Aurora Mobile Limited Announces Third Quarter 2023 Unaudited Financial Results

SHENZHEN, China, Nov. 16, 2023 (GLOBE NEWSWIRE) — Aurora Mobile Limited (“Aurora Mobile” or the “Company”) (NASDAQ: JG), a leading provider of customer engagement and marketing technology services in China, today announced its unaudited financial results for the third quarter ended September 30, 2023.

Third Quarter 2023 Financial Highlights

  • Revenues were RMB74.1 million (US$10.2 million), a decrease of 8% year-over-year.
  • Cost of revenues was RMB21.8 million (US$3.0 million), a decrease of 18% year-over-year.
  • Gross profit was RMB52.3 million (US$7.2 million), a decrease of 3% year-over-year.
  • Total operating expenses were RMB60.0 million (US$8.2 million), a decrease of 25% year-over-year.
  • Net loss was RMB7.0 million (US$1.0 million), compared with a net loss of RMB20.7 million for the same quarter last year.
  • Net loss attributable to Aurora Mobile Limited’s shareholders was RMB6.8 million (US$0.9 million), compared with a net loss attributable to Aurora Mobile Limited’s shareholders of RMB20.4 million for the same quarter last year.
  • Adjusted net income (non-GAAP) was RMB2.1 million (US$0.3 million), compared with an adjusted net loss of RMB14.5 million for the same quarter last year.
  • Adjusted EBITDA (non-GAAP) was at positive RMB4.5 million (US$0.6 million), compared with a negative RMB6.7 million for the same quarter last year.

Mr. Weidong Luo, Chairman and Chief Executive Officer of Aurora Mobile, commented, “This 3rd quarter of 2023 has been a great quarter for us operationally and financially. Firstly, two of our business lines recorded sequential revenue growth in each of the 3 quarters of 2023. In particular, Developer Services – Subscription revenues grew 15% quarter-over-quarter and Vertical Applications revenue grew 6% quarter-over-quarter driven by Financial Risk Management revenue grew 11% quarter-over-quarter. Secondly, our gross profits in absolute dollar terms also grew in each of the 3 quarters in 2023. Thirdly, we achieved yet another lowest OPEX since IPO in this quarter. Last, but not least, we achieved Adjusted EBITDA positive this quarter.

Developer Services – Subscription revenues were RMB46.7 million, up 12% year-over-year and 15% quarter-over-quarter. This was mainly driven by increases in both ARPU and customer numbers year-over-year and quarter-over-quarter.

Our overseas product, EngageLab, has reached major key milestones in this quarter:

(1)   we now have more than 100 paying customers;

(2)   these customers came from 16 different countries and regions (including Hong Kong and Taiwan). In this quarter alone, we added 4 new countries;

(3)   Thirdly, the cumulative signed contract value has exceeded RMB10 million.

Vertical Applications recorded the quarterly revenue growth in each of the quarters in 2023. In Q3’2023, it grew another 6% quarter-over-quarter fueled by the strong revenue growth from the Financial Risk Management segment.”  

Mr. Shan-Nen Bong, Chief Financial Officer of Aurora Mobile, added, “In Q3’2023, we have yet another record low quarterly operating expenses at RMB60.0 million. The 3rd quarter operating expenses was down 25% year-over-year and 6% quarter-over-quarter. Maintaining low level of operating expenses is of critical importance to us. This was the main reason why we are able to record the lowest quarterly net loss in since IPO and turned Adjusted EBITDA positive in this quarter.

Our AR turnover days was at a healthy level of 40 days in this quarter. This is relatively consistent year-over-year and quarter-over-quarter.

Total Deferred Revenue, which represents cash collected in advance from customers for future contract performance, continued to be at high balance of RMB130.6 million. This is the 7th consecutive quarter where our deferred revenue balance has exceeded RMB130 million.”

Third Quarter 2023 Financial Results

Revenues were RMB74.1 million (US$10.2 million), a decrease of 8% from RMB80.4 million in the same quarter of last year, attributable to a 10% decrease in revenue from Developer Services (mainly due to weakness in Value-Added Service revenue) and a 4% decrease in revenue from Vertical Applications.

Cost of revenues was RMB21.8 million (US$3.0 million), a decrease of 18% from RMB26.4 million in the same quarter of last year. The decrease was mainly due to a RMB8.5 million decrease in media cost, which is partially offset by a RMB1.9 million increase in technical service fee and a RMB1.8 million increase in short message cost.

Gross profit was RMB52.3 million (US$7.2 million), a decrease of 3% from RMB54.0 million in the same quarter of last year. The gross profit grew sequentially in each of the first 3 quarters of 2023 and recorded the highest quarterly number in 2023 to-date.

Total operating expenses were RMB60.0 million (US$8.2 million), a decrease of 25% from RMB80.0 million in the same quarter of last year.

  • Research and development expenses were RMB32.8 million (US$4.5 million), a decrease of 14% from RMB38.3 million in the same quarter of last year, mainly due to a RMB5.1 million decrease in bandwidth costs, a RMB4.7 million decrease in personnel costs, and a RMB4.5 million decrease in depreciation expense. The impact is partially offset by a RMB7.0 million increase in cloud costs.
  • Sales and marketing expenses were RMB21.8 million (US$3.0 million), a decrease of 10% from RMB24.2 million in the same quarter of last year, mainly due to a RMB3.0 million decrease in personnel costs.
  • General and administrative expenses were RMB5.4 million (US$0.7 million), a decrease of 69% from RMB17.6 million in the same quarter of last year, mainly due to a RMB2.9 million decrease in personnel costs, a RMB1.0 million decrease in professional fee, and an one-time RMB7.6 million gain on disposal of property and equipment.

Loss from operations was RMB7.7 million (US$1.1 million), compared with RMB26.0 million in the same quarter of last year. The loss from operations reduced by 70% year-over-year.

Net Loss was RMB7.0 million (US$1.0 million), compared with RMB20.7 million in the same quarter of last year. The net loss reduced by 66% year-over-year.

Adjusted net income (non-GAAP) was RMB2.1 million (US$0.3 million), compared with an adjusted net loss of RMB14.5 million in the same quarter of last year.

Adjusted EBITDA (non-GAAP) turned positive at RMB4.5 million (US$0.6 million) compared with a negative RMB6.7 million for the same quarter of last year.

The cash and cash equivalents, restricted cash, and short-term investment were RMB98.4 million (US$13.5 million) as of September 30, 2023 compared with RMB116.3 million as of December 31, 2022.

Update on Share Repurchase

As of September 30, 2023, the Company had repurchased a total of 2,685,312 ADS, of which 854,213 ADSs, were repurchased during the third quarter in 2023.

Conference Call

The Company will host an earnings conference call on Thursday, November 16, 2023 at 7:30 a.m. U.S. Eastern Time (8:30 p.m. Beijing time on the same day).

All participants must register in advance to join the conference using the link provided below. Please dial in 15 minutes before the call is scheduled to begin. Conference access information will be provided upon registration.

Participant Online Registration: 
https://register.vevent.com/register/BI9ad70a87fcb9492a9f1ae13d03b3126f

A live and archived webcast of the conference call will be available on the Investor Relations section of Aurora Mobile’s website at https://ir.jiguang.cn/.

Use of Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses two non-GAAP measures, adjusted net income/(loss) and adjusted EBITDA, as a supplemental measure to review and assess its operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company defines adjusted net income/ (loss) as net loss excluding share-based compensation, reduction in force charges, impairment of long-term investment and change in fair value of foreign currency swap contract. The Company defines adjusted EBITDA as net loss excluding interest expense, depreciation of property and equipment, amortization of intangible assets, amortization of land use right, income tax expenses/(benefits), share-based compensation, reduction in force charges, impairment of long-term investment and change in fair value of foreign currency swap contract.

The Company believes that adjusted net income/ (loss) and adjusted EBITDA help identify underlying trends in its business that could otherwise be distorted by the effect of certain expenses that it includes in loss from operations and net loss.

The Company believes that adjusted net income/ (loss) and adjusted EBITDA provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by the management in their financial and operational decision-making.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using adjusted net income/(loss) and adjusted EBITDA is that they do not reflect all items of income and expense that affect the Company’s operations. Further, the non-GAAP financial measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.

The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating the Company’s performance. The Company encourages you to review its financial information in its entirety and not rely on a single financial measure.

Reconciliations of the non-GAAP financial measures to the most comparable U.S. GAAP measure are included at the end of this press release.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Among other things, the Business Outlook and quotations from management in this announcement, as well as Aurora Mobile’s strategic and operational plans, contain forward-looking statements. Aurora Mobile may also make written or oral forward-looking statements in its reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Aurora Mobile’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Aurora Mobile’s strategies; Aurora Mobile’s future business development, financial condition and results of operations; Aurora Mobile’s ability to attract and retain customers; its ability to develop and effectively market data solutions, and penetrate the existing market for developer services; its ability to transition to the new advertising-driven SAAS business model; its ability to maintain or enhance its brand; the competition with current or future competitors; its ability to continue to gain access to mobile data in the future; the laws and regulations relating to data privacy and protection; general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company’s filings with the Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of the press release, and Aurora Mobile undertakes no duty to update such information, except as required under applicable law.

About Aurora Mobile Limited

Founded in 2011, Aurora Mobile is a leading provider of customer engagement and marketing technology services in China. Since its inception, Aurora Mobile has focused on providing stable and efficient messaging services to enterprises and has grown to be a leading mobile messaging service provider with its first-mover advantage. With the increasing demand for customer reach and marketing growth, Aurora Mobile has developed forward-looking solutions such as Cloud Messaging and Cloud Marketing to help enterprises achieve omnichannel customer reach and interaction, as well as artificial intelligence and big data-driven marketing technology solutions to help enterprises’ digital transformation.

For more information, please visit https://ir.jiguang.cn/.

For investor and media inquiries, please contact: 
Aurora Mobile Limited 
ir@jiguang.cn

Christensen 
In China
Mr. Eric Yuan
Phone: +86-10-5900-1548
E-mail: eric.yuan@christensencomms.com

In U.S.
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: linda.bergkamp@christensencomms.com

Footnote:

This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB7.2960 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of September 29, 2023.

 
 
AURORA MOBILE LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED INCOME STATEMENTS
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
                             
    Three months ended   Nine months ended
    September 30,
2022
  June 30,
2023
  September 30,
2023
  September 30,
2022
  September 30,
2023
    RMB   RMB   RMB   US$   RMB   RMB   US$
                             
Revenues   80,431     73,331     74,058     10,150     241,908     212,822     29,170  
Cost of revenues   (26,403 )   (25,620 )   (21,756 )   (2,982 )   (75,904 )   (66,817 )   (9,158 )
Gross profit   54,028     47,711     52,302     7,168     166,004     146,005     20,012  
Operating expenses                            
Research and development   (38,275 )   (30,243 )   (32,797 )   (4,495 )   (119,047 )   (94,721 )   (12,983 )
Sales and marketing   (24,178 )   (20,009 )   (21,750 )   (2,981 )   (73,787 )   (60,649 )   (8,313 )
General and administrative(1)   (17,569 )   (13,873 )   (5,436 )   (745 )   (69,366 )   (33,582 )   (4,603 )
Total operating expenses   (80,022 )   (64,125 )   (59,983 )   (8,221 )   (262,200 )   (188,952 )   (25,899 )
Loss from operations   (25,994 )   (16,414 )   (7,681 )   (1,053 )   (96,196 )   (42,947 )   (5,887 )
Foreign exchange (loss)/gain, net   (449 )   (118 )   26     4     (3,713 )   (67 )   (9 )
Interest income   276     354     269     37     1,915     953     131  
Interest expenses   (194 )   (218 )   (209 )   (29 )   (2,815 )   (650 )   (89 )
Other income/ (expenses)   5,479     (7,514 )   411     56     24,010     (3,787 )   (519 )
Change in fair value of structured deposits   49         11     2     52     24     3  
Change in fair value of foreign currency swap contract                   764          
Loss before income taxes   (20,833 )   (23,910 )   (7,173 )   (983 )   (75,983 )   (46,474 )   (6,370 )
Income tax benefits/ (expenses)   110     179     177     24     (25 )   506     69  
Net loss   (20,723 )   (23,731 )   (6,996 )   (959 )   (76,008 )   (45,968 )   (6,301 )
Less: net loss attributable to redeemable noncontrolling interests   (296 )   (715 )   (225 )   (31 )   (2,357 )   (1,115 )   (153 )
Net loss attributable to Aurora Mobile Limited’s shareholders   (20,427 )   (23,016 )   (6,771 )   (928 )   (73,651 )   (44,853 )   (6,148 )
Net loss attributable to common shareholders   (20,427 )   (23,016 )   (6,771 )   (928 )   (73,651 )   (44,853 )   (6,148 )
Net loss per share, for Class A and Class B common shares:                            
Class A and B Common Shares – basic and diluted   (0.26 )   (0.29 )   (0.08 )   (0.01 )   (0.93 )   (0.56 )   (0.08 )
Shares used in net loss per share computation:                            
Class A Common Shares – basic and diluted   62,306,416     62,943,573     62,731,319     62,731,319     62,168,880     62,813,504     62,813,504  
Class B Common Shares – basic and diluted   17,000,189     17,000,189     17,000,189     17,000,189     17,000,189     17,000,189     17,000,189  
Other comprehensive income/(loss)                            
Foreign currency translation adjustments   3,472     2,787     (343 )   (47 )   7,300     1,640     225  
Total other comprehensive income/(loss), net of tax   3,472     2,787     (343 )   (47 )   7,300     1,640     225  
Total comprehensive loss   (17,251 )   (20,944 )   (7,339 )   (1,006 )   (68,708 )   (44,328 )   (6,076 )
Less: comprehensive loss attributable to redeemable noncontrolling interests   (296 )   (715 )   (225 )   (31 )   (2,357 )   (1,115 )   (153 )
Comprehensive loss attributable to Aurora Mobile Limited’s shareholders   (16,955 )   (20,229 )   (7,114 )   (975 )   (66,351 )   (43,213 )   (5,923 )
                             
                             
(1) Starting from January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses.

 
 
AURORA MOBILE LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”))
             
    As of
    December 31, 2022   September 30, 2023
    RMB   RMB   US$
ASSETS            
Current assets:            
Cash and cash equivalents   116,128     87,890     12,046  
Restricted cash   132     491     67  
Short-term investment       10,000     1,371  
Accounts receivable   29,727     31,255     4,284  
Prepayments and other current assets   30,401     23,650     3,242  
Amounts due from a related party   255          
Total current assets   176,643     153,286     21,010  
Non-current assets:            
Long-term investments   141,901     134,941     18,495  
Property and equipment, net   14,947     1,939     266  
Operating lease right-of-use assets(2)   33,756     6,556     899  
Intangible assets, net   23,947     19,539     2,678  
Goodwill   37,785     37,785     5,179  
Other non-current assets   4,128     5,456     748  
Total non-current assets   256,464     206,216     28,265  
Total assets   433,107     359,502     49,275  
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND SHAREHOLDERS’ EQUITY            
Current liabilities:            
Short-term loan   5,000     5,000     685  
Accounts payable   18,169     20,229     2,773  
Deferred revenue and customer deposits   138,804     130,588     17,899  
Operating lease liabilities(2)   18,133     6,393     876  
Accrued liabilities and other current liabilities   75,333     70,956     9,725  
Total current liabilities   255,439     233,166     31,958  
Non-current liabilities:            
Deferred revenue   3,585          
Operating lease liabilities(2)   6,959     968     133  
Deferred tax liabilities   4,824     4,303     590  
Other non-current liabilities   4,058     560     77  
Total non-current liabilities   19,426     5,831     800  
Total liabilities   274,865     238,997     32,758  
Redeemable noncontrolling interests   30,552     29,864     4,093  
Shareholders’ equity:            
Common shares   50     50     7  
Treasury shares   (1,689 )   (1,859 )   (255 )
Additional paid-in capital   1,037,007     1,043,930     143,083  
Accumulated deficit   (925,982 )   (971,424 )   (133,145 )
Accumulated other comprehensive income   18,304     19,944     2,734  
Total shareholders’ equity   127,690     90,641     12,424  
Total liabilities, redeemable noncontrolling interests and shareholders’ equity   433,107     359,502     49,275  
             
(2) The Company adopted ASU No. 2016-02, Leases (Topic 842) and the respective updates for annual reporting periods beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022. Results for three months ended March 31, 2023, June 30, 2023 and September 30, 2023 are presented under the new accounting standard, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historical accounting practices under ASC 840.
             
             

AURORA MOBILE LIMITED
RECONCILIATION OF GAAP AND NON-GAAP RESULTS
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”))
                             
    Three months ended   Nine months ended
    September 30,
2022
  June 30,
2023
  September 30,
2023
  September 30,
2022
  September 30,
2023
    RMB   RMB   RMB   US$   RMB   RMB   US$
Reconciliation of Net Loss to Adjusted Net Loss/ (Income):                            
Net loss   (20,723 )   (23,731 )   (6,996 )   (959 )   (76,008 )   (45,968 )   (6,301 )
Add:                            
Share-based compensation   4,470     4,168     2,848     390     14,654     10,054     1,378  
Reduction in force charges   1,712     1,051     619     85     5,903     2,358     323  
Impairment of long-term investment       9,660     5,604     768     7,016     15,264     2,092  
Change in fair value of foreign currency swap contract                   (764 )        
Adjusted net (loss)/ income   (14,541 )   (8,852 )   2,075     284     (49,199 )   (18,292 )   (2,508 )
Reconciliation of Net Loss to Adjusted EBITDA:                            
Net loss   (20,723 )   (23,731 )   (6,996 )   (959 )   (76,008 )   (45,968 )   (6,301 )
Add:                            
Income tax (benefits)/ expenses   (110 )   (179 )   (177 )   (24 )   25     (506 )   (69 )
Interest expenses   194     218     209     29     2,815     650     89  
Depreciation of property and equipment   5,868     1,799     868     119     18,854     4,853     665  
Amortization of intangible assets   1,665     1,589     1,519     208     4,412     4,714     646  
Amortization of land use right   183     811             183     994     136  
EBITDA   (12,923 )   (19,493 )   (4,577 )   (627 )   (49,719 )   (35,263 )   (4,834 )
Add:                            
Share-based compensation   4,470     4,168     2,848     390     14,654     10,054     1,378  
Reduction in force charges   1,712     1,051     619     85     5,903     2,358     323  
Impairment of long-term investment       9,660     5,604     768     7,016     15,264     2,092  
Change in fair value of foreign currency swap contract                   (764 )        
Adjusted EBITDA   (6,741 )   (4,614 )   4,494     616     (22,910 )   (7,587 )   (1,041 )
                             

 
AURORA MOBILE LIMITED
UNAUDITED SAAS BUSINESSES REVENUE
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”))
                             
                             
    Three months ended   Nine months ended
    September 30,
2022
  June 30,
2023
  September 30,
2023
  September 30,
2022
  September 30,
2023
    RMB   RMB   RMB   US$   RMB   RMB   US$
                             
Developer Services   57,003     52,072     51,534     7,063     172,009     149,071     20,432  
   Subscription   41,692     40,526     46,659     6,395     114,391     124,693     17,091  
   Value-Added Services   15,311     11,546     4,875     668     57,618     24,378     3,341  
Vertical Applications   23,428     21,259     22,524     3,087     69,899     63,751     8,738  
Total Revenue   80,431     73,331     74,058     10,150     241,908     212,822     29,170  
Gross Profits   54,028     47,711     52,302     7,168     166,004     146,005     20,012  
Gross Margin   67.2 %   65.1 %   70.6 %   70.6 %   68.6 %   68.6 %   68.6 %
                             

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