Aurora Mobile Q3 2026 Earnings Call Transcript

Aurora Mobile (NASDAQ:JG) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Aurora Mobile Limited reported a record Q3 2026 performance, with SaaS revenue exceeding RMB 100 million for the fourth time, driven by strong developer subscription revenue and the success of EngageLab.

The company’s gross profit increased by 11% year over year to RMB 71 million, marking the highest level since transitioning to a pure SaaS model in Q1 2021. The company also achieved its sixth consecutive quarter of US GAAP net profit.

Aurora Mobile is expanding internationally with an asset-light strategy in Southeast Asia and North Asia, which contributed 34% of Q3 revenue. The company also signed a strategic MOU with Exabyte for regional business growth.

Despite a decrease in Vertical Applications revenue, the company maintained strong operational metrics, including a net dollar retention rate of 106% and a deferred revenue balance at an all-time high of RMB 185.2 million.

The company revised its full-year 2026 revenue guidance downward to RMB 405-415 million, citing challenges in the financial risk management sector, but remains optimistic about long-term growth and shareholder value.

Full Transcript

OPERATOR (Moderator)

Ladies and gentlemen, thank you for standing by and welcome to Aurora Mobile Fourth Quarter 2026 conference call. At this time, all participants are in listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.

Please be advised that today’s conference is being recorded, and I’d like to hand the conference over to your host today, Christian Arnel. Thank you. Please go ahead, sir.

Christian Arnel

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.aurora-mobile.com. On the call today are Mr. Weidong Luo, Chairman and Chief Executive Officer, Mr. Shan-Nen Bong, Chief Financial Officer, and Mr. Guang Yanchen, 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 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 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 call over to Mr. Luo. Please go ahead.

Weidong Luo (Chief Executive Officer)

Thanks, Christian. Hi everyone. Welcome to Aurora Mobile 2026 third quarter earnings call. Before I comment on our Q3 results, I would like to remind everyone that we have uploaded the quarterly earnings deck on our IR. You may refer to the deck as we proceed with the call today. I am very pleased with the very strong quarter that we have delivered. The suitable description that I would give to the third quarter of 2026 is a quarter of broad-based record performance. Let me share more with you all on the great quarter we have had. Our achievements in the third quarter of 2026 are as follows. Firstly, for the fourth time in our history we recorded SaaS revenue in excess of RMB 100 million in a single quarter. We now have back-to-back quarter revenue of more than RMB 100 million.

More importantly, this quarter revenue was at the highest level since we transitioned to pure SaaS model in Q1 of 2021. Secondly, our core developer subscription revenue of RMB 77 million reached the highest number in Aurora’s history. Thirdly, our global flagship product EngageLab recorded highest quarterly revenue of RMB 29.5 million since its introduction where it grew 124% year over year. Fourthly, gross profit grew by 11% year over year to RMB 71 million, reached new high since Q1 of 2022.

In this quarter we delivered the six consecutive quarters of U.S. GAAP net profit. This quarter’s net profit was also at the highest level since transition to pure SaaS model in Q1 of 2021. For cash flows, operationally, we brought in net cash inflow of RMB 6.6 million this quarter. This quarter marks an important inflection point for Aurora, validating years of disciplined transformation into a pure SaaS business. Our team’s execution has unlocked a new higher revenue run rate anchored by our foundational developer subscription business and complemented by rapid traction in EngageLab, our global flagship offering. Growth is no longer concentrated in a single stream. We are building two powerful recurring revenue pillars with improving growth profitability.

Equally meaningful is our consistent track record of profitability. Six consecutive quarters of U.S. GAAP net profit with net profit at a post-transition high demonstrates that our SaaS operating model is self-sustaining. These results are not episodic wins. They reflect rising customer adoption, strong retention dynamics and the operational discipline we have embedded across the organization. We believe this foundation positions us well to capture further global opportunity and deliver long-term value to our shareholders.

Let me now share more on the business aspect. Our total Q3 group revenue reached RMB 106.5 million representing a strong 17% year over year growth. We now have two consecutive quarters of revenue north of RMB 100 million. Not only that, RMB 106.5 million revenue also marks the highest revenue level since we transitioned to pure SaaS model. This is very encouraging and a big thank you to the teams who made this possible. A few key messages that I think are important that I share with you all today.

Firstly, two consecutive quarters of revenue exceeding RMB 100 million with Q3 group revenue of RMB 106.5 million, up 17% year over year, establishes a sustained higher run rate and represents our peak revenue level since completing the pure SaaS strategic transformation. Secondly, our growth profile is strengthened by record recurring core developer subscription revenue and rapid traction of EngageLab, our global flagship product, reinforcing our dual-engine growth strategy and expanding our high-margin recurring revenue base.

Thirdly, measured asset-light overseas expansion across key Asian markets is diversifying our revenue mix, complementing domestic momentum and opening new long-term avenues for scalable SaaS adoption. Fourthly, expanding revenue scale paired with improved gross profitability extends our streak of U.S. GAAP net profit, demonstrating rising operating leverage and validating our execution toward consistent profitable growth for shareholders. In this quarter, Developer Services recorded a strong 37% revenue growth year over year, but Vertical Applications revenue decreased year over year. Developer Services revenues, which consist of subscription service and value-added services, delivered excellent performance. In this quarter, our core business Developer Subscription Services delivered its best quarterly revenue number of RMB 77 million, representing growth of 34% year over year and 9% quarter over quarter.

The year over year and quarter over quarter revenue growth was mainly driven by increases in both customer number and ARPU. The very strong Q3 developer subscription revenue growth was mainly fueled by our global flagship product EngageLab. Let me take a moment here to recap the mission we had when launching EngageLab back in late 2022. EngageLab was created to address our customers’ main need of reaching out and engaging with their users in a cost-efficient and effective way. Through EngageLab, our customers can reach and engage with their users through any one or all of the following messaging channels, such as App Push, Web Push, Email Service, SMS Service, WhatsApp Business API and OCP.

We have also made substantial foundational investments on the technical front to underpin our global solution delivery for customers. To reliably power our cross-border SaaS offerings, we have built out our global data infrastructure footprint. Our platform maintains leading international security and privacy certifications including ISO 27001, ISO 27701 and SOC 2, which provide robust assurance around information security and data privacy for our worldwide customer base.

In this quarter, the highlights of EngageLab business include: firstly, EngageLab won additional RMB 32.8 million worth of new contracts in this quarter alone. In our view, EngageLab’s addressable market remains sizable and largely underpenetrated. We see a long growth runway ahead for the product with sustained expansion expected across many quarters to come. Secondly, the EngageLab customer number has exceeded 2,430 as of September 30, 2026. This represents a very strong 86% growth year over year.

Global customers are continuing to sign up and switch to EngageLab. Thirdly, the recognized revenue for EngageLab in Q3 2026 reached RMB 29.5 million, representing an outstanding 124% growth year over year. Within subscription revenue, some of the notable wins in this quarter include, but are not limited to, Tesla China, Kai Tak Sports Park, Bilibili and CITIC Bank. Value-added services revenues were RMB 11.1 million, up 21% quarter over quarter and up 57% year over year. The year over year and quarter over quarter spike was mainly attributable to increased ad spending by our customers in this quarter.

Let me switch gear here. I think it is time now to give an update on our overseas expansion progress. We continue to advance our major global expansion across key Southeast Asian and North Asian markets. With established local presence in Hong Kong, Malaysia, Thailand, Singapore and Japan, overseas markets now represent a meaningful and growing component of our business. As mentioned above, contributing approximately 34% of the group’s total revenue in Q3.

Our go-to-market model for international growth blends direct sales teams supported by our on-the-ground local talent alongside strategic partnerships with regional ISVs and SIs. This hybrid approach balances market penetration with capital discipline. It allows us to build local market expertise, customer trust and channel reach without the burden of large upfront fixed investments in each new territory. We view this partnership-led, asset-light expansion framework as a sustainable blueprint to scale our pure SaaS offerings across new geographies, diversify our revenue base and capture the rising demand for our developer tools and EngageLab customer engagement solutions worldwide.

Advancing our asset-light global playbook, in August we entered a three-year strategic MOU with Southeast Asia-based Exabyte to market our EngageLab Omnichannel Engagement and GPT Bots AI Enterprise AI Agent solutions across the region. By pairing our enterprise-ready AI technology stack with Exabyte’s broad local business ecosystem, we aim to solve real-world AI execution challenges for regional enterprises, expanding our international addressable market and reinforcing overseas revenue diversification.

Alongside our direct sales operations in Hong Kong, Malaysia, Thailand, Singapore and Japan, I expect this partnership to generate positive commercial traction and support our longer-term growth in Southeast Asia. And of course we will continue to review this strategy and we will make the necessary tweak to adapt to the ever-changing international business landscape. 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.

Shan-Nen Bong (Chief Financial Officer)

Thanks, Chris. And next I’ll go over the revenue for vertical application that includes financial risk management and market intelligence. Overall, vertical application revenue decreased year over year and quarter over quarter, and within vertical application, financial risk management revenue decreased 36% year over year and 19% quarter over quarter, and it is important to note that market conditions remain difficult. Against this backdrop, the team is making deliberate adjustments across our go-to-market model and the related strategy to recapture the market.

The customers that we sign up or renew in Q3 include, but are not limited to, Sendu, Inhang, and many more licensed credit or financial institutions throughout China. And market intelligence revenue — we’re very encouraged by the improvement in this quarter, where it recorded revenue increase of 18% year over year and 6% quarter over quarter, and this was mainly benefited from the increase in customer demand. Coming on to other P&L items, our gross profit recorded another strong Q3 quarter with 11% year over year and 2% quarter over quarter growth to Renminbi 70.9 million. This Renminbi 70.9 million gross profit marked a new high since Q1 of 2022.

The sequential gross profit growth is particularly encouraging. It signals that profitability gains are not one-off, but they are also being sustained as our revenue run rate steps up. This enlarged gross profit pool strengthens our financial optionality to pursue high-return growth opportunity across domestic and overseas markets. This further confirms that our SaaS business is maturing into a more profit-generating operation. Building on the positive momentum we established starting in Q1 2026, we extended our streak of US GAAP profitability to six consecutive quarters. Net profit for the quarter reached 4.5 million, marking the strongest bottom-line results in Aurora Mobile history, and this sustained run of profitability is meaningful beyond a single quarter’s result. It demonstrates that our SaaS operating model has matured into one that can consistently generate positive earnings.

It enhances our internal cash-generating capacity and it reduces our reliance on external capital to fund operations. Secondly, it also gives us greater confidence to continue investing selectively in high-potential growth priorities while maintaining financial discipline, and delivers tangible proof that our multi-year transformation is creating predictable value for shareholders. And in this quarter, performance reflects a well-balanced execution across the business, with strength flowing from the top-line revenue expansion all the way through to sustained bottom-line profitability and onto operating expenses. The Q3 OpEx was at Renminbi 68.1 million, up 1% quarter over quarter and 6% year over year. The OpEx came in line within our forecast and we are very comfortable with the current spend level. I’ll now dive deeper into the individual OpEx categories.

R&D expenses increased by 17% year over year to Renminbi 30.2 million, mainly due to higher staff costs and associated expenses. Technical service fees also contributed to the year over year increase. Selling and marketing expenses increased by 9% year over year to Renminbi 29 million, mainly due to higher staff costs driven by overseas business expansion. And G&A expenses decreased by 24% year over year to Renminbi 9 million, mainly due to the decrease in bad debt provision resulting from the improved collection efficiency and the reduction in other personnel-associated costs.

Next, I’ll share four very important KPIs that we closely monitor. Our net dollar retention rate, a commonly used KPI for SaaS companies, stood at 106% for our core developer subscription business for the trailing 12 months period ended 9-30-2026, and we recorded back-to-back NDR of 106%, which is the highest NDR to date, and this metric is a compelling indicator of the loyalty and the engagement within our existing customer base. This record NDR reflects robust product stickiness, deeper consumption from our installed account, and the effective upsell and cross-sell motion within the customer that we have.

And although NDR may naturally shift period over period due to the individual renewal timing and customer circumstances, we view this milestone as encouraging, and we remain focused on preserving strong retention dynamics going forward. Secondly, another financial KPI for tracking the performance of SaaS companies is total deferred revenue, and this represents cash collected in advance from our customers for future contract performance, and it stood at Renminbi 185.2 million as of 9-30-2026, and this balance surpassed the prior quarter and is the historic high balance in our history. This high-quality reservoir of prepaid customer commitments provides enhanced predictability of our forward revenue pipeline and bolsters our cash position as customer prepayments are received in advance.

Thirdly, we continue to maintain a healthy level of AR turnover days at 36. I believe this is an industry-leading low number that we are very proud of. This efficient collection cycle preserves strong working capital flexibility and reduces exposures to credit risk across our customer base. And onto cash flow, another important financial KPI for us to manage the business. For the quarter ended September 30th, 2026, we recorded net operating activities cash inflow of Renminbi 6.6 million, and this positive operating cash inflow underscores the quality of our earnings and gives shareholders added assurance that our profit stream is cash-backed and sustainable.

And let us now recap on a quarter of broad-based record performance commentary at the beginning of this call. In the third quarter of 2026, we achieved another quarter of US GAAP net profit, and this marks a streak of six consecutive quarters of net profit, and our business has proven to be able to return GAAP profit consistently quarter over quarter; and second-highest quarterly revenue of Renminbi 106.5 million post-transition to pure SaaS; and our core developer subscription services recorded the highest revenue of 77 million in history.

It is simply fantastic, and our global flagship product EngageLab recorded the highest revenue quarter since its launch. In this quarter, EngageLab contributed more than one-third — 38% to be precise — of our core developer subscription revenue, and equally important was EngageLab’s revenue, which increased by 124% year over year; gross profit grew by 11% year over year and quarter over quarter to a new high since Q1 of 2022; and our NDR for core developer services at back-to-back record high of 106%; and we have a net cash inflow of Renminbi 6.6 million reported from operating activities. Indeed, this quarter delivers an exceptionally strong set of financial results, and the results are not accidental. They stem from sound strategic choices, disciplined operational decisions, and consistent execution across the organization.

And our financial performance is a direct reflection of the collective hard work and the realignment from every part of our team, and we drove meaningful top-line growth this quarter, which paired with favorable profitability dynamics, lifted gross profit to a new post-Q1 2020 high, and this operational strength flowed through to our bottom line and delivered our highest net profit since adopting the pure SaaS model in Q1 of 2021. And with this proven operating model in place, we enter the next phase with confidence in our long-term growth prospect.

And next is the Business Outlook Update, and we are revising our full year 2026 revenue guidance from a range of 450 million Renminbi to 480 million Renminbi to a range of Renminbi 405 million to 415 million, representing year over year growth of approximately 8% to 11%, and the revision primarily reflects revenue from our financial risk management business, which came in below our expectation. And this shortfall was driven by the continued adjustment underway in the China consumer credit and loan facilitation industry.

As regulatory requirements continue to be implemented in greater depth, financial institutions and loan facilitation platforms have further adjusted their product offering, their pricing, customer mix, and business scale, and certain customers have tightened their new credit origination and taken a more prudent approach to business budgeting, which in turn has affected demand for related data and technology services. And we have previously expected customer demand to gradually stabilize following the industry adjustment.

However, the depth and duration of the adjustment have exceeded our expectation, and the above outlook is based on the current market condition and reflects the company’s current and preliminary estimate of the market, operating conditions, and customer demands, which are all subject to change. And lastly, before I conclude, I’ll give a quick update on the share repurchase plan. In the quarter ended September 30, 2026, we repurchased 99,000 ADS. Cumulatively, we have repurchased a total of 585,000 ADS since the start of our repurchase program. And this concludes our prepared remarks, and we are happy to take your question now. Operator, please proceed.

OPERATOR (Moderator)

Thank you. To ask a question now, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. And our first question comes from the line of Kelvin Wong of Spica Capital. Please go ahead, Kelvin, your line is open.

Kelvin Wong (Analyst)

Good evening. Thank you for taking my question, and congrats to you, management. Indeed, today’s Q3 earnings reflected a very solid quarter. So could management elaborate more on the key actions and strategic choices that helped deliver such strong set of results?

Shan-Nen Bong (Chief Financial Officer)

Thank you, Kevin. Good to hear from you again, and thanks for the question and the quarter’s results. You are right, it did not come from a single one-off factor. They are the cumulative outcome of consistent, disciplined execution that we have done over the past few years, and I can elaborate more. Firstly, I think we stayed focused on growing our high-quality recurring revenue foundation, and we continued to invest in our core developer subscription offering. We deepened the engagement with existing enterprise customers while we expanded our installed base, and we delivered record subscription revenue in this quarter. In parallel to that, we have also prioritized EngageLab as our global flagship product, refining the product capability and go-to-market motion, and that focus is now translating into larger contract wins and rapid year-over-year growth for the product.

Secondly, I think our overseas expansion strategy has been deliberate and capital efficient. As Chris mentioned earlier during the call, we adopted a hybrid model of combining a direct local team in key Asian markets together with trusted ISV and SI partners, and this asset-light approach let us gain local market access without heavy upfront investment. The international revenue is now a meaningful and growing part of our group revenue and inching close to the 20–30% mark this quarter.

We also built the necessary global data infrastructure and maintained the critical security and privacy certifications to earn enterprise customer trust across the border. And third, I would say we have maintained tight operational discipline along targeted growth investment. We continuously optimize our product mix and cost structure to expand gross profit, which reached the highest level since Q1. Leverage paired with our focused revenue quality has allowed us to extend our streak of US GAAP profitability. We are careful in where we deploy resources even amid the challenging external environment, and we are doubling down on the highest return opportunities while managing our risk carefully.

We are very hopeful, and we are very confident in the future execution. Hello?

OPERATOR (Moderator)

Hello. Thank you. Do you have a further question, Kelvin?

Kelvin Wong (Analyst)

I’m fine. Great, thanks.

OPERATOR (Moderator)

Can you hear me? Thank you, Mr. Bong. And our next question comes from the line of Marco Zhang of Gelonghui Research. Please go ahead. Marco, your line is open. Marco, your line is open. Please proceed with your question. Marco, please unmute and proceed with your question. Your line is open.

Marco Zhang (Analyst)

Hi, can you hear me?

OPERATOR (Moderator)

Yes, I can. Please proceed.

Marco Zhang (Analyst)

Yes, hi, this is Marco from Gelonghui. Is the management still there? Because I got disconnected earlier.

OPERATOR (Moderator)

Yeah, I can hear you.

Marco Zhang (Analyst)

Hi. Hi. Yeah, sorry. Congrats on the results. So we observed our share price faced downward pressure in Q2 of this year before staging a meaningful recovery through Q3. Could you walk us through the key drivers behind this share price volatility and what catalysts lie ahead that may support continued positive momentum?

Shan-Nen Bong (Chief Financial Officer)

Hey. Hi, Marco. This is a tough question. Give it a few seconds. Let me just pull the data that you mentioned. Okay. I’ll just take the average 20-day share price prior to the Q2 earnings release versus the Q3. If I look at the numbers right now in front of my screen, the average 20-day share price prior to the Q2 earnings release was $5.18, and the average 20-day share price prior to today’s earnings release was $7.03. Indeed, the share price has moved 36% between the two earnings releases.

I think it’s important to separate share price performance from underlying business fundamentals, because the two diverged in Q2. I think the pullback reflects the broader market sentiment rather than weakness within our operation. As a smaller-cap name with limited trading liquidity and limited analyst coverage, I think our stock price remains sensitive to the prevailing mood towards Chinese equity. When we released our Q2 earnings, we delivered 32% growth — that was last quarter’s numbers — revenue and further traction across Japan and Southeast Asia, our ongoing buyback activity, and an extended track record of consistent profitability. The last point carries particular significance, and a number of institutional investors have requirements around sustained profitability before they can initiate positions. So each additional profitable quarter that we have expands our potential investor base, and with the strong Q3 numbers that we are sharing today, we are further reinforcing this proof point.

We have now delivered back-to-back 100-million-quarter revenue. We have multiple new business record highs, and we extended our US GAAP net profit streak to 6 quarters, at the highest level since we transitioned to a pure SaaS transition. And we do believe that with this set of Q3 financials that we released today, more and more investors will look at us and will follow us closely. I hope this answers your question, Marco.

OPERATOR (Moderator)

Thank you. I am showing no further questions. I’ll now turn the conference back to Christian for his closing comments.

Christian Arnel

This concludes the call and management’s prepared remarks. Pardon me. Excuse me. This concludes the call and management’s prepared 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. Thank you. Very nice. Thank you very much and have a good night.

OPERATOR (Moderator)

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

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.