Aurora Mobile Ltd (JG) 2023 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Aurora Mobile Second Quarter 2023 Earnings Conference Call. At this time, all participants are a listen-only mode. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host for today, Rene Vanguestaine. Thank you. Please go ahead, sir.

女士們、先生們，感謝大家的支持，歡迎參加 Aurora Mobile 2023 年第二季財報電話會議。此時，所有參與者都是只聽模式。 （操作員指示）請注意，今天的會議正在錄製中。現在我想將會議交給今天的東道主雷內·範格斯坦。謝謝。請繼續，先生。

Thank you, Michelle. Hello, everyone, and thank you for joining us today. Aurora's earnings release was distributed earlier today and is available on the IR website at https://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.

謝謝你，米歇爾。大家好，感謝您今天加入我們。奧羅拉 (Aurora) 的財報已於今天稍早發布，可在投資者關係網站 https://ir.jiguang.cn 上查閱。今天參加電話會議的是董事長兼執行長羅衛東先生；邦善能先生，財務長；陳光彥先生，總經理。

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.

在準備好發言後，他們將在接下來的問答環節回答您的問題。在開始之前，我想提醒您，本次電話會議包含經修訂的 1934 年證券交易法第 21E 條含義以及 1995 年美國私人證券訴訟改革法案中定義的前瞻性陳述。前瞻性陳述基於管理層當前的預期以及當前的市場和經營狀況，這些預期很難預測，並可能導致公司的實際結果、績效或成就與前瞻性陳述中的結果有重大差異。

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'd now like to turn the conference call over to Mr. Luo. Please go ahead.

有關這些和其他風險、不確定性和/或因素的更多資​​訊包含在該公司向美國證券交易委員會提交的文件中。除適用法律要求外，本公司不承擔因新資訊、未來事件或其他原因而更新任何前瞻性聲明的義務。現在我想把電話會議轉給羅先生。請繼續。

Thanks, Rene. Good morning, and good evening, everyone. Welcome to Aurora Mobile's 2023 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 to the deck as we proceed with the call today. Coming off from our seasonal slow Q1 quarter, we managed to achieve a few good results sequentially in this quarter. Overall, we did see signs of recovery on most of the business lines within the quarter. However, they are not back to the level a year ago. During Q2 of 2023, we did a few things right.

謝謝，雷內。大家早安，晚上好。歡迎參加 Aurora Mobile 2023 年第二季財報電話會議。在評論我們第二季的業績之前，我想提醒大家，季度收益報告可以在我們的投資者關係網站上找到。當我們今天繼續通話時，您可以參考該牌組。擺脫第一季季節性放緩的影響，我們在本季連續取得了一些不錯的業績。總體而言，我們確實在本季內看到了大多數業務線的復甦跡象。然而，他們並沒有回到一年前的水平。 2023 年第二季度，我們做了一些正確的事。

Firstly, we continued to expand our Subscription business with the help of our engagement products operating overseas. I will share more on our engagement business at a later part. Secondly, our value-add distributed business recorded impressive sequential revenue growth. Further, our vertical application business recorded solid growth. Last but not least, we continue to control our expenses throughout the organization.

首先，我們藉助海外營運的互動產品繼續拓展訂閱業務。我將在稍後的部分分享更多關於我們的訂婚業務的資訊。其次，我們的加值分散式業務錄得令人印象深刻的連續收入成長。此外，我們的垂直應用業務錄得穩健成長。最後但並非最不重要的一點是，我們繼續控制整個組織的開支。

With this as the backdrop, here are the good financial results that I would like to share with you. Total revenue grew 12% quarter-over-quarter. Gross profit grew quarter-over-quarter to RMB 47.7 million. Lowest adjusted operating expenses since IPO at RMB 54.6 million. Lowest operating expenses since IPO at RMB 54.1 million. AR turnover days at 37 days improvement year-over-year and quarter-over-quarter. Deferred revenue balance above RMB 130 million for the past 6 consecutive quarters.

在此背景下，我想與大家分享一些良好的財務表現。總收入較上季成長 12%。毛利季增至人民幣4,770萬元。調整後營運費用為首次公開募股以來的最低水平，為人民幣 5,460 萬元。營運費用為 5,410 萬元人民幣，創 IPO 以來最低水準。 AR 週轉天數與去年同期相比均有所改善，為 37 天。遞延收入餘額連續6季超過1.3億元。

Now, let me go through our different revenue streams. Developer Services revenue decreased 6% year-over-year, mainly due to the weakness in the value-added services, offset by the 6% growth in subscription services. However, Developer Services revenue grew solid by 15% quarter-over-quarter where both Subscriptions and Value-added-services have recorded sequential revenue growth.

現在，讓我介紹一下我們不同的收入來源。開發者服務收入年減 6%，主要是由於增值服務疲軟，但被訂閱服務 6% 的成長所抵消。然而，開發者服務收入較上季成長 15%，其中訂閱和增值服務收入均較上季成長。

Subscription Services revenue were RMB 40.5 million, up 6% year-over-year, mainly driven by increasing ARPU. Similarly, with record revenue growth of 8% quarter-over-quarter with the growth in ARPU between the quarters. Some of the notable new and renewal customers in this quarter include but not limited to (inaudible).

訂閱服務收入為人民幣4,050萬元，較去年成長6%，主要受到ARPU成長的推動。同樣，隨著各季度之間 ARPU 的成長，營收季增 8%，創歷史新高。本季一些值得注意的新客戶和續訂客戶包括但不限於（聽不清楚）。

Value-added-services revenues were RMB 11.5 million, decreased by 32% year-over-year which was a result of weak advertising demand. However, we did manage to record a good sequential revenue growth of 45% quarter-over-quarter. This was mainly due to our ability to capture a good portion of the eCommerce advertising spending for the 6/18 online shopping festival. However, we remain cautious on the revenue growth in the online advertisement market.

增值服務收入為人民幣1,150萬元，較去年同期下降32%，這是由於廣告需求疲弱所致。然而，我們確實實現了季度環比 45% 的良好連續收入成長。這主要是因為我們能夠獲得 6/18 網購節電子商務廣告支出的很大一部分。然而，我們對網路廣告市場的收入成長仍持謹慎態度。

Next, let me give you some updates on our overseas EngageLab product. As I shared in the pre-quarter earnings release, we now have the data center across the global catering for customers in different regions and continents. As we expand our footprint globally, we have signed up more international customers. Our investment in technology innovation and building global infrastructure have paid off.

接下來我來跟大家介紹一下我們海外EngageLab產品的最新狀況。正如我在季度前財報中分享的那樣，我們現在擁有遍布全球的資料中心，為不同地區和大洲的客戶提供服務。隨著我們在全球擴大業務，我們已經簽約了更多的國際客戶。我們對技術創新和建設全球基礎設施的投資已獲得回報。

As of now, we have global customers coming from 12 different countries and regions, including Hong Kong and Taiwan. Per our discussion with these overseas customers, they selected our service mainly due to the following reasons: one, reliable and stable service delivery to strengthen data security and compliance, free local data centers across the world. Let me share some other impressive metrics here in Q2. Our EngageLab business segment signed contract value was at 21% of the total new contract value for the group. This number has grown 3x between the quarters showing great momentum.

截至目前，我們擁有來自香港、台灣等12個不同國家的全球客戶。根據我們與這些海外客戶的討論，他們選擇我們的服務主要是因為以下原因：一、可靠穩定的服務交付，加強資料安全性和合規性，免費的全球本地資料中心。讓我在第二季分享一些其他令人印象深刻的指標。我們的 EngageLab 業務部門簽署的合約價值佔集團新合約總額的 21%。這個數字在兩個季度之間增長了 3 倍，顯示出強勁的勢頭。

In addition, we have also seen great overseas e-mail and SMS volume growth. In Q2, the total overseas e-mail request volume was at 3.3 billion, representing 4.2x of our domestic e-mail request volume. Overseas e-mail and SMS request volumes have recorded 19% and 90% growth between the quarters. Our EngageLab business activity is gradually growing in importance for both transaction and contract value contributions. Therefore, I'm very confident on the progress of our overseas business expansion strategy that we have started a year ago. I believe we will -- we have the benefit of this overseas effort in the near future.

此外，我們也看到海外電子郵件和簡訊量的大幅成長。第二季度，海外電子郵件請求總量為 33 億次，是國內電子郵件請求量的 4.2 倍。海外電子郵件和簡訊請求量在兩個季度之間分別增加了 19% 和 90%。我們的 EngageLab 業務活動對於交易和合約價值貢獻的重要性正在逐漸增長。因此，我對我們一年前開始的海外業務擴張策略的進展非常有信心。我相信我們會在不久的將來從這項海外努力中受益。

With that, I will now pass the call over to Shan-Nen, who will share more information on the vertical application and other aspects of our financial performance for this quarter.

現在，我將把電話轉給 Shan-Nen，他將分享更多有關垂直應用程式以及我們本季財務表現其他方面的資訊。

Thanks, Chris. Just to recap, Vertical Applications mainly consists of financial risk management and market intelligence. In this quarter, Vertical Applications recorded revenues growth on both year-over-year and quarter-over-quarter basis. For Financial Risk Management, revenue grew year-over-year and quarter-over-quarter. This was positively impacted due to ARPU growth between the periods.

謝謝，克里斯。回顧一下，垂直應用主要包括金融風險管理和市場情報。本季度，垂直應用的營收年增和季比均實現成長。對於財務風險管理，收入同比和環比增長。由於各時期之間的 ARPU 增長，這受到了積極影響。

In Q2 of 2023, we have seen customer consumption or purchase of our services increased, thus pushing the ARPU quarter-over-quarter. Apart from customers increased their consumption, we managed to sign up more customers such as (inaudible). As for Market Intelligence, the revenue remained stable year-over-year and quarter-over-quarter.

2023 年第二季度，我們看到客戶消費或購買我們的服務增加，推動 ARPU 環比成長。除了客戶增加消費外，我們還成功簽約了更多客戶，例如（聽不清楚）。市場情報方面，收入較去年同期維持穩定。

I'll now go through some of our key expenses and balance sheet items. Onto operating expenses. I'm again very pleased to share with you that in Q2 2023, we have yet another record low quarterly OpEx at RMB 64.1 million. For year-over-year comparison, OpEx decreased by 27%, where all 3 categories of OpEx being research and R&D, S&M and G&A, all recorded reduction between the periods. This is critically important for us to maintain our OpEx at optimal level. This is the reason why we are able to record a 42% year-over-year improvement in adjusted EBITDA when the revenue dropped by 4% year-over-year. We strive to continue to tightly monitor and control our OpEx now and going forward.

我現在將介紹一些主要費用和資產負債表項目。到營運費用。我很高興再次與您分享，2023 年第二季度，我們的季度營運支出再次創下歷史新低，為人民幣 6,410 萬元。與去年同期相比，營運支出下降了 27%，其中研究與研發、S&M 和 G&A 這 3 個類別的營運支出均在不同期間出現下降。這對於我們將營運支出維持在最佳水平至關重要。這就是為什麼在營收年減 4% 的情況下，我們的調整後 EBITDA 卻年增 42%。我們現在和未來都努力繼續嚴格監控和控制我們的營運支出。

I will now go through the individual OpEx category. In particular, R&D expenses decreased by 26% year-over-year to RMB 30.2 million, mainly due to lower headcount that reduced salary costs and associated share-based compensation and a decrease in depreciation expenses as a result of, first, no longer needing as many servers due to our ongoing cloud initiatives. Selling and marketing expenses decreased by 14% year-over-year to RMB 20 million, mainly due to the decrease of headcount by [30]. G&A expenses decreased by 41% year-over-year to RMB 13.9 million, mainly due to a RMB 2.5 million decrease in personnel costs and RMB 5.3 million decrease in professional fees.

我現在將介紹單獨的營運支出類別。其中，研發費用年減26%至人民幣3,020萬元，主要是由於人員數量減少導致工資成本和相關的股權激勵減少，以及折舊費用減少，因為首先，不再需要由於我們正在進行的雲計劃而有盡可能多的伺服器。銷售及行銷費用年減14%至人民幣2,000萬元，主要是因人員減少[30]。一般及行政費用較去年同期下降 41% 至人民幣 1,390 萬元，主要由於人員成本減少人民幣 250 萬元和專業費用減少人民幣 530 萬元。

As I mentioned earlier, as a result of our focus to drive OpEx at optimal level, the adjusted EBITDA improved significantly by 42% year-over-year to negative RMB 4.6 million.

正如我之前提到的，由於我們專注於將營運支出推向最佳水平，調整後的 EBITDA 年比大幅提高 42%，達到負 460 萬元。

On to the balance sheet. I will again share 2 very important KPIs that we closely monitor. We continue to maintain a healthy AR turnover days at 37 days. This was a huge improvement from a year ago where the AR turnover days was at 46 days. And we also shortened the AR turnover days quarter-over-quarter. In summary, our team has done a great job in this quarter to improve our cash collection and mitigating the AR doubtful debt risk.

到資產負債表上。我將再次分享我們密切監控的 2 個非常重要的 KPI。我們繼續保持 37 天的健康 AR 週轉天數。與一年前的 AR 週轉天數 46 天相比，這是一個巨大的進步。我們也季比縮短了 AR 週轉天數。總而言之，我們的團隊在本季在改善現金回收和降低 AR 可疑債務風險方面做得非常出色。

Secondly, one of the key 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. The balance continues to be at a high level of RMB 137.3 million. And this is the sixth consecutive quarter where our deferred revenue balance exceeded RMB 130 million. We continue to sign up new and renewal customers where they prepaid their fees in advance. This again, greatly improved our cash flow quarter-over-quarter.

其次，追蹤SaaS公司績效的關鍵財務KPI之一是遞延收入總額，它代表為未來合約履行而從客戶提前收取的現金。餘額繼續維持在人民幣1.373億元的高點。這是我們的遞延收入餘額連續第六個季度超過人民幣1.3億元。我們繼續簽約新客戶和續訂客戶，他們提前預付了費用。這再次大大改善了我們的現金流季度環比。

Next, total assets were RMB 371.9 million as of June 30, 2023. This includes cash and cash equivalents of RMB 81.1 million, accounts receivable of RMB 34 million, prepayments and other current assets at RMB 31.1 million, fixed assets at RMB 10.1 million, long-term investment of RMB 140.4 million, goodwill of RMB 37.8 million and intangible assets of RMB 20.9 million resulted from the SendCloud acquisition in March 2022.

接下來，截至2023年6月30日，總資產為人民幣3.719億元。其中現金及現金等價物人民幣8110萬元，應收帳款人民幣3400萬元，預付款項及其他流動資產人民幣3110萬元，固定資產人民幣1,010萬元，2022年3月收購SendCloud產生長期投資1.404億元人民幣、商譽3,780萬元人民幣及無形資產2,090萬元人民幣。

Total current liabilities were at RMB 235.8 million as of June 30, 2023. This includes short-term loan of RMB 5 million, accounts payable of RMB 22.2 million, current operating lease liability of RMB 7.3 million, deferred revenue of RMB 135.4 million, accrued liabilities of RMB 65.8 million.

截至2023年6月30日，流動負債總額為人民幣2.358億元。其中包括短期貸款人民幣500萬元、應付帳款人民幣2220萬元、當期經營租賃負債人民幣730萬元、應計遞延收入人民幣1.354億元。負債人民幣6580萬元。

And lastly, before I conclude, I'll give a quick update on the share repurchase plan. In the quarter ended June 30, 2023, we repurchased 443,000 ADSs. Cumulatively, we have repurchased a total of 1.83 million ADS since the start of our repurchase program. And this concludes management's prepared remarks. We're happy to take your call now.

最後，在結束之前，我將快速介紹股票回購計畫的最新情況。截至 2023 年 6 月 30 日的季度，我們回購了 443,000 股美國存託股。自回購計畫啟動以來，我們已累積回購了 183 萬股美國存託股。管理層準備好的演講到此結束。我們很高興現在接聽您的電話。

(Operator Instructions) Our first question comes from (inaudible).

（操作員說明）我們的第一個問題來自（聽不清楚）。

I would like to have 2 questions, if I may. The first question is related to your financials. Actually, it is great to see that your financials are recording continuous improvement every quarter. Like last quarter, we saw a sequential increase in revenue, sequential decrease in OpEx and sequential narrowing in negative adjusted EBITDA. So the question is very simple, what is the management expectation on turning into positive adjusted EBITDA? Is this something we will see like next quarter or in Q4 of this year?

如果可以的話，我想問兩個問題。第一個問題與您的財務狀況有關。事實上，很高興看到您的財務狀況每個季度都在持續改善。與上季一樣，我們看到收入環比成長，營運支出環比下降，調整後的 EBITDA 負值環比收窄。所以問題很簡單，管理階層對調整後的正EBITDA的預期是什麼？我們會在下個季度或今年第四季看到這種情況嗎？

And the second question is related to your EngageLab product. We actually see that you EngageLab products was making good progress overseas. So can management share more about the progress and how management is looking at this business and its growth path? So the first question is related to adjusted EBITDA. The second one is related to EngageLab product.

第二個問題與您的 EngageLab 產品有關。我們實際上看到你們的EngageLab產品在海外取得了良好的進展。那麼管理層能否分享更多有關進展以及管理層如何看待該業務及其成長路徑的資訊？所以第一個問題與調整後的 EBITDA 有關。第二個與EngageLab產品有關。

Sure, [Kevin], this is Shan-Nen. Let me take your call. Yes, you're right. Your observation is spot on. Yes, the financial KPIs, be it revenue growth, OpEx number or adjusted EBITDA are all improving sequentially. So as a company, we are very pleased with the effort made by the team throughout the organization over the few quarters. I guess our work is not done. We still need to make good progress on the revenue expansion. I think we need to moving customers -- moving into more customers or getting more customers in and outside of China and increasing the ARPU across the board.

當然，[凱文]，這是珊嫩。讓我接你的電話。你是對的。你的觀察很到位。是的，財務 KPI，無論是收入成長、營運支出或調整後的 EBITDA 都在連續改善。因此，作為一家公司，我們對整個組織的團隊在幾個季度中所做的努力感到非常滿意。我想我們的工作還沒完成。我們仍然需要在收入擴張方面取得良好進展。我認為我們需要轉移客戶——吸引更多客戶或在中國境內外吸引更多客戶，並全面提高 ARPU。

And secondly, I think we certainly cannot take our eyes of monitoring our expenses. But the market conditions are relatively volatile, as you know. So I believe we are in a great position through the hard work that we have put in for the past 6 or 8 quarters in the past year or 2. And the question you asked based on our current trajectory, we are cautiously optimistic that should everything goes according to our plan, we should be able to record positive adjusted EBITDA in Q4 of this year. But I guess, I still have to put a disclaimer, this is our best current estimate and is subject to market conditions.

其次，我認為我們當然不能不去監控我們的開支。但如您所知，市場狀況相對不穩定。因此，我相信，透過我們在過去一年或兩年的過去6 個或8 個季度的努力工作，我們處於有利位置。根據我們目前的軌跡，您提出的問題，我們持謹慎樂觀的態度，認為一切都應該發生。按照我們的計劃，我們應該能夠在今年第四季錄得正的調整後 EBITDA。但我想，我仍然需要聲明，這是我們目前最好的估計，並取決於市場狀況。

Nevertheless, I think should -- but there is still a possibility that we could turn adjusted EBITDA positive in Q3 should everything go according to plan or earlier than what we expected. So we'll see how we trend in Q3.

儘管如此，我認為應該——但如果一切按計劃進行或早於我們的預期，我們仍有可能在第三季將調整後的 EBITDA 轉為正數。所以我們將看看第三季的趨勢如何。

And the second question you asked about the EngageLab. Yes, I think you have heard what Chris said. We are very pleased with the progress with our EngageLab product. I guess a few things that we have done well. I think one is the fact that we have invested additional data center infrastructure around the world. This gives our overseas customers a great option to choose how and where they want to store their data that better suits their security and compliance needs. And of course, ensuring our service delivery is utmost important, we need to make sure that our services meet or even exceed customer expectations. We need to address all our customers concerns on a timely basis.

您問的第二個問題是關於 EngageLab 的。是的，我想你已經聽到克里斯說的話了。我們對 EngageLab 產品的進展感到非常滿意。我想我們在一些事情上做得很好。我認為其中之一是我們在世界各地投資了額外的資料中心基礎設施。這為我們的海外客戶提供了一個絕佳的選擇，可以選擇如何以及在何處存儲數據，以更好地滿足其安全性和合規性需求。當然，確保我們的服務交付至關重要，我們需要確保我們的服務滿足甚至超越客戶的期望。我們需要及時解決客戶的所有疑慮。

Therefore, whether the customer is based in Singapore or Australia or in China, we have to provide a consistent high-level quality -- high-quality services to all our customers around the globe. And also, I will give you an update on the latest. I guess, from -- based on the deck you have seen, our customers are coming from 12 countries and regions around the world. I was told earlier this week that we are now starting to process additional service in Mexico and Turkey.

因此，無論客戶是在新加坡、澳洲或中國，我們都必須為全球所有客戶提供一致的高水準品質—優質服務。另外，我也會向您通報最新情況。我猜，根據你看到的牌組，我們的客戶來自全球12個國家和地區。本週稍早我被告知，我們現在開始在墨西哥和土耳其提供額外服務。

So I guess, you can see our services are moving into new territories quarter-over-quarters. And therefore, we believe we have done many things right, for us to be able to venture outside of China, and we should continue to grow our overseas customer base every quarter. So this is my answer to your question, Kevin .

所以我想，您可以看到我們的服務逐季進入新的領域。因此，我們相信我們做了很多正確的事情，使我們能夠在中國境外開展業務，並且我們應該每個季度繼續擴大我們的海外客戶群。這就是我對你問題的回答，凱文。

Thank you for your comments on the positive adjusted EBITDA. It's very clear.

感謝您對正調整 EBITDA 的評論。非常清楚。

Our next question comes from Brian Kinstlinger with Alliance Global Partners.

我們的下一個問題來自 Alliance Global Partners 的 Brian Kinstlinger。

Great. The early success you're having overseas sounds great. I'm wondering if you can quantify the revenue impact during the second quarter and maybe put some context into how you expect this to ramp overseas in terms of revenue?

偉大的。你們在海外取得的早期成功聽起來很棒。我想知道您是否可以量化第二季的收入影響，並可能提供一些背景資訊來了解您預計這將如何在海外增加收入？

Brian, this is Shan-Nen. Right now, the contribution is not material as yet. But probably, as you know, based on our business model, one contract that we signed, the revenues really contribute on a monthly basis for the next 12 months. So -- but I guess the good thing that we have seen is like what Chris has said. Based on the new contract that we have signed in Q2, 20% of them is coming from overseas, and this has increased 3x from Q1. So you can see the trending of this so-called contract value contribution from overseas. So this is something that we are tracking. Maybe in the next quarter or 2, when the revenue contribution is material enough, we'll make a disclosure.

布萊恩，這是珊嫩。目前，貢獻還不是實質的。但正如您所知，根據我們的商業模式以及我們簽署的一份合同，未來 12 個月的收入可能確實按月貢獻。所以——但我想我們看到的好事就像克里斯所說的那樣。從我們第二季簽訂的新合約來看，其中20%來自海外，比第一季增加了3倍。所以你可以看到海外所謂的合約價值貢獻的趨勢。所以這是我們正在追蹤的事情。也許在下個季度或第二個季度，當收入貢獻足夠大時，我們將進行揭露。

Got it. And what is that. Can you share that contract value with us?

知道了。那是什麼。您能與我們分享該合約價值嗎？

Not the value. Yes, we are not in a position to disclose the value of the contract yet.

不是價值。是的，我們目前還無法透露合約的價值。

Great. And then on subscriptions, you saw higher ARPU. Is that pricing or more services for customers? And then do you see more opportunity for ARPU growth in the second half of the year? And if so, what drives that?

偉大的。然後在訂閱方面，您會看到更高的 ARPU。這是定價還是為客戶提供更多服務？那麼您認為下半年 ARPU 成長的機會更大嗎？如果是這樣，是什麼推動了這一點？

Yes. If any ARPU growth, that will come from overseas. And I think we have discussed before. I shared with you or other investors or analysts, the ARPU that we get from overseas is at least double of that of China. So with the contribution from overseas getting bigger, our ARPU certainly will have to go up.

是的。如果 ARPU 有任何成長，那將來自海外。我想我們之前已經討論過。我跟大家或其他投資人或分析師分享，我們從海外得到的ARPU至少是中國的兩倍。所以隨著海外的貢獻越來越大，我們的ARPU肯定要上去。

But if overseas was the material in the second quarter, what was the factor that drove higher ARPU in the second quarter?

但如果第二季的主要內容是海外，那麼推動第二季度 ARPU 上升的因素是什麼？

Yes, it's not material as yet, but it does help us on the ARPU between the quarters, because Q1 is always the low quarter for the year. So back to your question. Overall, we did see some pickup on the ARPU. But what I'm trying to say is the major contribution is coming from overseas, the ARPU growth.

是的，目前還不是很重要，但它確實對我們在季度之間的 ARPU 有所幫助，因為第一季始終是一年中的最低季度。回到你的問題。總體而言，我們確實看到 ARPU 有所回升。但我想說的是，主要貢獻來自海外，也就是 ARPU 的成長。

And then how much of the sequential revenue growth in value-added services was a result of capturing the ad spend on June 18 Shopping Festival. And then are there any other such festivals that we should think about in the second half of the year?

然後，增值服務的環比收入增長有多少是由於抓住了 6 月 18 日購物節的廣告支出的結果。那麼下半年還有哪些值得我們思考的節慶呢？

Sure. I would say majority of the value-added services revenue growth is from the 6/18 Festival. So if you look at going forward, in China, I think there are 2 big -- so-called big online e-commerce festivals, one is the 6/18 and the one is 11/11 in Q4. So having said that, which means that Q3 will likely to be a slower season compared to Q2 and Q4.

當然。我想說大部分增值服務收入成長來自6/18節日。因此，如果你展望未來，在中國，我認為有兩個大型的所謂大型線上電子商務節日，一個是 6/18，另一個是第四季的 11/11。話雖如此，這意味著與第二季和第四季相比，第三季可能會是一個較慢的季節。

Got it. Great. And lastly, while you guys have done a great job in managing expenses, the gross margin was at a multiyear low during the second quarter. What were the factors that drove that? And is that more of an anomaly? Or is it more of the new baseline for the company?

知道了。偉大的。最後，雖然你們在管理費用方面做得很好，但第二季的毛利率處於多年來的最低水準。是什麼因素推動了這一點？這是否更反常？或者它更多的是公司的新基準？

No, it's not a baseline. If you look at what we have in -- based on our current Q3 estimate, the gross margin is going to come up, is going to be higher than 65%. This is answer to the other question. And the first question you asked, the reason was simply because of the fact that the SMS-related revenue contribution was higher in the quarter because the SMS business, revenue tend to have a lower margin compared to other SaaS business because we have a kind of a fixed cost that we need to pay to telcos for using the SMS that we sent.

不，這不是基線。如果你看看我們的情況——根據我們目前第三季的估計，毛利率將會上升，將高於 65%。這是對另一個問題的回答。你問的第一個問題，原因很簡單，因為簡訊相關的收入貢獻在本季度較高，因為簡訊業務的收入往往比其他 SaaS 業務的利潤率較低，因為我們有一種我們需要向電信公司支付使用我們發送的簡訊的固定費用。

(Operator Instructions)

（操作員說明）

There are no further questions at this time. I'd like to turn the call back over to Rene for any closing remarks.

目前沒有其他問題。我想將電話轉回給雷內，讓他發表結束語。

Thank you, Michelle. 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.

謝謝你，米歇爾。謝謝大家今晚加入我們的電話會議。如果您還有任何其他問題和意見，請隨時聯絡 IR 團隊。通話就此結束。祝你晚安。謝謝。

This does conclude the program. You may now disconnect.

這確實結束了該程式。您現在可以斷開連線。