Aurora Mobile Limited (JG) Q1 2022 Earnings Call Transcript

Aurora Mobile Limited (NASDAQ: JG) Q1 2022 earnings call dated Jun. 09, 2022

Corporate Participants:

Rene Vanguestaine — Investor Relations

Weidong Luo — Co-Founder, Chairman & Chief Executive Officer

Shan-Nen Bong — Chief Financial Officer

Analysts:

Brian Kinstlinger — Alliance Global Partners — Analyst

Ryan Roberts — Navis Capital Partners — Analyst

Presentation:

Operator

Ladies and gentlemen, thank you for standing by and welcome to Aurora Mobile First Quarter 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers’ presentation, there will be the question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded.

I would now like to hand the conference over to your first speaker today, Rene Vanguestaine. Please go ahead.

Rene Vanguestaine — Investor Relations

Thank you, Nadia. 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 ir.jiguang.cn. On the call today are Mr. Weidong Luo, Chairman and Chief Executive Officer; and Mr. Shan-Nen Bong, Chief Financial Officer. Following their prepared remarks, they will be available to answer your questions during the Q&A session that will follow. 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 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 over to Mr. Luo. Please go ahead.

Weidong Luo — Co-Founder, Chairman & Chief Executive Officer

Thanks, Rene. Good morning and good evening to everyone on the call. Welcome to Aurora Mobile’s 2022 first quarter earnings call. Before I comment on our Q1 results, I would like to remind everyone that the quarterly earnings deck is available on our IR website for your reference. You may refer to the deck as we proceed with the call today. Let me start off today’s call on the one important milestone we have reached. In Q1 of 2022 we have made a significant and important investment that obviously further solidify our leading position to help customers to enhance their user engagement through multi-channel solutions that we can provide. As we shared in the Q4 earnings call, since then, we have completed the acquisition of majority interest in SendCloud, China’s leading email API platform for consumer marketing and user centric transactional email services. With the completion of the transaction in March 2022, we have initiated the integration of the operations.

In this process, we have started identifying the list of SendCloud customers that we can potentially sell our JG services into and vice versa. We believe this is an effective and efficient way to increase the revenue of the Group. We will provide updates on this in the future earnings call. From product perspective, with SendCloud’s very strong presence in the email services, we have integrated its email services into our UMS product. This will further enhance our leading position to help our customers from all sections of the market to reach their users for our omnichannel communication technology. We believe this is a great product offering that the market has been longing for. Q1 of 2022 proven to be a very challenging quarter for most business due to very weak macroeconomic conditions as the resurgence of COVID across major economic hubs in China which slowed down the business activity significantly.

Nevertheless, with the effort by the teams throughout the company, we have made another set of impressive financial results amidst this tough operating environment in Q1 of 2022. The key achievements in this — in the quarter includes as follows. Revenues were RMB85.3 million, up 11% year-over-year. Operating expenses were RMB94.5 million, down 7% year-over-year. Operating loss was at RMB36 million narrowed by 17% year-over-year. Net loss was at RMB30.9 million representing 23% improvement from a year-ago. Adjusted EBITDA was negative RMB8.2 million, also significantly improved by 56% year-over-year. AR days remained at a healthy level at around 46 days. Total deferred revenue was above RMB100 million for eight consecutive quarters. We have been closely monitoring and controlling our expenses as our continued efforts to drive operating efficiency since late last year. This effort has paid off as both our operating expenses and loss from operations have reduced year-over-year.

We will continue to be very stringent in all aspects of expense — expenditures now and going forward. Let me continue with the different revenue streams within the Group. In Q1 2022, our Developer Services continued to deliver solid results with a 14% year-over-year growth, which was mainly fueled by a substantial 35% year-over-year growth in Value-added Services while our Subscription Services recorded modest 2% growth during the same period. Subscription Services revenues were RMB34.4 million, an increase of 2% year-over-year primarily driven by new customer acquisitions. During the quarter the financial sector, mainly banks and brokerage firms, has contributed a sizeable percentage of revenue for both the push subscription and private cloud services. The financial sector customer include Ping An Bank, Guangzhou Bank, Lanzhou Bank, Citi Credit Card, and China Investment Security, just to name a few.

With this financially sound and strong customers, we have plans to continue selling other JG products and services to them in the near future. We believe this is a good strategy for us to further increase the revenue or ARPU from these existing customers as we are in good position to know of their needs in order to provide the relevant solution. And we will also expand our reach to more financial sector based customers as our products are well received in this sector of the market. Value-added Services within Developer Services, which include revenue from JG Alliance services and Advertisement SAAS, continued to deliver a solid 35% year-over-year growth to RMB25.4 million from RMB18.8 million in Q1 2021. On the supply side of the JG Alliance, the traffic pool remained stable during the quarter. However, in the quarter has shifted to better operate each of the DAUs within the traffic pool.

In summary, what it means is we are making different attempts to have each of the apps within our JG Alliance traffic pool to search for better match of one or more advertisers so that these apps can maximize their returns on exposure. We believe by doing so; both the traffic pool suppliers, the mobile apps, and us will benefit from such initiative through growing the revenue to be generated for each devices within the pool. In terms of revenue contribution by product formats, both the live push and in-app message, touched approximately 50:60 versus 40 respectively in Q1 of 2022. On the demand side, mini-program developers and retargeting related demand remained strong as our JG Alliance product format remains to be very ideal and as an effective means to reach out to their target audience. In total, these both subgroups contribute more than 90% of our JG Alliance revenue in Q1 2022.

During the quarter, demands from direct customers have been very strong and contributed more than 70% of JG Alliance revenue stream while the rest came from the third-party advertising agency. Major customers of JG Alliance consisting of repeated customers and market leaders across many industry verticals. Key customers include BYD, Baidu, Alibaba, Tencent, JD, and Weibo. Here I would like to provide some colors on the advertise services in recent months. Starting from March of 2022, we have seen advertisers getting back their advertising spends across all mediums of advertisement in China. We have felt the impact of COVID-19 and lockdowns in some key cities as the demand for our value-added services has not being as strong as anticipated. Therefore, the revenue from value-added services is better to the impact in Q2 of 2022. Nevertheless, we believe things will change around soon and the demand for our Value-added Services will pick up again as the economy recovers.

Lastly, a very important product update on the Value-added Services. As we announced in the press release earlier this week, we have recently launched our advertising mediation platform. With our proprietary SDK technology, we will be in a better position to help mobile app developers to access other mainstream advertising platforms in China with greater ease and help them better monetize their advertising inventory. This is a major and proven business model. Overseas players study as AppLovin, MoPub, and ironSource have been helping overseas app developers to grow and monetize using similar advertising mediation platform services. We believe we will bring great values to the mobile app developers through this arrangement.

With that, I will now pass the call over to Shan-Nen, who will share more about the vertical applications and other parts of the Q1 2022 earnings release.

Shan-Nen Bong — Chief Financial Officer

Thanks, Chris. Let’s now move on to the Vertical Applications that mainly consisted of Financial Risk Management and Market Intelligence. These revenues grew steadily by 6% year-over-year with the Financial Risk Management business contributing the lion’s share of the revenue growth. In the Financial Risk Management segment, revenue increased by 11% year-over-year with a solid 33% growth in ARPU. We are very pleased with the revenue growth recorded in the period especially as Q1 2022 was a tough quarter due to the relatively weak macroeconomic conditions and the resurgence of COVID in certain pockets of the key cities in China. Nevertheless, the demand for our products remained strong. During the quarter, we have hired new key customers and continue to retain many existing customer every quarter. These customers have expanded demands with us resulting in a very strong 33% ARPU growth year-over-year.

Some of our new and renewed customers include all license operators such as DTE, Ant Financial, [Indecipherable], just to name a few. Our Market Intelligence product line continued to sign up a number of new and well-known key account corporate customers during Q1 of 2022. They include again DTE, [Indecipherable], BYD Auto, and some of the — and one of the largest pension plans in the world that’s based in Ontario. Revenue remained at a fairly stable level with slight decline year-over-year again due to the macro environment, which slowed down the business activities. Now I’ll go through some of our key expenses and balance sheet items. On to operating expenses. As a result of our continuous effort to efficiently run the business and tightly manage our expenses, in Q12022 our operating expenses decreased by 7% year-over-year to RMB94.5 million.

In particular, R&D expenses decreased by 23% to RMB40 million mainly due to reduction in headcount and reduced salary cost and associated share-based compensation. Selling and marketing expenses decreased by 2% to RMB26.3 million mainly due to the decrease in marketing expense spending in this quarter. G&A expenses increased by 24% to RMB28.2 million mainly due to the reversal of AR provision in Q1 2021 that did not repeat in this quarter that resulted in a RMB1.5 million stream and a RMB1.4 million share-based compensation and RMB1 million increase in professional fee incurred. Adjusted EBITDA; calculated as EBITDA excluding share-based compensation, reduction in force charges, impairment of long-term investment, and change in fair value of foreign currency swap contracts; recorded a 56% improvement year-over-year to negative RMB8.2 million.

This was made possible as we managed to grow our revenues and gross profit while effectively controlling our operating expenses year-over-year.

And to recap the key financial performance in this relatively tough quarter. We have managed to grow our revenue by 11% despite Q1 of 2022 being a very tough quarter for most if not all businesses in China. Gross margin was at 69% this quarter as we paid more traffic cost to mobile app developers for our JG Alliance business. Operating expenses decreased by 7% due to management effective and stringent cost control measures. As a result, both our net loss and adjusted EBITDA has narrowed by 23% and 56% year-over-year respectively. During the quarter we continued to streamline our workforce in an effort to further improve our operating efficiency and ensure that OpEx is remaining at a optimal level. On to the balance sheet, I’ll again share two very important KPIs that we always closely monitor.

First is the AR turnover days, which has shortened by 2 days at 46 days this quarter compared to 48 days a year-ago. Our disciplined accounting policy and cash collection effort ensured a timely collection of our accounts receivables. Secondly, the total deferred revenue balance, which represents cash collected in advance from customer, has exceeded RMB100 million at quarter-end for the eighth consecutive quarter. As of March 31, 2022 the total deferred revenue balance was at historical high of RMB133.3 million. Next, total assets were RMB625.5 million as of March 31, 2022. This includes cash and cash equivalent of RMB273 million, accounts receivable of RMB42.3 million, prepayments of RMB15.4 million, fixed assets of RMB55.6 million, long-term investment of RMB137.3 million, and goodwill of RMB37.8 million and intangible assets of RMB24.1 million resulted from the SendCloud acquisition in March 2022.

And total current liabilities were at RMB394.2 million as of March 31, 2022. And this includes short-term loan of RMB160 million, which were all repaid in Q2 2022; accounts receivable of RMB21.6 million; deferred revenue of RMB129.5 million; and accrued liabilities of RMB83 million. Next, business outlook. Since March 2022 the resurgence of COVID-19 in certain parts of China has increased the risk and uncertainties for conducting business in China and this has in turn making business performance harder to forecast in the near future. With that, we believe it is the right decision for us to suspend providing or updating the revenue guidance until such time that the situation substantially improves. Lastly, before I conclude, I’ll give a quick update on the share repurchase plan. In the quarter ended March 31, 2022 we did not repurchase any shares. As of March 31, 2022 cumulatively we have repurchased a total of 921,000 ADS since the start of our program.

And this concludes management prepared remarks. We’re happy to take your question now. Rene, you may proceed. Rene or operator? We are ready.

Questions and Answers:

Operator

Thank you for confirming. So dear participants, we will now begin the question-and-answer session. [Operator Instructions] The first question comes from the line of Brian Kinstlinger from AGP. Please ask your question.

Brian Kinstlinger — Alliance Global Partners — Analyst

Great. Thanks so much for taking my questions. First question I had, the year-over-year growth rate in JG Alliance has slowed significantly in the last few quarters you commented. Can you provide the factors that caused this? How much was market conditions versus COVID?

Weidong Luo — Co-Founder, Chairman & Chief Executive Officer

[Technical Issues]

Operator

Excuse me, dear speaker, your line is not clear.

Weidong Luo — Co-Founder, Chairman & Chief Executive Officer

Hello. Better now?

Operator

Yes, it’s better. Thank you.

Weidong Luo — Co-Founder, Chairman & Chief Executive Officer

Okay. So I think that’s the same thing, right. I mean the COVID impact upset the advertisers’ budget and the advertisers reduced their advertising budget so they upset the JG Alliance revenue. Because our prices basically are like JD, Alibaba, Weibo — especially JD and Alibaba, their business is affected by the logistic which is impacted heavily by the COVID-19 so they reduced their budget heavily in Q2. Now we see some color or pickup in this months but not as — not 100% as what happens in Q4. We still need more colors in next quarter.

Brian Kinstlinger — Alliance Global Partners — Analyst

Got it. Okay. Thanks. And then a similar question on subscriptions were down to single-digit growth for this quarter. Is that all — is that generally COVID too or is that more churn on some of your subscriptions? Just maybe take me through the factors that led to single-digit growth compared to what historically has been a little bit better growth there.

Weidong Luo — Co-Founder, Chairman & Chief Executive Officer

For the subscription service Q1 is in single-digit, it is mostly impacted by the COVID because in March our headcount incentive has been a lockdown by more than one week — around one week and we see the — in Q2 the subscription service will pickup and recover and we will double-digit growth Q2 and Q3 as well.

Brian Kinstlinger — Alliance Global Partners — Analyst

I’m just curious when subscriptions, how do they change when there’s lockdowns? Do they stop paying their subscriptions? That’s what I’m confused about why there was slower growth.

Weidong Luo — Co-Founder, Chairman & Chief Executive Officer

No. The impact basically for the subscription service is impact the new customers and the renewal customers. But is basically delay the contract renewal and delay the payment, right. So when the allotting happens, we just cannot ship our — sign the contract with the customer, we cannot ship and deliver the invoice to the customer so we cannot close the deal with the customer. But in Q2 — from Q2 we have a contract or something like that to reduce these kinds of problem.

Brian Kinstlinger — Alliance Global Partners — Analyst

Okay. Now with lockdowns easing albeit probably slowly, I wonder are the segments beginning to improve although I guess how do you think also then about advertising budget, it seems that it’s still pretty weak even without COVID given the economic uncertainty. So maybe take through — take us through how things are improving over the last two months in your business versus how you think the environment has changed maybe permanently for the year?

Shan-Nen Bong — Chief Financial Officer

Hey Brian. This is Shan-Nen. Now back to your question. No, the ad budget demand has slowed down as what Chris has said in his script so what we have seen is things has been slow compared to previous quarter or previous months. So what we have seen is if you look at the quarter-over-quarter, we expect the Q2 ad spend or revenue to be even potentially lower than Q1. And if you look at what we are looking forward in the next couple of months, we expect the demand to continue to be fairly slow in Q2 and maybe into Q3 too as well.

Brian Kinstlinger — Alliance Global Partners — Analyst

Okay. And then new product you launched, talk about how you see that with adoption and potentially impacting revenue given those conditions?

Weidong Luo — Co-Founder, Chairman & Chief Executive Officer

So, as you know, it’s very difficult for those in the advertising market. So the apps go on the traffic so they have various demand for them to improve the monetization efficiency, right. So I mean before they probably only involved with one ad network. But currently they will work with three or four or even more basic networks to improve the monetization efficiency. So eventually they can improve the AD law or CPM. So I think this product can bring the value and can help those apps can monetization better in the currently very challenging environments. So eventually they will help JG Alliance I think. So I mean in the overseas market, APP and ironSource, this kind of product can — the value is proven.

Brian Kinstlinger — Alliance Global Partners — Analyst

Okay. Thank you so much.

Operator

Thank you. The next question comes from the line of Ryan Roberts from Navis Capital. Please ask your question.

Ryan Roberts — Navis Capital Partners — Analyst

[Foreign Speech] So my two questions are number one on kind of the gross profit margin, it’s kind of compressed a little bit from about 76 — 77% to down about 69% and I want to know kind of more what’s behind that with respect to the traffic pool cost to get to the revenue share. If management can give us some more color on like is that, is that kind of a temporary thing, I know your guidance has been over 70% historically. But is that more like a structural thing that we’re seeing or alternatively is that like a shift and if there’s color in terms of like what kind of partners are asking for more share that’d be good to know. And number two is more generally on the outlook and kind of the overall condition of the market. Management seems to kind of indicate the demand is just kind of holding up and the industry should rebound I guess after COVID, but it seems like there are some other headwinds with respect to data collection and so on and so forth that I think actually would be a tailwind for Aurora given the fact that it has targeting data to have better ads. I’m kind of curious if management could walk us through those two points.

Shan-Nen Bong — Chief Financial Officer

Hey Ryan, this is Shan-Nen. Back to your first question on the margin. Yes, this quarter we have been giving more shares of the revenue to the traffic pool in the JG Alliance business. I think this is something that’s a part of the negotiation that we have undergone with them. So having said that, going forward I think looking out for the next few quarters or throughout the year, we expect the margin to be around 65% to 70% range. So this is something that — if you look at what we have is besides JG Alliance, the other businesses like the likes of Subscription, Vertical Application, Financial Risk Management; those are the ones with a much higher margin which is above 70%. So, this is the only segment of the business that we are having a relatively low or comparatively low margin. So, I just want to give you some color in terms of the makeup of our margins.

So, majority of the businesses are still having 70% and above margin. So, this is the first question. And the second on the outlook. Again if you peel what we have in terms of the revenue, let’s say we can segregate them or we can separate them into Value-added Services and others. If you look at Value-added Services like what Chris and I have said, the demand for the ad spending or ad revenue has been low since beginning of this quarter, which is like given the late March. From March onwards, we have seen the demand for advertising has been low and pretty low. If you look at what Tencent has announced, again their Q2 revenue is expected to drop again for about 20% to 30%. I don’t think we are any better so things will be pretty tough for Value-added Services.

Having said that for the subscription — the likes of Subscription or the Financial Risk Management or the Market Intelligence, those are pretty okay. Okay in the sense that like what Chris has said in the earlier calls or answering the earlier question. The lockdown did not diminish the demand for these services. What it did is simply delay the contract renewal, delayed the cash collection from customers. So the customers are still there, just the fact that we are not able to sign our contract, we are not able to chase our money. So, those are the delays that we are experiencing because the fact that you don’t have contracts; you cannot provide service, we cannot record revenue. So, we do not see any diminishing or disappearance of customers. It’s a matter of delays.

Ryan Roberts — Navis Capital Partners — Analyst

Okay. And then maybe if I can ask kind of a follow-up — can I have at least two follow-ups. First, on your first one on kind of the gross margin issues. So I guess, I mean when we first started talking about the JG Alliance and it’s kind of being a unique traffic pool and kind of a very differentiated offering, it sounds like this is something that frankly ATC companies really were kind of effectively price takers because you had such a unique kind of product to offer them to monetize — help them monetize that without it, they were kind of on their — basically relying on the standard kind of Tencent or whatever kind of a platform to push ads on their app. But with the compression in kind of — sorry, we mean increase in take rates so I guess the compression in margin there, it seems like that’s not consistent.

And I guess I’d like more color there because it sounds like maybe there’s some pushback for larger platforms [Foreign Speech] like asking for more share because they realize the value of their traffic perhaps? And then kind of maybe on the second part, kind of on the overall demand side. I understand the weakness in [Indecipherable] and so forth, but it does seem like there’s kind of a — again I take on board with a lot since, but it does seem like there is some overall maybe back half — second half loaded potential growth there. And maybe if you could give us some color on where if you have specific verticals that you’re seeing either strength or weakness in that would be helpful because with COVID-19 lockdowns, it seems like there are e-commerce and other kind of maybe verticals that might see some growth, which maybe could be kind of into the second half. And so if you can maybe touch on those two follow-ups, that would be great.

Operator

Excuse me, have you finished with your questions?

Ryan Roberts — Navis Capital Partners — Analyst

Yes, I have.

Shan-Nen Bong — Chief Financial Officer

We are here. Ryan, on the first question, yes, you are right. We’re providing very specific unique services to those apps that needs monetization. But what we are seeing is in the first quarter of 2022 due to the lack of demand or the reduced demand for the advertising, you can see the ECPM or the price that the advertisers are willing to give us has reduced, right, because the fact that the demand has decreased. So what we could not do is we could not just pass on the reduced ECPM to our app developer. So in a sense that we are taking a hit in a sense so that’s why our margin has dropped a bit and you can see it’s fairly good, still at 70% or 69%.

Ryan Roberts — Navis Capital Partners — Analyst

Almost. It’s the question. So what was — that almost sounds to me kind of like a perfect subsidy that you’re offering the app developers, which is — it’s a little bit different than just kind of saying there’s a structural change in revenue share with the app developer. So is that a better way to characterize I guess the impact on margin is that you are kind of passing through more revenue kind of on a temporary type basis or alternatively is that a contractual structural change in how you’re sharing the ad risk?

Weidong Luo — Co-Founder, Chairman & Chief Executive Officer

Hey, Ryan. There are some of the arrangements that we have with the app developer at a fixed ECPM arrangement, which means that if — let’s say they are supposed to give them $1 or renminbi ECPM, if we received $2, of course we got a good margin. If we receive a 1.5 ECPM from customers, we still have to give them $1 I mean to the app developer. That’s why what I’m trying to say is the amount that we have arranged to give to the app developer is kind of fixed for some of them.

Ryan Roberts — Navis Capital Partners — Analyst

Got it. Definite squeeze there. Okay. Understood.

Weidong Luo — Co-Founder, Chairman & Chief Executive Officer

And your second question was the overall outlook on…

Ryan Roberts — Navis Capital Partners — Analyst

Yes. Just the overall outlook kind of really on kind of maybe second half, maybe if you can give some color on the different verticals that you’re exposed to? Because I know that kind of gaming — irrespective of the recent announcements about new games being announced and being released, maybe there’s some kind of e-commerce lift that you may see. I think Palo Alto and some of the e-commerce players like [Indecipherable] are kind of your customers. And so with some COVID lockdown, maybe there could be an offsetting effect from that and demand from those advertisers that kind of really offset the maybe gaming and some other kind of weaker…?

Weidong Luo — Co-Founder, Chairman & Chief Executive Officer

I guess it’s not really a benefit from COVID, but on the other hand maybe I can call as silver lining. What we have seen is we have seen a lot of our customers, the subscription-related customers, has gone overseas like the likes of BYD, MT [Phonetic] or some of the delivery companies. So when they venture into overseas Wuhai, right? Let’s say, they go to Southeast Asia. In China they are using our push services. In Southeast Asia when they set up a new venture, we are providing the services there as well. So what we’re trying to say is we do see a new venture or new growth driver in the Wuhai area, which means that we are providing the same customers who are going into overseas market. Even developer side, some of the Southeast Asia customers base are selecting to use or have chosen to use our push services.

One of which is one from my home country, a Malaysian company, a gaming company — a gaming publishing company. For some reason, I think for a good reason, they have chosen Guang Services to push their services in Malaysia. So this is something that we see. So long as we are doing well — performing or doing well, providing a good quality service in push services; I think we have a good chance of getting more services in Southeast Asia and probably I’ll give you some color. We have recently set up companies in Singapore and the reason why is we do see some potential new businesses signing up contracts in that area. So if you look at what we have forecast internally, we expect the so-called overseas related revenue to be around 3% to 5% of our subscription business in Q2 and beyond. So, there’s some new growth drivers where we have seen missed this so-called relatively set COVID environment.

Ryan Roberts — Navis Capital Partners — Analyst

Right. And maybe kind of one kind of housekeeping — one or two housekeeping questions if I could. Could you please give us an update on the size of the JG Alliance kind of the DAU pool? I think you guys did that last quarter and that transparency great. I’m sure we all appreciate it. Can you give us that?

Weidong Luo — Co-Founder, Chairman & Chief Executive Officer

Sure. The DAU pool in the traffic for JG Alliance is still fairly stable. It’s about — I think in the last call we had it at about 190 million DAUs. So, this is fairly stable. I think the numbers that I’m going to give you is the ECPM that we’ve seen has declined. The ECPM quarter-over-quarter we expect it to drop about 20% to 30%.

Ryan Roberts — Navis Capital Partners — Analyst

And I think as you commented on an earlier question, that’s more or less kind of market softness since I got that. Has there been any kind of meaningful churn in kind of JG Alliance kind of DAU outside of, let’s say, normal acquisition? Because earlier you announced some pretty large kind of marquee type wins it sounds like anyway. Has there been any change in the composition of who’s in the pool?

Weidong Luo — Co-Founder, Chairman & Chief Executive Officer

No, I think there hasn’t been any big loss or big change. I think what we try to do is even though let say our DAU did not increase from 19 million, that’s fine. What we have seen is we are able to increase the exposure or the ad load that we talk about. I think a couple of quarters ago we used to have like 0.5 ad load per DAU. So long as the DAUs are there, we are able to — we are still able to make good traction so long as we increase the exposure. If we are able to increase the exposure of the same DAU, we are able to increase the revenue.

Ryan Roberts — Navis Capital Partners — Analyst

And what’s the ad load these days roughly?

Weidong Luo — Co-Founder, Chairman & Chief Executive Officer

Let’s say still around 1.5 because of the lack of demand.

Ryan Roberts — Navis Capital Partners — Analyst

Because of lack of demand?

Weidong Luo — Co-Founder, Chairman & Chief Executive Officer

Yeah. Because of the lack of demand, we are not able to show as many advertisement as we would like to this 190 million exposure of the DAUs.

Ryan Roberts — Navis Capital Partners — Analyst

Great. Thanks a lot, guys. Appreciate the color.

Operator

Thank you. [Operator Instructions] Dear speakers, there are no further questions. I would like to hand over the call back to Rene for closing remarks. Please go ahead.

Rene Vanguestaine — Investor Relations

Thank you, Nadia. 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 all.

Operator

[Operator Closing Remarks]