Aurora Mobile Limited

Ladies and gentlemen, thank you for standing by. Welcome to Aurora Mobile first quarter 2023 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 need to press star 11 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the call over to your host today, Christian Arnel. Thank you. Please go ahead, sir.

Thank you, operator. 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 or through Newswire Services. On the call today are Mr. Wei Dongluo, Chairman and Chief Executive Officer, Mr. Shannon Bong, Chief Financial Officer, and Mr. Guangyan Chen, General Manager. Following their prepared remarks, they 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 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 USSEC. 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, Christian. Good morning and good evening, everyone. Welcome to Aurora Mobile's 2023 First Quarter Earnings Call. Before I comment on our Q1 results, I would like to remind everyone that the quarterly earnings debt is available on our website. You may refer to the deck as we proceed with the call today. Despite the challenging macro environment, we successfully conclude the first quarter of 2023 with business and social activities slowly recovering during COVID following a shift in COVID policy towards the end of 2022. Some of our businesses were impacted to varied degrees. However, we are pleased to report that so far in Q2, we have witnessed good momentum in revenue growth, especially from developer services. Although The external macro environment was rocky during the first quarter. We have not stopped making our organization more efficient. We carry on with our strict cost management strategy and cautious hiring, threaten our management structure, and as a result, our overall expenditure have continued to drop year over year and queue quarter over quarter. We believe these efforts will help us improve our financial performance in the long run. which will also give us the space in a difficult environment to execute on our ambition. Here are some key financial results that I am proud to share. Lowest net loss since 2019 Q3 at RMB 15.2 million. Lowest adjusted operating expenses since IPO at RMB 57.4 million. Lowest operating expenses since IPO at RMB 64.8 million. Gross margin back to 70%. at 39 days, before revenue balance has been higher than maybe 100 million for over 12 consecutive quarters. Total customer number remains stable at 4,527, up 1% year-over-year. Our effective cost optimization continues to yield noticeable financial results, with net loss since 2019 Q3 at RMB 15.2 million and adjust operating expenses at a historically low since IPO of RMB 57.4 million. We also maintain a very healthy gross margin of 70%. Now let me go through our different revenue streams. Developer services revenue decreased 24% year-over-year mainly due to the weakness in value-added services, offset by the growth in subscription services. Subscription services revenue will remain be 47.5 million, up 9% year-over-year, mainly fueled by increasing output. Subscription services, as our core business, include J-Push, Analytics, UMS, and other products. And despite the external and 13-micro environment, we sign up many well-known clients including but not limited to Guangda Bank, Shunfeng, Zabra, and BYD. Going into Q2, we expect some major recovery in subscription services and we hope we will see double digital growth on a Q of Q basis. Value-added services revenue will remain be 8.0 million, decreased by 69% year-over-year, which was a result of weak advertising demand. We believe advertising-related revenue will continue to be impacted by the unfettering and volatile microeconomic environment. Moving on to our products and services, we have seen strong growth potential and interest in the Engagelet platform that we launched during Q4 last year. We have implemented various improvements to other products under Engagelab. Recently, Engagelab has established a reliable network of data centers in multiple regions around the world to ensure that customers can choose the storage location that best suits their business needs. These data centers meet the highest security standards and have parts of rigorous certification and audit process. With the rapid growth In global data exchange, overseas customers have increasing data security and compliance requirements. In addition to Singapore, Engagelab has now added more data center options for overseas customers to deploy the push notification product, AppPush and WebPush. This includes China, Hong Kong, Germany, Frankfurt, US, California, Japan, Tokyo, and South Korea, Seoul, UAE, Dubai, Brazil, Sapporo, and Australia, Sydney. Customers can select one appropriate data center to store data for an application based on comprehensive considerations such as the location of their end user and regulations. We will continue to invest in technology innovation and global infrastructure building. and are committed to providing our customers with the highest level of data security and compliance assurance. We are pleased to report that Engagelab has attracted numerous valuable overseas customers and generated significant revenue and output in just a few months. Encouragingly, new contributions from overseas customers continue to outpace those from domestic customers, and we anticipate that our overseas business will be one of our biggest growth drivers going forward. Our products have been well received by customers in multiple countries and regions, including the US, Malaysia, Thailand, and Singapore. Notably, well-known companies such as BYD, Dachshund Bank, and Media have become our valued customers. With this recognition from our customers, we remain committed to enhancing our products and services to enable global developers to achieve high efficiency and cost-effective user reach. In addition to other achievements this quarter, we have launched our latest enhancement to JPUCH, the in-app messaging function. Unlike notifications sent through external channels, G1 in-app messages appear within the app using pop-up windows and floating bots to capture users' attention. This feature places emphasis on user interaction and engagement, ensuring developers can cultivate and retain their most available users. While push notifications bring users back to the app, in-app messages guide users to interact with the app in a way that meets their expectations. With our app developer-centric strategy, and for our ongoing improvements and iterations of products and technologies. We will continue to improve the app and help mobile app developers answer their optional and growth demands and provide better user experience. With that, I will now pass the call to Shannan, who will share more information about the vertical applications and other aspects of our performance.