
Kill a result.
And I took the opportunity to remind everyone that a cadre or and if that is available on our IR.
Our website for your reference.
You'll may rep breath of attack as we proceeded with Dakota day.
That's speaking I'll reveal with a highlight of all key operate.
D and financial performance for the first quarter of 2000 and told you for it.
And the income basically seb.
And I'll put that in 'twenty.
Obviously, if it's allowed per car on the topic.
And I.
I wish I could give you a better price, so basically and medical applications.
And all Apple to Apple.
Comparison.
Numbers presented here exclude the contribution from the legacy packed day marketing and up pre like barilla employee culture.
And the principal cadre.
We continue to grow our company.
Body and white brokered and Carlos.
Book to grow our stock repurchase and deliver impressive.
Impressive results.
The number of paying customers increased to 2000 and about how I'm doing.
Cobell from 2049, a year ago.
Other times, you free per day year over year.
Revenue per square, so let me be.
And so the $76.6 meter per day year over year.
Gross margin reached a historical high of 75, 9% more than 2 pardon free tonnes a year ago.
Gross profit what does that mean, B 58 per 1 million and safety.
Yeah, yeah over year.
Well your profit and revenue.
And adjusted EBITDA was negative and renminbi avian part and for media.
And that's a substantial improvement.
But and I'm for example, yoga demonstrating strong operating leverage.
Safety restaurants on business revenue growth, mainly due to strong growth of 16.7 per se, if you bet for services and but his expert and vertical applications.
Yeah.
Yeah.
The historical high gross margin is strong evidence of how the transition to a pure sales business model.
That's been positively impacting our results.
And see some other to be crazy, which has higher gross margins due to our competitive advantage and notification distribution network and the high efficiency of its Asia allows Peterborough range, so basis, you'll see minimal working capital.
And the startup phases.
The growth was driven by both the revenue growth of 56%.
And the earlier.
Yeah.
And imagine if things went from.
79% to 17.5.
75 per cent year over year.
Oh Wow.
Well also like to take a moment to give you an update on our latest product say to you on that and take your loss.
Okay.
But they do U M S.
Okay.
And for all unification messaging system.
We started to commercialize this product post the Chinese new year.
And I will 2000, and so on your first.
And we have a sign contracts and the total value existing that maybe it wasn't meeting with and I'll talk about <unk>.
100, K this customer much cover a wide range.
And so all the industry vertical and Cody and social E Commerce education lifestyle surfaces.
And Marty coal industry and social.
We are seeing a strong pipeline being developed and scale with it.
And we believe this product has addressed the critical needs of many corporate customers, who want to manage their customer engage them and more cost effectively.
So it's a to your boss product, we stay and Bravo.
Mr. Please.
We closed on more than 10 customers contracts things like it's all based on our post the Chinese new year.
We've also for blood and then maybe 100 K too.
The continued sales momentum and answer session.
And traction demonstrate the demand from the mobile App developers, who have successfully are proud of our.
And as a roster of their applications and happy.
And the employees have been important user experience, increasing user engagement and time and again.
And has the maritime and say I don't want like isolation capability on.
Rich user engagement and time from application they've lost product has increased by a foot per se.
We will continue to provide updates.
The products and the coming quarters.
We continue to book.
Continue the typical.
Great emphasis on product development and innovation by hiring more tail on it.
And upgrading our infrastructure, our R&D team achieved significant improvements on.
On our.
And diversify the product.
So I'll just operate and spend a personality.
So actually our customers expectations.
And particular after continuous iteration of J push SDK and mobile App developers and now able to access the mobile phone manufacturer message channel, which will significantly improve the push message.
Free.
This further summers, our leading position to own mobile at the better price seeking more engaging and effective ways of marketing to their users.
In addition on.
Annuity update and <unk> version, 2 and zero officially announced that recently.
And that's with the rapid adoption of <unk>.
Technology, we are free to announced at our day to U S version 2.0 kind of fully support <unk> messaging channels.
For Apache and messaging and surface prep was wechat subscription messaging and we are able to conduct post the message on that is for App developers.
And a better pizza and user behavior mobile.
And the better breadth and also adjusted message strategy and railcar.
And which reduced that disruption and disrupt disruption to us English.
How do you hedge away.
Or are you more flexibility to marketing needs.
To get there rich.
Now I will turn the call to Fe, who will discuss the kilowatt per from us in greater detail.
Thank you Chris.
I mean, you started discussing on different revenue streams within the SaaS business is.
Following his stellar performance throughout 2020.
And developer services continue to be the biggest revenue contributor in first quarter 'twenty 'twenty, 1 we recorded RMB $52.4 million in revenue for developer services.
Which represented a very strong 67% growth on a year on year basis.
The significant revenue growth was driven by a strong 35% growth in subscription services and the 189% of growth and value added services.
Subscription and services revenue was RMB $33.7 million and increase of 30.
Since year over year, primarily driven by the by and Youll push notification and customer acquisition.
And the cross selling of non pushing notification products in our product portfolio, which includes other subscription products such as day verification J S. M S.
5 per analytics et cetera.
And contribution of non pushing electrification products increased to 35 per cent from 23% in <unk> 2020, non pushing electrification products have a higher on a pool, resulting in the overall pool for subscription.
Sales, increasing by 21 per cent.
To be 16 point.
And.
Compare with them and be 13 point and 90000 in <unk> 'twenty.
New and renewed contracts of notable customers include a Starbucks and Mcdonald's, Yes, I herb.
And so because they used to and airlines and so on.
Value added services within developer services, which include the revenues from JG Alliance services and the advertisement fast recorded another very impressive quarter as revenues grew by 189% to RMB 18.
10 million from RMB, $6.5 million in <unk> 'twenty.
Spike Q1, being a seasonally slower quarter. This stellar year over year revenue growth is attributable to the growth in both the supply and the demand side of the JD Alliance.
On the supply.
8 of the alliance the total number of apps and the <unk> within our network exceeded 280 apps compared to 200, Inc. Fourth quarter, and 150 million EBITDA, you compared to $130 million in fourth quarter, representing very strong 40 per cent and 15% growth.
Hi, Syed from fourth quarter, 2020, respectively.
And this quarter, we continue to sign on for many larger and the popular mobile apps from different industrial verticals into our <unk> alliance fixed supply pool.
This continued increase in traffic a pool is important as it provides a great number of reusable.
Growth, which in turn helps us to increase impressions and that generates higher revenues on.
On the demand side, we see strong demand from mini program developers, which again contributed more than a third the O J J Elias revenue.
Seems to be launched Digi alliance in late 2019.
<unk> has proven to be and effective traffic acquisition medium for these mini program developers, who continuously and need to expand their user base.
Our services for mini program developers also beneficial to mini program platform.
Such as Wechat, because the platform encourage.
And as traffic originated from all sides, the wechat ecosystem to enhance the traffic a pool for us the mini programs inside of Wechat.
The other vertical where we see strong demand.
And who use our services for dormant user re targeting and purpose.
Major customers of GG Elias in the quarter.
Courage of the state of <unk>.
Market leaders across many industry verticals and they include but are not limited to Weibo and <unk> syndrome.
Paul to Shanghai.
True VIP shop.
J D Alliance is a highly complex business model, which requires many.
Cause parts, they need to work proactively and seamlessly and all to make it fully integrated such as technical product innovation traffic acquisition and operation.
Advertisers acquisition, and the operation data and AI algorithm development and the smooth operation of the <unk>.
Moving and system and the platform just to name a few we believe the relationships and the trust that we have built with our developers over the past 10 years have enabled us to sustain a steady flow of traffic and accumulate invaluable big data insights.
As we continue to.
Get steady traffic.
And to use machine learning for data analysis, and this really reinforced the magnitude of our AI technology and the capabilities and performance at which in turn and continue to bring higher ROI for advertisers and a higher return to our traffic and suppliers.
The addressable market of JD Alliance is.
Massive and they're projected to be over RMB 10 billion based on third party research and we adjusted at the very beginning of the growth curve.
Now, let's move on through the discussion on vertical applications.
Collectively the revenue from vertical applications, including market intelligence financial risk.
Risk management and item.
Year over year vertical application revenue continued to grow by 36% as demand continued to recover from pandemic, particularly financial risk management business has outperformed where revenue grew by 56%. All these businesses recorded a solid.
Solid year over year revenue growth.
Revenue from our market intelligence intelligence product increased by double digits year over year.
And to see strong growth from corporate with more than 60% of revenue contributed by corporate clients, new and renewed corporate customers included hardball.
Obama etcetera.
Et cetera.
In the financial risk management segment revenue increased significantly by 56% per year over year. We believe the demand for this business has fully recovered from the impact of COVID-19.
And the continued demand from banks and the licensed institutions.
Has pushed the AVO up by 64% year over year, new and renew the customers include of Baidu and the 360 finance.
The strong performance is also the result of our strategy shift to focus on key customers, who typically have massive demand and the bigger budget.
As long as we offer solid products that performed well branded and stickiness will be retained among customers.
Customers.
And then lastly, our eyes on business is still in the midst of product transitions.
Based on market demand and our product strength, we are focusing our product development efforts on Cds.
City planning.
And the state and the marketing related or demand. Nevertheless, we recorded a solid 38% per year over year revenue growth in the in the quarter driven by demand from real estate and the city planning customers with that I will now pass the call crews and then.
Thanks Ray.
Although 2019 expenses and balance sheet items on.
On the operating expenses.
Total operating expenses decreased by 9% year over year, let me be 1 on 1.5 million.
Hello.
R&D expenses increased by 75%.
And $1.90 day.
And you do that.
On <unk>.
And Paul.
<unk>.
Pension.
Selling and marketing expenses increased by 7%.
$6.9 million, mainly due to increased customer visits.
And traffic.
And maybe 1 other.
Offline marketing expenses.
G&A expenses decreased by 14%.
And at $2.8 million, mainly due to year over year reduction and maybe.
$6.8 million and bad debt provision.
The decrease in net.
And that provision was buddy.
And the reversal of bad debt provision.
Revenue.
Funds from loans outstanding net.
Okay.
Partly offset by increased professional fees and costs.
Adjusted EBITDA covenant on the EBITDA, excluding share based compensation income 70.
And year over year.
And negative $18.4 million from negative.
$90.2 million in Q1 revenue.
In summary.
Year over year comparison, and the key takeaways in this quarter income.
Our stock businesses revenue.
Increased significantly.
And then.
Gross margin income from 33% and 76% by revenue.
And all of Q1 and when.
When you want and gross margin being 100% contributed by line.
And businesses.
Opex however.
9%.
As a result of adjusted EBITDA.
439% the scalability of our business model has become clear.
And we are very proud of.
And revenue strength.
And the stockpile.
Q1, and 1021 and.
It has clearly demonstrated that our business and investing in sensors.
Balance sheet.
I'll leave that up and listeners.
And our comp momentum.
Moving forward.
And our balance sheet.
Our continued efforts and closely monitor outstanding accounts receivable and pay off.
And all of these decreased significantly from 86.
And Q1.
Reported.
This quarter.
This was due to both the shift away from the legacy product and marketing business and focus on sales business.
The company continued effort.
And the election cycle.
And for the fourth consecutive quarter and deferred revenue balance.
Cash and cash philosophy and that one's from customers.
Moving to 100 million and.
And as of March 31, 2021, and the balance was at 110 million.
The shift from businesses.
Where most customers are required to prepay and swapping from our cash flow and competitive.
And if supplier partners, where we had some legacy Huntington and marketing business.
Net.
And that's with really be 744 million as of March 31st 2021, and this includes testing.
Cash and cash equivalents of 400 million.
And so your silver on 36 million free.
Payments.
Payment of my <unk> and fixed up 60.
And $67 million and long term investments of $106 million and 269 billion.
How do you like lithium and $430 million myself March 31st and then we could be once this include accounts payable on <unk>.
Deferred revenue.
<unk> hundred $10 million.
Our current liabilities of $81 million and comfortably and most of 229 million and we should fully redeemed in April 2021.
And your business outlook.
And any concerns that the previously provided guidance for the financial.
And finally sugar and the December 31, 2021 for the total revenues of 318 million from 400.
The $400 million.
Representing year over year growth of approximately 47 percentage of 55%.
And gross margin to be above 70% and about a 3 year.
Change.
And so that the flow meaningful comparison purposes. The prior year revenue on just used 2 copies and revenue growth with percentage exclude revenue from targeted marketing business.
Growth outlook is based on the current market conditions.
And reflect the company's current and preliminary estimate of.
The market and operating conditions and the customer be months, we on subjects and wish him all subject to change.
And lastly, before I conclude I'll give a quick update on the share repurchase plan.
And then for the ended March 31st range of anyone and we did not repurchase any shares.
And as of March 31, 2.
And if anyone.
Cumulatively and we have repurchase a total of 921000 and.
Since this since the start of our repurchase program.
And this concludes the managements prepared remarks, we are happy to take a question off line.
And to.
Please proceed.
And.
Thank you.
Good day.
And to ask a question.
And the number 1 and this time.
Hum.
Please go ahead.
Keith.
At this time line.
And.
And once again at this time.
Question.
Our first question comes from the line of Bo Pei of Oppenheimer.
Thanks Hilton ease from here.
Hi management and good evening, Thanks for taking my questions and congrats on the salary shows.
So I have 3 questions here. So first is a quick 1 in.
Previous quarters last year, we talked about operating.
Cash flow I know, our accounts receivable and deferred revenue ex Tac Trust being true.
And quite a quite a lot it's okay and talk about the operating cash flow for 1 Q and then the second question is about.
J J, you en masse and I'll radio ads and surveys.
So you mentioned, we are having a strong.
Pipelines for both products. So can you talk about how many companies are we.
And talk with and then a conversion and I are exactly and then also like Dr pool compared with our.
Jay push and.
Purchased services and then the third question and you spelled J J Lions. So you mentioned, we are seeing strong demand and supply side. So I know the business is growing very nicely on close to 200% so but.
But if you have to like pick 1.
Which side is the bottleneck for these ER visits right now would you say you would need to work harder on the demand style and the supply side. That's all my questions. Thank you.
Yeah.
Well thanks for your question and I'll take the first question just on the operating cash flow for.
For Q1, 2091 for Q1, and we didn't have a negative.
On net negative cash flow from operating on.
And there was because of 2 reasons 1 is the collection from customer wants relative relatively slower.
And in Q1 due to the Chinese new.
Yeah and.
And the majority of our customers.
On a weighted for the long and extensive public holidays and digitally cash collections from first quarter and.
And the majority of our pumping even though from a majority of the companies from China.
Including the pain and annual bonus.
Yes, and Q1 so.
The combination of these 2 factors resulted in a negative cash position and Q1 of 2021, if we look back from what we did in Q1, 2020 just depends on familiar user that vaccine and factors because of this lower cash collections and Tennessee.
Cash and a cash bonus that we paid.
And going from Q1.
Yes.
Okay.
Hi, Bob and let me answer the second question regarding J G U M S and a vast the pipeline situation right. Yeah. So so actually you know in the prepared remarks.
Max Christmas.
Christmas and the pipeline is pretty strong.
And indeed actually you know.
Right after Chinese new year within a very short period of 2 months actually.
And both products, we have signed over on 10 and customers paying customers and sign the contract.
And deliver the service and with the Apple actually they both are exceeding exceeding a 100 <unk> hundred thousand per year. The op, who is meaningfully higher then Jay pushed products.
Typically a pool is about 60000 per year, okay and and.
And looking at the pipeline numbers and what we're seeing is like over 200 and meaningful.
Credible pipelines have been built up and the sales team is following with each of the pipeline customers very efficiently and with the total contract value over.
Over $30 million, so a 30 minute yeah. So that's that's what.
What I want to comment on J D. You MFS and the vast pipeline of situations.
And.
So the question regarding the JV Alliance right. So as you know Hum.
Ms motto.
Though goes you need to have to have to fly first and down and once you have to supply into the GT Alliance. The traffic of pool. Then you can you can work on it and then you use.
On the expense either you can consume them.
Demand demand sides.
Customers to.
Consumed the traffic right, so which side is the bottleneck of course Oh.
And I would not call. It a bottleneck I would just say which side is the more important it's like a chicken and egg and they need to basically in this situation and if you have the chicken and first thing to have to have the supply price.
So our hour.
BD PD unit actually is a very strong you know units as you know on this.
PD.
Team is actually incubated from the from a traditional developer subscription service team right. So they can leverage that relationship.
Ship existing relationship with those.
And those are.
And develop a subscription customers and and.
And they try to sell them. This new type of a service to help them to to monetize on their own traffic. So so and just and this actually progress.
<unk> is going on and very well and and.
And as I mentioned.
And in the in the fourth and the in.
And the first quarter, we already have a how about you you about $150 million right. So looking looking at second quarter second quarter from now.
And a second quarter.
And we should have additional.
On 30 million kind of legacy <unk>.
And on board before end of June so so the pipeline looks very strong and and and and we think everything is on track for us to continue to.
To give a day.
And on debate and very very good results in this business.
Got it and that's why it helpful. Thank you.
Thank you.
Next question is from the line of.
Silverman of Alliance Global partners.
Please go ahead your line is open.
Hi, everyone. Thanks for taking my questions just to follow up on those question about G. G Alliance how is the demand been looking for mini programs and the second quarter and what verticals are you seeing the greatest adoption and.
Yeah. So so the demand from many programs continue to be to be very strong.
And it contributed close to 40 per cent of the total JV alliance revenue in the and the <unk>.
First quarter right. So so so we typically you know we.
C.
Customers actually from the.
And from the travel sector, Tom tried and true.
And actually is 1 of our biggest customer and also we see we see big demand from.
And from <unk>.
Actually the finance sector.
Baidu to Shanghai.
Yes.
And also.
<unk> finance customer in this segment, so so so overall and.
We see this mini program and continue to be the revenue driver for this teach your lines of business and that the trend is continuing in the second quarter as well.
Great and are you seeing any cross selling opportunities from your U M S offering and.
What's the interest level been from many programs. If you have and then just if you could give us a little more detail sorry on the video as a service is it live now and if not when.
And when is it going to be a lot.
Are you talking about the cross selling of U M S with Oh, Oh, a traditional subscription products.
Yeah cross selling between subscriptions and then and the G G and alliance if that's happening.
Yeah, Yeah. So you are right and actually you know.
And when we when you go to market right.
From the very beginning of course, we will try to find our customers who are already our subscription customers right. Because we have a massive base of subscription customer. This is our crown jewel.
Core assets, so whenever we introduce and new product, whether it's J D alliance or whether it's a G. G. U M. S. All of US we typically flow through the go to the existing customers to promote this new product. So so from the contracts we have signed in the in the first quarter as well as as well as you know.
And the and the 2 month into the second quarter actually majority of the of the finding customers our existing existing customers. So so so once we exhaust all of our existing resource than we may think about going and going into expand the customer base.
This into into those customers, who are not our existing customer right. So it's always on currently you can you can consider.
And basically a majority of the selling.
Is from the cross selling.
And for the balance actually is already live and we have already delivered derivative products.
And for those customers, who have already signed signed the contracts because customer day, we're not fine and if they don't.
The opportunity to test the product range to have to be feel comfortable before day before they sign a contract with us. So so that's a must have product.
Should it be need to be ready before.
We sign any contract.
So just to clarify video as a service it's alive for some customers and are you generating revenue from it yet.
Yes, so we are generating revenue actually we already generated revenue over $1 billion.
I will not say revenue revenue per se.
And that's.
And after recognition.
Accounting basis.
<unk> actually the contract value over and over $1 million, we already sign such contracts for the vast customers.
Okay, so and.
I'm, sorry, and so I guess I misunderstood so from U M. S have you shared the contract value.
And so far I know, you said about $30 million and the pipeline.
Have you recognized any revenue are you going to recognize any revenue and the second quarter from you on US yeah actually in the first quarter, we already signed the contract and recognized a small number of Ah.
On the revenue for.
For the U S as well and and.
And I think our entrepreneurial yes.
Contract value similar to Vas is overwhelming.
Okay. Thank you.
And thank you and 1 final question from Alright.
Alright, 1 final question from me and then I'll hop back in the queue if I.
And of anymore.
Just curious of Apple and the idea of a policy on the new iOS update and that he has had any impact on your ability to reach mobile consumers I would imagine it's little to no impact as Apple has minimal market share in China, but and I'm, assuming you're getting first party data, but has there been any issue at all.
No for us actually in China, and the apples and you are right about market share is pretty small.
Only on the 20% right. So you because because all market and market presence and mimic the market share.
Device manufacturers market share right. So so majority.
Majority of our SDK.
And in the Android device around the 80% of the total market right.
And so this and this this new new privacy policy.
From the market share.
And basically the impact to us is very very minimal and our second actually.
Actually most of our business, that's not really really.
Actually rely on rely on the IRS data right I always a day.
Compared to and joined the Android data.
And basically as you know.
Most of the system, so actually whether it's.
The app developer or SDK.
Provide us service provider actually.
Access to the IRS data is it's very minimum to begin with so so we and our business whether it's strategic alliance.
Whether whether it's.
On the subscription business actually into revenue generation and does not really dependent upon the iOS ecosystem and also iOS data. So so.
On.
Basically the policy change actually will not impact on us.
Much.
And very immaterial immaterial.
So maybe just data.
And this policy.
Impact and big companies right.
Whose main business.
And their main business is in advertisement and business and also they.
And many of our customers could be.
Some kind of impact for us.
It's immaterial.
Worried about this at all.
Thanks, so much everybody.
Thank you.
And once again.
Next question please.
And number 1.
And.
Okay.
Keith.
Next question.
Uh huh.
Please go ahead.
Yeah.
And maybe you guys. Thanks for let me hop on acute and the question for you here.
Couple of quick ones from me.
First what's the current AD load on.
And <unk> lines.
And kind of I think.
Before we discuss kind of starting slowly and then ramping it up as we kind of on here at the middle of the year.
And has that been tracking and what's the outlook and the rest of the year.
And not.
And having that discussion I'd had discussion so currently.
And of our JJ and I ask why.
Currently it's quite small so less than 1 actually.
And I wish means.
For <unk>.
We'll have less than 1 less day and 1 in patients.
Advertisement.
Good day.
So.
Aneel per there.
And we're glad to be.
And.
Later this later this month.
So Alicia weekend.
Implore the LOE per <unk>.
Significantly.
So we it's Matt.
We expect the number can be.
Between.
Total free per day.
And after we launch this product.
So so you can imagine so the.
Price.
And as I can be improved a lot and surveillance.
And we launched the <unk>.
New upgraded <unk> loans.
Product.
And so.
Yes.
Let me add on to Chris' comments, so basically our current the product right and in Apple products, that's not really support multiple.
And the loads per day, you, but once we launch this new product, we will be able to basically have a.
More than 1 ideally it should be 2 to 3 and AD loads per day, you basically we can we can basically on to show the add on.
Based on the use of the behavior.
Hevia right, because because instead of blindly show into the user once they use and open up the app. After a few a few seconds. We show up the user. So we show up that we can basically you know on to monitor the users behavior, whether they go through such as if they go to their user at the center maybe that's.
Good opportunity to show and at our day through other they go to other pages. We can we can show and ads to make sure the user experience.
Is that line is mostly optimized.
And we have already.
Talk to the.
Basically the traffic and supplier to us actually.
Very much welcome this kind of mechanism.
And that's why.
<unk>.
Made us.
To make the decision to 2.
And to upgrade all kind of on the product to enable this functionality.
Okay, and then in terms of overall pricing and so I think again like deep.
And the strategy was to start low and Campbell.
E C P M.
Type number and then kind of bring it up over time on a check that kind of line.
And that's still on track and kind of what youre looking for that and kind of.
Go out to kind of as you look at the second half of the year.
Yes currently on.
Uh huh.
Price is <unk> ICL op CPM.
We are slightly improved our ECM.
Which will be paid.
Pay day pay the tropics.
Net.
As long as our monetization capability is important.
So.
On country, all price is basically 2 plus ex price.
It means.
Basically we pay <unk> to them and be to the supplier and we pass ex <unk> ex means.
If the charter is because our traffic quality.
And it is different right with the Trop AC is mitigate we gradually.
More.
Upon us to these traffic so so at least the ex.
And also give us.
On a capability to differentiate different.
Traffic sources.
Ross.
So currently.
And these are 2 plus ex pricing is.
I mean, it's very committed as.
And as competitor in this market.
Okay. Okay. Okay. Thank you.
And that's very helpful.
Okay.
Okay.
And then kind of sticking on the J.
J D line is just for a second and it's kind of like.
Last 1 just kind of get a sense of on the on the on the demand side, 1 thing and it seemed like and if you're talking and marketing business historically you.
And you had kind of some pretty established verticals you were you were.
And and gaming was 1.
And 1 of the ones that you were not terribly strong and you guys were very strong and financials.
As you were pushing out and <unk> lines, and maybe you're trying to kind of taxes, maybe somewhat similar customers and kind of use them and some of the relationships and so on and so forth and and.
The book of business.
Is there any kind of.
And a bias or kind of are there any trends coming.
Coming out and the buyers are for traffic and friends of lease or some other kind of characteristics you can share.
Yeah. So so currently actually.
We breakdown the day the alliance customers buy by different actually categories right if.
Book at the breakdown by industry actually and domain industry currently that consumes our <unk> alliance traffic come from hero apps right such as.
And I mentioned in my prepared remarks, like a top hour like LIBOR.
And customers they use our <unk> alliance.
Yes.
The product actually to re activated their dominant customers right. So this is true.
Yeah.
A big zone.
And the second ethically and e-commerce.
E Commerce.
Top our J D.
These big e-commerce platforms.
They day day continuously.
To use DG alliance to for new user acquisition.
And Tom and user.
Activation and third further big category is actually the finance.
Including including the insurance, including.
On the online lending.
This is about like 20% of our of our total revenue. So so so currently the bigger buckets the big.
From a segment actually on day 3 segments.
Overtime of course, we will try to penetrate into into additional.
And in additional industries.
Yes.
And the education.
And.
Actually the lifestyle.
Kind of like and services.
And so so we are working on that we're working on that so I think.
And time goes by I think.
No.
Eventually we would be very similar the customer mix would it be would it be similar to what you see from other add on.
And a night.
Sure.
And the traffic and network, Okay and.
Yes.
Okay, and then if I.
And maybe just tack on 1 last 1.
This is just kind of I guess encapsulate.
Capsulate and all the points you just discussed so it sounds like <unk> monetization.
Starting off very well and he was.
And the service monetization is starting off.
Willington and contracts and so on and so forth and a debt.
Tracking and something is tracking.
Well <unk> line second half is shaping up nicely.
And <unk>.
It up a little bit and AD load, increasing double and it sounds like.
<unk>.
I'm curious what's in your guidance and it sounds like when you guys gave guidance maybe previously some of these.
Some of these items may not have been in.
And there I'm kind of curious if you could kind of help me frame out.
What's in your to your guidance for the rest of the year.
Yeah. So it's actually on the full year guidance actually we.
In our earning release, we actually maintained our full year guidance, which is a full year revenue.
And from.
$380 million to $400 million right.
And based on current current business traction and and outlook. So I think if we if we.
And do well in on.
On 1 of those things you just mentioned the right AD load and the traction.
<unk> J D.
Yes.
And and.
More traffic.
Acquisition for JJ Elias I think if you do better than we currently anticipate of course that we have.
We will have a good chance to beat the guidance right for.
For now I think we just want to maintain that guidance for.
And for the for the time being.
Got it thanks, okay. Thanks.
Thanks, a lot.
Thank you.
And again.
Next question please.
Number 1.
Thanks.
Your question please.
Okay.
Okay.
And there are no further questions.
And had the conference back to Mr.
Please go ahead.
Thank you Annie.
Thank you everyone for joining our call Tonight. If you have any question or comments. Please don't hesitate to reach out to the IR team. This concludes the call have a good night.
Thank you.
Yeah.
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