Q3 2022 Aurora Mobile Ltd Earnings Call

Okay.

Ladies and gentlemen, thank you for standing by and welcome to the Aurora Mobile's third quarter 2022 earnings Conference call.

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

I'll ask a question during the session you will need to press star one one telephone please be advised that today's conference is being recorded I would now like.

And the conference over to your host today, where the APAC was time. Thank you. Please go ahead.

Thank you Deskman Hello, everyone and thank you for joining us today.

What was the earnings release was distributed earlier today and is available on the IR website at IR G. Guang Dot C N.

On the call today are Mr. Wei don't rule, Chairman and Chief Executive Officer.

And Mr. Shan Nen, Bong, Chief Financial Officer, and Mr. Guan Yung Chen General manager.

Following their prepared remarks, they 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 21 E of the Securities Exchange Act of $19 34, as amended and as defined in the U S. Private Securities Litigation Reform Act of 1995.

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 or factors are incurred.

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.

Except as required under applicable law.

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

Hi, right now.

Good morning, and good evening everyone.

I remember all those tons, you're talking to a friend harder on this call.

Because I comment on our Q3 results I would like to remind everyone that the quantity of new stuff is available on our IR website, you'll may retro to the debt as we proceed with the call today.

While we continue to navigate through my call economic uncertainties.

He was a solid quarter for farmers and financial measurements in most all of our business months.

Also activity expanding our footprint into overseas markets and prioritizing opportunities for future growth.

It's bank Angel multi towers in the nature of my remarks.

We continue our cost control initiatives in the third quarter and are very pleased with our progress.

Sure some of the great key results that we wanted to share with you.

Operating expenses for the past 16 quarters since Q4, Opex kind of your 18.

The $80 million.

At 3% year over year.

Net loss is carefree oftentimes in 19.

Lead times are probably staying on median they read them by 43% year over year.

Adjusted EBITDA and net Covid related.

So it's probably the same immediate Sydney for sensory input by 58%.

Deferred revenue balance is the highest in the history of the company.

You're welcome Joel freight, but did not meet it.

Total customer numbers up 71% year over year to 4655.

Hey afternoon, what days significantly inputs by eight days from 46 days in Q2, what types of furniture for eight days, despite the tough business environment.

I'm sure everyone on the call ahead, Scott Henry.

Hey, Matthew.

One of the worlds.

Not just social media company recently looking at the our decision to stop restructuring and cost cutting in the second half oftentimes if anyone could not have been wiser.

<unk> been slow and one in Mexico to have a decision now we would be in a much worse financial situation.

That's what these key financial highlights.

In past few quarters.

Very proud that our team has stayed together and execute well.

To have the company become leaner and more efficient I am confident that we will come out of this difficult times on a stronger.

This quarter.

The record another quarter with historically low operating expenses lever of Renminbi median.

Plenty of 3% year over year.

Net loss is also that she has killed kill freight uptick in 19, and there may be times at Pike, seven meter narrowing down by 42% year over year.

One of our main goals going into Q4 and financial year 'twenty to 'twenty three is to ensure we continue to operate efficiently.

Okay, great grow revenue faster than expenses.

And the other encouraging signs from that revenue perspective.

You saw a sequential revenue growth in most of our basis in on.

This quarter.

Anticipated anticipating more recovery and growth.

Oh, yeah two qualities.

They trend however, the sequential growth in all business lines is a major positive sign for us.

Yeah.

That's a global and domestic economies.

Currently calling for some May Johnson and entrees.

Look at sequential revenue growth as more indicative of the health, obviously, it's impossible that restaurant will change.

We have done.

We want to see the sequential trends continue for several more quarters before we are comfortable saying that things are back.

That's a normal.

Now let me go for that different revenue streams within that book.

Matt I'm not sure if I say its revenue increased by 3% quarter on quarter to 57 meter Rachel was many due to the increase in subscription services.

You bet I play services decreased by 12%, mainly due to the weakness in matter of Azure services offset by the growth in subscription and services.

The question is I'll say it this revenue will be a bunch of $1 7 million up 9%.

Although over quarter and up 5% year over year.

So I'll say this our core business and I encourage a push on Medicaid.

Our products and services.

<unk> and enterprise to improve down Akshay option now.

Great operator.

No efficient the increasingly apple.

The growth in revenue and we managed to grow our customer base.

Several well known as I spoke customer, including Idiots again stop Ross <unk> and can you again, just one I hope you.

I guess I'd say, just revenue decreased quarter on quarter by 9% year over year by 49% to renminbi 15 funds.

Keep timeframe meter as we saw market demand further price ads and advertisers continuing to capex budgets.

It's quite visible as similar to those reported by larger advertisement pipelines.

Direct cost that much more.

More than.

75% of the J J I'll add that revenue stream loud that Kevin Brown.

For a party of edges major customer over J J I'll answer.

Ill repeat customer and market leaders across many industry verticals key customer not to include that Baidu Alibaba Tencent and.

And so although we believe that these franchise are temporary and they get.

I would tell you the market is bad debt to talk about.

We are taking actions and continue to alright, prioritizing our resources on projects that will drive the most of the growth with the launch of our E D.

Speaker 1: our resources on projects that will drive the most growth. With the launch of our AD mediation platform in Q2, over 3 million DAUs and over 40 apps have joined the platform and we are anticipating more DAUs to join our platform in Q4. Services enabling traffic monetization for our ADs.

The Asia Pac front in Q2, our framing NDA USA over 40 apps.

And we are anticipating more.

Strong Opex line Q4 services, enabling choppy choppy monetization for our tight.

Ladies have become an important driver is fair in the development of the mobile Internet ecosystem.

That's a major mobile at mutations have fronts have a surprise overseas is that pricing is very efficient market.

Speaker 1: have become an important driver during the development of the mobile internet ecosystem.

Speaker 1: As the major mobile app mediation platform has spread overseas in established markets such as APB Levy, Iron Source and Mopup, we are also striving to help the developers directly grow and improve monetization efficiency.

People love it.

And we are also striving to have to do better pistol rep date growth and improved monetization efficiency.

We put some emphasis on coping with the near term uncertainties quake consistently stay focus on our long term strategy of spending off basically its the overseas sales away, but even with that obviously is becoming a substantial globe for strategy for Chinese companies.

Speaker 1: While we put some emphasis on coping with the near-term uncertainties, we consistently stay focused on our long-term strategy of expanding our business overseas since we believe that going overseas is becoming a substantial growth strategy for Chinese companies. After several months of our team's effort, in mid-October, we launched our overseas messaging service platform. The anybody who can help you is Shot!

After several months of our team's effort in mid October we launched obviously messenger and some of it's prevalent in catching up.

Although you can get a better place to reach for all of our users if they should stay where they are if activity is a major milestone for us since we can now have a broke the Chinese companies and overseas based the company still carrying.

Your friend and a great real estate reach and engagement at low cost with higher message delivery rates and conversion rates I in my utilization our website at www dot engaged laptop call to see for yourselves.

Speaker 1: and conversion rates. I invite you to visit our website at www.engagedlab.com to see for yourself.

At present.

Engage at that provides five major services, including a P. P push wrappers email sure if they say that's unmatched surface and whatsapp business API.

Speaker 1: App Present. EngageLab provides five major services including app push, web push, email services, SMS services and WhatsApp business API and exploring additional messaging channels in overseas markets.

Exploring additional messaging channels in overseas markets.

Based on the current the border and nature of jewelry from our from both Chinese companies going overseas and C space. The companies. We are very pleased with our progress.

Speaker 1: Based on the current volume and nature of our inquiry from both Chinese companies going overseas and overseas-based companies, we are very pleased with our progress. We believe we have a set of tools and services that meet the market demand, and we are in the best possible position to tap into the growth in this segment of the market going forward.

We have a set of tourists and southeast that meet that about 50 mile and we are in the best possible position to tap into that growth in this segment of the market going forward.

Alright, we will provide regular updates on these spaces in a future call tourists randon umbrella a material.

Speaker 1: We will provide regular updates on these pieces in the future quarters when the numbers are material. With that, I will now pass the floor over to Shanlin who will share more information about the vertical applications and other aspects of our performance.

With that I will now pass the call over to Shannon, who will share more information about that.

Medical applications.

Off of it.

Thanks, Chris.

Let me provide some colors on the vertical application business.

Speaker 2: Thanks Chris.

In this quarter, we have seen sequential growth, but the code application revenue, which is very encouraging.

Speaker 2: And now let me provide some colors on the vertical application business.

Speaker 2: In this quarter, we have seen such sequential growth in vertical application revenue, which is very encouraging.

But think of applications, mainly consists of financial risk management and market intelligence.

Speaker 2: Particular applications mainly consist of financial risk management and market intelligence.

What type of application revenue increased by 12%.

Over quarter and decreased by 9% year over year.

Speaker 2: Vertical application revenue increased by 12% quarter over quarter and decreased by 9% year over year.

In the financial risk management segment revenue increased by 20% quarter over quarter to renminbi, $14 4 million and decreased by 7% year over year.

Speaker 2: In the financial risk management segment, revenue increased by 20% quarter over quarter to RMB 14.4 million and decreased by 7% year over year.

The financial risk management quarter over quarter revenue growth was mainly due to the increase in customer numbers as the month has shown good growth over the quarters.

Speaker 2: Thank you.

Speaker 2: was mainly due to the increase in customer numbers as demand has shown good growth over the quarters.

While our financial risk management team has pushed continuously to establish deeper connection with our key customers. That's also discover more opportunities with our existing client base.

Speaker 2: While our Financial Risk Management team has pushed continuously to establish deeper connections with our key customers, it has also discovered more opportunities with our existing client base.

Also our ongoing improvement in addition to the product mix.

Speaker 2: Also, our ongoing improvement and additions to the product mix have helped us signing up many more new clients and renew customer, including but not limited to two xiao man, higher xiao facing room.

Help us signing up many more new clients and renew customer, including but not limited to do sell model higher so.

Operating room.

One quick thinker and.

Hum.

Our market intelligence services delivered strong revenue growth up 23% quarter over quarter and up 24% year over year to renminbi $8 9 million.

Speaker 2: Wong Hui, Jin Ke, and Guang Fa Yinhan.

Speaker 2: Our market intelligence services deliver strong revenue growth up 23% quarter over quarter and up 24% year over year to RMB 8.9 million.

During this quarter, we have further cemented our strategy to retain key customers from both PRC in overseas market.

Speaker 2: During this quarter, we have further cemented our strategy to retain key customers from both PRC and overseas markets.

And we signed up numerous well known customer, including but not limited to.

Morningstar Xinhua University.

Speaker 2: And we sign off numerous well-known customers including but not limited to

Hi Chi keep.

Speaker 2: Morningstar, Tsinghua University.

And its all opinion of evil.

Speaker 2: IGE keep students talking and people

I'll now go through some of our key expenses and balance sheet items.

Speaker 2: I will now go through some of our key expenses and balance sheet items.

Onto operating expenses.

As Chris mentioned earlier tightening expenses control has been a theme over the past few quarters.

Speaker 2: onto operating expenses.

Speaker 2: As Chris mentioned earlier, tightening Spencer's control has been the theme over the past few quarters.

And by doing so we have achieved very solid results with pilots through these tough times.

Speaker 2: And by doing so, we have achieved very solid results to tie us through these tough times.

And we have we have had another record quarter for operating expenses at <unk> 80.

Speaker 2: And we have had another record low quarter of operating air sensors at 80 million, down 23% year over year.

<unk> million dollars <unk> percent year over year.

All three components within operating expenses category has recorded year over year reduction.

Speaker 2: All three components within Operating Expenses category has recorded year-over-year reduction.

In particular R&D.

R&D expenses decreased by 31% to renminbi $38 3 million.

Speaker 2: In particular...

Speaker 2: R&D expenses decreased by 31% to RMB 38.3 million.

Mainly due to lower head count there.

The reduced salary cost and associate that share based compensation and.

Speaker 2: mainly due to lower headcounts that reduce salary costs and associated share-based compensation.

And a decrease in cloud costs as a result of improvement and optimization of our cloud platform.

Speaker 2: and a decrease in cloud costs as a result of improvement and optimization of our cloud platform.

Selling and marketing expenses decreased by 18% to renminbi $24 2 million.

Speaker 2: Selling and marketing expenses decreased by 18% to RMB 24.2 million, mainly due to the decrease in our headcount by 42, and the marketing expenses and salary costs decreased accordingly this quarter.

Mainly due to the decrease in our head count by 42, and the marketing expenses and salary costs decreased accordingly this quarter.

G&A expenses decreased by 7% to around $17 6 million, mainly due to salary costs, which is the result of a reduction in head count.

Speaker 2: GNA expenses decreased by 7% during the P17.6 million, mainly due to salary costs which is the result of a reduction in headcount.

Adjusted EBITA improved by 58.

But then year over year and by 16% quarter over quarter, respectively to a negative <unk> $6 7 million.

Speaker 2: adjusted EBITDA improved by 58% year over year and by 16% quarter over quarter respectively to negative 6.7 million.

Our company wide effort to optimize headcount and operating expenses has continued to pay off and you had good results for us.

Speaker 2: Our company-wide effort to optimize H-Count and operating expenses has continued to pay off and yielded good results for us.

And below other highlights that I want to recap.

In this quarter, we have had the lowest operating expenses for the past 16 quarters since Q4 of 2018.

Speaker 2: and below are the highlights that I want to recap.

Speaker 2: In this quarter, we have had the lowest operating advances for the past 16 quarters since Q4 of 2018, at RMB 18 million, decreased 23% year-over-year.

Let me be 80 million decreased 23% year over year.

We had the lowest net loss since Q3 of 2019 and negative.

Speaker 2: We had the lowest net loss since Q3 of 2019 at negative RMB 20.4 million, narrowed down by 43% year over year.

We're gonna be $20 4 million narrowed down by 43% year over year.

As mentioned adjusted EBIDTA at negative $6 7 million improved by 58.

Speaker 2: As mentioned, adjusted EBITDA at negative 6.7 million improved by 58% year over year. Then we had the lowest adjusted operating expenses, which represent the cash component of OPEX since Q1 of 2019 at RMB 66.9 million decreased by 24% year over year.

<unk> year over year.

Then we had the lowest adjusted operating expenses.

Represent the cash component of Opex since Q1 of 2019 at Reuben P $66 9 million decreased by 24% year over year.

And onto the balance sheet.

Oh sure sure two very key Kpis that we closely monitor.

Speaker 2: And on to the balance sheet.

Speaker 2: I will again share two very key KPIs that we closely monitor.

Firstly, the al turnover days decreased from 46 days in Q2 2022 to 38 days.

Speaker 2: Firstly, the AR turnover days decreased from 46 days in Q2 2022 to 38 days.

Oh disciplined accounting policy and cash collection efforts and ensure timely collection of our accounts receivables.

Speaker 2: Our discipline accounting policy and cash collection effort ensure timely collection of our accounts receivables.

And this is very important to mitigate the exposure to bad and doubtful debts. During this particularly challenging times.

Speaker 2: And this is very important to mitigate the exposure to bad and doubtful deaths during these particularly challenging times.

And secondly, one of our key financial Kpis for tracking the performance of SaaS companies.

Speaker 2: And secondly, one of the key financial KPIs for tracking the performance of SaaS companies, the total deferred revenue, which represent cash collected in advance from customer for future contract performance.

The deferred revenue, which represents cash collected in our bonds from customer for future contract performance.

We recorded the highest balance in the history of the company at <unk> hundred $39 1 million.

Speaker 2: We recorded the highest balance in the history of the company at RMB 139.1 million.

Another angle.

On this matter our deferred revenue balance is continually growing and exceeded 100 million at quarter end for 10 consecutive quarters.

Speaker 2: Another angle on this matter, our deferred revenue balance has continually growing and exceeded RMB 100 million at QN for the 10 consecutive quarters.

And he has demonstrated excellent health condition of our financial Kpis under the salt business.

Speaker 2: And this demonstrates the excellent health condition of our financial KPI under the SAS business.

Our next.

That's what we're going to be 445 million as of September 30 of 2022, and this includes cash and cash equivalent of one 8 million.

Speaker 3: The next.

Speaker 2: Total assets were RMB 4.5 million as of September 30th 2020.

Speaker 2: million as of September 30th, 2022.

Accounts receivable of 32 million.

Speaker 2: and this includes cash and cash equivalent of 108 million.

Prepayments and other current assets of 32 million.

Speaker 2: accounts receivable of 32 million.

Fixed assets of $42 9 million long term investment of $142 9 million.

Speaker 2: prepayments and other current assets of 32 million.

Speaker 2: fixed assets of 42.9 million, long-term investment of 142.9 million, goodwill of 37.8 million and intangible assets of 25.2 million resulted from the...

$37 8 million and intangible assets of $25 2 million resulted from the.

Central acquisition in March 2022.

And so the current liabilities to treat $8 4 million as of September 30 of 2022.

Speaker 2: central acquisition in March 2022.

Speaker 2: And total current liabilities were at 238.4 million as of September 30th, 2022.

This include our.

Accounts, or so accounts payable or $17 5 million.

Speaker 2: This includes.

<unk> had revenue of $132 7 million in accrued liabilities of $88 2 million.

Speaker 2: accounts payable of 17.5 million, deferred revenue of 132.7 million and accrued liabilities of 88.2 million.

And lastly, before I conclude shall give a quick update on the share repurchase plan.

Speaker 2: And lastly, before I conclude, I shall give a quick update on the shared repurchase plan.

In the quarter ended September 30 of 2022, we repurchased 27000, eds and cumulatively, we have repurchased a total of 94 8000 eds.

Speaker 2: In the quarter ended September 30th 2022, we repurchased 27,000 ADS and cumulatively we have repurchased a total of 948,000 ADS.

Since the start of our repurchase program.

And with this.

Speaker 2: since the start of our repurchase program.

Concludes management prepared remarks, well be happy to take the question now operator.

Speaker 2: And with this...

Speaker 2: concludes the management prepared remarks. We're happy to take the question now. Operator

Thank you Yossi.

As a reminder to ask a question you will need to press star one on your telephone please standby, while we compile the Q&A roster.

Speaker 4: Thank you. Thank you.

Speaker 5: As a reminder to ask a question, you will need to press star 11 on your telephone. Please stand by while we compile the Q&A roster.

One moment for the first question.

First question is from the line up Brian <unk> from Alliance Global. Please proceed.

Speaker 5: One moment for the first question.

Speaker 5: First question is from the line of Brian Kingslinger from Alliance Global. Please proceed. Please proceed.

Hi, there this is <unk> on for Brian Thanks for taking my questions.

Just wanted start with now that we're halfway through the fourth quarter. How is it looking so far compared to the third quarter should we be expecting similar results or are you seeing any new trends that you're going to move to.

Speaker 6: Hi there, this is Shervin on for Brian . Thanks for taking my question.

Speaker 6: I just want to start with now that we're halfway through the fourth quarter, how is it looking so far compared to the third quarter? Should we be expecting similar results or are you seeing any new trends that you can allude to? Do you want to test particular trends for the Threat cerquez?

Hi, This is Shannon thanks.

Thanks for the question, yes based on the trajectory that we've seen to date Q4.

Speaker 2: This is Shannon. Thanks for the question. Yes, based on the trajectory that we have seen to date, Q4, we should be able to achieve a sequential growth again in this quarter. So things start to pick up and we do see sign of recovery for most, if not all of our businesses.

Should be able to a cheaper sequential growth again.

In this quarter, so things start to pick up and we do see sign of recovery for most if not all of our businesses.

Yes.

Thank you.

Another question you guys mentioned, the abundance and deferred revenue, so which segment if any do you see unusual strength in which you see unusual weakness if any and why do you think that do you think this is affecting your growth in any way.

Speaker 6: Thank you.

Speaker 6: Another question, you guys mentioned the abundance in deferred revenue. So which segments, if any, do you see unusual strength in, and which do you see unusual weakness, if any? And why do you think that is? Do you think this is affecting your growth in any way?

No.

There are a few of the layers in terms of the make up of deferred revenue.

Speaker 7: Thank you.

Yes, mainly coming from the subscription business and vertical application because GG.

Speaker 2: To peel off the layers in terms of the makeup of deferred revenue, they are mainly coming from the subscription business and vertical application. Because the value-added services are mainly advertising based, so those customers are unlikely to prepay. So the main focus or the component of deferred revenues are coming from subs and vertical application.

Value added services.

The advertising base. So those customers are unlikely to prepaid so the main focus or the component of deferred revenues are coming from subs and what to go obligation. So I didn't we do not see any.

Any weakness in terms of where it's coming from but I guess based on the balances that has been growing.

Speaker 2: So, we do not see any weakness in terms of where it's coming from.

We have no concern and we do see strength on this quarter over quarters.

Speaker 2: I guess based on the balances that have been growing, we have no concern and we do see strength on this quarter over quarter.

Great. Thank you so much.

That's all I have.

Thank you for the questions.

Speaker 6: Great, thank you so much.

Speaker 8: That's all I have.

Speaker 5: Thank you for the questions.

As a reminder, if you'd like to ask a question. Please press star one.

Okay.

Speaker 5: As a reminder, if you'd like to ask a question, please press star 1 1.

Speaker 9: Thank you..

One moment for the next question.

Oh.

We have to like the questions from the line of Calvin Wong from <unk> capital. Please proceed.

Speaker 5: One moment for the next question.

Speaker 10: How?

Speaker 5: We have the questions from the line of Kelvin Wong from Spica Capital. Please proceed.

Okay.

Hi management.

Many thanks for taking my question I would like to have three question if I may.

Speaker 2: Hi, management. Many thanks for taking my question. I would like to have three questions, if I may. The first one is related to the launch of EngageLab for overseas customers. Could you provide more insights on the EngageLab platform for us?

The first one is <unk>.

Weighted to the launch of engaged therefore overseas.

Customers.

Could you provide more insights on.

And Google platform for Us.

That's the first question.

And the second question.

We have noticed that you have started cooperating with BYD ball spaces in Europe , So would love to hear more about the details on that so the second question is related to your cooperation with BYD.

Speaker 2: That's the first question. And the second question, we have noticed that you have started cooperating with BYD for its business in Europe . So we'd love to hear more about the details on that. So the second question is related to your cooperation with BYD.

And finally, a more financial related question.

We noticed that you have done a good job.

Speaker 2: And finally, a more financial related question. We noticed that you have done a good job in managing the outpass. So appreciate if you could share with us how this outpass is trending in the next few quarters. And also, if you can, when you could you also share with us when are we expecting the company to turn from E

Managing the Opex so.

Appreciate if you could share with us how this opex is trending in the next few quarters.

So.

You can win could you also share with us when we are expecting the company to come closer tape at adjusted EBITDA.

Thanks.

Yes, sure Kevin Let me recap your question for the first one you're asking about the anguish left for our overseas customer right.

Yes.

Okay. So actually it is part of our plan to facilitate this audio are Chinese companies going overseas and we have launched this anguish lab.

And Sean just to ensure that the Chinese companies can carry out the refi and accurate user reach overseas.

Speaker 2: And we have launched this Engage Lab, in short, just to ensure that the Chinese companies can carry out the refined and accurate user reach overseas with our

Low cost and high efficiency rate that we can offer.

Looking at our English lab actually we are committed to offering omnichannel messaging solution to global.

Speaker 11: low cost and high efficiency rate that we can offer. If you look at our Engage Lab, actually we are committed to offering omni-channel messaging solution to global.

Enterprise and developers and <unk>.

As we have as we have mentioned in our press release at present Anguish lab provides five major services, including pushed web push email service SMS services and Whatsapp and we are at the moment exploring additional messaging channels in overseas market as well.

Speaker 11: enterprise and developers and

Speaker 11: As we have mentioned in our press release at present, EngageLab provides five major services, including App Push, Web Push, Email Service, SMS services, and WhatsApp. We are at the moment exploring additional messaging channels in the overseas market as well.

So besides the Chinese companies venturing overseas.

We believe our English lab is also well suited to overseas developers, who have the needs to reach their customers in a more efficient and effective ways.

Speaker 11: So besides the Chinese companies venturing overseas...

Speaker 11: We believe our Engaged Lab is also well suited to overseas-based developers who have the needs to reach their customers in a more efficient and effective way.

And hopefully I can give you some colors in terms of where we are and up until recently, we have signed up more than 15, one five overseas based customer with many more in the pipeline. So.

Speaker 11: and probably I can give you some colors in terms of where we are. And up until recently, we have signed up more than 15, overseas-based customers with many more in the pipeline.

So we believe that this strategy to put our resources in English lab.

For overseas customer all four Chinese companies going overseas is the right one and definitely we delivered positive results in the near future.

Speaker 11: So we believe that this strategy to put our resources in EngageLab.

Speaker 11: for overseas customers or for Chinese companies going overseas is the right one and definitely we will deliver positive results in the near future

And I hope this answer your question.

Looking at mining.

Speaker 11: And I hope this answers your question.

Okay sure.

Second question I have is with regards to be widely.

Speaker 12: And if I look at my notes...

Speaker 11: Okay, sure. And the second question we have is with regards to BYD in Europe , and that's one of the press releases that we have made recently. I can give you some background in terms of the cooperation. So this is in late, I think it's late September , we have entered into this agreement with BYD for them to launch their services in...

In Europe , and that's the one of the press release that we have.

Recently I can give you some background in terms of the corporation. So this is a late I think it was late September we have entered into this agreement with BYD for them to launch <unk> services in.

Northern Europe in particular in this in the country of Norway, where they have delivered more than 1000 pure electric SUV in Norway.

Speaker 11: Northern Europe , in particular in the country of Norway, where they have delivered more than 1,000 pure electric SUVs in Norway.

So leveraging on our messaging solution. So we are able to help us effectively carry out.

Speaker 11: So leveraging on our messaging cloud solution, so we are able to help BYD effectively carry out the user reach in that particular market and improve their messaging experience for their users.

So rich in Denmark in depth in that particular market and improve their messaging experience for their users.

So.

Apart from the so called messaging delivery system.

Speaker 11: So apart from the so-called messaging delivery system, we believe that Chinese companies face various security compliance requirements, especially in Europe , where GDPR is very stringent.

We believe the Chinese company faced various security compliance requirements, especially in Europe , where GDP is is very stringent.

So I believe our solution is well cater for Chinese company based Chinese based companies going overseas and in particular with our experiences in stable and quality messaging and data compliance competency I think we believe we are the service provider of choice, we don't any adults.

Speaker 11: So I believe our solution is well catered for Chinese-based companies going overseas, and in particular with our experiences in stable and quality messaging and data compliance competency. I think we believe we are the service provider of choice without any doubts.

And I guess with this project we view it.

That will open more doors for us in securing in securing more similar contracts overseas and do look for our future press releases in this matter.

Speaker 11: And I guess with this project with BYD, we think that it will open more doors for us in securing more similar contracts overseas. And do look out for our future press releases in this matter.

And then Kevin and what was your third question.

Okay. So first question again.

Speaker 11: And what was your third question?

One is about the trend in the coming trend.

Speaker 2: Okay, the third question again, two things. One is about the trend, the coming trend of your OpEx because you know you've done a very good job in managing the OpEx over the past few quarters. So we'd like to hear from you about the trend of OpEx in the coming few quarters. And secondly, very straightforward.

Opex because you've done a very good job in managing the I'll pass over the past few quarters. So we'd like to hear from you about the trend of Opex in the coming few quarters and secondly, very straightforward.

Going to your expense.

EBITDA and adjusted.

Adjusted EBITDA at the time cause appear.

Speaker 2: when are we going to expect the EBITDA to turn, just take EBITDA to turn positive

Sure sure.

That's a tough question.

I guess based on the financials.

Speaker 11: Sure, sure. That's a tough question. I guess based on the financials that we have released for the past few quarters, we have seen we have proactively controlled our operating expenses over the past four to five quarters, and we have made really good progress.

<unk> released for the past few quarters.

You have seen we have proactively controlling our operating expenses over the past four to five quarters and we have made really good progress.

As mentioned by Chris and myself for the third quarter. This year, we have the lowest operating expenses for the past 16 quarters. We have the record low net loss since Q3 of 2019, and adjusted EBITA continued to improve by 58% year over year.

Speaker 11: And as mentioned by Chris and myself, for the third quarter this year, we have the lowest operating expenses for the past 16 quarters. We have the record low net loss since Q3 of 2019 and our adjusted EBITDA continue to improve by 58% year over year.

And.

I must say that Oh this achievement by no means easy more straightforward and it was.

Speaker 11: And I must say that all these achievements are by no means easy nor straightforward.

Or due to our team's effort to execute this cost reduction plan continuously quarter over quarter.

Speaker 11: all due to our team's effort to execute this cost reduction plan continuously, quarter over quarter.

And probably as you are aware our cost control initiative is an ongoing process.

Speaker 11: And probably as you are aware, our cost control initiative is an ongoing process.

And the operating expenses perspective, we believe we are at a pretty optimized level now and buy steel internally, we are challenging our departmental hits to keep.

Speaker 11: and the operating advantage perspective, we believe we are at a pretty optimized level now but still, internally we are challenging all department heads to keep

The company's expenses at the lean and the more effective level.

And I haven't seen that I think.

Speaker 11: the company's expenses at the lean and more effective level.

There could be some unforeseen events in the <unk>.

Speaker 11: And having said that, I think...

At this moment that might be potentially to the scale and we have to.

Speaker 11: there could be some unforeseen events at this moment that might potentially kill the scale. And with the overall global macroeconomic uncertainty, at this point we do not give any specific timing as to when we will turn.

Overall global macro economic uncertainty at this point, we do not give any specific timing as to when we open.

Positive fall adjusted EBIDTA.

So long as we keep our operating expenses at the optimal level and we believe that when the economy recovers and intend revenue continued to grow and turning adjusted EBITDA positive is the only natural course of events.

Speaker 11: Positive for our adjusted EBITDA.

Speaker 11: I guess so long as we keep our operating expenses at the optimal level and we believe that when the economy recovers and in turn revenue continue to grow and turning adjusted if cost positive is the only natural cause of event.

They are back.

Yes, that's my answer to your question Kevin.

Okay very clear thanks.

Speaker 11: That's my answer to your question, Kevin.

Thank you for the questions.

At this time there are no further questions from the line I would like to hand, the call back to Rene for closing remarks.

Speaker 13: OK, very clear. Thanks.

Speaker 5: Thank you for the question.

Speaker 5: At this time, there are no further questions from the line. I would like to hand the call back to Renee for closing remarks.

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.

Speaker 14: Thank you everyone for joining our call tonight.

Speaker 14: If you have any further questions or comments, please don't hesitate to reach out to the IAR team.

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

Ladies and gentlemen, you may now disconnect your lines.

Speaker 14: This concludes the call. Have a good night. Thank you.

Speaker 5: Ladies and gentlemen, you may now disconnect your lines.

Okay.

The conference will begin shortly to raise your hand during Q&A you can dial star one one.

Speaker 15: The conference will begin shortly. To raise your hand during Q&A, you can dial star 11.

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