Aurora Mobile Reports First Net Profit

Aurora Mobile(NASDAQ:JG) reported second quarter 2025 earnings on August 28, 2025, achieving its first-ever quarterly GAAP net profit driven by 13% year-over-year revenue growth to RMB 89.9 million and strong performance in its flagship EngageLab business. The results featured double-digit year-over-year revenue increases across all business segments, expansion in global customer base, heightened gross profits, and meaningful improvements in operational efficiency. The insights below examine the unique drivers behind these results, management execution, and the quantifiable outlook.

EngageLab powers global expansion

EngageLab's customer count rose 25% sequentially to 1,058, with revenues surging 67% year-over-year and 24% quarter-over-quarter, now serving clients in over 45 countries. Global contract value signed reached RMB 11.2 million, and the segment delivered its eighth consecutive quarter of robust growth.

"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 RMB 11.2 million in Q2. The growth acceleration has been great for this business since day 1. 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 1,058. This was driven by the continued progress we are making across our go-to-market growth. Further, the revenue recognized for the EngageLab, again, recorded very strong growth of 67% year-over-year, 24% quarter- on-quarter. Firstly, our EngageLab products and services are now sold to customers in more than 45 different countries and regions globally, customers from 4 new countries has been converted and signed up with us in Q2."
-- Weidong Luo, Chairman and CEO

This multi-year global expansion through EngageLab establishes diversified revenue streams and supports recurring revenues.

Cost optimization delivers first-ever GAAP net profit

The company reduced headcount from over 820 to approximately 400, while all core business units reported double-digit year-over-year revenue growth in the second quarter of 2025. Gross profit climbed 13% year-over-year to RMB 59.6 million, the highest in the last 10 quarters, and operating expenses grew only 11% year-over-year.

"Apart from ensuring top line growth, we also serious 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 head count was also reduced from the higher of more than 820 to around 400 now. As we work hard scaling up revenue, maintaining high gross margins and with tight and lean 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 Aurora Mobile GAAP net profit came in this quarter."
-- Weidong Luo, Chairman and CEO

Deferred revenue and net dollar retention underscore SaaS business resilience

Deferred revenue stood at RMB 156.1 million, marking the second consecutive quarter above RMB 150 million, indicating strong advance cash collection and customer commitments. Net dollar retention (NDR), a key software-as-a-service (SaaS) metric reflecting recurring and expanding customer relationships, was 99% for the trailing twelve months ended June 30, 2025, in the core developer service business.

"For net dollar retention, a commonly used KPI for SaaS company, it stood at 99% for our core developer service business for the trailing 12-month period ended June 30, 2025. This high NDR number reflecting that we have high customer retention rate, coupled with the ability to increase revenue to upsell, upgrades and expansion. And this is another quarter with impressive NDR number. Secondly, another financial KPI for tracking the performance of SaaS companies is the total deferred revenue, which represents cash collected in advance from customers for future contract performance. which was at high of RMB 156.1 million. This is the second consecutive quarter where we have deferred revenue balance in excess of RMB 150 million."
-- Shan-Nen Bong, Chief Financial Officer

High net dollar retention and elevated deferred revenue provide visibility into future topline stability.

Looking ahead

Management has guided for revenue between RMB 88 million and RMB 91 million, representing 11% to 15% year-over-year growth compared to the third quarter of 2024. No additional quantitative or margin guidance was provided, but management expressed continued optimism based on current business momentum and customer demand trends. The company reported the repurchase of 27,000 ADS in the second quarter of 2025, totaling 323,000 ADS since initiation of its buyback program.

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This article was created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.