Aurora Mobile Limited

Ladies and gentlemen, thank you for standing by, and welcome to the Aurora Mobile First Quarter of 2021 Earnings Conference Call. At this time, all participants are in written-only mode, and after the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Mr. Rene Van Der Veen. Thank you. Please go ahead, sir.

Thank you, Annie. Hello, everyone, and thank you for joining us today. All of our earnings release was distributed earlier 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. Shanleng 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 overlooking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended and as defined in the U.S. Private Security 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 other 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 would now like to turn the conference over to Mr. Luo. Please go ahead.

Thanks, Operator. Good morning and good evening to everyone on the call. Welcome to Aurora Mobile's first quarter 2021 earnings call. This is the first quarter where our financial results reflect only our SaaS business as we fully accepted our legacy target marketing business at the end of 2020. We have entered a new chapter and are very excited about our future business prospects. Before I comment on our Q&A results, I would like to take this opportunity to remind everyone that the quarterly earnings deck is available on our IR website for your reference. You may refer to the deck as we proceed with the call today. Let's begin our review with a highlight of our key operating and financial performance for the first quarter of 2021. As we complete the SCD, target marketing at the end of 2020. Our business is now focused on SaaS business, which includes developer services and vertical applications. For Apple to Apple comparison, numbers present here exclude a contribution from the legacy target marketing in the prior year and pre-quarter. In the first quarter, We continue to put our company-wide focus and concerted effort to grow our SaaS business and deliver impressive results. The number of paying customers increased to 2,500 from 2049, a year ago, up 23% year-over-year. Revenue was going to be 76.6 million, up 56% year-over-year. Group growth margin reached a historical high of 75.9%, more than 2.3 times from a year ago. Growth profit was revenue B, 58.1 million, up 60% year-over-year, growing faster than revenue. And adjusted EBITDA was negative revenue B, 18.4 million, a substantial improvement of 49% for a year ago, demonstrating strong operating leverage. The strong SaaS business revenue growth was mainly due to strong growth of 67% in developer services and 36% in vertical applications. The historical high growth margin is strong evidence of how the transition to a pure SaaS business model has been positively impacting our results. As this model typically retains higher gross margins due to our competitive advantage in notification distribution network and the high efficiency of JG Alliance delivering services using minimum working capital. The strong startup business growth was driven by both the revenue growth of 56% year-over-year mentioned earlier and the margin expansion from 73.9% to 75.9% year-over-year. Here, I would also like to take a moment to give an update on our latest products, ZG-UMS and ZG-VAS. For ZG-UMS, we stand for Unification Messaging System. We started to commercialize this product post-Chinese New Year in March 2021. Since then, We have signed contracts for total value existing RMB 1 million, with an output of more than RMB 100K. These customers cover a wide range of industry verticals, including social, e-commerce, education, lifestyle services, medical, industry, etc. We are seeing a strong pipeline being developed and scaled, and we believe this product has addressed the critical needs of many corporate customers. who want to manage their customer engagement more cost-effectively. For JGU VARs product, which stands for Video as a Surface, we have signed more than 10 customer contracts since its official rule outpours the Chinese New Year, with output of more than 100K2. The continuous sales momentum and traction demonstrate the demand from the mobile app developers who have successfully applied our VARs to their applications. helping improve user experience, increase user engagement time, and enhance monetization capability. On average, user engagement time for applications with vast products has increased by 50%. We will continue to provide updates on these products in the coming quarters. We continue to put great emphasis on product development and innovations by hiring more and upgrading our infrastructure. Our R&D team achieved significant improvements on our diversified product offering and expanded functionality to exceed our customers' expectations. In particular, after continuous iteration of jPush SDK, mobile app developers are now able to access the mobile phone manufacturer message channel, which will significantly improve the push message success rate. This further summons our leading position to all mobile ad developers seeking more engaging and effective ways of marketing to their users. In addition, our newly updated JG-UMS version 2.0 officially launched recently. With the rapid adoption of 5G technology, we are free to announce that our JG-UMS version 2.0 can fully support 5G messaging channels. for party messaging service platforms, which are subscription messaging. And we are able to conduct custom message analysis for app developers to get a better picture of user behavior. Mobile app developers can also adjust their message strategy in real time, which reduce the disruption to end users in a highly effective way, allowing more flexibility to meet marketing needs and reach. Now I will turn the call to Fei, who will discuss the Q1 performance in greater detail.