REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of Each Class |
Trading Symbol |
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(The Nasdaq Global Market) |
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Large accelerated filer | ☒ | |||||
Non-accelerated filer |
Emerging growth company |
† | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
International Financial Reporting Standards as issued | Other ☐ | |||||||
by the International Accounting Standards Board ☐ |
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• | “ADSs” are to our American depositary shares, every three of which represent two Class A common shares; |
• | “Aurora,” “we,” “us,” “our company” and “our” are to Aurora Mobile Limited, our Cayman Islands holding company, and its subsidiaries and its consolidated variable interest entity; |
• | “BVI” are to the British Virgin Islands; |
• | “China” or the “PRC” are to the People’s Republic of China, excluding, for the purposes of this annual report only, Hong Kong, Macau and Taiwan; |
• | “Class A common shares” are to our Class A common shares of par value US$0.0001 per share; |
• | “Class B common shares” are to our Class B common shares of par value US$0.0001 per share; |
• | “common shares” are to our common shares, par value US$0.0001 per share; |
• | “cumulative app installations” as of a certain date are to the cumulative number of apps that have installed one or more of the SDKs offered as part of our developer services as of the same date; |
• | “customers” in a given period are to those that purchase at least one of our paid-for SAAS Businesses or targeted marketing during the same period. We treat each contracting party as a separate customer although it is possible that a company may have more than one contracting party to enter into contracts with us and multiple entities within one corporate group may use the same contracting party to enter into contracts with us; |
• | “monthly active SDKs” in a given period are to the number of SDKs offered as part of our developer services and integrated into apps that have been installed on mobile devices, which have established active connection with our servers in the last month of the same period; |
• | “monthly active unique mobile devices” in a given period are to the number of unique mobile devices that have at least one app establishing active connection with our servers in the last month of the same period; |
• | “our SAAS Businesses” are to our developer services and vertical applications; |
• | “our VIE” are to Shenzhen Hexun Huagu Information Technology Co., Ltd., or Hexun Huagu; |
• | “our WFOE” are to JPush Information Consultation (Shenzhen) Co., Ltd., or Shenzhen JPush; |
• | “RMB” and “Renminbi” are to the legal currency of China; |
• | “SAAS” are to Software-as-a-Service; |
• | “US$,” “U.S. dollars,” “$,” and “dollars” are to the legal currency of the United States. |
• | our goals and strategies; |
• | our future business development, financial conditions and results of operations; |
• | the expected growth of the mobile internet industry and the mobile app developer services market in China; |
• | the expected growing application of big data technology in China, including in areas such as mobile online marketing, financial risk management, market intelligence and location-based intelligence services; |
• | our expectations regarding demand for and market acceptance of our SAAS Businesses and targeted marketing; |
• | our expectations regarding our relationships with app developers, customers, strategic partners and other stakeholders; |
• | competition in our industry; and |
• | relevant government policies and regulations relating to our industry. |
ITEM 1. |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
ITEM 2. |
OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3. |
KEY INFORMATION |
A. |
Selected Financial Data |
For the Year Ended December 31, |
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2016 |
2017 |
2018 |
2019 |
2020 |
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RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
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(in thousands, except for per share data) |
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Consolidated Statements of Operations Data: |
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Revenues |
70,322 | 284,709 | 714,141 | 906,458 | 471,614 | 72,278 | ||||||||||||||||||
Cost of revenues (1) |
(47,722 | ) | (213,370 | ) | (517,074 | ) | (649,596 | ) | (265,436 | ) | (40,680 | ) | ||||||||||||
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Gross profit |
22,600 | 71,339 | 197,067 | 256,862 | 206,178 | 31,598 | ||||||||||||||||||
Operating expenses: (1) |
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Research and development expenses |
(33,717 | ) | (71,651 | ) | (134,358 | ) | (176,248 | ) | (174,597 | ) | (26,758 | ) | ||||||||||||
Sales and marketing expenses |
(33,062 | ) | (59,673 | ) | (83,853 | ) | (118,548 | ) | (102,319 | ) | (15,681 | ) | ||||||||||||
General and administrative expenses |
(13,480 | ) | (32,431 | ) | (71,641 | ) | (109,291 | ) | (119,087 | ) | (18,251 | ) | ||||||||||||
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Total operating expenses |
(80,259 | ) | (163,755 | ) | (289,852 | ) | (404,087 | ) | (396,003 | ) | (60,690 | ) | ||||||||||||
Loss from operations |
(57,659 | ) | (92,416 | ) | (92,785 | ) | (147,225 | ) | (189,825 | ) | (29,092 | ) | ||||||||||||
Loss before income taxes |
(57,472 | ) | (94,271 | ) | (66,167 | ) | (109,679 | ) | (224,989 | ) | (34,480 | ) | ||||||||||||
Net loss |
(61,382 | ) | (90,291 | ) | (66,197 | ) | (109,841 | ) | (225,075 | ) | (34,493 | ) | ||||||||||||
Net loss attributable to Aurora Mobile Limited’s shareholders |
(61,382 | ) | (90,291 | ) | (66,197 | ) | (109,841 | ) | (225,075 | ) | (34,493 | ) | ||||||||||||
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Accretion of contingently redeemable convertible preferred shares |
(12,427 | ) | (26,391 | ) | (24,094 | ) | — | — | — | |||||||||||||||
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Net loss attributable to common shareholders |
(73,809 | ) | (116,682 | ) | (90,291 | ) | (109,841 | ) | (225,075 | ) | (34,493 | ) | ||||||||||||
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Net loss per common share: |
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Basic and diluted |
(1.73 | ) | (2.73 | ) | (1.57 | ) | (1.43 | ) | (2.91 | ) | (0.45 | ) | ||||||||||||
Weighted average number of shares used in calculating basic and diluted loss per common share: |
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Common shares — Basic and diluted |
42,666,670 | 42,666,670 | — | — | — | — | ||||||||||||||||||
Class A common share — Basic and diluted |
— | — | 40,441,999 | 59,721,341 | 60,415,978 | 60,415,978 | ||||||||||||||||||
Class B common share — Basic and diluted |
— | — | 17,000,189 | 17,000,189 | 17,000,189 | 17,000,189 |
(1) | Share-based compensation expenses are allocated in cost of revenues and operating expenses as follows: |
For the Year Ended December 31, |
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2016 |
2017 |
2018 |
2019 |
2020 |
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RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
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Cost of revenue |
— | — | — | 73 | 4 | 1 | ||||||||||||||||||
Research and development expenses |
664 | 1,408 | 9,448 | 12,819 | 7,176 | 1,100 | ||||||||||||||||||
Sales and marketing expenses |
189 | 944 | 3,347 | 6,040 | 3,965 | 608 | ||||||||||||||||||
General and administrative expenses |
1,850 | 5,923 | 11,766 | 28,352 | 17,713 | 2,715 | ||||||||||||||||||
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Total |
2,703 | 8,275 | 24,561 | 47,284 | 28,858 | 4,424 | ||||||||||||||||||
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As of December 31, |
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2016 |
2017 |
2018 |
2019 |
2020 |
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RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
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(in thousands) |
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Consolidated Balance Sheet Data: |
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Cash and cash equivalents |
103,168 | 208,161 | 576,562 | 431,459 | 356,115 | 54,577 | ||||||||||||||||||
Accounts and notes receivable, net |
9,444 | 49,594 | 141,911 | 135,417 | 44,886 | 6,879 | ||||||||||||||||||
Prepayments and other current assets |
13,508 | 34,228 | 80,578 | 86,087 | 49,013 | 7,511 | ||||||||||||||||||
Total assets |
165,944 | 359,450 | 992,068 | 939,923 | 787,427 | 120,679 | ||||||||||||||||||
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Accounts payable |
1,110 | 8,340 | 18,811 | 19,996 | 16,592 | 2,543 | ||||||||||||||||||
Deferred revenue and customer deposits |
18,148 | 49,557 | 59,483 | 77,561 | 109,182 | 16,733 | ||||||||||||||||||
Accrued liabilities and other current liabilities |
19,737 | 52,639 | 76,666 | 96,277 | 109,136 | 16,725 | ||||||||||||||||||
Total liabilities |
53,819 | 117,197 | 390,408 | 432,135 | 466,188 | 71,446 | ||||||||||||||||||
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Total mezzanine equity |
220,539 | 466,637 | — | — | — | — | ||||||||||||||||||
Total shareholders’ equity/(deficit) |
(108,414 | ) | (224,384 | ) | 601,660 | 507,788 | 321,239 | 49,233 | ||||||||||||||||
Total liabilities, mezzanine equity and equity |
165,944 | 359,450 | 992,068 | 939,923 | 787,427 | 120,679 | ||||||||||||||||||
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For the Year Ended December 31, |
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2016 |
2017 |
2018 |
2019 |
2020 |
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RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
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(in thousands) |
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Consolidated Cash Flow Data: |
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Net cash used in operating activities |
(42,152 | ) | (75,532 | ) | (97,925 | ) | (25,758 | ) | 75,810 | 11,619 | ||||||||||||||
Net cash used in investing activities |
(29,928 | ) | (28,644 | ) | (139,206 | ) | (88,966 | ) | (144,415 | ) | (22,133 | ) | ||||||||||||
Net cash provided by financing activities |
(135,348 | ) | 217,446 | 614,884 | (33,883 | ) | 315 | 48 | ||||||||||||||||
Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash |
2,450 | (8,282 | ) | (9,352 | ) | 3,504 | (7,054 | ) | (1,081 | ) | ||||||||||||||
Net increase (decrease) in cash and cash equivalents and restricted cash |
65,718 | 104,988 | 368,401 | (145,103 | ) | (75,344 | ) | (11,547 | ) | |||||||||||||||
Cash and cash equivalents and restricted cash at the beginning of year |
37,570 | 103,288 | 208,276 | 576,677 | 431,574 | 66,142 | ||||||||||||||||||
Cash and cash equivalents and restricted cash at the end of year |
103,288 | 208,276 | 576,677 | 431,574 | 356,230 | 54,595 |
B. |
Capitalization and Indebtedness |
C. |
Reasons for the Offer and Use of Proceeds |
D. |
Risk Factors |
• | attract new app developers and customers, including from diversified industry verticals, and retain and expand our relationships with existing app developers and customers on a cost-effective basis; |
• | maintain the breadth of our ad publisher network and attract new publishers; |
• | innovate and adapt our services and solutions to meet evolving needs of current and potential customers, including to address market trends; |
• | maintain and increase our access to data necessary for the development and performance of our solutions; |
• | maintain the proper functioning of SAAS Businesses which include Developer Services and Vertical Applications, and other business initiatives as we continue to collect increasing amounts of data from a growing user base; |
• | continuously improve on the algorithms underlying the products and the technologies; |
• | adapt to a changing regulatory landscape governing privacy matters; |
• | keep pace with the new technological development in the industry; |
• | invest sufficiently in our technology and infrastructure, at the pace required to support our growth; |
• | productize new solutions; |
• | introduce our services and solutions to new geographic markets; |
• | increase awareness of our brand among more businesses; and |
• | attract and retain employees. |
• | investments in our research and development team and in the development of new solutions and enhancement of our solutions; |
• | investments in sales and marketing, including expanding our sales force, increasing our customer base and increasing market awareness of our platform; |
• | expanding our operations and infrastructure, including internationally; and |
• | incurring costs associated with general administration, including legal, accounting and other expenses related to being a public company. |
• | the failure to accurately predict market or customer demands; |
• | defects, errors or failures in the design or performance of our new products or product enhancements; |
• | negative publicity about the performance or effectiveness of our SAAS Businesses; |
• | delays in developing and enhancing existing products or releasing our new products to the market; |
• | the introduction or anticipated introduction of competing products by our competitors; |
• | poor business conditions for our customers, causing them to delay purchases; and |
• | the perceived value of our services and SAAS Businesses relative to their cost. |
• | greater name recognition, longer operating histories and larger user bases; |
• | broader, deeper or otherwise more established relationships with technology, channel and business partners, including ad publishers and customers; |
• | greater resources to make acquisitions; |
• | larger and more mature intellectual property portfolios; |
• | larger sales and marketing budgets and resources and the capacity to leverage their sales efforts and marketing expenditures across a broader portfolio of products; and |
• | substantially greater financial, technical and other resources to provide support, to make acquisitions and to develop and introduce new products. |
• | difficulties in integrating the operations, technologies, services and personnel of acquired businesses, especially if those businesses operate outside of our core competency; |
• | cultural challenges associated with integrating employees from the acquired company into our organization; |
• | reputation and perception risks associated with the acquired product or technology by the general public; |
• | ineffectiveness or incompatibility of acquired technologies or services; |
• | potential loss of key employees of acquired businesses; |
• | inability to maintain the key business relationships and the reputations of acquired businesses; |
• | diversion of management’s attention from other business concerns; |
• | litigation for activities of the acquired company, including claims from terminated employees, clients, former shareholders or other third parties; |
• | failure to identify all of the problems, liabilities or other shortcomings or challenges of an acquired company, technology, or solution, including issues related to intellectual property, solution quality or architecture, regulatory compliance practices, revenue recognition or other accounting practices or employee or client issues; |
• | in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries; |
• | costs necessary to establish and maintain effective internal controls for acquired businesses; |
• | failure to successfully further develop the acquired technology in order to recoup our investment; and |
• | increased fixed costs. |
• | temporary closure of offices, travel restrictions or suspension of services of our customers and suppliers have negatively affected, and could continue to negatively affect, the demand for our services; |
• | our customers in industries that are negatively impacted by the outbreak of COVID-19, including healthcare, travel, auto/transportation, and financial services sectors, may reduce their budgets on advertising and marketing, which may materially adversely impact our revenue from advertisement; and |
• | our customers may require additional time to pay us or fail to pay us at all, which could significantly increase the amount of accounts receivable and require us to record additional allowances for doubtful accounts. |
• | levying fines or confiscating our income or the income of our PRC subsidiary or our VIE; |
• | revoking or suspending the business licenses or operating licenses of our PRC subsidiary or our VIE; |
• | discontinuing or placing restrictions or onerous conditions on our operations through any transactions between our WFOE and our VIE; |
• | requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with our VIE and deregistering the equity pledges of our VIE, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control over our VIE; |
• | restricting or prohibiting our use of the proceeds of our initial public offering to finance our business and operations in China; and |
• | taking other regulatory or enforcement actions that could be harmful to our business. |
• | variations in our net revenues, earnings and cash flow; |
• | announcements of new investments, acquisitions, strategic partnerships, or joint ventures by us or our competitors; |
• | announcements of new products and services and expansions by us or our competitors; |
• | changes in financial estimates by securities analysts; |
• | fluctuations in operating metrics; |
• | failure on our part to realize monetization opportunities as expected; |
• | changes in revenues generated from our significant business partners; |
• | additions or departures of key personnel; |
• | release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; |
• | detrimental negative publicity about us, our management, our competitors or our industry; |
• | any share repurchase program; |
• | regulatory developments affecting us or our industry; |
• | potential litigation or regulatory investigations; and |
• | general economic or political conditions in China or elsewhere in the world. |
ITEM 4. |
INFORMATION ON THE COMPANY |
A. |
History and Development of the Company |
B. |
Business Overview |
• | Vertical Applications |
• | Market intelligence |
• | Financial risk management |
• | Location-based intelligence iZone brick-and-mortar |
• | Targeted marketing XiaoGuoTong |
• | Volume—massive and ever-growing data pool |
• | Variety—multi-dimensional data |
• | Velocity—data timeliness |
• | Veracity—data accuracy |
• | Storage |
• | Cleansing non-usable, corrupted or redundant data. |
• | Structuring |
• | Encrypting |
• | Modeling |
• | We have optimized our data warehouse structure to make it more suitable for AI and machine learning processes. We have also designed and built our data warehouse based on the types and features of our data to allow for flexible yet secured access by our engineers and data scientists for developing and maintaining multiple solutions. |
• | Based on the features of our data sets, we constantly refine rules engines and machine learning algorithms to improve the accuracy and comprehensiveness of tags generated. |
• | We design and tailor machine learning algorithms based on the nature of our solutions. For example, to enhance our financial risk management solutions, we improve traditional deep learning algorithms by utilizing the machine learning technique of GBDT (gradient boosting decision tree), which not only preserves the correlations between variables but also maximizes the explanatory ability of patterns. |
• | Enterprise-oriented solutions |
• | Fund-oriented solutions |
• | Project-based tailor-made solutions in-depth analytics services and generate customized statistics reports based on customers’ specific requirements. |
• | Customer insights easy-to-use |
• | Customer acquisition and re-targeting re-engagement plans through our targeted marketing platform. We charge a performance-based fee for our customer acquisition and re-targeting solutions based on a CPC or CPA pricing model. |
• | Operation optimization project-by-project |
• | Developer services |
• | Market intelligence |
• | Financial risk management |
• | Location-based intelligence (“iZone”) brick-and-mortar |
• | Collaboration with media partners |
• | Offline events |
• | Online channels follow-up marketing attempts. |
• | Online customer acquisition |
• | the primary location of the day-to-day |
• | decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval of organizations or personnel in the PRC; |
• | the enterprise’s primary assets, accounting books and records, company seals and board and shareholder resolutions are located or maintained in the PRC; and |
• | 50% or more of voting board members or senior executives habitually reside in the PRC. |