Aurora Mobile Limited

Ladies and gentlemen, thank you for standing by, and welcome to the Aurora Mobile Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host for today, Rene Vagastein. Thank you. Please go ahead, sir.

Thank you, Michelle. 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.gguang.cn. On the call today are Mr. Wei-Long Luo, Chairman and Chief Executive Officer, Mr. Shan-Len 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 follows. Before we begin, I'd like to remind you that this conference call contains forward-looking statements within the meaning of Section 21 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 call over to Mr. Luo. Please go ahead.

Thanks, René. Good morning and good evening, everyone. Welcome to Arora Mobile's 2023 Second Quarter Earnings Call. Before I comment on our Q2 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. Coming off from our seasonal slow Q1 quarter, we managed to achieve a few good results sequentially in this quarter. Overall, we did see signs of recovery on most of the business lines between the quarters. However, they are not back to the level a year ago. During Q2 of 2023, we did a few things right. Firstly, we continue to expand our subscription business with the help of our EngageLab products offering overseas. I will share more on our EngageLab business at the later part. Secondly, our value added service business records impressive sequential revenue growth. Thirdly, our vertical application business records solid growth. Last but not least, we continue to control our expenses throughout the organization. With this as the Backdrop, here are the good financial results that I would like to share with you. Total revenue grew 12% quarter-of-quarter. Growth profit grew quarter-of-quarter to RMB 47.7 million. Lowest adjusted operating expenses since IPO at RMB 54.6 million. Lowest operating expenses since IPO at RMB 64.1 million. AR turnover days at 37 days, improvement year-over-year and quarter-over-quarter. The further revenue balance about $130 million for the past six consecutive quarters. Now let me go through our different revenue streams. Developer surface revenue decreased 6% year-over-year, mainly due to the witnessing in the value added surfaces, offset by the 6% growth in subscription surfaces. However, developer surface revenue grows solid by 1.5% quarter-over-quarter, where both subscription and value-added services have record sequential revenue growth. Subscription surface revenue will remain be 40.5 million, up 6% year-over-year, mainly driven by increasing ARPU. Similarly, we record revenue growth of 8% quarter-over-quarter, with the growth in ARPU between the quarters. Some of the notable new and renewable customers in this quarter include, but not limited to, Taikan Renshou, China Dianxin, Shimalaya, Jishan Hang Kong, just to name a few. Earlier at the surface, the revenue of RMB 11.5 million decreased by 32% year-over-year, which was a result of weak advertising demand. However, we did manage to record a good sequential revenue growth of 45% quarter-over-quarter, This was mainly due to our ability to capture a good portion of the e-commerce advertising spending for the 618 online shopping festival. However, we remain cautious on the revenue growth in the online advertisement market. Next, let me give you some updates on our overseas Engagelab product. As I shared in the pre-quarter earnings release, we now have the data center across the global catering for customers in different regions and continents. As we expand our footprint globally, we have signed up more international customers. Our investment in technology innovation and building global infrastructure have paid off. As of now, we have global customers coming from 12 different countries and regions, including Hong Kong and Taiwan. For our discussion with these overseas customers, they selected our service mainly due to the following reasons. One, reliable and stable service delivery. Two, strengthened data security and compliance, three local data centers across the world. Let me show some other impressive metrics here in Q2. Our EngageLab business segment signed contract value was at 21% of the total new contract value for the group. This number has grown three times between the quarters, showing great momentum. In addition, We have also seen great overseas email and SMS volume growth. In Q2, the total overseas email request volume was at 3.3 billion, representing 4.2 tons of our domestic email request volume. Overseas email and SMS request volumes have record 19% and 19% growth between the quarters. Our engagement basis activity is gradually growing importance for both transaction and contract value contributions. Therefore, I am very confident on the progress of our overseas business expansion strategy that we have started a year ago. I believe we will reap the benefit of this overseas effort in the near future. With that, I will now pass the call over to Xianglin. We will share more information about the vertical application and other aspects of our financial performance for this quarter.