Aurora Mobile Ltd (JG) Q1 2021 Earnings Call Transcript

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Aurora Mobile Ltd (NASDAQ:JG)
Q1 2021 Earnings Call
Jun 10, 2021, 7:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thanks for standing by, and welcome to the Aurora Mobile first-quarter 2021 earnings conference call. At this time, all participants are in listen-only mode. And after the speakers’ presentation, there will be a 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 host today, Mr. Rene Vanguestaine. Thank you. Please go ahead, sir.

Rene Vanguestaine — Investor Relations

Thank you, Annie. Hello, everyone, and thank you for joining us today. Aurora’s earnings release was distributed earlier and is available on the IR website at ir.jiguang.cn. On the call today are Mr.

Weidong Luo, chairman and chief executive officer; Mr. Fei Chen, president; and Mr. Shan-Nen Bong, chief financial officer. Following their prepared remarks, all three 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 make 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 other 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 over to Mr. Luo.

Please go ahead.

Weidong Luo — Chairman and Chief Executive Officer

Thanks, operator. Good morning, and good evening to everyone on the call. Welcome to Aurora Mobile’s first-quarter 2021’s earnings call. This is the first quarter where our financial results reflect only our SAAS business as we fully exited our legacy targeted marketing business at the end of 2020.

We now enter our new chapter and are very excited about our future business prospects. Before I comment on our Q1 results, I would like to take this opportunity 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’s begin our review with highlights of our key operating and financial performance for the first quarter of 2021.

As we completely exited targeted marketing at the end of 2020, our business is now focused on the SAAS business, which include developer services and vertical applications. For apple-to-apple comparison, numbers present here excluded the contribution from the legacy targeted marketing in the prior year and prior quarter. In the first quarter, we continued to put our companywide focus and conscious effort to grow our SAAS business and deliver impressive results. The number of paying customers increased to 2,512 from 2,049 a year ago, up 23% year over year.

Revenue was RMB 76.6 million, up 56% year over year. Group gross margin reached a historical high of 75.9%, more than 2.3 times from a year ago. Gross profit was RMB 58.1 million, up 60% year over year, growing faster than revenue; and adjusted EBITDA was negative RMB 18.4 million, a substantial improvement of 39% from a year ago, demonstrating strong operating leverage. The strong SAAS business revenue growth was mainly due to strong growth of 67% in developer services and 36% in vertical applications.

The historical high gross margin is strong evidence of how the transition to a pure SAAS business model has been positively impacting our results. As this model typically retains higher gross margins due to our competitive advantage in notification distribution network and the high efficiency of JG Alliance delivering services, we see minimum working capital. The strong SAAS business gross profit growth was driven by both the revenue growth of 56% year over year mentioned earlier, and the margin expansion from 73.9% to 75.9% year over year. Here, I would also like to take a moment to give an update on our latest products, JG UMS and JG Alliance.

For JG UMS, which stands for Unification Messaging System, we started to commercialize this product post the Chinese New Year in March 2021. Since then, we have signed contracts for total value existing RMB 1 million with an ARPU of more than RMB 100,000. These customers cover a wide range of industry vertical, including social e-commerce, education, lifestyle services, medical industry essential. We are seeing a strong pipeline being developed and scaled, and we believe this product has addressed the critical needs of many corporate customers who want to manage their customer engagement more cost-effectively.

For JG VaaS product, which stands for Video-as-a-Service, we [Technical difficulty] more than 10 customers’ contracts since its official rollout post the Chinese New Year, with up to more than RMB 100,000 too. The continued sales momentum and traction demonstrate the demand from the mobile app developers who have successfully applied our VaaS to their applications, helping improve user experience, increase user engagement time, and enhance monetization capability. By average, user engagement time from application with VaaS products has increased by 30%. We will continue to provide updates on these products in the coming quarters.

We continue to put great emphasis on product development and innovations by hiring more talent and upgrading our infrastructure. Our R&D team achieved significant improvements on our diversified product offering and expand functionality to exceed our customers’ expectations. In particular, after continuous integration of push SDK, mobile app developers are now able to access the mobile phone manufacturer message channel, which will significantly improve the push message successfully. This further cements our leading position to our mobile ad developers seeking more engaging and effective ways of marketing to their users.

In addition, our newly updated JG UMS version 2.0 officially launched recently. With the rapid adoption of 5G technology, we are free to announce that our JG UMS version 2.0 can fully support 5G messaging channels, third-party messaging service platforms, retail subscription messaging, and we are able to conduct push message analysis for app developers to get a better big feature of user behavior. Mobile app developers can also adjust their message strategy in real time, which reduce the disruption to end users in a highly effective way, allowing more flexibility to meet marketing needs and eventual reach. Now I will turn the call to Fei, who will discuss the Q1 performance in greater detail.

Fei Chen — President

Thank you, Chris. Let me start with the discussion on different revenue streams within the SAAS businesses. Following its stellar performance throughout 2020, developer services continued to be the biggest revenue contributor in first quarter of 2021. We recorded RMB 52.4 million in revenue for developer services, which represented a very strong 67% growth on a year-over-year basis.

The significant revenue growth was driven by strong 35% growth in subscription services and 189% growth in value-added services. Subscription services revenue was RMB 33.7 million, an increase of 35% year over year, primarily driven by the — by new push-notification customer acquisition and the cross-selling of nonpush-notification products in our product portfolio, which includes other subscription products such as JVerification, JSMS, JAnalytics, etc. Revenue contribution of nonpush-notification products increased to 35% from 23% in 1Q 2020. Nonpush-notification products have a higher ARPU, resulting in the overall ARPU for subscription services increasing by 21% to RMB 16,900 compared with RMB 13,900 in 1Q ’20.

New and renewed contracts of notable customers include Starbucks, McDonald’s, Jans, iHub, China Eastern Airlines, and so on. Value-added services within developer services, which include revenues from JG Alliance services and the advertisement SAAS recorded another very impressive quarter as revenues grew by 189% to RMB 18.8 million from RMB 6.5 million in 1Q ’20 despite Q1 being a seasonally slower quarter. This stellar year-over-year revenue growth is attributable to the growth in both the supply and the demand side of the JG Alliance. On the supply side of JG Alliance, the total number of apps and the DAU within our network exceeded the 280 apps, compared to 200 in the fourth quarter and 150 million DAU compared to 130 million in the fourth quarter, representing very strong 40% and 15% growth from fourth-quarter 2020, respectively.

In this quarter, we continue to sign up many large and popular mobile apps from different industrial verticals into our JG Alliance traffic supply pool. This continued increase in traffic pool is important as it provides a great number of usable DAUs, which in turn helps us to increase impressions and generates higher revenues. On the demand side, we see strong demand from many program developers, which again contributed more than a third of JG Alliance revenue. Since we launched JG Alliance in late 2019, it has proven to be an effective traffic acquisition medium for these mini program developers who continuously need to expand their user base.

Our services for mini program developers are also beneficial to many program platforms such as WeChat because the platform encourages traffic originating from outside the WeChat ecosystem to enhance the traffic pool for its many programs inside WeChat. Data vertical where we see strong demand for apps who use our services for dormant user retargeting purposes. Major customers of JG Alliance in the quarter consisted of market leaders across many industry verticals. They include but are not limited to Weibo, [Inaudible], Xindong, Taobao, Du Xiaoman, [Inaudible].

JG Alliance is a highly complex business model, which requires many moving parts that need to work cohesively and seamlessly in order to make it fully integrated such as technical product innovation, traffic acquisition and operation, advertiser’s acquisition and operation, data and AI algorithm, development and the smooth operation of the ad ecosystem in the platform, just to name a few. We believe the relationships and the trust that we have built with our developers over the past 10 years have enabled us to sustain a steady flow of traffic and accumulate invaluable big data insights. As we continue to get steady traffic and use machine learning for data analysis, this will reinforce the magnitude of our AI technology and the capabilities on performance apps which in turn continue to bring higher ROI for advertisers and higher return to our traffic suppliers. The total addressable market of JG Alliance is massive and projected to be over RMB 10 billion based on third-party research, and we are just at the very beginning of the growth curve.

Now, let’s move on to the discussion of vertical applications. Collectively, the revenues from vertical applications, including market intelligence, financial risk management, and iZone, year-over-year vertical application revenue continue to grow by 36% as demands continue to recover from the pandemic, particularly financial risk management business has outperformed while revenue grew by 56%. All of these businesses recorded a solid year-over-year revenue growth. Revenues from our market intelligence product increased by double digits year over year.

We continue to see strong growth from corporate with more than 60% of revenue contributed by corporate clients, new and renewed corporate customers including, Taobao, [Inaudible], etc. In the financial risk management segment, revenue increased significantly by 56% year over year. We believe the demand for this business has fully recovered from the impact of COVID-19. Solid and continued demand from banks and licensing institutions has pushed our ARPU up by 64% year over year.

New and the renewed customers included Baidu and the 360 financed. The strong performance is also the result of our strategic shift to focus on KA customers who typically have massive demand and the bigger budgets. As long as we offer solid products that perform well, brand stickiness will be retained among KA customers. And lastly, our iZone business is still in the midst of product transition.

Based on market demand and our product strengths, we are focusing our product development efforts on city planning, real estate, and marketing-related demand. Nevertheless, we recorded a solid 38% year-over-year revenue growth in there in the quarter, driven by demand from real estate and city planning customers. With that, I will now pass the call to Shan-Nen.

Shan-Nen Bong — Chief Financial Officer

Thanks, Fei. I will go through some of the key expenses and balance sheet items. Onto the operating expenses, total operating expenses increased by 9% year over year from RMB 101.5 million, in particular, R&D expenses increased by 25% RMB 51.9 million really due to the increase in SaaS cost, higher bandwidth, and cloud expenses to support our SaaS business expansion. Selling and marketing expenses increased by 7% from RMB 36.9 million mainly due to increased customer business after the traffic restriction was implemented at the start of 2021 and other offline marketing expenses incurred.

G&A expenses decreased by 14% to RMB 32.8 million, mainly due to a year-over-year reduction of RMB 6.8 million in bad debt provision. The decrease in bad debt provision was partly due to the reversal of bad debt provision as we continue to receive funds from long outstanding debts through legal proceedings. This was — this was partly offset by the increase in professional fees incurred. Adjusted EBITDA, completed as EBITDA-improving share-based compensation, improved 39% year over year to negative RMB 18.4 million from negative RMB 30.3 million in Q1 2020.

In summary, for the year-over-year comparison, the key takeaway in this quarter includes our top businesses revenue increased significantly by 53%, group gross margin improved from 33% to 76% as a direct result of Q1 2021 gross margin being 100% contributed by high-margin SaaS businesses. Opex, however, only increased by 9%. As a result, our adjusted EBITDA has improved by 39%. The scalability of our business model has become clear, and we are very proud of and very pleased with the results of Q1 2021.

This has clearly demonstrated that our businesses who invest in the SaaS businesses was the right strategy. We believe that the SaaS businesses will continue — will continue the good momentum and the solid growth moving forward. Onto the balance sheet. With our continued effort to closely monitor our outstanding accounts receivables, the AR turnover days decreased significantly from 86 days Q1 2020 to 48 days this quarter.

This was due to a further shift away from the legacy targeted marketing business to focus on SaaS business and the company’s continued efforts to shorten the AR collection cycle. And for the fourth consecutive quarter, the deferred revenue balance, which represents cash collected in advance from customers exceeded RMB 100 million at quarter-end. As of March 31, 2021, the balance was at RMB 110 million. The shift was [Audio gap] businesses where most customers are required to prepay ads marketing from our cash flow compared with the prior quarters where we had legacy targeted marketing business.

Last, total assets were RMB 734 million as March 31, 2021. This includes cash and cash equivalent of RMB 400 million, accounts receivable of RMB 36 million, prepayments of RMB 9 million, fixed asset RMB 67 million, and long-term investment of RMB 106 million — RMB 169 million. Total current liabilities were at RMB 430 million as of March 31, 2021, and include accounts payable of RMB 15 million, deferred revenue of RMB 110 million, accrued liabilities of RMB 81 million, and convertible notes of RMB 229 million we shall fully review in April 2021. Onto business outlook.

The company confirms that the previously provided guidance for the financial year ended December 31, 2021, for the total revenues of RMB 380 million to RMB 400 million, representing a year-over-year growth of approximately 47% to 55%, and gross margin to be about 70% for the full year remains unchanged. This was added for meaningful comparison purposes the prior-year revenue on this, used to calculate the revenue growth percentage excludes revenue from targeted marketing business. The good outlook is based on the current market conditions and reflects the company’s current and preliminary estimate of the market and operating conditions and customer demands we are subject — which are all subject to change. And lastly, before I conclude, I’ll give a quick update on the share repurchase plan.

In the quarter ended March 31, 2021, we did not repurchase any share. As of March 31, 2021, cumulatively, we have repurchased a total of 921,000 shares since the start of our repurchase program. And this concludes the management’s prepared remarks. We’re happy to take your questions now.

Operator, please proceed.

Questions & Answers:

Operator

Thank you. [Operator instructions] Our first question comes from the line of Bo Pei of Oppenheimer. Your line is open. Please go ahead.

Bo Pei — Oppenheimer & Co. Inc. — Analyst

Hi, management. Good evening. Thanks for taking my questions and congrats on the solid results. So, I have three questions here.

So, first is a quick one. In the previous quarters last year, we talked about operating cash flow. I know our accounts receivable, deferred revenues, etc., has been improved quite a lot. So, can you talk about the operating cash flow for 1Q? And then the second question is about JG UMS and our Video-as-a-Service products.

So, you mentioned we are having a strong pipeline for both products. So, can you talk about how many companies are we in talks with and then conversion, etc., and then also like the ARPU compared with our JPush and other developer services? And then the third question is about JG Alliance. So you mentioned we are seeing strong demand and supply side. So I know the business is growing very nicely or close to 200%.

So — but if you have to like pick one, which side is the bottleneck for this business right now? Would you say you need to work harder on the demand side or the supply side? That’s all my questions. Thank you.

Shan-Nen Bong — Chief Financial Officer

Bo, thanks for your question. I’ll take the first question with just of the operating cash flow for Q1 2021. For Q1, we did have a negative — net negative cash flow from operating activities and that was because of the following reasons. One is the collection from customer was relatively slower in Q1 due to the Chinese New Year as majority of our customers are away over the long extended public holidays and this delayed cash collection in the first quarter.

And secondly, majority of our — probably, you know, Bo, majority of the companies in China, including us, paid an annual bonus to employees in Q1. So the combination of these two factors resulted in a negative cash position in Q1 of 2021. If we look back to what we did in Q1 2020, the trend was similar due to the exact same factors because of the slower cash collection in Chinese New Year and the cash bonus that we paid to employees in Q1.

Fei Chen — President

OK. Hi, Bo. Let me answer the second question regarding JG UMS and the VaaS, the pipeline situation, right? Yeah, so actually, you know, in the prepared remarks, Chris mentioned the pipeline is pretty strong. And indeed, actually, you know, right after Chinese New Year, within a very short period of two months, actually, you know, in both products, we have signed over 10 customers — paying customers, signed the contract and delivered the service.

And with the ARPU, actually, both exceeding 100,000 per year. The ARPU is meaningfully higher than JPush products. The typical ARPU is about 60,000 per year. OK.

And looking at the pipeline numbers, what we are seeing is like over 200 meaningful credible pipelines have been built up and the sales team is following with each of the pipeline customers very vigilantly and with the total contract value over 30 million. It’s over 30 million. Yeah, so that’s what I want to comment on JG UMS and the VaaS pipeline situation. And your third question regarding the JG Alliance, right? So, as you know, the business model goes you need to have the supply first.

And then once you have the supply into the JG Alliance, you know, the traffic pool, then you can work on it. And then you — on the demand side, you can consume that demand-side customers who consume the traffic, right? So which side is the bottleneck? Of course, I would not call it a bottleneck. I would say, which side is more important? It’s like the chicken egg and the — you need to basically — in this situation, you need to have the chicken first and to have the supply first. So our BD unit actually is very strong, you know, units as you know.

And this BD team is actually incubated from the — from our traditional developer subscription service team, right? So they can leverage that relationship — existing relationship with those developer subscription customers, and to try to sell them this new type of service to help them to monetize on their own traffic. So — and this actual progress is going on very well. And, you know, as I mentioned, in the fourth — in the third — in the first quarter, we already have a DAU about 150 million, right? So looking at second quarter, from now to end of second quarter, we should have additional, you know, 30 million kind of like a DAU be onboard before end of June. So the pipeline looks very strong.

And we think everything is on track for us to continue to deliver the very, very, very good results in this business.

Bo Pei — Oppenheimer & Co. Inc. — Analyst

Got it. That’s very helpful. Thank you. 

Operator

Thank you. Next question is from the line of Jacob Silverman of Alliance Global Partners. Please go ahead. Your line is open. 

Jacob Silverman — Alliance Global Partners — Analyst

Hi, everyone. Thanks for taking my questions. Just to follow up on those question about JG Alliance. How has the demand been looking for mini programs in the second quarter and what verticals are you seeing the greatest adoption in? 

Fei Chen — President

Yeah, so the demand from mini programs continue to be very strong. You know, again, they contribute close to 40% of the total JG Alliance revenue in the first quarter, right? So we typically — you know, we see customers actually from the travel sector, Tongcheng Travel actually is one of our biggest customer. And also, we see big demand, you know, from actually the finance sector, the Baidu Du Xiaoman is also bigger finance customer in this segment. So overall, we see this mini program continue to be the revenue driver for this JG Alliance business.

And the trend is continuing in the second quarter as well.

Jacob Silverman — Alliance Global Partners — Analyst

Great. And are you seeing any cross-selling opportunities from your UMS offering, and what’s the interest level been for mini programs if you have? And then just — if you could give us a little more detail, sorry, on the Video-as-a-Service. Is it live now? And if not, when is it going to be live? 

Fei Chen — President

Are you talking about the cross-selling of the UMS with our traditional subscription products? 

Jacob Silverman — Alliance Global Partners — Analyst

Yeah, cross-selling between subscriptions and then in the JG Alliance if that’s happening.

Fei Chen — President

Yeah, so you are right, actually. You know, when we go to market, right, from the very beginning, of course, we will try to find our customers who are already our subscription customers, right? And because we have a massive base of subscription customer. This is our core asset. So whenever we introduce a new product, whether JG Alliance or whether it’s JG UMS or VaaS, we typically go to the existing customer to propose to this new product.

So from the contracts we have signed in the first quarter, as well as in the two months into the second quarter, actually, majority of the signing customers are our existing customers. So once we exhaust all of our existing resources, then we may think about, you know, going into — expand the customer base into those customers who are not our existing customer, right? So currently, you can consider — you know, basically, majority of the selling is from the cross-selling. And for the VaaS, actually, it’s already live and we have already delivered the products for those customers who have already signed the contracts. Because customer, they will not sign if they don’t have the opportunity to test the product, right? They have to be, you know, feel comfortable before they sign the contracts with us.

So that’s a must. Product should be — need to be ready before we sign any contract. 

Jacob Silverman — Alliance Global Partners — Analyst

So just to clarify, Video-as-a-Service is live for some customers, and are you generating revenue from it yet?

Fei Chen — President

Yes, we are generating revenue. Actually, we already generated revenue, over 1 million. Or, actually, I will not say revenue, revenue cause that’s a recognition, right, accounting-basis measurement. Actually, the contract value, over 1 million, we already signed such contracts for the VaaS customers.

Jacob Silverman — Alliance Global Partners — Analyst

OK. So — I’m sorry. So I guess I misunderstood. So for UMS, have you shared the contract value so far? I know you said about 30 million in the pipeline.

So have you recognized any revenue — are you going to recognize any revenue in the second quarter from UMS?

Fei Chen — President

Yeah. Actually, in the first quarter, we already signed the contract and recognized a small number of, you know, the revenue for the UMS as well. And I think — 

Weidong Luo — Chairman and Chief Executive Officer

Contract value.

Fei Chen — President

Yeah, contract value is similar to VaaS. It’s over 1 million.

Jacob Silverman — Alliance Global Partners — Analyst

OK. Thank you. And — 

Operator

Thank you.

Jacob Silverman — Alliance Global Partners — Analyst

One final question from — sorry, one final question for me, and then I’ll hop back in the queue if I have any more. Just curious of Apple’s IDFA policy on the new iOS update has had any impact on your ability to reach mobile consumers? I would imagine it’s little to no impact as Apple has minimal market share in China, but — and I’m assuming you’re getting first-party data. But has this been any issue at all?

Fei Chen — President

No, for us, actually, in China, Apple’s market, you are right. Apple’s market share is pretty small. It’s only 20%, right? So you — because our market presence mimic the market share — the device manufacturers’ market share, right? So majority of our SDK in the Android device, around 80% of the total market, right? So this new privacy policy from the market share perspective, basically, you know, the impact to us is very, very minimal. And the second, actually, most of our business does not really, you know, actually rely on the iOS data, right? iOS data compared to Android data, you know, basically, iOS, as you know, is a closed system.

So actually, whether it’s app developer or SDK service provider, the access to the iOS data is very minimal, to begin with, right? So we — in our business, you know, whether it’s JG Alliance, whether it’s the subscription business, the revenue generation does not really dependent upon the iOS ecosystem and also iOS data. So the — basically, the policy change will not impact us much. I would say it’s very immaterial. So maybe this data, you know, this policy can and will impact the big companies, right, whose main business is in the advertising business.

And also, you know, there have been many iOS customers that could have some kind of impact. But for us, it’s immaterial. We are not worried about this at all. 

Jacob Silverman — Alliance Global Partners — Analyst

Thanks so much, everybody.

Operator

Thank you. [Operator instructions] Next question is from the line of Ryan Roberts of Navis Capital. Please go ahead. Your line is open.

Ryan Roberts — Navis Capital — Analyst

Hi. Good evening, guys. Thanks for letting me in the question queue here. A couple of quick ones from me.

First, what’s the current ad load on JG Alliance? I think before we discuss, it kind of starting slowly and ranking it up. As we kind of up here at the middle of the year, how has it been tracking and what’s the outlook for the rest of the year? 

Weidong Luo — Chairman and Chief Executive Officer

I got his question. So currently, the outlook of our JG Alliance is quite small. It is less than one, actually. So this means, for each DAU, we will have less than one.

It’s less than one impression or replacement per day. So we have a product launch later this month to which we can improve the ad load per DAU to be efficient. So we expect the number can be between two to three per DAU after we launch this product. So you can imagine, the price can be improved a lot after we launch the new upgrade of JG Alliance product.

Fei Chen — President

So let me add to Chris’s comment. Basically, our current — the product, right, the in-app product does not really support multiple ad load for DAU. But once we launch this new product, we will be able to have more than one, ideally, it should be two to three, ad load for DAU. Basically, we can show the ad based on the user’s behavior, right? Because instead of blindly showing to the user once the user opens up the app after a few seconds, we can basically, you know, monitor the user’s in-app behavior, whether they go through such as — if they go to their user center.

You know, maybe that’s a good opportunity to show an ad or to others. We can show an ad to make sure the user experience is mostly optimized. So we have already you know talked to the traffic supplier of the apps. They very much welcome this kind of mechanism.

So that’s why, you know, they made us make the decision to upgrade our current product to enable this functionality.

Ryan Roberts — Navis Capital — Analyst

That’s it. OK. And then in terms of like overall pricing, so I think, again, like the strategy was to start low coming up with a pretty low eCPM type of number and then kind of bring it up over time. I just want to check if that’s kind of where — if that’s kind of on track and what you’re looking for as you look at the second half of the year?

Fei Chen — President

Yeah. Currently, our price is eCPM, a low eCPM but we are slightly improving our eCPM, which we pay the traffic as long as our monetization capability is improved. So currently, all price is, basically, two plus X price, which means we pay eCPM RMB 2 to the traffic supplier. And we pass X — with X means if traffic — because the traffic quality is different, right? If the traffic is very good, we’re going to have more bonus to this traffic.

So the X also gives us the capability to differentiate traffic sources. So currently, this 2x pricing are very competitive in this market. 

Ryan Roberts — Navis Capital — Analyst

OK. Thank you. That’s very helpful. OK.

And kind of sitting on the, you know, the JG Alliance for a second. It’s kind of my last one. I just want to get a sense of — on the demand side, one thing that seemed like a targeted marketing business, historically, you had kind of some pretty established verticals you are you and gaming was one of the ones that you were not terribly strong on. You guys were very strong in financials.

As you were pushing out JG Alliance, I know you’re trying to kind of tax maybe some of the customers, and use similar relationships, and so on and so forth in the business. Is there any kind of bias, or are there any trends coming out into the buyers for traffic, or alternatively, are there some other kind of characteristics you can share?

Fei Chen — President

Yeah. So currently, we break down the JG Alliance customers by different categories, right? If you want to look at the breakdown by industry, the main industry that consumes our JG Alliance traffic comes from their apps, right, such as, I mentioned, in my prepared remarks, like Tobo, like Weibo. You know, these customers, they use our JG Alliance and the product actually to reactivate their dormant customers, right? So this is a big fact. And the fact that e-commerce like, you know, Weibo, JD, these big e-commerce platforms, continuously use JG Alliance for new user acquisition or dormant user reactivation.

So the bigger category is actually finance, including insurance, including online lending. This is about 20% of our total revenue. So currently, the bigger buckets to the segment, actually, are these three segments. Over time, of course, we will all, you know, tried to penetrate into additional in additional industries such as education, right, the lifestyle services.

So we are working on that. So I think when time goes by, eventually, the customer mix would be similar to what you see from other traffic networks. OK? 

Ryan Roberts — Navis Capital — Analyst

And then if I could maybe tack on one last one. This is just kind of I guess encapsulating all the points you just discussed. So some new mass monetization is starting off very well, some citywide and service monetization is starting off within 10 contracts, and so on and so forth. And that’s tracking companies are tracking well.

And JG Alliance in the second half is shaping up nicely. With eCPM, it sounds like guide up a little bit and ad load increasing, doubling it sounds like. I’m curious what’s in your guidance? It sounds like when you guys give guidance previously, some of these items may not have been in there. I’m kind of curious if you can kind of help me frame out what’s in your guide for the rest of the year?

Fei Chen — President

Yeah. So actually, on the full-year guidance, in our early release, we actually maintained our full-year guidance, which is full-year revenue from 380 million to 400 million, right, based on the current business traction and outlook. So I think if we do well in getting one of those things you just mentioned, the right ad load, the traction in JG UMS, and more traffic acquisition for JG Alliance, I think, if we do better than we currently anticipate, of course, we will have good chance to beat the guidance. But for now, I think we just want to maintain that guidance for the time being.

Ryan Roberts — Navis Capital — Analyst

Got it. Thanks, Fei. Weidong, thanks a lot. 

Operator

[Operator instructions] As there are no further questions, I’d now like to have the conference back to Rene Vanguestaine for closing remarks. Please go ahead. 

Rene Vanguestaine — Investor Relations

Thank you, Annie. Thank you, everyone, for joining our call tonight. If you have any questions or comments, please don’t hesitate to reach out to the IR team. This concludes the call.

Have a good night. Thank you all.

Duration: 49 minutes

Call participants:

Rene Vanguestaine — Investor Relations

Weidong Luo — Chairman and Chief Executive Officer

Fei Chen — President

Shan-Nen Bong — Chief Financial Officer

Bo Pei — Oppenheimer & Co. Inc. — Analyst

Jacob Silverman — Alliance Global Partners — Analyst

Ryan Roberts — Navis Capital — Analyst

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