Aurora Mobile Limited

Ladies and gentlemen, thank you for standing by, and welcome to the Aurora Mobile fourth quarter and fiscal year 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker 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, press star 0. please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Rene Vangestein. Thank you. Please go ahead, sir.

Thank you, Andrew. 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 Luo, Chairman and Chief Executive Officer, Mr. Fei Chen, President, and Mr. Shannon Bong, Chief Financial Officer. Following the 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 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 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'd 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 fourth quarter and full year 2021 earnings call. Before I comment on our Q4 and FOIA results, I would like to remind everyone that the quarterly earnings debt is available on our website for your reference. You may refer to the debt as we proceed with the call today. Despite a very challenging operating environment in 2021, we have achieved remarkable progress in our business operations and financial performance. The conclusion of the first quarter marked the first full year of our successful transition into our SaaS business model, which includes developer services and vertical applications. I am more than delighted to share with you the achievements we have made with various record-high key business results. For an effort-to-effort comparison, Numbers presents its core contribution from the legacy target marketing business in the pre-year. We entered the fourth quarter with a lot of momentum. Our key business metrics are showing exceptionally great results, which further proves that our strategy's decision to fully transition into the SaaS business is a great victory. Revenue was RMB 101.2 million over 32 years of the year. This marked the highest SaaS revenue record for the company, surpassing RMB 100 million for the first time, a key milestone for us. Gross profit was RMB 72.1 million, the highest gross profit since Q1 of 2020, up by 23% year-over-year. Group gross margin was 71.2%, which is more than 1.2 times compared with 56.7% a year ago. Adjusted EBITDA was RMB 1.84 million, the first-ever adjusted EBITDA profitable profitable quarter since our transition to the pure stock basis since Q1 of 2021, and adjusted EBITDA significantly improved by RMB 19 million year-over-year, from negative RMB 17.1 million in Q4 2020. Net loss was RMB 35.6 million, significantly narrowed down by 60% for a year ago. The number of paying customers increased to 2,768 from 2,367 a year ago, up 17% year-over-year. Total deferred revenue was about $1,100 million for seven consecutive quarters, indicating strength in our SaaS business growth where we collected payments from customers at the inception of each contract period. AR days remained consistent at around 38 days, indicating our disciplined customer credit checks and credit granting policy when pursuing revenue growth. Last but not least, our 2031 three-year revenue was RMB357.3 million, representing a year-over-year of growth of 39%, achieving the top end of revenue guidance range. Turning it into profitability is a strong acknowledgement of our success in growing the top-line revenues, as well as our disciplined approach to driver optional efficiency throughout the year. We are committed to continue to control and optimize operating expenses across all business functions going forward, and we expect to further drive operating efficiency in 2022. We are confident that with all these efforts in place, we are on the right path to achieve free profitability on adjusted EBITDA for 2022. Let me now give you some updates on our product iterations and technology innovations, which we believe are key to driving our long-term competitiveness and meet the ever-evolving needs of our customers. At UMS, we imported two meaningful product features. Our first feature update was focused on encrypting and enhancing the protection of data information. With this new feature, our customers' internal information can be centrally accessed, and at the same time, sensitive data are separated into various project data banks to mitigate risk of information leaks and ensure compliance and information security of users and developers. The second update is where we have increased the amplitude of one of the UMS channels, the SMS channel, with the ability to manage both upstream and downstream SMS messages. With these new functionalities, customers can manage not only the messages they send to the end user, but they also can receive, save, and manage the messages that are sent back from end users. We are continuing to see customer reception steadily increasing for our UMS product. Well-known customers who have signed up during the quarter include but are not limited to China International Capital Corporation, China Merchants Fund, and Wudu Security. We also want to share with you the latest development regarding our partnership with Huawei Cloud since November 2021. When we officially launched our Java verification and other customized surveys on Huawei Cloud recently, we have also launched our iApp product and will soon add the J-Push Private Cloud to the list. By the end of 2022, we aim to complete the integration of our full product lineup to Huawei Cloud, including BaaS, UMS, M-Link and so on. Our cooperation with Huawei Cloud demonstrates the industry-wide account and trust we command for our comprehensive and competitive product portfolio and services. Similarly to the partnership with Huawei, we have entered into a partnership agreement with TeamCloud Technology Corp to launch our verification service, J-Verification, on the TeamCloud marketplace. a one-stop trading platform that provides cloud-based apps and other service offerings. Securely integrated into the Cloud hybrid ecosystem, JV will provide a quick user registration and logging, two-step security verification, and other multi-factor authentication. G1 will continue to promote in-depth cooperation with the Cloud. and leverage our technology advantage to expand our product offering to empower developers and enterprises to conduct high-quality operations. Sustainable development and effective monetization on the SYNCLOUD platform. Earlier this week, we entered into a definitive agreement to acquire a majority equity interest in SYNCLOUD. China's leading email API platform for consumer marketing and user-centric transactional email services. We are a pioneer in the field of customer engagement, and SendCloud has a leading position in email sending services. Customers today are more and more dependent on flexible omni-channel strategies as the need for user engagement intensifies. With the addition of SendCloud's email sending services, we will be able to quickly enrich our omni-channel customer engagement product offering, which currently includes mobile app push notifications, SMS, WeChat official accounts, WeChat mini programs, Alipay mini programs, ThinkTalk, and enterprise WeChat. With DAO4 can provide customers with industry-leading technology to simplify their omni-channel communications without having to manage different vendors for each channel. Together, we will have the joint advantage to provide a reliable and effective customer engagement platform for different industrial verticals. Our paying customer base is also expected to almost double upon completion of this transaction, as ZenCloud has more than 2,000 paying customers during the fourth quarter of 2021. Both parties can benefit from this acquisition through more close selling opportunities to the combined customer base and help fill our future revenue growth. I'm truly looking forward to the one plus one greater than two synergy between the two companies and believe we can achieve more together. Now I will turn the call over to Fei who will discuss the Q4 performance in greater details.