Aurora Mobile Limited (JG) Earnings

Management highlights

- Overall Financial Performance - Delivered the fourth consecutive quarter of US GAAP net profit, even in the seasonally slow Q1 period - Gross profit grew 13% year-over-year to RMB 66.3 million; gross margin improved 490 basis points year-over-year, reaching the highest level in 8 quarters - Total deferred revenue (future committed revenue) stood at RMB 173.9 million as of March 31, 2026; accounts receivable turnover days remained healthy at 42 days, supporting strong cash liquidity and low bad debt risk - Operating expenses totaled RMB 36.1 million, up 9% year-over-year but down 3% quarter-over-quarter, within management forecasts: R&D expenses increased 17% year-over-year to RMB 28.7 million driven by higher staff and technical service costs; selling and marketing expenses increased 11% year-over-year to RMB 25.9 million driven by overseas expansion staffing; G&A expenses decreased 9% year-over-year to RMB 11.5 million due to lower bad debt provisions from improved collection - Repurchased 42,000 ADS in Q1 2026, bringing cumulative repurchases to 441,000 ADS since the program launched - Engage Labs Competitive Advantages - Mature, elastic, highly concurrent underlying infrastructure polished by years of commercial operation, supporting massive data processing, real-time delivery, and global traffic scheduling - Early completed global market layout with established brand recognition in overseas digital service sectors - Exclusive capability to unify customer full-lifecycle user data across acquisition, activation, engagement, retention, and conversion - Self-developed media AI technology deeply embedded in all product scenarios, paired with standardized automated workflow engines to improve customer operational efficiency and cut labor costs - Full compliance with global strict data regulations (privacy protection, cross-border transmission, regional data residency) to meet market access requirements across Europe, North America, Southeast Asia, and other key regions - Lightweight architecture with low integration barriers, enabling fast launch for customers and improving market replication efficiency - Global Expansion Progress - Added 9 new independent overseas distribution partners in Q1 2026, bringing the total global partner count to 26 to expand local market reach - Notable new subscription wins in Q1 included the world's largest EV company (China operations), SS Express, Gorto Security, Dongwu Security, and Cheji International

Guidance

Management reaffirmed its strategic guidance for full-year 2026, committing to continued disciplined cost control alongside accelerated global expansion of the Engage Labs business. Management expects core developer subscription services to deliver substantial revenue expansion over the remaining three quarters of 2026, and forecasts that Engage Labs' revenue growth will accelerate as the company's global market footprint unlocks further growth potential. No explicit numerical revenue or profit guidance was provided, and no upward or downward revision to prior full-year targets was announced.

Segment performance

Total company revenue for Q1 2026 was RMB 93.3 million, a 5% year-over-year increase. 1. Developer Services (contributes ~76.7% of total revenue): - Total segment revenue grew 15% year-over-year to approximately RMB 71.6 million, down 6% quarter-over-quarter. - Developer Subscription Services (core business): Revenue hit a record high of RMB 64.9 million, up 21% year-over-year and 5% quarter-over-quarter. Net dollar retention rate for the trailing 12 months was 103%, marking the third consecutive quarter above 100%. - Value-Added Services: Revenue was RMB 6.7 million, down 53% quarter-over-quarter, due to the absence of major seasonal e-commerce shopping festivals in Q1. - Engage Labs (global flagship product within this segment): As of March 2026, ARR reached $11.7 million, up 172% year-over-year. Q1 2026 recognized revenue was RMB 24 million, up 210% year-over-year. Cumulative signed contract value through Q1 2026 was RMB 185 million, with RMB 28 million in new contracts signed in Q1. Total global customers grew 120% year-over-year to 1,864, with 223 new customers added in Q1. 2. Vertical Applications (contributes ~23.3% of total revenue): - Total segment revenue declined 19% year-over-year, with both year-over-year and quarter-over-quarter decreases. - Financial Risk Management: Revenue decreased 18% year-over-year and 29% quarter-over-quarter, facing headwinds from recent Chinese financial industry regulatory updates. - Market Intelligence: Revenue increased 3% quarter-over-quarter but decreased 25% year-over-year, in line with management expectations, due to weak demand for Chinese APP data.

Risks & headwinds

- Seasonal headwinds: Q1 is inherently a slow business quarter in China due to the long Chinese New Year holiday, and advertising/value-added service revenue is pressured by the absence of major e-commerce shopping festivals, leading to lower marketing spending from brand clients - Regulatory headwinds: The financial risk management vertical business segment faces ongoing headwinds from recent regulatory updates in China's financial industry, which have softened customer demand - Macroeconomic headwinds: Broad macroeconomic weakness has reduced overall customer demand for vertical application products, particularly market intelligence services focused on Chinese APP data - Forward-looking statement risk: Actual future results may differ materially from management expectations due to unpredictable market and operating conditions, with additional risk factors detailed in the company's SEC filings

Analyst Q&A

• Q: Given the consistent positive operating and financial performance, including strong Engage Labs growth and consecutive profits, how should investors view Aurora Mobile for 2026 and beyond?

  A: Management stated that the consistent results prove the company's business model and execution capabilities are market-tested. They argue the company should be re-valued to reflect three core strengths: stable domestic core business that generates reliable cash flow, scalable global SaaS growth from Engage Labs that creates a clear long-term growth curve, and native AI integration that creates tech and valuation upside. Management notes the company should not be valued purely as a traditional infrastructure firm or single-function AI tool, but as a combined platform with synergy across global SaaS growth and AI innovation.

• Q: How much long-term growth headroom remains for Engage Labs, and how long can the current strong growth trajectory be sustained?

  A: Management explained that after three years of growth, the company still holds only a small fraction of the global market, leaving substantial multi-year growth room. Geographically, even in Southeast Asia (which generates 40% of Engage Labs revenue), the company is not yet market-dominant, and most other global regions (including APAC ex-SEA, Middle East, and Europe) remain largely untapped. Vertically, nearly all industries require user engagement and notification services, and the company has not achieved dominance in any vertical, creating massive untapped demand across the global market.

• Q: Why did overall year-over-year revenue and gross profit growth slow compared to Q4 2025?

  A: Management confirmed Q1 is a traditionally slow seasonal quarter, but the core developer subscription business still delivered strong 21% year-over-year growth to a new record high. The slowdown in overall growth comes from weakness in value-added services (due to seasonal advertising slowdown from lack of e-commerce shopping festivals and Chinese New Year holidays reducing marketing spend) and vertical applications (due to macroeconomic headwinds and regulatory changes impacting financial risk management demand). Management expects core business growth and Engage Labs expansion to accelerate over the rest of 2026.