Q2 2026 Aurora Mobile Ltd Earnings Call

August 20, 2026

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Aurora Mobile Q2 2026 earnings call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you would 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 would like now to hand the conference over to your host today, Christian Arnell. Please go ahead.

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Aurora Mobile Q2 2026 earnings call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you would need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would like now to hand the conference over to your host today, Christian Arnell. Please go ahead.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you would need to press star one-one (*) 1 1 on your telephone; you would then hear an automated message advising your hand is raised.

Speaker #1: To withdraw your question, please press star one one again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your host today, Christian Arnell.

Speaker #1: Please go ahead.

Speaker #2: Thank you. Hello, everyone, and thank you for joining us today. Aurora Mobile's earnings release was distributed early today, and is available on its IR website at ir dot aurora dash mobile dot com.

Christian Arnell: Thank you. Hello, everyone, and thank you for joining us today. Aurora Mobile's earnings release was distributed early today and is available on its IR website at ir.aurora-mobile.com. On the call today are Mr. Weidong Luo, Chairman and Chief Executive Officer, Mr. Shan-Nen Bong, Chief Financial Officer, and Mr. Guangyan 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 would 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 US Private Securities Litigation Reform Act of 1995.

Speaker #2: On the call today are Mr. Wei Dongruo, Chairman and Chief Executive Officer; Mr. Shan-Nen Bong, Chief Financial Officer; and Mr. Guangyan Chen, General Manager.

Speaker #2: 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.

Speaker #2: The 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.

Christian Arnell: 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 are included in the company's filings with the US SEC. The company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required under applicable law. With that, I would now like to turn the conference call over to Mr. Luo. Please go ahead.

Speaker #2: Further information regarding these and other risks, uncertainties, and factors are included in the company's filings with the U.S. SEC. 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 #2: With that, I'd now like to turn the conference call over to Mr. Luo. Please go ahead.

Speaker #3: Thanks, Christian. Hi, everyone. Welcome to Aurora Mobile's Q2 2026 earnings call. Before I comment on our Q2 results, I would like to remind everyone that we have uploaded the quarterly earnings deck on our IR website.

Weidong Luo: Thanks, Christian. Hi, everyone. Welcome to Aurora Mobile's 2026 Q2 earnings call. Before I comment on our Q2 results, I would like to remind everyone that we have uploaded the quarterly earnings deck on our IR website. You may refer to the deck as we proceed with the call today. As we have done in the past, the suitable description that I would give to the Q2 of 2026 is our CNY 100 million revenue quarter. The reason for this narrative is obvious. Our achievements in the Q2 of 2026 are as follows. Firstly, for the third time in our history, we recorded SaaS business revenue in excess of CNY 100 million in a single quarter. This was fueled by the highest Developer Service revenue in history of CNY 79.9 million in this quarter. Secondly, our global flagship product, EngageLab, has its best quarter yet.

Speaker #3: You may refer to the deck as we proceed with the call today. As we've done in the past, the suitable description that I would give to the second quarter of 2026 is: our R&B $100 million revenue quarter.

Speaker #3: The reason for this narrative is obvious. Our achievements in the second quarter of 2026 are as follows: Firstly, for the third time in our history, we recorded fast business revenue in excess of RMB 100 million in a single quarter.

Speaker #3: This was fueled by the highest developer service revenue in history, of RMB 79.9 million in this quarter. Secondly, our global flagship product, Engage Labs, had its best quarter yet.

Speaker #3: The Engage Labs ARR for June 2026 has scaled to a record high of $14.6 million, representing 170 percent year-over-year growth. Thirdly, gross profit grew by 16 percent year-over-year.

Weidong Luo: The EngageLab's ARR for June 2026 has scaled to a record high of $14.6 million, representing 170% year-over-year growth. Thirdly, gross profit grew by 16% year-over-year. Gross margin improved by 197 basis points between the years. Having top-line growth alone is not enough. In this quarter, we delivered the fifth consecutive quarters of US GAAP net profit. Last but not least, operationally, we brought in net cash inflow of CNY 23.3 million this quarter. This marks a strong Q2 performance building on our Q1 results released in May. Taken together, the first two quarters of 2026 validate our robust growth momentum, and we remain on track to deliver against our target for a highly promising full year 2026. Let me now share more on the business aspects. CNY 100 million revenue a quarter. Yes, we made it again. This milestone came one quarter earlier than what we previously anticipated.

Speaker #3: Gross margin improved by 197 basis points between the years. Having top-line growth alone is not enough. In this quarter, we delivered the fifth consecutive quarter of U.S.

Speaker #3: Gap net profit. Last but not least, operationally, we brought in a net cash inflow of RMB 23.3 million this quarter. This marks a strong second quarter performance.

Speaker #3: Building on our Q1 results released in May, taken together, the first two quarters of 2026 validate our robust growth momentum, and we remain on track to deliver against our targets for a highly promising full year 2026.

Speaker #3: Let me now share more on the business aspects. R&B: 100 million revenue a quarter — yes, we made it again. This milestone came one quarter earlier than what we previously anticipated.

Speaker #3: We are very pleased with this early pleasant surprise. Our total Q2 group revenue reached RMB 101.2 million, representing a strong 13 percent year-over-year growth.

Weidong Luo: We are very pleased with this early pleasant surprise. Our total Q2 group revenue reached CNY 101.2 million, representing a strong 13% year-over-year growth. This CNY 100 million of quarter revenue is a very important milestone for us. It signifies a few key messages that I think are important that I share with you all today. Firstly, the CNY 100 million quarterly revenue milestone marks a landmark validation of Aurora Mobile's pure SaaS strategic transformation, forming a durable, larger revenue foundation. Secondly, top-line expansion is anchored by high-margin recurring Developer Subscription revenue supported by solid customer retention and rising enterprise demand. Thirdly, dual growth engines, domestic developer ecosystem, and fast-growing global EngageLab business jointly drive scalable cross-market revenue expansion. Fourthly, greater revenue scale improves operating leverage, underpinning our consistent profitability trend and long-term path of sustainable shareholder returns.

Speaker #3: This RMB 100 million-a-quarter revenue is a very important milestone for us. It signifies a few key messages that I think are important to share with you all today.

Speaker #3: Firstly, the RMB 100 million quarterly revenue milestone marks a landmark validation of Aurora Mobile's pure SaaS strategic transformation, forming a durable, larger revenue foundation.

Speaker #3: Secondly, top-line expansion is anchored by high-margin, recurring developer subscription revenue, supported by solid customer retention and rising enterprise demand. Thirdly, dual growth engines—the domestic developer ecosystem and the fast-growing global Engage Labs business—jointly drive scalable, cross-market revenue expansion.

Speaker #3: Fourthly, greater revenue scale improves operating leverage, underpinning our consistent profitability trend and long-term path of sustainable shareholder returns. In this quarter, developer services recorded a strong 24% revenue growth year-over-year, but vertical applications revenue decreased 16% year-over-year.

Weidong Luo: In this quarter, Developer Services recorded a great 24% revenue growth year-over-year, but Vertical Applications revenue decreased 16% year-over-year. Developer Services revenues, which consist of Subscription Service and Value-Added Services, delivered excellent performance in this quarter. Our core business, Developer Subscription Services, delivered another historic high quarterly revenue number of CNY 70.7 million, representing growth of 32% year-over-year and 9% quarter-over-quarter. The year-over-year and quarter-over-quarter revenue growth was mainly driven by increases in both customer number and ARPU. In short, the momentum of this business is very strong, and I do have high hope of the continued growth in many more quarters to come. Now, let's move on to the update on our global flagship product, EngageLab. EngageLab, being the jewel of Aurora Mobile's growth engine, has again brought in excellent numbers every quarter since its launch.

Speaker #3: Consisting of subscription services and value-added services, we delivered excellent performance in this quarter. Our core business, developer subscription services, delivered another historic high quarterly revenue number, with year-over-year growth of 32 percent and quarter-over-quarter growth of 9 percent.

Speaker #3: The year-over-year and quarter-over-quarter revenue growth was mainly driven by increases in both customer number and RPU. In short, the momentum of this business is very strong, and I do have high hopes for continued growth in many more quarters to come.

Speaker #3: Now, let's move on to the update on our global flagship product, Engage Labs. Engage Labs, being the jewel of Aurora Mobile's group engine, has again brought in excellent numbers every quarter since its launch.

Speaker #3: In this quarter, the highlights include: firstly, Engage Labs recorded another quarter of tremendous growth, where the ARR reached a new milestone of $14.6 million as of June 2026.

Weidong Luo: In this quarter, the highlights include, firstly, EngageLab recorded another quarter of tremendous growth, where the ARR reached a new milestone of $14.6 million as of June 2026. This represents a 170% year-over-year growth. Secondly, EngageLab broke another record where the cumulative signed contract value has exceeded RMB 200 million by the end of Q2 of 2026. This speaks volume in terms of the market acceptance and total addressable market for this product. For sure, we are very pleased with this achievement. Nevertheless, we will continue to work hard and smart to conquer more markets and winning more contracts. In Q2 alone, we inked more than RMB 27.4 million worth of new contracts. Thirdly, more and more new global customers are being converted and switched to EngageLab. The EngageLab customer number has exceeded 2,100 as of 30 June 2026.

Speaker #3: This represents a 170 percent year-over-year growth. Secondly, Engage Labs broke another record, where the cumulative signed contract value has exceeded RMB 200 million by the end of Q2 2026.

Speaker #3: This speaks volumes in terms of the market assessments and total addressable market for this product, for sure. We are very pleased with this achievement.

Speaker #3: Nevertheless, we will continue to work hard and smart to conquer more markets and win more contracts. In Q2 alone, we inked more than RMB 27.4 million worth of new contracts.

Speaker #3: Thirdly, more and more new global customers are being converted and switched to Engage Labs. The number of Engage Labs customers has exceeded 2,100 as of June 30, 2026.

Weidong Luo: The expansion of EngageLab across the globe has been very successful. Fourthly, the recognized revenue for EngageLab in Q2 of 2026 reached RMB 27.5 million, representing an outstanding 186% growth year-over-year. Also, in this quarter, there was a new addition to the EngageLab family where we officially launched Silent Auth, an advanced password-less authentication solution designed to complement existing SMS OTP services and elevate identity verification for the global market. Silent Auth to phone-based authentication across three key use cases. Namely, firstly, faster registration and login. Secondly, secure verification for high-risk operations, and certainly marketing fraud prevention. We view the launch of Silent Auth not only enriches EngageLab's omni-channel customer engagement portfolio, but also reinforces Aurora Mobile's commitment to providing global enterprises with stable, efficient, and intelligent solutions.

Speaker #3: The expansion of Engage Labs across the globe has been very successful. Fourthly, the recognized revenue for Engage Labs in Q2 2026 reached RMB 27.5 million, representing an outstanding 186 percent growth year-over-year.

Speaker #3: Also, in this quarter, there was a new addition to the Engage Labs family, where we officially launched Silent Ox, an advanced passwordless authentication solution designed to complement existing SMS OTP services and elevate identity verification for the global market.

Speaker #3: Silent Ox provides a more dependable approach to phone-based authentication across three key use cases, namely: first, faster registration and login; second, secure verification for high-risk operations; and third, marketing fraud prevention.

Speaker #3: We view the launch of Silent Ox not only as enriching Engage Labs' omnichannel customer engagement portfolio, but also as reinforcing Aurora Mobile's commitment to providing global enterprises with stable, efficient, and intelligent solutions.

Speaker #3: Going forward, it is my goal that Engage Labs will continue to leverage advanced technologies to help businesses build stronger, trust-based customer relationships and accelerate global growth within subscription revenue. Some of the notable wins in this quarter include, but are not limited to: Bank of China Hong Kong, CXMT, DeepSeek, Mincheng Zhenzhen, and Hashkey.

Weidong Luo: Going forward, it is my goal that EngageLab will continue to leverage advanced technologies to help businesses build stronger trust-based customer relationships and accelerate global growth. Within subscription revenue, some of the notable wins in this quarter include, but are not limited to, Bank of China (Hong Kong), CXMP, DeepSeek, Mincheng Jiancheng, and HashKey Group. Value-Added Services revenues were RMB 9.2 million, up 36% quarter over quarter, but down 15% year over year. The quarter over quarter spike was mainly attributable to the traditional quarterly online shopping of 618 in Q2. I think it is also time for me to provide an update on the progress and updates we have on our enterprise AI agent platform, GPTBots.ai. Recently, we released a major production-grade upgrade to GPTBots.ai, tackling the key industrial limitations whereby conventional AI agents only support conversations and demos, lacking deep business system integrations and end-to-end task execution.

Speaker #3: Value-added services revenues were RMB 9.2 million, up 36 percent quarter-over-quarter but down 15 percent year-over-year. The quarter-over-quarter spike was mainly attributable to the traditional quarterly online shopping event, 618, in Q2.

Speaker #3: I think it is also time for me to provide an update on the progress and updates we have on our enterprise AI agent platform, GPTBots.ai.

Speaker #3: Recently, we released a major, production-grade upgrade to GPTBots.ai, tackling key industry limitations whereby conventional AI agents only support conversations and demos, lacking deep business system integration and end-to-end task execution.

Speaker #3: The upgrade centers on three pillars: a graph-enhanced knowledge base for context-aware business analysis; autonomous workflow automation across 14 communication channels via agent collaboration; and robust enterprise governance with audit trails, runtime safeguards, and mandatory human validation for live deployment.

Weidong Luo: The upgrade centers on three pillars. A graph-enhanced knowledge base for context-aware business analysis, autonomous workflow automation across 14 communication channels via agent collaboration, and robust enterprise governance with audit trails, runtime safeguard, and mandatory human validation for live deployments. This product advancement supports GPTBots global expansion through the following. Firstly, transform the platform into a production-ready solution to improve overseas sales conversion. Secondly, native compatibility with global channels, including WhatsApp, Slack, and Teams, extends market reach across North America, Europe, and Southeast Asia. Thirdly, strengthened governance satisfies international data compliance requirements, enabling deals with multinationals and regulated sectors. Fourthly, optimized knowledge processing reduces customization and onboarding costs for global clients and improves project gross margins. We believe the upgrade puts Aurora Mobile in a strong position to capture market share as enterprises worldwide transition from AI testing to large-scale deployment of agentic AI.

Speaker #3: This product advancement supports GPTBots' global expansion through the following: Firstly, it transforms the platform into a production-ready solution to improve overseas sales conversion. Secondly, native compatibility with global channels, including WhatsApp, Slack, and Teams, extends market reach across North America, Europe, and Southeast Asia. Thirdly, it strengthens governance and satisfies international data compliance requirements, enabling deals with multinationals and regulated sectors. Fourthly, optimized knowledge processing reduces customization and onboarding costs for global clients and improves project growth margins.

Speaker #3: We believe the upgrade puts Aurora Mobile in a strong position to capture market share as enterprises worldwide transition from AI testing to large-scale deployment of agentic AI.

Speaker #3: As you can see, besides growing the business globally, we have been busy on the R&D front. Our team has not taken our eyes off the need to continue to upgrade and create new products and services to supplement our entire suite of offerings to our customers.

Weidong Luo: As you can see, besides growing the business globally, we have been busy on the R&D fronts. Our team has not taken our eyes off the needs to continue to upgrade and create new products and services to supplement our entire suite of service to our customers. This is important because we will not rest on our laurels amidst our achievements to date. We must remain attuned to the latest developments across global markets and implement necessary product upgrades, adjustments, and innovations as circumstances demand. Only by doing so can we stay relevant and meet the evolving needs of our global customer base. Collectively, these efforts form critical building blocks to sustain ongoing revenue growth and advance our path toward improved profitability. Now, let me pass the call over to Shan-Nen, who will take you through the metrics on vertical applications and financial performance for this quarter.

Speaker #3: This is important because we will not rest on our laurels amidst our achievements today. We must remain attuned to the latest developments across global markets and implement necessary product upgrades, adjustments, and innovations as circumstances demand.

Speaker #3: Only by doing so can we stay relevant and meet the evolving needs of our global customer base. Collectively, these efforts form critical building blocks to sustain ongoing revenue growth and advance our path toward improved profitability.

Speaker #3: Now, let me pass the call over to Shan-Nen, who will take you through the metrics on vertical applications and financial performance for this quarter.

Shan-Nen Bong: Okay. Thanks, Chris. For vertical application, that includes Financial Risk Management and Market Intelligence. Overall, vertical application revenue decreased year-over-year and quarter-over-quarter. Within vertical application, Financial Risk Management revenue decreased 17% year-over-year and pretty much remained flat quarter-over-quarter. We are still operating in a tough business environment, and we are making the necessary adjustment on go-to-market and various strategies. The customers that we sign up or renew in Q2 include, but not limited to, Shanghai Pudong Development Bank, Ping An Consumer Finance, WeBank, and many more licensed credit or financial institutions throughout China. Market Intelligence revenue decreased 11% quarter-over-quarter and 12% year-over-year due to the continued weak market demand for Chinese APP data. This result is in line with our expectation. Coming to the other P&L items.

Shan-Nen Bong: Okay. Thanks, Weidong Luo. For vertical application, that includes Financial Risk Management and Market Intelligence. Overall, vertical application revenue decreased year-over-year and quarter-over-quarter. Within vertical application, Financial Risk Management revenue decreased 17% year-over-year and pretty much remained flat quarter-over-quarter. We are still operating in a tough business environment, and we are making the necessary adjustment on go-to-market and various strategies. The customers that we sign up or renew in Q2 include, but not limited to, Shanghai Pudong Development Bank, Ping An Consumer Finance, WeBank, and many more licensed credit or financial institutions throughout China. Market Intelligence revenue decreased 11% quarter-over-quarter and 12% year-over-year due to the continued weak market demand for Chinese APP data. This result is in line with our expectation. Coming to the other P&L items.

Speaker #1: Great, thanks, Chris. For vertical applications, that includes financial risk management and market intelligence. Overall, vertical application revenue decreased year-over-year and quarter-over-quarter. Within vertical applications, financial risk management revenue decreased 17 percent year-over-year and pretty much remained flat quarter-over-quarter.

Speaker #1: We are still operating in a tough business environment, and we are making the necessary adjustments to our go-to-market and various strategies. The customers that we signed up or renewed in Q2 include, but are not limited to: Pufa Yinhang, Ping An Xiaojing, Wei Zhong Yinhang, and many more licensed credit or financial institutions throughout China.

Speaker #1: Market intelligence revenue decreased 11 percent quarter-over-quarter and 12 percent year-over-year due to the continued weak market demand for Chinese app data. This result is in line with our expectations.

Speaker #1: Moving to the other P&L items, our gross profit recorded another strong Q2 quarter with 16% year-over-year growth to RMB 69.2 million. Our gross margin also showed a significant improvement, rising by 197 basis points year-over-year.

Shan-Nen Bong: Our gross profit recorded another strong Q2 quarter with 16% year-over-year growth to CNY 69.2 million. Our gross margin has also recorded significant improvement by 197 basis point year-over-year. This improvement reflects better product mix and tighter operating control discipline. Higher gross profit give us greater flexibility to invest in growth while absorbing external cost pressures. Most importantly, it proves that we can convert business scale into sustainable profit generation, which is critical to driving shareholders' return over time. On net profit, following the great momentum we had in Q1 of 2026, we recorded yet another GAAP net profit quarter, making it fifth consecutive quarter of GAAP net profit. We are well pleased with how this quarter has played out financially, from top-line growth to bottom-line profitability. On to operating expenses.

Speaker #1: This improvement reflects a better product mix and tighter operating control discipline. Higher gross profit gives us greater flexibility to invest in growth while absorbing external cost pressures.

Speaker #1: Most importantly, it proves that we can convert business scale into sustainable profit generation, which is critical to driving shareholders' return over time.

Speaker #1: On net profit, following the great momentum we had in Q1 of 2026, we recorded yet another GAAP net profit quarter, making it the fifth consecutive quarter of GAAP net profit.

Speaker #1: We are very pleased with how this quarter has played out financially, from top-line growth to bottom-line profitability. Onto operating expenses. Q2 OPEX was at RMB 67.6 million, up 2 percent quarter-over-quarter and up 11 percent year-over-year.

Shan-Nen Bong: Q2 OPEX was at CNY 67.6 million, up 2% quarter-over-quarter and up 11% year-over-year. The OPEX is within our forecast, and we are happy at the level where they are. I will now dive deeper into the individual OPEX category. R&D expenses increased by 13% year-over-year to CNY 29.3 million, mainly due to the higher staff costs and associated expenses. Technical service fees also contributed to the year-over-year increase. Selling and marketing expenses increased by 25% year-over-year to CNY 28.3 million, mainly due to the higher staff costs driven by overseas business expansion. G&A expenses decreased by 18% year-over-year to CNY 10 million, mainly due to the decrease in bad debt provision resulting from improved collection efficiency. Besides, there was no loss on disposal on property and equipment in Q2 of 2026, while such a loss was incurred in the same quarter last year.

Speaker #1: The OPEX is within our forecast, and we are happy with the level they are at. I’ll now dive deeper into the individual OPEX categories.

Speaker #1: R&D expenses increased by 13 percent year-over-year to RMB 29.3 million, mainly due to higher staff costs and associated expenses. Technical service fees also contributed to the year-over-year increase.

Speaker #1: Selling and marketing expenses increased by 25 percent year-over-year to RMB 28.3 million, mainly due to higher staff costs driven by overseas business expansion.

Speaker #1: G&A expenses decreased by 18 percent year-over-year to RMB 10 million, mainly due to the decrease in bad debt provision resulting from improved collection efficiency. Besides, there was no loss on disposal of property and equipment in Q2 2026, while such loss was incurred in the same quarter last year.

Speaker #1: Next, I'll share four other very important KPIs that we closely monitor. Our net dollar retention rate, a commonly used KPI for such companies, stood at 106 percent for our core developers' subscription business for the trailing 12-month period ended June 2026.

Shan-Nen Bong: Next, I will share four other very important KPIs that we closely monitor. Our net dollar retention rate, a commonly used KPI for SaaS company, stood at 106% for our core Developer Subscription Services business for the trailing 12-month period ended June 2026. This is the highest NDR number that we have recorded to date. This is an important signal of existing customer health. This record NDR speaks to strong product stickiness, expanded usage from our install base, and a successful up-sell and cross-selling activity within our current client. While NDR can fluctuate quarter-over-quarter, given customer-specific renewal dynamics, we are very encouraged by this peak result, and we are focused on sustaining healthy retention trends ahead. Secondly, another financial KPI for tracking the performance of SaaS company is total deferred revenue.

Speaker #1: This is the highest NDR number that we have recorded to date. This is an important signal of existing customer health. This record NDR speaks to strong product stickiness, expanded usage from our install base, and the success of upsell and cross-selling activity within our current clients.

Speaker #1: While NDR can fluctuate quarter over quarter, given customer-specific renewal dynamics, we are very encouraged by this peak result, and we are focused on sustaining healthy retention trends ahead.

Speaker #1: Secondly, another financial KPI for tracking the performance of such a company is total deferred revenue. This represents cash collected in advance from customers for future contract performance, and it stood at RMB 181.9 million as of June 30, 2026.

Shan-Nen Bong: This represents cash collected in advance from customers for future contract performance, and it stood at CNY 181.9 million as of 30 June 2026. This is also a historic high balance. This balance acts as a high-quality leading indicator. It gives us good visibility into the near-term revenue stream and strengthens our operating cash flow profile by bringing cash collection forward relative to the income statement recognition. Thirdly, we continue to maintain a healthy level of AR turnover days of 37. This low AR turnover days ensure we have great cash liquidity while mitigating the risk of bad and doubtful debts. Onto cash flow, another important financial KPI for us to manage the business. For the quarter ended 30 June 2026, we recorded net operating cash inflow of CNY 23.3 million.

Speaker #1: This is also a historic high balance. This balance acts as a high-quality leading indicator. It gives us good visibility into the near-term revenue stream and strengthens our operating cash flow profile by bringing cash collection forward relative to the income statement recognition.

Speaker #1: Thirdly, we continue to maintain a healthy level of AR turnover days at 37. This low AR turnover ensures we have great cash liquidity while mitigating the risk of bad and doubtful debt.

Speaker #1: And onto cash flow, another important financial KPI for us to manage the business. For the quarter ended June 30, 2026, we recorded net operating cash inflow of RMB 23.3 million.

Speaker #1: Having operating net cash inflow is very important, as it validates our earnings quality and gives investors and shareholders greater confidence in the sustainability of the reported profit.

Shan-Nen Bong: Having operating net cash inflow is very important, as it validates our earning quality and gives investors and shareholders greater confidence in the sustainability of the reported profit. Let us now recap on Chris' comment on our CNY 100 million revenue quarter. In Q2 2026, we achieved another quarter of GAAP net profit in 2026. This marks our fifth consecutive quarters of net profit, a great trend for healthy, profitable, and sustainable business. Two, our core Developer Subscription Services business has outdone itself again by recording another historical high of CNY 17.7 million revenue in this quarter. The jewel of Aurora Mobile, EngageLab, continues to scale rapidly across the globe. Our EngageLab business exceeded its past record in this quarter. The ARR in June 2026 reached US$14.6 million. This represents a stunning 170% year-over-year growth.

Speaker #1: And let's now recap on Chris's comment regarding our RMB 100 million revenue quarter. In the second quarter of 2026, we achieved another quarter of GAAP net profit.

Speaker #1: This marks our fifth consecutive quarter of net profit, a great trend for a healthy, profitable, and sustainable business. Second, our core developers’ subscription business has outdone itself again by recording another historical high of RMB 70.7 million in revenue for this quarter.

Speaker #1: The duo of Aurora Mobile and Gage Lab continues to scale rapidly across the globe. Our Engage Lab business exceeded its past record in this quarter; the ARR in June 2026 reached $14.6 million.

Speaker #1: This represents a stunning 170 percent year-over-year growth. Fourth, our gross margin grew by 197 basis points year-over-year, and gross profit grew by 16 percent year-over-year.

Shan-Nen Bong: Four, our gross margin grew by 197 basis point year-over-year, and gross profit grew by 16% year-over-year. Number five, our net dollar retention for core Developer Services stood strongly at 106%, another historic high. Number six, equally important was the net cash inflow that I mentioned of CNY 23.3 million we brought in from operating activities. As I have alluded in the last quarter's earnings call, Q1 numbers we have recorded paved the way for great financial year of 2026, and this momentum we built in Q2 2026 was truly phenomenal. The quarterly operating and financial results that Chris and I shared during the call today reflect the considerable strength across our business. We will continue to execute against our established strategic priorities. As we deliver on our execution roadmap, we are confident this operational wins will translate into sustained improvement in our financial statement.

Speaker #1: Number five, our net dollar retention for core developer services stood strongly at 106 percent, another historic high. Number six, equally important was the net cash inflow that I mentioned of RMB 23.3 million.

Speaker #1: We brought in from operating activities. As I alluded to in last quarter's earnings call, the Q1 numbers we recorded paved the way for a great financial year of 2026, and the momentum we built in Q2 2026 was truly phenomenal.

Speaker #1: The quarterly operating and financial results that Chris and I shared during the call today reflect the considerable strength across our business. We'll continue to execute against our established strategic priorities as we deliver on our execution roadmap.

Speaker #1: We are confident these operational wins will translate into sustained improvement in our financial statements. Lastly, before I conclude, I'll give a quick update on the share repurchase plan.

Shan-Nen Bong: Lastly, before I conclude, I will give a quick update on a share repurchase plan. In the quarter ended 30 June 2026, we repurchased 44,000 ADS. Cumulatively, we have repurchased a total of 485,000 ADS since the start of our repurchase program. This concludes our prepared remarks. We are happy to take your question now. Operator, please proceed.

Speaker #1: In the quarter ended June 30, 2026, we repurchased 44,000 ADS. Cumulatively, we have repurchased a total of 485,000 ADS since the start of our repurchase program.

Speaker #1: And this concludes our prepared remarks. We are happy to take your questions now. Operator, please proceed.

Operator: Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. The first question comes from Calvin Wong with Spica Capital. Your line is now open.

Speaker #2: Thank you. As a reminder, to ask a question, please press star one-one on your telephone and wait for your name to be announced. To withdraw your question, please press star one-one again.

Speaker #2: The first question comes from Calvin Wong with Spica Capital. Your line is now open.

Speaker #3: Good evening, management. Thank you for taking my question. Based on the numbers released today, we note that you have a very, very strong Q2 quarter.

Calvin Wong: Good evening, management. Thank you for taking my question. Based on the numbers released today, we note that you have a very strong Q2 quarter. Can I get the management to shed some light on the Q2 quarter and perhaps some hints on how Q3 and Q4 will fare for 2026?

Speaker #3: Can I get the management to shed some light on the Q2 quarter, and perhaps maybe some hints on how Q3 and Q4 will fare for 2026?

Shan-Nen Bong: Hi, Calvin. Thanks for your question. Let me take your question today. You are right. The Q2 number that we just had was a good quarter for us. If I may take a few minutes or just probably 1 minute to summarize here, the three key highlights for Q2 of 2026 would be, number 1, our quarterly revenue exceeded CNY 100 million mark. Number 2, we recorded the fifth consecutive quarters of US GAAP profit. Number 3, operating activities brought in net cash inflow of CNY 23.3 million. Hitting all these three milestones in 1 quarter is significant. It reflects a thriving business where revenue is at a high level. We are delivering GAAP profitability while we also generate net cash inflow, which is very important. Chris and I are very pleased with how this quarter has unfolded.

Speaker #1: Hi, Calvin. Thanks for the question. Let me take your question today. Yeah, you're right, the Q2 numbers that we just had were a good quarter for us.

Speaker #1: If I may take a few minutes—or just probably just one minute—to summarize here, the three key highlights for Q2 of 2026 would be: number one, our quarterly revenue exceeded the RMB 100 million mark.

Speaker #1: Number two, we recorded the fifth consecutive quarter of US GAAP profit. And number three, operating activities brought in a net cash inflow of RMB 23.3 million.

Speaker #1: And hitting all these three milestones in one quarter is significant. It reflects a thriving business, where revenue is at a high level. We are delivering GAAP profitability while also generating net cash inflow, which is very important.

Speaker #1: Chris and I are very pleased with how this quarter has unfolded. As we look into the rest of 2026, our stance remains cautiously optimistic.

Shan-Nen Bong: As we look into the rest of 2026, our stance remains cautiously optimistic. We are encouraged by the business growth trajectory with the global EngageLab business delivering standout momentum. Meanwhile, we will continue to exercise strict cost discipline. Even so, we will still allocate resources selectively to high-priority initiatives that we believe are critical to driving durable and long-term sustainable growth. Hope this answered your question, Calvin.

Speaker #1: We're encouraged by the business growth trajectory with the global Engage momentum. Meanwhile, we'll continue to exercise strict cost discipline. Even so, we'll still allocate resources selectively to high-priority initiatives that we believe are critical to driving durable and long-term sustainable growth.

Speaker #1: And I hope this answers your question, Calvin.

Calvin Wong: Very clear. Thank you.

Speaker #3: Very clear. Thank you.

Operator: Thank you. Our next question is going to come from Jack Sun with Gonghui Research. Your line is open.

Speaker #2: Thank you. And our next question is going to come from Jack Sun with Galongwe Research. Your line is open.

Jack Sun: Thanks, management, for taking my question. I am Jack Sun from Gonghui Research. I noticed from the press release by the company and the commentary made by Chris during the call, we are launching various new services such as Silent Auth and Model X, together with some upgrades to GPTBots. My question is, are they necessary? How do they benefit the company as a whole?

Speaker #4: Thanks, management, for taking my question. I'm Jack Sun from Galongwe Research. I noticed this from the press release by the company and the commentary made by Chris during the call.

Speaker #4: We are launching various new services, such as sign-off and model links. Together with some upgrades to GPT-bots, my question is: are they necessary, and how do they benefit the company as a whole?

Shan-Nen Bong: Hi, Jack. Good to hear from you. Let me take this question. Those services and upgrades that you mentioned are purpose-built upgrades built upon our existing customers' engagement and AI platforms. They are not disconnected new ventures. This is an important differentiator when compared to others in the space. We are not building all these new tools or services just to follow the flavor of the month trend. Instead, every single new capability ties back to our core business. Take for example, Silent Auth. They expand EngageLab value proposition beyond traditional messaging. It reduces user login drop-off, it strengthens the fraud defense, and gives us high-value authentication revenue from our existing global enterprise client. For Model X that you mentioned also, it addressed the fragmentation enterprise face juggling different AI model vendors.

Speaker #1: Well, hi Jack, good to hear from you. Let me take this question. Those services and upgrades that you mentioned are purpose-built upgrades built upon our existing customers' engagement and AI platforms.

Speaker #1: They are not disconnected new ventures, and this is an important differentiator when compared to others in the space. We are not building all these new tools or services just to follow the flavor-of-the-month trend.

Speaker #1: Instead, every single new capability ties back to our core business. I think, for example, Sign-off expands Engage Lab’s value proposition beyond traditional messaging.

Speaker #1: It reduces user login drop-off, strengthens fraud defense, and gives us high-value authentication revenue from our existing global enterprise clients. And for the model links that you mentioned, it also addresses the fragmentation enterprises face juggling different AI model vendors.

Speaker #1: It acts as our unified AI model gateway, cutting integration overheads for customers, and it simplifies billing and operation, feeding model multimodal capability directly into the GPT-bots to make our AI agent more powerful for end users.

Shan-Nen Bong: It acts as our unified AI model gateway, cutting integration overheads for customers. It simplifies billing and operation and feeding multi-model capability directly into the GPTBots to make our AI agent more powerful for end user. Just to share, even our own internal IR team, we use Model X to prepare the Q2 ER deck that we uploaded to the IR website today. It is simply because Model X has so many different large language models that we can pick and choose from within one single platform. There is no need to switch between different large language model accounts for different companies. It is also very easy to use. So I will sincerely encourage everyone on this call to try out Model X too. As for our GPTBots platform upgrades, it advances our enterprise AI agent offering. It expands multi-agent orchestration, multi-model workflow, and no-code tooling.

Speaker #1: And just to share, even our own internal IR team will use model links to prepare the Q2 deck that we'll upload to the IR website today.

Speaker #1: It's simply because Model Link has so many different large language models that we can pick and choose from within one single platform. There's no need to switch between different large language model accounts for different companies.

Speaker #1: It is also very easy to use, so I sincerely encourage everyone on this call to try out model links too. As for our GPT-bots platform upgrades, they advance our enterprise AI agent offering.

Speaker #1: It expands multi-agent orchestration, multimodal workflow, and no-code tooling. And this drives upsell among our large existing customer base and attracts new clients seeking production-ready AI automation, and not just AI prototypes.

Shan-Nen Bong: This drives upsell among our large existing customer base and attracts new clients seeking production-ready AI automation and not just AI prototypes. So if I may summarize, collectively, I believe these upgrades or new product that you mentioned, they reinforce our integrated platform strategy where deeper stickiness within our current account, it helps higher our average contract value. Also this represents a new venture, a new revenue stream while leveraging our existing global sales compliance and infrastructure footprint. Hope this answered your question, Jack.

Speaker #1: So if I may summarize, collectively, I believe this upgrades or new product that you mentioned, they reinforce our integrated platform strategy where deeper stickiness within our current account, it helps higher our average contract value and also this represent a new venture, a new revenue stream while leveraging our existing global sales compliance and infrastructure footprint.

Speaker #1: And I hope this answers your question, Jack.

Speaker #4: Yeah, yeah. That's very clear. Thanks a lot. Operator, I have no more questions.

Jack Sun: Yeah. That is very clear. Thanks a lot. Operator, I have no more questions.

Speaker #1: Thank you.

Shan-Nen Bong: Thank you.

Operator: Thank you. As a reminder, to ask a question, please press star one one on your telephone. I am showing no further questions at this time. I will now turn the call back over to Christian for closing remarks.

Speaker #2: Thank you. And as a reminder, to ask a question, please press star one-one on your telephone. Yeah, I am showing no further questions at this time.

Speaker #2: I will now turn the call back over to Christian for closing remarks.

Speaker #5: Thank you, everyone, for joining the call tonight. If you have any further questions or comments, please don't hesitate to reach out to the IR team.

Christian Arnell: Thank you everyone for joining the call tonight. If you have any further questions or comments, please do not hesitate to reach out to the IR team. This concludes the call. Have a good evening. Thank you very much.

Speaker #5: This concludes the call. Have a good evening. Thank you very much.

Operator: Thank you. This does conclude today's conference call. Thank you for participating, and you may now disconnect.