Aurora Mobile Limited

Ladies and gentlemen, thank you for standing by. This is Aurora Mobile's second quarter 2020 earnings conference call. At this time, all participants are in listen-only mode. After speaker's presentation, there will be questions. During the session, you will need to press star 1 on your telephone. Please be advised that today's conference has been recorded. I would now like to hand the conference over to your host today, Mr. Rene Wangerstein. Thank you. Please go ahead, sir.

Thank you, AJ. Hello, everyone, and thank you for joining us today. Aurora's earnings release was distributed earlier today and is available on the IR website at ir.jiguang.cn. On the call today are Mr. Weidong Luo, Chairman and Chief Executive Officer, Mr. Fei Chen, President, and Mr. Shan-Nen Bong, Chief Financial Officer. Following their prepared remarks, all three will be available to answer your questions during the Q&A session that will follow. Before we begin, I'd like to remind you that this conference call contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon management's current expectations and current market and operating conditions, which are difficult to predict and may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties and or 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 like to turn the conference call over to Mr. Luo. Please go ahead.

Thanks, operator. Good morning and good evening to everyone on the call. Welcome to Alamova's second quarter 2020 earnings call. Before I proceed, may I share with everyone that for the very first time, we have uploaded a quarterly earnings deck onto our IR webpage under webcast and presentations section for your reference. You may refer to the deck as we proceed with the call today. Since the end of 2019, As highlighted in our last earnings call, we took the initiative to further strengthen our call competency. I am pleased to share that our strategic decision to focus on developer services and vertical applications has produced excellent results as of today. Later in this call, Fei, Shan-Nen and myself will take turns to elaborate more on this from different angles. Let's begin our review with highlights for our key operating and financial performance for the second quarter of 2020. First, the number of mobile apps utilizing it is one of our development successes. Our cumulative app installations reached 1.95 million as of June 30, 2020, from approximately 1.29 million last June. This represents an average of 18,000 new apps coming on board every month during the quarter. We are our developers' first choice service provider when it comes to push service in China. Second, cumulative SDK installations increased by 53% to 40.6 billion as of June 2020, from 26.6 billion in June 2019. This is mainly attributable to both the impact of developers using our subscription-based development services and the wide adoption of general verification SDKs. The number of monthly active-unit mobile devices recovered continues to increase, reaching 1.38 billion in June 2020 from 1.13 billion in June 2019. Lastly, in the second quarter of 2020, we saw the number of paying customers increase to 2,396 from 2,211 a year ago. On to the Q2 2020 financial numbers. Please refer to our presentation tag for key financial highlights. Our strategic focus to drive our SaaS business, which includes developer services and vertical applications, generated a significant return on investment in this quarter. This business is recorded impressive. Revenue of revenue is 66.5 million. A 35% growth for both year-over-year and quarter-of-quarter and Gross profit of Renminbi 50.8 million of 43% year-over-year and 49% quarter-over-quarter growth, even though the overall market remained challenged by the impact of COVID-19 pandemic. In building on the great momentum from the first quarter, developer services was once again the highlight for the quarter with its impressive performance. We recorded that Renminbi 45.8%... 45.8 million in revenue for developer services. A new historical high in terms of quarterly revenue. This revenue includes both subscriptions and value added services. A record of phenomenal 127% and 46% revenue both year-over-year and quarter-of-quarter respectively on the back of increase in both Apple and customers' numbers. Equally impressive was the gross profit from developer shortages of RMB 35 million, which represented 142% and 50% in year-over-year and quarter-of-quarter growth respectively. For subscription shortages, we continue to see more customers lining up to our slate of developer shortages. New and renewed customers include, but are not limited to, Tesla, Starbucks, China Telecom, China Apple Bright Bank, Credit Card Center, Ping An Jiankang, and Zhuo Ye Bang. Subscriptions revenue was around 30.7 million, a significant increase of 52% year-over-year. Primary driven by increase in both the number of customers by 34% and up of 14%. Value added services, which include revenue from advertisement SaaS and Jigwang Alliance services, have also recorded another quarter of impressive results. The revenue from value-added services also resulted in phenomenal growth of 134% quarter-over-quarter, from RMB 6.4 million in Q1 2020 to RMB 15 million in this quarter. We noted that both the output and customer numbers have grown by more than 60% within the quarter. Key customers of our LiPo services in the quarter include Weibo, Chenmin Clicker, Tencent Video, and JD. The strong performance was primarily driven by wide adoption of such services by many software and e-commerce developers. Here, I would like to provide some additional insights on the contribution of the legacy target marketing business. In the second quarter, target marketing business only contributed 49% and 5% of the revenue and gross profit, respectively. This was down significantly from 61% revenue contribution and 12% gross profit contribution in the last quarter. As we march towards winding down the legacy target marketing business, their contributions are expected to be insignificant going forward. Now I will send a call to Fei, who will discuss the Q2 performance of the three basic lines within vertical applications in more detail. Thank you, Chris.