Aurora Mobile CFO Shares Views on the Group's Gross Margin and Profits

SHENZHEN, China, Aug. 08, 2024 (GLOBE NEWSWIRE) -- Aurora Mobile Limited (NASDAQ: JG) (“Aurora Mobile” or the “Company”), a leading provider of customer engagement and marketing technology services in China, today released a summary of an interview of its Chief Financial Officer, Mr. Shan-Nen Bong with an overseas financial magazine.

Interview summary:

Interviewer: In the past four quarterly earnings reports, I noticed that your company's gross margin remained between 65% and 72%. This is a fairly high level. Could you explain the main reasons for this high gross margin?

Mr. Shan-Nen Bong: There are several driving factors behind this. First, we have adjusted our revenue structure in terms of businesses, strategically reducing low-margin businesses and investing more resources in high-margin products & services, thereby improving our overall profitability. In the first quarter of 2024, our gross margin reached its highest level in two years. Second, in terms of expense management, we continued to implement strict budget management systems and cost control measures. While ensuring the quality of our services and the efficiency of our operations, we have been actively controlling various costs and expenses. In the first quarter, our total operating expenses decreased by 18% year-over-year, a historically low level since our IPO. Finally, the overseas market is becoming an important growth driver for our profitability. We started our overseas expansion in 2022. Overseas contract revenues recognized in the first quarter increased more than 10X year-over-year, fully validating our overseas strategy. Going forward, we will continue to pursue opportunities in the overseas market and actively expand our overseas footprint to achieve broader growth and development.

Interviewer: How does the company's gross margin compare to your peers and overseas companies?

Mr. Shan-Nen Bong: We are pleased to note that our gross margins for 2021 and 2022, which were 74.1% and 68.7%, respectively, are higher than the average level of Chinese SaaS listed companies, according to Ernst & Young's report of Financial Performance Review and Future Outlook of Chinese Enterprise SaaS Listed Companies in 2022 (the "Report"). For SaaS companies listed on the A-share market, the average gross margins for 2021 and 2022 were 60.3% and 57.8%, respectively, according to the Report. For SaaS companies listed on the Hong Kong stock market, the average gross margins for 2021 and 2022 were 56.9% and 53.6%, respectively. For SaaS companies listed on U.S. stock exchanges, the average gross margins for 2021 and 2022 were 65.2% and 57.8%, respectively.