Earnings call transcript: Aurora Mobile achieves first-ever net profit in Q2 2025

Aurora Mobile Ltd reported a significant milestone in Q2 2025, achieving its first-ever quarterly GAAP net profit. The company’s revenue grew by 13% year-over-year to RMB 89.9 million, maintaining its impressive 65.03% gross profit margin. Despite these achievements, the stock remained relatively stable, closing at $10.17 with a minor change of 0.8%. The company’s market capitalization stands at $62.12 million, with the stock showing remarkable strength, delivering a 175.41% return over the past year.

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Key Takeaways

• Aurora Mobile reported its first-ever quarterly net profit.
• Revenue increased by 13% year-over-year to RMB 89.9 million.
• EngageLab, a flagship product, saw a 67% year-over-year revenue growth.
• The company reduced its headcount by more than half to improve efficiency.
• Q3 2025 revenue guidance is set between RMB 88-91 million, indicating continued growth.

Company Performance

Aurora Mobile’s Q2 2025 performance marks a significant achievement with its first-ever quarterly GAAP net profit. The company reported a 13% increase in revenue, reaching RMB 89.9 million. This growth is attributed to the strong performance of its EngageLab product and strategic cost management, including a reduction in headcount from 820 to 400 employees. The company has also expanded its presence in key Asian markets, including Hong Kong, Singapore, Malaysia, Thailand, and Japan, enhancing its competitive position with localized service capabilities.

Financial Highlights

• Revenue: RMB 89.9 million, up 13% year-over-year
• Gross Profit: RMB 59.6 million, up 13% year-over-year
• Net Operating Cash Inflow: RMB 7.9 million
• Total Deferred Revenue: RMB 156.1 million
• Net Dollar Retention Rate: 99%

Outlook & Guidance

Aurora Mobile provided revenue guidance for Q3 2025, projecting between RMB 88-91 million, representing an 11-15% year-over-year growth. The company plans to continue focusing on its EngageLab product as the primary growth engine and further empower its offerings with AI technology. Aurora Mobile remains confident in its sustainable expansion path.

Executive Commentary

CEO Weidong Luo highlighted the company’s achievements, stating, "This was just the best quarter we have ever had," and emphasized the strategic importance of EngageLab by saying, "EngageLab is the engine of growth for our mobile in the next twelve to twenty-four months."

Risks and Challenges

• Market competition: Increased competition in the mobile and AI sectors could pressure margins.
• Economic conditions: Fluctuating economic conditions in key markets may affect revenue growth.
• Technological advancements: Rapid changes in technology require continuous innovation to maintain competitiveness.
• Operational efficiency: Maintaining streamlined operations with a reduced workforce could pose challenges.

Q&A

During the earnings call, analysts raised questions about the factors driving Q2 performance and the future of EngageLab. Management emphasized the importance of employee commitment and strategic execution in achieving the quarter’s results.

Full transcript - Aurora Mobile Ltd (JG) Q2 2025:

Conference Operator: Ladies and gentlemen, thank you for standing by, and welcome to Aurora Mobile Second Quarter twenty twenty five 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. Please be advised that today’s conference is being recorded. I’d now like to hand the conference over to your host today, Christian Arnold.

Thank you. Please go ahead, sir.

Christian Arnold, IR Representative, Aurora Mobile: Thank you. Hello, everyone, and thank you for joining us today. Aurora Mobile’s earnings release was distributed earlier today and is available on the IR website at ir.jiguang.en. On the call today are Mr. Weidong Luo, Chairman and Chief Executive Officer Mr.

Shannon Bong, Chief Financial Officer and Mr. Guangyuan Chen, General Manager. Following their prepared remarks, they will all be available to answer your questions during the Q and 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 or factors are included in the company’s filings with the U. S. SEC.

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. Roel. Please go ahead.

Weidong Luo, Chairman and Chief Executive Officer, Aurora Mobile: Thanks, Christine. Greetings to all. Welcome to Aurora Mobile’s twenty twenty five second quarter earnings call. Before I comment on our Q2 results, I would like to remind everyone that the quarterly earnings deck is available on our IR website. You may refer the deck as we proceed with the call today.

I’m so excited about this call today and sharing this Q2 earnings release with you because this was just the best quarter we have ever had. At the end of this call, I believe all of you will be equally excited as I am now. Let’s get started. As we did in the past, based on the Q2 numbers, I have a suitable discussion for the second quarter results, which is a new chapter in Aurora Mobile for one very significant milestone we have achieved. We record the first ever quarterly net profit.

This is GAAP profit, by the way, in our history. This great milestone aside, we have record many other great operating results in this quarter, too. Let me elaborate more later in the call. Firstly, our global flagship product, EngageLab, continues to expand and scale globally with great year over year and quarter over quarter customer number and contract value growth. Secondly, the group’s revenue this quarter of RMB89.9 million achieving a remarkable year over year and sequential growth.

This RMB89.9 million was the higher end of the guidance we have provided. Engaged apps recognized revenue also grew strongly by 67% year over year and 24% quarter over quarter. Thirdly, our Financial Risk Management business has another great quarter, recording solid revenue growth of 27% year over year. Firstly, gross profit grew strongly by 13% year over year, while achieving the highest gross profit for the past ten quarters. Gross margin has also improved quarter over quarter.

In summary, I’m truly pleased with the great achievement we have had in this quarter. Achieving historical GAAP net profit is not easy. We have spent considerable time, effort and energy over the past two to three years to strategize the growth path. Looking back, it was a tough but truly enjoyable and fulfilling journey. During that period, we explored new markets, consolidated our services, created our global flagship product, EngageLab, for global market.

Our AI agent platform, gbpboss.ai, CanStopWar2, providing our enterprise customers an easy to use AI agent platform for them to easily embrace the advancement and the great power of artificial intelligence. Over these periods, we saw significant increase in both customer numbers and business volume. This puts the business firmly on solid grounds and on sustainable expansion path. Apart from ensuring top line growth, we also seriously look at the OpEx. We challenged and improved operational efficiency of the entire organization.

Hard decisions were made to streamline our services offering and certain departments. Certain services with less than ideal gross margins were abandoned or ditched. The group headcount was also reduced from the higher of more than eight twenty to around 400 now. As we work hard scaling up revenue, maintaining high gross margins and with tight and linked cost structure, achieving the quarterly GAAP net profit is just a matter of when. Since everything fell into the right place in Q2, that’s the very first our mobile net profit came in this quarter.

Now let me share more on the individual business performance. Our total Q2 group revenue has grown 13% year over year driven by the great performance from Developer Services. Within the group revenue, obviously, segments, like Developer Subscription Services, Value Added Services and Vertical Applications record solid acceleration and double digit year over year revenue growth. Developer services revenue, which consists of subscription services and value added services increased by a strong 14% growth year over year and 3% growth quarter over quarter. Subscription revenue can solid revenue numbers, well, it increased by 12% year over year and increased slightly quarter over quarter.

Value added services revenue grew by an impressive 30% year over year and increased 21% quarter over quarter. Our core business, Developer Subscription Services revenue of CNY53.7 million, record growth of 12% year over year and increased slightly quarter over quarter. The year over year revenue growth was mainly driven by increase in both customer number and ARPU. I believe this segment has stood firmly on its solid foundation where the subscription revenue record fourth consecutive quarter of RMB 40,000,000 plus revenue. For subscription services, we have record year over year revenue growth in both the domestic and overseas markets.

Next, I shall elaborate more on our EngageLab business this quarter. Our flagship product, EngageLab, continue to be the star performer for the group as far as revenue growth trajectory goes. Firstly, we had another strong quarter of for EngageLab, where the total contract value we have signed amount to 11,200,000.0 in Q2. The growth acceleration has been great for this business since day one. Secondly, global customers from all corners of the world continue to purchase our product and services.

The customer number has increased by 25% sequentially, reaching to ten fifty eight. This was driven by the continued progress we are making across our go to market growth. Further, the revenue recognized for the Engageddon again record very strong growth of 67% year over year and 24% quarter over quarter. Firstly, our engagement product and services are now sold to customers in more than 45 different countries and regions globally. Customer from four new countries has been converted and signed up with us in Q2.

As I mentioned this before, but we would like to reiterate that I truly believe that Engage that is the engine of growth for our mobile in the next twelve

Unidentified Speaker/Participant: twenty two twenty four months.

Weidong Luo, Chairman and Chief Executive Officer, Aurora Mobile: The number it has delivered over the past eight quarters is the greatest testament of my belief. Next, within subscription revenues, some of the notable win this quarter include, but not limited to Pufa, credit card, Tesla China, Dongguo Yinlei and China City Bank International, just to name a few. Value added services revenue were 10,700,000.0, increased by 30% year over year and increased by 21% quarter over quarter. The significant revenue year over year growth we have seen was mainly due to the increased advertiser spending allocation to us and new customer acquired in Q2. In addition, the traditional Q2 online shopping business will also contribute to the revenue growth.

Now let me pass the call over to Shannon, who will share more about the vertical application and other aspects of our financial performance for this quarter.

Shannon Bong, Chief Financial Officer, Aurora Mobile: Thanks, Chris. Next, I’ll go over the revenue for vertical application that includes financial risk management and market intelligence. Overall, vertical application had a strong quarter, where revenue increased by 10% year over year, but decreased 4% quarter over quarter. Within vertical application, financial risk management recorded a 27% growth in revenue year over year, but decreased 1% quarter over quarter. Financial Risk Management had another excellent quarter, recorded two consecutive quarters of revenue in excess of 21,000,000.

The 27% year over year revenue growth was mainly due to a strong 48% in customer number growth. As I have shared in the previous quarter, the upgraded product and services found their place in the financial industry vertical. We continue to see deeper cooperation and usage of our financial risk management product by many leading platforms in China. This will no doubt further solidify the continued demand for this service in the many quarters to come. We see new and existing licensed financial institution continue to buy and use our product and services in their risk model.

The customer that we signed up or renewed in Q2 include, but not limited to, Fengqi Le, Zhongming Xiaoting, Ping An, Kuhui and many more licensed credit and financial institution throughout China. Market Intelligence revenue, on the other hand, decreased by 38% year over year and 23% quarter over quarter due to the continued weak demand for Chinese APP data. This result is within our expectation. For Market Intelligence, we started making major and meaningful upgrades for the product to better meet the dynamic market needs. We believe upon completion, it will attract more usage and customers.

Based

Unidentified Speaker/Participant: on

Shannon Bong, Chief Financial Officer, Aurora Mobile: the current feedbacks we have received, it has been very encouraging. I shall provide more timely updates on this upgraded market intelligence product in the future earnings call. Next, I’ll go over some of the profit and loss and balance sheet items. Our gross profit, it continued to scale new heights. It grew both year over year and quarter over quarter to CNY 59,600,000.0.

This was the record high level that we have achieved for the immediate past ten quarters. This shows that at Aurora Mobile, we can have revenue growth and gross profit acceleration at the same time. This is a very hard act to juggle, but we did it. It demonstrated the high quality revenue that we have been able to generate. And we do not blindly go after revenue growth at the expense of margin.

And this is a fundamental of how we go about managing the business as a whole. On to operating expenses. The Q2 operating expenses was at million, representing an 11% increase year over year and slightly increased quarter over quarter. Operationally, our Q2 revenue grew by 13% year over year, while OpEx only grew by 11%. And we are pleased to see how we have been controlling OpEx to support the double digit revenue growth across all business lines.

I’ll now dive deeper into the individual OpEx categories. For R and D expenses, it increased 10% year over year to million, mainly due to the increase in staff costs and associated expenses. Technical service fee and cloud costs also contributed to the year over year increase. Selling and marketing expenses increased by 11% year over year to RMB22.7 million, mainly due to the increase in sales commission and traveling expenses, in line with revenue growth and cash collection recorded in this quarter. And marketing expenses for investment in global business expansion also contributed to the year over year increase in selling and marketing expenses.

G and A expenses increased by 14% year over year to 12,200,000.0, mainly due to the increase in staff costs and the loss on disposal of property and equipment. And next, I shall share three very important KPI that we closely monitor. For net dollar retention, a commonly used KPI for SaaS company, it stood at 99% for our core developer service business for the trailing twelve month period ended 06/30/2025. This high NDR number reflecting that we have high customer retention rate, coupled with the ability to increase revenue through upsell, upgrades and expansion. And this is another quarter with impressive NDR number.

Secondly, another financial KPI for tracking the performance of SaaS company is the total deferred revenue, which represent cash collected in advance from customers for future contract performance, which was at high of 156,100,000.0. This is the second consecutive quarter where we have deferred revenue balance in excess of 150,000,000. Thirdly, we continue to maintain a healthy AR turnover days at fifty four days. This remain an industry leading low level. We continue to work hard to ensure we’re actively and timely collecting cash from customers and at the same time, mitigating the risk of bad and tough debt.

On the cash flow, we are also very pleased with our overall cash collection and usage in operating activities this quarter. For the quarter ended June 30, we recorded net operating cash inflow of RMB7.9 million. On to balance sheet. Total assets were 381 million as of June 30. This includes cash and cash equivalent of RMB119.8 million, accounts receivable of million, prepayments and other current assets of RMB16.5 million, Operating lease right of use asset of CNY 17,400,000.0, fixed assets of 3,200,000.0, long term investment of CNY 113,300,000.0, goodwill of 37,800,000.0 and intangible assets of RMB 12,100,000.0 resulting from the Saint Cloud acquisition in March 2022.

The total current liabilities were RMB 267,700,000.0. This includes accounts payable of 38,400,000.0, current operating lease liability of 84,800,000.0, deferred revenue of 156,100,000.0, accrued liabilities of CNY 68,400,000.0. And let me now take a few minutes to here to recap the description, a new chapter in Aurora Mobile that Chris mentioned in the beginning of this call. In this quarter, we achieved our very first quarterly GAAP profit in the history. Equally important, all business lines achieved double digit year over year revenue growth.

Our core developer subscription business had a fourth consecutive quarter of million plus plus revenue quarter. Our flagship product, EngagedLab, continues its great growth trajectory. We won and signed more than million dollars worth of new contract in Q2 alone, fueled by the new global customer acquisition. Gross profit grew 13% year over year, achieving the highest level for our past ten quarters. Operating activities brought in net cash inflow of million, And our net dollar retention for core Developer Service stood strongly at 99.

And this was indeed a spectacular quarter where all our business line and related KPIs have done very well. And we are encouraged by the excellent Q2 numbers we have delivered. As we look ahead for the rest of 2025, we are very optimistic and confident about our ability to execute against the things that we

Weidong Luo, Chairman and Chief Executive Officer, Aurora Mobile: can control. And

Shannon Bong, Chief Financial Officer, Aurora Mobile: Chris and I are very thankful for the dedication and commitment by the teams. And this quarter’s stellar performance is a true testament to the effort that they put in day in and day out. And we are truly honored to come to work side by side with such an exceptional group every day. And now let’s turn to business outlook. And based on the current available information, the company sees the Q3 revenue guidance to be in the range of RMB88 million to RMB91 million, representing a solid growth of 11% to 15% year over year compared to the same quarter in 2024.

And the above outlook is based on the current market condition and reflects the company’s current and preliminary estimates of the market and operating condition and customer demands, which are all subject to change. Lastly, before I conclude, I shall give a quick update on the share repurchase plan. In this quarter, we for the quarter ended 06/30/2025, we repurchased 27,000 ADS. Cumulatively, we have repurchased a total of 323,000 ADS since the start of our repurchase program. And this concludes our prepared remarks, and we are happy to take your question now.

Operator, please proceed.

Conference Operator: Thank you. We will now begin the question and answer session. We will now take our first question from the line of Kelvin Wong from Speaker Capital. Please ask your question, Kelvin.

Unidentified Speaker/Participant: Good evening, management. Thank you for taking my questions. And first of all, on the great first GAAP net profit in the history. I would like to have two questions, if I may. The first question, I will be appreciative if you could share with us what was the factors behind the great results in Q2?

And secondly, more on outlook, are you expecting quarterly GAAP net profits to be a long going forward?

Shannon Bong, Chief Financial Officer, Aurora Mobile: Hi, Kevin. Good to hear from you again. Let me take this call take this question. This quarter’s breakthrough performance reflects a collaborative effort of multiple forces. It is primarily driven by the diligent contribution of our employees in Aurora Mobile, whose ongoing commitment to overcoming challenges across technology development, customer service and operational execution has collectively strengthened the foundation for the performance growth.

And more importantly, our forward looking strategy have anchored a clear direction for the business development with the precise execution. From a business perspective, the growth momentum stemmed from the strong push of internal and external dual engine. On one hand, our overseas flagship product, EngagedLab, continues to accelerate its expansion, constantly breaking boundaries to globalized reach and localized service capability. On the other hand, our AI agent platform, GPT Bot AI, leveraging AI driven technological empowerment to drive innovative across business scenario, becoming the next growth engine. It is worth emphasizing that domestic market also performing well in this quarter, achieving solid year over year growth and creating synergistic pattern of internal and external linkage of growth alongside with overseas market, together contributing to this quarter’s outstanding overall performance.

And also from a deeper perspective on business drivers and financial support, these driving force are not short term variables but rooted in the long term accumulation of capability building, strategic implementation and market trends. And with the ongoing release of synergies between internal and external businesses, the continuous deepening of technology empowerment and the steady advancement of strategic execution will bring us across the line. And Gavin, hope this answer your question.

Unidentified Speaker/Participant: Great. It’s very clear. Thank you.

Conference Operator: Thank you. We will now take our next question from Marco Zhang from Geelong Hui Research. Please go ahead,

Weidong Luo, Chairman and Chief Executive Officer, Aurora Mobile: Hi. This is Marco from Geelong Hui Research. Congrats to the

Marco Zhang, Analyst, Geelong Hui Research: management for delivering a set of stunning results in this quarter. It has been proven that the business model does work and it works well to deliver net profit. In particular,

Weidong Luo, Chairman and Chief Executive Officer, Aurora Mobile: we know that your Engage lab has been delivering strong numbers and is driving the growth for the group. So appreciate management to share more on this business, including the current and future states. Thanks.

Shannon Bong, Chief Financial Officer, Aurora Mobile: Hi, Marco. Thanks for your question. Yes, so let me take this question too. As you rightly pointed out, our English lab product, our flagship product is highly promising business segment of the group. And it has already demonstrated strong business viability and becoming the next the group’s next engine growth.

Currently, EnglishLab is serving customers in more than 45 countries and regions worldwide, with a total signed contract amount of of existing 113,000,000 and a year on year revenue growth of 67%. And looking ahead to the upcoming quarters, we are confident and have high hopes of EngagedLab growth momentum. And from the perspective of market expansion, its global market footprint has clearly outlined its path. We have established localized presence in Hong Kong, Singapore and Malaysia and is solidifying its services foundation by forming local teams in Thailand and Japan. And leveraging this regional depth and localized service capability, combined with the existing technological advantage and service experience, EngagedLab will continue to penetrate market demands across different industry and regions, attracting more customers to collaborate.

And both Chris and myself are very confident on the continuous growth trajectory of this business. And hope this answer your question, Markku.

Marco Zhang, Analyst, Geelong Hui Research: Great. Thanks.

Conference Operator: Thank you. I am showing no further questions. I’d now like to turn the conference back to Christian for closing comments.

Christian Arnold, IR Representative, Aurora Mobile: Thank you, everyone, for joining our call tonight. If you have any further questions and comments, please don’t hesitate to reach out to the IR team. This concludes the call. Have a good evening or morning. Thank you.

Conference Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect your lines.

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