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spk00: Ladies and gentlemen, thank you for standing by and welcome to Aurora Mobile Fourth Quarter and Fiscal Year 2020 Earnings Conference Call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question today, you need to press star 1 on your telephone. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your host today, Rene Venkatesen. Thank you. Please go ahead.
spk05: RENE VENKATESEN Thank you, Amber. 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.juguang.cn. On the call today are Mr. Wei Dong Luo, 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 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 US 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. Future 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. Wu. Please go ahead.
spk06: Thanks, operator. Good morning and good evening to everyone on the call. Welcome to Aurora Mobile's fourth quarter and full year 2020 earnings call. The year 2021 marks the 10th anniversary of Aurora Mobile. Looking back, we are extremely proud of what we have achieved in the past decade in helping all our mobile app customers in China to improve their optional efficiency helping each and every one of them improve their options, grow, and now monetize. I still vividly remember the very first JFoosh product we developed for mobile app developers way back in 2011, and we have come a long way since. Over these past decade, through in-house innovation, technical progress, and relentless pursuit of excellence, we have reached many milestones. We started with one J-Push product in 2011, and over the years, we developed seven additional products for mobile app developers, meeting their different and evolving optional needs. Cumulatively, as of December 31, 2020, we have worked with more than 591,000 app developers, representing more than 1.7 million apps in total. Our developer service SDKs have been installed more than 46.7 billion times. In the fourth quarter of 2020, on average, every month there were more than 17,000 new mobile apps joining and using one or more of our eight developer services. I would like to use this opportunity to thank all the mobile app developers who have been alongside us. trusted us and cooperated with us over these 10 years. I believe the next 10 years will be even greater for our customers thanks to the new exciting and innovative product and service offering from Aurora Mobile. The year 2020 was a very extraordinary year in which an unexpected pandemic reshaped the world and changed how people live their lives and how companies conduct their business in so many ways. During the crisis, we persistently carried out our core strategy to serve our developer customers by helping them with their business operations, user growth, and the monetization of their user base. Based on the solid business foundation built with our developer subscription services, we ventured into new business territory by innovatively creating our JG Alliance business business alliance to help our developer customers better monetize their user traffic. The JG alliance became a great success as we achieved a phenomenal 15 times growth year-over-year in revenue and DAUs grew rapidly from 0 to 130 million in merely five quarters. Meanwhile, we completed the wind down of our target marketing business. Despite being the largest revenue contributor in 2019, we felt the target marketing business did not fit with our company's long-term direction. I am proud to announce that by the end of the fourth quarter, 2020, our business transition was 100% complete and we have successfully transitioned our company to a pure SaaS-based business model. During the year, we also put great emphasis on product development and innovation. We successfully launched three new heavyweight products. First, we enhanced our JJ Alliance product portfolio by adding a new in-app message product. And in our developer subscription basis, we launched a unification messaging service, OU Math, and video as a service, or VAS, product to address new critical needs for developers. On the customer front, We have formed partnerships with numerous well-known and key customers across almost every industry vertical, as you have seen from the price releases we issued from time to time. Cooperation with these KA customers has helped us better penetrate into different industries. Take the new energy vehicle sector, for example, after our cooperation with the rewarding the world's leading new energy vehicle manufacturer and BYD. As of this week, we now have 39 customers within the auto industry, of which 19 are free paying. We are replicating the success of the EV market expansion model in other industries, such as short video, education, gaming, finance, telecom, e-commerce, and blockchain. Through this domino effect, where we leverage our existing corporation relations with the market leaders of each industry, we believe we can and we will quickly sign up more customers to ramp up or increase our market share. Throughout the year, we also upgraded our talent pool by hiring a number of senior executives across R&D, sales, operations, and HR. who have rich management experience accumulated from Tencent, BaBa, ByteDance, and Huawei. We optimize our business operations so we can run the business more efficiently and create education certainty. Continue the talent acquisition with target with wide performance-based incentive scheme put in place and fine-tuning the way we manage our organizations will lay a solid foundation for our future business growth and success. Before I comment on our 4Q results, I would like to take this opportunity to remind everyone that we have uploaded a quarterly earnings deck on our IR webpage for your reference. You may refer to the deck as we proceed with the quarter date. Let me continue with our key operating highlights for the fourth quarter of 2020 other than those I have mentioned earlier. First, the number of monthly active unit mobile devices we covered continue to grow. reached $1.395 billion in December 2020 from $1.36 billion in December 2019. Over 90% of mobile devices in China have at least one or more Qigong SDK installed. Second, during the quarter, we saw the number of paying customers grow to 2,420 from 2,131 a year ago. I would like to focus the discussion on our SaaS business, which includes only the developer services and vertical application business as we have officially accepted the traditional talking marketing business on December 2020. Therefore, starting from January 1st, 2021, all our revenue will be contributed by this SaaS business. Our SaaS business continues to record impressive results this quarter with revenue of revenue 76.6 million, which was at the higher end of our guidance range, representing 17% growth year-over-year and 18% growth quarter-of-quarter, and gross profit of revenue be 58.5 million, growing 29% year-over-year and 20% quarter-of-quarter. On a SaaS business basis, the total revenue grow 70% year-over-year, mainly due to the strong 46% growth in developer services. partially offset by the decline in vertical applications, which have been impacted by the COVID-19. Nevertheless, revenue from vertical applications have seen solid sequential growth for three consecutive quarters, as customers' demand in this segment continue to recover. On a quarter-of-quarter basis, SaaS business revenue records joint sequential growth of 18% to revenue In Q4 2020, our SaaS business contributed 72% of total revenue, up from 60% in Q3 2020. Going forward, SaaS business will contribute 100% of our revenue. On a business basis, gross profit has also shown strong growth of 28% year-over-year to revenue 58.7 million for the quarter end of 2020. Due to both the revenue growth of 70% year-over-year and margin expansion from 70% to 76% year-over-year, we expect our gross margin in 2021 to remain above 70% throughout the year. For Q4 2020, SaaS business can contribute 98% of the gross profit, up from 96% in Q3 2020. Going forward, SaaS business will contribute 100% of our gross profit. Here, I would also like to take a moment and share with you our new product initiatives. We have recently launched both the JGUMS and JGVAS products after conducting follow-up market analysis with our app developers and customers to understand their needs and plan points. In brief, JGUMS, which stands for Unification Message System, enables businesses to engage with their target customers more efficiently and cost-effectively through one integrated message management platform, therefore improving optional simplicity while reducing cost with flexible routing strategy management. In the past two years, with the proliferation of many user engagement channels, such as mini programs, WeChat public accounts, DingDing, etc., user engagement has become much more complex than ever before. UMS therefore comes to the market as the right product at the right time to address such pain points. UMS is not only suitable for app developers, but also suitable for businesses that do not even have a mobile app. Pretty much all the businesses in China will need this product, as long as they have a site for customer base and utilize multiple channels to reach their customer base. JGVAS, which stands for Video Azure Surface, on the other hand, enables mobile app developers to provide relevant user-friendly short video content in their apps, therefore improving their user experience, increasing user engagement and speediness, and enhancing monetization capability. It is a distributive way for users to consume short videos anytime and anywhere, rather than having to go to a dedicated short video app to view short videos in a centralized fashion. Both UMS and Vaas are operated in a subscription-free based model, where our customers pay us a new fee based on the features they like to enjoy. We believe both products can greatly expand our paying customer base and output for our developer subscription business over time. We anticipate that these two products will start generating revenues in the second quarter of 2021. Now, I will turn it over to Fei, who will discuss the Q4 performance in greater detail.
spk03: Thank you, Chris. Let me start the discussion of different revenue streams within the SaaS businesses. Our staff former developer services shine continuously from the first quarter to the fourth quarter of 2020 and was the biggest revenue contributor within our SaaS businesses in fourth quarter 2020. For the quarter ended December 31st, 2020, we recorded RMB 52.5 million in revenue for developer services, which represented 46% growth on a year-over-year basis. The significant revenue growth in developer services was fueled by 28% and 14% growth in customer numbers and our pool, respectively. For subscription services within the developer services, we continue to see more customers signing up to our suite of developer services. New and the renewal customers include, among others, Incur, Farfetch, Segway 9-Bolt, Tiger Brokers, Pufa Bank, and the Ping An Bank. Subscription services revenue was RMB 35.1 million, an increase of 6% year-over-year and 16% quarter-over-quarter, primarily driven by the increase in customer numbers. Value-added services within developer services, which includes revenues from JG Alliance services and advertisement stats, recorded another strong quarter as revenues grew by 29% quarter-over-quarter and 432% year-over-year. The value-added services four-year revenue grew from RMB 3.3 million in financial year 2019 to RMB 52.5 million. The 15X annual revenue growth demonstrates the large potential market opportunity and the growing demand for our value-added services. In the fourth quarter, the revenue from value-added services was RMB 17.4 million compared to RMB 3.2 million in the same quarter a year ago. This 432% year-over-year revenue growth is attributable to the growth in both the supply and the demand sides of the JG Alliance. On the supply side, we continue to see many apps joining our JG Alliance traffic network. The total number of apps and the DAU within our network exceeded 200 apps and 130 million DAU in the fourth quarter, representing 100% and 30% growth from the third quarter 2020 respectively. The notable new members of JG Alliance on the traffic side mainly include large and popular mobile apps from different industry sectors such as utilities, education, and financial. The continued growth in the number of apps and DAUs is proof of the strong market demand for JG Alliance products. On the demand side, many program developers continue to play a pivotal role as traffic consumer of JG Alliance by contributing 39% of revenue in the quarter. Notable customers of JG Alliance included but not limited to Weibo, JD, Pinduoduo, 全民K歌, 美团, 重城旅游Travel Go, and Baidu's Du Xiaomai Financial. Our JG Alliance ever-increasing traffic pool resources and innovative and unique advertising formats have given our customers a brand new effective and a different media for user acquisition needs and dormant user retargeting needs. Now, I would like to provide a brief update on the legacy targeted marketing business. The revenue and the growth profit contributions from target marketing have both declined from 40% in Q3 2020 to 28% in 4Q and from 4% in third quarter 20 to 2% in fourth quarter 20, respectively. The fourth quarter of 2020 is the last quarter where we recognize revenues from target marketing. This business has ceased its entirety by December 31st, 2020. Therefore, starting from first quarter 2021, revenues will be 100% from our SaaS businesses, which include only developer services and vertical applications. Now let's move on to the discussion of vertical applications. The combined revenue from vertical applications, which include market intelligence, financial risk management, and iZone, increased by 10% sequentially from RMB 21.9 million in the third quarter of this year to RMB 24.1 million. Revenue from vertical applications recorded a sequential growth every quarter in 2020. Revenues from our marketing intelligence product increased by 16% year-over-year. We continue to see strong growth from corporates with more than 60% revenue contributed by corporate clients. New corporate customers include Zuo Ye Bang, Huawei Lai, JAL, Baidu. In the financial risk management segment, revenue increased by 23% quarter-over-quarter as demand for this business has recovered strongly from the impact of COVID-19 since the first half of 2020. Solid and continued demand from banks and licensed financial institutions has pushed both the ARPU and the customer number to grow by 15% and 7% respectively, sequentially. And lastly, our iZone business is still facing challenges as a result of COVID-19 impacting on the demand for location-based products. This business unit is still undergoing a number of new initiatives in product transitions. We recently launched a joint product with Country Garden called Zhikou Duo. This product will not only provide a full traffic analysis for properties up for sale, but also help property developers to identify and target potential property buyers. We expect such product could help renew the growth in Aizong over time. With that, I now pass the call to Shannon.
spk04: Thanks, Fei. Since Chris and Fay already talked about our top line numbers for this quarter, I'll go through some of the other P&L and balance sheet items. And let me summarize the key takeaways and highlights on the P&L items for this quarter. First, the SAS businesses revenue and gross profit contribution recorded solid double-digit year-over-year growth in all four quarters in 2020. The value-added services achieved revenue growth of 432% year-over-year in Q4 2020. Third, we recorded yet another record high gross margin of 56% in Q4 2020, up from 47% in Q3 2020. With the business becoming pure SaaS-based, we anticipate our gross margin to be above 70% in 2021. 98% of our current quarter gross profit was contributed by the SaaS businesses. Lastly, targeted marketing business has completely won down by 12-31-2020. And we are now beginning a new chapter in the Arora Mobile story, where from January 2021, all our revenue will be 100% contributed by the SaaS businesses only. We are demonstrating that operationally and financially, that this transition is beneficial and healthy to our financial performance as a whole. On to operating expenses, the total operating expenses increased by 3% year-over-year to 106.5 million RMB. In particular, R&D expenses decreased by 8% to RMB 40.6 million, mainly due to decrease in staff costs as a result of lower headcount and no severance payment in Q4 2020. Such reduction was due to the restructuring that took place in Q4 2019. Selling and marketing expenses decreased by 27% to $22.3 million, mainly due to the reduction in salary costs as a result of lower headcount and lower offline marketing expenses due to the COVID pandemic restriction. G&A expenses increased by 51% to RMB $43.5 million, mainly due to the RMB $10.9 million impairment charge related to fixed assets due to our going cloud project in 2021, where under the US GAAP, we are to book the impairment charge for the servers to be retired or made redundant. Other factors contributed to the increase, including increase in professional fees and bad debt provision. Adjusted EBITDA improved 22% to negative RMB 17.1 million from negative RMB 22 million in Q3 2020. In addition, Q4 2020 was the quarter where we achieved the best quarterly adjusted EBITDA results in year 2020. The company will continue working hard to improve this number going forward. Onto the balance sheet items, account receivables turnover days continue to improve and show great results as it decreased significantly from 70 days in Q4 2019 and 45 days in Q3 2020 to 37 days in Q4 2020. This was attributable to management greater effort and emphasis on stringent customer credit granting policy, outstanding accounts receivable monitoring, along with aggressive and timely collection during the quarter. Furthermore, the decline of targeted marketing business during the quarter also contributed to the shortening of AR turnover base. The deferred revenue balance, which represents cash collected in advance from customer, increased significantly by 41% year-over-year to 109 million renminbi as of December 31, 2020. This is in line with our shift to the SaaS businesses where most customers are required to prepay their annual contract fee upon commencement of service. In the fourth quarter of 2020, our operating cash flow was once again positive. This is the third consecutive quarter since Q2 2020 that we have recorded net operating cash inflow. All of the above KPIs show that our transition to focusing on SAS Business is generating more cash and granting fewer ARR credit days than we have had under the targeted marketing era. The improvement in each of these balance sheet items were primarily driven by our shift to SAS Business model, and we are very pleased with this improvement over the quarters. Next, total assets were will be 787 million as of December 31st, 2020. and this includes cash and cash equivalent of $436 million, account receivables of $44 million, prepayments of $12 million RMB, fixed assets of RMB $73 million, long-term investment of $168.5 million. Total current liabilities were RMB $460 million as of December 31, 2020. This includes accounts receivable of RMB $16.6 million, Deferred revenue of RMB 109 million. Accrued liabilities of 109 million. Convertible notes of 225 million. And for the financial year ending December 31st, 2021, the company expects the total revenue to be between RMB 380 million and 400 million RMB, representing a year-over-year growth of approximately 47% to 55%. and the gross margin to be above 70% for the full year 2021. However, please note that for meaningful comparison purposes, the prior year revenue numbers used to calculate the growth percentage here excludes revenue from targeted marketing business. And the above outlook is based on the current market condition and reflects the company's current and preliminary estimate of the market and operating conditions and customer demands, which are subject to change. Lastly, before I conclude, I'll give a quick update on the share repurchase plan. In the quarter ended December 31, 2020, we did not repurchase any shares. As of December 31, 2020, cumulatively, we have repurchased a total of 921,000 ADS since the start of our program. And this concludes the management prepared And we're happy to take the question now. Operator, please proceed.
spk00: Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the pound or hash key. Once again, this is star 1 for questions. Our first question comes from the line of Brian Kinslinger from AGP. Please ask your question.
spk01: Great. Thanks for taking my questions. Can you remind listeners the benefits of many programs joining the JG Alliance? And then maybe which verticals are you seeing the greatest adoption versus which verticals maybe are taking a little bit longer to adopt the technology?
spk03: Hey, Brian, are you asking about the JG Alliance network, right? On the demand side, the mini program? Okay. Yeah, so yes, as you know, the mini program has been a profileration over the past couple of years, right? So many, many program developers once they build their mini program, you know, the account, the mini programs, they need to acquire users. So currently, you know, most of them can only rely on, you know, the WeChat internal traffic, right, for the users to search, to find the mini programs. And the traffic within the WeChat is limited. So if they want to, you know, continue to grow, they have to look for additional resources, additional traffic. So that's why we come into the place. Because for the DigiAlliance network, our product, we have two products, right? For the in-app messages as well as the light push messages. These two actually media formats work very well to direct the traffic to the WeChat mini programs. So that's why over the past year, this mini program developers, the demand from mini program developers have been very strong for our traffic. And the last quarter, we had about 39% of the revenue that's generated by these mini program developers. And for example, in terms of the vertical, actually the e-commerce, like the travel, also the financial, these sectors actually currently are where the demand is coming from.
spk01: Great. My follow-up is in terms of the subscription services, can you talk about how fast you're able to convert the freemium into paid customers? And what has been the biggest obstacle to converting these customers right now?
spk03: Yeah, so actually, you know, in terms of the conversion, right, so currently we have about 60,000 freemium customers who actually enjoy our free service. And the paying ratio is relatively low, about 3%. a little bit less than 4%. So that's still room to increase the conversion. So what we are trying to do, basically we need to put a few mechanisms in place. We need to have the sales organization basically to go through the list of the freemium customers and have an engagement with them and basically to educate them the difference between the paying and the non-paying, the benefits they can get by paying a little bit, monthly fee. So this is ongoing and this effort actually this year we basically intensified, put a great effort into this effort. And the second is we also look at basically to do the current paying customers, the profile analysis to identify the common features of these paying customers, why they like to pay, right? How big is their DBU? How many messages they typically send, right? So we come to basically, it's just like doing a user profile. So based on this profile, we can more accurately select those freemium customers who are more likely to be converted. So this work is being done by the R&D operation and also sales operation. So that when the sales go talk to the freemium customer, you know, they can be more effective. Yeah, so these are the approaches we are currently undertaking.
spk01: Great. Thanks for answering my question. Thank you.
spk00: Your next question comes from Ryan Roberts from Nevis Capital. Please ask a question.
spk02: Good evening. A couple from me. Maybe this is kind of better directed to you. I'm just kind of curious what the... the bad debt provision is, kind of what we saw in this quarter, and also the breakdown on the impairment a little bit. I think that was in the slide deck you guys mentioned is going cloud. I'm just kind of curious what the, maybe more of that project, because I think around the IPO time, one of the kind of the points, the positive points was your network of servers across the country and how quickly you could perform the push services, push notification, which is kind of a differentiating factor And some of you were wondering the context of a going cloud, what that means for the infrastructure and service level. So I guess I'll just start with those two.
spk04: Hey, thanks, Ryan. Okay, I'll take your question on the bad debts. Yeah, we will not go into specific of particular debtors, but in overall, those are the debtors pertaining to the legacy targeted marketing business that we are winding down. So those are the one that has been lingering with us for a couple of orders that we are thinking that it's no longer able to recover the debt. So those are the ones that we have made provision, 100% provision. So meaning that going forward in Q1 2021, we have a fresh page of the accounts reserved going forward. And secondly, the question you asked about the impairment, yes, that was in relation to the going cloud project that we had. So based on the current projection, we are expecting to complete this going cloud project by sometime in second quarter of 2021. And the reason why we do this is throughout the years, we have managed to see, besides the fact that we are able to build our own infrastructure, we are taking advantage of the technical advancement of this cloud service provider because they have the ability to help us to leverage on their infrastructure. Trying to say is it will only help us to improve our service delivery and stability going forward for all our developers.
spk02: Are you going to replace a lot of your infrastructure, a lot of your servers with cloud? No, no, no.
spk03: So Ryan, let me answer. So actually we are not replacing everything. We are just replacing part of which we think will benefit from the going cloud. So basically those servers might be better managed by the cloud service provider so we can focus on the path level instead of we put resources on the data center management, server management, those high-level type of dirty work. So that's the whole purpose of it.
spk02: Okay, and then maybe just kind of on the numbers, the last one, I see a pretty chunky impairment of a long-term investment, looks like about $44 million. Kind of curious what that is.
spk04: Yeah, again, those are the investments that we have made in the past pertaining to a few investees. Again, those are the ones that we have made, the investments we made with the intention of helping us in the targeted marketing era. We thought of the fact that we would be able to have some synergy through these investees, and the fact that now we are winding down the targeted marketing business, so we deem there's no longer any value for them to Jigwang going forward, and the fact some of them are not performing well operationally, so based on the U.S. gap on the ground of conservatism, so we make a full provision for a couple of them.
spk02: Okay, so it sounds like it's mostly targeted marketing-related. Okay. And maybe just to get a sense on the new product side, I think you guys have launched some new products recently. I was wondering if you could maybe share some early feedback from customers and clients. I think it sounds like there's a lot of R&D effort up front to develop these pain points and develop these packages. I'm just kind of curious, so far, how's the reception been? And also, how does that factor into your outlook kind of for the year? I think the guidance was $380, $400, which is, what's that, 60% somewhere around there, YOY. So I'm curious if you're expecting a lot of contribution from the new products, or alternatively, that's mostly reflecting kind of the JG Alliance. I'm trying to get a sense of what maybe some of the assumptions are in there.
spk03: Okay, Ryan, let me take your questions. So regarding the new product, the progress with the new product going to market, right? So first of all, you know, these two new products, the UMS and the VAS, were launched in the later part of fourth quarter. So after Chinese New Year, and then, you know, starting from the beginning of this year and also, you know, quickly that's Chinese New Year. So actually right after Chinese New Year, actually, you know, the real Chinese the sales work started, you know, kicked off. And in a very short period of time, about a month, we actually already built very great pipelines. Yeah, so for the UMS, actually, we already, you know, have 19 credible pipelines. And the customers, we are in the constant dialogue with the customers. And these 19 customers represent a few million dollars RMB. And actually to tell you the good news, actually as we speak, actually yesterday when I asked our sales head and she told me she just signed one contract, UMS contract, and we have already received the money, which is great, right? And for us, actually, it's in a very similar situation. And after Chinese New Year, we mobilized our sales force. Currently, we already built 12 very credible sales pipelines. And again, these 12 pipelines account for a few million RMB. So based on this initial feedback, we are very encouraged And based on the analysis, we also think these two products will have a higher ARPU, actually a much higher ARPU than our traditional past business such as the J-PUSH. So we believe over time, over the course of a year, we think these two businesses will become new growth actually legs. for our subscription business. And we also actually put the KPI on these two products to our sales organization. So it's not that they are not encouraged to sell. Actually, they are very incentivized to push these two products out. And the market reaction, as I just mentioned, is very positive and promising. So next quarter, maybe I can give you more data, more progress on these two new products. And also, you asked about our overall guidance, right? We guided 380 to 400 million, which represents 47% to 55% year-over-year growth. And you are right. Actually, most of the growth is going to be driven by the JG Alliance. As we talked about last time and before, actually JG Alliance has the characteristics that can have an explosive growth. So we are expecting JG Alliance to continue to have a triple digit growth this year. And for the subscription business, as I just mentioned, which typically is going to be around 30%-ish. This is the same year, too, for the vertical application. So, net-net, you will see about 55% growth for the entire year.
spk02: Okay. And if I could just tackle one last one, if you'll allow me. One of the things we kind of talked about in a previous call, I mean, the one prior, were kind of the efforts to kind of bring back some of the targeted marketing clients to the new kind of JG Alliance, that product that kind of, you know, you've got the new advertising inventory and you have kind of companies that, you know, need advertising. I guess the COVID-19 situation aside, it sounds like you have this new advertising service that you can sell to people that you already have a relationship with. And I think, if I recall, I think you were trying to do some of that. And I'm just kind of curious if you can share any updates on how it's going, bringing back some of those old accounts to spend on your new, the new JG Alliance products.
spk03: Hey Ryan, actually when I compare the customer base, actually they are very different. The customers who currently use our JG Alliance network, actually are very fundamentally different from those customers who use our target marketing business. So for the target marketing, actually before, most of our advertising customers are coming from the financial sectors, like those lenders per se. But for these mini programs, Actually, as I mentioned in the press release, if you recall those names, right, those are, you know, very large Internet companies. And regardless whether, you know, they are trying to go through our JG Alliance network to reactivate their domain customers or they are trying to, you know, increase their user base for their mini programs, actually most of them are very well-known, you know, Internet leaders. So the nature of these customers, they have basically one, they are very credit worthy. That's a little chance they can be default when you compare to the target marketing customers. And the second, they have a deep pocket. The budget is not an issue. As long as we have enough traffic, they will say, okay, give it all to me. So that's a good thing. So, and also, you know, to share with you data, I look at the cohort analysis, right? You know, starting from last July, for every month, the new customers joined our JG Alliance as the demand side. You know, when I look at their revenue contribution for the second month, for the third month, for the fourth month, and the following, and so on. and it's all above 100%. So which means the customer retention, the stickiness is very, very high. It's unlike a target marketing business before. If I show you this number, it's going to be below 100%, maybe 50% next month. So that's the drastic difference. So this gives us so much confidence that this product really, really shines. really has a strong value proposition. And these customers, they are happy with the performance we are able to deliver. These customers, they are happy with the volume we are able to deliver. So, yeah, that's why, you know, we are so confident about the growth trajectory of this JG Alliance in 2021.
spk02: Understood. Thank you very much, Faith. It's very helpful. Appreciate it. Sure.
spk00: Just a reminder, ladies and gentlemen, to ask a question, please press star 1 on your telephone keypad. All right, Daniel, for the question, I'll now turn the call back to Rene for closing remarks.
spk05: Thank you, Amber. 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 good night. Thank you all.
spk00: Ladies and gentlemen, that does conclude our conference for today. Thank you for participating.
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