JG - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Aurora Mobile Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. to Mr. conference like host to now today, for would hand over the your I Vanguestaine. Rene you. Thank Please go ahead, sir.

Rene Vanguestaine

distributed is A.J. you at today. was for you, ir.jiguang.cn. joining today Thank Hello, us Aurora’s everyone. earnings IR on the available And thank earlier website and release

Mr. Chief On Officer; Financial are Officer. Chief today and President; call Weidong Luo, Chen, the and Mr. Chairman Mr. Executive Fei Shan-Nen Bong,

answer prepared Following that three your to questions all available session during remarks, their will be follow. Q&A the will

that you XXE and remind conference Act statements to achievements difficult or forward-looking Exchange These like U.S. forward-looking like With of information, are statement of the Luo. the cause otherwise, I'd begin, ahead. management’s the to go are conference predict uncertainties Reform with and/or any update Mr. and from those and included not applicable Section Please we risks, and Commission. forward-looking current Private contains Company filings materially are Company's turn does any Company's new of as differ forward-looking call these XXXX. or Act amended under within except the that, the of regarding in future to a required to events as this conditions, statements defined now as The current result the undertake law. performance operating in Securities I'd factors other Exchange over actual U.S. results, Before obligation call may which information Securities in upon Litigation market the as Securities to of meaning XXXX based expectations and the to Further statements.

Weidong Luo

the good to evening Thanks quarter Mobile's Welcome operator. call. XXXX Aurora earnings Good to everyone third and on call. morning

our everyone take web would this IR earnings I that page on deck like remind proceed, I have your for uploaded Before reference. quarterly we to opportunity to

the press those as with in release. call You the it addition information in to to today may useful we financial the as proceed refer we have deck contains

Let's begin for our third of and our XXXXt. quarter financial key review operating with highlights performance the of

apps apps or installations at XX, one as year mobile First, X.XX services, of the least board cumulative see XX.XXXX great mobile the our app app of average approximately from number an developer encouraged by first we of a joining we humbled of on month Quarter-over-quarter, every number came million quarter. are yet XXXX during utilizing ago, the developers new us reached X.XX trend. and this still September truly million the of

September XXXX of unique to recover billion X.XX the in monthly to from active devices mobile XXXX. continued in billion increase Second, September numbers X.XX

of Lastly, increased number ago. only highlights. have X,XXX the financial discussion the the helpful we in third At On business SAAS Applications which we like because year refer please deck our from only this the how it's key webpage to stock to uploaded now. the our for of presentation understand and the quarter the XX, Services numbers, IR quarter include XXXX, XXXX would will Vertical relevant to Business. XXXX, beginning saw March investors with of to QX, to Business customers and performing for ending begin with the appropriate, is to SAAS underlying financial I a paying X,XXX Developer

revenue RMBXX million, of Our of XX% quarter profit SAAS year-over-year result to this or year-over-year. continue impressive Business in XX% gross record with million and or RMBXX.X growth

applications On have for been RMBXX relatively vertical year, revenue stable two strong has from noting It's customer total partially applications, impacted in worth which services, due to gradually the basis, for grew offset growth recovered this quarters. quarter-over-quarter in growth at the consecutive from and revenues second year-over-year COVID-XX. the XX% Business, SAAS have by that remained by vertical applications million. the quarter a decline developer of XX% demand sequential been Our vertical mainly

at for SAAS has this also the margin to XX% to year-over-year SAAS Business, year-over-year quarter ended same gross was RMBXX XXXX Also Our to gross reason stable and revenue on of shown due happened profit September quarter-over-quarter. the XX% XX, for solid quarter what growth million the Business, trends.

pro XX% margin gross to professional, We industry stable leveraging maintain growth services extensively forma operational helping to we capabilities. third range expect quarter, monetization great the forward. our developers explore with going about and and operations, secure efficient, at and various focusing analysis on verticals, continued by APP In mobile

APP to a as operations. tools helping gaming, and we launched strategic a education retention, to for intelligent across also conversion, their them user and Recently, leverage During and online industry finance, user variety weather, of operational such platforms user signed on one-stop fresh cooperation the to tools, engagement, as greater further improve efficiency, developers, insurance, refine food quarter, we acquisition well experience. internet platform growth and user traffic, agreements greater drive with e-commerce, improve verticals as leading achieve

of Center WiFi For Moji and and have An Weather, well-known Ping signed Missfresh, with Games, Lilith China example, other companies. we already Masterkey, Bank, XXzuoye, Life, Data agreements

Now, conference who detail. to discuss in QX performance I'll great will turn the Fei the

Fei Chen

Thanks Chris.

revenue SAAS discussion was XXXX, the Business. again star the third once of the consecutive. first the Services start different streams Developer for performer me within of Since Let the quarter

year-over-year developer XX% a ended growth was and by in growth which XX% we For The the XX, XX% million on fueled respectively. revenue quarter and ARPU growth the for in represented recorded September custom RMBXX.X basis. services, the services significant XXXX, developer in revenue a number

customers developer subscription our up services. be more For we suite continue to services, of signing to

primarily the include China revenues customers XX% quarter. recorded and the JG from XX% number strong XX%. and McDonald's, ARPU and and both driven New of increase also SaaS, Mobile, among Advertisement which services Value-added-services, million, revenue in Tianjin Alliance others, Subscription customers by Hunan Province, Anhui. by services renewal increases of had RMBXX.X was by significant include, another year-over-year, a

stagnant for user to developer’s user to costly order market base APP operational become help developers as their monetization and growth monetize and our needs, urgent with our competitive existing to the user While need business become in needs survive. Alliance the satisfies monetize JG subscription developers APP traffic that services APP incrementally APP

JG market to the at services Our monetization Alliance to this right come time purpose. exactly the very serve

RMBXX.X The compared to business. from the million from in Value-added-services same quarter, was potential growth the quarter revenue this tremendous expect ago. zero revenue in year a We

side, as to On China, our XXX we the million DAUs Masterkey, launched have total less in and within further market traffic. third others exceeded in network. few WiFi number hero quarter, APP acceptance the as their such to in XX app APPs, up the monetize our mobile app signed of value major the we already Alliance over year hero milestone the a The products proven OUR million of JG recently reaching with DAUs supply The a than ago. service of great a traffic this network has endorsement joining a since has JG help Alliance

On developers become largest the have consumer program many demand traffic JG of the and Alliance. side,

are With the they user supply, that with WeChat program increasing many those limited needed longer urgently and as expansion such of developers traffic meet acquisition additional no need. to the satisfied traffic program huge mini ecosystem, within external

in massive engine demand this us future. and effectively need. business foreseeable Therefore, the Alliance format will a meet the can growth the to Alliance results full is side JG traffic JG innovative whether or growth confidence gives the their supply from side, that advertising our Our overall it become drive user acquisition

the would quarter to to only marketing of of in wind business business. a XX% total the third profits. XXXX and It gross like XXXX, from quarter revenue X% to contributed plan. continue provide up the I brief on down according update down of legacy Here, second targeted In revenue XX% targeted of marketing of

second in quarter profit from the of of total X% gross Now XXXX.

from As the Chris mentioned, the will end the application. quarter XXX% therefore, booked includes XXXX of services and wind developer starting SAAS only by business this we revenue first year, down Business will vertical which of of

second to RMBXX.X The from combined from of the market including financial Fund remained our this by applications. vertical discussion million. Revenues X% on the increased quarters. of in Revenue clients. again and revenue management corporate vertical million intelligence risk quarter was to product from move let's the equally applications, and item year both by between the Investment market intelligence, this stable the contributed quarter relatively RMBXX.X Now

An the include Chrysler Bank, Huawei, corporate SoftBank. and Ping New

the For COVID-XX. increased from impact quarter-over-quarter segment, continued to by this recover revenue financial X% business management risk the as of

financial quarter-over-quarter particularly a And a lastly, strong growth for licensed that, Shan-Nen. our pass of driven demand our the a institution by products the different we XX%. COVID-XX, as of shown increased to XX% improvement our business item by location growth are with in mainly ARPU banks demand in I'll XX% financial verticals. China for and industry from We products call solid in quarter-over-quarter intelligence seeing With recovers sector, and has see increase ARPU across based do

Shan Bong

RMBXX.X solid RMBXX.X provision to further beyond, customer decreased gross a control trajectory marketing executing above next We're Applications result through to in material other XX financial we believe this mentioned reduction by expenses by one high. results reflected expenses both year-over-year balance very the over foundation sheet for this to Vertical in collection some margin policy Onto percentage X% the year-over-year by RMBXX.X in expenses increased quarter-over-quarter our also in good RMBXXX No September provision, I The and result Developer for COVID-XX accounts the pushed and balance continue expenses as performance due already expenses talked G&A as quarter. and about to XX sheet. to restriction. financial operating quarter turnover of our operating expenses. XXXX. P&L effort, and the reduction and wise revenue these with in XX% by in high quarter of particular, significantly such QX, healthy million. have to Since balance make X% well QX, line and million, business. Application investing, decreased that sheet and and Vertical items. Chris I'll by Fei of operating increased to margin Fei. This to quarter. On the RMBXX the and credit XX, With future. mainly the are item; in on year. provision growing will Selling customers, million, along million historic million, QX, numbers the has improve and XX% usually decreased success our total due in this increased from collected of mainly from advance due commitment headcount increased days was solid decreased year-over-year our of us in expenses; go XX% cash gross of contribution Services where cost our depreciation and needed to Service the and Thanks, specific and has gross expenses In lower XXXX. by better pleased a stringent which to last XXXX marketing XXXX XX% into to due a for is our for less all-time receivable days pandemic to margin represents technical mainly top benefit Developer to deferred R&D an days balance, operating for

Our two flow inflows of has RMBXX positive quarters, more been for consecutive with this operating million. now quarter cash than cash

RMBXXX restricted healthy Business level a were to assets receivables RMBXX In RMBXX RMBXXX revenue include solid we Thus, million, further assets Business invest will liabilities million. expand SAAS start notes of addition, million, cash equivalent mentioned we million XX, guidance. our Beginning investment of balance of payments fixed cash of includes long-term RMBXXX accrued million RMBXX XX, Total believe going forward. above. of RMBXXX financial million, liabilities September million. of of were and and cash million RMBXXX million, position investment in current quarterly deferred of short-term providing convertible a Total September of as we of pre at of equivalents, XXXX. XXXX. XX, this from accounts September This million our RMBXXX RMBXX cash very as RMBXX million, cash and the SAAS revenue high-margin are as RMBXXX and quarter, of was payable in and million of Account

and the approximately conditions and representing fourth demand, For conditions of XX% QX reflects operating XXXX, Company and of XX%. RMBXX million is quarter-over-quarter million, the the SAAS to RMBXX and preliminary Business revenue Business Company’s between the subject to market change. customer current are expects SAAS quarter This growth and based to revenue the all on market estimates outlook which of current be

XXXX, conclude, ADS September quarter as Lastly, a And start program. September prepared give of update cumulatively; the repurchase we XX, XX, on the total shares XXX,XXX not XXXX, I repurchased of concludes remarks. share a did of this repurchase management's have In quick before I'll ended any plan. we the our since

to We take Operator, are a happy proceed. now. question please

Operator

Ryan [Operator the the Instructions] question We have Roberts. from line first of

RyanRoberts

and SAAS like congratulations and question the up progress, to continued see. you building taking I very of for also for improved on much transparency. Thanks to applaud evening. kind the And but Good the that. great that's thank

the understand meaningful with the more helpful that's what's you that. market for for very think business. on and I going to Thank

to as is kind trajectory. of question And Business things of my actually, next SAAS we really, talked about I more So SAAS want a we the a of get growth one and pure course, the past discussion about get on guess, the more because think maybe to start is kind kind of kind QX, Business bit to going just the I growth of, year, in with in trajectory. of

of want obviously, a push kind want looking to get there, at -- looking into year kind into growth of sequential, What realized from bigger I definitely you're should looking it's an at to looks of to but see maybe year-over-yea, kind some, of to XXXX. drivers? obviously, so alliances kind flattish, growth of area, sounds growth of we the I sense view what your the revenues significant. for ahead. what sequentially. the looking tap maybe, it as you're kind look interesting it SAAS QX. for driver picture and there's look kind Business I but QX, of we the kind like looking So a get some the I the less sense for at also are But mean, And pretty through be The of

FeiChen

This Ryan. is Hey, Fei.

second the the second reason a quarter third are little compare there's right, bit actually, the is the actually value- SAAS Business major we seeing sequentially, that's So in regarding a performance you the flattish added service, quarter, decline when slightly in performance a quarter of right. compared the to

actually, couple kind a we deck, a had a earning what quarter second who strong in behind of like the from e-commerce the mainly activities. explained, because XXX page it, in reason X, demand promotion is So it's on I the benefit to of customers due the

also so last end the the at sort And that e-commerce strong. started just of quarter was And the in second because we in particularly right. business of year,

quarter up. So, ramping in the second like, the still of is process

right. basically, are base, So diversified their advertising customers, a customer actually the very not the customers, they the

So have we to the given customers.

outperformed So if the he a bit. who might a skew single customer performance little

third third the customer base. diversification that's why fourth was than you quarter we But going since actually quarter, diversified So second actually, still has see performance quarter. seemingly quarter. have that the is the a in our the better on And

to So, SAAS that to our we will right, Because have that, quarter-over-quarter to which growth. value-added you this expectation the also a guidance for the sequential guidance service, -- notice our quarter, a actually of fourth guide of see our going also, sequential That growth XX% Business, strong able momentum. you reflects growth are XX%. for are

questions. I address your so that Okay, hope can

RyanRoberts

Is flowing that of on thoughts the just of great. VAS effectively the the be push see there? or but Maybe at board, pure be from we of is if be you growth it target I some because done be growth, could year, through that end up seeing little year, away the next we're kind is on a which picks And out, should transition, just draw kind to it's again, the then alternatively of kind going kind kind were can lot kind SaaS Fei, kind the that we explosive share year. early, I of maybe I should model segment, the more is maybe the looking you we would at guess, thinking alliances, about a take maybe a of looking where of where is growth for next of which marketing, of driver this it's

FeiChen

Yes.

a drivers we side, the to supply will service, then get enough number be so more growth our APP supply, actually on we traffic surely the and discussions more able revenue the had And we right. the rapidly. long it's network as will us of the because of as growth before demand, and generate the have joining added for supply actually nature value- the DAU drive mainly we So, of

growth next also to internally, year. And growth for expectation for high we will digit a this have achieve this year compared the So we believe for triple trajectory very we business.

business WiFi triple So, are at this year, mainly, we the million Masterkey, It's announced hasn't been WiFi but between Masterkey the so prepared next in who's somewhere about ramping to RMBXX we actually, DAU join the it's and included we for line, year, RMBXX in business. are recently up, we country XXX is million, the very right, total the million of digit stage network, for announced roughly this remarks. the of is have in our a it pipeline the this to just looking traffic initial of going in growth strong of APP, in addition

to of So so supply, generate million able next confidence us the close you DAUs know WiFi that like triple year as a all alone deliver the to actually digit for for right. that itself we right, are strong Masterkey, very kind XXX these business, growth pipeline this gives --

For the before, to XX going it's I well our ARPU other offering, to increasing traditional follow a mainly products, trajectory of types of by going can mentioned yes, to, subscription, so, business, to as introducing help like XX path growth it's XX customer which number functionalities kind of are right growth, percent-ish of as as the new as we well. driven the like

and sequential the vertical quarter, And third the that's quarter, the the first to already recovery of in compared right. you've function the applications, basically, quarter improvements. both actually, these for So second seen the

we we recovering but the now bottom, the hit from First bottom. quarter, are

experienced to back more the take the on trends three business to year, that's more Yes, able and same seeing, growth lines, continue the level, see sequential you basis, couple the this so couple may Business, and channel we the we going it as the business are a last offer. SAAS major a coming So the color a we quarters. are overall, to quarters, from the

RyanRoberts

then That's kind you. And one thing. helpful. just Thank Okay. of housekeeping

we the Is I remarks right? discussing, that think were that said? what GPM around in you Is to prepared XX%. stay expected you

FeiChen

repeat, get Ryan, you. can we didn't you So,

RyanRoberts

Sorry. Yes.

you During that kind I your remarks, said basis. should six the gross and I I normalized think and were Did It XX%, margin, a hear you think of -- on we correctly? discussing zero. profit said

FeiChen

Yes. see the the right. pro the at just SAAS margin, you forma, Ryan, meaning actually, difference, if gross looking

stable few very around past years, like between XX%, to It's it's always the over bouncing So actually, XX%. right. XX%

the start so can quarter target the we Business, expect because -- have next the to basically of year, margin no margin right, beginning the gross you your so of next gross the since we first on be since longer corporate the are So coming above SAAS content from marketing; year. our be -- will XX%

RyanRoberts

it attractive, with revenue of to if all you. stronger last box XX in between SAAS That the and kind would lower we're talking obviously is very of the there it, and my be in, one Then thing about kind products. the Got of SAAS delta we obviously, the growth think gross kind so the of just is sounded margin. maybe number question about

wondering tight doing XXXX and about Additionally, you at point into to OpEx, maybe if structure of into pretty kind for obviously thinking should you that become QX, this you be have change looking have of or a challenging to of during been. noticed a drive then which you SaaS transition XXXX. ultimately kept cost kind of of growth business that kind be it kind should of a costs, move of look and we year, kind more kudos straight kind explosive profitability of those the kind guys how especially you we once conditions I'm kind in for But that of as more I profile.

FeiChen

every salary cost so, we a right, going a dramatically year expecting increase, we terms Yes, right. to employee actually, slight change this compared certain to the of the because increase are next normal in amount structure cost of structure not year, have as year

some continuously keep non-performer. will workforce, range, to better that hire to optimize remove So try to increase also within right, basically the talent, we are but trying we certainly, and current

XX%, increase XXXX. year this model, in of my OpEx expect only to in would actually, I compared XX% So, about to

RyanRoberts

Okay. That's very helpful.

SAAS talking sheet, from Okay, you all what you change, of less down. I again, sneak receivables, AR sorry, looks on to era, actually we come like expecting kind think guys move like what should suppose, curious to side, that definitely be some of let's, continue the transition as again, that's one. yes, I working maybe have suspect. as looks capital, the I'm out, into Shan-Nen more my playing when SAAS one I, that about have last it that's we been in balance began the year, see we I last to just the to

revenue, You a kind of front. pay of, sorry, lot upfront, mentioned some the deposit business, deferred before up of

should So of it at be looking maybe I'm the model. just how for kind of balance continues kind Maybe, new sheet, the curious as evolve that's to we Shan-Nen, you.

ShanBong

not any balance do know you Business of majority a Yes, deterioration Ryan. prepaid switch of to We the are mode. see sheet as probably we in Business, customer SAAS once our condition SAAS

not expect switch from AR new do a we business see in huge and old business. the So because we increase to

On SAAS demonstrated deferred we money fact the we that from two to because to quarters simply we advance under been collect past Business, customers. revenue do for have expect contrary, has increasing do which quarter-over-quarter in the increase see the

see don't I forward. issue have to -- I any expect So AR going do not us

FeiChen

AR have target calculation, Yes, so marketing still involved, business currently right. we

one the gone. So completely marketing is target of businesses

As target has a you marketing know AR. longer

we gone quarter all So achieved AR We there's XX once think the for in for is that room XXXX. days still of that of improvement. business third

are aiming XX get to anywhere between to So XX. we

are I that's manage. trying base we AR think to good a

our target. Okay, so that's

RyanRoberts

That's AR Got I coming. there's indicate mean the you. Yes. didn't to that is deterioration. all

FeiChen

deterioration, not It's yes.

to improve. continuing are So actually we

Operator

follow go a Please Ryan We up ahead. from Roberts. have again

RyanRoberts

guys. Sorry,

noticed buyback. the more of in one the release. on kind Just I

QX, maybe if QX. there of of an post maybe kind give could have update wondering you kind activity mentioned us You buyback been in no

of sheet capital kind at the, any SAAS as Additionally, some taken as soon. as can effectively cash How of about balance kind you of should some I allocation you of it guess, more of give kind kind allocation, of point maybe entered us of maybe of the with kind gets convert capital think you generative a have how to you the you care hurdles model? sense

FeiChen

Ryan, acquire expecting are cash, and And points. day as we you team, are with reach a actually some base, quickly, have players, upcoming about would by don't marketplace, have product might we so non-organic more but once we in small acquisition good like they So, we the a enough they don't with or certainly actually, to decide of a kind right, breakeven have have proven day the customer organically cash they a they the assets SAAS right we making or Ryan, right, the is, product what the growth, are for salesforce, right. think those

we have innovative sales have right. robust market, we a deliver the products to system into So infrastructure, those very the

leverage So basically look of for our and I opportunities. advantage, should think opportunistically actively we to to kind such

So accelerate by we our growth doing can yes. trajectory, so,

RyanRoberts

the discussion, kind or any strategy? buyback color on maybe and Thanks of

ShanBong

as SAAS say immediate think buyback there's don't expansion immediate any plans terms are there get the in trying you as to are of more soon right no growth now. because to plan Business, I so repurchase we No. much as of to

Operator

Thank you.

back are there questions, Rene to hand to like further would the As I no call

Rene Vanguestaine

Thank for you, everyone joining call you AJ. Thank tonight. our

This to reach IR thank any And the further please questions call. don't team. have you night. If to the out good Have a comments, you hesitate again. Goodbye. concludes and

Operator

Thank for today. conference for Thank participating. concludes you. the Ladies you and that gentlemen,

all now. Thank may disconnect You you.

Rene Vanguestaine	Christensen & Associates, Investor Relations
Weidong Luo	Co Founder, Chairman and Chief Executive Officer
Fei Chen	Co Founder and President
Shan Bong	Chief Financial Office
Ryan Roberts	Navis Capital

Aurora Mobile Limited (JG) 25 Nov 202020 Q3 Earnings call transcript