Aurora Mobile Limited (JG) Q4 2020 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Aurora Mobile Fourth Quarter and Fiscal Year 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your host today, Rene Vanguestaine. Thank you. Please go ahead.

Thank you, Amber. 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; 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 may cause the Company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Future information regarding these and other risks, uncertainties and/or 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.

Thanks, operator. Good morning and good evening to everyone on the call. Welcome to Aurora Mobile's fourth quarter and full year 2020 earnings call. The year 2021st marks the 10th anniversary of Aurora Mobile. Looking back, we are extremely proud of what we have achieved in the past decade in helping all our mobile APP customers in China to improve their operational efficiency, helping each and every one of them improve their operations, grow, and now monetize. I still see vividly everybody remember the very first JPush product we developed for mobile APP developer's way back in 2011 and we have come a long way since. Over the - of this past decade to in-house innovation, technical progress, and relentless pursuit of excellence. We have reached many milestones. We started with one JPush product in 2011. And over the years, we developed seven additional products for mobile APP developers meeting their different and evolving optional needs. Cumulatively as of December 31 of 2020, we have worked with more than 591,000 APP developers, representing more than 1.7 million APPs in total. Our developer service SDKs have been installed more than 46.7 billion times. In the fourth quarter of 2020, on average, every month there were more than 17,000 new mobile apps joining and using one or more of our developer services. I would like to use this opportunity to thank all the mobile APP developers who have been alongside us, trusted us and co-operated with us over these 10 years. I believe the next 10 years will be even greater for our customers, thanks to the new exciting and innovative product and service offerings from Aurora Mobile. The year 2020 was a very extraordinary year in which an unexpected pandemic reshaped the world and changed how people live their lives and how companies conduct their businesses in so many ways. During the crisis, we persistently carried out our core strategy to serve our developer customers by helping them with their business operations, user growth and the monetization of their user base. Based on the solid business foundation built with our developer subscription services, we ventured into new business territory by innovatively creating our JG Alliance business lines to help our developer customers better monetize their user traffic. The JG Alliance became a great success as we achieved a phenomenon of 15 times growth year-over-year in revenue and DAUs grew rapidly from nil to 120 million in merely five quarters. Meanwhile, we completed the wind down of our Targeted Marketing business. Despite being the largest revenue contributor in 2019, we felt the Targeted Marketing business did not fit with our company's long-term direction. I'm proud to announce that by the end of the fourth quarter 2020, our business transition was 100% complete and we have successfully transitioned our company to a pure SaaS based business model. During the year, we also put greater emphasis on product development and innovation. We successfully launched three new heavy-weight products. First, we enhanced our JG Alliance product portfolio by adding a new In-App message product. And in our developer subscription business, we launched our Unification Messaging Service or UMS and Video as a Service or VAAS, products to address new critical needs from developers. On the customer front, we have won partnership with numerous well-known and key customers across almost every industry vertical, as you have seen from the press releases, we issued from time to time. Cooperation with these KA customers has helped us better penetrate into different industries, like the New Energy Vertical sector for example, after our cooperation with awarding - with the world's leading New Energy Vertical, manufacturer and BYD as of this week, we now have 39 customers within the Auto Industry, of which 19 are prepaid. We are replicating the success of the EV market expansion model in other industries, such as short video application, gaming, finance, telecom, e-commerce, and blockchain. For this nominal effect, where we leverage our existing cooperation relationship with the market leaders of each industry, with video we can and we will quickly sign up more customers to ramp up or increase our market share. For the year, we also upgrade our talent pool by hiring a number of senior executives across R&D, sales, operations, and HR, who have rich management experience accumulated from Tencent, Alibaba, Baidu and Huawei. We optimize our business operations so we can run the business more efficiently and create education certainty. Continue the Talent Acquisition with target - with wide performance-based incentive scheme in place and fine turning the way we manage our organizations will lay a solid foundation for our future as their business grows and surpass. Before I comment on our 4Q results, I would like to take this opportunity to remind everyone that we have uploaded quarterly earnings that on our IR web page for your reference. You may refer to the deck as we proceed with the call today. Let me continue with our key operating highlights for the fourth quarter of 2020, other than those I have mentioned earlier. First, the number of monthly active unique mobile devices recover continue to grow with 1.395 billion in December 2020 from 1.36 billion in December 2019. Of 90% of mobile devices in China have at least one or more cumulative SDK installed. Second, during the quarter we saw the number of paying customer grow to 2,420 from 2,121 a year ago. I would like to focus the discussion on our SAAS businesses, which include only the Developer Services and Vertical Applications businesses, as we have officially exited the traditional Targeted Marketing business on December 2020. Therefore starting from January 1, 2021, all our revenue will be contributed by these SAAS businesses. Our SAAS businesses continue to record impressive results this quarter with revenue of RMB76.6 million, which was at a higher end of our guidance range, representing 17% growth year-over-year and 18% growth quarter-over-quarter and gross profit of RMB58.5 million, growing 29% year-over-year and 20% quarter-over-quarter. On our SAAS business basis, the total revenue grew 70% year-over-year, mainly due to the strong 46% growth in Developer services, partially offset by the decline in Vertical Applications, which have been impact by COVID-19. Nevertheless, revenues from Vertical Applications have seen solid sequential growth for three consecutive quarters, as customer demand in this segment continue to recover. On a quarter-over-quarter basis, SAAS businesses revenue records a strong sequential growth of 18% to RMB76.6 million. In Q4, 2020, our SAAS businesses contributed 72% of total revenue, up from 60% in Q3, 2020. Going forward, SAAS businesses will contribute 100% of our revenues. On a SAAS businesses basis, gross profit has also shown strong growth of 28% year-over-year to RMB58.7 million for the quarter ended 2020, due to both the revenue growth of 17% year-over-year, and margin expansion from 70% to 76% year-over-year. We expect our gross margin in 2021 to remain above 70% throughout the year. For Q4 2020, SAAS businesses have contributed 98% of the gross profit, up from 96% in Q3 2020. Going forward, SAAS businesses will contribute 100% of our gross profit. Here I will also like to take a moment and share with you our new product initiatives. With a recent release of the launch of the JG UMS and JG VAAS products, after conducting thorough market analysis with our app developers and customers to understand their needs and pain points. Importantly, JG UMS, which stands for Unification Messaging System enables businesses to engage with their targeted customers more efficiently and cost effectively through one integrated messaging management platform, therefore improving operational simplicity, while reducing costs with flexible routing strategy management. In the past two years, with the proliferation of many user engagement channels, such as mini programs, which probably accounts in being - user engagement has become much more complex than ever before. UMS therefore comes to the market as the right product at the right time to address such pain points. UMS is not only suitable for APP developers, but also suitable for business that do not even have a mobile app. Pretty much all the business in China will need this product, as long as they have a sizeable customer base and utilize multiple channels to reach their customer delivery. JG VAAS, which stands for Video-as-a-Service, on the other hand enable mobile app developers to provide relevant user-friendly short video content in their apps, therefore improving their user experience, increasing user engagement and stickiness, and enhancing monetization capability. It's a distributed way for users to consume [ph] short videos anytime and anywhere, rather than have to go to dedicate short-video apps to view short videos in a centralized fashion. Both UMS and VAAS are offered in a subscription fee-based model, where our customers pay us annual fee based on the features they like to enjoy. We believe both products can greatly expand our paying customer base and ARPU for our developer subscription business over time. We anticipate that these two products will start generating revenues in the second quarter of 2021. Now, I will turn the call to Fei, who will discuss the Q4 performance in greater detail.

Thank you, Chris [ph] Let me start the discussion of different revenue streams within the SAAS businesses. Our SAAS form Developer Services shine continuously from the first quarter to the fourth quarter of 2020, and was the biggest revenue contributor within our SAAS businesses in fourth quarter 2020. For the quarter ended December 31, 2020, we recorded RMB52.5 million in revenue for Developer Services, which represented 46% growth on a year-over-year basis. The significant revenue growth in Developer Services was fueled by 28% and 14% growth in customer numbers and ARPU respectively. For Subscription Services within the Developer Services, we continued to see more customers signing up to our suite of Developer Services. New and the renew customers include, among others include, Farfetch, [indiscernible] and the Ping An Bank Subscription Services revenue was RMB35.1 million, an increase of 6% year-over-year and 16% quarter-over-quarter, primarily driven by the increase in customer numbers. Value-Added-Services within Developer Services, which include revenues from JG Alliance services and Advertisement SaaS, recorded another strong quarter, as revenues grew by 29% quarter-over-quarter and 432% year-over-year. The value-added-services full year revenue grew from RMB3.3 million in financial year 2019 to RMB52.5 million. The 15X annual revenue growth demonstrates the large potential market opportunity and growing demand of our value-added-services. In the fourth quarter, the revenue from value-added-services was RMB17.4 million compared to RMB3.2 million in the same quarter a year ago. This 432% year-over-year revenue growth is attributable to the growth in both the supply and demand sides of the JG Alliance. On the supply side, we continued to see many APPs joining our JG Alliance traffic network. The total number of APPs and DAU within our network exceeded 200 APPs, and 130 million DAU in the fourth quarter, representing 100% and 30% growth from third quarter 2020, respectively. The note for new members of JG Alliance under traffic site mainly include large and the popular mobile app from different industry sector, such as utilities, education and the financial. The continued growth in the number of APPs and DAUs is proof of the strong market demand for JG Alliance products. On the demand side, mini program developers continued to play a pivotal role as traffic consumer of JG Alliance by contributing 39% of revenue in the quarter. Notable customers of JG Alliance included, but not limited to Weibo, JD, [indiscernible] Our JG Alliance's ever-increasing traffic pool resources and innovative & unique advertising formats have given our customers a brand new effective and different media for user acquisition needs and dormant user retargeting needs. Now I would like to provide a brief update on the legacy targeted marketing business. The revenue and gross profit contributions from Target Marketing have both declined from 40% in Q3 '20 to 28% in 4Q and from 4% in third quarter '20 to 2% in fourth quarter '20 respectively. The fourth quarter of 2020 is the last quarter where we recognized revenues from Target Marketing. This business has ceased its entirety by December 31, 2020. Therefore, starting from first quarter 2021 revenues will be 100% from our SAAS businesses, which includes only Developer Services and Vertical Application. Now let's move on to the discussion of Vertical Applications. The combined revenues from Vertical Applications, which include market intelligence, financial risk management and iZone, increased by 10% sequentially from RMB21.9 million in the third quarter of this year to RMB24.1 million. Revenue from Vertical Applications recorded a sequential growth every quarter in 2020. Revenues from our marketing intelligence products increased by 16% year-over-year. We continue to see strong growth from corporate with more than 60% revenue contributed by corporate clients. New corporate customers include Douban, Huawei Ital [ph] Baidu. In the financial risk management segment revenue increased by 23% quarter-over-quarter, as demand for this business has recovered strongly from the impact of COVID-19. Since the first half of 2020, solid and the continued demand from banks and licensed financial institutions has pushed the both the ARPU and the customer number to grow by 15% and the 7% respectively, sequentially. And lastly, our iZone business is still facing challenges as a result of COVID-19 impacting on the demand for location-based products. This business unit is still undergoing a number of new initiatives in product transition. We recently launched a joint product with Country Garden [ph] called Tucod [ph]. This product will not only provide foot traffic analysis for properties up for sale, but also help property developers to identify and target potential property buyers. We expect such product could help renew the growth in iZone over time. With that, I'll now pass the call to Shan.

Thanks, Fei. Since Chris and Fei already talked about our top line numbers for this quarter. I'll go through some of the other P&L and balance sheet items. And let me summarize the key takeaways and highlights for - on the P&L items for this quarter. First, the SAAS businesses' revenue and gross profit contributions recorded solid double-digit year-over-year growth in all four quarters in 2020. Second, the value-added-services achieved revenue growth of 432% year-over-year in Q4, 2020. Third, we recorded yet another record high group gross margin of 56% in Q4, 2020, up from 47% in Q3, 2020. With the business becoming pure SaaS based, we anticipate our gross margin to be above 70% in 2021. Fourth, 98% of our current quarter gross profit was contributed by the SAAS businesses. Lastly, Targeted Marketing business has completely wind down by 12/31/2020. And we are now beginning a new chapter in the Aurora Mobile story, so from January 2021 all our revenue will be 100% contributed by the SAAS businesses only. We are demonstrating that operationally and financially that this transition is beneficial and healthy to our financial performance as a whole. Onto operating expenses, the total operating expenses increased by 3% year-over-year to RMB106.5 million. In particular, R&D expenses decreased by 8% to RMB40.6 million, mainly due to decrease in staff costs, as a result of lower headcount and no severance payment in Q4, 2020. Such reduction was due to the restructuring that took place in Q4, 2019. Selling and marketing expenses decreased by 27% to RMB22.3 million, mainly due to the reduction in salary costs, as a result of lower headcount and lower offline marketing expenses due to the COVID pandemic restriction. G&A expenses increased by 51% to RMB43.5 million, mainly due to the RMB10.9 million impairment charge related to fixed assets due to our Going-Cloud project in 2021. Where under the US GAAP, we have booked the impairment charge for the servers to be retired or made redundant. Other factors contribute to the increase, including increase in professional fees and bad debt provision. Adjusted EBITDA improved 22% to negative RMB17.1 million from negative RMB22 million in Q2, 2020. In addition Q4, 2020 was a quarter where we achieved the best quarterly adjusted EBITDA results in year 2020. The company will continue working hard to improve this number going forward. Onto the balance sheet items, accounts receivable turnover days continued to improve and show great results, as it decreased significantly from 70 days in Q4, 2019, and 45 days in Q3, 2020 to 37 days in Q4, 2020. This was attributable to management greater effort and emphasis on stringent customer credit granting policy, outstanding accounts receivable monitoring, along with aggressive and timely collection during the quarter. Furthermore, the decline of Targeted Marketing business during the quarter also contributed to the shortening of AR turnover days The deferred revenue balance, which represents cash collected in advance from customer, increased significantly by 41% year-over-year to RMB109 million as of December 31, 2020. This was in line with our shift to the SAAS businesses where most customers are required to prepay their annual contract fee upon commencement of service. In the fourth quarter of 2020, our operating cash flow was once again positive. This is the third consecutive quarter since Q2 2020 that we have recorded net operating cash inflow. All of the above, KPI showed a transition to focusing on SAAS business is generating more cash and granting fewer AR credit days that we have had under the positive marketing era. The improvement in each of these balance sheet items were primarily driven by our shift to the SAAS business model. And we are very pleased with this improvement over the quarters. Next, total assets were RMB787 million as of December 31, 2020. And this includes cash and cash equivalent of RMB436 million, account receivables of RMB44 million, pre payments of RMB12 million, fixed assets of RMB73 million, long term investment of RMB168.5 million. Total the current liabilities were RMB460 million as of December 31, 2020. This includes accounts receivable of RMB16.6 million, deferred revenue of RMB109 million, accrued liabilities of RMB109 million, convertible notes of RMB225 million. For the financial year ending December 31, 2021, the company expects the total revenue to be between RMB380 million and RMB400 million, representing a year-over-year growth of approximately 47% to 55%, and gross margin to be about 70% for the full year 2021. However, please note that, for meaningful comparison purposes, the prior year revenue number used to calculate the growth percentage share excludes revenue from Targeted Marketing business. And the above outlook is based on the current market conditions and reflects the company's current and preliminary estimates of market and operating conditions and customer demand, which are subject to change. Lastly, before I conclude, I'll give a quick update on the share repurchase plan. In the quarter ended December 31, 2020, we did not repurchase any shares. As of December 31, 2020, cumulatively, we have repurchased a total of 921,000 ADS since the start of our program. And this concludes the management prepared remarks. And we're happy to take the question now. Operator, please proceed.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line and Brian Kinstlinger from AGP. Please ask your question.

Great. Thanks for taking my questions. Could you remind listeners the benefits of mini program is joining the JG Alliance? And then maybe which verticals are you seeing the greatest adoption versus which verticals maybe are taking a little bit longer to adopt the technology?

Hey, Brian. Are you asking about the JG Alliance network, right? On the demand side, mini program, okay.

Right.

Yeah. So yes, as you know, the mini program has been in proliferation over the past couple of years, right. So many mini program developers, once they build their mini program, you know, the account, the mini programs, they need to acquire users. So currently most of them can only rely on, you know, the WeChat internal traffic, right for the user to search to find - to find the mini programs. And the traffic within the WeChat is limited. So if they want to, you know, continue to grow, they have to look for additional resources, additional traffic. So that's where - that's why we come into the place. Because for the JG Alliance network, our product, the - we have two products, right, for the in-app messages, as well as the light push messages. These two actually media format, you know, worked very well to direct the traffic through the WeChat mini programs. So that's why over the past year, this mini program developers, the demand from mini program developers have been very strong for our traffic. And the last quarter, we had over 30 - about 39% of the revenue is generated by these mini program developers. And for example, like, you know - in terms of the vertical, actually on the e-commerce, like the travel, also the financial, these sectors actually currently where the demand is coming from.

Great. and my follow up is, in terms of the subscription services, can you talk about how fast you're able to convert the premium into paid customers, and what has been the biggest obstacle to converting these customers right now?

Yeah. So, actually, you know, in terms of the conversion, right, so, currently, we have about 60,000 premium customers, who actually enjoy our free service, and as the paying ratio is relatively low about 3% - less then, a little bit less than 4%, right. So there's still room for - to increase the conversion. So, what we are trying to do, basically we need to put a few mechanisms in place. We need to have the sales organization basically to go through the list of the premium customers, and have an engagement with them, and basically to educate them, you know, the difference between the paying and the non-paying rather benefits t they can get by paying a little bit, you know, monthly fee, right. So this is ongoing, and these efforts, actually, you know, this year, we basically intensified for the great efforts into this effort, right. And the second is, we also look at, basically to do the current paying customers, the profile analysis, to identify, you know, the common features of these paying customers, why they like to pay, right, how big is the view [ph] how many messages they typically send, right. So we come to basically - you know, basically, it's just like doing a user profile, right. So, based on this profile, we can more accurately select those premium customers who are more likely to be converted, right. So this work is being done by the R&D operation, and also sales operation, right. So that when the sales go talk to the premium customer, they can be more effective. Yeah, so, these are the approaches we are currently undertaking.

Great. Thanks for answering my question.

Thank you.

And your next question comes from Ryan Roberts from Navis Capital. Please ask your question.

Good evening. Couple from me. Maybe Shan-Nen, this is kind of better directed to you. I'm curious what the bad debt provision is, kind of we saw in this quarter, and also the breakdown on the impairment a little bit. I think that was in the slide deck that you guys mentioned is Going-Cloud. I'm kind of curious what the - maybe more of that project, because I think, around the IPO time, one of the kind of the points, the positive points with your network of servers across the country, and how quickly you could perform the push services, push notification, which is what kind of a differentiating factor. And so I was wondering the context of Going-Cloud, what that mean for your infrastructure and service level? So I guess I'll just start with those two.

Thanks, Ryan. Okay, I'll take your question, on the bad debt. Yeah, we will - we'll now go into specifics of particular debtors. But in overall, those are the debtors pertaining to the legacy Targeted Marketing business that we are winding down. So those are the one that has been lingering with us for a couple of quarters. That we are thinking that is no longer able to recover the debt. So those are the ones that we have made provision, 100% provision. So meaning that going forward into Q1 2021, we have first - a base of the concerts of going forward. And secondly, the question you asked about the impairment, yes, there was in relation to the Going-Cloud project that we had. So based on the current projection, we are expecting to complete this Going-Cloud project by sometime in second quarter of 2021. And the reason why we do this is, throughout the years, we have managed to see, besides the fact that we are able to build our own infrastructure, we are taking advantage of the technical advancement of this cloud service provider, because they have the ability to help us to leverage on their infrastructure, I am trying to say, it will only help us to improve our service delivery and stability going forward for our - or our developers.

Are you going to replace kind of a lot of your infrastructure, a lot of your servers with cloud?

No, no. Ryan, let me answer that. So actually, we are not replacing everything, we are just replacing a part of, okay, which we think we all benefit from the Going-Cloud, okay. So basically, you know, those servers might be better managed by the cloud service provider instead of, so we can focus on a path level, instead of we put, you know, resources on the data center management, right, server management, you know, those type level or type of dirty work, right. So that's the whole focus there.

Okay. And then maybe just kind of on the numbers, and the last one, so you put pretty chunky impairment on the long-term investment with about RMB44 million, kind of curious what that is?

Yeah, again, those are investment that we have made in the past, pertaining to a few investees. Again, those are the ones that we have made - the investment we made with the intention of helping us in the positive marketing era. We thought of the fact that we will be able to have some synergy to this investees. And the fact that now we are winding down the Targeted Marketing business. So we didn't - there's no longer any value for them to keep on going forward. And the fact some of them are not performing well, operationally. So based on the US GAAP on the ground of conservatism, so we make a full provision for a couple of them.

Okay. So it's not like it's mostly Targeted Marketing related, okay. Okay. And maybe if you could tell us, just get a sense of - on the new product side, I think you guys have launched some new kind of - new products recently? I just wondered if you can maybe share some early kind of feedback from customers and clients. I think it sounds like there's a lot of R&D effort upfront to kind of - to develop these, you know, solve these pain points and develop these packages. Obviously, I am curious so far how is the reception been? And also, how does that factor into your outlook, kind of for the year? I think the guidance was 380, 400, which is - was up 80% somewhere on there Y-o-Y. And so I'm curious if you're expecting a lot of contributions from the new products or currently that's mostly reflecting kind of JG Alliance. I am trying to get a sense of what maybe some of your assumptions are in there?

Okay. Ryan, let me take your questions. So regarding the new product, the progress with the new product go into market, right. So first of all, you know, these two new products, the UMS and VAAS, were launched in the later part of fourth quarter. So after Chinese New Year, and then starting from beginning of this year, and also, you know, particularly the Chinese New Year, so actually right after Chinese New Year, actually the real, the fieldwork started, you know, kick it off. And in a very short period of time, about a month, we actually already built very good pipelines. Yeah. So, for the UMS actually, we already you know, have 19 credible pipelines. And the customers, we are in the constant dialogue with the customers, and these 19 customers represent a few million dollars renminbi. And actually and tell you good news, actually, as we speak, actually, yesterday, when I asked our sales head, and she told me, she just signed one contract, UMS contract, and we have already received the money. So, which is great, right. And for the VAAS, actually it's in a very similar situation. And after Chinese New Year, we mobilized our sales force. Currently, we already built 12, very credible sales pipelines. And again, you know, these 12 pipelines account for a few million RMB. So, based on this initial feedback, we are very encouraged. And we - and based on the analysis, we also think these two products will have a higher ARPU, actually a much higher ARPU than our traditional path business, such as JPush, right. So we believe over time, over the course of a year, we think, you know, these two businesses will become new growth, actually like for our subscription business. And we also actually put the KPI on these two products to our sales organization. So it's not that you know, they are not encouraged to sell, actually they are very incentivized to push these two products out. And the market reaction, as I just mentioned, is very positive and promising, okay. So, next quarter, maybe I can give you more data, more progress on these two, new two products. And also, you asked our overall guidance, right, we guided RMB380 million to RMB400 million, which represents 47% to 55% year-over-year growth. And you are rights, you know, actually the most of the growth is now - it's going to be driven by the JG Alliance, as we talk about, you know, last time and before, actually JG Alliance has the characteristics that can have explosive growth, right. So we are expecting, you know, JG Alliance to continue to have triple digit growth this year. And for the subscription business, as I just mentioned, which, you know, typically is going to be around 30%-ish. This is same true for the vertical application. So, net-net, you will see about, you know, 55% growth for the entire year.

Okay. And if I could just check one last one, if you allow me. One of the things we kind of talked about, I mean, on previous call, I mean, one of the one prior, were kind of the efforts to kind of bring back some of the targeted marketing clients to the new kind of JG Alliance, that product, that kind of - you've got the new advertising inventory, and you have kind of companies that need advertising. I guess, the COVID-19 situation aside, it sounds like you have this new advertising service and you could sell to people that you already have a relationship with. And I think if I recall, I think you were trying to do some of that. And I'm just kind of curious, you can share any updates on how it's going and bringing back some of those old accounts to spend on your new kind of - the new JG Alliance products?

Hey, Ryan, actually when I compare the customer base, right, actually, they're very different. The customers who currently use our JG Alliance network actually are very, very, very fundamentally different from those customers who use our Target Marketing business. So for the Target Marketing, actually, before, you know, most of our advertising customers are coming from the financial sectors, like those lenders, okay, per se. But for these, you know, our mini programs, actually, as I mentioned in the press release, if you recall those names, right, those are, you know, very large Internet companies. And regardless whether they are trying to go through our JG Alliance network to reactivate their dominant customers, or they are trying to, you know, increase their user base for their mini programs, actually, most of them are very well known, you know, Internet leaders. So the nature of these customers, you know, they have basically, one, they are very credit worthy, right, that's little chance, they can be default, right? Then, you know, when compare to the Target Marketing customers, right. And the second, they have a deep pocket, the budget is not an issue, as long as we have enough traffic, you know, they will say, okay, give it all to me, okay. So that's, that's a good thing. So - and also, to share with you a data, I look at the cohort analysis, right, starting from last July, for every month, the new customers joined our JG Alliance, as the demand side, you know, when I look at their revenue contribution for the second month, for the third month, for the fourth month, and the following, and so on. And it's all above 100%, okay. So, which means the customer retention is - you know, the stickiness is very, very high. It's unlike the Target Marketing business before, if I show you this number, it's going to be below 100%, maybe 50% next month, okay. So that's the drastic difference. So this is - you know, gives us so much confidence that this product really, really shines, really has a strong value proposition and these customers they are happy with the performance, we are able to deliver these customers, they are happy with the volume we are able to deliver. So, yeah, that's why we are so confident about the growth trajectory of this JG Alliance in 2021.

Understood. Thank you very much. I think it's very helpful. Appreciate it.

Yeah, sure.

[Operator Instructions] Right, there are no further questions. I'll now turn the call back to Rene for closing remarks.

Thank you, Amber. 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.

Bye.

Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect.