Aurora Mobile Limited

Ladies and gentlemen, thank you for standing by and welcome to the Aurora Mobile Third Quarter 2020 Earnings Conference Call. At this time, all participants are in listen-only mode. After speaker's presentation, there will be a question and answer session. To ask 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 end the conference with your host for today, Mr. René Van Gistein. 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. Wei Dongluo, Chairman and Chief Executive Officer, Mr. Fei Chen, President, and Mr. Shannon 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 U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required under applicable law. With that, I'd now like to turn the conference over to Mr. Luo Please go ahead.

Thanks, Omar. Good morning and good evening to everyone on the call. Welcome to Arora Mobile's first quarter 2020 earnings call. Before I proceed, I would like to take this opportunity to remind everyone that we have uploaded a quarterly earnings stack on our IR webpage for your reference. You may refer to the deck as we proceed with the quarter day as it contains useful financial information in addition to those we have in the press release. As we begin our review with highlights of our key operating and financial performance for the third quarter of 2020. First, the number of mobile apps utilizing at least one of our developer services or the cumulative app installation. reached 1.65 million as of September 30, 2020, from approximately 1.39 million a year ago. An average of 7,000 new apps came on board every month during the third quarter. Quarter of quarter, we still see the great number of mobile app developers joining us, and we are truly humbled yet encouraged by this trend. The number of monthly ITV unit mobile devices recovered continued to increase, reaching $1.39 billion in September 2020 from $1.34 billion in September 2019. Lastly, in the third quarter of 2020, we saw the number of paying customers increase to 2,405 from 2,300 to well a year ago. On to the Q3 2020 financial numbers. Please refer to our presentation deck. Upload it to our IR web page for the key financial highlights. I would like to begin with the discussion of SaaS business, which includes only the developer services and vertical applications business, because it's appropriate, relevant, and helpful for investors to understand how the underlying SaaS business are performing now. As beginning with the quarter ending March 31st, 2021, we will only have this SaaS business. Our SaaS business continues to record impressive results in this quarter with revenue of RMB 65.6 million, an 18 growth year-over-year, and gross profit of RMB 49 million, a 16% growth year-over-year. On SaaS business basis, the total revenue grew 18% year-over-year, mainly due to the strong 99% growth in developer services, partially offset by the decline in vertical applications, which have been impacted by COVID-19. It's worth noting that customer demand for vertical applications has gradually recovered from the second quarter of this year, and revenues from vertical applications have been sequential growth for two consecutive quarters. On a quarter-of-quarter basis, revenue remained relatively stable at RMB 66 million. On a sub-business basis, gross profit has also shown solid growth of 16% year-over-year to RMB 49 million for the quarter ended September 30, 2020. Due to the same reasons as what happened to the revenue trend, Also, on SaaS basis, growth margin for this quarter was 75%, stable year-over-year, and quarter-over-quarter. We expect pro forma growth margin to maintain at about 60% range going forward. In the third quarter, we continue to extensively explore various industry verticals, focusing on helping mobile app developers with operations, growth, and monetization by leveraging our professional, efficient, secure, and stable services and great operational analytics capabilities. During the quarter, we launched a one-stop operational platform for app developers, helping them to improve user engagement, retention, and conversion, as well as achieve great efficiency leverage on intelligent user acquisition tools to further refine their operations. Recently, we also started strategic cooperation agreements with leading platforms across a greater variety of industry verticals, such as finance, insurance, weather internet tools, gaming, fresh food, e-commerce, and online education to drive user growth and traffic and improve user experience. For example, we have already started agreements with Ping An Bank, Data Center of China Life, MoziWeather, Wi-Fi Master Key, Nidhi Scan, Miss Fresh, and 17 Joyeux, and other well-known companies. Now, I will turn it over to Fei, who will discuss the Q3 performance in great detail.