Aurora Mobile Ltd (JG) 2023 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by and welcome to the Aurora Mobile fourth quarter and fiscal year 2023 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.

女士們、先生們，感謝你們的支持並歡迎參加 Aurora Mobile 第四季和 2023 財年財報電話會議。（操作員指示）請注意，今天的會議正在錄製中。我現在想把會議交給今天的東道主克里斯蒂安·阿內爾。謝謝。請繼續，先生。

Thank you. Hello, everyone, and thank you for joining us today. Aurora Mobile's earnings release was distributed earlier today and is available on its 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, Chief General Manager. Following their prepared remarks, they will be available to answer your questions during the Q&A session that follows.

謝謝。大家好，感謝您今天加入我們。Aurora Mobile 的財報於今天稍早發布，可在其投資者關係網站 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。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。

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 US 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 US 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.

在我們開始之前，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。這些前瞻性陳述是基於管理階層目前的預期以及目前的市場和營運狀況，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。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。

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

現在我想把電話會議轉給羅先生。請繼續。

Thanks, Christian. Good morning and good evening, everyone. Welcome to Aurora Mobile's 2023 fourth quarter earnings call. Before I comment on our Q4 results, I would like to remind everyone that our call today is available on our IR website. You may refer to the deck as we proceed with the call today.

謝謝，克里斯蒂安。大家早安，晚上好。歡迎參加 Aurora Mobile 2023 年第四季財報電話會議。在評論我們第四季度的業績之前，我想提醒大家，我們今天的電話會議可以在我們的投資者關係網站上查看。當我們今天繼續通話時，您可以參考該牌組。

Overall, if I were to give a comment for the performance of this quarter, the appropriate discussion for this quarter is growth, growth, and growth. The reasons are as follows. Firstly, we have record for the first time in history consecutive quarters of positive adjusted EBITDA. Secondary, our total revenue grew every single quarter in 2023. For the rate of average subscription revenue also record sequential revenue growth in all quarter of 2023. Fourthly, our gross profit also grew in every quarter of 2023. Last but not least, our overseas product, EngageLab, continue to expand globally and recorded great results this quarter. Next, let me shed more light on the business and revenues.

總的來說，如果我要對本季的業績做出評論，那麼本季合適的討論是成長、成長還是成長。原因如下。首先，我們歷史上首次連續幾季實現正向調整 EBITDA。其次，我們的總收入在 2023 年每季都在成長。平均訂閱收入率也創下了 2023 年所有季度的環比收入成長。第四，我們的毛利在2023年每季也都在成長。最後但並非最不重要的一點是，我們的海外產品EngageLab繼續在全球範圍內擴張，並在本季度取得了不錯的成績。接下來，讓我詳細介紹一下業務和收入。

For our total group revenue, we achieved a steep growth of 5% quarter-over-quarter, driven mainly by the growth in developer services revenue. Now let me go through our different revenue streams. Developer services revenue, which consists of subscription services and value-add services, decreased to 1% year-over-year, but grew 8% quarter-over-quarter, mainly due to the weakness in the value-added services offset by the 5% growth in subscription services.

就集團總收入而言，我們實現了 5% 的季度環比大幅增長，這主要得益於開發者服務收入的成長。現在讓我介紹一下我們不同的收入來源。開發者服務收入（包括訂閱服務和增值服務）年減至 1%，但環比增長 8%，主要是由於增值服務的疲軟被 5 季度的抵消所抵消。訂閱服務增長百分比。

Next is the detailed discussion of each business line. Subscription services revenues were RMB48.8 million, up 5% over year-over-year and quarter-over-quarter. This was mainly driven by increase in ARPU, both year-over-year and quarter-over-quarter. Within the year 2023, the subscription services revenue grew sequentially in all four quarters, mainly due to the steady increase in ARPU throughout the year. In Q4 2023, our team has completed a handful of private deployment purchase for many customers. I'm very encouraged by this trend and believe more good results will come.

接下來是各業務線的詳細討論。訂閱服務收入為人民幣4,880萬元，較去年同期成長5%。這主要是由於 ARPU 同比和環比增長推動的。2023年內，訂閱服務營收四季均較上季成長，主要得益於全年ARPU的穩定成長。2023 年第四季度，我們的團隊已為許多客戶完成了少量私人部署購買。我對這種趨勢感到非常鼓舞，相信會帶來更多好的結果。

Some of the notable new and renewable customers in this quarter include, but not limited to, 360 Finance, China Telecom, China Pacific Insurance, Everbright Bank Credit Card Center, and (inaudible) just to name a few. Value-added services revenues were RMB6.8 million, decreased 60% year-over-year but increased by 38% quarter-over-quarter, which was due to the annual single day and Double 12 online shopping festival in Q4, where advertisers increased their spending and more budget allocation to us. However, no such event in Q3.

本季一些著名的新客戶和再生客戶包括但不限於 360 金融、中國電信、中國太平洋保險、光大銀行信用卡中心等（聽不清楚）。增值服務收入為人民幣680萬元，年減60%，但環比增長38%，主要是由於第四季度一年一度的單日和雙12網購節，廣告商增加他們的支出和更多的預算分配給我們。然而，第三季沒有這樣的事件。

Next, I would like to share with you on some exciting news and great achievements we did have in Q4 for our EngageLab business. Firstly, by the end of 2023, we had more than 170 customers signed up to purchase our EngageLab products. This we saw a tremendous 70% growth between the quarters. Secondly, the commercial contract value of EngageLab has RMB15 million, representing a great 50% growth between the quarters. Thirdly, our EngageLab customers are from 17 different countries around the world.

接下來，我想與您分享我們在第四季度的 EngageLab 業務中取得的一些令人興奮的消息和巨大成就。首先，到 2023 年底，我們有超過 170 位客戶註冊購買我們的 EngageLab 產品。我們看到兩個季度之間實現了 70% 的巨大成長。其次，EngageLab的商業合約金額達1,500萬元人民幣，季度較上季成長50%。第三，我們的EngageLab客戶來自全球17個不同的國家。

As we show in our Q3 earnings graph, we aim to grow this business every quarter, and we did it. We achieved great milestones between the quarters for EngageLab business. I'm very proud of the hard work that the team has putting over the past quarter in order to record such an impressive customer number and contract value growth. This is by no means an easy task consists during the top overseas market environment and the uncertainty causing the air. We continue to see strong demand for our EngageLab products overseas. Our EngageLab product is a non-store customer engagement platform, enabling our customers to use any of the following messaging channels, app push, web push, e-mail services, SMS service, WhatsApp, and WhatsApp business API.

正如我們在第三季收益圖中所示，我們的目標是每季都實現這項業務的成長，我們做到了。我們在兩個季度之間實現了 EngageLab 業務的偉大里程碑。我對團隊在過去一個季度所付出的辛勤工作感到非常自豪，以實現如此令人印象深刻的客戶數量和合約價值成長。這絕對不是一件容易的事，因為海外市場的環境和不確定性導致了空氣的惡化。我們持續看到海外對 EngageLab 產品的強勁需求。我們的 EngageLab 產品是一個非商店客戶參與平台，使我們的客戶能夠使用以下任何訊息傳遞管道、應用程式推播、網路推播、電子郵件服務、簡訊服務、WhatsApp 和 WhatsApp 業務 API。

Based on the feedback we received, the key major advantage of our EngageLab product is it allows our customers in different countries and regions to engage their own customers in an effective yet cost-efficient manner. We aim to ensure we stay ahead of the game by continuing to fine-tune our products on a regular basis. More importantly, for us to meet and achieve our goal, customers expect our global customers' expectations.

根據我們收到的回饋，我們的 EngageLab 產品的主要優勢是它允許我們不同國家和地區的客戶以有效且經濟高效的方式與自己的客戶互動。我們的目標是透過持續定期調整我們的產品來確保我們保持領先地位。更重要的是，為了讓我們滿足並實現我們的目標，客戶期望我們全球客戶的期望。

With that, I will now pass the call over to Shan-Nen, who will share more about the vertical applications 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. Next, I'll go over the revenue for vertical applications where it is made up of financial risk management and market intelligence. Vertical applications had a tough quarter, where revenue recorded single-digit decline both year-over-year and quarter-over-quarter. However, for financial risk management, revenue grew 17% year-over-year and stayed pretty much stable quarter-over-quarter. The 17% year-over-year revenue growth was positively impacted by a 26% customer number growth. In particular, one good trend that we have observed is that the fact that customer number has recorded sequential growth in every quarter of 2023. This Q4 customers that we have signed up include, but not limited to, Meituan, 360 Finance, (inaudible) and many other licensed financial institutions throughout China.

謝謝，克里斯。接下來，我將回顧垂直應用程式的收入，其中由財務風險管理和市場情報組成。垂直應用程式經歷了一個艱難的季度，收入同比和環比均出現個位數下降。然而，在財務風險管理方面，營收年增 17%，季增 17%，環比維持相當穩定。17% 的年收入成長受到 26% 客戶數量成長的正面影響。特別是，我們觀察到的一個良好趨勢是，2023 年每季的客戶數量都實現了環比增長。我們簽約的第四季客戶包括但不限於美團、360金融（聽不清楚）以及中國各地的許多其他持牌金融機構。

As for market intelligence, the revenue decreased 40% year-over-year and 10% quarter-over-quarter due to the continued great demand for Chinese-based app data as the investment sentiment towards Chinese ADR still remains lackluster. Nevertheless, amidst this slow market condition, we still managed to sign up some well-known large customers such as Baidu, Ite, Taobao, 58, and many top-tier global hedge fund and investment funds.

市場情報方面，由於對中國 ADR 的投資情緒依然低迷，對中國應用程式數據的需求持續強勁，營收年減 40%，季減 10%。儘管如此，在市場低迷的情況下，我們仍然成功簽約了一些知名大客戶，如百度、Ite、淘寶、58以及眾多全球頂級對沖基金和投資基金。

I'll now go through some of the key expenses and balance sheet items. On to operating expenses. The Q4 operating expenses was at RMB61.2 million, representing 36% decrease year-over-year but slightly increased 2% quarter-over-quarter. Overall, we are very pleased with our expense control and monitoring efforts between the years. In summary, our Q4 OpEx has decreased year-over-year by RMB34.2 million. This is a testament of our commitment to wisely spend every single penny. And if you look at the OpEx on an annual basis, it has decreased by RMB108 million between the years, representing a 30% decrease year-over-year. This, again, show the management determination to effectively execute its cost-saving plans as previously announced. I think at this stage, the company is well managed and ready to -- is ready for the next growth phase cycle. With this relatively low OpEx to run the business, so long as we execute top-line growth fairly well, I believe the group result will come sooner rather than later.

我現在將介紹一些關鍵費用和資產負債表項目。關於營運費用。第四季營業費用為人民幣6,120萬元，較去年同期下降36%，但較上季小幅成長2%。總體而言，我們對多年來的費用控制和監控工作感到非常滿意。綜上所述，我們第四季的營運支出年減了 3,420 萬元人民幣。這證明了我們明智地花每一分錢的承諾。如果按年計算營運支出，則兩年間減少了 1.08 億元人民幣，年減了 30%。這再次表明管理層決心有效執行先前宣布的成本節約計劃。我認為在這個階段，公司管理良好，並準備好進入下一個成長階段週期。由於營運業務的營運支出相對較低，只要我們能很好地實現營收成長，我相信集團業績會早日到來。

Next, I'll go to the individual OpEx categories. In particular, R&D expenses decreased by 23% year-over-year to RMB27.1 million, mainly due to lower headcount and reduced salary costs and associated share-based compensation and a decrease in several depreciation expenses due to the growing cloud initiative. Selling and marketing expenses decreased by 10% year-over-year to RMB22.1 million, mainly due to a decrease in salary costs resulted from headcount reduction as we further make adjustment to operate at the optimal level.

接下來，我將討論各個營運支出類別。其中，研發費用年減23%至人民幣2,710萬元，主要是因為人員數量減少、薪資成本和相關的股權激勵減少，以及雲端計畫不斷發展導致的多項折舊費用減少。銷售及行銷費用年減10%至人民幣2,210萬元，主要是由於我們進一步調整以達到最佳營運水平，人員減少導致工資成本下降。

G&A expense decreased by 66% year-over-year to RMB12.1 million, mainly due to onetime noncash impairment loss of RMB32 million recognized in last year Q4 of 2022. Further streamlining of the headcount also contributed to the decrease in salary costs between the years. And for the quarter ended December 31, 2023, the adjusted EBITDA, which is calculated as an EBITDA excluding share-based compensation, reduction in force charges, the impairment of long-term investment, and change in fair value of foreign currency contracts, we recorded another positive adjusted EBITDA in this quarter. And this is a historical event where we have consecutive quarters of positive adjusted EBITDA.

一般及行政費用年減 66% 至人民幣 1,210 萬元，主要是由於 2022 年第四季確認的一次性非現金減損損失 3,200 萬元。人員編制的進一步精簡也導致薪資成本逐年下降。截至 2023 年 12 月 31 日的季度，調整後的 EBITDA（計算為不包括股權激勵、人力費用減少、長期投資減損和外幣合約公允價值變動的 EBITDA）本季調整後 EBITDA 再次為正值。這是一個歷史性事件，我們連續幾季調整後的 EBITDA 為正值。

On to the balance sheet. I'll share two very important KPIs that we closely monitor. We continue to maintain a healthy AR turnover days at 38 days, which is a two-days improvement quarter-over-quarter. These two shortened days is very important as they let us collect cash from customer at an even shorter period of time. We believe this 38 days turnover is leading the industry in terms of collection days.

到資產負債表上。我將分享我們密切監控的兩個非常重要的 KPI。我們繼續保持 38 天的健康 AR 週轉天數，比上一季改善了兩天。這兩天的縮短非常重要，因為它們讓我們可以在更短的時間內向客戶收取現金。我們認為，就收款天數而言，38 天的營業額在業界處於領先地位。

Secondly, one of the key financial KPIs that we track for performance of SaaS company is the total revenue, which represents cash collected in advance of customer for future contract performance, continue to be the high balance of RMB141.5 million. This is the eighth consecutive quarter where our deferred revenue balance has exceeded RMB130 million. This is very important as we are collecting more cash in the advance from customer and this greatly improve our cash flow, at the same time, mitigate risk of bad debt.

其次，我們追蹤 SaaS 公司業績的關鍵財務 KPI 之一是總收入，即為未來合約履行而提前向客戶收取的現金，繼續保持人民幣 1.415 億元的高餘額。這是我們的遞延收入餘額連續第八個季度超過人民幣1.3億元。這非常重要，因為我們從客戶那裡預收了更多現金，這大大改善了我們的現金流，同時降低了壞帳風險。

On the cash flow, we have another great quarter in Q4 of 2023, where we recorded net operating cash inflow of RMB11 million and total cash inflow of RMB16.6 million, and this was a combination of our sales team actively collecting cash from customers, and we tightly control our cash spending.

在現金流方面，我們在2023 年第四季又迎來了一個偉大的季度，我們錄得經營現金流入淨額為人民幣1100 萬元，現金流入總額為人民幣1660 萬元，這是我們的銷售團隊積極向客戶收取現金的結合，我們嚴格控制現金支出。

Next, total assets were at RMB349.1 million as of December 31. This includes cash and cash equivalent of RMB115 million, accounts receivable of RMB34.3 million, prepayments and other current assets of RMB20.2 million, fixed assets of RMB1.4 million, long-term investment of RMB112.9 million, goodwill of RMB37.8 million and intangible assets of RMB17.9 million, resulted from the SendCloud acquisition in March 2022. Total current liabilities were RMB241.3 million as of December 31, 2023. This includes accounts payable of RMB21.1 million, current operating lease liability of RMB4 million, deferred revenue of RMB141.5 million, accrued liabilities of RMB74.7 million.

其次，截至12月31日，總資產為人民幣3.491億元。其中包括現金及現金等價物人民幣115百萬元、應收帳款人民幣3430萬元、預付款項及其他流動資產人民幣2020萬元、固定資產人民幣140萬元、長期投資人民幣112.9百萬元、商譽人民幣37元80 萬元人民幣和 1,790 萬元無形資產是 2022 年 3 月收購 SendCloud 產生的。截至2023年12月31日，流動負債總額為人民幣2.413億元。其中包括應付帳款人民幣2110萬元、當期經營租賃負債人民幣400萬元、遞延收入人民幣1.415億元、應計負債人民幣7470萬元。

At this juncture, let me take a few minutes here to summarize the growth quarter that Chris has mentioned earlier. In Q4 of 2023, our total revenue and developer subscription revenue grew in every single quarter of 2023. Gross profit has also recorded sequential growth in all quarters of 2023. And for the first time in the history, we have consecutive quarters of positive adjusted EBITDA. Total annual operating assets decreased by RMB108 million between the years. And our EngageLab product operating globally, signing up more and more customers and contract every quarter.

此刻，讓我花幾分鐘總結克里斯之前提到的成長季度。2023 年第四季度，我們的總收入和開發者訂閱收入在 2023 年每季都在成長。2023年所有季度的毛利也錄得較上季成長。我們歷史上首次連續幾季實現調整後 EBITDA 為正值。年度經營資產總額較去年同期減少人民幣1.08億元。我們的 EngageLab 產品在全球範圍內運營，每個季度都會吸引越來越多的客戶並簽訂合約。

We have done many things right in this quarter and the result has shown as such. We are very pleased with the Q4 execution efforts and numbers. Nevertheless, we will not sit on our (inaudible). We will continue to execute our plan and deliver the goods. Lastly, before I conclude, I'll give an update on the share repurchase plan. In the quarter ended December 31, 2023, we have repurchased 53,000 ADS. Cumulatively, we have repurchased a total of 188,000 ADS since the start of our repurchase program.

本季我們做了很多正確的事情，結果也已經顯示了這一點。我們對第四季的執行努力和數字非常滿意。儘管如此，我們不會坐以待斃（聽不清楚）。我們將繼續執行我們的計劃並交付貨物。最後，在結束之前，我將介紹股票回購計畫的最新情況。截至2023年12月31日的季度，我們回購了53,000股ADS。自回購計畫啟動以來，我們已累積回購了 188,000 個 ADS。

And this concludes management's prepared remarks. We're happy to take your questions now. Christian?

管理層準備好的演講到此結束。我們很高興現在回答您的問題。基督教？

(Operator Instructions) Calvin Wong, Spica Capital.

（操作員指示）Calvin Wong，Spica Capital。

Good evening. Thank you for taking my questions. First of all, congrats to your management for consecutive quarters of positive adjusted EBITDA. This is a great result, well done. I would like to have two questions, if I may. The first one, a follow-up on this adjusted EBITDA. I just want to hear from management how you see this adjusted EBITDA will trend going forward in 2024? That's the first question.

晚安.感謝您回答我的問題。首先，恭喜您的管理層連續幾季實現正向調整 EBITDA。這是一個很好的結果，做得很好。如果可以的話，我想問兩個問題。第一個是調整後 EBITDA 的後續行動。我只是想聽聽管理階層的意見，您如何看待調整後的 EBITDA 在 2024 年的未來趨勢？這是第一個問題。

And second question, again on EngageLab. We have been tracking your EngageLab business every quarter. So, it seems that it has been doing great with better than our expectation results in terms of customer number and contract value every quarter. So, we would like to know two things. A, are you expecting such explosive growth every quarter going forward? And B, what is the revenue contribution by EngageLab in this quarter? Thanks.

第二個問題，同樣是在 EngageLab 上。我們每季都會追蹤您的 EngageLab 業務。因此，從每季的客戶數量和合約價值來看，它的表現似乎都比我們預期的要好。所以，我們想知道兩件事。答：您預計未來每季都會出現如此爆炸性的成長嗎？B，EngageLab 本季的營收貢獻是多少？謝謝。

Okay. Thanks, Calvin. Let me take a minute to recap your question. You have two questions. One is on positive adjusted EBITDA and the other one is on EngageLab. Yeah, let me take this question. Yeah, I guess, yes, we are very pleased with the fact that we delivered another quarter of positive adjusted EBITDA in Q4 of 2023 and as I said, this is a historical event for us since IPO, to have two quarters of positive adjusted EBITDA. This is possible to the hard work that we are putting every day, day in and day out. And I believe besides the fact that you, our shareholders and investors, are really thrilled see this positive adjusted EBITDA that we have recorded.

好的。謝謝，卡爾文。讓我花一點時間回顧你的問題。你有兩個問題。一項是正向調整 EBITDA，另一項是 EngageLab。是的，讓我來回答這個問題。是的，我想，是的，我們非常高興我們在2023 年第四季度又實現了一個季度的正調整EBITDA，正如我所說，這是自IPO 以來我們的歷史性事件，有兩個季度的正調整EBITDA 。這得歸功於我們日復一日的辛勤工作。我相信，除此之外，您、我們的股東和投資者看到我們記錄的調整後 EBITDA 為正值，真的感到非常興奮。

And if we peel through, the most important thing that I think we'd like to deliver the message is the OpEx numbers over the four quarters, you'll see one good trend there as mentioned. Between the years, the annual OpEx of between 2023 and 2022 has actually decreased by RMB108 million. So, in summary, we have saved or trimmed out more than RMB100 million expenses in 2023 to various cost-cutting initiatives that we have undertaken, from headcount reduction and then we reviewed all the expenses, we even reduced our office rental space. So, we have been working hard over the past year to seriously reduce our OpEx in the past 12 months.

如果我們深入了解，我認為我們想要傳達的最重要的訊息是四個季度的營運支出數據，您會看到如上所述的一個良好趨勢。這些年來，2023年至2022年的年度營運支出實際上減少了​​1.08億元。所以，綜上所述，我們在2023年節省或削減了超過1億元人民幣的費用，透過我們採取的各種成本削減舉措，從減少人員到我們審查所有費用，甚至減少我們的辦公室租賃空間。所以，我們在過去的一年裡一直在努力，在過去的 12 個月大幅降低我們的營運支出。

So, what this means is really, really important. With this much lower OpEx, we are in a good position for 2024. As I said, so long as we continue to grow our top line domestically, or through EngageLab globally, I believe sooner or later the positive adjusted EBITDA will come as a natural course of events. So, this is an answer to your first question.

所以，這意味著什麼真的非常重要。由於營運支出大幅降低，我們在 2024 年處於有利地位。正如我所說，只要我們繼續在國內或透過 EngageLab 在全球範圍內增加我們的收入，我相信遲早積極調整的 EBITDA 將成為一個自然的過程。所以，這是你第一個問題的答案。

And second question is on EngageLab. Yes, I think we are very true. And as mentioned by Chris, he's really happy to see that things have been trending well. I guess the fact that this is no fluke, it's a result of again our commitment and our investment by the company and the dedication by the team to expand overseas. And let me recap the great achievement in Q4 for EngageLab that Chris has mentioned. Firstly, the contract value has grown 50% between the quarters, achieving cumulative up to RMB15 million by Q4. And secondly, the customers' number has grown 70% to 170% between the quarters. And this 70% revenue -- customer number growth is simply impressive. And thirdly, our customer has come from 17 different countries around the world.

第二個問題是關於 EngageLab 的。是的，我認為我們是非常真實的。正如克里斯所提到的，他真的很高興看到事情進展順利。我想這並不是僥倖，這是我們的承諾和公司投資以及團隊致力於海外擴張的結果。讓我回顧一下 Chris 提到的 EngageLab 在第四季取得的巨大成就。首先，合約金額較上季成長50%，截至第四季累計達到人民幣1,500萬元。其次，客戶數量在兩個季度之間增加了 70% 至 170%。這 70% 的收入——客戶數量成長簡直令人印象深刻。第三，我們的客戶來自全球17個不同的國家。

In summary, we do have high hopes for this business to grow every single quarter. As I mentioned in the previous quarter, in addition to using ISV, independent software vendor arrangement that I talked about last quarter, we have started selling teams to overseas market to further solidify our position there. And just last week we have started a small team in Singapore to kick off our expansion plan. And we believe the overseas market, especially Southeast Asia, is where we can first grab more market share due to the proximity, the culture of familiarity, and the high penetration of Chinese cellphones there. So, this is the EngageLab.

總而言之，我們確實對該業務每季的成長抱有很高的期望。正如我在上季度提到的，除了使用我上季度談到的ISV（獨立軟體供應商安排）之外，我們還開始向海外市場出售團隊，以進一步鞏固我們在海外市場的地位。就在上週，我們在新加坡成立了一個小團隊來啟動我們的擴張計畫。我們相信海外市場，尤其是東南亞，是我們可以先搶佔更多市場份額的地方，因為那裡距離近、文化熟悉，而且中國手機的滲透率很高。所以，這就是參與實驗室。

And for the revenue contribution that you talked -- you asked, it is still not material. This is simply the fact that, as you're aware, we recognize revenue based on amortization depending on the length of the contract, be it one year or two years. The RMB15 million contract that I mentioned earlier will make its way to the books over the years. However, one number that I can share with you is that the recognized EngageLab revenue, which is overseas revenue, has grown eight times from Q1 of 2023 to Q4, which means the revenue recognized is on exclusive growth.

對於你談到的收入貢獻——你問過，它仍然不重要。這只是一個事實，正如您所知，我們根據合約期限（一年或兩年）的攤銷來確認收入。我之前提到的1500萬人民幣的合約將在數年後記入帳簿。不過，我可以與大家分享的一個數字是，確認的EngageLab收入，即海外收入，從2023年第一季到第四季度增長了八倍，這意味著確認的收入是獨家增長的。

So, if I may summarize, I would like to leave this message with you and all the callers in today's call is the fact that our EngageLab business is doing great. We will continue to invest in the necessary infrastructure to ensure rich service delivery and quality service, and we'll continue to explore every single market in Southeast Asia every quarter. Calvin, hope this answered your question.

因此，如果我可以總結一下，我想向您和今天通話中的所有來電者傳達這樣的訊息：我們的 EngageLab 業務做得很好。我們將繼續投資必要的基礎設施，以確保豐富的服務交付和優質的服務，並且每個季度我們將繼續探索東南亞的每個市場。卡爾文，希望這能回答你的問題。

Okay. That's very clear. Thank you.

好的。這非常清楚。謝謝。

Brian Kinstlinger, Alliance Global Partners.

Brian Kinstlinger，聯盟全球合作夥伴。

Thanks so much. Good evening to you, guys, and thanks for taking my questions, I have a whole bunch. Subscriptions are growing nicely, you mentioned, due to the higher ARPU. Can you talk about new customer accounts? I think I heard 26 in the quarter. But generally, what are new business trends like, what industries are driving this recovery? And maybe discuss your ability to continue to grow subscriptions and the impact the Chinese economy might have on this service offering or is having.

非常感謝。晚上好，夥計們，感謝您提出我的問題，我有一大堆問題。您提到，由於 ARPU 較高，訂閱量成長良好。能談談新客戶帳號嗎？我想我在本季度聽到了 26 次。但總的來說，新的商業趨勢是什麼樣的，哪些產業正在推動這種復甦？也許還可以討論一下您繼續增加訂閱量的能力以及中國經濟可能對該服務產品產生或正在產生的影響。

Okay. Yeah, thanks, Brian. This is Shan-Nen. I guess for industry for subscription, we don't see any particular concentration. I think it's across the board. As we mentioned a couple of quarters ago, for the past few years, we have seen a change in terms of how people look at push notification investment. Rather than investing in their own infrastructure, employing employees, engineers to do this work, they now are more than willing to outsource to a company like us. So, we see this change in terms of mentality by companies. That's where we pick up all the new customers, be it private cloud or public cloud. So, this, we do not see any concentration in terms of where the new customers are from.

好的。是的，謝謝，布萊恩。這是善念。我想對於訂閱行業來說，我們沒有看到任何特別的集中。我認為這是全面的。正如我們幾個季度前提到的，在過去的幾年裡，我們看到人們對推播通知投資的看法發生了變化。他們現在更願意外包給像我們這樣的公司，而不是投資自己的基礎建設、僱用員工、工程師來完成這項工作。因此，我們看到了企業心態的這種變化。這就是我們吸引所有新客戶的地方，無論是私有雲還是公有雲。因此，我們認為新客戶的來源地並不集中。

And then, can you just speak to the Chinese economy. Is it neutral right now to the impact on your revenue? Is it offsetting the strength in demand and you could do much better on the recovery? Just kind of take us through the impact the economy is having on your subscriptions in China.

然後，您能談談中國經濟嗎？目前對您收入的影響是中性的嗎？它是否抵消了需求的強勁，您可以在復甦方面做得更好嗎？請讓我們了解一下經濟對中國訂閱的影響。

Sure. If you compare domestic and overseas, I'm sure you can sense that overseas market is where the growth is from. Yes, domestically, we do not see such explosive growth, but we still -- we think that it will go through a stable but relatively low growth domestically.

當然。如果你對比國內和海外，相信你能感覺到海外市場才是成長的來源。是的，在國內，我們沒有看到如此爆炸性的成長，但我們仍然認為國內將經歷穩定但相對較低的成長。

But EngageLab is not having a big impact on your revenue. So, I assume still the growth in recovery is coming in China, no?

但 EngageLab 並沒有對您的收入產生重大影響。所以，我認為中國仍將出現復甦成長，不是嗎？

Yes. But the growth is much slower compared to EngageLab.

是的。但與EngageLab相比，成長速度慢很多。

And then, can you quantify the change in ARPU per subscription that's driving this? And is there still opportunity to grow ARPU even more? And if so, what gives you that confidence?

然後，您能否量化推動這一趨勢的每訂閱 ARPU 的變化？還有機會進一步提升 ARPU 值嗎？如果是這樣，是什麼給了你這樣的信心？

Sure. If you look at the ARPU from Q1 of 2023, it's about RMB8,000, and come Q4, it's RMB11,000, okay? So, this is where we have seen a 17% growth year-over-year. And we do see this to continue to grow but at a much slower pace, probably about single-digit 5% growth. And partly of this is the fact that we are able to complete some of the private cloud project as well, which is of much bigger contract value. So this is what is driving the ARPU growth. On an annual basis, the same customers, we are not able to increase the price too much.

當然。如果你看2023年第一季的ARPU，大約是8000元，到第四季度，是11000元，好嗎？因此，我們看到同比增長 17%。我們確實看到這一增長將繼續增長，但速度要慢得多，可能約為 5% 個位數的增長。部分原因是我們也能夠完成一些私有雲項目，而這個項目的合約價值要大得多。這就是推動 ARPU 成長的因素。每年，對於同樣的客戶，我們不能將價格提高太多。

Got it. Thank you, that's helpful. And then in terms of non-subscription revenues such as vertical applications, I know this includes market intelligence and other services. But it seems like that revenue base has stabilized. What has to happen in terms of market conditions to begin to get confident that revenue line will begin to recover and grow even more?

知道了。謝謝，這很有幫助。然後就垂直應用程式等非訂閱收入而言，我知道這包括市場情報和其他服務。但收入基礎似乎已經穩定。市場狀況必須發生什麼才能開始有信心收入線將開始恢復並進一步成長？

Yeah. If you look at the advertising business, in a way, we do not invest as much in it. So, we'll let it run on its natural cost. So, this very much fluctuate, depends on the overall sentiment. If you look at how the fourth quarter pan out every single year, the advertising market will peak in Q2 and Q4. Q2 being the 618 online festival. And then the Q4 is just what Chris has mentioned, we've got Double 11, Double 12. So, these are the two peaks. So that is for value-added service.

是的。如果你看看廣告業務，在某種程度上，我們並沒有在上面投入那麼多。因此，我們將讓它以其自然成本運行。所以，這個波動很大，取決於整體情緒。如果你看看每年第四季的表現，廣告市場將在第二季和第四季達到頂峰。第二季是618線上節慶。然後第四季就是克里斯提到的，我們有雙11、雙12。所以，這是兩個峰值。這就是加值服務。

And for vertical applications, I think overall, market intelligence is still a bit slow in terms of the demand for Chinese ADR, APP numbers. But what we've seen is the financial risk management is doing well. It's doing well. It's increasing 17% year-over-year. So, this is where we earn money to the credit companies or the banks who are trying to get the creditworthiness of individual lenders or the borrowers of their credit cards. So, we see this trending up in terms of the inquiries. Each bank is buying our services. So, if you look at the three non-subscription business, financial risk management is something that we have higher hopes in terms of continued growth.

而對於垂直應用，我認為整體來說，市場情報對於中國ADR、APP數量的需求還是有點慢。但我們看到的是，財務風險管理做得很好。進展順利。較去年同期成長 17%。因此，這就是我們向信貸公司或銀行賺錢的地方，這些公司或銀行試圖獲得個人貸款人或其信用卡借款人的信譽。因此，我們看到查詢量呈上升趨勢。每家銀行都在購買我們的服務。所以，如果你看一下三項非認購業務，財務風險管理是我們對持續成長寄予更高希望的。

Got it. And then just to the balance sheet, it looks like quarter to quarter, you increased tax by RMB4 million. I think I heard cash flow, if I did a quick calculation from operations, was up RMB1 million and change. So, what were the other sources of cash that increased RMB4 million compared to the cash flow of RMB1.3 million sequentially?

知道了。然後就資產負債表來看，好像每季，你增加了400萬元的稅。我想我聽說現金流量，如果我從營運中快速計算一下，增加了 100 萬元並且發生了變化。那麼，與上一季 130 萬元的現金流相比，增加 400 萬元的其他現金來源是什麼？

Sure. We -- in Q4, we divested one of the investments that we have made. We made some -- we received some additional cash based on that. So, those are -- that's under investing activities.

當然。我們在第四季剝離了一項投資。我們賺了一些——基於此我們收到了一些額外的現金。所以，這些都是投資活動。

But that divestiture, does it have any impact on revenue?

但這次剝離對收入有影響嗎？

No, not at all. It's pure divestiture of investment.

一點都不。這是純粹的投資剝離。

And then lastly, on seasonality, I assume the first quarter is your weakest quarter given holidays. Correct me if I'm wrong. And help us with any other seasonality, I think you said the second and the fourth quarter, you're strongest. Or I just want to make sure that I understand completely the seasonality.

最後，關於季節性，我認為第一季是考慮到假期後最弱的季度。如我錯了請糾正我。並幫助我們解決任何其他季節性問題，我認為您說過第二季度和第四季度，您是最強的。或者我只是想確保我完全理解季節性。

Sure. If you look at overall in terms of business, even the entire China, if I may, the Q1 will be slow simply because of the fact that it's Chinese New Year, February is a shorter month, everybody is away. So, the last thing they want is to sign contract and do everything else. So Q1 will definitely be a slow season. But for non-subscription business, I think only the value-added service which is the ad service were picked in Q4 and Q2. The others, assuming if the economy is doing as it should be, we should see an uptrend every single quarter from Q1.

當然。如果你從整體業務角度來看，即使是整個中國，如果可以的話，第一季會很慢，因為這是農曆新年，二月是一個較短的月份，每個人都離開了。所以，他們最不想做的就是簽訂合約並做其他一切。所以第一季一定會是淡季。但對於非訂閱業務，我認為第四季和第二季只選擇了增值服務，也就是廣告服務。其他人則假設，如果經濟按照應有的方式運行，我們應該會看到從第一季開始每個季度都出現上升趨勢。

And to the previous caller's question, given the seasonal weakness in the first quarter, I assume you won't be EBITDA positive, but in quarters following that, you will be? Is that how I -- am I reading it right? Or am I not reading that right?

對於上一個來電者的問題，考慮到第一季的季節性疲軟，我認為您的 EBITDA 不會為正，但在接下來的幾季中，您會嗎？我就是這樣──我讀得對嗎？還是我沒讀對？

Yeah. I think it will be pretty much what you say. Q1 will be -- it will be difficult to get positive EBITDA.

是的。我想這跟你說的差不多。第一季將很難獲得正的 EBITDA。

Right. Do you think you'll be around breakeven after?

正確的。您認為之後您會達到收支平衡嗎？

Yes, that's the goal. That's the goal, yes.

是的，這就是目標。是的，這就是目標。

Okay. Thank you so much and nice work on the recovery over the year.

好的。非常感謝你們一年來在恢復方面所做的出色工作。

Thank you, sir.

謝謝你，先生。

(Operator Instructions) There were no further questions at this time. I will now hand the conference back to Christian Arnell for closing remarks. Thank you.

（操作員說明） 此時沒有其他問題。現在我將把會議交還給克里斯蒂安·阿內爾 (Christian Arnell) 致閉幕詞。謝謝。

Thank you, everyone, for joining the call tonight. And if you have any further questions or comments, please don't hesitate to reach out to the IR team. That concludes the call. Thank you and have a good evening.

謝謝大家參加今晚的電話會議。如果您還有任何其他問題或意見，請隨時聯絡 IR 團隊。通話結束。謝謝您，祝您晚上愉快。

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

謝謝。今天的電話會議到此結束。感謝您的參與，您現在可以斷開連接。