Aurora Mobile JG Q1 2026 Earnings Transcript

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Date

Tuesday, May 26, 2026 at 7:30 a.m. ET

Call participants

• Chairman and Chief Executive Officer — Weidong Luo
• Chief Financial Officer — Shan-Nen Bong
• Investor Relations — Christian Arnell

Takeaways

• Total revenue -- RMB 93.3 million, reflecting 5% year-over-year growth during a seasonally slow quarter.
• Gross profit -- Reached RMB 66.3 million with 13% year-over-year growth, representing improved profitability.
• Gross margin -- Increased by 490 basis points year over year, marking the highest level in eight quarters.
• GAAP net profit -- Achieved for the fourth consecutive quarter, indicating sustained bottom-line improvement.
• Developer services revenue -- Grew 15% year over year, but declined 6% quarter over quarter, driven primarily by subscription services.
• Core developer subscription revenue -- Hit a historical high of RMB 64.9 million, up 21% year over year and 5% quarter over quarter.
• EngageLab annual recurring revenue (ARR) -- Rose to $11.7 million, up 172% year over year for March 2026.
• EngageLab customer growth -- Added 223 new customers globally this quarter, raising the total to 1,864, a 120% year-over-year increase.
• EngageLab recognized revenue -- Reported RMB 24 million, advancing 210% year over year.
• New EngageLab contracts -- Signed contract value reached RMB 28 million in fiscal Q1 ended March 31, 2026, with cumulative signed value at RMB 185 million.
• Value-added services revenue -- Reported RMB 6.7 million, dropping 53% quarter over quarter, attributed to the absence of major online shopping festivals in fiscal Q1 ended March 31, 2026.
• Financial risk management revenue -- Down 18% year over year and 29% quarter over quarter due to regulatory headwinds.
• Market intelligence revenue -- Increased 3% quarter over quarter but decreased 25% year over year, consistent with management’s expectations.
• Operating expenses (OpEx) -- Totaled RMB 66.1 million, up 9% year over year and down 3% quarter over quarter, with R&D and selling expenses increasing mainly due to staff costs from overseas expansion.
• Net dollar retention (NDR) -- 103% for the trailing twelve months of the core developer subscription business, marking the third consecutive quarter above 100%.
• Deferred revenue -- Stood at RMB 173.9 million as of March 31, 2026, indicating strong future revenue visibility.
• Accounts receivable (AR) turnover days -- Remained stable at 42 days, supporting healthy cash collection.
• Share repurchases -- 42,000 ADS repurchased during the quarter; cumulative total reached 441,000 ADS since inception of the program.
• Overseas partnership expansion -- Signed 9 new overseas partners in fiscal Q1 ended March 31, 2026, bringing the global total to 26.

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Risks

• Financial risk management revenue decreased due to "recent regulatory updates within the financial industry," which created "more headwinds for this segment of the business."
• Quarter-over-quarter revenue and gross profit growth rates slowed, affected by cyclically low seasonality, lack of ecommerce shopping festivals, and "macroeconomic headwinds have softened our overall client demand."
• "Value-added services revenues were RMB 6.7 million, down 53% quarter over quarter," with the decrease "mainly attributable to the absence of the traditional quarterly online shopping festivals."
• Operating expenses increased 9% year over year. Selling and marketing expenses increased by 11% year over year, mainly due to higher staff costs driven by overseas business expansion.

Summary

Aurora Mobile Limited (NASDAQ:JG) delivered its fourth consecutive quarter of GAAP net profit, driven primarily by record high core developer subscription revenue and rapid expansion in the EngageLab business. Financial key performance indicators further strengthened, as net dollar retention held at 103% and deferred revenue advanced to RMB 173.9 million. The company expanded its international footprint, onboarding 223 new global customers and adding nine overseas partners to bolster revenue streams.

• The increase in gross margin by 490 basis points over the period signals enhanced operational efficiency within the core business lines.
• Despite topline growth, management cited that "recent regulatory updates within the financial industry" have impacted the financial risk management segment, resulting in an 18% year-over-year revenue decline.
• R&D and selling expense hikes were concentrated in staff investments supporting overseas expansion, while general and administrative cost reductions were linked to improved bad debt collection efficiency.
• The absence of traditional shopping festivals weighed on value-added service revenue, and management underscored cyclically slow marketing spending among brand clients during the quarter.
• The company reiterated its commitment to disciplined spending and global expansion as foundational strategies for long-term revenue acceleration.

Industry glossary

• Annual recurring revenue (ARR): The annualized value of subscription contracts, used to evaluate the recurring revenue base of SaaS products.
• Net dollar retention (NDR): A SaaS metric indicating how recurring revenue from existing customers evolves, factoring in expansions, downgrades, and churn.
• Deferred revenue: Cash collected for services to be delivered in future periods, indicating contractual revenue commitments.
• Accounts receivable (AR) turnover days: The average duration in days it takes to collect payment on invoices.
• GAAP net profit: Net income calculated according to U.S. Generally Accepted Accounting Principles, reflecting the standard for financial reporting.
• Double 11/Double 12: Major ecommerce shopping festivals in China, held on November 11 and December 12 respectively, typically driving higher transaction volumes for relevant software/services providers.

Full Conference Call Transcript

Weidong Luo: Thanks, Christian. Hi, everyone. Welcome to Aurora Mobile's 2026 First Quarter Earnings Call. Before I comment on our Q1 results, I would like to remind everyone that we have uploaded the quarterly earnings deck on our IR website. You may refer to the deck as we proceed with the call today. As we've done in the past, the simple description that I would give to the first quarter of 2026 is a good spring brings a good year. Within this first quarter of 2026, our achievements are as follows: Firstly, in this quarter, the group recorded revenue of RMB 93.3 million, representing a solid 5% year-over-year growth. Secondly, our global flagship product, EngageLab continues to shine.

The EngageLab ARR for March 2026 surged to a record high of $11.7 million, representing 172% year-over-year growth. Thirdly, gross profit grew by 13% year-over-year. Gross margin improved by 490 basis points between the year. Along the way, we delivered the fourth consecutive quarter of U.S. GAAP net profit. Trust you would agree with me, the Q1 that we have delivered was indeed a fairly good set of financials, and this is a great way to kick off a brand-new 2026 financial year. Let me now share more on the business aspects. Q1 of each year is always the tough quarter for majority, if not all of businesses.

Just to share, within the first quarter of the year, we have the shorter month of February, coupled with the long Chinese New Year holidays, business activities tend to be slower at this time of the year. Despite the slower quarter of the year, we worked harder and smarter and managed to pull through with relative excellent results. Our total Q1 group revenue reached RMB 93.3 million, representing a solid 5% year-over-year growth. In this quarter, Developer Services recorded great 15% revenue growth year-over-year, but vertical applications revenue dipped 19% year-over-year. Developer services revenues, which consists of subscription service and value-added services delivered strong performance with 15% growth year-over-year but decreased 6% quarter-over-quarter.

Our core business, developer subscription services delivered another quarter of excellent revenue number of RMB 64.9 million, representing growth of 21% year-over-year and 5% quarter-over-quarter. The year-over-year revenue growth was mainly driven by increases in both customer number and ARPU. In this quarter, subscription revenue recorded its highest level in history yet at RMB 64.9 million, surpassing the RMB 61.9 million high level in Q4 of 2025. Now let's move on to the update on our global flagship product, Engage Labs. As we have seen in the past 12 to 18 months, Engage Labs is now the indisputable primary driver of revenue growth for Aurora Mobile. and it is on great acceleration path.

First, EngageELabs ARR has refreshed its own record and achieved a new milestone of $11.7 million as of March 2026. For the second consecutive quarter, we recorded very remarkable year-over-year ARR growth. In this quarter, the growth was 172%. Secondly, EngageLab continues to record another strong quarter. Cumulative signed contract value amounted to RMB 185 million by the end of Q1 of 2026. In Q1 alone, we won and signed up about RMB 28 million worth of new contracts. It has again shown the great growth momentum for this business. Thirdly, we continue to witness the influx of new global customers signing up to purchase EngageLab.

In this quarter alone, we have converted and won over 223 new customers all over the world. The customer number has grown by 120% year-over-year to 1,864. We are very pleased with the new wins. Fourthly, the recognized revenue for EngageLab in Q1 of 2026 reached RMB 24 million, representing an outstanding 210% growth year-over-year. We continue to see great strength in EngageLab business expansion. The revenue growth, new wins and great ARR numbers were all result of the great work done by the team to meet and exceed overseas customers' needs and expectations quarter-over-quarter. We saw more customers converted to using EngageLab platform due to the superior suite of products we have to address their needs.

Equally important is our service-oriented mindset to attend to and resolve customers' issues on a timely basis. Let me take a few minutes to share with you on our Aurora Mobile competitive advantages based on what I have witnessed for the past 18 to 24 months and why we can grow the EngageLab revenue with strength quarter-over-quarter. Firstly, over the years, we have built mature, highly concurrent and elastically scalable underlying infrastructure polished through years of commercial operation. This infrastructure supports massive data processing, real-time delivery and global traffic scheduling for our customers. Secondly, we have completed global market layout at an early stage and have established solid brand recognition in overseas digital service sectors.

Thirdly, we possess exclusive capabilities, helping our customers to unify their full life cycle user data, covering acquisition, activation, engagement, retention and conversion. Fourthly, our products are equipped with self-developed native AI technology, deeply embedded in full product scenarios together with standardized automated workflow engines. Our solutions help customers boost operational efficiency, realize intelligent management and cut labor costs significantly. Fifthly, we have spent considerable effort ensuring we fully comply with global stringent data regulations, including privacy protection, cross-border data transmission and regional data residency rules, meeting market access requirements across Europe, America, Southeast Asia and other key regions.

Fifth equally important is our lightweight architecture features easy access and low development barriers to developers and enterprise technical teams for cloud integration and launch. At the same time, it lowers potential customers reaching depletion barriers and greatly improve market replication efficiency. I believe these competitive advantages will no doubt solidify our position in the global user engagement space and market. These advantages are pivotal to long-term revenue acceleration in the years to come. On to our global expansion road map, we made great progress in Q1 of 2026. Within the first 3 months of 2026, we managed to sign up and finalize 9 other new overseas partners.

These overseas partners will help us to sell into the local customers in their respective countries. As of now, we have 26 independent partners globally working together to help us further expand our reach and footprint to more overseas customers. Within subscription revenue, some of the notable wins in this quarter include, but are not limited to, the largest TV company in the world for their China operations, SF Express, Guo Securities, Du Security and JG International. Value-added services revenues were RMB 6.7 million, down 53% quarter-over-quarter. The decrease was mainly attributable to the absence of the traditional quarterly online shopping festivals, mainly the Double 11 or Double 12 in Q1.

Now let me pass the call over to Sean Net, who will take you through the metrics on vertical applications and financial performance for this quarter.

Shan-Nen Bong: Okay. Thanks, Chris. Next, I'll go over the revenue for vertical applications that includes Financial Risk Management and Market Intelligence. Overall, vertical application revenue decreased year-over-year and quarter-over-quarter. Within vertical application, financial risk management revenue decreased 18% year-over-year and 29% quarter-over-quarter. The recent regulatory updates within the financial industry have resulted more headwinds for this segment of the business, but we are making necessary adjustment in terms of products and go-to-market approach to move forward. Despite the tough operating environment, we still managed to win new contracts as the demand for our products and services is still there.

The customers that signed up or renewed in Q1 include, but not limited to, FilXiai,ingnui, Xing and many more licensed credit for financial institutions throughout China. Market Intelligence revenue increased by 3% quarter-over-quarter, but decreased by 25% year-over-year due to the weak market condition and demand for Chinese APP data, and this result is in line with our expectation. Coming to the other P&L items. Our gross profit recorded another good quarter with 13% year-over-year growth. The RMB 66.3 million gross profit that we had in Q1 pave a great foundation for the rest of the year in 2026. Our gross margin also recorded significant improvement by 490 basis points year-over-year.

This again signifies the healthy business model that we are operating in. With this healthy level of margin, we are poised to record good bottom line numbers going forward. On net profit, following the great momentum that we have in 2025, we started the year 2026 with another GAAP net profit quarter. This is a great achievement as Q1 is a cyclically slow quarter for each year. On to operating expenses. Q1 OpEx was at RMB 66.1 million, down 3% quarter-over-quarter, but up 9% year-over-year. The OpEx is within our forecast, and we are happy with the level where they are. I will now dive deeper into the individual OpEx category.

For R&D expenses, it increased by 17% year-over-year to RMB 28.7 million, mainly due to the higher staff costs and associated expenses. Technical service fee also contributed to the year-over-year increase. Selling and marketing expenses increased by 11% year-over-year to RMB 25.9 million, mainly due to the higher staff costs driven by overseas business expansion. G&A expenses decreased by 9% year-over-year to $11.5 million, mainly due to the decrease in bad debt provision resulting from improved collection efficiency. And next, I'll share 3 very important KPIs that we closely monitor.

Our net dollar retention rate, a commonly used KPI for SaaS company stood at 103% for the -- for our core developer subscription business for the trailing 12-month period ended March 31, 2026. And this is the third consecutive quarter where the NDR number has exceeded the 100% threshold. And this is the best testimony on the great products and services we are selling. In summary, customers continue to increase their spending with us over time. Secondly, another financial KPI for tracking the performance of SaaS company is the total deferred revenue. This represents cash collected in advance from customers for future contract performance and it stood at RMB 173.9 million as of March 31, 2026.

And this high deferred revenue balance is the best proof that SaaS business model that we are in is working well. In short, we have secured RMB 173.9 million worth of future revenue as of March 31, 2026. Thirdly, we continue to maintain a healthy level of AR turnover days at 42 days. And these low turnover days ensure we have great cash liquidity while mitigating the risk of bad and doubtful debt. Cash collection is one of the key KPIs that we have for our sales team. Let us now recap on Chris' comment on a good spring brings a good year at the beginning of this call.

In view of the slower quarter in Q1 of each year, we have achieved and delivered a terrific set of Q1 numbers. Firstly, we achieved GAAP net profit in the very first quarter of 2026, and this marks our fourth consecutive quarter of net profit. Secondly, our core developer subscription business achieved a historical record high of RMB 64.9 million revenue this quarter. Third, our flagship product, EngageLab, continued to scale rapidly across the globe. Our EngageLab business exceeded its own past record in this quarter. The ARR in March reached USD 11.7 million. This represents a stunning 172% year-over-year growth.

Fourth, -- gross margin grew by 490 basis points year-over-year, the highest it has been for the past 8 quarters, and the gross profit grew by 13% year-over-year. Last but not least, our net dollar retention for core developer service stood strongly at 103%. Although Q1 has been a tough quarter, but we have been resilient and managed to navigate through these rough quarters. In Q1 '26 results that we have presented today volume. We delivered revenue growth and our EngageLab business continued to scale new highs. And this lays solid foundation for the rest of 2026. And we are very committed to expanding the business on a global level and continue to be highly disciplined in our spending.

We believe this combination is the appropriate strategy to bring the business forward. Lastly, before I conclude, I'll give a quick update on the share repurchase plan. In this quarter ended March 31, 2026, we repurchased 42,000 ADS. Cumulatively, we have repurchased a total of 441,000 ADS since the start of our repurchase program. And this concludes our prepared remarks. We are happy to take the questions now. Operator, please proceed.

Operator: And the first question comes from the line of William Chun from S Capital.

Unknown Analyst: Based on the Q1 numbers you have released earlier today, it is a really good set of financial statements. We have revised and reanalyzed the company ER for the past 5 quarters, and it appears that things are moving to the right direction operationally and financially. The revenue, I mean, especially the EngageLab has been showing great growth momentum. Gross profit and margins are pretty solid. Most importantly, the company has turned full year profit in 2025 and again in this quarter. So my question for the management is how we should look at the Aurora Mobile for the financial year 2026.

Shan-Nen Bong: William, let me take this call -- this question. Yes, you are right, we are very pleased with the Q1 results for the beginning of 2026. And you are right to point out too, for the entire financial year of 2025 and Q1 of 2026, we have been consistently delivering solid financial numbers quarter-over-quarter without fail. And this has proven that the business model and the execution capability of the management are standing up to the test quarter-over-quarter and year-over-year. And in the call earlier, you have heard Chris share on Aurora Mobile's competitive advantages in the market that propel the growth that we have seen today.

And these competitive advantages are real and continue to fuel our growth acceleration in the future. And customers are switching to us and buy our services because of these advantages that we have in the marketplace. At this point, I would like to add that maybe it is time now to relook at our overall and why it is time to invest right now. And there's no doubt that the current valuation is at the low side, but let me share with you on our long-term valuation logic. I believe our valuation logic includes the following aspect: one, our solid and foundational domestic core business delivers stable cash flow and strong cyclical resilience.

Secondly, through our global flagship product, English Lab, our scalable global SaaS expansion brings clear predictable long-term growth curves. And through GPT bots, the in-depth native AI integration empower us and our business to gain high premium and valuation rerating upside. Our exclusive full scenario contextual platform builds replicable competitive moat and operational defensibility. And equally important is the alignment of outcome-based enterprise software trend. And this significantly enhance our long-term monetization capability and profit elasticity. And what all this means is I think Aurrom Mobile should not be valued purely as a traditional infrastructure company nor as a purely as a single point AI tool. Our corporate framework should reflect platform synergy, global SaaS growth and AI upside altogether.

I believe the above is a better way to view and value Aroma Mobile as a whole for now. And I hope this answers your question, William.

Operator: Our next question comes from the line of Jackson from Gilongy Research.

Jack Sun: I'm Jack from Gilongu Research. I look at the Q1 earnings with one particular focus on EngageLab. We have been seeing EngageLab growing every quarter with good numbers from customer numbers. Contract value signed to impressive ARR growth. My question for management is how much feel is left in the tank for EngageLab? In other words, how long can this EngageLab growth can be sustained?

Shan-Nen Bong: Jack, let me take this question, too. This is a good question, but it's a very tough one that you have for us today. And my short answer to your question is, yes, we still have a long way to go in terms of the growth of EngageLab. You're right. And a lot of people have been saying our EngageLab business has been growing from day 1 of its launch about 3 years ago. And as of now, after 3 years, we're still growing, but we are only gaining a fraction of the market globally. And let me share a view on your question on -- let me answer your question in 2 aspects. Firstly, let's look at the geography.

If we zoom further into Southeast Asia market, where we generate about 40% of EngageLab business, we are nowhere near market dominant position. What that means is the room for growth even in just Southeast Asia itself is huge. Overall, the global user engagement market is vast. Besides Southeast Asia, the other markets are sizable, too. For example, Asia Pacific. includes Australia and New Zealand, Middle East and European market. Right now, we are just at the tip of the iceberg. The market is so huge that we believe it can provide many years of growth to come. The second aspect is the industry that we are selling into.

Again, as of now, we have not dominated any particular industry vertical at all. As a matter of fact, majority, if not all businesses in all industry verticals have needs to engage with their users. Now let me share with you on the actual examples. One, all APPs will need to send notification to its user, be it promotional or simply inform its user to update the latest version of APP. A second example is online merchants would like to send notification to its user on the timing of the merchant delivery. and coffee apps such as Starbucks and Cy coffee, both are our clients, informing customers that the Lapees or Americans are ready to pick up.

And fourthly, airline companies needing to inform their passenger on upcoming flight, the check-in date or the boarding gate. So these are just some of the real-life examples that notification are being deployed in a daily life. And I'm sure you can appreciate this application. The notification or user engagement are simply omnipresent for most, if not all enterprise in all industry. Therefore, the market is there for us to capture both hands. So back to your question, there's still a lot of few left in the time for our EngageLab business. The EngageLab market landscape remains vast, which equip us with a substantial multiyear growth headroom for further penetrate for more markets and drive steady revenue growth.

And I hope this answers your question.

Operator: We are now going to take our next question. And this question comes from the line of Mike Ting from Baric Research.

Unknown Analyst: Congratulations on a great quarter. Just a quick question for me. I've noticed that from a year-over-year perspective, both revenue and gross profit seems to have -- in terms of the growth rate seems to have fallen a bit compared to fourth quarter. Can you just maybe talk about some of the reasons behind that?

Shan-Nen Bong: Sure, Michael. Thanks for your interest on our mobile and the question. Let me take this call. And probably you appreciate Q1 is a traditionally slow quarter amongst the 4 quarters within the year. We still managed to see good results from our core developer subscription business, where year-over-year revenue achieved a solid 21% growth that I talk about -- Chris talked about too and reaching an all-time high of $64.9 million. And also in this quarter, gross profit rose by 13% year-over-year. The overall slow growth that you mentioned was mainly attributable to the revenue from other sector, which is the value-added service and vertical application. And let me share with you the reason.

And one is the fact that advertising business was pressured by the seasonality and Q1 is traditionally a slow season for the industry. And without the traffic catalysts such as e-commerce shopping festival and coupled with the long Chinese New Year holidays, marketing spending by brand clients remain slow and leading to the current market condition that you have seen in Q1. And secondly, the slower demand for vertical application. The macroeconomic headwinds have softened our overall client demand, in particular, the financial risk management business were also impacted by the recent regulatory adjustment that I shared earlier on.

But for the remaining 3 quarters of 2026, our core developer subscription business is poised for substantial growth with meaningful revenue expansion. And meanwhile, our overseas business, EngageLab is expected to accelerate and benefit from our global footprint will further be unlocked and realized. I hope we answer your question, Michael.

Operator: There are no further questions for today. I will now hand the call back to Christian Arnold for closing remarks.

Christian Arnell: 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, and thank you.

Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

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