Aurora Mobile Limited

Ladies and gentlemen, thank you for standing by and welcome to Aurora Mobile fourth quarter and fiscal year 2022 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 during the session, you will need to press dial 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. And I'd like to hand the conference over to your host today, Rene Regenstein. Thank you. Please go ahead, sir.

Thank you, Amber. Hello, everyone, and thank you for joining us today. Aurora's earnings release was distributed earlier today and is available on our IR website. On the call today are Mr. Wei Dongluo, Chairman and Chief Executive Officer, Mr. Shanlan Bong, Chief Financial Officer, and Mr. Guan Yang Chen, General Manager. Following their prepared remarks, they 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 findings 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, Rene. Good morning and good evening, everyone. Welcome to Aurora Mobile's 2022 fourth quarter on this call. Before I comment on our Q4 results, I would like to remind everyone that the quarterly earnings debt is available on our IR website. You may refer to the debt as we proceed with the call today. Before looking at the fourth quarter, I would like to reflect upon our journey in the past couple of years. In a challenging environment caused by pandemic, what we did right what we learned, how we came through the toughest time, and how much we have grown as an organization. I'm proud to say that we came out of the difficult times and became more resilient and efficient. Along the way, we have been constantly reviewing our overall strategy, not afraid of making necessary decisions, no matter how tough, to ensure we are always on the right track to long-term growth. Throughout this effort, our revenues and margins remained strong as we improved gross profit while technically controlling and lowering our path. We started up fresh as a pure start business in Q1 2021. Amidst the transition period, we didn't start innovating and harnessing our core business line developer services. This really is bringing us rewards for the long run. I will give you more details later. With economic efficiency going globally, in mid-2021, we act quickly and proactively to make our organization stronger and nimble by enacting restructuring and strict cost management across the company. We are so glad we made these decisions, and our efforts are reflected in our financial results. Let me share some of the key results with you. Second, Positiva adjusted EBITDA since 2021 Q4 at RMB 0.6 million. All businesses, including developer services, subscription value add services, and vertical applications can record Q of Q growth. Highest gross profit in 2022 at RMB 59.8 million. operating expenses since IPO or for the past 18 quarters at RMB $62.8 million. Lowest adjusted net loss since Q3 of 2019 at RMB $6.6 million, improved by 18% year-over-year. AR turnover days at 32 days, lowest since IPO. default revenue balance is the highest in the history of the company at RMB 142.4 million. Total customer number up 70% year-over-year to 4,719. I am afraid to report renewed growth in Q4 2022. Total revenue rose to RMB 86.9 million, up 8% quarterly over quarter. And both developer services or co-business and vertical applications have achieved sequential growth with the biggest revenue growth contribution by developer services at 11%. In this quarter, we record the highest quarterly revenue of 2022 and lower our adjusted OPAS, being the cash component of OPAS, to a historically low level. With that, our adjusted EBITDA was positive for the second quarter since Q4 2021 at RMB 0.6 million, significantly improved by RMB 7.3 million from negative RMB 6.7 million in Q3 2022. Our adjusted net loss was also the lowest since Q3 2019 at RMB 6.6 million, improved by 18% year-over-year. Furthermore, We ended this quarter on a higher note, with more than $142 million in total deferred revenue, our remaining performance obligations up 15% versus last year. This is a set of impressive financial numbers for Q4 2022 that our team has worked hard to achieve, and it shows that we are running the business well. I sincerely believe more good things will come. We are confident that the end of the COVID zero policy in December 2022 marks the beginning of China's emergence from the pandemic, even though there may be some short-term headwinds. This, we believe, has put the country on a path to return people's lives to normalcy and resume pre-COVID levels of consumer, social, and economic growth. Therefore, the outlook for Renewal consumer activities and the gradual recovery of our business in 2023 is very promising. Now, let me go through our different revenue streams. Developer service revenue increased 11% quarter-over-quarter to revenue of $63.2 million, which was mainly due to the increase in both subscription services and value-added services. Year-over-year, developer services revenue decreased by percent, mainly due to the weakness in value-added services offset by the growth in subscription services. Subscription services revenue will remain be 46.3 million, up 11% quarter-over-quarter, and up 4% year-over-year. Subscription services, our core business line, include J-PUSH, Analytics, UMS, and other products and services that help developers and enterprise to improve optional efficiency. Our private car service revenue increase has contributed to the subscription revenue growth, and we were able to bring a number of renowned customers on board, including but not limited to Zhaoshan Zhengjuan, Ping An Bank, and Zhongxin Bank. The increase in our pool also contributed to the growth in revenue, and we managed to grow our customer base with several well-known and successful customers, like IKEA, Guangda Bank, Taiping Yang Baochuan, and J&T Express, just to name a few. Since our launch of the overseas service platform Engagelab in October, we have seen encouraging trends and customers have been expressing their strong interest in our products. We are expecting stronger revenue growth going into 2023, and we will continue to improve our products and services to help global developers with high-efficiency and cost-effective user reach. As I mentioned earlier, we are anticipating consumer activities to recover further in 2023. During Q4, we already saw some growth in our value-added services revenue, which is a good indicator of overall reviving consumer activities. The value-added services revenue increased quarter-of-quarter by 10%, and it was the first quarter-of-quarter growth in 2022, a major positive sign for us. Year-over-year revenue was down 44% to revenue of $16.9 million, and we expect the year-over-year growth trend will continue to recover in 2023. Major customers of the JG Alliance services consisted of repeated customers and market leaders across many industry verticals. Key customers included BAT, Baidu, Alibaba Tencent, Zhaoxiang Bank, and Zhihu. For our ADPub that was launched back in Q2 2022, we are seeing more and more entries from various apps. Over 10 million DAUs joined our platform by the end of this quarter, a growth in DAUs of over 300%. And as the overall economy recovers in China, we believe that more DAUs will join our platform going forward. Another exciting news, which also marked a major milestone for us, is our pioneer work in integrating the ChatGPT's technology in our JPUCH, our push notification solution, and in our email and SMS service platform. Today, AI has become the cornerstone of many products and services, and it is very important for us to be one of the first movers in applying AI technology. Our proactive integration of interactive leverage model technology and AIGC really give us the edge and a great opportunity to make our product smarter, further benefiting all our customers. For a long time, a critical concern of developers has been how to attract users' attention for creative, high-quality push content and improve message click-through rate and user conversion. The AI creation tool resulting from the integration of ChatGPT into J-Push delivers a powerful solution. Using this tool, developers can quickly tap into the AIGC generated personalized intelligent push content to achieve high query and high conversion, effectively improving the efficiency of user reach and engagement. And for our email service, integrating ChatGPT will enable customers to generate AIGC personalized email content according to the recipient information profile and preference. The upgraded email services will not only improve the readability and attractiveness of emails, but also increase the response rate and conversion rate of email, thereby helping our customers interact with their target users more effectively and achieve higher marketing success. Furthermore, earlier last month, we became one of the first ecosystem partner of ErnieBot, a generative AI chatbot developed by Baidu. We will access ErnieBot and apply Baidu's leading intelligent dialog technology in our customer engagement and marketing technology services. This initiative is an additional step in our implementation of our AI-driven strategy with the support and empowerment of leading AI checkbox technology. As an ecosystem partner, we will be given priority for internal testing with Earnings Board and will integrate Earnings Board in our products. Many renowned companies have joined the Earnings Board ecosystem, including iQiyi, Jidoo Automobile, Xiaoduo, high enterprise solution, Kindle, Jalpin, and PCAuto. It's clear that going forward, our businesses are getting ready for this new mega AI trend. We will also carry out in-depth research and development in chatGPT-related technology, realize interactive dialogue similar to real people through chatGPT technology, and further improve the richness of our push message, email, and SMS content to empower the great conversion rate, and marketing engagement. With that, I will now pass the call over to Shannon, who will share more information about the vertical application and other aspects of our performance.