Q1 2025 Aurora Mobile Ltd Earnings Call

Okay.

Ladies and gentlemen, thank you just aren't getting by and welcome to city of over mobile first quarter 2025 earnings Conference call.

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Speaker Change: Please be advised that today's conference is being recorded I would now like to turn the conference over to your host today when I guess they take thank you. Please go ahead Sir.

Speaker Change: Thank you Heidi.

Hi, everyone and thank you for joining us today.

Well there are more buyers earnings release was distributed earlier today and is available.

On the IR website.

G Guang Dot C.

Mr. <unk>: On the call today are Mr. <unk>, Chairman and Chief Executive Officer, Mr. Shan, Nen, Bong, Chief Financial Officer, and Mr. Guan Yu Heng Chen General manager.

Mr. <unk>: Following the prepared remarks, there will be available to answer your questions. During the Q&A session that follows.

Mr. <unk>: 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 and Exchange Act of 1934.

Mr. <unk>: As a mandate and as defined in the U S. Private Securities Litigation Reform Act of $19 95.

Mr. <unk>: 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.

Mr. <unk>: Further information regarding these and other risks uncertainties and factors are included in the company's filings with the U S Securities and Exchange Commission.

Mr. <unk>: The company does not undertake any obligation to update any forward looking statement as a result of new information future events or otherwise.

Mr. <unk>: Sept as required under applicable law.

Speaker Change: With that I would now like to turn the conference over to Mr. Luo. Please go ahead.

Luo: Thank you Savannah.

Luo: Great.

Speaker Change: Welcome to I remember was 2035 first quarter earnings call.

Mr. <unk>: Before I comment on <unk> results.

Mr. <unk>: I'd like to remind everyone that our quarterly earnings is available on.

Mr. <unk>: Left side.

Mr. <unk>: Youll made reference to that that as we proceed with the call today.

Mr. <unk>: As we did in the past based on Q1 numbers.

Mr. <unk>: So the board discretion for the plus of course, our results, which is a quarter of accelerating growth driven by globalization for the following innovators.

Mr. <unk>: Firstly, I will engage at applebee's or master closure, where we close out model.

Mr. <unk>: <unk> wealth of contract value in just one quarter.

Mr. <unk>: This is <unk>.

Mr. <unk>: Precedented history.

Mr. <unk>: This brings the total cumulative engaging a contract value in excess of <unk>.

Mr. <unk>: While enjoying <unk> bye.

Mr. <unk>: For deferred to 2035.

Speaker Change: Secondly, the group's revenue this quarter, Alberta, RMB 18 million.

Mr. <unk>: Actually and remarkable 48% growth year over year.

Speaker Change: This is <unk>.

Mr. <unk>: One media was the highest Q1 quarterly revenue, we have see us transition to pure SaaS.

Mr. <unk>: <unk> recognized revenue also grew by 127% year over year.

Mr. <unk>: <unk> revenue number is what we have previously guided in Q4 of 2024.

Mr. <unk>: Firstly, our financial risk management business is.

Mr. <unk>: Its best quarter in <unk> history.

Mr. <unk>: Record the highest quarter revenue offered maybe $22 2 million.

Mr. <unk>: Revenue grew by 54% year over year.

Mr. <unk>: Ferocity.

Mr. <unk>: Profit grew strongly by 27% year over year, while achieving the highest gross profit for the past nine quarters.

Mr. <unk>: Gross margin has also improved.

Mr. <unk>: Zero.

Mr. <unk>: This is Paul cutoff quarter.

Mr. <unk>: We record an adjusted EBITDA profit in this quarter.

Mr. <unk>: Mark the seventh consecutive quarter quarterly positive adjusted EBITDA, we have had.

Mr. <unk>: Although.

Mr. <unk>: It was a great quarter of rail or the business lines.

Mr. <unk>: Ill preferred debt targets, we have set for them.

Mr. <unk>: Yeah.

Mr. <unk>: This is no doubt sell great momentum for the rest of today certify.

Carter: Hey, Carter in project.

Carter: <unk> outperformance and our solid financial position enabled us to invest more resources into the development of our enterprise AI agent that fraud.

Carter: Its global expansion.

Carter: Now let.

Carter: Let me share more on individual basis premise.

Carter: Our total <unk> revenue has grown 48% year over year driven by the <unk>.

Speaker Change: Great numbers, probably beneficial basis within the core revenue or business segments. Then it developers Susquehanna services video services and financial risk management, or our preferred and record significantly year over year revenue growth.

Carter: Developer services revenues, which consist of subscription services are better as a it is increased by a strong 14% year over year and decreased 12% quarter over quarter subscription revenue has been rapid in great number where it increased by 26% year over year and decreased 2% cutoff recorder better Ags <unk>.

Carter: <unk> revenue grew by an incredible 259% year over year and decreased 46% quarter over quarter.

Carter: Our copy say, it's a subscription services revenue of renminbi.

Carter: $3 5 million record growth of 36% year over year and decreased 2% cutoff quarter, yes.

Carter: For the year revenue growth was mainly driven by a 22% increase in.

Carter: Carrying on the great momentum, we've got in kill for alternate any fall.

Carter: Our subscription revenue record third consecutive quarter of RMB.

Carter: <unk> revenue.

Carter: For subscription services.

Carter: Look out year over year revenue growth of import demand.

Carter: Domestic and overseas markets in particular are engaged that revenue will grow by 127% year over year disarray multiple rumba, what's always out of the house to cover up many notable wins in the oversea market.

Carter: Both customer numbers and also.

Carter: Have a solid growth year over year with a great product and services, we have IBD, where we can scale distributed globally to get more customers and new wins in many countries in many quarters to come.

Carter: Next ico elaborate more are engaged in our business. This quarter. This is basically it's always gets me very pumped out wed show you review.

Carter: Firstly, the total contract value retail has spoken to maybe 110 million milestone in Q1 of <unk> just a recap.

Carter: The total contract value was only in there maybe $10 million at Q3 of <unk> six quarters. Later this amount has grown 10 clients.

Carter: This is a remarkable achievement by the team.

Carter: Secondly, customer acquisition continue to be the driving force of the success of these spaces.

Carter: That customer number has increased by 25%.

Carter: Pushing 848.

Carter: Firstly, the revenue recognized for the engage it again record great growth of 127% year over year.

Carter: Firstly, our engage in our products and services and also to a customer in more than 40 different countries and regions globally.

Carter: I am truly pleased with the teams at Scotia effort results and the momentum of engage it up.

Carter: I believe that is the engine of growth for us in the next.

Carter: 24 months.

Carter: We're seeing sequentially revenue some of the notable new and renewable customer in this quarter include but not limited to.

Carter: <unk>.

Carter: BYD.

Carter: SF Express.

Carter: <unk> AI.

Carter: In Hangzhou, Ben just to name a few.

Carter: Value added services revenue were RMB $8 9 million increased by 215 per se year over year, but decreased by 46% quarter over quarter.

Carter: <unk> revenue year over year growth. We have we have seen was many due to the recovery of the advertiser spending we have seen in Q1 for the same PRA advertiser spending has increased more than 20% we should feel their revenues by year over year. The sequential revenue decline was mainly due to the double 11 at <unk>.

Carter: Financial Pain Festival in Q4, but was not assistance in Q1.

Carter: Let me pass the call over to Shannon, who will share more about the vertical application and other aspects of our financial performance of this quarter.

Shannon: Thanks, Chris.

Speaker Change: Next I'll go over the revenue for vertical application that includes.

Carter: Financial risk management and market intelligence overall.

Mr. <unk>: Overall.

Mr. <unk>: The code application had a very strong quarter.

Mr. <unk>: Revenue increased by 35% year over year, and 20% quarter over quarter.

Mr. <unk>: And we didn't vertical application financial risk management as I called it a 64% growth in revenue year over year, and 36% growth quarter over quarter.

Mr. <unk>: Financial risk management has its best and biggest quarter ever recorded Q1 revenue in excess of 22 million renminbi.

Mr. <unk>: This 64% year over year revenue growth was mainly due to the strong 19%.

Mr. <unk>: Customers number growth and 38% ARPA growth.

Mr. <unk>: As I mentioned in the prior quarter that our team has fine too and upgraded our service and products.

Mr. <unk>: The result is simply stunning to see it at least.

Mr. <unk>: The upgraded product and services were in high demand amongst our financial industry vertical.

Mr. <unk>: The new and existing licensed financial institution, while buying and consuming our products and services.

Mr. <unk>: Apart from developers subscription revenue that Chris mentioned earlier financial risk management presented itself as a next growth engine in early 2025.

Mr. <unk>: We are certainly very pleased to see the resurgence of this business in this quarter and beyond.

Mr. <unk>: The customers that we have signed out or renew in Q1 include but not limited to <unk> <unk>.

Mr. <unk>: So you can quit pool pool, and many more license.

Mr. <unk>: Credit and financial institutions throughout China.

Mr. <unk>: Market intelligence revenue on the other hand decreased by 26% year over year and managed to record a modest 4% growth quarter over quarter due to the continued weakness in the market demand for Chinese ADP data and this result is in line with our expectation.

Mr. <unk>: Next I'll go through some of the key census, and balance sheet items.

Mr. <unk>: Onto operating expenses.

Mr. <unk>: The Q1 operating expenses was at <unk> $66 million, representing a 14% increase year over year and remained flat quarter over quarter.

Mr. <unk>: The majority of the increase was attributable to our sales and marketing Department.

Mr. <unk>: Snapshot, our Q1 revenue grew by 38% year over year gross profit grew by 27%.

Mr. <unk>: While opex only grew by 14% overall.

Mr. <unk>: Overall, we are pleased to see how opex has been trending in view of the revenue and gross profit growth we have achieved.

Mr. <unk>: And do just a sustainable growth model for a long term basis.

Mr. <unk>: I'll now go over the individual Opex category.

Mr. <unk>: For R&D expenses increased 8% year over year to renminbi, $24 6 million, mainly due to the increase in staff costs and associated expenses cost has also contributed to the year over year increase in R&D expenses.

Mr. <unk>: Selling and marketing our centers increased by 34% year over year to RMB 23, 3 million, mainly due to the increase in sales Commission and traveling expenses in line with our revenue growth and cash collection recorded in this quarter.

Mr. <unk>: G&A expenses decreased by 2% year over year to $12 7 million, mainly due to the reduction in professional fees as a result of our continuous disciplined management of expenses.

Mr. <unk>: Next I'll shift three very important <unk>, either we closely monitor.

Mr. <unk>: For net dollar retention rate a commonly used kpis for soft company is stood at 96% for our core developer subscription business for the trailing 12 months ended March 31, 285, and this high end Dr percentage, reflecting that we have high customer retention rate couple.

Mr. <unk>: With the ability to increase revenue to upsells.

Mr. <unk>: Through upgrades and expansion and do just another great quarter with such an impressive number.

Mr. <unk>: Secondly.

Mr. <unk>: And other financial Kpis for tracking the performance of soft company is the total deferred revenue, which represents cash collected in advance from customers for future contract performance.

Mr. <unk>: At a record high of <unk> $156 9 million and this is the historical record where our deferred revenue balance has exceeded RMB $150 million.

Mr. <unk>: Thirdly, we continue to maintain healthy.

Mr. <unk>: Our turnover this now.

Mr. <unk>: 53 days and this was slightly higher than what we had in Q4 simply due to the extended holiday during the Chinese new year period, where collection is typically slower than other quarters.

Mr. <unk>: We will continue to work hard to ensure we collect cash from customer activity.

Mr. <unk>: And at the same time mitigating the risk of bad and doubtful debts.

Mr. <unk>: Onto our balance sheet.

Mr. <unk>: Next total assets were <unk> 376 million.

Mr. <unk>: March 31st don't even at 5%.

Mr. <unk>: This includes cash and cash equivalent of one to $3 6 million.

Mr. <unk>: Accounts receivable of $54 1 million prepayments and other.

Mr. <unk>: $17 4 million operating essences.

Mr. <unk>: Operating lease.

Mr. <unk>: Right of use SSL $15 9 million fixed assets of $4 $3 million long term assets of $3 5 million <unk> of $37 8 million and intangible assets of $12 8 million, resulting from the central acquisition and much needed to.

Mr. <unk>: And total liabilities were.

Mr. <unk>: $261 6 million as of March 31st this.

Mr. <unk>: This include accounts payable of $34 1 million.

Mr. <unk>: Current operating lease liability of $4 2 million.

Mr. <unk>: Revenue of $156 9 million.

Mr. <unk>: And accrued liabilities of $66 4 million.

Mr. <unk>: And now let me take a few minutes here to recap the description a quarter of accelerated growth driven by globalization that Chris used at the beginning of this call.

Mr. <unk>: In this quarter, our revenue year over year grew strongly by 38%, reaching RMB $89 million. This was our highest Q1 revenue since the transition into pure SaaS model our.

Mr. <unk>: Our developer subscription service item and another $50 million revenue quarter with Reminbi.

Mr. <unk>: <unk> three 5 billion.

Mr. <unk>: Secondly.

Mr. <unk>: Our English lab had a very strong quarter revenue grew by close to $127 million on year over year basis and cumulated cumulative.

Mr. <unk>: Cumulative contract value increased by more than $63 million in Q1 alone, bringing the total signed contract value to 110 million renminbi.

Mr. <unk>: Both the gross profit and gross margin has improved along with our global expansion efforts.

Mr. <unk>: We have a seventh consecutive quarter of positive adjusted EBITA.

Mr. <unk>: And this is a no doubt very strong growth quarter for our own mobile we started the year with a great quarter, one and we believe that momentum will carry on to the other quarters of 2025.

Mr. <unk>: Now, let's turn to the business outlook and based on the current available information. The company sees the Q2 2025 revenue guidance to be in the range of <unk> 87, 5 million to let me be $90 5 million, representing a solid 10% to 14% year over.

Mr. <unk>: Compared to same quarter often into for.

Mr. <unk>: And the growth outlook is based on the current market conditions and reflects the company's current and preliminary estimate of market and operating conditions and customer demands, which are all subject to change.

Mr. <unk>: Lastly, before I conclude I'll give a quick update on the share repurchase plan.

Mr. <unk>: For the quarter ended March 31, 225, we repurchased 16000.

Mr. <unk>: <unk> thousand <unk>.

Mr. <unk>: Cumulatively, we have repurchased a total of 295000 since the start of our repurchase program.

Mr. <unk>: And this concludes our prepared remarks, we're happy to take the question now operator. Please proceed.

Mr. <unk>: Thank you.

Mr. <unk>: As a reminder, if you wish to ask a question. Please press star one on your telephone from leap your name to be announced to the jewelry. Your question. Please press star one one again.

Mr. <unk>: Yeah.

Mr. <unk>: Yes.

Mr. <unk>: We will take our first question.

Speaker Change: On the first question comes from the line of Calvin Wong from <unk> Capital. Please go ahead. Your line is open.

Speaker Change: Good evening management.

Mr. <unk>: Thank you for taking my question.

Mr. <unk>: I have one question related to the engaged lab.

Mr. <unk>: First of all congrats on.

Mr. <unk>: And get to that business has achieved breakthrough contract value of 110.

Mr. <unk>: <unk> hundred 10 million RMB in Q1, so you buy back the calculation correctly. So that's.

Mr. <unk>: Total newly signed contract value was more than <unk>.

Mr. <unk>: 16 million now MB in Q1, so I won't be able to say.

Mr. <unk>: Management could provide some guidance outlook of engaging that business going forward.

Speaker Change: Okay, Doug let me take this call.

Mr. <unk>: This question.

Mr. <unk>: I guess your calculation is spot on so at the back of achieving this $60 million contract in a single quarter.

Mr. <unk>: Yeah, a few metals alloys share review and everyone on the call.

Mr. <unk>: One is the fact that we have proven to have the ability to win big contracts in global stage just to clarify this.

Mr. <unk>: Newly signed 60 million contract in Q1, and if I were from different customer outside of China.

Mr. <unk>: And second our product and services are indeed meeting the needs of global customers customers are willing to sign multi year contract with US is another testament of the superior quality of our service and product and this customer have shown great long term commitment towards our product and services.

Mr. <unk>: And you asked me, whether we will get another $60 million.

Mr. <unk>: New signed contract in Q2, I guess my friend and honest question is unlikely at this stage, which is a realistic expectation.

Mr. <unk>: But this 60 million renminbi quarter partners, a few values real lesson to make significant wins going forward.

Mr. <unk>: It shows that we have the clinical capability and know how to win big contracts our products are superior to competitors in the market.

Mr. <unk>: So.

Mr. <unk>: Our growing presence in the global stage other overseas customer will start to look at English let differently.

Mr. <unk>: And maybe this 60 million new contracts a quarter is not too far away at all.

Kevin: This answer your question Kevin.

Kevin: Very clear thanks.

Kevin: Yes.

Kevin: Okay.

Kevin: Thank you once again, if you wish to ask a question. Please press star one on your telephone.

Kevin: We will take our next question.

Marco Zhang: Your next question comes from the line of Marco Zhang from Dow Corning Research. Please go ahead. Your line is open.

Michael: Hi, This is Michael from the local research grants.

Michael: Our strong quarters.

Speaker Change: One question for the management so.

Michael: This quarter your revenue grew 38% year over year gross profit grew 27 year over year and adjusted EBITDA.

Speaker Change: On the seventh consecutive quarter of positive numbers. However.

Speaker Change: Companies do recording that loss. So my question is when do you think we can expect.

Kevin: The net profit.

Speaker Change: Hi, Michael.

Michael: Your question I think youre right to point out a few key numbers, let me recap in this quarter. What we have is revenue grew by 38%.

Michael: Gross profit grew by 27% and our Opex is only grew by 14% and this business model has a perfect relationship to generate profitability in shop.

Michael: You may conclude that we earn more than what we spend.

Michael: But if I Peel further deeper.

Kevin: So phase one of our important finding download shared with you and the others on the call is there a day or so.

Kevin: Within expenses that we need to spend now in order to feed a continuous growth trajectory.

Kevin: Let me ask but and more for example, R&D and it is vitally important that we continue to research and develop and continue to fine tune our product now.

Kevin: One Great example is the financial risk management.

Kevin: <unk> business grew by 64% year over year and this is mainly due to <unk>.

Kevin: Krista, we have meet and this upgrade resulted in more customer using and consuming our products. Therefore, we have to 65% revenue growth on the flip side, if we stand still and we have no intention to increase our R&D activities, our product will not have evolved and we.

Kevin: We will not get a 65% revenue growth.

Kevin: And secondly, marketing expenses is another crucial expense for any company needing to spend in order to broaden our global reach and expansion.

Kevin: We need to have English that brand name known globally.

Kevin: It was because the marketing campaign that we had we were able to grow the business without borders into 40 countries and region by March 31.

Jamie: Thank you Jamie.

Kevin: As a matter of fact, if you one net profit next quarter I think we can do that all we need to do is just with our R&D and marketing expenses.

Kevin: However, this will come at the expense of product development and continue newest marketing spend and this was certainly hurt our ability to grow our revenue in the near future.

Kevin: Therefore, we need to strike a balance between spending diligently enough. So that we can have the firepower to few hour continuous revenue growth in the next 12 or 24 months.

Kevin: As long as we continue to scale our business the results will come sooner or later and hope this answer your question Michael.

Michael: Okay. Yeah. Thanks, Congrats again and look forward to see another strong quarter.

Michael: I have no more questions.

Michael: Thank you thank you Sir.

Speaker Change: No further questions I would like to hand back to Nathan gifting for closing remarks.

Speaker Change: Okay.

Michael: Okay.

Michael: Okay.

Speaker Change: There are no further questions I'll hand back to Bonnie Zhang for closing remarks.

Bonnie Zhang: Thank you Heidi. Thank you everyone for joining our call Tonight.

Michael: 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 good night. Thank you.

Michael: This concludes today's conference call. Thank you for participating you may now disconnect.

Michael: Okay.

Michael: Okay.

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