Aurora Mobile Limited

Ladies and gentlemen, thank you for standing by and welcome to the Aurora Mobile Second Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. 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. If you require any further assistance, please press star 0. Please be advised that today's conference is being recorded. I would now like to hand the contents over to your host today, Mr. René van Gisteyn. Thank you. Please go ahead, sir.

Thank you, Rohit. 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-Dong Wu, 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. Lewald. Please go ahead.

Thanks, Rene. Good morning and good evening to everyone on the call. Welcome to Aurora Mobile's second quarter 2021 earnings call. This is the second quarter where we have been operating under the pure SaaS business model since the beginning of 2021. We deliver strong results and I am pleased to kick off this call now to share with you our business progress and key business metrics achieved in the second quarter of 2021. Before I comment on our Q2 results, I would like 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 highlights of our key operating and financial performance for the second quarter of 2021. As a reminder, we completely accepted target marketing at the end of 2020, and our business is now 100% focused on the SaaS business, which includes developer service and vertical applications. For effort-to-effort comparison, numbers presented exclude contribution from the legacy target marketing in the previous year. In the second quarter, We continue to apply our company-wide focus and concert efforts to grow our SaaS business, and it has paid off. Here is a summary of the strong results for Q2 2021. The number of paying customers increased to 2,634 from 2,281 a year ago, up 1.5% year-over-year. Revenue will remain be $89 million. up 34% year-over-year. Group gross margin was 75.7%, which is more than 1.8 times compared with 41% from a year ago. Gross profit was remain be 67.4 million, up 43% year-over-year. And adjust EBITDA was negative remain be 13.3 million, a substantial improvement of 27% from a year ago. demonstrating our strong operating leverage. Revenues from our SaaS business continue their strong growth momentum this quarter, mainly due to the 34% growth in both the developer services and vertical applications. The successful transition into the pure SaaS business model since the beginning of 2021 has helped us to deliver two consecutive quarters with growth margin above 75%, a significant improvement from 41% a year ago. The strong growth of our SaaS business was mainly driven by revenue growth of 44% year-over-year. Here, I would like to take a moment to give an update on our latest product, JG Unification Messaging System, JG UMS, and JG Video as a Service, which is JG VAS. We continue to see strong market demand for our new products, namely JG-UMS and JG-VAAS, since their respective launches. The total signed contract value for UMS and VAAS has crossed over maybe 3 million. The current and potential customers for these products come from a wide and diversified number of industries, including finance, medical and healthcare, media, short video content provider, social networks, e-commerce platforms, and more. For example, we recently partnered with UU PowerTrain, an online consumer events and delivery platform. They start implementing our AI-powered JGUMS to optimize their smart operations and drive intelligent solutions to expand user reach. Through this partnership, UU PowerTrain was able to replace manual operations, such as sending messages on different platforms via different channels, with JGUMS integrated messaging platform to reduce cost and increase operational efficiency with flexible routing management. Going forward, we will continue to help our customers jointly build an extensive value chain of their existing services. When we provide better and more customized solutions, we are able to create deeper and closer connection with our customers. We recently can also launch a new public call version of UMS, which provides free basic UMS services for mobile developers. Mobile developers can use this free version as a quick access and meaningful trial of JGUMS integrated multi-channel messaging services upon registering for an account without additional cost. In turn, this will help us to convert these mobile developers into fee-paying VIP customers. For customers with higher requirements for multi-channel push notification and user management, they can upgrade to the VIP versions of JGUMS and enjoy unlimited channel management, higher API call frequency limits, and other exclusive VIP services. As we discussed before, we need to continue to push innovation in our R&D efforts in order meet the evolving customer needs and new requirements, which in turn will continue to drive our business growth. Our motto is to continuously promote innovations for our R&D organizations, which remains at the top of our priority. I would like to take a few minutes to share with you the progress of some of our product innovations during the quarter as a result of our relentless efforts and focus to stay ahead of the game. Besides continuous iteration developed for UMS and last product, we recently introduced a smart push version for our J-Push surfaces, which add your new post-push analytical functionalities to the integrated platform. App developers are now equipped with multi-channel analysis of the push message cycle. For example, developers are given message delivery data, including total number of message sends total messages reached to end users and click-through rates with the ability to visualize the data from different levels. This statistic helps developers identify key issues more accurately and efficiently in real time. For push message delivery that fails, developers can also utilize all deterioration analysis functions to detect the data from the full message delivery cycle and from there, they can uncover the root cause of any and deliver the messages. With the help of these post-push functionalities and the push strategy recommendations, this feature can help developers effectively increase the delivery rates and create full rates of the push message by providing a much more accurate push strategy based on learning from the past results. We believe that this new functionality will help developers create more reliable, comprehensive, and intelligent toolkits. and these two keys will in turn greatly assist developers in improving delivery rates of notifications and query rates of the push message. Now, I will turn the call to Fei, who will discuss the Q2 performance in greater detail.