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Aurora Mobile Ltd (JG) reported notable financial results for the fourth quarter of 2024, showcasing revenue growth and operational improvements. The company’s stock experienced a significant premarket surge of 9.76%, reflecting investor optimism. According to InvestingPro data, Aurora Mobile maintains impressive gross profit margins of 68.45% and holds more cash than debt on its balance sheet. The company’s strategic focus on AI integration and global market expansion contributed to its positive performance, as evidenced by a 20% year-over-year increase in total revenue.
Key Takeaways
- Aurora Mobile’s Q4 revenue increased by 20% year-over-year.
- The company achieved its first full year of adjusted EBITDA profitability.
- Aurora Mobile’s stock rose by 9.76% in premarket trading.
- Strategic restructuring and AI integration were key performance drivers.
Company Performance
Aurora Mobile delivered strong results in Q4 2024, marking its first full year of adjusted EBITDA profitability in its 14-year history. The company reported a total revenue of RMB 93.2 million, a 20% increase from the previous year. This growth was driven by the successful integration of AI capabilities across its product offerings and an expanded presence in international markets.
Financial Highlights
- Total Q4 revenue: RMB 93.2 million (+20% YoY)
- Adjusted EBITDA profitability achieved for the first time
- Net operating cash inflow: RMB 19.5 million
- Total assets: RMB 378 million
- Cash and cash equivalents: RMB 119.5 million
Market Reaction
Aurora Mobile’s stock price showed a positive reaction, climbing 9.76% in premarket trading to reach $9.90. This movement reflects investor confidence in the company’s strategic direction and financial health. The stock’s performance stands out against its 52-week range, which has seen a high of $20.94 and a low of $2.36. InvestingPro analysis indicates the stock is currently trading near its Fair Value, with a remarkable 199.51% return over the past year. For investors seeking deeper insights, InvestingPro offers 15 additional exclusive tips and a comprehensive Pro Research Report, available among 1,400+ detailed company analyses.
Outlook & Guidance
Looking ahead, Aurora Mobile provided revenue guidance for Q1 2025, projecting RMB 74-77.5 million, which suggests a year-over-year growth of 15-20%. While the company plans to continue its investment in enterprise AI and focus on expanding its global market presence, InvestingPro data reveals the company faces some challenges with short-term obligations exceeding liquid assets, as reflected in its current ratio of 0.68. Discover more detailed financial health metrics and expert analysis with InvestingPro’s comprehensive research tools.
Executive Commentary
CEO Weidong Luo highlighted the company’s achievements, stating, "An incredible Q4 to close out a perfect 2024." He emphasized the integration of AI into various departments, noting, "We are now not only deeply integrated AI into the workflows of various departments, but also using it as a KPI."
Risks and Challenges
- Market Competition: The SaaS and AI sectors are highly competitive, which may impact growth.
- Economic Conditions: Global economic fluctuations could affect customer spending.
- Technological Changes: Rapid advancements in technology require continuous innovation.
Aurora Mobile’s strategic initiatives and robust financial performance have positioned it well for future growth, with a strong emphasis on AI and global expansion.
Full transcript - Aurora Mobile Ltd (JG) Q4 2024:
Amber, Conference Operator: Ladies and gentlemen, thank you for standing by and welcome to Aurora Mobile Fourth Quarter and Fiscal Year twenty twenty four 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. Session. Please be advised that today’s conference is being recorded.
I’d now like to hand the conference over to your host today, Rene Wagensdink. Thank you. Please go ahead, sir.
Rene Wagensdink, IR Representative, Aurora Mobile: Thank you, Amber. 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.centimeters. On the call today are Mr.
Weidong Luo, Chairman and Chief Executive Officer Mr. Shannen Bong, Chief Financial Officer and Mr. Guangyang Chen, General Manager. Following their prepared remarks, they will 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. The 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 other factors are included in the company’s filings 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 like to turn the conference over to Mr. Luo. Please go ahead.
Weidong Luo, Chairman and Chief Executive Officer, Aurora Mobile: Thanks, Renee. Greetings to all. Welcome to Alarmobile’s twenty twenty four fourth quarter earnings call. Before I comment on our Q4 results, I would like to remind everyone that the quarterly earnings debt is available on our IR website. You may refer to that as we proceed with the call today.
As we did in the past, based on the Q4 numbers, The appropriate description I would describe for the fourth quarter result is an incredible Q4 to close out of perfect 2024 for the following reasons. Firstly, we recorded full year adjusted EBITDA positive for twenty twenty four calendar year. This is our very first full year profitability since the inception of Alarm Mobile fourteen years ago. In this quarter, we recorded the six consecutive quarterly positive adjusted EBITDA. Secondly, the gross revenue this quarter of RMB93.2 million, achieving a remarkable 20% growth year over year.
This was attributable to solid growth to all business lines within the group. Thirdly, our overseas business, EngageLab, continued its great growth momentum, recording a whopping 20% revenue growth on year over year basis and newly signed contract value grew by RMB10 million in Q4 alone. Fourthly, we recorded net operating cash inflow of RMB19.5 million, yet another highest quarterly number in the past seventeen quarters, bringing the cash balance close to $12.31, $20.24. Now let’s move to the individual business performance. Our total Q4 group revenue has grown 20% year over year, fueled by the very strong numbers from developer services.
Between the group revenue, all revenues, mainly developer subscription services, value add services and financial risk management, all record year over year and quarter over quarter revenue growth. Developer services revenue, which consists of subscription services and value added services, increased by a strong 28% year over year and 24% quarter over quarter. Subscription revenue has been recording great numbers, value increased by 12% year over year and 6% quarter over quarter. Value added services revenue grew by 142% year over year and 180% quarter over quarter. Our core business’s subscription services revenue of RMB54.7 million, recorded growth of 12% year over year and 6% quarter over quarter.
The year over year and quarter over quarter revenue growth was mainly driven by increase in both ARPU and customer number. Carrying on the great momentum we had in Q3, our subscription revenue broke the history record again well in this quarter, we have the highest quarterly revenue yet at RMB54.7 million. For subscription services, we have record year over year revenue growth in both the domestic and overseas markets. In particular, our EngageLab revenue grew close to 200% year over year. This was driven by the new customer acquisition in the overseas market.
Since we venture overseas, we get one services contract from both Chinese companies venturing overseas and overseas companies, dominantly in their respective countries. With our exemplary three of production basis, we are gaining more new customers every quarter. However, this is just a tip of iceberg. The total addressable market for overseas is huge. We will direct more resources in terms of human capital and infrastructure to capture more overseas market share.
Based on the historical track record we have had, I convinced our EngageLab business will have a very strong and long track of growth in the future. Next, I shall elaborate more on our EngageLab business this quarter. Firstly, the growth of EngageLab business has been important and instrumental for us to achieve great quarterly revenue number. Secondly, customer momentum has been impressive from day one. We converted more overseas customers in this quarter.
The contracted customer number has reached six seventy eight, representing an impressive 32% sequential growth. Thirdly, the cumulative sum contract value of EngageLab has, in two consecutive quarters, grown by close to RMB10 million quarter over quarter. As of 12/31/2024, the total ZAN contract value was RMB48 million. Fourthly, we continue to expand our footprint globally. By December 2024, our EngageLab products and services are now sold to customers in more than 37 different countries and regions globally.
Within subscription revenue, some of the notable new and renewable customers in this quarter include, but not limited to, China Telecom, Ping An and China Merchant Security just to name a few. Value added services revenue of RMB16.3 million increased by 180% quarter over quarter and increased by 142% year over year. The sequential revenue spike was mainly due to the double 11 and double 12 online shopping fixed over in Q4, but was now 80% in Q3. This revenue growth trend in Q4 was within our expectations, but the magnitude of our growth was much better than what we had anticipated. A job well executed by our team to secure more ad spending from advertisers in the last Q of twenty twenty four.
Next, let me share with you on my fourth on how the recent advancement in AI will shape the landscape. The development of AI technology and overseas expansion has been IRR Mobile’s core strategy over the past two years. These strategies have already led to strong revenue growth at EngageLab and even accelerating the overall revenue growth of our entire group. We believe this momentum will continue and set the stage for new growth trajectory. In the past, we have primarily provided updates on our overseas expansion.
Now, we would like to reiterate our AI strategy to the market. Alarm Mobile remains committed to our AI strategy and views AI as the most critical business driver for the future. We are now not only deeply integrated AI into the workflows of various departments, but also using it as a KPI in the BSC assessments for both the company and each employee. This ensures that technology implementation is closely aligned with the performance results. Our core products are fully integrated with Ava’s AI capabilities that enable various applications such as email editing, push notification, copywriting and data analytics.
This AI driven enhancement enable our customer to drive business innovations and improve operational efficiency. Over the past two years, we have continuously invested in the development of JupyterBox AI, an enterprise level AI agent platform. By simply investing native AI agent technology into workflows, we are helping companies accelerating their transformation to an AI first strategy. Over the past few quarters, we have seen rapid growth in subscription revenue for GBP post .ai. The new era of industry revolution is just beginning.
The enterprise application of AI is still in its early stage, and we remain committed to increasing our investment in enterprise AI. We believe that our vast enterprise customer base, diverse business scenarios and rich data resources will be invaluable assets in this AI era. Let me pass the call over to Shenhe, who will share more about the virtual application and other aspects of our financial performance for this quarter.
Shannen 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 good quarter where revenue increased by 3% quarter over quarter and 1% year over year. And within vertical application, financial risk management recorded a 34% growth in revenue year over year and 4% growth quarter over quarter. The 34% year over year revenue growth was mainly due to a strong 24% growth in customers number and 8% ARPU growth.
We are very pleased with the progress made by this business. Over the past few quarters, the team has fine tuned and upgraded the service and products. They are very well received by the market plus the revenue growth we have seen. The customers that we have signed up or renewed in Q4 include but not limited to Weizhongmingang, Fenqile, Zhongbangingang and many other licensed credit and financial institutions throughout China. And Market Intelligence revenue
Weidong Luo, Chairman and Chief Executive Officer, Aurora Mobile: on
Shannen Bong, Chief Financial Officer, Aurora Mobile: the other hand decreased by 36% year over year and stayed flat quarter over quarter due to the continued weak market demand for Chinese APP data and this result is within our expectation. Now let me go through some of the key expenses and balance sheet item. Onto operating expenses. The Q4 OpEx was at RMB16.3 million, representing a slight 1% decrease year over year and a 6% increase quarter over quarter. The majority of the increase was attributable to our sales and marketing department.
The continued increases in revenue and cash collection in this quarter resulted in additional commission and expenses. These are all within our expectation. Overall, we are very pleased to see how OpEx has been trending in view of the revenue growth we have achieved. I will now go through the individual OpEx category. For R and D expenses, it decreased 10% year over year to RMB24.3 million mainly due to reduction in personnel costs both the salary and share based compensation as we continue to optimize expenses that improve operational efficiency.
Selling and marketing expenses increased by 11% year over year to RMB24.6 million mainly due to the increase in sales commission and travelling expenses in line with the revenue growth and cash collection recorded in this quarter. G and A expenses decreased by 6% year over year to RMB11.4 million mainly due to reduction in personnel costs both the salary and share based compensation as a result of continued effort to manage costs. Next, I’ll share three very important KPI that we closely monitor. For net dollar retention rate, a commonly used KPI for SaaS companies is stood at 95% for our core developer subscription business for the trailing twelve months period ended 12/31/2024. And it was a good growth compared to 92% for the period ended 09/30/2024.
Secondly, another financial KPI for tracking the performance of SaaS companies is the total deferred revenue which represent cash collected in advance from customers for future contract performance which was at record high of RMB147.1 million. And this is the twelfth consecutive quarter where our deferred revenue balance has exceeded RMB130 million. Thirdly, we continue to maintain a healthy AR turnover days at forty four days. We continue to work hard to secure more cash from our customers and at the same time mitigating the risk of bad and doubtful debts And carry on the great momentum we have from Q3, we achieved great results on the cash flow in this quarter. Our team has done a great job in cash management in operating activities this quarter.
For the quarter ended 12/31/2024, we recorded net operating activities cash inflow of RMB19.5 million, which was the highest level in the past seventeen quarters. Onto the balance sheet. Total assets were at RMB378 million as of 12/31/2024 and this includes cash and cash equivalents of RMB119.5 million, accounts receivable of RMB50.8 million, group repayments and other current assets of RMB14.3 million, operating lease right of use assets of RMB17.1 million, fixed assets of RMB4.6 million, long term assets of RMB113.5 million, goodwill of RMB37.8 million, intangible assets of RMB13.8 million resulting from the Sand Cloud acquisition in March 2022. The total current liabilities were at RMB261.6 million. This includes short term loan of RMB3 million, accounts receivable of RMB32.7 million, current operating liabilities of RMB4.5 million, deferred revenue of RMB147.1 million, accrued liabilities of RMB74.4 million.
And here I would like to echo what Chris has said at the beginning of this call. Let me recap the description that he made. An incredible Q4 quarter to close out a perfect 2024. In this quarter, the total revenue grew strongly by 20% reaching RMB93.2 million. This is a set of remarkable results when we compare to our peers and other listed company in the SaaS space.
Our core developer subscription services had a R54.7 million revenue, another first in history. Second, our EngageLab product continued its great momentum. Revenue grew by close to 200% on a year over year basis and cumulative contract value increased by more than RMB10 million in Q4 alone. And third, we have a sixth consecutive quarter of positive adjusted EBITDA and more importantly we achieved for the first time in history full year adjusted EBITDA profitable year. And fourth, we have a net operating cash inflow of KRW 19,500,000.0.
And with these impressive numbers that we have delivered across all financial metrics, it was a great quarter that we had and it has been a great year of growth in our core business. I believe we have delivered a set of financials that current shareholders and investors will be pleased. Now let’s turn to the business outlook. Starting from this quarter, we will start to provide revenue guidance on a quarterly basis. Based on the current available information, the company sees the Q1 twenty twenty five revenue guidance to be in the range of RMB74 million to RMB77.5 million, representing a strong 15% to 20% year over year growth compared to the same quarter in 2024.
The growth outlook is based on the current market condition and reflects the company’s current and preliminary estimate of the market and operating conditions and customer demands, which are all subject to change. And lastly, before I conclude, I’ll give a quick update on the share repurchase plan. In the quarter ended 12/31/2024, we repurchased 33,000 ADS. Cumulatively, we have repurchased a total of 279,000 ADS since the start of our repurchase program. And this concludes our prepared remarks.
We are happy to take the question now. Operator, please proceed.
Amber, Conference Operator: Thank you. We will now begin the question and answer session. We will now take our first question from the line of William Chan from Speakers Capital. Please ask your question, William. Capital.
Please ask your question, William.
William Chan, Analyst, Speakers Capital: Hello, management. Thank you for taking my question. First, I want to congratulating to the management to deliver such a strong quarterly results. I think an incredible Q4 to close out perfect 2024 is a perfect description for this quarter and the full year 2024 as a whole. So my question for the management is to achieve such a good result, what measures or actions were taken by the management?
Thank you.
Shannen Bong, Chief Financial Officer, Aurora Mobile: Thanks, William. Let me take the call. Yes, you are right to point out that Chris has reiterated in Q4, it was an incredible year, incredible quarter for us that closed out the 2024 for a couple of reasons. Let me just recap. First, our revenue has grown strongly 20% year over year and our core developer service has broke through the JPY 50,000,000 mark revenue in two consecutive quarters.
And of course, our overseas business continues, it’s great momentum and revenue increased by close to 200% year over year and we signed more than JPY 10,000,000 or close to JPY 10,000,000 new contract value in a single quarter. And of course, we have been very diligent in spending our money, so that’s why the optimal level of OpEx. And lastly, we have six consecutive quarters of adjusted EBITDA bringing the full year positive adjusted EBITDA for 2024. And probably you appreciate there are many pieces to the puzzle in order for us to have the great numbers. And one important thing that I’d like to bring out is the fact that this good result has been in the making.
And we have been consistently delivering good results since Q3 of twenty twenty three when we had our first of the sixth consecutive quarters of positive adjusted EBITDA. Therefore, I will say this is not an one off event or by any luck and it was purely due to hard work, dedication and commitment from our team. And also we have also restructured the group in terms of our strategy and our execution plan by more than two years ago. And during the time, I think we have beat the bullet by doing a few things. One is we streamline the product and services that we offer in the market.
We make tough decision to cut the low margin business and cut the department at the headcount and we redirect our resources and effort to serving global customers in a global market and also mix down resources allocation to our overseas as mentioned plan. So looking back under Chris’ leadership and the management made the right decision, with a more focused service offering and serving global customers, we found the next growth driver in the business. And not only the global customers are bringing more revenue, their contracts are providing a healthy cash flow into the group. And as we are still at the very beginning stage of overseas suspension, we truly believe the market is huge and we are able to continue the growth trajectory in the many years to come. And back to the question you have, I guess the short answer is we have taken many steps and measure over the past twelve to eighteen months in order to achieve these great results.
Any single one of them will not have the same impact. So it was a collective effort as a whole. And we believe we are ready for a next phase growth in our business and all the market signals we have received are also very promising in terms of future growth. I hope this answer your question, William.
William Chan, Analyst, Speakers Capital: Thank you. Thank you for your answer.
Amber, Conference Operator: Thank you. We will now take our next question from the line of Jack Sun from Galonghui Research. Please ask your question, Jack.
Jack Sun, Analyst, Galonghui Research: Okay, thanks. I got a question for management. Congratulations to management on achieving another very good quarter. One particular trend that I would like to do in the future is the growth of developer subscription revenues. It has a past RMB15 billion revenue mark in two consecutive quarters.
I would like to hear the management’s point of view of how we should look at the trend going forward? Thanks.
Shannen Bong, Chief Financial Officer, Aurora Mobile: Hi, Jack. Thanks for the question. You’re right. Subscription business has been the star of the business unit where it crosses KRW 50,000,000 mark in two consecutive quarters. And let me share with you why that’s all.
And there are a couple of reasons. One, our customers, the developer service or the developer or the enterprise are in need of this service to help them to engage their users in an effective and cost efficient manner. So this demand has not changed. And the next is we have a suite of product that cater to their needs. And besides the traditional app push we offer, we now offer web push, we offer email, WhatsApp, OTP and other communication channel.
And we are seeing more and more customers are switching from their incumbent service provider to us. So if you look deeper and the growth of this business came from both the growth in the customers numbers and ARPU. And this is very important and this is exactly what we are looking for because we want to grow the customers’ number while also growing the ARPU. And this is very healthy trend to sustain the long strip of growth in the future. So in a nutshell, we see the developer service revenue no doubt will be very important to us and the growth trajectory will help to drive the overall group business.
And with a strong demand that I talk about and a huge addressable market, we are very hopeful of the good results in the future. I hope this answers your question, Jack.
Jack Sun, Analyst, Galonghui Research: Yes, yes, that’s very great. Thanks a lot.
Amber, Conference Operator: Thank you. I’m showing no further questions. I’ll now turn the conference back to Rene for closing comments.
Rene Wagensdink, IR Representative, Aurora Mobile: Thank you everyone for joining our call tonight. If you have any further questions or comments, please don’t hesitate to reach out to the IR team. This concludes the call. Have a good night. Thank you.
Amber, Conference Operator: Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.
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