Aurora Mobile Ltd Sponsored ADR Class A Aktie

Ladies and gentlemen, thank you for standing by, and welcome to the Aurora Mobile First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your host today, Christian Arnell. Thank you. Please go ahead, sir.

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.cn. On the call today are Mr. Weidong Luo, Chairman and Chief Executive Officer; Mr. Shan-Nen Bong, Chief Financial Officer; and Mr. Guangyan Chen, General Manager.

Following their prepared remarks, they will be available to answer your questions during the Q&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 and/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 statements 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. Luo. Please go ahead.

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 Service recorded great 15% revenue growth year-over-year, but vertical applications revenue dipped 19% year-over-year. Developer Service 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 Service 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, EngageLab. As we have seen in the past 12 to 18 months, EngageLab is now the indisputable primary driver of revenue growth for Aurora Mobile and it is on great acceleration path. First, EngageLab 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 lifecycle 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, friendly to developers and enterprise technical teams for fast 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, Guotai Junan Securities, Somu Security, and Cheg 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 Shan-Nen, who will take you through the metrics on vertical applications and financial performance for this quarter.

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, Fenqile, Xiaoying Puhui, Ping An Puhui, Zhonglian Xiaojin, 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 paved 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 RMB 11.5 million, mainly due to the decrease in bad debt provision resulting from improved collection efficiency.

And next, I'll share three 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 debts. 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's big 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 Instructions] And the first question comes from the line of William Chan from [ Spiga Capital ].

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?

William, let me take this call -- take 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 Aurora Mobile 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, EngageLab, our scalable global SaaS expansion brings clear predictable long-term growth curves. And through GPTBots.ai, 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 you 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 Aurora 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 Aurora Mobile as a whole for now. And I hope this answers your question, William.

Our next question comes from the line of Jack Sun from [ Gelonghui Research ].

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

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 two 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. 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 Cotti Coffee both our clients, informing customers that the lattes or Americanos are ready to pick up.

And fourthly, airline companies needing to inform their passengers on upcoming flight, the check-in date or the boarding date. 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 with both hands.

So back to your question, there's still a lot of fuel left in the tank for our EngageLab business. The EngageLab market landscape remains vast, which equips 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 Instructions] We are now going to take our next question. And this question comes from the line of [ Mike Tang ] from [indiscernible] Research.

Congratulations on a great quarter. Just a quick question from 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?

Sure, Michael. Thanks for your interest on Aurora Mobile and your question. Let me take this call. And probably you appreciate Q1 is a traditionally slow quarter amongst the 4 quarters within a 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 RMB 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 in 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 answered your question, Michael.

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

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.

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

Ladies and gentlemen, thank you for standing by. Welcome to the Aurora Mobile Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Christian Arnell. Please go ahead, sir.

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.cn. On the call today are Mr. Weidong Luo, Chairman and Chief Executive Officer; Mr. Shan-Nen Bong, Chief Financial Officer; and Mr. Guangyan Chen, General Manager.

Following their prepared remarks, they will be available to take your questions and give you answers during the Q&A session that follows. Before we begin, I'd like to remind you that this conference call contains forward-looking statements made 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 and/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. Luo. Please go ahead.

Thanks, Christian. Hi, everyone. Welcome to Aurora Mobile's 2025 Fourth Quarter Earnings Call. Before I comment on our Q4 results, I would like to remind everyone that we have uploaded the quarterly earnings day on our IR website. You may reference the deck as we proceed with the call today. I'm truly excited about the various things that are going here at Aurora Mobile. Revenue is surging and our financials are as strong as ever.

By the end of this call, I trust you will agree with me, our 2025 and Q4 numbers are truly exceptional. As we have done in the past, when looking at the fourth quarter and the year as a whole, a single phase comes to mind a year of pure brilliance. Why? Because we recorded first ever full year net GAAP profit in our history. Not only that, but we achieved 3 consecutive quarters of non-GAAP profit leading to this quarter, which just as importantly achieved quarterly revenue exceeding RMB 100 million mark. It's been a truly historic year.

Let me now dive deeper into the outstanding work and numbers that make this success possible. Firstly, the group's revenue this quarter surged to RMB 105.2 million, representing a remarkable double-digit 13% year-over-year and 16% sequential growth. This performance brought through the guidance we shared in our Q3 earnings call. Secondly, our global flagship product, EngageLab continued to fire on all cylinders, winning new customers across the globe. This momentum drove EngageLab's ARR for December 2025 to a record high of USD 10 million, representing 186% year-over-year growth.

Further, gross profit grew by 23% year-over-year and by 9% quarter-over-quarter. This is the highest gross profit we have seen over the past 16 quarters. Last but not least, we delivered another standout quarter on cash management. Net operating cash inflow hit RMB 35.1 million, the highest we have seen since Q4 of 2020. With so many record highs this quarter, I am incredibly proud of what our team has managed to accomplish. It's truly gratifying to share these results with you today, and it was driven by our strategy, hard work and passion, not by luck.

Everyone in Aurora Mobile for the effort and energy toward our collective growth day in and day out, 2025 stands as one of our most successful year-to-date, the result of true commitment and strong execution. With that said, the work is not done. The solid foundation we have built over the past few years position us to achieve even great things. I sincerely believe we are ready to seize the next wave of global opportunities and our track record proves we can.

As we move into 2026, we will continue on our expansion path with the same discipline and focus we show in the past years, enhancing our products and services, accelerating growth and maintaining strong financial management. I am optimistic of what 2026 will bring. The path ahead is rich with opportunities and our brightest moments are still to come. After a year of pure brilliance, I think for 2026 is clear growth acceleration.

Now let me share more on the individual business performance. Our total Q4 group revenue has exceeded RMB 100 million mark for the first time in history since the transition to pure SaaS business model. It has grown both year-over-year and quarter-over-quarter. In particular, the lion's share of year-over-year revenue was contributed by strong numbers from developer subscription services. Our solid execution in 2025 across different markets provided an excellent platform to drive our top line performance.

In this quarter, both developer subscription services and vertical application record solid acceleration with double-digit year-over-year revenue growth. Developer Services revenue, which consists of subscription services and Value-Added Services delivered strong performance with 7% growth year-over-year and 18% growth quarter-over-quarter. Subscription revenue performed well, increasing by 13% year-over-year and 7% quarter-over-quarter. Value-Added Services revenue grew by an impressive 101% quarter-over-quarter, but decreased 13% year-over-year. Our core business developer subscription services gave a revenue of RMB 61.9 million, representing growth of 13% year-over-year and 8% quarter-over-quarter.

The year-over-year revenue growth was mainly driven by increase in both customer number and ARPU. In this quarter, subscription revenue both for the RMB 60 million 1 quarter revenue mark and reached its highest level in history. Now it's time for what many of you have been waiting for, an update on our global flash product, EngageLab, which continued its remarkable growth trajectory quarter after quarter since it was launched.

First, EngageLab's ARR has achieved a new and important milestone, USD 10 million as of December 2025. Following triple-digit growth in Q3, we record 186% year-over-year ARR growth this quarter. Secondly, we delivered another very strong quarter of EngageLab. Cumulative signed contract value amount to RMB 157 million by the end of Q4 of 2025. In Q4 alone, we signed up more than RMB 29 million worth of new contracts. This, in our view, is simply outstanding. We expect this revenue growth momentum to continue for the next 24 months.

Thirdly, we secured new wins from global customers across all corners of the world. Our number of customers increased by 142% year-over-year to reaching 1,641. Our global go-to-market initiatives are proving highly effective in driving this growth. Fourthly, our EngageLab products and services are now sold to customers in more than 70 different countries and regions globally. We expanded our footprint into 18 new countries in Q4 alone. Ultimately, the rollout of EngageLab into global market has been a resounding success.

Looking back to 2025, we are immensely pleased with the expansion of our global flash product. We have come a long way since we launched EngageLab in Q4 of 2022. In a nutshell, EngageLab provides a suite of products and services for omnichannel infrastructure, helping our customers to strengthen engagement with their users in an efficient and effective manner. The customers of EngageLab are from various industry verticals with no specific industry concentration risk. The very strong numbers we have recorded in 2025 have given us great confidence in the acceleration profit of this business.

Historical 2025 numbers aside, in the beginning from 2026, we have seen healthy signs from the overseas markets in terms of potential needs and customers. Let me also touch on the excellent partners we have globally. As of December 2025, within our EngageLab ecosystem, we have 17 partners in different countries and regions. These partners are selected to strengthen, rigorous and often multistage process. We think that our representative in different markets, which means we have high expectation of the contribution from this partner in overseas market in the future.

They are another important driver of our sustainable long-term growth. We will continue to work and engage with more local partners to better utilize their resource and local networks. Within subscription revenue, some of the notable wins in this quarter include but are not limited to Kimi large language model, J&T Express, Citibank and China Unicom. Value-Added Services revenue were RMB 14.2 million, up 101% quarter-over-quarter. The solid revenue quarter-over-quarter growth was mainly due to the significant increase in spend by advertisers. The traditional quarterly online shopping festival in Q4 also contributed to significant revenue growth sequentially.

Now let me pass the call over to Shan-Nen, who will take you through the metrics of vertical applications and financial performance for this quarter. Take it away.

Thanks, Chris. And next, I'll go over the revenue for vertical application that includes financial risk management and market intelligence. Overall, Vertical Applications had a good quarter where revenue grew both year-over-year and quarter-over-quarter. And within vertical application, financial risk management recorded a strong 43% growth in revenue year-over-year and 12% quarter-over-quarter. Financial Risk Management delivered another excellent performance. We recorded robust revenue growth of 43% year-over-year and 11% quarter-over-quarter.

Notably, this segment achieved revenue of more than RMB 22 million in each of the 4 quarters in 2025. In particular, the strong year-over-year performance was driven by impressive 20% in customer number growth and a 20% increase in ARPU. The customers that we signed up or renewed in Q4 include, but not limited to ChongXiing, Xiao, Chengduinhang and many more licensed credit or financial institutions throughout China. Market Intelligence revenue, on the other hand, decreased by 24% year-over-year and 3% quarter-over-quarter due to the continued weak market demand for Chinese APP data. This result is in line with our expectation.

Next, I'll go over some of the profit and loss items. Our gross profit delivered another exceptional quarter, growing 23% year-over-year and 9% quarter-over-quarter. The RMB 69.7 million gross profit we had also was the highest gross profit recorded among any of the past 16 quarters. In this quarter, our revenue grew 13% year-over-year, yet our gross profit grew by 23% year-over-year. Notably, we saw this trend in Q3 as well.

This tells a clear story. We are strengthening our ability to generate high-quality revenue with higher margins. Our strong gross profit number has proven instrumental in bringing us to a full year profitability in 2025. On net profit, after 3 consecutive profitable quarters, we have landed ourselves in a new territory, our first ever full year GAAP net profit for 2025. This is a great way for us to conclude our brilliant Q4 and full year 2025 story on a high note.

On to operating expenses. Q4 operating expenses was at RMB 68.2 million, up 13% year-over-year and 6% quarter-over-quarter. Overall, we are pleased with the trending of OpEx to support revenue and profitability growth. I'll now dive deeper into the individual OpEx category. R&D expenses increased 16% year-over-year to RMB 28.3 million, mainly due to the higher staff costs and associated expenses. Technical service fee also contributed to the year-over-year increase in R&D expenses.

Selling and marketing expenses increased by 16% as well year-over-year and to RMB 28.4 million, mainly due to the higher sales commission in line with the revenue growth and cash collection recorded in this quarter. Marketing expenses for investment in global business expansion also contributed to the year-over-year increase in SMS -- in selling and marketing expenses. G&A expenses remained flat at RMB 11.4 million, representing no change from the same quarter of last year.

Next, I will share 3 very important KPIs that we closely monitor. Our net dollar retention rate, NDR, a commonly used KPI for SaaS companies stood at 103% for our core developer subscription business for the trailing 12-month period ended December 31, 2025. This is the second consecutive quarter where the NDR number has exceeded the 100% threshold. We are proud of this number as this demonstrates how our SaaS business model is widely accepted by the market. Customers have increased their spending on our platform 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, which exceeded the historical high we had last quarter and stood at RMB 178.7 million in Q4 of 2025. This historical high deferred revenue balance is a hallmark of high-quality, scalable business. It signifies strong customer loyalty, predictable future revenues, healthy cash flow and an effective sales strategies.

Thirdly, we continue to maintain a healthy level of AR turnover days at 37 days. This number is simply fantastic. It shows we are collecting cash quickly and effectively. And this has really improved our financial liquidity while mitigating the risk of bad and doubtful debts. And there was no shortcut to achieving this. It was simply due to the result of our team's diligence, hard work and timely effort to engage with customers.

On to the cash flow. We recorded yet another great number this quarter. For the quarter ended December 31, we recorded net operating activity cash inflow of RMB 35.1 million. This exceeds the last quarter and is now our best quarterly cash flow result since Q4 of 2020. Another metric to share with you, between the years, our cash and cash equivalent balance has increased by RMB 53.8 million. It represents a whopping 45% increase to RMB 173 million as of December 31, 2025. This reflects not only the significant step-up in our financial results, but also a meaningful improvement in the overall quality of our operations.

Now let me take a few minutes here to recap. As you have heard Chris mention a year of pure brilliance at the beginning of this call. And throughout the entire 12 months of 2025, we have been operating under a high level of focus and rigor together with financial discipline. Our financial profile has fundamentally improved and moving in the right direction. And we closed a very strong and exceptional fiscal 2025. The numbers we have presented today speak for themselves. And this quarter, we achieved many historical milestones.

Each one, a strong statement about the exceptional 2025 we have had and each one building momentum as we look forward to the next 12 months ahead of 2026. First, we achieved our very first full year GAAP net profit in history. Number two, the group quarterly revenue exceeded RMB 100 million mark, a historical first since we transitioned to the pure SaaS business model. Third, our core developer subscription business achieved a record of RMB 61.9 million in revenue this quarter, breaking through the RMB 60 million threshold for the first time.

Our flagship product, EngageLab, continues to shine. Our EngageLab business reached another very important key milestone, ARR of USD 10 million in December 2025. This represents a stunning 186% of year-over-year growth. Number five, gross profit grew significantly at 23% year-over-year and the highest it has been for the past 16 quarters. Number six, operating activities brought in a net cash flow of RMB 35.1 million.

Our net dollar retention, NDR, for core developer service surpassed 100%, reaching 103%. The 2025 numbers demonstrate our excellent execution. We have exceeded most, if not all, of our targets. With this in mind, Chris and I believe we are exceptionally well positioned to continue this momentum into 2026. Now let's turn to the business outlook. Based on the current available information, the company sees the 2026 full year revenue guidance to be in the range of RMB 450 million to RMB 480 million, representing a very solid and strong growth of 20% to 28% year-over-year compared to 2025.

And the above outlook is based on current market conditions and reflects the company's current and preliminary estimate of the market and operating conditions and the customer demand, which are all subject to change.

Lastly, before I conclude, I'll give a quick update on the share repurchase plan. In this quarter ended December 31, 2025, we repurchased 73,000 ADSs. Cumulatively, we have repurchased a total of 400,000 ADS since the start of our repurchase program.

And this concludes our prepared remarks. We're happy to take your questions now. Operator, please proceed.

[Operator Instructions] And our first question is going to come from Calvin Wong with Spica Capital.

First of all, congrats to you guys for delivering a year of pure brilliant financials today. Both the Q4 and the full year 2025 numbers have been very, very impressive. One question for me, if I may. Can the management shed some light on the top 3 things that you have done well to deliver this set of such good financials.

Calvin, good to hear from you, and thanks for the kind words. Let me take this question. Yes, we are very proud of ourselves to be able to share such a wonderful set of financials earlier on during the call. And to get to where we are, it is by no means easy, and we work very hard and smart to navigate the volatile business environment globally. As on the 3 things that we have done well, let me have a go. First, it has to be the courage to venture outside our comfort zone. And looking back in 2022, when the idea of going overseas was first brought up by Chris as the next important strategic initiative for Aurora Mobile.

At that time, I think we didn't have any single overseas employees nor did we have any partners outside of China. But then forward-looking vision was a brief one. So making -- I think making the right decision to go overseas would be my #1 thing that we have done right. If we did not make such brave or bold decision, we will not have this conversation today. And secondly, making the monumental shift of the product service offering outside of China is another game changer. We will not be as successful as we are today if we're simply making slip service of going overseas.

Over the course of the past, I think, 2 to 3 or 3 to 4 years, we have made considerable amount of investment and resources to actually having a brand-new EngageLab product, specifically for our overseas market with its own distinct spec and features for global customers, along with the overseas data centers catering for the needs of our global customers. If you were lazy or took a shortcut of simply using what we had before in China for overseas market, it will not work.

The third factor would be the commitment to excel throughout the organization to support this going overseas initiative that Chris brought up. When we started, there was no how to go overseas guide book to show us the way. We took the hard way by figuring out all ourselves and doing it all ourselves. I still remember at the early stage when we started EngageLab, Chris and I were standing at our booth in Singapore Tech Expo to introduce EngageLab and to answer questions from potential customers, and we have since come a long way.

Just to recap, looking back, one, we made the right decision to venture overseas. Two, we make serious commitment in terms of investment in the right product offering. Third, the entire organization was in sync and aligned to this strategic initiative. And this took us back a little bit to the memory lane. I hope I answered your question, Calvin.

And our next question will come from Jack Sun with Gelonghui Research.

I'm Jack Sun from Gelonghui Research. Congratulations to the management team on another quarter with good numbers. in particular, a full year GAAP net profit is a really great turning point. My question for the management is, how should we look at Aurora's financials for the first quarter of 2026 and beyond?

Jack, thanks for the question. And you're right, we have a great 2025 when we achieved our very first GAAP profit for the year. And equally important was the spectacular Q4 numbers that we have presented earlier today. And in Q4, our total revenue exceeded RMB 100 million and go through the revenue guidance we have provided in Q3 and marking the best quarter revenue in our history. And of course, you heard about the fact that our global flagship product, EngageLab continues its great acceleration path. All the KPIs we have achieved has done through meaningful and significant growth year-over-year and quarter-over-quarter, be it ARR, customer numbers, total contract value signed or revenue recognized, they just exceeded all our internal targets.

And of course, all these were the fruit of a hard labor that we started 3 years back. Results like this will not happen overnight or over 1 quarter. And we sowed the seeds of EngageLab growth when we committed to venture overseas in late 2022. We invested the appropriate resources in terms of capital and infrastructure with a balance of ensuring expansion without blinding spending for sake of spending. And now that we have laid a solid foundation for EngageLab, the growth prospect is very certain.

We have presented and delivered such sequential growth without fear in the past. If I may summarize on how one should view Aurora Mobile, you can think of our business as, one, we have proven to be able to achieve full year net profit with positive cash inflow. Two, domestic business continued its solid and relatively stable growth. Three, our global flagship product, EngageLab will provide the lion's share of the growth momentum for the next 3 years. Four, our AI strategy will provide the next phase of growth momentum. And thus, we -- management as a whole are very confident on the business prospects in 2026 and beyond. And I hope this answers your question, Jack.

And I'm showing no further questions at this time. I would now like to turn the call back over to Christian for closing remarks.

Thank you, everyone, for joining the call tonight. If you have any further questions or comments, please don't hesitate to reach out to the Jiguang IR team. This concludes the call. Have a great evening or morning. Thank you.

This does conclude the conference call. Thank you for participating, and you may now disconnect.

Ladies and gentlemen, thank you for standing by, and welcome to the Aurora Mobile Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your host today, Rene Vanguestaine. Please go ahead, sir.

Thank you, Michelle. 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.cn. On the call today are Mr. Weidong Luo, Chairman and Chief Executive Officer; Mr. Shan-Nen Bong, Chief Financial Officer; and Mr. Guangyan Chen, General Manager.

Following their prepared remarks, they will be available to answer your questions during the Q&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 and/or 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 would now like to turn the conference over to Mr. Luo. Please go ahead.

Thanks, Rene. Greetings to all. Welcome to Aurora Mobile's 2025 First Quarter Earnings Call. Before I comment on our Q3 results, I would like to remind everyone that the quarterly earnings deck is available on our IR website. You may refer to the deck as we proceed with the call today. Without further ado, let's get started.

As we did in the past, based on the Q3 earnings numbers, the suitable description I will give the -- to the first quarter result is good things, time tells.because we record the first ever back-to-back quarterly non-GAAP profit in our history, following the main net GAAP profit last quarter, our strong business performance carried us across the line again in Q3.

Let me elaborate more on the strong business we have had in this quarter. Firstly, the group's revenue this quarter of RMB 19.9 million, achieving a remarkable 15% year-over-year and 1% sequential growth. This RMB 19.9 million was at the very high end of the guidance we have provided.

Secondly, our global flash product, EngageLab continued its great momentum with another quarter of great numbers. EngageLab recorded very strong quarterly growth in customer number and contract value growth. In particular, EngageLab's ARR for September 2025 stood strongly and reached a new milestone at RMB 53.7 million. It has grown by 160% year-over-year. Thirdly, our financial risk management business had its best quarter yet, recording highest quarterly revenue of RMB 22.6 million with growth of 33% year-over-year.

Fourthly, gross profit exceeded our expectations and grew strongly by 20% year-over-year while achieving the highest gross profit for the past 15 quarters. Gross margin has also improved year-over-year and quarter-over-quarter. Last but not least, having all the great number about it great, it's equally important that we are generating positive cash flow and in great cash position. Indeed, we are. The net operating cash inflow of RMB 23.3 million recorded the highest level since Q4 of 2020.

It is very humbling for me to share with you on yet another stellar quarterly financial results. As I mentioned in the pre-earnings call, achieving historical GAAP net profit was not easy. For us to have back-to-back GAAP net profit is simply a great achievement for Aurora Mobile. To achieve that all the process in the organization worked really well for the entire fourth quarter of 2025.

Our hard work and commitment to throughout Aurora Mobile will not stop here. There are more we need to achieve together, and we will. Short of giving our promise on this call, I'm truly hopeful for the team's dedication on execution on our group strategy and going forward. Now let me share more on the individual business performance.

Our total Q3 group revenue has grown both year-over-year and quarter-over-quarter. In particular, revenue grew 15% year-over-year, driven by strong numbers from Developer Services and Financial risk management business. Again, in this quarter, all business segments, mainly developer subscription services, value-added services and vertical applications recorded solid acceleration with double-digit year-over-year revenue growth.

This is the second consecutive quarter we have such a strong revenue growth momentum. Developer Services revenue, which consists of subscription services and value-added services increased by a strong 12% growth year-over-year and flat quarter-over-quarter. Subscription revenue had solid revenue numbers where it increased by 11% year-over-year and increased 7% quarter-over-quarter. Value-added services revenue grew by an impressive 22% year-over-year, but decreased 24% quarter-over-quarter.

Our core business developed subscription services with revenue of RMB 57.3 million, recorded growth of 11% year-over-year and 7% quarter-over-quarter. The year-over-year revenue growth was mainly driven by increase in both customer numbers and ARPU.

Subscription revenue recorded the fifth consecutive quarter of RMB 50 million plus revenue and reached its highest level in history in this quarter. Next, let me share more on our global flagship product, EngageLab, which continued its excellent growth acceleration path quarter after quarter since its introduction.

Firstly, EngageLab's ARR has reached a new and important milestone of RMB 53.7 million marked in September 2025. This 160% year-over-year ARR growth was just impressive. Secondly, we had another very strong quarter for EngageLab where the cumulative contract value we have signed amount to RMB 128 million by the end of Q3 of 2025.

In Q3 alone, we signed up more than RMB 15 million worth of new contracts. This is just outstanding. We do expect this revenue growth momentum to continue for the next 12 -- 24 months. Further, global customers from all corners of the world continue to purchase our products and services. The customer number has increased by 156% year-over-year, reaching 1,312. This was driven by the continued progress we are making through our global go-to-market effort.

Firstly, our EngageLab products and services are now sold to customers in more than 52 different countries and regions globally. This is a great testament that our global flagship product, EngageLab is indeed a globally accepted product from customers originated from all 4 corners of the world.

Our global flasgship product, EngageLab has a very unique and different position in the market. We have been taking market share from competitors in all of the overseas markets we operate in. This is evident from the growth rate of EngageLab we have seen today. From the market intelligence we have gathering, it shows that the demand for our EngageLab products and services remains strong.

With this great result delivered by EngageLab, it once again reinforced my strong belief that this global flash product is the torch bell as far as revenue growth is concerned for us in the next 12 months -- or 24 months.

Within subscription revenue, some of the notable wins in the quarter include but not limited to [ DepSi ], Shanghai Disneyland, BYD and China Eastern Airlines, just to name a few. Value-added services revenue were RMB 7.1 million increased by 22% year-over-year, but decreased by 24% quarter-over-quarter. The solid revenue year-over-year growth was mainly due to the increase in new advertisers acquired between the years.

The absence of traditional quarter online shopping festival will result in a negative revenue growth sequentially. Now let me pass the call over to Shan-Nen, who will share more about the vertical application and other aspects of our financial performance for this quarter.

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 grew both year-over-year and quarter-over-quarter. Within Vertical Application, Financial Risk Management recorded a significant 33% growth in revenue year-over-year and 3% quarter-over-quarter. Following the strong Q2, Financial Risk Management had a sequential excellent quarter. It has now the third consecutive quarters of revenue in excess of RMB 21 million under its belt.

Another significant milestone for this business is that it recorded the highest quarterly revenue in history of RMB 22.6 million in this quarter. This 33% year-over-year revenue growth was mainly due to a strong 44% in customer number growth. The customers that we signed up or renewed in Q3 include, but not limited to, Lexing, Xinoti, Ningohang and many more licensed credit and financial institutions throughout China.

Market Intelligence revenue, on the other hand, decreased by 23% year-over-year and 2% quarter-over-quarter due to the weak -- the continued weak demand for the Chinese APP data, and this result is in line with our expectation. Next, I'll go over some of the P&L and balance sheet items. Our gross profit had a spectacular results too in this quarter where it grew 20% year-over-year and 7% quarter-over-quarter.

The RMB 63.8 million gross profit we had was also the highest gross profit for the past 15 quarters. Within -- with the group revenues grew 15% year-over-year, yet our gross profit grew by 20% year-over-year. It shows that we had recorded very high-margin revenue in this quarter. This is certainly a key target that we would like to maintain and extend beyond this quarter.

On to operating expenses. The Q3 operating expenses was at RMB 64.4 million, representing a 12.8% increase year-over-year and increase of 5.8% quarter-over-quarter. Operationally, our Q3 revenue grew by 15% year-over-year, while OpEx only grew by 12.8%. Overall, 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 category. For R&D, expenses increased by 7% year-over-year to RMB 25.9 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 in R&D expenses. Selling and marketing expenses increased by 19% year-over-year to RMB 26.6 million, mainly due to the increase in sales commission in line with revenue growth and the cash collection in this quarter.

Marketing expenses for investment in global business expansion also contributed to the year-over-year increase in selling and marketing expenses. G&A expenses increased by 13% year-over-year to RMB 11.9 million, mainly due to increase in staff costs, professional fees and better provision.

Next, I'll share 3 very important KPIs that we closely monitor. For NDR, which means net dollar retention rate, a commonly used KPI for SaaS companies, it stood at 104% for our core developer service business for the trailing 12 months ended September 30, 2025. And this is the very first time where NDR numbers have exceeded 100% milestone. The number says it all.

It means customer retention rate, coupled with the fact that our customer has increased their spending with us through upsell, upgrades and expansion. And this is the best testament of our sustainable SaaS business. Secondly, another important financial KPI for tracking the performance of SaaS company is total deferred revenue, which represents cash collected in advance from customers for future contract performance, which was at historical high of RMB 166.3 million.

And this high deferred revenue balance is a hallmark of a high-quality scalable business. It signifies a strong customer loyalty, predictable future revenue, healthy cash flow and effective sales strategy. Thirdly, we continue to maintain healthy AR turnover days level at 49 days, and this remains at an industry-leading level.

We will 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 doubtful debts. On the cash flow, we recorded another great numbers.

For the quarter ended September 30, 2025, we recorded net operating activities cash inflow of CNY 23.3 million. This is the best quarterly cash flow numbers we have since Q4 of 2020. On to balance sheet. Total assets were RMB 388.2 million as of September 30, 2025. This includes cash and cash equivalent of RMB 141.2 million, accounts receivable of CNY 43.9 million, prepayments and other assets of RMB 15.7 million, operating lease right-of-use assets of RMB 15.9 million, fixed assets of CNY 2.9 million, long-term investment of RMB 113 million, goodwill of RMB 37.8 million and intangible assets of RMB 11.5 million resulting from SendCloud acquisition in March 2022.

Total current liabilities were at $274.6 million as of September 30, 2025, and this includes accounts payable of $31.9 million, other operating lease liability of $4.1 million, deferred revenue of $166.3 million, accrued liabilities of $72.3 million.

And now let me take a few minutes here to recap the description, good things come and pass that Chris mentioned at the beginning of this call. In this quarter, we have many great achievements that I would like to take a few minutes to reiterate.

First, we achieved our very first back-to-back GAAP net profit in history. Number two, our core developer subscription business had its best revenue in history of RMB 57.3 million as did the financial risk management business. Our flagship product, EngageLab, continued its expansion beyond the shores.

Apart from great growth in customer number and contract value, EngageLab business reached another very important key milestone where the ARR was at RMB 53.7 million in September 2025, representing a stunning 160% year-over-year growth. Gross profit grew 20% year-over-year and recorded its highest levels for the past 15 quarters. Number five, operating activities brought in net cash inflow of RMB 33.3 million.

Our NDR net dollar retention for core developer service recorded the best number in history of 104%. And now let's turn to business outlook. Based on the current available information, the company sees the Q4 2025 revenue guidance to be in the range of CNY 94 million to RMB 96 million, representing a solid growth of 1% to 3% year-over-year compared to the same quarter 2024.

The above outlook is based on the current market conditions 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 before I conclude, I'll give a quick update on the share repurchase plan. In this quarter ended September 30, 2025, we repurchased 4,000 ADS. Cumulatively, we have repurchased a total of 327,000 ADS since the start of our repurchase program.

And today, our Board of Directors of the company approved a share repurchase program, whereby the company is authorized to repurchase up to USD 10 million worth of its ordinary share, including in the form of ADS during the 12-month period starting today, and this is a 100% increase from the USD 5 million program we had previously.

The company proposed repurchase may be made from time to time in the open market at a prevailing market price in private negotiated transaction, in block trades and/or through -- other legally permissible means, depending on the market conditions and in accordance with the applicable rules and regulation.

The company's Board of Directors will review the share repurchase program periodically and may authorize adjustment in terms of size and terms. The company expects to fund the repurchase of its existing cash. And this concludes our prepared remarks. We'll be happy to take your questions now. Operator, please proceed.

[Operator Instructions]

And our first question will come from Calvin Wong with Spicer Capital.

First of all, congrats for delivering another set of outstanding results this quarter. I have only one question. Based on my reading of the earnings release, I noticed the strength of EngageLab business and how it strengthened the group's financial results. So I would appreciate if management could tell us more about EngageLab and why the growth trajectory has been so strong since day 1?

Let me take this call. Kevin, good to hear from you again, and thanks for your interest. And I'll take your earlier statement about EngageLab growth trajectory has been strong since day 1, and this is factual, and we are very proud of the achievement since day 1. And for those listeners who have access to our ER deck that we have uploaded to the IR web page, you can refer to, I think, Slide #3, where we have the pictorial display or diagram of engagement of EngageLab business to date.

And one new particular data point that we have included in this quarter's earnings deck is the ARR, is the annual recurring revenue for EngageLab business. And for the month of September 2025, the ARR was at RMB 53.7 million, and this is a 160% jump from a year ago. And we are very encouraged by this number because it shows that the business has a very significant growth trajectory, and we have made great revenue expansion in just 12 months.

And I would say the success of EngageLab is not by chance or that we are lucky. It was a result of endless improvement upgrades that we made to the product and service offering that help us to acquire more new customers and retain existing customers globally.

If you look back when Chris decided to launch EngageLab back in Q4 of 2022, the mission was pure and direct, just to address our customers' main needs of reaching out and engaging with their users in a cost-efficient and effective manner. And through EngageLab, our customers are able to reach and engage with their users through any one or all of the following messaging channels such as app push, web push, e-mail, SMS, WhatsApp and OTP.

And also from a technical standpoint, we have done all the heavy lifting for our customers, too. To deliver the global solution for our customers, we have invested heavily in data facility in 8 cities globally. And just this week, we have launched a new data center in Turkey, further expanding our global infrastructure.

That aside, we have also incorporated our notification channel for all different operating systems from iOS to Android, from Harmony, OS to others. And it makes it easy and efficient for our customers to ensure that their notification are delivered no matter where the users are and what phone they are using. And maybe you can think of EngageLab is reaching your users without borders.

And for service-wise, we have received countless compliments from our customers that our customer service team are very responsive and deliver a much better service than our peers. And this stays a lot from a customer standpoint. And when they encounter issues, they need solution. And this is something that we can deliver, and we are proud of it.

And therefore, with such a great value proposition where customers can get one-stop engagement platform and great services, all wrapped in one, and it is not hard to see why EngageLab has been able to deliver such great numbers quarter-over-quarters. And historical result aside and both Chris and myself have great hopes and confidence in the EngageLab business going forward.

As Chris rightly called out during the call earlier, EngageLab is the torch barrier for our revenue growth in the next 24 months. And Kevin, hope this answer your question adequately.

And our next question will come from Jack Sun with Gelonghui Research.

I'm Jack Sun from Gelonghui Research. Congratulations on another good quarter with solid earnings, in particular, 2 consecutive quarters with GAAP net profit, well done. I have a question for the management. Help me to recap what went well in Q3 that delivered another quarter with GAAP net profit?

Jack, thanks for the question. Yes, it was a great quarter indeed. I think Chris mentioned, we executed very well operationally and everything just went well, and this flow on to our financials number that we have released earlier today.

There are a couple of things I can share more. Firstly, revenue in Q3 has been very strong. All business lines recorded great year-over-year double-digit growth. What that means is we are now head and shoulder above where we were a year ago. And both the subscription business and the financial risk management recorded their own best revenue quarter in history.

Equally important is the revenue by EngageLab, where it contributed RMB 13 million in this quarter alone, also a historical high. We grew our revenue not at the expense of sacrificing margins. This is evident that while we grew our revenue significantly, our gross profit reached the highest level for the past 15 quarters. At the same time, our gross margin increased year-over-year and quarter-over-quarter too. And this is a really hard act to follow.

And since revenue, gross profit grew at a faster pace than our OpEx, the U.S. GAAP net profit is a certainty and which is why we had the second consecutive quarters of U.S. GAAP net profit. And 2 other important and great KPIs that I would like to reiterate here. One is the NDR, where we reached 104% for our core developer subscription business. And this is the very first time NDR exceeded 100%.

And what that means is simple and straightforward. Our customer has been buying more of our services between the periods through upgrades, upsell and other services, and this is a great number to have. And secondly, is the deferred revenue balance of $166.3 million, another historical high balance. In short, we have $166.3 million worth of secured revenue that we can recognize in the future.

And the best part is we have already received the cash. So for this $166.3 million, we don't even have to worry about cash collection effort or the risk of bad debt in the future. And managing cash flow has also yielded great results. In this quarter, we have net operating cash inflow of $23.3 million, the highest level for the past 20 quarters, which is actually the 5 years, the past 5 years, the best results. And with that positive inflow of cash, our 9/30 quarter end cash balance has also climbed to $141.2 million, the highest balance in the past 14 quarters as it improved by 40% year-over-year.

As you can see, it's not hard for you or anyone to conclude that this quarter has been great. And however, rest assured that we are not contented by the present. We need to move faster and expand more. Therefore, we will continue to invest as part of our global growth plan.

And lastly, if time permits, I would like to cordially invite you and other investors to drop by our San Shenzhen head office. We are more than happy to host you and chat with greater detail for any questions you might have. That is my answer to your question, Jack.

Thank you I show no further questions in the queue at this time. I would like to turn the call back over to Rene for closing remarks.

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 night. Thank you all.

This does conclude the conference call. Thank you for participating, and you may now disconnect.

Ladies and gentlemen, thank you for standing by, and welcome to Aurora Mobile Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your host today, Christian Arnell. Thank you. Please go ahead, sir.

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.cn. On the call today are Mr. Weidong Luo, Chairman and Chief Executive Officer; Mr. Shan-Nen Bong, Chief Financial Officer; and Mr. Guangyan Chen, General Manager.

Following their prepared remarks, they will all be available to answer your questions during the Q&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 now -- with that, I'd now like to turn the conference over to Mr. Luo. Please go ahead.

Thanks. Christian. Greeting to all, welcome to Aurora Mobile's 2025 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 description for the second quarter results, which is our new chapter in Aurora Mobile. For one very significant milestone we have achieved, we recorded the first ever quarterly net profit. This is GAAP profit by the way, in our history. This great milestone aside, we have recorded many other great operating results in this quarter 2.

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 RMB 89.9 million, achieving a remarkable year-over-year and sequential growth. This RMB 89.9 million was the higher end of the guidance we have provided. EngageLab 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. Fourthly, gross profit grew strongly by 13% year-over-year while achieving the highest gross profit for the past 10 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 can spend considerable time, effort and energy over the past 2 to 3 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, consolidates our services, creating our global flagship product, EngageLab for global market. Our AI agent platform, GPTBots.ai, [indiscernible] 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 ground and on sustainable expansion path. 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. Now let me share more on the individual business performance. Our total Q2 revenue has grown 13% year-over-year, driven by the great performance from Developer Services. Within the group revenue, all business segment, mainly Developer Subscription Services, value-added services and Vertical Applications, record solid acceleration and double-digit year-over-year revenue growth.

Development Services revenue, which consists of subscription services and value-added services increased by a strong 14% growth year-over-year, 3% growth quarter-over-quarter. Subscription revenue get solid revenue numbers, well, 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 RMB 53.7 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 million 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 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. As I mentioned this before, but we would like to reiterate that. I truly believe that EngageLab is the engine of growth for Aurora Mobile in the next 12 -- 24 months. The number it has delivered over the past 8 quarters is the greatest testament of my belief.

Next, within subscription revenues, some of the notable wins this quarter include but not limited to [indiscernible] China Citibank International, just to name a few. Value-added services revenue were RMB 10.7 million 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 customers acquired in Q2. In addition, the traditional Q2 online shopping festival also contribute to the revenue growth.

Now let me pass the call over to Shan-Nen, who will share more about the Vertical Application and other aspects of our financial performance for this quarter.

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 has another excellent quarter recorded 2 consecutive quarters of revenue in excess of RMB 21 million. 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 further solidify the continued demand for this service in the many quarters to come. We see new and existing licensed financial institutions continue to buy and use our products and services in their risk model. The customer that we signed up all renew in Q2 include, but not limited to, [indiscernible] and many more licensed credit and financial institutions 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, we will attract more usage and customers. Based on the current feedback we have received, it has been very encouraging. I shall provide more timely update 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 continued to scale new heights. It grew both year-over-year and quarter-over-quarter to RMB 59.6 million. This was the record high level that we have achieved for the immediate past 10 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 an 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 RMB 60.8 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&D expenses, it increased 10% year-over-year to RMB 26 million, mainly due to an 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 RMB 22.7 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&A expenses increased by 14% year-over-year to RMB 12.2 million mainly due to the increase in staff costs and the loss on disposal of property and equipment.

And next, I shall share 3 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 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. Thirdly, we continue to maintain a healthy AR turnover days at 54 days. This remains an industry-leading low level. We continue to work hard to ensure we actively and timely collecting cash from customers and at the same time, mitigating the risk of bad and doubtful debt. On the cash flow, we are also very pleased with the overall cash collection and usage in operating activities this quarter. For the quarter ended June 30, we recorded net operating cash inflow of RMB 7.9 million.

On to balance sheet. Total assets were RMB 381 million as of June 30, includes cash and cash equivalent of RMB 119.8 million, accounts receivable of RMB 54.1 million, prepayments and other current assets of RMB 16.5 million. Operating lease right-of-use asset of RMB 17.4 million, fixed assets of RMB 3.2 million; long-term investment RMB 113.3 million, goodwill of RMB 37.8 million and intangible assets of RMB 12.1 million, resulting from the SendCloud acquisition in March 2022. The total current liabilities were RMB 267.7 million, this includes accounts payable of RMB 38.4 million. Current operating lease -- current operating lease liability of RMB 84.8 million, deferred revenue of RMB 156.1 million, accrued liabilities of RMB 68.4 million.

And let me now take a few minutes 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 the fourth consecutive quarter of RMB 50 million plus, plus revenue quarter. Our flagship product, EngageLab continues its great growth trajectory, we won and signed more than RMB 11 million worth of new contracts in Q2 alone, fueled by the new global customer acquisition.

Gross profit grew 13% year-over-year, achieving the highest level for the past 10 quarters. Operating activities brought in net cash inflow of RMB 7.9 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 lines 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 can control.

And Chris and I are very thankful for the dedication and commitment by the teams. In 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 RMB 88 million to RMB 91 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 demand, we are all subject to change. Lastly, before I conclude, I shall give a quick update on the share repurchase plan. In this quarter, for the quarter ended June 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 questions now. Operator, please proceed.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] We will now take out first question from the line of [ Kelvin Wong from Speaker Capital ].

First of all, congrats on the great first GAAP net profit in the history. I would like to have 2 questions, if I may. The first question, I will be appreciated 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 profit to be along going forward?

Kelvin, 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 stem from the strong push of internal and external dual engine. On one hand, our overseas flagship product, EngageLab continues to accelerate its expansion, constantly breaking boundaries to globalized reach and localized service capability. On the other hand, our AI agent platform, GPTBot.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 markets, together contributing to this quarter's outstanding over performance. And also from a deeper perspective on business drivers and financial support, these driving forces 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 technologic empowerment and the steady advancement of strategic execution will bring us across the line.

And Kelvin, I hope this answers your question.

We will now take our next question from [ Marco Zhang from Gelonghui Research ].

This is Marco from Gelonghui Research. Congrats to the management for delivering a set outstanding results in this quarter. It has been proven that the business model does work and it works well to deliver net profit, in particular we know that your EngageLab 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.

Marco, thanks for your question. Also let me take this question, too. As you rightly pointed out, our EngageLab product, our flagship product is highly promising business segment of the group, and it has already demonstrated strong business viability and becoming the group's next engine group. Currently, EngageLab is serving customers in more than 45 countries and region worldwide with a total signed contract amount -- affects existing RMB 113 million in a year-on-year revenue growth of 67%.

And looking ahead to the upcoming quarters, we are confident and have high hopes of EngageLab 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 the 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, EngageLab will continue to penetrate market demand across different industries and regions, attracting more customers to collaborate.

And both Chris and myself are very confident on the continuous growth trajectory of this business. I hope this answers your question, Marco?

I am showing no further questions. I'd now like to turn the conference back to Christian for closing comments.

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.

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

Ladies and gentlemen, thank you for standing by, and welcome to the Aurora Mobile First Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your host today, Rene Vanguestaine. Thank you. Please go ahead, sir.

Thank you, Heidi. 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.cn.

On the call today are Mr. Weidong Luo, Chairman and Chief Executive Officer; Mr. Shan-Nen Bong, Chief Financial Officer; and Mr. Guangyan Chen, General Manager. Following their prepared remarks, they will be available to answer your questions during the Q&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 and 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 and/or 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 would now like to turn the conference over to Mr. Luo. Please go ahead.

Thanks, Rene. Greetings to all. Welcome to Aurora Mobile's 2025 First Quarter Earnings Call. Before I comment on our Q1 results, I would like to remind everyone that the quarterly earnings desk is available on our IR website. You may refer to the deck as we proceed with the call today.

As we did in the past, based on the Q1 numbers, I have a suitable discussion for the first quarter results, which is a quarter of accelerated growth driven by globalization for the following reasons. Firstly, our EngageLab business had a monster quarter, where we closed out more than CNY 63 million worth of contract value in just one quarter. This is unprecedented in our history. This brings the total cumulative EngageLab contract value in excess of CNY 110 million by March 31, 2025.

Secondly, the group's revenue this quarter of CNY 89 million, achieving a remarkable 38% growth year-over-year. This CNY 89 million was the highest Q1 quarterly revenue we had since transition to pure SaaS. EngageLab's recognized revenue also grew by 127% year-over-year. This Q1 revenue number exceeds what we have previously guided in Q4 of 2024.

Thirdly, our Financial Risk Management business had its best quarter in its history, recording highest quarter revenue of CNY 22.2 million, revenue grew by 64% year-over-year.

Fourthly, gross profit grew strongly by 27% year-over-year, while achieving the highest gross profit for the past 9 quarters. Gross margin has also improved 520 basis points quarter-over-quarter.

Fifth, we recorded an another adjusted EBITDA profit in this quarter. This marks the seventh consecutive quarterly positive adjusted EBITDA we have had.

Overall, it was a great quarter where all the business lines have outperformed the targets we have set for them. This is no doubt set a great momentum for the rest of 2025. Equally important, the progress in our performance and our solid financial position enable us to invest more resources into the development of our enterprise AI agent platform and its global expansion.

Now let me share more on the individual business performance. Our total Q1 group revenue has grown 38% year-over-year, driven by the great numbers from Developer Services. Within the group revenue, all business segments, mainly Developer Subscription services, Value-Added Services and Financial Risk Management, all outperformed and record significant year-over-year revenue growth.

Developer Services revenues, which consists of Subscription Services and Value-Added Services, increased by a strong 39% year-over-year and decreased 12% quarter-over-quarter. Subscription revenue has been recording a great number, where it increased by 26% year-over-year and decreased 2% quarter-over-quarter. Value-Added Services revenue grew by an incredible 269% year-over-year and decreased 46% quarter-over-quarter.

Our core business, subscription services revenue of CNY 53.5 million, record growth of 26% year-over-year and decreased 2% quarter-over-quarter. The year-over-year revenue growth was mainly driven by a 22% increase in ARPU, carrying on the great momentum we had in Q4 of 2024. Our subscription revenue record third consecutive quarter of CNY 50 million plus revenue.

For Subscription Services, we had recorded year-over-year revenue growth in both the domestic and overseas markets. In particular, our EngageLab revenue grew by 127% year-over-year. This remarkable number was a result of the hard work by team to convert many notable wins in the overseas markets.

Both the customer numbers and ARPU have solid growth year-over-year. With the great products and services we have, I believe we can scale this business globally to get more customers and new wins in many quarters to come.

Next, I shall elaborate more on our EngageLab business this quarter. This business always gets me very pump up when sharing with you. Firstly, the total contract value we have signed has broken CNY 110 million milestone in Q1 of 2025. Just to recap, the total contract value was only CNY 10 million at Q3 of 2023. Six quarters later, this amount has grown 10x. This is a remarkable achievement by the team.

Secondly, customer acquisition continue to be the driving force of the success of this business. The customer number has increased by 25%, reaching 848.

Thirdly, the revenue recognized for the EngageLab again record great growth of 127% year-over-year.

Fourthly, our EngageLab products and services are now sold to customers in more than 40 different countries and regions globally.

I'm truly pleased with the team's execution effort, results and the momentum of EngageLab. I believe that it's the engine of growth for us in the next 24 months.

Within subscription revenue, some of the notable new and renewable customers in this quarter include, but not limited to, DeepSeek BYD, SF Express, Monsha AI and [ Hangzhou Ben ], just to name a few.

Value-Added Services revenue were CNY 8.9 million, increased by 269% year-over-year but decreased by 46% quarter-over-quarter. The huge revenue year-over-year growth we have seen was mainly due to the recovery of the advertiser spending we have seen in Q1. For the same period, the advertiser spending has increased more than 200%, which fueled the revenue spike year-over-year. The sequential revenue decline was mainly due to the Double 11, Double 12 online shopping festival in Q4 but was not existent in Q1.

Let me pass the call over to Shan-Nen, who will share more about the Vertical Applications and other aspects of our financial performance of this quarter.

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 very strong quarter, where revenue increased by 35% year-over-year and 20% quarter-over-quarter. And within Vertical Application, financial risk management recorded a 64% growth in revenue year-over-year and 36% growth quarter-over-quarter.

Financial risk management has its best and biggest quarter ever, recorded Q1 revenue in excess of CNY 22 million. This 64% year-over-year revenue growth was mainly due to the strong 19% customers number growth and 38% ARPU growth. As I mentioned in the prior quarter that our team has fine-tuned and upgraded the service and products. The result is simply stunning to say the least.

The upgraded product and services were in high demand amongst the financial industry vertical. The new and existing licensed financial institution for buying and consuming our product and services. Apart from Developer Subscription revenue that Chris mentioned earlier, financial risk management presented itself as the next growth engine in early 2025. We are certainly very pleased to see the resurgence of this business in this quarter and beyond.

The customers that we have signed up or renewed in Q1 include but not limited to [indiscernible], Ningbo Ehang, [indiscernible] and many more license credit and financial institutions throughout China. Market intelligence revenue, on the other hand, decreased by 26% year-over-year and managed to record a modest 4% growth quarter-over-quarter due to the continued weakness in the market demand for Chinese APP data, and this result is in line with our expectations.

Next, I'll go through some of the key expenses and balance sheet items. On to operating expenses. The Q1 operating expenses was at CNY 60.6 million, representing a 14% increase year-over-year and remained flat quarter-over-quarter. The majority of the increase was attributable to our sales and marketing department.

In a snapshot, our Q1 revenue grew by 38% year-over-year. Gross profit grew by 27%, while OpEx only grew by 14%. Overall, we are very pleased to see how OpEx has been trending in view of the revenue and gross profit growth we have achieved. And this is a sustainable growth model for long-term basis.

I'll now go over the individual OpEx category. For R&D, expenses increased 8% year-over-year to CNY 24.6 million, mainly due to the increase in staff costs and associated expenses. Cloud cost has also contributed to the year-over-year increase in R&D expenses.

Selling and marketing essences increased by 34% year-over-year to CNY 23.3 million, mainly due to the increase in sales commission and traveling expenses in line with our revenue growth and cash collection recorded in this quarter.

G&A expenses decreased by 2% year-over-year to CNY 12.7 million, mainly due to the reduction in professional fees as a result of our continuous disciplined management of expenses.

Next, I'll share 3 very important KPIs that we closely monitor. For net dollar retention rate, a commonly used KPI for SaaS company, it stood at 96% for our core Developer Subscription business for the trailing 12 months ended March 31, 2025. And this high NDR percentage, reflecting that we have high customer retention rate, coupled with the ability to increase revenue to upsells through upgrades and expansion. And this is another great quarter with such an impressive number.

Secondly, another financial KPI for tracking the performance of SaaS company is the total deferred revenue, which represents cash collected in advance from customers for future contract performance, which had a record high of CNY 156.9 million, and this is the historical record where our deferred revenue balance has exceeded CNY 150 million.

Thirdly, we continue to maintain healthy AR turnover days level at 53 days. And these are slightly higher than what we had in Q4, simply due to the extended holiday during the Chinese New Year period, where collection is typically slower than other quarters. We will continue to work hard to ensure we collect cash from customer activity and at the same time, mitigating the risk of bad and doubtful debts.

On to balance sheet. Net total assets were CNY 376 million as of March 31, 2025. This includes cash and cash equivalents of CNY 113.6 million, accounts receivable of CNY 54.1 million, prepayments and other assets of CNY 17.4 million. Operating expenses -- operating lease right-of-use assets of CNY 15.9 million, fixed assets of CNY 4.3 million, long-term assets of CNY 113.5 million.

Goodwill of CNY 37.8 million and intangible assets of CNY 12.8 million resulting from the Zanroo acquisition in March 2022. And total liabilities were CNY 261.6 million as of March 31, this includes accounts payable of CNY 34.1 million. Current operating lease liability of CNY 4.2 million, deferred revenue of CNY 156.9 million and accrued liabilities of CNY 66.4 million.

And now let me take a few minutes here to recap the description, a quarter of accelerated growth driven by globalization that Chris used at the beginning of this call. In this quarter, our revenue year-over-year grew strongly by 38%, reaching CNY 89 million. This was the highest Q1 revenue since the transition into a pure SaaS model. Our Developer Subscription service had another CNY 50 million revenue quarter with CNY 53.5 million.

Secondly, our EngageLab had a very strong quarter. Revenue grew by close to CNY 127 million on a year-over-year basis. And cumulative contract value increased by more than CNY 63 million in Q1 alone, bringing the total signed contract value to exceed CNY 110 million. Both the gross profit and gross margin has improved along with our global expansion efforts. We have a seventh consecutive quarter of positive adjusted EBITDA. And this is no doubt a very strong growth quarter for Aurora Mobile. We started the year with a great quarter 1, and we believe the momentum will carry on to the other quarters of 2025.

Now let's turn to the business outlook. And based on the current available information, the company sees Q2 2025 revenue guidance to be in the range of CNY 87.5 million to CNY 90.5 million, representing a solid 10% to 14% year-over-year compared to same quarter of 2024, and the above outlook is based on the current market conditions and reflects the company's current and preliminary estimate of the market and operating conditions and customer demands, which are all subject to change.

Lastly, before I conclude, I'll give a quick update on the share repurchase plan. In the quarter ended March 31, 2025, we repurchased 16,000 ADS. Cumulatively, we have repurchased a total of 295,000 ADS since the start of our repurchase program.

And this concludes our prepared remarks. We're happy to take the questions now. Operator, please proceed.

[Operator Instructions] We will take our first question and the first question comes from the line of [ Calvin Wong from Spicer Capital ].

I have one question related to the EngageLab. First of all, congrats on the EngageLab business has achieved breakthrough contract value of RMB 110 million in Q1. So if I work back the calculation correctly, so that's the total newly signed contract value was more than RMB 60 million in Q1. So I would be appreciate if management could provide some guidance outlook of the EngageLab business going forward?

Okay. Thanks, Calvin. Let me take this call -- take this question. I guess your calculation is spot on. So at the back of achieving this CNY 60 million contract in single quarter, there are a few matters that I'll share with you and everyone on the call. One is the fact that we have proven to have the ability to win big contracts in global stage. Just to clarify, this newly signed CNY 60 million contract in Q1 2025 were from different customers outside of China.

And second, our product and services are indeed meeting the needs of global customers. Customers are willing to sign multi-year contract with us is another testament of the superior quality of our services and product. And this customer have shown great long-term commitment towards our product and services.

And if you ask me whether we'll get another CNY 60 million new signed contract in Q2, I guess my frank and honest question (sic) [ answer ] is unlikely at this stage, which is a realistic expectation. But this CNY 60 million a quarter taught us a few very useful lessons to make significant wins going forward. It shows that we have the technical capability and the know-how to win big contracts. Our products are superior to competitors in the market. So with our growing presence in the global stage, other overseas customers will start to look at EngageLab differently. And maybe this CNY 60 million new contracts a quarter is not too far away after all. I hope this answers your question, Calvin.

[Operator Instructions] We will take our next question. Your next question comes from the line of [ Marco Zhang from Gelonghui Research ].

This is Marco from Gelonghui Research. Congrats to the company on another strong quarter. I have one question for the management. So this quarter, your revenue grew 38% year-over-year, gross profit grew 27% year-over-year and your adjusted EBITDA is on the seventh consecutive quarter of positive number. However, the company is still recording net loss. So my question is that when do you think we can expect your quarterly net profit?

Marco, let me take your question. I think you are right to point out a few key numbers. Let me recap in this quarter, what we have is revenue grew by 38%, gross profit grew by 27% and our OpEx is only grew by 14%. And this business model has a perfect relationship to generate profitability. In short, you may conclude that we earn more than what we spend. But if I peel further deeper beyond the surface, one very important finding that I'll share with you and the others on the call is that there are certain expenses that we need to spend now in order to fill the continuous growth trajectory.

Let me explain more. For example, R&D, and it is vitally important that we continue to research and develop and continue to fine-tune our product. And one great example is the financial risk management, where the business grew by 64% year-over-year. And this is mainly due to product upgrades that we have made. And this upgrade resulted in more customers using and consuming our products. Therefore, we have the 65% revenue growth. On the flip side, if we stand still and with no intention to increase our R&D activities, our product will not have evolved, and we will not get a 65% revenue growth.

And secondly, marketing expenses is another crucial expense for any company needing to spend in order to broaden global reach and expansion. We need to have EngageLab brand name known globally. It was because of the marketing campaign that we had, we were able to grow the business with our borders into 40 countries and region by March 31, 2025.

As a matter of fact, if you want net profit next quarter, I think we can do that. All we need to do is just to freeze our R&D and marketing expenses. However, this will come at the expense of product development and continuous market spend, and this will certainly hurt our ability to grow our revenue in the near future.

Therefore, we need to strike a balance between spending diligently enough so that we can have the firepower to fuel our continuous revenue growth in the next 12 or 24 months. And so long as we continue to scale our business, the results will come soon or later. And I hope this answers your question, Marco?

There are no further questions. I would like to hand back to Rene Vanguestaine for closing remarks. There are no further questions. I'll hand back to Rene Vanguestaine for closing remarks.

Thank you, Heidi. 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 night. Thank you.

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