Q3 2021 Aurora Mobile Ltd Earnings Call

Ladies and gentlemen, thank you for standing by and welcome to the Aurora Mobile third quarter 2021 earnings conference call. And at this time, all participants are in listen-only mode and after the speaker's presentation

Ladies and gentlemen, thank you for standing by and welcome to the Aurora Mobile third quarter 2021 earnings Conference call.

At this time all participants are in listen only mode. After the speaker's presentation there'll be a question and answer session.

Ask a question Gena session, you will need to press star and the number one on your.

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Mr. Rene Vandersveen. Thank you.

Telephone please be advised that today's conference is being.

I would now like to hand accomplished over to your host today.

I understand thank you. Please go ahead sir.

Thank you Annie.

Hello, everyone, and thank you for joining us today. Aurora's earnings release was distributed earlier today and is available on the IR website at ir.jiguang.cn.

Hello, everyone and thank you for joining us today.

The earnings release was distributed earlier today and is available on the IR website.

G Guang don't see them.

On the call today are Mr. Weidong Luo, Chairman and Chief Executive Officer, Mr. Fei Chen, President, and Mr. Shan Nenbong, Chief Financial Officer.

On the call today are Mr <unk>, Chairman and Chief Executive Officer.

Mr. Fei Chen as you note.

And Mr Shan Nen Bong Chief Financial Officer.

Following their prepared remarks, all three will be available to answer your questions during the Q&A session that will follow.

Following their prepared remarks, all three will be available to answer your questions. During the Q&A session that will follow.

Before we begin, I'd like to remind you that this conference call contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended and as defined in the U.S. Private Securities Litigation Reform Act of 1995.

Before we begin I'd like to remind you that discuss heartlands call 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 of $19 95.

These forward-looking statements are based upon management's current expectations and current market and operating conditions.

These forward looking statements are based upon management's current expectations and current market and operating conditions, which are difficult to predict and may cause the company's actual results performance or achievements to differ materially from those in the forward looking statements.

which are difficult to predict and may cause a company's actual results, performance or achievement.

to differ materially from those in the forward-looking state.

Further information regarding these and other risks, uncertainties, and or factors.

Further information regarding these and other risks uncertainties and factors.

are included in the company's findings with the U.S. Securities and Exchange Commission.

And 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.

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 will now turn the conference over to Mr. Luo. Please go ahead.

With that I will now turn the conference over to Mr. Luo. Please go ahead.

Thanks Rene. Good morning and good evening to everyone on the call.

Thank you Sir.

Morning.

Every other call.

Welcome to Aurora Mobile's first quarter 2021 earnings call.

Now onto our own mobile App for Dakota, 2000 times, you want on your call.

This is the third quarter where we have been operating under the pure SAS business model since the beginning of 2021.

The first quarter, where we have been operating under the appeal of South Beach intermodal since the beginning of 2021.

We continue to see great business growth in the SaaS business and I will go straight into our quarter results and share with you our business progress and key business metrics in the first quarter of 2021.

We continue to see great business growth in the hospital.

We'll go straight into our quarter results I will share with you our business progress and keeping his.

Metric in the protocol at all of 2021.

Before I comment on our Q3 results, I would like to remind everyone that the quarterly earnings data is available on our IR website for your reference.

Before I comment on our carefully without I would like to remind everybody what that quarterly hardness that is available.

That site for your reference.

You may refer to that as we proceed with the call today.

You'll may refer it to that that as we proceed with the call today.

Let's begin our review with highlights of our key operating and financial performance for the third quarter of 2021.

Let's begin with highlights of our key operating and financial performance for the protocol at all of 2021.

As a reminder, we completely acetate target marketing at the end of 2020 and our business is now 100% focused on the SaaS business model, which includes developer service and vertical applications.

A reminder, we completely apathy marketing at the end of 2020.

It's not 100 per sample cost.

South based model, which includes the better for sure I think that vertical applications.

For an effort-to-effort comparison, numbers presented excluded contributions from the legacy target marketing in the previous year.

But for an apples to apples comparison numbers presented here at Dakota contribution from the legacy you're talking about getting in there for you.

In the first quarter, we have seen a steady and solid upward trend in our SaaS business, which is a result of our dedicated effort in building and growing them. Here is a summary of the solid results for Q3 2021. The number of paying customers increased to 2,729 from 2,320 a year ago, up 18% year-over-year.

In the first quarter.

Debbie I saw the upward tanking, our topical recently as a result of our dedicated effort in building and growing them at a family. That's already results for Q3 2000, and finally won.

Paying customer increased to 2729 from 2300 a year ago.

18% year over year.

Revenues will remain at $19.5 million, up 48% year-over-year.

Revenue was RMB 19, five median up.

But if I say year over year.

Group growth margin was 74.4%, which is more than 1.5 times compared with 47% from a year ago.

Gulfport marketing, what 74 pulp our pets and we should have more than one five times compared with 47 for example, a year ago.

World's profit was around $167.4 million.

Workforce Quad Pol say it wasn't a M B P.

Seven 4 million.

up 48% year-over-year, and adjusted EPW's net revenue to $16.1 million, a substantial improvement of 27% from a year ago, demonstrating our strong operating leverage.

For the eight per Se Oh, the ER and adjusted EBITDA was a negative <unk> 15 per 1 million.

Substantial implement of cleanliness I don't take them for a year ago, demonstrating our strong operating leverage.

Total deferred revenue was about RMB100 million for six consecutive quarters, indicating strength in South Beach's growth.

If our revenue was up our belongings a medium for six consecutive quarters, indicating strength in south beach as well.

AR days continue to decrease to 39 days, indicating our discipline quite granting and last majority of quality customers paying on time.

<unk> continued to decrease to 39 days, indicating our disciplined credit.

Ranking and brought the majority of quality of customers paying on time.

Revenues from our subsidies set another quarterly record high.

Revenues from our side.

Set another quarterly record high.

48% growth in developer services and 18% in vertical applications on a year-over-year basis.

For the APAC, India about a personnel basis and 18% in vertical applications on a year over year basis.

Our group margin has greatly improved from 47% a year ago to 74.4%, which was a result of our successful transition into the pure subspecies model since the beginning of 2021. The strong gross profit growth of our subspecies was mainly driven by revenue growth of 38% year-over-year.

Our group margin has greatly improved the wrong foot.

47% a year ago to 74, 4%, which was already which was a result of our successful transition into a pure SaaS business model.

The beginning of 2000 and talking to you on the show.

<unk> was perfect for us actually.

This was mainly driven by revenue up 48% year over year.

The people of all continue continuous revenue growth has been our relentless pain upper end.

Continuous revenue growth has been our relentless team effort and prioritization of innovation in developer services products. We always strive to provide solutions that exceed our customers' needs and requirements for continuous developer feedback and iterations.

Isolation of innovation in developing innovative product, we always strive to provide solutions that exceed.

Our customers' needs and requirements for continuously.

In this quarter, we are proud to share recent updates with you and innovations across the various product lines. Our product development philosophy has always been to introduce widely applicable products and tools that are scalable and suitable for all industries.

And this quarter right.

I apologize shale recent updates we have new innovations across the various product lines all product development.

He has always been to introduce a library up a couple of part outs and tourists.

But as suitable for our industry.

Then, based on the needs and feedback from each specific industry vertical, we move on to address and offer solutions and services that can meet specific requirements of each user base in our target market.

Then based on the needs and feedback from Asia, especially for industrial vertical we more audio to win more time to adjust.

Jess and offer cirrhosis and stuff like that can meet specialty requirements of the <unk> user base.

For example, how do we go deeper to raise customer satisfaction and fulfill their needs?

Target market.

For example, how do we go deeper to raise customer satisfaction and fulfill fulfill their needs.

Many of our development efforts in recent quarters have been focused on creating deeper customer engagement.

Many of our development efforts in recent quarters have been focused on creating deeper customer engagement.

In Q3, we launched a free version of our CodeJPush product, featuring a brand new upgrade to the Hub function, whereby mobile app developers can easily integrate the seven major mobile phone manufacturers and operating systems push channels into the app, including but not limited to channels such as Huawei, Xiaomi, OPPO, Vivo, and Meizu.

And carefully.

Launch all flavors of I'll call Jay pushed product.

Featuring our brand new upgrade to the hub solution, whereby mobile app developers to easily integrate the save a major mobile phone manufacturers and operating systems push channels into the App.

Including but not limited to China, such as Huawei, Xiaomi Oppo vivo and major.

Through this HUB function, we are able to help mobile app developers significantly increase the overall notification delivery rate by 80% compared to those mobile apps who do not use this HUB function, which sequentially improves the click-through rate of their apps.

For these heart function, we are able to have mobile app developers significant sort of increase the overbuild notification dilemma right.

The rate by 80% compared to a dozen mobile apps, who do not use diesel propulsion.

Sequentially I'm, sorry in post that great parade of apps.

Mobile app developers no longer have to integrate each manufacturer's and operating systems channels on their own.

What will help you better person no longer how to integrate each manufacturer operating interest as China on their own.

By using our HUB function, they can easily integrate all of these 7 major notification channels and manage all of the push messages on our Zikuan platform in one go.

Using our high function. They can easily integrate all of this they were major notification changes and manage all of their push message one gigawatt power plant in one go.

As of today.

Over 7,000 apps have already started using this new function.

7000 apps have already started using this new function.

Over 45% of the new apps that use our Jpush SDK have already integrated this function into their apps.

Over 45% of the new apps that use our J push SDK have already integrated dysfunction intuitive apps.

This hub function marks a new milestone, helping developers greatly improve their push results with very simple and efficient integration steps, and cements our position as the leading push notification provider in China.

These heart function marks a new milestone, having do better for greater input to help push our results.

Very simple and efficient integrate integration steps and Simmons our position as the leading push notification provider in China.

As one of several newly introduced products in 2021, our vast product has generated much customer interest.

As a one off several of our newly introduced products in 2019, while I'll have Russ products has generated much customer interest.

With the Boeing demands in the short video industry, we can notice that some industry verticals can evolve over the past few years and become even more dependent on the product range and scope of our work surface.

With doubling the amount of in the short video industry, we kind of noticed that certain industry verticals scalar evolved over the past few years and become even more dependent on the product range and scope of all of our surveys.

During the quarter, one of the most renowned manufacturers in the smartphone industry started testing our vast products on their smartphone appliance intended for wider rollout in the near future.

During the call her whilst our mantra now manufactures in the smartphone industry started testing, our baas products or their smartphone plans intend. Therefore, why they were all in the near future.

As more and more screens, displays become integrated into the smartphone appliance and devices, bringing out the right content on these screens has quickly become a better way of keeping users engaged and, in turn, create a better user experience.

As more and more screens this pace.

<unk> integrated into the smartphone update our plans and devices, bringing out the right content on these screens has quick has quickly kind of late.

Rachel way of keeping users engaged in training for a better user experience.

By providing short videos that are tailored, customized, and geared towards different user groups and displayed on the different appliances, our vast product continues to satisfy customers' requirements and increase user stickiness and user retention time. We believe our vast product has a vast market potential and applications going forward.

By providing short videos they are paid a customized and geared towards different user groups.

And gets paid on the different paths, our vast product continues to satisfy customer requirements and increasing user stickiness.

Early patient time repeated with lots of products lots of market potential and applications going forward.

In addition.

We have recently launched our on-demand video cloud, Dianboyun, service under the Vaast product line.

Later, we recently launched our R&D might be deal call employee survey under the various product lines.

This new service provides app developers an opportunity to quickly integrate their apps with video functions.

This new service provider for a rise at the better price and opportunity to quickly integrate their app with video content one.

Once they have implemented our on-demand video cloud service into their apps, developers can enjoy the freedom and convenience to perform a string line of actions, including upload, review, and create, manage, and play the videos on their own apps. This service fundamentally eliminates the tedious and laborious process for those developers who want to manage their own videos on their app.

While they have implemented the hour.

On demand video call surface into their apps developers can enjoy the freedom and convenience.

Quick final streamline of actions, including a block reveal and create manage and play the videos on their own apps.

Fundamentally eliminates the peak.

And the poorest part that support those developers who want to manage their only deals on their apps.

Within the short release period in Q3, we have already seen great customer interest and received many inquiries about this product. We have observed that this on-demand video cloud service has added a great value to app developers and is part of our product development strategy to go deeper and to satisfy customers' specialty requirements and needs.

So it really is pure it and feel free.

<unk> seen.

Great customer interest and received many inquiries about this product.

Our reserved up that is the on demand video cloud surface has added a great value to etsy better for it and it's part of our product development strategy to go deeper at reset to satisfy customers, especially if they have requirements and needs.

By doing so, we can develop closer ties with our customers and become a long-term trust partner.

By doing so we can give better proposal killed with our customers.

Because they are alone long term trusted partner.

Last but not least, another very exciting news that I want to share with you is that on November 17, our verification and other customized surfaces were officially launched on Huawei Cloud. The cooperation with Huawei Cloud demonstrates the industry-wide client and trust we command for our robust technical capability and services.

Finally, and other very exciting news that I wanted to share with you is that on the November 17th.

Jay verification and other customer MISO faithful, obviously launched our hot Huawei caused the cooperation with Huawei, how demonstrate that demonstrates the industry why okay and trough our trough, we command for our robust clinical capability and so what they say.

Currently, developers can easily purchase and experience our diversification service by simply logging into our Huawei Cloud account.

Currently the better Presque easily.

<unk> and experienced I'll, let you identification showcased by simply looking into it up into our holiday Paula Com.

In addition to Java verification, developers can also gain access to Jiguang's customized showcase package on Huawei Cloud, which includes push notifications, instant messaging, traffic monetization, Jiguang Alliance, Jiguang Mask, and UMS, and the other products.

Yes.

In addition to Jive N application developers can also get at that took <unk> coupons customized showcased package of Ali cloud, which includes a push notifications instant messaging traffic.

Traffic monetization.

<unk> and <unk> and the other products.

that help developers operate, grow, and monetize their applications. We believe that this cooperation with Huawei Cloud can benefit us by reaching out to more potential free paying customers.

To help give enterprises operate to grow and monetize new applications. We believe that this corporation will colleague Karl can benefit us by reaching out to more potential fee paying customers.

and will bring positive results in the near future. In fact, we have already signed a number of paying customers since this alliance started.

And we'll bring a stable results in the near future. In fact, we have already signed a number of paying customers and since this allows have started.

Now I will turn the call to Fei, who will discuss the Q3 performance in greater detail.

Now I will turn the call to Fe, who will discuss our performance in greater detail.

Thanks, Chris. Let me start the discussion on different revenue streams within the SaaS businesses.

Thanks, Chris.

Let me start the discussion on different revenue streams within the SaaS businesses.

In Q3 2021, revenues from developer services reached RMB 64.7 million, a robust 48% growth on a year-over-year basis.

Third quarter 10-Q, one revenues from developer services reached RMB $64 7 million, a robust 48% growth on a year.

Year over year basis.

A year on year revenue growth was a result of strong growth of 32% new subscription services and a very impressive 84% of growth.

<unk> added the services.

Subscription services revenues were RMB 39.8 million, an increase of 32% year-over-year, primarily driven by new customer acquisition.

Subscription services revenues were RMB 39, 8 million, an increase of 32% year over year, primarily driven by new customer acquisition.

Apart from new customer acquisition, our continuous efforts in cross-selling various

From new customer acquisition, our continuous efforts in cross selling various non pushed subscription products such as T. Verification J S. M. S. J analytics have increased our customer subscription uptake.

Non-push subscription products such as JVerification, JSMS, JAnalytics have increased our customer subscription uptake via multiple product lines.

Multiple product lines as a result, our revenue contribution or push notification products increased to 43% from 31% a year ago now I'm pushing electrification products also achieved a higher output of RMB 37000.

Our revenue contribution of non-push notification products increased to 43% from 31% a year ago. Non-push notification products also achieved a higher R pool of RMB 37,000.

resulting in the overall APU for subscription services increasing by 13% to RMB 16.6 thousand.

Resulting in the overall Abu for subscription services, increasing by 13% to RMB 16.

6000, compared with RMB 14, 7000, a year ago.

compared with RMB14.7 thousand a year ago.

New and renewed contracts of notable customers in the quarter include NetEase News, China Southern Power Grid Company, Starbucks, McDonald's, and

New and renew the contract of notable customers in the quarter include net East News, China Southern power grid company.

<unk> Mcdonald and so on.

Value-added services within developer services, which include revenues from DigiAlliance services and the advertisement stats, achieved outstanding results where revenues grew significantly by 84% year-on-year to RMB 24.9 million from RMB 13.5 million in third quarter 2020. The demand for our

Value added services within developer services, which include revenues from <unk> Alliance services and advertisement fast achieved outstanding results, where revenues grew significantly by 84% year on year to RMB $24 9 million from RMB 13.

$5 million in third quarter 2020.

The demand for our <unk> Alliance products.

has proven to be continuously strong since its introduction to the market. We expect this strong demand trend to continue into the future. On the supply side of JG Alliance, during the quarter we continue to grow this traffic pool as it is a vital part of our strategy to increase opportunities for monetization channels.

Has proven to be continuously strong.

<unk> introduction to the market.

We expect this strong demand trend to continue into the future.

On the supply side of Digi Alliance during the quarter. We continued to grow this traffic pool as it is a vital part of our strategy to increase the opportunities for monetization channels.

The total number of apps within our network exceeded 390 apps.

The total number of apps within our networks exceeded the 390 apps.

compared to 344 in second quarter 2021.

Compared to 344 in second quarter, 'twenty, 'twenty, one representing a 15% growth quarter over quarter. The total <unk> within the network has stabilized at $180 million same as the second quarter as discussed in the last earnings call. There has been some delay in develop.

representing a 15% growth quarter over quarter.

The total DAU within the network has stabilized at 180 million, same as the second quarter.

As discussed in the last earnings call, there has been some delay in developers joining our Alliance network and integrating our SDK due to the regulatory requirements.

His joining our alliance network and integrating our SDK due to the regulatory requirements that became the top focus during the quarter.

that became their top focus during the quarter. However, we are seeing the ramp up of this integration period during the fourth quarter, which lays a solid foundation on the supply side of the equation and can in turn help us achieve a strong sequential revenue growth for the coming quarters.

However, we have seen the ramp up of this integration period during the fourth quarter, which lays a solid foundation on the supply side of the equation and it can in turn help us achieve our strong sequential revenue growth for the coming quarters.

On the demand side, many program developers and app retargeting related demand continue to play a pivotal role by contributing to the majority of our JG Alliance revenues in third quarter 2021. During the quarter, other agencies contributed more than 50% of JG Alliance revenue stream, while the rest came from direct customers.

On the demand side mini program developers and absolutely targeting related demand continued to play a pivotal role by contributing to the majority of our <unk> Alliance revenues in third quarter 2021 during the quarter and the agencies contributed more than 50% of <unk> Alliance revenue stream.

While the rest came from direct to customers.

Major customers of JG Alliance consisted of repeat customers and market leaders across many industry verticals.

Major customers of TG Alliance consistent consisted of repeat customers and the market leaders across many industry verticals.

They include, but are not limited to, Weibo, Meituan, JD, Alipay, Taobao, Baidu, VIPshop, and

They include but are not limited to LIBOR may try and JD highly paid hubbell baidu.

VIP shop and Trevor go.

Now let's move on to vertical applications that cover financial risk management, market intelligence, and iZone products.

Now, let's move on to vertical applications that cover our financial risk management market intelligence and <unk> products.

These revenues grew steadily by 18% year-over-year with the lion's share of the growth coming from the financial risk management business. In the financial risk management segment, revenues increased substantially by 35% year-over-year with the help of the 37% growth in ARPU.

These revenues grew steadily by 18% year over year with the Lions share of the growth coming from the financial risk management business in the financial risk and management segment revenues increased substantially by 35% a year over year with the help of the 37% growth in our pool. This.

This quarter, we had another remarkable quarter with the highest revenues since the beginning of COVID-19 in first quarter of 2020. The strong demand for our financial risk management products has paved the way for us to acquire new customers and retain many existing customers each quarter.

This quarter, we had another remarkable quarter with the highest revenues since the beginning of COVID-19 in first quarter of 2020, the strong demand for our financial risk management products has paved the way for us to acquire new customers and they retained mainly existing capex each quarter.

New and renewed customers include Zhong An Insurance, Du Xiaoman Financial, 300 Digitech.

New and renewing customers, including insurance and financial 300 Digitech.

Our market intelligence product line recorded a slight 3% dip in revenue year-over-year due to the lackluster China ADR investment environment in Q3 2021 as many investors pulled out such China ADR investment due to regulatory concerns. Nevertheless, we expect the demand for this product line to recover in Q1 and Q2 going forward.

Our market intelligence product line recorded a slight 3% dip in revenue year over year due to the lack of lots of China ADR investment environment in third quarter 2021 as meeting investors pulled out.

China ADR investment due to regulatory concerns. Nevertheless, we expect the demand for this product line to recover in kind of the quarter and the quarter going forward.

During the third quarter of 2021, we have signed renewed contracts with many large customers including Himalaya, NetEase Media, Ali Entertainment, etc. And lastly, our iZone business has delivered a modest 5% revenue growth year-over-year. With that, I'll pass the call over to Shannon.

During the third quarter of 2021.

We have signed that renew contracts with many large customers include Himalaya Netease media <unk> entertainment et cetera.

Lastly, our iron business has delivered a modest 5% revenue growth year over year with that I'll pass the call over to Shannon.

Thanks Fei. I'll go through some of the key expenses and balance sheet items.

Thanks Fay.

Truly some of the key expenses and balance sheet items.

And let's talk about operating expenses. The total operating expenses increased by 6% year over year to RMB103.7 million.

And lets talk about operating expenses.

The total operating expenses increased by 6% year over year to renminbi $103 7 million.

In particular, R&D expenses increased by 22% to RM55.5 million, mainly due to the increase in staff compensation as we continue to invest in our R&D department, improve IT infrastructure such as a higher bandwidth and cloud expenses to support the expansion of the SaaS businesses.

In particular, R&D expenses increased by 22% to be $55 5 million, mainly due to the increase in staff compensation as we continue to invest in our R&D Department improved it infrastructure, such as a higher bandwidth and cloud expenses to support the expansion of the <unk> businesses.

Selling and marketing expenses increased by 5% to RM29.4 million.

Selling and marketing expenses increased by 5% to $29 4 million.

mainly due to the increase in staff compensation and travel expenses.

Mainly due to the increase in staff compensation and travel expenses.

G&A expenses decreased by 22% to RM18.8 million, mainly due to year-over-year reduction of RM6.9 million in bad debt provision due to our proactive and strict financial control measures.

G&A expenses decreased by 22% to RMB 18, 8 million, mainly due to year over year reduction of renminbi $6 9 million in bad debt provision due to our proactive and strict financial control measures.

Adjusted EBITDA, calculated as EBITDA excluding share-based compensation, impairment of long-term investment and change in fair value of foreign currency swap contracts, improved by 27% year-over-year to negative RMB16.1 million from negative RMB22 million in Q3 2020.

Adjusted EBITA calculated as EBITDA, excluding share based compensation impairment of long term investment and change in fair value of foreign ex foreign currency swap contracts.

<unk> by 27% year over year to negative $16 1 million from negative <unk>.

$22 million in Q3 2020.

For the third quarter of 2021, we deliver another set of solid financial results.

For the third quarter of 2021, we deliver another set of solid financial results.

For year-over-year comparison, the key highlights for this quarter include

Were you aware comparison the key highlights for this quarter include.

Revenue of our SAS businesses increased significantly by 38%.

Revenue of our plus business has increased significantly by 38%.

Group Gross Margin improved from 47% to 74.4%, a direct result of Q3 2021 Gross Margin being 100% contributed by high-margin SAS businesses. Operating expenses, however, increased by only 6%.

Gross margin improved from 47% to 74, 4% a direct result of Q2 2021 gross margin being 100% contributed by high margin businesses.

Operating expenses increased by only 6%.

As a result, our adjusted EBITDA improved by 27%, which continue to demonstrate the scalability of our business model.

And this is the third quarter where we have delivered SAS business-only results, and we are very pleased with the results we have achieved. We believe that the growth momentum of Q1, Q2 and Q3 this year will continue to bring more sound results in the coming quarters.

And this is the third quarter, where we delivered solid business results and we are very pleased with the results we have to achieve.

We believe that the growth momentum of Q1, Q2 and Q2. This year, we continue to bring more strong results in the coming quarters.

Next, on to the balance sheet, I'll start with two very important KPIs that we closely monitor. Firstly, the AR turnover days decreased from 45 days in Q3 2020 to 39 days in this quarter.

Next onto the balance sheet I'll start with two very important keep it keep you either we closely monitor.

Firstly the alternate with this deal.

Decreased from 45 days in Q3 2020 to 39 days in this quarter.

This was similar to the trend we have seen last quarter due to both the shift away from the legacy targeted marketing business to focus on SaaS businesses and the disciplined credit granting policy and our focus on improving AR collection.

This was similar to the trend we have seen last quarter.

Due to both a shift away from the legacy targeted marketing business to focus on SaaS businesses, and a disciplined credit granting policy and our focus on improving our collection.

Secondly, the total deferred revenue balance, which represents cash collected in advance from customers, for a six-consecutive quarter has exceeded RM100 million at quarter end.

Secondly, the total deferred revenue balance which represents cash collected.

Funds from customer for a sixth consecutive quarter has exceeded 100 million at quarter end.

As of September 30 of 2021, the balance was it.

It was at $119 million up from 111 5 million in Q2 this year.

Next, total assets were at RM627 million as of September 30, 2021. This includes cash and cash equivalent of RM281 million, accounts reservable of RM41 million, prepayments of RM13 million, fixed assets of RM68.9 million, long-term investment of RM165.6 million.

Next total assets will be $627 million as of September 30 of 2021. This includes cash and cash equivalent of RMB, two 1 million.

Accounts receivable of 41 million prepayments of 13 million fixed assets of $68 9 million long term investment of $165 6 million.

Total current liabilities were at RMB 373.1 million as of September 30, 2021. These include short-term loan of RMB 105 million, accounts payable of RMB 13.5 million, deferred revenue of RMB 114.4 million, accrued liabilities of RMB 95.1 million.

Total current liabilities.

<unk> $273 1 million as of September 30 of 2021. These include short term loan of $105 million.

Comps payable $13 5 million.

First revenue of $114 4 million.

Liabilities of $95 1 million.

Next one to business outlook.

Based on the current available information, the company sees full year 2021 revenue guidance to be in the range of RMB350 million to RMB360 million, representing growth of 36 to 40 percent year-over-year compared with last year, and our guidance for our full year gross margin to remain above 70 percent.

Based on the current available information the Companys full year 2021 revenue guidance to be in the range of <unk> B 350 million to <unk> 306 zero million, representing growth of 36% to 40% year over year compared with last year and our guidance for the full year gross margin to remain.

70%.

Please note that for meaningful comparison purposes, the prior revenue numbers used to calculate the growth percentage exclude revenue from the targeted marketing business.

Please note that for a meaningful comparison purposes. The prior year revenue numbers used to calculate the growth percentage as revenue from the targeted marketing business.

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 customers' demand, which are all subject to changes.

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 demand, which are all subject to changes.

Lastly, before I conclude, I'll give a quick update on the share repurchase plan.

Lastly, before I conclude I'll give a quick update on our share repurchase plan.

In the quarter ended September 30th, 2021, we did not repurchase any shares. As of September 30th, 2021, cumulatively we have repurchased a total of 921,000 ADS since the start of our repurchase program.

In the quarter ended September 30 of 2021, we did not repurchase any shares.

As of September 30 of two new to anyone cumulatively, we have repurchased a total of 921000 evs since the start of our repurchase program.

And this concludes the management prepare remarks. We are happy to take your questions now. Rene, back to you.

And this concludes management prepared remarks, we are happy to take your question now when they are back to you.

Operator, please start the Q&A.

Operator please.

Some of the Q&A.

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Thank you Alex next question please.

He is from the line.

of Brian Kinzlinger of Alliance Global Partners.

Brian canceling or other lines Global partners. Please go ahead.

Great, thanks for taking my questions. First, can you comment on the pace of JG Alliance integrations? Is the pace picked up to the same pace prior to the discussions of new regulations, or is there?

Great. Thanks for taking my question.

First let me comment on that please.

Do you mind integrations.

Picked up to the same paid prior to the discussion of new regulations.

Or is there going to be a gradual pick up and you still have a bit more to go before the pace returns to.

going to be a gradual pickup and you still have a bit more to go before the pace returns to that rapid.

That rapid pace.

Hey Brian , hi, this is Fei. So in terms of the app, the pipeline to join the GD Alliance, right? So we do see actually starting from the end of third quarter, beginning of the fourth quarter, many apps before they were delaying the process has renewed the process, started engaging with us. So we actually currently are seeing.

Hey, Brian This is Mike so in terms of.

The app the pie.

Clients, who joined the alliance right. So we do see actually studying.

From the end of.

Third quarter, beginning of the fourth quarter.

Before they were delaying the process has renewed the process started engaging with us. So so we actually currently are seeing.

seeing a pretty, pretty decent pipeline, yeah, it will be a very strong pipeline. Not only, not only, you know, some medium-sized apps, but also some large, large, very large apps who are in the discussion with the.

<unk> are pretty pretty decent pipeline.

It will be a very strong pipeline not only not only some medium size app, but also some <unk>.

It's large very large as well.

In discussing with us.

So we do expect there's a decent number of DAUs going to be joining our network in current quarter. So because of this situation, this outlook, that's why it gives us confidence that we will be able to narrow our guidance range for the revenue as you have seen, right?

So we do expect.

That's a decent number of <unk>.

It's going to be joining all joining.

Joining our network.

During the quarter.

Because of this.

This situation, although that's why it gives us confidence that we will.

L B.

To narrow our.

Our guidance range for the revenue as you haven't seen right.

narrowed to the up end. So that shows the confidence and the visibility we currently have.

Narrowed it to the up and so that shows the confidence and the visibility we currently have.

Just a follow-up on that, is the pace...

Just to follow up on that.

Is the pace.

fully recovered or is it partially recovered and you still have more to go as those

Fully recovered or is it partially recovered and you still have more to go.

Yes.

who bear regulatory situation for their own.

Improve their regulatory.

Situations, where their own apps.

I think it will be, you know, most of it has recovered, yeah, I would say 70, 80 percent.

I think I think that you will be you know most of it hasnt recovered.

Does the 70% to 80%.

Okay, and then in terms of G. G Alliance to talk about the mix of direct sales versus publishers and how you kind of rank these going forward as growth drivers.

Talk about the mix of direct sales versus publishers and how you kind of rank these and see these going forward as growth drives.

I think that the growth driver, you know, because actually the demand is always there and the demand for our product actually, you know, that's not a bottleneck as I previously

I think that the growth driver.

Because actually the demand is always there and the demand for our product actually actually.

It's not another bottleneck as I previously shared with you on this.

shared with you this commentary in previous course. Actually, the bottleneck has always been on the supply side.

This commentary previous cost actually the bottleneck as always has always been on the high side. So as long as you know.

So as long as there are more apps joining, more DAUs joining our network, we will be able to offer more impression, more exposure to the customers on the demand.

More apps joining us joining our network, we will be able to offer more impressions more exposure to the to the customers on the demand side right. So so.

So that's the situation I want to emphasize.

So that's the that's the.

Situation.

I want to emphasize again.

Okay, and lastly can you talk about the early adoption trends with video as a service products since launch and how do you expect it to impact our revenues over the near and long term and then in terms of that maybe go through the sales cycle, how long haul perspective prospective customers maybe Texas.

Product before purchasing.

Yes, so in terms of G fast products right. So.

Actually since this launch we are continuing to educate and the broader market and we have discovered that the demand actually is coming from a very diversified industrial verticals such as financial institutions.

The secure.

Security houses right local services transportation Entertainment.

Many industry verticals the customers.

The app developer in those verticals.

Expressed a strong strong interests, which is as you as you have read.

Press release right. We recently successfully signed up with a contract with a leading Iot manufacturer in China.

And this is a very big contract okay.

Close to $1 million.

<unk>.

Versus traditionally actually the approval for this product is about 100000 right.

So.

Initially for the video content.

Peer on this out to users mobile mobile App and that you were up here on the smart devices think about the user case when you wake up in the morning, so to the kitchen and the start preparing a breakfast when you're cooking the big screen.

On your refrigerator, where starts showing your favorite short videos. So it isn't just going to be going to make your cooking more fun.

All of this is possible.

It is powered by <unk>. So we think that this is what's going to happen in the future and we think it's really exciting.

I think.

Adoption across multiple industries are going to happen.

Overnight, but we do see the trend actually the demand is there.

So in the short term there'll be a very small contributor of revenue, but as we look.

Maybe the second half of 2022.

A catalyst to revenue growth or is that even too soon.

That's what we are aiming to yes, you are correct in the short term with the revenue contribution is still relatively small given our large base of our.

Traditional product.

The push services and other.

Related.

<unk> right.

For next year actually.

We aim to have the sales force.

To have two to drive strongly.

Just to promote to sell this product. So so certainly there will be our key focus for next year for this vast product otherwise you EMS product. These two new products.

Okay. Thank you.

Thank you.

Our next question from the line of Brian Roberts Nevis Capital. Please go ahead. Your line is open.

Hi, Good evening, guys can you hear me.

Yes, Ryan.

Great. So my question is really kind of more on the I guess the the.

The financials the financials.

Performance.

So first question kind of on gross margin for SaaS I know it moves around a little bit from kind of from quarter to quarter and looking it softened a little and this quarter.

So you can give us some color on why that might have been.

And I've got a question about the outlook.

After that.

Yes, I guess the module.

As much as well.

Effective.

Drop a bit but I guess it is of a functionality or some of the apps that we brought in for the <unk> Alliance.

We managed to get more of them some of the share of revenue. So in that case, though we are giving them some of the benefits of our gross margin. So we do not expect that to be a continuous trend. So we expect the margin to be above 17. Nevertheless.

As far as the margin is concerned we don't see Tennessee medical.

Yeah. So we aim to keep our gross margin above above 70% at least that's our.

Our near term targets.

Gotcha Gotcha, Okay and then.

It sounds kind of like a I guess a base case.

Past several quarters, it's been certainly well above that.

So.

I think it's all I'm looking at them.

It really kind of.

And as we sit here now in November.

Looking into.

Actually we're almost in December here.

How are you thinking about next year.

It sounds like you have G G lynes devices coming back into the pool.

The previous analysts asking about sign ups and then you mentioned that youre back on to a normalized pace, which.

Realize theres a bakery there with them.

What we want to do or not.

But how are we thinking about the year ahead.

And then maybe on <unk> lines could you update us on kind of the overall ad load.

As you go into the end of the year and also in CPM.

How are those metrics kind of shaping up.

Yeah, so sorry.

So actually our team different with different business units currently are still undertaking the process to finalize the next year's budget right. So.

We usually have.

He used to approach bottom up and top down okay. So the management top management.

Sitting here have a goal we want to achieve for next year, but also we need to look at how the people in the field that they look at their confidence level and what they see in terms of the demand and the macro environment.

So we need to take everything.

Into consideration and then come up.

Set ago four different business units and then we come up.

The guidance for the for the entire company right. So currently we are still in the process with them in this so I think.

My next earning call we should be able to give you confidently concrete number what we are going to achieve.

And in terms of.

Yeah.

Yes, the AD load right.

So so avalon that actually.

Actually to come in a number of factors one is.

We talked about this a number of times basically the product called SSP 2.0, which allow us enable the multiple exposure for you right. So actually you know talk about this product actually in the third quarter. It continued product iteration, we made some progress.

In the third quarter, which actually helps to improve our.

<unk>.

A little bit.

Magnitude is not to our satisfaction currently the improvement is less than 10% overall and the progress of the transition is a little bit slower than we expected.

We expect that the full migration of existing apps into <unk> 2.0 will be delayed to the fourth quarter.

Two.

Because not only the product to be robust enough, but also we need our salesforce and app traffic operating teams working together to identify each app usage scenario that is suitable for multiple exposure. For example, we need to determine when a user enters what page and conduct.

Whats action that it is appropriate to send another message right. So after such information that has been kind of like we need to have the conversation with the average product development. One by one to tell them. This is how we think about it in.

And the way they should have added dysfunctionality and all of this actually takes time. So our goal is to have the antidote.

For you from this perspective to improve by.

Close to 20% overall by the end of fourth quarter.

And other than this asset to zero.

Movement, which we are improved.

AD load.

Actually they are there.

There are other ways.

Can improve improve the adviser as well such as you know, we are making technical improvements and which can give us more chances to display.

Example.

We are storing some some backup.

If the first the first impression doesn't work doesn't happen and then the backup at kind of show up which we are certainly helps improve the AD load and this is a technical improvement and also we are identifying and eliminating unnecessary lost opportunities.

The AD due to Susan do setting.

So there are multiple things we are currently undertaking.

We tried to improve the adenoma so.

Thank you.

One <unk>.

Our tool.

Sure.

These things, we do well I think it was absolutely we will continue to see upward trend.

In terms of in terms of.

Uh huh.

Uh huh.

Uh huh.

What's the question you're asking.

Telecom.

The other question was on <unk>.

Okay.

I mean, the quarter actually remained remains.

Stable during the quarter and <unk> actually is.

I'm pretty much come in by the CDC and the ctr and that actually could come into bye bye.

Well, we fine tune the algorithm.

And and suddenly you know.

We actually spend a lot of other efforts or other things.

And it did.

This improvement on the CPM actually actually.

We are currently have a plan.

That was not.

Our focus in the third quarter.

Gotcha, and then maybe if you could share some because I know the advertising industry in China has been a bit.

Touching go I guess in the last several several months.

In terms of demand and kind of where that's coming from the education program can you give us a sense of where you are vertical wise.

What's what's meaningful right now and kind of maybe if you could share a little bit and kind of outlook on the band what youre seeing from them that would be helpful.

Yes, so you know.

Actually recently.

A number of Internet platforms right. They reported earnings as we all know there were affected by macro environment.

And ended the regular regulation and supervision of key Advertiser industries, right, which are directly impacted their customer churn, which is why we have seen the education industry all have their budgets reduced on the client side such as the gaming industry. However for JD Alliance, we don't have much coverage in those two.

<unk> industries.

Main customers mini program, Advertisers', App, retargeting advertisers and advertisers.

The field of finance and e-commerce, so customers customer budgets in those areas are relatively stable.

And.

So so actually we are we are not seeing any weakening in terms of the demand.

From the demand side.

We do not really see the demands will have impact.

Our <unk> line is the growth going forward.

Got you okay. So it sounds it sounds like churn churn then I guess it sounds it sounds pretty loving it and I think he mentioned on the last day.

Analysts asked about mix between.

Agents and kind of your direct sales.

Color you can share.

You mean, the agent advertising agents versus direct.

So yeah, you went into that I think the last the last question.

I'm sorry, the question earlier, but in terms of any churn in terms of by like the advertisers I guess ultimately you know who the advertising through the platform.

Do you see any kind of any changes in overall kind of.

As competition.

Who's buying ads, you mentioned kind of many many programs in.

Yes, yes, yes.

Yes.

So the core actually the top advertisers are still the similar.

The same guys right.

And.

The players basically why the mini program operated and the players.

For after you're targeting purpose.

Such as companies such as cover any pain.

May tie.

And.

And we will.

These customers remain our our top customers and.

They are very very stable and in the.

Other than that actually we are continuing to to penetrate.

Into into.

Into new industries.

Such as such as you know.

<unk>.

The actually the car industry, okay. So.

We acquired some customers.

In that quarter and also we continue to leverage leverage our AD agencies. So if you look at the revenue mix between the AD agency and direct sales accurate actually last quarter. It was about.

50, 50, but this quarter actually the AD agency contributed <unk>, 55% of the.

T J lines revenues right.

So it's actually you have seen.

And the pickup.

In terms of the revenue mix by the AD agencies and that these AD agencies they bringing.

Fresh brand new customers to our.

Add customers to our platform, which is which is a good thing. So so I think overall.

<unk>.

The customers are stable and.

And.

You are not seeing any meaningful change churn by by any large customers.

Okay, great. Thanks, Thanks, Craig.

Yes sure.

Thank you.

Our next question is from the line of Brian, Pennsylvania, or other lines Global partners.

Go ahead.

Thanks for taking my follow up first of all.

Margin of 70%.

Then you have been quite a bit higher for the last three quarters from there.

You see that much pressure over the next few quarters to get you as low as 70% or is that.

The previous gentleman, just said is that just sort of a base case long term of where you'll be.

Yes, I think we're operating the business your margin of 70.

5% no we do not expect margin to dip in Q4.

Okay.

Then.

So Brian right actually let me clarify actually we constantly actually.

<unk> said that we will keep our gross margin above 70% right. So that's that's our base case and above 70% between 70%, 75%, certainly USD fluctuation probably between quarter and quarter and but that is normal right.

Because.

Some business business segments, such as the <unk> lineup.

On the margin.

It's actually it's actually.

Decided by how we cook to deal with.

<unk>.

The supplier.

Patrick a supplier, but suddenly.

We aim to keep the gross margin about 70%. So that's our goal.

Yes, Okay and then.

As we head into next year talk about the seasonality and how much of an impact.

These new year has on each of your businesses.

Yes, so if you look at our Paas.

Several years.

Chinese new year seasonality is certainly the first quarter is the weakest quarter for us not only for us actually for the other most of the Chinese companies as well.

Because the Chinese new year, and basically at least two weeks nobody was working right. So basically anybody who's spending money.

So that certainly we are we are impacting the demand for.

Gigi Alliance the business.

For the other business because the cost is.

Cushman base right. So so.

It is.

It's highly highly stable highly visible.

But that said.

Overall for the company as a whole.

You should be.

Certain magnitude of seasonality in the first quarter I.

E <unk>.

The sequential revenue decline.

A bit in the first quarter.

But what youre, saying.

And the vertical applications both of those as well.

A little bit more flattish.

[noise] SDK will be okay, but vertical application does one product Dakota financial risk management financial risk management actually are and the customer there and the demand is consumer related demand. So because people were borrowing money less.

So during that time actually if they're if they're kind of consumer demand decreases.

Use it to use our service we have decreased as well because it is a volume based pricing model, so that will be impacted as well other than that our our subscription based business.

And our our.

<unk>.

The.

The industry.

Our insights business should be should be stable.

Great. Thank you.

Okay.

Thank you.

Yes. It does have a question from the line of Ryan Roberts Old Navy's capital. Please go ahead.

Hi, Thanks for taking the follow up question or if you're thinking about the next year.

Again, I realize youre in the planning process, so on and so forth.

Again, but here we are finding ourselves knocking on December store.

The R&D spend which has been kind of.

Chunky compared to last year.

Most of that head count.

What are you thinking about next year in terms of head count and kind of expense allocation for this year things have been.

Bold.

But as you move into next year.

What are you thinking about.

And maybe what are some of that.

Key concerns.

Youre weighing into the new.

The year end.

Yeah. So so for next year actually actually in terms of the Opex and also the spending rate, particularly R&D.

Hum.

One thing is clear we are not.

I'm going to try to increase much about the R&D expense, okay, and we are not going to increase much about.

R&D.

Head count, Okay, and we think there's a lot of room to improve to improve the efficiencies not only.

From the from the human resource perspective, but also from the ITT results perspective, and we are currently slated for.

Really doing the analysis.

We can where we can improve the efficiency right. So so so.

This improvement that needs to happen next year, so that will be.

Basically we are not you will not see much much increase.

In the expense.

R&D.

Understood, Okay, and then maybe if I could.

Turning back to something you mentioned earlier in the call I'm sorry, it maybe they don't.

I think maybe you mentioned it.

The Huawei kind of news.

Or maybe some of the investors are kind of on the call.

That or not super familiar with the landscape.

Cloud providers in.

China, and maybe what that actually means transformation Lee kind of for your company.

It gives you exposure to maybe talk a bit around kind of what youre thinking about.

The I guess the impact of the <unk>.

Quality deals.

That opens your software.

The SDK and stuff.

Opened you up to.

In terms of the overall kind of bonds.

A market share perspective, and if you could kind of.

Give us some insights on what that could look.

What that could mean for you.

Yeah sure. So originally.

Jan verification.

Customized show Facebook officially launch on Ali cloud.

So basically the corporation with quality call.

<unk>.

I think demonstrate that industry wide client trust, we come off of our robust technical capability and service.

So basically a developer can they can touch it.

And expands our geographic HIV.

By locking in their hobby car com.

And Harvey how pipeline.

So we have launched the allowance.

Allow us a couple of months.

So we already see.

The appeal contest from data allowance.

So.

<unk>.

So next Ali cloud Paas to feel and.

Why stop integrations of its pipeline with us.

Primary to package our developer based product into one solution hosted cloud Paas lot. So it is a real keen with developers that ease of livestock purchasing experience.

So at the same time, we will provide systematic training for our sales teams took a better understanding of our operating regarding these China and what policy, we plan to generate more sales opportunities.

In addition, we will also.

Collaborators tend to on marketing activity.

Such as office applying advanced targeting targeting the financial industry.

Of course, a huge developer code base that way.

We will also provide a great commercial value for highway cloud itself.

We are also actively discussing how we can at that polyculture faced into one into our commercial cirrhosis and aneel signature and promote into our buy rate.

Sure.

That's why we see so far.

Okay.

Well I don't know.

It was the only choice.

Sure Nick.

I'm sure you've seen time between the Gulf Power you can help me with.

Sure Nick.

Sure.

Hum.

No doubt.

Oh, who may have had a bunch of material.

Yeah.

About our manufacturer customers.

<unk> mobile of about about how we count that as a business customer.

Right.

Yes, yes, yes.

Yes.

Actually is growing very very fast and agile.

Article.

Right right.

I just wanted to understand the difference was.

This is kind.

I guess, the Huawei cloud infrastructure provider as opposed to any kind of relationship with Huawei.

Smartphone brands, So I guess, there's maybe some central misunderstanding about you know.

While none of it versus LTE smartphone and blah blah blah.

And that's why we are now collaborating with Huawei smartphone, we are only collaborating with our cloud business.

Basically it basically you know they have the they have the to be business right. So we have the two new business, so thats a customer affinity.

So far so basically I'd give me that number.

Hum.

Karl has.

Has around 2000 San Luis.

In that I mean.

All over China.

And when we already have there.

Number two number two in China right.

The club currently a number two or three I would say Tencent call off highway.

<unk>.

At September two offering.

Got you okay. Okay, that's what I want to clear. Thank you very much appreciate that.

Thank you once again for those who wish to ask a question. Please press.

And the number one.

Name to be announced.

Okay.

Great questions. Please press Star then number one and wait for any inconvenience.

Okay, and I would like to hand, the Congress that too.

This need for closing remarks. Please go ahead.

Thank you Annie Thank you everyone for joining our call Tonight.

If you have any further questions or comments, please don't hesitate to reach out to the IR team.

This concludes the call have a good night. Thank you.

Thank you ladies and gentlemen.

The conference for today and thank you for participating.

Okay.

Okay.

[music].

[music].

[music].

Ladies and gentlemen, thank you for standing by and welcome to the Aurora Mobile third quarter 2021 earnings Conference call.

At this time, all participants are in listen only mode and after the Speakers' presentation there'll be a question and answer session and to ask a question. During the session you will need to press star and the number one on your telephone. Please be advised that today's conference is being recorded.

I would now like to hand accomplished over to your host today, because everybody's I understand. Thank you. Please go ahead Sir.

Thank you Amy.

Hello, everyone and thank you for joining us today.

The earnings release was distributed earlier today and is available on the IR website.

G Guang don't see.

On the call today are Mr weighed on me.

Chairman and Chief Executive Officer, Mr. Fei, Chen President and Mr. Shan Nen Bong Chief Financial Officer.

Following their prepared remarks, all three will be available to answer your questions. During the Q&A session that will follow.

Before we begin I'd like to remind you that discuss earnings call contains forward looking statements within the meaning of section 21 E of the Securities Exchange Act of 1934 <unk>.

And as defined in the U S Private Securities Litigation Reform Act of $19 95.

These forward looking statements are based upon management's current expectations and current market and operating conditions.

Which are difficult to predict and may cause the company's actual results performance or achievements to differ materially from those in the forward looking statements.

Further information regarding these and other risks uncertainties and factors.

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 will now turn the conference over to Mr. Luo. Please go ahead.

Yeah.

Thanks for right now.

Good morning, and good evening.

Everyone on the call.

That would happen to Aurora Mobile's first quarter 2021 years call.

This is the first quarter, where we have been operating under the pure SaaS based intermodal since the beginning of 2021.

We continue to see great business growth in the hospital and I will go straight into our quarter results I will share with you our business progress and key business metrics.

The metrics on the first quarter of 2010 do you want.

Before I comment on our carefully results I would like to remind everybody loves that totally financed that is available on our IR web site for your reference.

You may refer it to that that as we proceed with the call today.

Let's begin with highlights of our key operating and financial performance for the protocol at all of 2021.

As a reminder, we completely acetate marketing at the end of 2020 and our people. This is not 100 per sample cost.

Hospice model, which included you better buy something for everybody to coat applications.

But for an apples to apples comparison.

Present here, that's quota contribution from their legacy you're talking about getting in there.

And definitely the partner or we can listen.

Maybe a solid upward trend in our topical recently as a result of our dedicated in building and growing them.

But that's the only way South Park Hill by 2000, and timing of what the number of paying customers increased to two 1729 from 2300 in time here a year ago.

18% year over year.

Revenue was RMB 19, five medium up with.

But the 8% year over year.

Gross margin was 74 pardon for pets and reaches more than one five times compared with 47 for example, a year ago.

Workforce gross property it wasn't a and b.

Seven 4 million.

For the eight months a year over year and adjusted EBITDA was a negative <unk> 16 per 1 million a substantial improvement of cleanliness I don't put them for a year ago, demonstrating our strong operating leverage.

Total deferred revenue was up however, it may be longer medium for six consecutive quarter, indicating strength in south beach as well.

They are they've continued to decrease to 39 days, indicating.

Indicating our disciplined quick tidy granting and brought the majority of quality of customers paying on time.

Revenues for our test business.

Set another quarterly record high.

48%, while for India, Batter-fry shelf, Apis and 18% in vertical applications on a year over year basis.

Our gross margin has greatly improved the wrong foot 40.

But it sounds like a year ago total of 17, 4%, which was already which was our resolve our successful transition into the pure tax basis of model.

The beginning of 2000 and talking it was so strong was perfect for us.

While the management by revenue bump up 8% year over year.

The backbone of all continue continuous revenue growth has been our relentless thing ever and prioritization of innovation in developing innovative product. We always strive to provide so those are I'd say, our customers needs and requirements for continuous development.

Iteration and this quarter, we I apologize shale recent updates with new innovations across the various product lines or product development and also I'll say has always been to introduce a widely applicable part outs and tourists.

Forget about as suitable for our industry.

And based on the needs as a background issue, especially for industrial vertical.

More order to leave more time to adjust and offer solutions that can meet specialty requirements of the eastern user base.

Housing market place.

For example, how do we go deeper to raise customer satisfaction and fulfill fulfill their needs.

Many of our development efforts in recent quarters have been focused on creating a deeper customer engagement.

And carefully.

Onshore flavors and of our call Jay pushed product.

Catering a brand new upgrade to the hub paulsen, whereby mobile app developers to easily integrate the save a major mobile phone manufacturers and operating systems push channels into the App.

Including but not limited to China, such as Huawei, Xiaomi Oppo vivo and major.

For the propulsion, we are able to have mobile app developers significant sort of increase the overall notification dilemma right.

Rate by 80% compared to a dose of mobile apps, who do not use data hub function, which.

Which sequentially I'm, sorry in post that prey of apps.

Mobile App, you better person no longer how to integrate each manufacturer operating in China on their own.

By using our propulsion they've got easily integrate all of this they were major notification, China and manage it all of them pushed message.

Do you want to pick up on <unk>.

As of today.

Although our 7000 apps have already.

Ladies that they're using this new function.

Over our 45% of the new apps that use our J push SDK have already integrated dysfunction intuitive apps.

These hub function marks a new mouse don't have any better broke greatly improved they'll push results with very simple and efficient integrated integration steps and Simmons our position at the Lady and push notification provider in China.

Yeah.

That's a one off several of our newly introduced products in 2019, while I'll have Russ product has generated a much customer interest.

Lift up between the amount of in the short video industry, we kind of noticed that signings akshay vertical scaling involved with over the past few years and become even more dependent on the product range and scope of our surveys.

During the call her whilst our mantra right now manufactures in the smartphone industry started testing boss products or their smartphone plans and can therefore wider roll out in the near future.

At the mine more spring this pace.

Integrated into their smartphone update our products and devices.

Are the right content on these screens has played has quickly become.

Mitel way of keeping yourselves engaged in training for a better user experience.

By providing short videos they are paid a customized and geared towards different Yosef works.

And displayed on the different paths, our vast product continues to satisfy customer requirements and increasing user thickness.

So our retention time Liberty they were all up.

This product is a massive market potential and application is going to fall off.

In addition waste.

Wake aberration relaunch of our on demand video cloud volume service under the various product lines.

This new service provider.

At the better price and opportunity to quickly integrate their app with video content.

Once they have implemented our.

On demand video call surface into their apps developers can't enjoy the freedom and convenience.

You can find a streamline of actions, including a block reveal and create manage and play the videos on their own apps.

This survey is fundamentally eliminates the T G I.

And laborious process for those developers who want to manage their only deals on their apps.

They've been done within the salt, where they appeal it and feel free if you have already seen great.

Great customer interest and receive the money in Korea about this product.

Our reserve at that these on demand video cloud surface has added a grade ready to ask the better person as part of our product development strategy to go deeper and to reset that satisfy customers, especially if they have requirements and needs.

By doing so we can get better proposal killed with our customers.

And because they are around long term trusted partner.

That's finally.

Another very exciting news that I want to share with you is that I know.

November 17th.

Jay verification and other cousin MISO favorable officially launched our hot Huawei crowd, the cooperation with Huawei, how demonstrate demonstrates that industry wide and trials of our trials, we command for our rubber technical capability and so what they say.

Currently the better Presque easily.

<unk> and experience of our identification showcased by simply locking into the into our holiday account.

In addition to each other and application developers can also get access to Javan coupons customized just Asia Pac Asia off highway cloud, which includes a push notifications instant messaging traffic.

Traffic monetization.

Giovanni and your math and your other products.

They're happy about our price to operate grow and monetize new applications. We've been able with that this corporation of empower Karl can benefit us by reaching out to a more potential fee paying customers.

And we are bringing a stable results in the near future. In fact, we have already signed a number of paying customers and since this allows a static.

Now I will turn the call to say, who will discuss our performance in greater detail.

Thanks, Chris.

Let me start the discussion on different revenue streams within the SaaS businesses.

Third quarter 'twenty, one revenue from developer services reached RMB $64 7 million a robust for the 8% growth on a year over year basis.

On year revenue growth was a result of strong growth of 32% in subscription and services and a very impressive 84% of growth in value added services.

Subscription services revenues were RMB 39, 8 million, an increase of 32% year over year, primarily driven by new customer acquisition.

Apart from new customer acquisition, our continuous efforts in cross selling various.

Pushed subscription products, such as T verification J S. M. S. G analytics have increased our customer subscription uptake.

Multiple product lines as a result.

Our revenue contribution or non push notification products increased to 43% from 31% a year ago now and push notification products also achieved a higher output of RMB 37000.

In the overall Abu for subscript subscription services, increasing by 13% to RMB 16.

6000, compared with RMB 14, 7000, a year ago.

New and the renewal of contracts of notable customers in the quarter include net East News, China Southern power grid company.

<unk> Mcdonald's and so on.

Value added services within developer services, which include revenues from <unk> Alliance services and advertisement SaaS achieved outstanding results, where revenues grew significantly by 84% a year on year to RMB $24 9 million from RMB 13.

$5 million in third quarter 2020.

The demand for our <unk> Alliance products.

Has proven to be continuously strong since its introduction to the market.

Expect this strong demand trend to continue into the future.

On the supply side of Digi Alliance during the quarter. We continued to grow this traffic report as it is a vital part of our strategy to increase the opportunities for monetization channels.

The total number of apps within our networks exceeded the 390 apps.

Compared to 344 in second quarter, 'twenty, 'twenty, one representing a 15% growth quarter over quarter. The total you within the network has stabilized at 180 million same as the second quarter as discussed in the last earnings call. There has been some delay in developed.

Joining our alliance network and integrating our SDK due to the regulatory requirements that became the top focus during the quarter.

However, we have seen the ramp up of this integration period during the fourth quarter, which lays a solid foundation on the supply side of the equation and they can in turn help us achieve our strong sequential revenue growth for the coming quarters.

On the demand side mini program developers and absolutely packaging related demand continued to play a pivotal role by contributing to the majority of our <unk> Alliance revenues in third quarter 2021 during the quarter and the agencies contributed more than 50% of DG Alliance revenue stream.

While the rest came from direct to customers.

Major customers of DG Alliance consistent consisted of repeat customers and the market leaders across many industry verticals there.

They include but are not limited to Weibo may tie in GB highly paid hubbell baidu.

VIP shop and travel.

Now, let's move onto vertical applications.

Our financial risk management market intelligence and iron products.

These revenues grew steadily by 18% year over year with the Lions share of the growth coming from the financial risk management business and the financial risk and management segment revenues increased substantially by 35% year over year with the help of the 37% growth in our pool this quarter we.

Had another remarkable quarter with the highest revenues since the beginning of COVID-19 in first quarter of 2020, the strong demand for our financial risk management products.

Pave the way for us to acquire new customers, and then retaining mainly existing customers each quarter, new and renew the customers includes as to why insurance to which our main financial 300 digitech.

Our market intelligence product line recorded a slight 3% dip in revenue year over year due to the lackluster China ADR investment environment in third quarter and do you think you want as many investors pulled out such China ADR investment due to regulatory concerns. Nevertheless, we expect.

The demand for this product line to recover in kind of the quarter and the quarter going forward.

During third quarter 2021.

We have signed that renew contracts with many large customers include Himalaya Netease media <unk> entertainment et cetera.

Lastly, our iron business has delivered a modest 5% revenue growth year over year with that I'll pass the call over to Shannon.

Thanks Ray.

So truly some of the key expenses and balance sheet items.

And lets talk about operating expenses. The total operating expenses increased by 6% year over year to <unk> $103 7 million.

In particular, R&D expenses increased by 22% will be $55 5 million, mainly due to the increase in staff compensation as we continue to invest in our R&D Department improved it infrastructure, such as a higher bandwidth and cloud expenses to support the expansion of the <unk> businesses.

Selling and marketing expenses increased by 5% to $29 4 million.

Mainly due to the increase in staff compensation and travel expenses.

G&A expenses decreased by 22% to RMB $18 8 million.

Due to year over year reduction of renminbi, $6 9 million in bad debt provision due to our proactive and strict financial control measures.

Adjusted EBITA calculated as EBITDA, excluding share based compensation impairment of long term investment and change in fair value of our foreign ex foreign currency swap contracts improved by 27% year over year to negative $16 1 million from negative.

$22 million in Q3 2020.

For the third quarter of 2021, we deliver another set of solid financial results.

Were you aware comparison, the key highlights for this quarter in key.

Revenue of our plus business has increased significantly by 38%.

<unk>.

<unk> gross margin improved from 47% to 74, 4% a direct result of Q2 2021 gross margin being 100% contributed by high margin businesses.

Operating expenses increased by only 6%.

As a result, our adjusted EBITA improved by 27%, which continue to demonstrate the scalability of our business model.

And this is the third quarter, where we have delivered solid business for new results and we are very pleased with the results we have to achieve.

We believe that the growth momentum of Q1, Q2 and Q2. This year, we continue to bring more solid results in the coming quarters.

Next onto the balance sheet I'll start with two very important keep it keep you either we closely monitor.

Firstly, the Alto <unk>.

This was similar to the trend we have seen last quarter.

Due to both a shift away from the legacy targeted marketing business to focus on SaaS businesses, and a disciplined credit granting policy and our focus on improving our collection.

Secondly, the total deferred revenue balance which represents cash collected.

From a customer for a sixth consecutive quarter has exceeded <unk> 100 million at quarter end.

As of September 30 of 2021, the balance was at <unk>.

Let me be a $119 million up from 111 5 million in Q2 this year.

Next total SaaS will be $627 million as of September 30 of 2021. This includes cash and cash equivalent of RMB, two 1 million.

<unk> receivable of 41 million prepayments of 13 million fixed assets of $68 9 million long term investment of $1 $65 6 million.

Total current liabilities were at.

<unk> hundred $73 1 million as of September 30 of 2021. These include short term loan of $105 million.

Stable $13 5 million.

Revenue of $114 4 million.

<unk> liabilities of $95 1 million.

Next one to business outlook.

Based on the current available information the company six full year 2021 revenue guidance to be in the range of <unk>.

350 million to <unk>, 306 zero million, representing growth of 36% to 40% year over year compared with last year and our guidance for the full year gross margin to remain above 70%.

Therefore meaningful comparison purposes. The prior year revenue numbers used to calculate the growth percentage as revenue from the targeted marketing business.

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 demand, which are all subject to changes.

Lastly, before I conclude I'll give a quick update on the share repurchase plan.

In the quarter ended September 30 of two new <unk>, one we did not repurchase any shares.

September 30 of two new to anyone cumulatively, we have repurchased a total of 921000 since the start of our repurchase program.

And this concludes management prepared remarks, we are happy to take your question now when they are back to you.

Operator please.

The Q&A.

Thank you yes.

To ask a question you will need to press the star and the number one telephones.

We do all your questions.

Keith.

Please standby, while we compile the.

Boston.

Once again, please press star one again telephones cleaning.

Yeah.

Once again to start a question.

Ask your question. Please press star one.

Telephones.

Thank you I have quick question.

It's from the line.

Uh Huh, Brian canceling or other lines Global partners. Please go ahead.

Great. Thanks for taking my question.

Hum.

I meant on that please.

Do you mind integration is the pace picked up to the same pace prior to the discussion of new regulations or is there.

Gonna be a gradual pick up and you still have a bit more to go before the pace returns too.

That rapid pace.

Hey, Brian Hey, this is Dave so in terms of the.

On the App.

The pipeline for joined the DD Alliance right. So we do see actually studying.

The end of.

Third quarter, beginning of the fourth quarter before we work in.

In the process has renewed the process started engaging with us. So so we actually currently has seen.

A pretty pretty decent pipeline yeah.

There will be a very strong pipeline.

Not only not only some medium sized app, but also some large large very large volume.

In discussing with us so.

So we do expect you know.

It is a decent number of green.

Going to be joining.

Joining our network.

During the quarter.

Because of this.

This situation. This outlook that's why it gives us confidence that we will be.

To narrow our.

Our guidance range for the revenue as you haven't seen right.

Narrowed it to the up and so that shows the confidence and the visibility we currently have.

Just a follow up on that.

Is it fully.

Fully recover or even partially recovered and you still have more to go.

Apps.

Improve their regulatory.

In relation to their own apps.

I think I think that it will be most of it hasnt recovered.

How would I say, 70% to 80%.

Okay, and then in terms of G. G Alliance talk about the mix of direct sales versus publishers and how you kind of rank these going forward as growth drivers.

I think that the growth driver.

Because actually the demand is always there and the demand for our product actually actually.

That's another another bottleneck as I previously shared with you.

And this commentary you previous cost actually the bottleneck as always has always been on the high side, so as long as.

More apps, joining a model year used joining our network, we will be able to offer more impressions more exposure to the to the customers on the demand side right. So so.

So that's the that's the.

Situation.

I want to emphasize again.

Okay, and lastly can you talk about the early adoption trends with video as a service products since launch and how do you expect this to impact our revenues over the near and long term and then in terms of that maybe go through the sales cycle, how long well perspective prospective customers maybe Texas.

Probably before purchasing.

Yes, so in terms of G fast products right. So.

Actually since its launch.

We are continuing to educate and the broader market and we have discovered that the demand actually is coming from a very diversified industrial verticals such as financial institutions.

The the.

Security houses right local services Transportation Entertainment you know.

Many industry verticals the customers.

The app developer in those verticals.

Express a strong strong interests, which is as you as you have read.

Press release right. We recently successfully signed up with a contract with a leading Iot manufacturing in China.

And this is a very big contract okay.

Close to $1 million.

<unk>.

Versus traditionally actually the approval for this product is about 100000 right.

So.

Initially for the video content.

Peer on this out to users mobile App mobile App and there you are.

On the smart devices think about the user case, when you wake up in the morning, so to the kitchen and the start preparing your breakfast when you're cooking the big screen.

A refrigerator where stocks showing your favorite short videos.

There's going to be going to make a cookie more fun.

All of this is possible.

It is powered by <unk>. So we think that this is what's going to happen in the future and we think is really exciting.

I think the adoption across multiple industries are going to happen.

Not overnight, but we do see the trend actually the demand is there.

So in the short term there'll be a very small contributor to revenue.

We look.

Maybe the second half of 2022.

Come a catalyst to revenue growth or is that even too soon.

While we are aiming to yes, you are correct in the short term with a revenue contribution is still.

Relatively small given our large base of our.

Traditional products.

The push services ended the other.

Related.

You get towards right.

For next year actually.

We aim to have the sales force.

To have two to drive strongly.

To promote to sell this product. So so certainly there will be our key focus for next year for this vast product otherwise so your EMS product. These two new products.

Okay. Thank you.

Thank you.

Our next question from the line of Brian Roberts.

This capital. Please go ahead your line is open.

Hi, Good evening, guys can you hear me.

Yes, Ryan.

Great. So.

My question is really kind of more on the.

Financials financial performance.

So first question kind of on gross margin for SaaS I know it moves around a little bit from kind of from quarter to quarter and looking at it softened a little and this quarter.

So you can give us some color on why that might have been.

I've got a question about how the outlook there.

After that.

Yes, I guess the margin did not move.

As much as well.

Effective.

Drop a bit but I guess is about functionality or some of the apps that we brought in for the digital audience. We.

We measure against more than some of the share of revenue. So in that case. So we are giving them some of the benefits of all our gross margin. So we do not expect that to be a continuous trend. So we expect the margin to be above 17. Nevertheless.

As far as the margin is concerned we don't see Tennessee is that meaningful.

Yeah. So we aim to keep our gross margin above above 70% at least that's our our near term targets.

Gotcha Gotcha, Okay and then.

It sounds kind of like a Oh, my God, I guess I guess a base case.

Past several quarters, it's been certainly well above that.

So.

I think it's all I'm looking at the and it really kind of.

And as we sit here now in November I'm looking into I guess, it really actually were almost in December here.

How are you thinking about next year.

It sounds like you have G G lynes devices coming back into the pool.

Previous analysts asking about sign up and then you mentioned that you are back on a normalized pace, which.

I realize they're a bakery there with.

We want to do or not.

But how are we thinking about the year ahead.

And then maybe on JD lines could you update us on kind of the overall ad load.

As you go into the end of the year and also D. C. P M.

How are those metrics kind of shaping up.

Yeah, so sorry.

So actually our teams different to different business units currently are still undertaking the process to finalize the next year's budget right. So.

We usually have.

You used to approach for them up and a top down okay. So the management top management.

People are sitting here have ago, we want to achieve for next year, but also we need to look at how the people in the field that they look at their confidence level and what they see in terms of the demand and the macro environment.

So we need to take everything.

Into consideration and then come up.

<unk> set a goal for different business unit and then we come up you know.

The guidance for the for the entire company right. So currently we are still in the process of doing that so I think.

My next earning call we should be able to give you continentally concrete number what we are aiming to achieve.

And then in terms of.

Yeah.

Yeah, the AD load right.

So I don't know that actually.

Actually to come in to buy a number of factors. One is we've talked about this a number of times basically the product called <unk>, which allows enabled the multiple exposure for you right. So actually.

Talk about this product actually in the third quarter continued product iteration, we made some progress in the third quarter, which actually helped to improve our.

AD loads.

A little bit.

The magnitude is not easy to assess infection currently the improvement is less than 10% overall and the progress of the transition is.

Slower than we expected.

We expect that the full migration of existing App into SSP 2.0 will be delayed to the first quarter 2022.

Because not only the product to be robust enough, but also we need our salesforce and app traffic operation team working together to identify each app usage scenario that is suitable for multiple exposure. For example, we need to determine when a user enters what page and conduct.

<unk> action that it is appropriate to send another message right. So after such information has been analyzed we need to have the conversation with the average product development one by one to tell them. This is how we think about it in.

And why they should have added dysfunctionality and all of this actually takes time. So our goal is to have the AD load exposure for you from this perspective to improve by.

Close to 20% overall by the end of fourth quarter.

And other than this as key to zero.

Improvement, which we are improved.

AD load.

Actually they are there are other ways.

Can improve improve the AD load as well such as we are making technical improvements and which can give us more chances to display for.

For example, we are.

We are storing some some backup.

If the first the first one.

Doesn't happen and then the backup at cashew up which we are certainly helps improve the analog and this is a technical improvement and also we are identifying and eliminating.

Unnecessary lost opportunities.

Displaying the AD due to certain new setting.

So there are multiple things we are currently undertaking to try to improve the AD load. So I think one or.

All to all.

These things, we do well I think the AD load, we will continue to see upward trend.

In terms of in terms of the.

Sure.

Uh huh.

<unk>.

What's the question you're asking.

So the question here.

Your next question was on <unk>.

P M. Okay.

In the quarter actually remain remained.

Stable.

During the quarter and <unk> actually is.

I'm pretty much determined by the CDC and the Ctr.

And that's actually becoming the bye bye.

Well, we fine tune the algorithm.

And.

And then suddenly you know.

We actually spend a lot of our efforts on other things.

And this improvement on CPM actually actually.

We are currently have a plan.

That was not our focus in the third quarter.

Let's touch on go I guess in the last several several months.

In terms of demand and kind of where that's coming from the education program can you give us a sense of where you are vertical wise kind of what's what's meaningful right now and kind of maybe if you could share a little bit and kind of outlook on demand, what you're seeing from them would be helpful.

Yes, So you know actually recently.

A number of internet platforms right.

Wanted to earnings.

As we all know there were affected by macro environment.

And in the regular regulation and supervision of key Advertiser industries, which are directly impacting their customer churn.

While we have seen the education industry.

Everybody is reduced on the <unk> side, such as the gaming industry. However for <unk> lines. We don't have much coverage in those two industries are main customers mini program out of other apps repackaging advertisers and advertisers.

Fields finance and e-commerce, so customers customer budgets in those areas are relatively stable.

And.

So so actually we are we are not seeing any weakening in terms of the demand.

From the demand side.

We do not really see the demands.

Have a impact.

July is the growth going forward.

Okay. So it sounds it sounds like churn churn then I guess it sounds it sounds like a pretty low and I think you mentioned on the last analyst asked about mix between.

Agents and kind of your direct sales any any kind of churn.

It's a color you can share.

You mean the <unk>.

<unk>.

Advertising agency versus direct.

So yeah, you went into that I think the last the last question I'm.

I'm sorry, the question earlier on in terms of any churn in terms of let's say advertisers I guess ultimately you know who's advertising.

<unk>.

Do you see any kind of any changes in overall kind of.

As composition of who's buying ads I mean, you mentioned kind of many many programs and yes, yes, yes, yes.

Advertisers.

Yes.

So the core actually the top advertisers are still the similar.

The same guys right.

The players basically where the mini program operators and the players.

Four after you're targeting purpose.

Such as companies such as cover any pain and May tie.

And we bought <unk>.

These customers remain our our top customers and.

They are very very stable and and other than that actually we are continuing.

To penetrate.

<unk>.

<unk> into.

Into new industries.

Such as such as you know.

<unk>.

Actually the car industry. Okay. So we acquired some customers.

In that quarter and also we continue to leverage leverage our AD agencies. So if you look at the revenue mix between the AD agency interactive sales accurate actually last quarter. It was about.

50, 50, but this quarter actually the AD agency contributed around 55% of the.

<unk> revenues right right.

So it's actually.

We're seeing the pickup.

In terms of the revenue mix by the AD agencies and that these AD agencies they bring in.

Fresh brand new customers to our ads.

Add customers to our platform, which is a which is a good thing.

So I think overall you know.

The customers are stable.

And.

We are not seeing any meaningful change churn by by any large customers.

Okay, great. Thanks for Thanks Man.

Yes sure.

Thank you.

Next question is from the line of Brian, Pennsylvania, or other lines Global partners. Please go ahead.

Thanks for taking my follow up first of all.

From a gross margin of 70%.

Again, you have been quite a bit higher for the last three quarters from there.

What do you see that much pressure over the next few quarters to get you as low as 70% or is that.

As the previous gentleman, just said is that just sort of a base case long term of where you'll be.

Yes, I think we have been operating the business margin of 74 to 85.

5% no we do not expect the margin to dip in Q4.

Okay.

Yes.

Right.

Let me clarify actually we constantly actually.

<unk>.

Said that we are keep our gross margin above 70% right. So that's that's our base case and above 70% are between 70%, 75% certainly USD fluctuation.

Between quarter and quarter and.

That is normal right because.

Some business business segments, such as the <unk> lineup.

On the margin.

Sometimes.

He is actually is actually.

Decided by how we cook the deal with <unk>.

<unk>.

Higher traffic a supplier, but suddenly.

We aim to keep the gross margin about 70%. So that's our goal.

Yes, Okay and then.

As we head into next year talk about the seasonality and how much of an impact.

Chinese new year has on each of your businesses.

Yes, so if you look at our Paas.

Several years.

Chinese new year seasonality is certainly the first quarter is the weakest quarter for us not only for us actually for the other most of the Chinese companies as well first quarter, because the Chinese new year and basically at least the two weeks nobody was working right. So basically anybody who's spending money.

So that certainly we are we are impacting the demand for.

Gigi Alliance the business for the other business because the cost is.

Subscription base right. So so.

It's highly highly stable highly visible.

But that said.

Overall for the company as a whole.

You should be.

Certain magnitude of seasonality in the first quarter I.

E <unk>.

The sequential revenue decline.

A bit in the first quarter.

But what youre, saying.

And the vertical applications both of those will be.

Be a little bit more flattish.

SDK will be okay, but vertical application does one product called financial risk management financial risk management actually are and the customer there and the demand is consumer related demand.

Because people were borrowing money less.

So during that time actually if they're if they're kind of consumer demand decreases.

UCITS.

Use our service we have decreased as well because it is a volume based pricing model, so that will be impacted as well other than that.

Our subscription based business.

Our our.

<unk>.

Yeah.

Industry.

Insights.

It should be should be stable.

Great. Thank you.

Okay.

Thank you.

Now, let's have a question from the line of Ryan Roberts of <unk> capital. Please go ahead.

Thanks for taking the follow up what kind of question or if you're thinking about like next year.

And again I realize youre in the planning process, so on and so forth.

Again, we are finding ourselves knocking on December <unk>.

Looking at the kind of the R&D spend which has been kind of kind of chunky compared to last year.

Most of that head count.

What are you thinking about next year in terms of head count and kind of the new expense allocation for this year things have been.

Trolled.

But as you move into next year.

What are you thinking about and maybe what are some of them.

Concerns.

Weighing into the.

The year end.

Yeah. So so for next year actually actually in terms of the Opex and also the spending rate, particularly R&D.

One thing is clear we are not going to try to increase much about the R&D expense, okay and we are in.

Now going to increase much about.

R&D.

Head count, Okay, and we think there's a lot of room to improve to improve the efficiencies not only.

From the from the human resource perspective, but also from the <unk> perspective, and we are currently.

Really doing the analysis.

So we can where we can.

Improved efficiency right. So so so.

This improvement needs to happen next year, so that will be.

<unk> will not you will not see much much increase in the expense.

On the.

Understood, Okay, and then maybe if I could.

Got it turned back to something you mentioned earlier in the call I'm sorry, it maybe they don't.

I think I think maybe you mentioned it.

Got it.

Huawei kind of news or maybe some of the investors are kind of on the call.

Debt or not super familiar with the landscape of the cloud providers in.

China, and maybe what that actually means transformation really kind of for your company. What that gives you exposure to talk a bit around kind of what youre thinking about.

The I guess the impact of the <unk>.

Quality deals.

That opens your software.

The SDK and stuff.

Opened you up to.

In terms of the overall kind of.

Okay.

A market share perspective, and if you could kind of.

Give us some insights on what that could look.

What that could mean for you.

Yeah sure. So originally.

Jan verification.

Customized showcase will officially launch on Ali cloud.

So basically the corporation with quality call.

<unk>.

I think demonstrate that industry wide client trust, we come off of our robust technical capability is service.

So basically a developer can they can touch it.

And expands our geographic HIV.

By locking in their hobby car com.

So we have launched the <unk>.

Allow us a couple of months.

So we already see.

Key uphill contrast from data allowance.

So.

Sure.

So next holiday co pays to feel and.

While stock integration platform.

Primarily to package our developer based product into one solution hosted cloud platform. So it is a real keen with developers that ease of livestock purchasing experience.

So at the same time, we will provide systematic training for our sales teams took a better understanding of our operating regarding these China and what policy, we plan to generate more sales opportunities.

In addition, we were also color elaborate the statute on marketing activity.

Such as Apis.

Targeting targeting the financial industry.

Of course, a huge developer code base that way.

<unk> will also provide a great commercial value for highway cloud itself.

We are also actively discussing how we can at that polyculture faced into one into our commercial solutions and Aneel signature Ed Provost dental our buy rate.

Thanks.

That's what we see so far.

Okay.

Well I mean.

Sure Jonathan.

Sure Nick.

Im not sure equal impact between the Gulf Power you can tell me what type of a bunch of trial and even though Nick sure.

I was wondering.

Thanks Daniel.

I think I'll follow you now.

No doubt.

So who may have had a bunch of material.

Yeah.

About the our manufacturer customers.

<unk> mobile of about about how we count that as a basis customer.

Alright.

Yes, yes, yes.

Yes.

Actually is growing very very fast and agile.

Article.

Right right, Yeah, I just wanted to understand.

The difference was.

Yes.

It kind of gets the Huawei cloud infrastructure provider as opposed to any kind of relationship with Huawei.

Smartphone brands, So I guess, there's maybe some central misunderstanding about.

While none of us versus LTE smartphone and blah blah blah.

No. That's right. We are now collaborating with Huawei smartphone, we are only collaborating with our cloud business.

Basically it basically they have they have to be business right. So we have the two new business. So thats a customer synergy yes, yes.

So basically I can give me on that.

Our call has.

<unk> has around 2000 sailors.

I mean, all over China.

We already have.

Number two number two in China right.

In terms of cloud currently a samba to offer a telephone call lapping.

At September to operate.

Got you okay. Okay, that's what I want to clear out. Thank you very much appreciate that.

Thank you once again for those who wish to ask a question. Please press star and the number one and weight training to be announced.

Yes.

Great questions. Please press Star then number one.

Cleaning convenience.

Okay, and I would like to hand the call.

Or is that too.

For closing remarks. Please go ahead.

Thank you Annie.

Thank you everyone for joining our call Tonight. If you have any further questions or comments, please don't hesitate to reach out to the IR team.

This concludes the call have a good night. Thank you.

Thank you ladies and gentlemen.

The conference for today, Thank you for participating.

Okay.