Q3 2024 Aurora Mobile Ltd Earnings Call
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Speaker Change: Ladies and gentlemen, thank you for standing by and welcome to the World.
Speaker Change: Third quarter 2024 earnings conference call at this time, all participants are in listen only mode.
Speaker Change: After the Speakers' presentation there'll be a question answer session and instructions will be given at that time.
Speaker Change: Please be advised that today's conference is being recorded.
I would like to hand, the conference over to your host today Christian Arnell. Thank you. Please go ahead Sir.
Christian Arnell: Thank you Michelle 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 Dot one dot C. Yet.
Christian Arnell: On the call today are Mr weighed on law, Chairman and Chief Executive Officer, Mr. Shan inbound.
Christian Arnell: <unk> financial Officer, and Mr. Guan Yan Chen General manager.
Speaker Change: During 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 21 E of the Securities Exchange Act of 1934 as amended and as defined in the U S. Private Securities Litigation Reform Act of 1990.
Speaker Change: Five.
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 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 SEC.
Speaker Change: 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: With that I'd now like to turn the conference over the conference over to Mr. Law. Please go ahead.
Speaker Change: Yeah.
Speaker Change: Thanks, Kristen great into our.
Speaker Change: We have gone to my boss tons, you're talking four first quarter earnings call.
Speaker Change: Before I comment on our Q3 results.
Speaker Change: To remind everyone that our call today on this that is available on our IR website.
Speaker Change: Youll made reference to that that as we proceed with the call today.
Speaker Change: As we did in the past based on the Q3 numbers.
A discussion I will use for the first quarter without <unk> record breaking for the following reasons.
Speaker Change: Firstly, we are writing our own history, we are on the road.
Speaker Change: This quarter, we're at record pace.
<unk> quarterly prestige adjusted EBITDA.
Speaker Change: Secondly, Dave everybody subscription revenue rack up of 7% growth quarter over quarter, and 11% growth year over year more importantly, the quarterly revenue has the FDA renminbi 50 million.
Speaker Change: The first time in history.
Speaker Change: Another record breaking even in this quarter.
Speaker Change: Our industrial outpacing its continue to shine in terms of customer numbers and come out you have a signed contract value.
Speaker Change: 42% and 23% quarter on quarter with activity.
Speaker Change: Firstly, we had record net operating cash inflow of renminbi tore well plus 3 million being the highest so therefore in the past 16 quarters, bringing the cash balance about renminbi 100.
Speaker Change: And 1 million as of last Friday.
Speaker Change: Tiger talked before.
Speaker Change: These are the net charge off the great numbers, we have achieved in this quarter now.
Speaker Change: Now they may expand further.
Speaker Change: All told US what revenue has grown 7% year over year.
Speaker Change: Fueled by the strong numbers frankly benefit services within the revenue get better plus subscription service and financial risk management.
Speaker Change: A record, 11% and 39% year over year revenue growth respectively.
Speaker Change: The manifesto business revenue, which consist the officers Christian services, better and services increased by two representing year over year, and 2% cutoff quarter subscription revenue has been record recruiting great number as well.
Speaker Change: Increased by 11% year over year, and 7% quarter over quarter better at this business revenue grew by 20% year over year.
Speaker Change: But decreased 40% quarter over quarter.
Our company's subscription services revenue.
Speaker Change: <unk> $51 7 million.
Gross journey by 11% year over year, and 7% quarter on quarter.
Speaker Change: Yes.
Speaker Change: Of course, our revenue growth was mainly driven by increase in Apple.
Speaker Change: As I mentioned earlier, we bought our own quarterly revenue record in this quarter, where we had for the first time in history.
Speaker Change: Subscription revenue is maybe 50 media and in a single quarter. This is a remarkable achievement.
Speaker Change: I would like I would like to take a moment to thank all of our customers interest in our products and services.
Speaker Change: <unk> for working hard and deliver great service to our customers.
Speaker Change: Another major contributor of this impressive revenue growth what the solid performance of our engage it up basis. So you can get you that this is Curt could you build this drove revenue growth in this quarter.
Speaker Change: The year over year basis. The recognized revenue for you guys has grown close to 100% sure more engaged in our business strategy.
Speaker Change: They've been subscription revenue so not a lot upon new and renewable customer in this quarter include but not limited to what's not just every company.
Speaker Change: Our Chinese operations.
Speaker Change: E.
Speaker Change: And.
Speaker Change: So I'll express came.
Speaker Change: <unk> Chad when the shot <unk> credit.
Speaker Change: Credit cards, just to name a few.
Speaker Change: Value added services revenue were RMB.
Speaker Change: <unk> decreased by 30% quarter over quarter by increased by 20% year over year.
<unk> decreased was due to the newly about wireline shopping festival in Q2 that was now assistance in Q3. This revenue in Q3 was within our expectations.
Speaker Change: NASA is the most exciting part of the business in terms of its growth and future prospects.
Speaker Change: Allow me to spend the next few minutes.
Speaker Change: Get you that basis this quarter, Firstly, we continue to add more <unk> customers in Q3.
Contract take customer numbers to catch it reached.
Speaker Change: Hi, Joanne.
Speaker Change: We spend a great representing 32% sequential growth secondary the commodity or a signed contract Mario if I can get you that has occurred by renminbi six media cutoff quarter as of December.
Speaker Change: September 30th.
It is only for the total signed contract barriers to add approximately that might be.
We are truly pleased with this result.
<unk> spent all global reach to two additional country in this quarter by September 30 of 2024.
Speaker Change: I can get you that products and services to customers in more than 51 different countries averages globally.
Speaker Change: In summary, CBOE expanding overseas more than 513 customers from.
Speaker Change: While the country.
Speaker Change: Testy conveys to empower our multichannel engage that surface is to have that improved user engagement.
Speaker Change: <unk> and to do it in a more cost efficient manner.
Speaker Change: I think our existing debt expectations is what we've been able to be the key to our success globally. We will certainly not be sitting what loris, we will continue to work hard and harder.
Speaker Change: We have high hopes to achieve greater things overseas internally wake up properly.
Speaker Change: Oh and prepared the detail escalation paths and allocate our resources accordingly.
Speaker Change: It's an ongoing process, where we will <unk>.
Speaker Change: <unk> continuous adjustments and tweaks uptake as we havent necessary, yes, the overseas expansion, it's not easy, but we have that track record we have.
For the past six quarters I'm very hopeful yet committed to ensure we can and will continue to bring in great customers from around the world every quarter.
Speaker Change: As of today, a path for our Singapore office, which I would say, our current Colombo office and car rental.
Speaker Change: Now have local sales who have great local knowledge.
Speaker Change: Ron can better serve their local markets and then levering countries and customers.
Speaker Change: As a matter of fact I would say.
Speaker Change: Incremental last week for the for the short one way business trip Dale I was overwhelmed with the great responses from our potential customers are incredible they were very impressed with the multichannel and get you. The services that we have working right and to assess where our services.
Speaker Change: I also have to say, it's indeed very similar to the local market and customers' needs. Therefore, we are building a very strong sales pipeline and Melissa and we're allocating more resources to increase both the market penetration and market share tail.
Speaker Change: But if the success cases that we have both both Singapore and Melissa we're going to replicate this conversion of new customer acquisition experience to other countries in Asia Pacific region.
Speaker Change: I believe there will be more grateful that story there.
Speaker Change: But to share with you in the next earnings call we.
Speaker Change: With that I will now pass the call to Shannon.
Shannon: Who will share more about the vertical applications and other aspect of our financial performance for this quarter.
Shannon: Thanks, Chris.
Speaker Change: I'll go over the revenue of all with the goal application that includes <unk>.
Speaker Change: Financial risk management and market intelligence.
Overall vertical application had a relatively quiet quarter, where revenue decreased by 6% quarter over quarter and 4% year over year.
Nevertheless, we didn't know relatively quiet quarter, which you saw great numbers from financial risk management, <unk> recorded a 29% growth in revenue year over year and relatively flat quarter over quarter.
Speaker Change: Stop a former we didn't put together applications.
The 29% year over year revenue growth was mainly due to a strong 28% growth in approved.
Speaker Change: The trend we have seen in Q3 was existing customer have increased their consumption of our financial risk management product and services.
Speaker Change: And it is very important and it provided a very solid foundation for the revenue numbers every quarter.
Speaker Change: This also demonstrates that our products are widely used and well received by the financial sector customer in their own risk model.
Speaker Change: The customers that we sign up all renew in Q3 include but not limited to Ningbo in ha 10 doing homes higher sheltering Ping on Celgene and many other more licensed credit and financial institution throughout China.
Speaker Change: Market intelligence revenue decreased by 41% year over year, and 22% quarter over quarter due to the continue Rick market demand for Chinese <unk> data.
Speaker Change: This is in line with our expectation in Q3 of 2024, we did manage to assign renewable contracts with some well known large customers.
Speaker Change: And we didn't market intelligence for product perspective, we have recently launched a global ranking of FEP service, where customers can now have access to multi dimensional indicators, including app penetration rate active users and new users of global key ABP across different countries.
Speaker Change: In different regions.
Speaker Change: And since its launch in September we have seen good trial accounts registration rates and we believe it will give a good and new set of independent source of data to enterprises and investment customers for them to make informed investment decisions.
Speaker Change: Next I'll go through some of the key expenses and balance sheet items.
Speaker Change: Onto operating expenses.
Speaker Change: Our Q3.
Speaker Change: Operating expenses was renminbi, $57 1 million, representing a slight 4% increase quarter over quarter, and 5% decrease year over year.
Speaker Change: The majority of the increase was attributable to our sales and marketing Department.
As we expand overseas.
Speaker Change: It has turned out require additional resources allocation.
Speaker Change: Also the increase in revenue and cash collection in this quarter also resulted in addition of commission and expenses.
These are all within our expectation.
Speaker Change: And so long as the revenue and gross profit are growing at a faster pace than Opex. The end result will be a plus to the financial statements.
Speaker Change: I will now go go through the individual Opex category.
Speaker Change: For R&D expenses decreased by 26% year over year to renminbi, $34 2 million, mainly due to lower head count that reduced salary cost and associated share based compensation and a decrease in data analysis and technical services expense.
Selling and marketing expenses increased by 3% year over year to $22 4 million, mainly due to the increase in sales Commission and travel expenses as we continue to expand overseas.
G&A expense increased by 92% year over year too.
Speaker Change: $10 4 million.
Speaker Change: Due to the one off <unk> $7 6 million gain from disposal of fixed assets in last year. There was nonexistent in Q3 of this year.
Speaker Change: Other G&A expenses when it was within expectation.
Speaker Change: Onto the balance sheet.
Speaker Change: Oh sure two very important kpis that we closely monitor.
Speaker Change: We continue to maintain a healthy turnover.
Speaker Change: 48 <unk>.
Speaker Change: We will continue to work hard to ensure we actively collect cash from customers and at the same time mitigating the risk of bad and doubtful debts.
Secondly, one of our key.
Speaker Change: TPI for tracking performance of SaaS company is a total deferred revenue, which represents cash collected in advance from customers for future contract performance, which remained high at <unk> $4 8 million.
Speaker Change: And this is the 11th quarter consecutive quarter, where we are.
Speaker Change: Our deferred revenue balance was has exceeded $130 million.
Speaker Change: On the boat on the cash flow, we are pleased with our team's diligent cash management in the operating activity this quarter.
Speaker Change: For the quarter ended September 30.
Speaker Change: We have record net operating activities cash inflow of roaming fees $12 3 million, which is the highest level for the past 16 quarters.
Speaker Change: Next.
Speaker Change: Total assets were.
Speaker Change: 535, $1 7 million as of September 30.
Speaker Change: This includes cash and cash equivalent of $101 million.
Speaker Change: Accounts receivable of $40 5 million prepayments and other current assets of $28 2 million operating lease.
Right of use assets of $20 9 million fixed assets of $3 2 million long term investment of $1 million to $5 million.
<unk> of $37 8 million of intangible assets of 14.
$7 million, resulting from the central acquisition in much 2022.
Speaker Change: Total current liabilities were at 238 3 million. This include accounts payable of $27 1 million current operating lease liability of $5 4 million.
Revenue of $134 8 million accrued liabilities of $68 million.
Speaker Change: Now let me take a few minutes here to recap Q3 of 'twenty to ensure that we just had.
Speaker Change: In this quarter, our developers subscription services record of solid and impressive revenue growth year over year, and more importantly achieve $50 million revenue quarter for the first time in history.
Speaker Change: Number two.
Speaker Change: Making history again in this quarter, where we had the fifth consecutive quarters of positive adjusted EBITDA.
Speaker Change: I'm, a tree and get you that.
Speaker Change: This record customer number growth of more than 32% quarter over quarter and cumulative contract value increased by more than 7 million between the quarters to more than $38 million.
Speaker Change: And we record net operating cash inflow of $12 3 million.
Speaker Change: And lastly, before I conclude I'll give an update on the share repurchase plan.
Speaker Change: For the quarter ended September 32004, we repurchased 29000 eds cumulatively, we have repurchased a total of 246000 since the start of our repurchase program.
Speaker Change: And this concludes our prepared remarks, we will happy to take your question now operator. Please proceed.
Speaker Change: Thank you if you'd like to ask a question. Please press star one one.
Speaker Change: If your question has been answered and you'd like to remove yourself from the queue. Please press star one again.
Our first question comes from Calvin Wong with Speaker capital. Your line is open.
Calvin Wong: Thank you for taking my questions.
Calvin Wong: I really appreciate that the management.
It has to deliver another quarter of very impressive results.
Speaker Change: I would like to recap what I heard from you.
Speaker Change: A few things one five consecutive quarters of positive adjusted EBITDA.
Speaker Change: And do you call developers subscription business revenue of more than 15 million now M B and finally I engage lapsed.
Speaker Change: Christmas is growing significantly every quarter.
Speaker Change: So I really appreciate if management could provide more colors on all of these three great achievements.
Speaker Change: Okay.
Speaker Change: Thanks, David Let me take this.
Speaker Change: Hum.
Speaker Change: For many including yourself will appreciate achieving this any one off this within a quarter is not an easy task and for us to do it.
Speaker Change: We have three great milestone that you mentioned in one quarter.
Speaker Change: It's remarkable to see the list.
Speaker Change: And if there's one thing that I can attribute this to I would say it will be the effective execution that help us bring this numbers.
Speaker Change: I mean, you can spend as much time and energy in the planning and preparation stage, but I think the key to any success is how well we execute our plan.
Speaker Change: But as you know we started the.
Speaker Change: Planned to go overseas about 18 to 20 months ago and by Daniel was.
Speaker Change: Ralph Road ahead of Us and we have to start everything from scratch.
Speaker Change: And we did not just by an overseas company, whose operations overseas.
Did the hard way.
Speaker Change: But on the way we learned a lot we tackle audit issues ourselves and for instance.
Speaker Change: Venture overseas, we need to sort out where we should start our customer's data and which oversees cost service provider that suit us best and suit our customers best and also wish it structure should we have to serve our customers across 31 countries that Chris mentioned and.
Speaker Change: And the best answer to this can only be head to onto execution.
Speaker Change: And also because we executed a growing overseas really well and we are able to have a $50 million.
Speaker Change: Revenue quarter for developers subscription service and this is the highest the highest single quarter revenue for this segment in our history.
Speaker Change: And this will not be achieved by simply having really good plants.
Speaker Change: And at the same token, having a $50 million revenue quarters, what developers subscription revenue itself will not automatically achieve positive adjusted EBITDA.
Speaker Change: We have to properly execute the business expansion and cost saving plans simultaneously and all these are interrelated.
Speaker Change: So definitely in conclusion it.
Speaker Change: It is clear that we management has executions SKU and determination to manage their business and manage it well so.
Speaker Change: So anywhere we effectively executed this plan that we have we can achieve a record breaking quarter that Chris mentioned at the beginning of this call I Hope this answer your question Kevin.
Speaker Change: Very clear.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Next question comes from Jackson.
Speaker Change: With <unk> research your line is open.
Speaker Change: Congratulations on a strong quarter, Ann Jackson, Bonga, where research.
Speaker Change: A question for management.
Speaker Change: I heard Chris mentioned during the call that for the overseas expansion you have offices and staff in both Singapore, and Malaysia to support overseas business growth.
Speaker Change: It came more offices around the world even near future. Thanks.
Yes.
Thanks, Jeff Let me take this question too.
Speaker Change: Yes, you are right, we now have offices in Singapore.
Speaker Change: Singapore and Malaysia.
Kuala Lumpur wishes in Malaysia, and we.
Conscious physician when selecting these two cities to have our offices.
Speaker Change: For the immediate we believe these two offices strategically located to help us expand into southeast Asia and beyond.
Speaker Change: Currently a good portion of our overseas revenue derived from customers in the established Asia region, Therefore, having local teams to support that.
Speaker Change: Richard is key and also we need to have.
Speaker Change: That we need to be there when customers have issue that needs addressing or when do you have plans to buy more harvest services.
And we believe there are a lot of opportunities in this obviously Asia countries that we can harvest in the near future.
Speaker Change: And so we have teams in KLM.
Speaker Change: Singapore It is only a short trip.
Speaker Change: For them, if they need to be in Bangkok, Taipei, Jakarta, or even any cities within our service Asia region.
Speaker Change: As a matter of fact, our Singapore team has flown to type basis.
Speaker Change: For meetings with our customers and I S Vida.
Speaker Change: And looking ahead, we certainly consider we've suddenly we'll be considering more offices. When there is a good reason to have.
Speaker Change: Thanks, a lot for example.
Speaker Change: Sure the business in terms of customers' number in revenue in the Gulf region is becoming material, we will certainly be open to having our officers in Doha, Dubai or even Abu Dhabi to serve the customer in that region.
Speaker Change: So if I may the short answer to your question is that the need to have offices overseas is wholly dependent on the numbers. So long as the numbers add up we have we have enough customers.
Speaker Change: Revenue, we definitely we set up.
This is a mall.
Speaker Change: Overseas offices in the near future.
Speaker Change: I hope this answer to your question Jack.
Speaker Change: Yeah, that's very clear thanks, a lot.
Speaker Change: Thank you there are no further questions at this time I'd like to turn the call over to Christian Arnell for closing remarks.
Christian Arnell: Thank you thank.
Christian Arnell: Thank you everyone for joining our call Tonight. If you have any further questions and comments. Please don't hesitate to reach out to the IR team. This concludes the call have a great evening everyone. Thank you.
Speaker Change: Thank you for your participation. This does conclude the program you may now disconnect good day.
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