Executive Summary / Key Takeaways

• Aurora Mobile has achieved a significant milestone, reporting its first-ever quarterly GAAP net profit in Q2 2025, a testament to its strategic pivot towards a pure SaaS model, global expansion, and "AI First" strategy.
• The company's flagship global product, EngageLab, is a primary growth engine, demonstrating robust expansion with a 67% year-over-year revenue increase in Q2 2025, a rapidly growing customer base, and a cumulative contract value exceeding RMB 110 million by Q1 2025.
• Aurora Mobile's enterprise AI agent platform, GPTBots.ai, is emerging as a critical future growth driver, leveraging advanced LLM integrations and no-code solutions to empower enterprise AI adoption and enhance operational efficiency for clients.
• Despite operating in a highly competitive landscape dominated by tech giants, Aurora Mobile differentiates itself through specialized, high-performance omnichannel engagement solutions and agile AI offerings, reflected in its 99% net dollar retention rate for core developer services.
• The company projects continued solid growth with Q3 2025 revenue guidance of RMB 88 million to RMB 91 million, underscoring management's confidence in its strategic execution and ongoing investments in R&D and global market penetration.

A New Chapter: Aurora Mobile's Strategic Transformation and Technological Edge

Aurora Mobile Limited, founded in 2011 and headquartered in Shenzhen, China, has undergone a profound transformation, evolving from a traditional mobile app developer service provider into a dynamic force in customer engagement and marketing technology. The company's strategic pivot towards a pure Software-as-a-Service (SaaS) model, coupled with an aggressive global expansion and an "AI First" strategy, has culminated in a significant milestone: its first-ever quarterly GAAP net profit in Q2 2025. This achievement is not merely a financial data point but the clear outcome of a multi-year strategic overhaul, including streamlining service offerings, divesting from low-margin businesses, and a substantial reduction in headcount from over 820 to approximately 400, all aimed at fostering a lean and efficient operational structure.

The company operates primarily through two segments: Developer Services and Vertical Applications. Developer Services, its core offering, provides a comprehensive suite of tools for mobile app developers and enterprises to engage users efficiently across multiple channels. Vertical Applications, on the other hand, delivers specialized solutions for industries such as financial risk management and market intelligence. This focused approach, combined with a relentless pursuit of technological differentiation, underpins Aurora Mobile's competitive positioning in a rapidly evolving digital landscape.

At the heart of Aurora Mobile's technological differentiation are its flagship products: EngageLab and GPTBots.ai. EngageLab is a world-leading AI-powered omnichannel customer engagement solution, uniting technology and versatility to offer seamless customer interactions across every channel, including Email, AppPush, WebPush, OTP, SMS, and WhatsApp Business. This platform boasts impressive performance metrics, including a push delivery rate that is 40% higher than mainstream vendors and a 99.97% email delivery rate. Recent innovations like the Smart Push and Push Plan features for AppPush and WebPush have already demonstrated their impact, boosting click-through rates by over 30% for early adopters in global e-commerce. Furthermore, EngageLab's industry-leading WebPush support for Chrome Extensions enables seamless, real-time notifications without requiring extra permissions, enhancing user engagement and extension efficiency. These quantifiable benefits translate directly into a stronger competitive moat, allowing Aurora Mobile to offer superior value to its clients through enhanced engagement and conversion rates.

Complementing EngageLab is GPTBots.ai, Aurora Mobile's enterprise AI agent platform. This platform is designed to empower businesses to build, train, and deploy AI bots for specific tasks using an intuitive, no-code interface. GPTBots.ai integrates with leading Large Language Models (LLMs) such as OpenAI's GPT series (including GPT-5), Google DeepMind (GOOGL)'s Genie 3, Anthropic's Claude Opus 4.1, Zhipu AI's GLM-4.5, and Grok 4, ensuring access to cutting-edge AI capabilities. The recently launched AI Workspace 2.0 and Marketplace transform GPTBots.ai into a comprehensive AI productivity platform, offering features like Enterprise AI Search (multimodal search with customizable models) and Automated Workflows (no-code process automation). Its Marketplace provides plug-and-play AI applications, including "Live Speechly" for real-time meeting translation, summarization, and action plan generation. The platform also introduces a Multi-Agent System creation portal, enabling enterprises to build collaborative "AI expert teams" for complex tasks like market research. A strategic partnership with GP Batteries (G06), for instance, resulted in over a 50% automated response rate and over a 50% reduction in operating costs, alongside 24/7 service hours and improved customer satisfaction. These technological advancements are critical for Aurora Mobile's long-term growth strategy, positioning it at the forefront of enterprise AI adoption and driving innovation across diverse business scenarios. Both EngageLab and GPTBots.ai have also achieved SOC 2 Type II certification, underscoring the company's commitment to high international data security standards.

Financial Performance: A Profitable Turnaround and Sustained Momentum

Aurora Mobile's strategic overhaul has demonstrably translated into robust financial performance, culminating in its historic Q2 2025 GAAP net profit. The company's total revenue for Q2 2025 reached RMB 89.9 million, marking a remarkable 13% year-over-year growth. This growth was broad-based, with all business segments, including Developer Subscription Services, Value-Added Services, and Vertical Applications, recording solid double-digit year-over-year revenue increases.

The core Developer Services segment saw revenue increase by a strong 14% year-over-year in Q2 2025. Within this, Developer Subscription Services, the company's foundational business, generated RMB 53.7 million in revenue, growing 12% year-over-year and marking its fourth consecutive quarter of over RMB 40 million in revenue. This consistent performance is driven by increases in both customer numbers and Average Revenue Per User (ARPU). The Net Dollar Retention (NDR) rate for core developer services stood impressively at 99% for the trailing 12 months ended June 30, 2025, indicating high customer retention and significant revenue expansion from existing clients.

EngageLab, the global flagship product, was a standout performer, with recognized revenue surging 67% year-over-year and 24% quarter-over-quarter in Q2 2025. The platform signed new contracts totaling RMB 11.2 million in Q2 alone, and its customer base expanded by 25% sequentially to 1,058. This rapid growth underscores its role as a key revenue driver. The Value-Added Services segment also contributed significantly, with revenue of RMB 10.7 million, increasing 30% year-over-year and 21% quarter-over-quarter, primarily due to increased advertiser spending and new customer acquisitions, boosted by the traditional Q2 online shopping festival.

In Vertical Applications, the financial risk management business recorded a solid 27% year-over-year revenue growth in Q2 2025, marking two consecutive quarters of revenue exceeding RMB 21 million. This growth was largely fueled by a strong 48% increase in customer numbers, demonstrating the market's positive reception to the segment's upgraded products and services. Conversely, the Market Intelligence segment continued to face headwinds, with revenue decreasing by 38% year-over-year in Q2 2025 due to weak demand for Chinese APP data. However, management is actively addressing this by undertaking major product upgrades to better meet dynamic market needs.

Profitability metrics also reflect a positive trajectory. Gross profit in Q2 2025 grew strongly by 13% year-over-year to RMB 59.6 million, achieving its highest level in the past 10 quarters, with gross margin improving quarter-over-quarter. Operating expenses in Q2 2025 increased by 11% year-over-year to RMB 60.8 million, a controlled growth rate that supported the 13% revenue increase across all business lines. This disciplined approach to cost management, alongside revenue scaling and high gross margins, was instrumental in achieving the quarterly GAAP net profit. The company has also maintained a streak of positive adjusted EBITDA for seven consecutive quarters by Q1 2025, culminating in its first full year of adjusted EBITDA profitability in 2024.

From a liquidity standpoint, Aurora Mobile demonstrates a healthy financial position. It recorded a net operating cash inflow of RMB 7.9 million in Q2 2025. Total deferred revenue, representing cash collected in advance from customers, stood at RMB 156.1 million in Q2 2025, marking the second consecutive quarter exceeding RMB 150 million. The company also maintains an industry-leading low AR turnover of 54 days, reflecting efficient cash collection.

As of June 30, 2025, cash and cash equivalents were RMB 119.8 million. Furthermore, the Board of Directors approved a strategic initiative in June 2025 to invest up to 20% of the company's cash and cash equivalents in cryptocurrencies and other digital assets, signaling an innovative approach to treasury management and asset value enhancement.

Competitive Positioning and Strategic Outlook

Aurora Mobile operates in a highly competitive technology landscape, vying with industry giants like Tencent (TCEHY), Alibaba (BABA), and Baidu (BIDU), particularly in China's mobile app services and data analytics sectors. While these larger competitors possess immense scale, broader ecosystems, and deeper AI resources, Aurora Mobile has carved out a distinct niche through its specialized, high-performance offerings and agile approach.

Aurora Mobile's competitive advantage lies in its ability to deliver tailored, vertical-specific solutions with superior performance. EngageLab's high push and email delivery rates, coupled with its AI-powered marketing automation, provide a tangible edge, leading to higher customer retention and increased revenue from existing clients, as evidenced by the 99% NDR. This technological superiority allows Aurora Mobile to attract customers who are actively switching from incumbent service providers. Similarly, GPTBots.ai's no-code platform and integrations with leading LLMs enable rapid, customized AI deployments, offering a more accessible and efficient solution compared to the broader, often more complex, offerings of larger players. The company's focus on specific industry verticals, such as financial risk management, where its upgraded products are seeing "deeper cooperation and usage" by leading platforms, further solidifies its market position.

Despite these strengths, Aurora Mobile faces vulnerabilities inherent to its smaller scale, which can lead to higher customer acquisition costs and potentially slower R&D cycles compared to its well-resourced rivals. The continued weak demand for Chinese APP data impacting its Market Intelligence segment also presents a challenge. However, management is actively addressing these by continuously investing in product upgrades and global market penetration.

Looking ahead, Aurora Mobile is "very optimistic and confident" about its ability to execute its strategy for the remainder of 2025. The company has provided Q3 2025 revenue guidance in the range of RMB 88 million to RMB 91 million, representing a solid 11% to 15% year-over-year growth. This outlook is underpinned by the expected continued strong performance of EngageLab, which management believes will be the "engine of growth for Aurora Mobile in the next 12-24 months." The company is actively expanding EngageLab's global footprint, establishing localized presences in Hong Kong, Singapore, and Malaysia, and forming local teams in Thailand and Japan to further penetrate international markets.

GPTBots.ai is also positioned as a "next growth engine," with ongoing investments in its development and global expansion. Management emphasizes a strategic balance between achieving immediate GAAP net profit and diligently investing in R&D and marketing to "fuel our continuous revenue growth in the next 12 or 24 months." This long-term growth-oriented investment strategy, coupled with a data-driven approach to overseas expansion (considering new offices based on material customer numbers and revenue), indicates a disciplined path forward. The increasing global traction of Chinese cross-border e-commerce and the accelerating digital transformation worldwide create significant tailwinds for Aurora Mobile's services, particularly its robust customer engagement and AI solutions.

Conclusion

Aurora Mobile Limited stands at a pivotal juncture, having successfully navigated a multi-year strategic transformation to achieve its first quarterly GAAP net profit in Q2 2025. This milestone underscores the efficacy of its focused pure SaaS model, aggressive global expansion led by EngageLab, and unwavering commitment to an "AI First" strategy through GPTBots.ai. The company's technological differentiators, including EngageLab's superior delivery rates and GPTBots.ai's accessible, powerful AI agent platform, provide a crucial competitive edge in a market dominated by larger players. While challenges such as intense competition and segment-specific demand weaknesses persist, Aurora Mobile's disciplined operational management, strong liquidity, and clear growth roadmap, supported by concrete guidance and strategic investments, position it for continued expansion. Investors should recognize Aurora Mobile as a compelling opportunity, poised to capitalize on the burgeoning demand for intelligent customer engagement and AI-powered solutions globally, driven by its proven ability to execute and innovate.