Q1 2024 Aurora Mobile Limited Earnings Call
Okay.
Operator: Ladies and gentlemen, thank you for standing by, and welcome to Aurora Mobile's first quarter 2024 earnings conference call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your host today, Rene Vanguestaine. Thank you. Please go ahead, sir.
Speaker Change: Ladies and gentlemen, thank you for standing by and welcome to our ROE around mobile first quarter 'twenty 'twenty four earnings conference call.
Speaker Change: At this time all participants are in a listen only mode.
Speaker Change: After the Speakers' presentation, there'll be a question and answer session.
Speaker Change: To ask a question. During this session you will need to press star one on your telephone you wouldn't hear in all the major message advising Yohan is raised to withdraw your question. Please press star one again.
Speaker Change: Please be advised that today's conference is being recorded.
Rene Vanguestaine: I'd now like to hand, the conference over to your host today Rene Pakistan. Thank you. Please go ahead Sir.
Speaker Change: Thank you Brenda.
Rene Vanguestaine: Hello, everyone, and thank you for joining us today. Aurora Mobile's earnings release was distributed earlier today and is available on the IR website at ir.jiguang.cn. On the call today are Mr. Shannon Bong, Chief Financial Officer, and Mr. Guan Yang, Chef Chen, General Manager. Following their prepared remarks, they will be available to answer your questions during the Q&A session that follows. 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.
Rene Vanguestaine: Hello, everyone and thank you for joining us today.
Speaker Change: Aurora Mobile's earnings release was distributed earlier today and is available on the IR website at IR adopt G Guang Doxy and.
On the call today are Mr. Shan, Nen, Bong, Chief Financial Officer, and Mr. Guan Young Jeff Chen General manager.
Speaker Change: Following their prepared remarks, there will be available to answer your questions. During the Q&A session that follows.
Rene Vanguestaine: 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 statement. Further information regarding these and other risks, uncertainties, and factors is 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.
Speaker Change: 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 1934 as amended.
And as defined in the U S Private Securities Litigation Reform Act of 1995.
Speaker Change: 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.
Speaker Change: Could differ materially from those in the forward looking statements.
Speaker Change: Further information regarding these and other risks uncertainties or factors are included in the company's filings with the U S Securities and Exchange Commission.
Speaker Change: The company does not undertake any obligation to update any forward looking statement as a result of new information.
Speaker Change: Events or otherwise.
Speaker Change: Except as required under applicable law.
Rene Vanguestaine: With that, I will turn the conference over to Mr. Bong. Please go ahead.
Speaker Change: With that I will turn the conference over to Mr. Banca <unk>. Please go ahead.
Thanks Ronnie.
Mr. Bong: Greetings to all. Welcome to Aurora Mobile's 2024 First Quarter Earnings Call, and thank you for our callers and listeners today. I would like to note that our CEO, Chris, is on a business trip and is not able to attend the call today. And today, in Chris' absence, I shall have the privilege of sharing with you all the great quarter we have. Before I comment on our Q1 results, I would like to remind everyone that the Quarterly Earnings Deck is available on our website. You may refer to the deck as we proceed with the call today.
Mr. Banca: Greetings to all.
Speaker Change: Onto our mobile too.
Speaker Change: 2024 first quarter earnings call.
Speaker Change: Well I'll call it at least for that today.
Speaker Change: I would like to know that our CEO, Chris is a business trip.
Speaker Change: He is not able to attend the call today.
Speaker Change: And today, Chris absence.
Speaker Change: I have the privilege to share with you all on the great quarter, we have.
Speaker Change: Before I comment on our Q1 results I would like to remind everyone that the quarterly earnings deck is available on our website you may refer to the deck as it proceeding with the call today.
Mr. Bong: Similar to the prior quarter on what Chris did, based on the Q1 numbers, I shall give an appropriate description for the performance of this quarter, and it would be a great start to 2024, and the reasons are as follows. Firstly, as far as managing the business went, I think we have done a great job. In this quarter, we recorded the third consecutive quarter of positive adjusted IPTAR.
Speaker Change: Similar to the prior quarter on what Chris has done based on the Q1 numbers.
Speaker Change: I shall give us appropriate description for the performance of this quarter.
Speaker Change: And it would be a great start to 'twenty 'twenty four.
Speaker Change: And the reasons.
Mr. Bong: Secondly, developer subscription revenue recorded a 13% revenue growth year-over-year, showing great growth momentum over the years. Thirdly, our gross margin grew both year-over-year and quarter-over-quarter. Fourthly, we are continuing to operate at a low level of OPEX, leveraging on our operational efficiency improvement over the past year.
Speaker Change: Follows.
Speaker Change: Firstly as far as the managing the business way.
Speaker Change: We have done a great job.
Speaker Change: In this quarter, we have recorded the third consecutive quarter of positive adjusted EBITDA.
Speaker Change: Secondly, developers subscription revenue record of 13% revenue growth year over year, showing great growth momentum over the years.
Certainly our gross margin grew both year over year and quarter over quarter.
Speaker Change: Fourthly, we are continuing to operate at a low level of Opex.
Speaker Change: Bridging on our operate should note efficiency improvement would upon.
Speaker Change: Our opex in this quarter is that historic low since our IPO.
Mr. Bong: Our OPEX in this quarter is at a historic low since our IPO. Last but not least, our star overseas product, Engage Lab, recorded excellent customer number and contract value growth this quarter again. I believe all of you would agree that we have a great Q1 for 2024. We are truly looking forward to building up the momentum for the next few quarters with even more exciting numbers. Next, let me share with you more.
Speaker Change: Last but not least our stock.
Speaker Change: With this product and it gets to that.
Speaker Change: Excellent customer number and kantar.
Speaker Change: High value growth this quarter again.
Speaker Change: I believe all you would agree that we have a great Q1 for 2024.
Speaker Change: We're truly looking forward to building up the momentum for the next few quarters with even more exciting numbers.
Speaker Change: Next let me share.
Speaker Change: Share with you more.
Mr. Bong: For total group revenue, it remained consistent at RM65 million, in particular, developer service revenue recorded a 2% year-over-year decline, and vertical application revenue decreased by 1% year-over-year. Developer service revenue, which consisted of subscription revenue and value-added services, decreased by 2% year-over-year. And with this developer service, subscription revenue increased 13% year over year, but was offset by a 70% decrease in value-added services. Next, I shall dive deeper into each piece of the line.
Speaker Change: Total group revenue remain consistent at <unk> $65 million in particular.
Speaker Change: Developers service revenue record at a 2% year over year.
Speaker Change: Flight and the particular application revenue decreased by 1% year over year.
Speaker Change: Develop a service revenue, which causes stood of subscription service and value added services decreased by 2% year over year.
And we did develop a service subscription revenue increased 13% year over year, but was offset by a 70% decrease in value added service.
Speaker Change: Next I shall dive deeper into each business line.
Mr. Bong: For such a business, revenue was at RM42.4 million, up 13% year-over-year, but declined 13% quarter-over-quarter, as Q4 is the usually the highest year-end quarter for each year. The 13% year-over-year growth was mainly driven by a 12% increase in ARPU. For year-over-year comparison, the high-year ARPU was mainly contributed by the completion of more private cloud projects in 2024. Another key factor for this 13% revenue is Year-over-year growth was due to revenue generated from EngageLab. The English Lab recognized revenue has increased 10 times year over year, and I shall elaborate more on the Engage Lab business later.
Speaker Change: Okay.
Speaker Change: <unk> business revenue were at <unk>, $42 4 million up 13% year over year.
Speaker Change: But declined 13% quarter over quarter.
Speaker Change: As Q4 is usually high quarter for each year.
Speaker Change: The 13% year over year growth was mainly driven by a 12% increase in our pool.
Speaker Change: For year over year comparison, the higher output was mainly contributed by completion of more private cloud projects in 2024.
Speaker Change: Another key factor.
Speaker Change: For this 13% revenue.
Speaker Change: Growth was due to the revenue originated from English lab.
Speaker Change: The English.
Speaker Change: We recognize revenue has increased 10 times year over year.
Speaker Change: And I'll show you elaborate more on English lab business later.
Mr. Bong: And with this subscription revenue, some of the notable new and renewal customers in this quarter include but are not limited to Volkswagen China, Sunfeng Express, Huawei, Coty Coffee, and Mihayu, just to name a few. Value-added service revenue was at $2.4 million, decreased 70% year-over-year and decreased 64% quarter-over-quarter, which was due to the lack of a major online shopping event in Q1.
Speaker Change: And we do subscription based solution revenue some of the notable new and renew a customer in this quarter include but not limited to walk smack in China soon.
Speaker Change: Pseudophone espresso quality coffee coffee and <unk> just to name a few.
Speaker Change: And value added service revenue were at $2 4 million decreased 70% year over year and decreased 64% quarter over quarter, which was due to lack of the major online shopping event in Q1.
Mr. Bong: And this low revenue in Q1 is within our expectation. However, we do foresee this business to bounce back in Q2 in anticipation of the 6-18 online shopping event. Next, let me share with you the great numbers we have recorded in our NLEG business in the first quarter of 2024. Firstly, by March 31st, 2024, I'll tell you that our customer number has grown again from 170 to more than 220. We continue to make great progress in new customer acquisition in the overseas market.
Speaker Change: And this low revenue in Q1 is within our expectation.
Speaker Change: However, we do foresee this business to bounce back in Q2 in anticipation of the 618 online shopping event.
Speaker Change: Next let me share with you on the great numbers, we have recorded.
Speaker Change: Our ela business in first quarter, often you're doing for.
Speaker Change: Firstly by March 31, 22 for our English that.
Customer number has grown again from 172 more than 220.
Speaker Change: We continue we continue to make great progress in new customer acquisition in the overseas market.
Mr. Bong: More and more new customers have signed up with us as they are seeking a reliable push and email service provider who can help them to improve message delivery rates and user engagement. Secondly, the cumulative signed contract value of Engagelab has another 60% QOQ growth, bringing the total cumulative contract value to more than 24 million RMB by Q1 of 2024, representing a 9 million growth quarter over quarter. Our English Lab overseas customer bought both our public and private cloud versions of our push service.
Speaker Change: More and more new customers have signed up with us.
Speaker Change: They are seeking reliable push an email service provider, who can help them to improve message delivery rate and user engagement.
Speaker Change: Secondly, the cumulative signed contract value of English, let pass another 6%.
Speaker Change: Percent quarter over quarter growth.
Speaker Change: Bringing the total cumulative contract value to more than 24 million Renminbi bike Q1, often you do four representing a $9 million growth quarter over quarter.
Speaker Change: Our English that overseas customer bought <unk>.
Speaker Change: Both our public and private cloud version of our push service.
Mr. Bong: And thirdly, our EngageLab products are sold to customers in more than 20 countries around the world. It has proven that our EngageLab products are truly global and catering to businesses and enterprises without borders. Next, I'm going to go over the revenue for Vertical Application, which is made up of financial risk management and market intelligence. Vertical Application had a stable quarter where revenue remains relatively consistent year over year but declined 9% quarter over quarter from the usual high, Q4 quarter. For financial risk management, we saw our revenue grew 14% year-over-year and 2% quarter-over-quarter. The 14% year-over-year revenue growth was positively impacted by a 41% customer number growth.
Speaker Change: And thirdly, our English that product has a salt to customers in more than 20 countries around the world has proven that our English you have products are truly global.
Speaker Change: Catering to business system, and perhaps around without borders.
Speaker Change: I show.
Speaker Change: But the revenue for a particular application where it is made up of financial risk management and market intelligence.
Speaker Change: Vertical application had a stable quarter, where revenue remained relatively consistent year over year, but declined 5% quarter over quarter from the usual high.
Speaker Change: Q4 quarter.
Speaker Change: For financial risk management, we saw our revenue grew 14% year over year and 2% quarter over quarter.
Speaker Change: The 14% year over year revenue growth was positively impacted by a 41% customer number growth.
Mr. Bong: And this is hot on the heels of a 26% year-over-year growth in Q4 of 2023. We did see a pick up in demand for our financial risk management products year over year as lending activities in China have been on the rise. Looking back, the quarterly revenue has been growing consecutively in each quarter since Q1 of 2023 to the current quarter, and the Q1 customers that we have signed up or renewed include, but are not limited to, Kunlun Yinhang. Suzhou Bank, Ant Financial, and many other licensed credit and financial institutions throughout China.
And this is hot on the Hughes of <unk>.
Speaker Change: 36% year over year growth in Q4 of 30 to retreat.
See pickup in demand for our financial risk management products year over year as lending activities in China has been on the rise.
Speaker Change: And looking back the quarterly revenue has been growing consecutively each quarter since Q1 of <unk> two.
Speaker Change: The current quarter.
Speaker Change: And the Q1 customers that we have signed up or renew include but not limited to <unk> <unk>.
Speaker Change: So in my thing wrong.
Speaker Change: License credit and financial institutions throughout China.
Mr. Bong: As for market intelligence, revenue decreased by 21% year-over-year and decreased 9% quarter over quarter due to the continued weak market demand for Chinese APP data. In Q1 of 2024, we signed up some well-known and large customers such as ByteDance, Huya, Qingbaobao, and many top-tier global hedge funds and investment funds. And next, I'll go over some of the key expenses and balance sheet items, starting with operating expenses. The Q1 operating expenses were at $53 million, representing an 18% decrease year-over-year and a 13% decrease quarter-over-quarter.
Speaker Change: As for market intelligence, the revenue decreased by 21% year over year and.
Speaker Change: And decreased 9% quarter over quarter due to the continue.
Speaker Change: Market demand for Chinese <unk> data.
Speaker Change: In Q1 of 2024, we sign up some of the well known and large customer such as <unk> Korea, King bubble and many top tier global hedge funds and investment funds.
Speaker Change: Our next.
Speaker Change: And where some of the key.
Speaker Change: Renters and balance sheet items.
Speaker Change: Onto operating expenses.
Speaker Change: The Q1 operating assets as well.
Speaker Change: 53 billion, representing an 18% decrease year over year, and 13% decreased quarter over quarter.
Mr. Bong: And this 53 million OPEX was the lowest quarterly OPEX we have recorded since IPO in July 2018. As shown in the financial statement, we are and have been making all the necessary steps and initiatives to maintain an optimal level of operating expenses. And we are very pleased with the current OPEX level. Now, I'll go to the individual OPEX categories.
Speaker Change: And is 53 million Opex was the lowest quarterly Opex, we have recorded since IPO in July 22 2018.
As showed on the financial statement.
Speaker Change: We are and have been making all the necessary steps and initiatives to maintain optimal level of operating expenses.
Speaker Change: We're pleased with the current opex level.
Mr. Bong: In particular, R&D expenses decreased by 28% year-over-year to RMB$22.7 million, mainly due to the lower headcount that reduced salary costs and associated share-based compensation and a decrease in service-related additional expenses due to the Going Cloud initiative we have undertaken. Selling and marketing expenses decreased by 8% year-over-year to $17.4 million, mainly due to the decrease in salary costs resulted from the headcount reduction as we made appropriate adjustments to operate at the optimal level, and G&A expenses decreased by 9% year-over-year to RM12.9 million, mainly due to the lower headcount that reduced salary costs and associated share-based compensation.
And that's our go to the individual Opex category.
In particular, R&D expenses decreased by 28% year over year to <unk> $22 7 billion.
Speaker Change: Mainly due to the lower head count that reduced salary costs in subsea of share based compensation and a decrease in distribution.
Speaker Change: Distribution expenses due to the growing cloud initiatives, we have undertaken.
Speaker Change: Our selling and marketing expenses decreased by 8% year over year to $17 4 million, mainly due to the decrease in salary costs resulted from the head count reduction as we meet appropriate adjustment to operate at the optimal level.
Speaker Change: And G&A expenses decreased by 9% year over year to.
Speaker Change: To renminbi $12 9 million.
Mainly due to the lower head count that reduced salary cost and associated share based compensation.
Mr. Bong: And for the quarter ended March 31st, 2024, we recorded yet another positive adjusted IPTA. This is an historical event where we have three consecutive quarters of positive adjusted IPTA. As mentioned above, we have tightly managed and controlled our OPEX over the years. We believe so long as we continue to grow our top line in the future, you will see more good quarterly results sooner rather than later on the balance sheet. I will again share two very important KPIs that we closely monitor.
Speaker Change: For the quarter ended March 31 2024.
Speaker Change: Yet another positive adjusted EBITA.
Speaker Change: And this is a historical event, where we have three consecutive quarter of positive adjusted EBITDA.
Speaker Change: Our specialty book, we have tightly manage and control our opex over the years.
Speaker Change: We believe so long as we continue to grow our top line in the future.
Speaker Change: You will see more good quarterly results sooner rather than later.
Speaker Change: Onto the balance sheet.
Speaker Change: Hi, again grew share two very important kpis.
Mr. Bong: We continue to monitor to maintain a healthy AR turnover daily level at 47 days, and this is still a low number and is peer-leading in this market space. We are working hard to ensure that we actively collect cash from customers and ensure we have low turnover days. At the same time, mitigating the risk of bad and doubtful debt.
Speaker Change: The monitor.
Speaker Change: We continue to monitor to maintain a healthy turnover days.
Speaker Change: At 47 days.
Speaker Change: You have lower numbers and peer leading in this market space.
Speaker Change: We are working hard to ensure that reactively collect cash from customer and ensure we have low turnover days at the same time mitigating the risk of bad and doubtful debts.
Mr. Bong: Secondly, one of the key financial KPIs for tracking the performance of a SaaS company is the total deferred revenue, which represents cash collected in advance from customers for future contract performance, which continues to be at a high balance of $135.2 million, and this is the ninth consecutive quarter that we have had a deferred revenue balance above $130 million. Next, Total Assets Web. RMB $334 million as of March 31st, 2024, which includes a cash equivalent of $99 million.
Speaker Change: Secondly, one of the key financial Kpis for tracking the performance of SaaS Company is the total deferred revenue, which represents cash collected in advance from customers for future contract performance.
Speaker Change: Continue to be at high balance of $135 2 million.
Speaker Change: And this is the ninth consecutive quarters that we have deferred revenue balance of $130 million.
Speaker Change: Next total assets.
Speaker Change: Renminbi <unk> 4 million as of March 31st I need to do for which includes cash and cash equivalent of 99 million.
Speaker Change: Accounts receivable of 33 million.
Speaker Change: Prepayments and other current assets at 23 million fixed assets at $1 4 million long term investment of one 3 billion.
Speaker Change: We were at $37 8 million intangible assets of $16 9 million resulted from the <unk> acquisition in March 'twenty two.
Speaker Change: And total liabilities were at $2 7 million as of March 31, 'twenty doing for these include a.
Speaker Change: Accounts payable of $22 million.
Speaker Change: Current operating.
Speaker Change: Plenty of 3 million deferred revenue of one five.
Speaker Change: And accrued liabilities of 64 million.
Mr. Bong: Accounts receivable of $33 million, prepayments and other current assets at $23 million, fixed assets at $1.4 million, long-term investment of $113 million, and goodwill at $37.8 million. Intangible assets at $16.9 million resulted from the Sand Cloud acquisition in March 2022, and total liabilities were at $227 million as of March 31st, 2024. This includes accounts payable of $22 million, a current operating liability of $3 million, deferred revenue of $125 million, and accrued liabilities of $64 million. At this juncture, let me recap on the great start to 2024 description that I mentioned at the start of this call. In this quarter,
Speaker Change: At this juncture, let me recap.
Speaker Change: Great start to 'twenty four 'twenty 'twenty four description that I have mentioned at the start of this call.
In this quarter.
Mr. Bong: I would be developer service revenue grew by 13% year-over-year. Number two, our gross margin is at the highest level since Q4 of 2021. For the first time in history, we have three consecutive quarters of positive adjusted EBITDA, and quarterly OPEX at $53 million, which is at the lowest level since IPO. 5.
Speaker Change: Our D.
Speaker Change: Developers service revenue grew by 13% year over year.
Speaker Change: Number two our gross margin at the highest level since Q4, often at any one.
Speaker Change: Three for the first time in history, we have three consecutive quarters of positive adjusted EBITDA.
For quarterly Opex at 50, $453 million, which is at the lowest level since the IPO.
Mr. Bong: Our English Lab product recorded customers' growth. Customer number growth of more than 30% quarter over quarter, and cumulative contract value grew more than 60% between the quarters. And with the above, I believe the management team has done a great job delivering yet another quarter of good financial results. And this set of numbers do not come easy, and we have done a lot of work since two years ago during the pandemic.
Speaker Change: Five <unk>.
Speaker Change: <unk> product record our customers' growth.
Customer number growth of more than 30% quarter over quarter and cumulative contract value grew more than 60% between the quarters.
Speaker Change: And we see above I believe the management team has done a great job delivering yet another quarter of good financial results.
And this set of numbers do not come easy.
Speaker Change: And we have done a lot of work since two years ago during the pandemic.
Mr. Bong: And let me spend a few minutes here to recap the work we have done to get to where we are now. One, we have refocused our strategy. During which, we gather all the heads of products, and we challenge them on their needs to maintain and sell each product in view of market potential.
Speaker Change: And let me spend a few minutes here to recap what we have done to get to where we are now.
Speaker Change: One we have refocused our strategy.
Speaker Change: And when should we get the order cadence of products, we challenged them on their needs to maintain and sell each product in the view of market potential.
Mr. Bong: The end result was... We've streamlined the number of product offerings. We cut down the products that are not bringing positive contributions to the books and put all our resources into a handful of key products that are profitable, in high demand domestically and overseas, and with great potential. Number two, we have restructured our teams and seriously looked at the headcount. With fewer products to be maintained, and to improve operational efficiency, our headcount has decreased close to 40% from the peak, thereby helping us to cut down the fixed cost component of our OPEC.
The result was.
Speaker Change: We have streamlined the number of product offerings.
Speaker Change: Cut down the products they are not bringing positive contributions to the books and putting all our resources to a handful of key products, which are profitable in high demand domestically and overseas and with great potential.
Mr. Bong: Apart from the headcount, we have also reviewed all the service contracts with external vendors, and during the process, we have also managed to lower fixed operating expenses year-to-year to an optimal level. Number four, more importantly, we have chosen the right direction by going overseas with our Engage Lab suite of products. And with this combination of the right steps that we have taken, we are now seeing a positive impact. Most notably is the three consecutive positive adjusted EBITDA that we have managed to deliver.
Speaker Change: Number two we have restructured our teams and seriously look at the head count.
Speaker Change: We have fewer products to be maintained and to improve operational efficiency. Our head count has decreased close to 40% from the peak.
Speaker Change: Thereby helping us to cut down the fixed cost component of our opex.
Speaker Change: And apart from the head Count we are also review all the service contract with external vendors.
Speaker Change: And during the process, we have also managed to lower fixed.
Speaker Change: Operating expenses year to year to an optimal level.
Speaker Change: And with four more importantly, we have chosen the right direction.
Speaker Change: By going overseas to our <unk> suite of products.
Speaker Change: And we've just combination of rights steps we have taken.
Speaker Change: We are now seeing the positive impact.
Speaker Change: Most notably is the tree consecutive positive adjusted EBITA that we have managed to deliver.
Mr. Bong: As we continue to scale our business, I believe more good results will come. And I would like to thank shareholders in Vest and the Aurora Group employees for the support and patience throughout these past few years.
Speaker Change: As you continue to scale our business I believe more good results will come.
Speaker Change: And I would like to turn the share.
Speaker Change: Hello, This is <unk> <unk> our group <unk>.
Speaker Change: <unk> for the support and patients throughout these past few years.
Speaker Change: And lastly, before I conclude.
Mr. Bong: I'll give a quick update on the share repurchase plan. In the quarter ended March 31st, 2024, we repurchased 17,000 ADS. Cumulatively, we have repurchased a total of 205,000 ADS since the start of our repurchase program. And with this, this concludes the Management Prepare Rebugs, and we will be happy to take your calls now. Operator, please proceed.
Speaker Change: I'll give a quick update on the share repurchase plan.
Speaker Change: In the quarter ended March 31, 224, we have repurchased 17000 eds.
Speaker Change: Cumulatively, we have repurchased a total of.
Speaker Change: 205000 during the start of our since the start of our repurchase program.
Speaker Change: And with this.
Speaker Change: The management prepared remarks, and we'd be happy to take your cost now operator. Please proceed.
Operator: Thank you. We will now begin the question and answer session. To ask a question, please press star 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 once again. Please stand by while we compile the Q&A roster. Our first question comes from Calvin Wong from Speaker Capital. Please ask your question, Calvin.
Speaker Change: Thank you we will now begin the question and answer session.
Speaker Change: Also a question. Please press star one one on your telephone and wait for your name to be announced.
Speaker Change: To withdraw your question. Please press star one one again please.
Speaker Change: Please standby, while we compile the Q&A roster.
Speaker Change: Our first question comes from the line of Calvin Wong from Speaker capital. Please ask your question Kevin.
Kevin: Thank you for taking my questions and congratulations again for another.
Calvin Wong: I would like to have two, if I may. Firstly, as we understand, Q1 is a relatively quiet quarter, but you still managed to deliver another quarter of positive adjusted EBITDA. So I would like to hear from management how this was possible, and are we now expecting another positive adjusted EBITDA in Q2? That's my first question. And my second question is...
Speaker Change: And another quarter of great results.
Speaker Change: I would like to have two if I may.
Firstly as we understand Q1 is.
Speaker Change: Relatively quiet quarter.
Speaker Change: But you still managed to deliver another quarter of positive adjusted EBITDA. So I'd like to hear from the management and how this was possible and we are now expecting another positive adjusted EBITDA in Q2, that's my first question and the second question.
Calvin Wong: I would like to circle back on the engaged lab business again. Based on the Q1 ER deck you have uploaded and the earlier management call, EngageLab had another great growth quarter. I would appreciate if management could shed more light on this business example. So again, two questions. One on the adjusted EBITDA outlook, and two about the outlook for the N-Gage lab.
Speaker Change: Yes.
Speaker Change: I'd like to circle back on the engage lab business again pays.
Based on the Q1 that you have upload and earlier management coal.
Speaker Change: Engage that had another great growth quarter.
Speaker Change: I would appreciate if management could shed more light.
Speaker Change: On this business segment.
Speaker Change: So again two questions one on <unk>.
Speaker Change: Our adjusted EBITDA outlook and to about.
Speaker Change: Outlook of engaged lab business.
Mr. Bong: Sure, Calvin. Let me recap. One is the question on the... Just the EBITDA number, and second is the English lab. Yeah, I think, honestly, we are truly happy that we have done a great job to deliver another quarter of positive adjusted EBITDA numbers in Q1. As you rightly mentioned, Q1 is typically a slow quarter because of the Chinese New Year along with the February shorter month. Of course, this Q1 positive adjusted EBITDA number did not come easy. As I just mentioned earlier, we have made a lot of adjustments. We have made tweaks, large or small. Try to be nimble.
Sure Kevin Let me recap what is the question on the.
Speaker Change: Adjusted EBITDA number and second is to English.
Speaker Change: Yes, I think.
Speaker Change: Honestly, we are truly happy. Thank you we have done.
Speaker Change: Done a great job to deliver another quarter of adjusted EBITDA positive numbers in Q1 as you rightly mentioned the Q1 is typically our slowest quarter because of the Chinese new year, along with the February shorter months.
Of course, this Q1 positive adjusted EBITDA number it did not come easy.
Speaker Change: Just mentioned earlier.
We have made a lot of adjustments, we make tweaks lots of small tried to be nimble and try to be agile and try to be fast enough to react to the market.
Mr. Bong: We have tried to be agile. We have tried to be fast enough to react to the market over the past two years. And I believe right now we are in a very good position with the right product and with great potential. And especially our overseas expansion being executed according to what we have set out to do and with a low level of operating expenses.
Speaker Change: Over the past two years.
Speaker Change: I believe right right now we are in a very good position with the right product and <unk>.
Speaker Change: With great potential and especially our overseas expansion being executed according to what we have set out to do.
Speaker Change: And with the lower level of operating expenses.
Speaker Change: I guess.
Mr. Bong: Let me just recap what we have done. With the things that we have done, we have recorded subscription revenue that grew 13%, and our engaged business has grown; revenue has grown 10 times year over year. And we recorded the highest gross margin that grew year and quarter over quarter, and our operating expenses were record lows in the IPO. And most importantly, a lot of investors and shareholders are looking for these three consecutive quarters of positive adjusted EBITDA.
Speaker Change: Let me just recap what we have done with.
Speaker Change: The things that we've done we have recorded the transaction revenue grew that grew 13% and our <unk> business has grown the revenue has grown 10 times.
Speaker Change: And we recorded the highest gross margin.
Speaker Change: And quarter over quarter, and our operating asset that goes with record lowest since IPO and most importantly, a lot of investors and shareholders are looking for this <unk> consecutive quarter of positive adjusted EBITDA.
Mr. Bong: I guess one may conclude that things are falling into the right places where they belong, and as well. I have a question on whether we are expecting another quarter of positive adjusted IPTA numbers. I think we should not get ahead of ourselves.
Speaker Change: I guess, one may conclude that things are falling into the right places where they belong.
Speaker Change: So.
Speaker Change: Question on whether we are expecting another quarter of positive adjusted EBITDA number I think we should not get ahead of ourselves, but I think what we need to do is the management team will continue to focus on what we have done right.
Mr. Bong: I think what we need to do is the management team should continue to focus on what we have done right, namely to scale our business domestically and overseas. And at the same time, we just need to closely monitor our operating expenses. And if we do this right, I think the results will reflect that. So this is my response to your first question, and to the English lab. If I may use one word to describe English Lab, it will be growth.
Speaker Change: Namely to scale, our business domestically and overseas.
At the same time, we just need to closely monitor our operating expense and if we do this right I think the results do reflect itself.
Speaker Change: So this is my restaurants to your first question.
Speaker Change: And on the anguish slip.
Speaker Change: If I may use one word to describe.
Mr. Bong: Probably you have seen, since we started sharing the quarterly Engage Lab business numbers in Q3 of 2023, the number has been growing ever since. Every single quarter we have recorded, good numbers grow, and customer numbers have grown impressively, and the cumulative contract value has grown significantly every quarter. Therefore, I would say we are very pleased with how the business has tracked so far, and I can also give you an insight in terms of what we have seen recently.
Speaker Change: It would be growth.
Speaker Change: Probably you have seen since we started sharing the quarterly English that business numbers in Q3 of their need to entry.
Speaker Change: Number has been growing ever since every single quarter, we record a good numbers group.
And customer number has grown impressively and a cumulative contract value has grown every quarter.
Speaker Change: Therefore, I would say we are pleased with how the business has tracked so far and I wish I could give you a insight in terms of what we have seen recently just last week we.
Mr. Bong: Just last week, we had a booth in Singapore for the Asia Tech Expo, and both Chris and myself attended the event in person. So we went there to Singapore, and during the three-day course, during the course of three days, we received more than, I would say, more than 100 leaks, more than a hundred sales leads. And Chris and I spoke to many potential customers, be it from Singapore, from Malaysia, my hometown, in Indonesia, the Philippines, even from as far as Romania.
Speaker Change: We had improved.
Paul for the Asia export and both Chris and myself attended the event in person. So we went there in Singapore and during the three day costs. During the course of three days and we received more than I would say more than 100 leap 100 still Smith.
Speaker Change: And Chris and myself spoke to many potential customer.
Speaker Change: Be it from Singapore, Malaysia, My hometown in Indonesia, Philippines, even from S y S. Romania. So personally I think I'm truly impressed with the interest we have received.
Mr. Bong: So personally, I think I'm truly impressed with the interest we have received from customers for our English Lab product in Asia. I guess from the technical standpoint, I should just give a brief overview of what we have done. And what we have done is we have incorporated our notification channel for all different phone operating systems. Whether you use iOS or you use Android or others, we are making this very easy for our customers to send their notifications to their customers regardless of what phone they are using.
Speaker Change: From our.
Speaker Change: Customers on our <unk> product in Asia.
Speaker Change: [laughter] doomed doomed.
Speaker Change: During the visit.
Speaker Change: From I guess from the technical standpoint.
Speaker Change: I just give us a brief on what we have done and what we have done is we have incorporated our notification China for all different phone operating system.
Speaker Change: Whether you use AOS are you use android or others.
Speaker Change: Making this very easy for our customers.
To send you a notification to the customer regardless of what form they are using.
Mr. Bong: So that is the business update on the Engage Lab. I hope this answers your question, Calvin. Very clear, thanks.
Speaker Change: So that is the.
Speaker Change: Business update.
Speaker Change: Update on the English, let's hope this answer your question Kevin.
Calvin Wong: Very clear, thank you. Thank you, Calvin. As a reminder, to ask a question, please use the Q&A function.
Speaker Change: Okay very clear thanks.
Speaker Change: Okay.
Speaker Change: Thank you Kelvin.
Operator: As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. Once again, that's star 11 for questions. I have no further questions, and I'll turn the conference back to Rene for a closing comment. Rene, you may wish to make the closing comments.
As a reminder to ask a question. Please press star one on your telephone and like for your name to be announced.
Speaker Change: Once again Thats star one one for questions.
Speaker Change: I'm showing no further questions.
I will now turn the conference back to Rene for closing comments.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Renee you may wish to do the closing comments.
Rene Vanguestaine: 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 all.
Renee: Thank you everyone for joining our call Tonight.
Speaker Change: If you have any further questions and comments, please don't hesitate to reach out to the IR team.
Renee: This concludes the call have a good night. Thank you all.
Operator: That concludes today's conference call. Thank you for participating. You may now disconnect.
Speaker Change: That concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
Speaker Change: Yeah.
Speaker Change: Okay.
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Okay.
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Speaker Change: Yeah.
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