Ladies and gentlemen, thank you for standing by. Welcome to the Aurora Mobile Third Quarter 2022 Earnings Conference Call. At this time, all participants are in the listen only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you need to press star one, one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Rene Vanguestaine. Thank you. Please go ahead.
Thank you, Desmond. 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. Shan-Nen Bong, Chief Financial Officer, and Mr. Guangyan Chen, General Manager. Following their prepared remarks, they will be available to answer your questions during the Q&A session that will follow.
Before we begin, I'd like to remind you that this conference call contains forward-looking statements within the meaning of Section 21 E of the Securities Exchange Act of 1934, as amended, and as defined in the US Private Securities Litigation Reform Act of 1995.
These forward-looking statements are based upon management's current expectations and current market and operating conditions, which are difficult to predict and may cause the company's actual results, performance, or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties, and/or factors are included in the company's filings with the US Securities and Exchange Commission.
The company does not undertake any obligation to update any forward-looking statement as a result of new information, except as required under applicable law. With that, I will now turn the conference over to Mr. Luo. Please go ahead.
Thanks, Rene. Good morning and good evening, everyone. Welcome to Aurora Mobile's 2022 first quarter earnings call. I comment on our third quarter results, I would like to remind everyone that the quarterly earnings deck is available on our IR website. You may refer to the deck as we proceed with the call today. While we continue to navigate through macroeconomic uncertainties, third qarter was a solid quarter for performance and financial measurements in most of our business lines. We are also actively expanding our footprint into overseas markets and prioritizing opportunities for future growth.
I will expand into more details in the later section of my remarks. We continue our cost control initiative in the third quarter and are very pleased with our progress. Here is a snapshot of some of the great key results that we want to share with you.
Lowest operating expenses for the past 16 quarters since fourth quarter of 2018 at CNY 80 million, down 23% year-over-year. Lowest net loss since third quarter of 2019 at CNY 20.7 million, narrowed down by 42% year-over-year. Adjusted EBITDA at negative CNY 6.7 million, significantly improved by 58% year-over-year. Deferred revenue balance is the highest in the history of the company at CNY 39.1 million. Total customer numbers up for 71% year-over-year to 4,665. AR turnover days significantly improved by 8 days from 46 days in second quarter 2022 to 38 days despite the tough business environment.
I'm sure everyone on the call has heard and read about the massive layoffs announced by one of the world's largest social media tech company recently. Looking back, our decision to start restructuring and cost cutting in the second half of 2021 could not have been wiser. Had we been slow and only make such a decision now, we would be in a much worse financial situation. Back to these key financial highlights in this and past few quarters. I'm very proud that our team has stayed together and execute brilliantly to help the company become leaner and more efficient.
I'm confident that we will come out of these difficult times only stronger. This quarter, we recorded another quarter with a historically low operating expenses level of RMB 80 million, down 33% year-over-year. Our net loss is also the lowest since third quarter of 2019 at RMB 20.7 million, narrowed down by 42% year-over-year.
One of our main goals going into fourth quarter and financial year 2023 is to ensure we continue to operate efficiently, where we organically grow our revenue faster than expenses. Another encouraging sign is from the revenue perspective, as we saw sequential revenue growth in most of our business line this quarter, while we are anticipating more recovery in growth. It is still too earlier to call this a definite trend, however. The sequential growth in our business lines is a major positive sign for us.
As the global and domestic economies are currently going through some major transitions and downturns, we look at sequential revenue growth as more indicative of the health of our business and possible directional changes. With that said, we want to see the sequential trends continue for several more quarters before we are comfortable saying the business are back to normal.
Let me go through the different revenue streams within the group. Developer services revenue increased by 3% quarter-over-quarter to RMB 57 million, which was mainly due to the increase in subscription services. Year-over-year developer services decreased by 12%, mainly due to the weakness in value-added services, offset by the growth in subscription services. Subscription services revenues were RMB 41.7 million, up 9% quarter-over-quarter, and up 5% year-over-year.
Subscription services, our core business line include JPush, Analytics, UMS, and others, are products and services that help app developers and enterprise to improve their operational efficiency. The increase in ARPU contributed to the growth in revenue, and we managed to grow our customer base, signing up several well-known and sizable customers, including Lilith Games, Starbucks, miHoYo , and Tenjin Games, just to name a few.
Value-added services revenue decreased quarter-over-quarter by 9% and year-over-year by 39% to RMB 15.3 million. We saw market demand further pressures and advertisers continuing to cut back budgets, this trend is quite visible and similar to those reported by larger advertisement platforms. Direct customers contributed more than 75% of JG Alliance revenue stream, while the rest came from third-party agencies. Major customer of JG Alliance consisted of repeated customer and market leaders across many industry verticals.
Key customers include Baidu, Alibaba, Tencent, Tianyancha, and Sohu. We believe that these factors are temporary and the advertising market is expected to bounce back, we are taking actions and continue to prioritizing our resources on projects that will drive the most growth.
With the launch of our ad mediation platform in second quarter, over 3 million DAUs and over 40 apps have joined the platform, and we are anticipating more DAUs to join our platform in fourth quarter. Services enabling traffic monetization through ads have become an important drivers fueling the development of the mobile internet ecosystem. As the major mobile app mediation platform have thrived overseas in establishing, established markets such as AppLovin, ironSource, and MoPub, we are also striving to help the developers to rapidly grow and improve monetization efficiency.
While we put some emphasis on coping with the near-term uncertainties, we consistently stay focused on our long-term strategy of expanding our business overseas since we believe that going overseas is becoming a substantial growth strategy for Chinese companies.
After several months of our team's effort, in mid-October, we launched our overseas messaging service platform, EngageLab, allowing developers to reach global users efficiently and effectively. This is a major milestone for us since we can now help both Chinese companies and overseas-based companies to carry out refined and accurate user reach and engagement at low cost with higher message delivery rates and conversion rates. I invite you to visit our website at www.engagelab.com to see for yourselves.
At present, EngageLab provides five major services including app push, web push, email services, SMS service, and WhatsApp business API, and is exploring additional messaging channels in overseas markets. Based on the current volume and nature of our inquiry from both Chinese companies going overseas and overseas-based companies, we are very pleased with our progress.
We believe we have a set of tools and services that meet the market demand. We are in the best possible position to tap into the growth in this segment of the market going forward. We will provide regular updates on this business in the future quarters when the numbers are material. With that, I will now pass the call off to Shan-Nen, who will share more information about the vertical applications and other aspects of our performance.
Thanks, Chris. Now let me provide some colors on the vertical application business. In this quarter, we have seen sub-sequential growth in vertical application revenue, which is very encouraging. Vertical applications mainly consist of financial risk management and market intelligence. Vertical application revenue increased by 12% year quarter over quarter and decreased by 9% year-over-year. In the financial risk management segment, revenue increased by 20% quarter-over-quarter to RMB 14.4 million, and decreased by 7% year-over-year.
The financial risk management quarter-over-quarter revenue growth was mainly due to the increase in customer numbers as demands has shown good growth over the quarters. While our financial risk management team has pushed continuously to establish deeper connection with our key customers, it has also discovered more opportunities with our existing client base.
Our ongoing improvement and additions to the product mix have helped us signing up many more new clients and renew customer, including but not limited to, Du Xiaoman, Haiyao, Xiaofeixiong, Ronghui, Jinke, and Guangfa Bank. Our market intelligence services delivered strong revenue growth, up 23% quarter-over-quarter, and up 24% year-over-year to RMB 8.9 million.
During this quarter, we have further cemented our strategy to retain key customers from both PRC and overseas market, we sign up numerous well-known customer, including but not limited to Morningstar, Tsinghua University, iQIYI, Keep, Zhaopin , and vivo. I'll now go through some of our key expenses and balance sheet items. Onto operating expenses. As Chris mentioned earlier, tightening expenses control has been the theme over the past few quarters.
By doing so, we have achieved very solid results to tie us through these tough times. We have had another record low quarter for operating expenses at RMB 80 million, down 23% year-over-year. All three components within operating expenses category has recorded year-over-year reduction. In particular, R&D expenses decreased by 31% to RMB 38.3 million, mainly due to lower headcounts that reduced salary costs and associated share-based compensation, and a decrease in cloud costs as a result of improvement and optimization of our cloud platform.
Selling and marketing expenses decreased by 18% to RMB 24.2 million, mainly due to the decrease in our headcount by 42, and the marketing expenses and salary costs decreased accordingly this quarter. G&A expenses decreased by 7% to RMB 17.6 million, mainly due to salary costs, which is the result of a reduction in headcount. Adjusted EBITDA improved by 58% year-over-year and by 16% quarter-over-quarter respectively to negative RMB 6.7 million. Our company-wide effort to optimize headcount and operating expenses has continued to pay off and yielded good results for us.
Below are the highlights that I want to recap. In this quarter, we have had the lowest operating expenses for the past 16 quarters since fourth quarter of 2018 at RMB 80 million, decreased 23% year-over-year. We had the lowest net loss since third quarter of 2019 at negative RMB 20.4 million, narrowed down by 43% year-over-year.
As mentioned, adjusted EBITDA at negative RMB 6.7 million improved by 58% year-over-year. We had the lowest adjusted operating expenses, which represent the cash component of OpEx since first quarter of 2019 at RMB 66.9 million, decreased by 24% year-over-year. On to the balance sheet. I'll again share two very key KPIs that we closely monitor. Firstly, the AR turnover days decreased from 46 days in second quarter, 2022 to 38 days. Our disciplined accounting policy and cash collection effort ensure a timely collection of our accounts receivables.
This is very important to mitigate the exposure to bad and doubtful debts during these particularly challenging times. Secondly, one of the key financial KPIs for tracking the performance of SaaS companies, the total deferred revenue, which represent cash collected in advance from customer for future contract performance. We recorded the highest balance in the history of the company at RMB 139.1 million. Another angle on this matter, our deferred revenue balance has continually growing and exceeded RMB 100 million at quarter end for the 10 consecutive quarters.
This demonstrate the excellent health condition of our financial KPI under the SaaS business. Next, total assets were RMB 445 million as of 30 September 2022, this includes cash and cash equivalent of 108 million, accounts receivable of 32 million, prepayments and other current assets of 32 million, fixed assets of 42.9 million, long-term investment of 142.9 million, goodwill of 37.8 million, and intangible assets of 25.2 million resulted from the SendCloud acquisition in March 2022. Total current liabilities were at 238.4 million as of 30 September 2022.
This include accounts payable of 17.5 million, deferred revenue of 132.7 million, and accrued liabilities of 88.2 million. Lastly, before I conclude, shall give a quick update on our share repurchase plan. In the quarter ended 30 September 2022, we repurchased 27,000 ADS, and cumulatively we have repurchased a total of 948,000 ADS since the start of our re-repurchase program. With this concludes the management prepared remarks. We're happy to take the question now. Operator... [crosstalk]
Thank you... [crosstalk]
You may proceed.
As a reminder, to ask a question, you need to press star one, one on your telephone. Please stand by while we compile the Q&A roster. One moment for the first question. First question's from the line of Brian Kinstlinger from Alliance Global. Please proceed.
Hi there, this is Sherman on from Brian. Thanks for taking my question. Just wanna start with, now that we're halfway through the fourth quarter, how is it looking so far compared to the third quarter? Should we be expecting similar results, or are you seeing any new trends that you can allude to?
Hi, this is Sherman. Thanks for the question. Yes, based on the trajectory that we have seen to date, fourth quarter we should be able to achieve a sequential growth again, in this quarter. Things are start to pick up, and we do see sign of recovery for most, if not all, of our businesses.
Thank you. Another question. You guys mentioned, the abundance in deferred revenue. Which segment, if any, do you see unusual strength in, and which do you see unusual weakness, if any? Why do you think that is? Do you think this is affecting your growth in any way?
No. If you peel off the layers in terms of the makeup of deferred revenue, they are mainly coming from the subscription business and vertical application. At JG Alliance, the value-added services are mainly advertising based, so those customer are unlikely to prepay. The main focus or the component of deferred revenues are coming from subs and vertical application. We do not see any weakness in terms of where it's coming from, but I guess based on the balances that has been growing, we have no concern. We do see strength on this quarter-over-quarter.
Great. Thank you so much. That's all I have.
Thank you for the questions. As a reminder, if you'd like to ask question, please press star one, one. One moment for the next question. We have the line, the question's from the line of Calvin Wong from Spica Capital. Please proceed.
Hi, management. Many thanks for taking my question. I would like to have three questions, if I may. The first one is related to the launch of EngageLab for overseas customers. Could you provide more insight on the EngageLab platform for us? That's the first question. The second question, we have noticed that you have started cooperating with BYD for its business in Europe, so would love to hear more about the details on that. The second question is related to your cooperation with BYD. Finally, a more financial related question.
We noticed that you have done a good job in managing the OpEx. Appreciate if you could share with us how this OpEx is trending in the next few quarters. If you can, when you could you also share with us, when are we expecting the company to turn positive adjusted EBITDA, sense?
Yeah, sure, Calvin. Let me recap your question. For the first one, you're asking about the EngageLab for our overseas customer, right?
Yes.
Actually this is part of our plan to facilitate our Chinese companies going overseas. We have launched this EngageLab in short just to ensure that we, the Chinese companies can carry out the refined and accurate user reach overseas with our low cost and high efficiency rate that we can offer. If you look at our EngageLab, actually we are committed to offering omni-channel messaging solution to global enterprise and developers. As we have mentioned in our press release, at present, EngageLab provides five major services, including app push, web push, email service, SMS services, and WhatsApp.
We are, at the moment, exploring additional messaging channels in the overseas market as well. Besides the Chinese companies venturing overseas, we believe our EngageLab is also well suited to overseas-based developers who have the needs to reach their customers in a more efficient and effective ways. Probably I can give you some colors in terms of where we are. Up until recently, we have signed up more than 15 overseas-based customers with many more in the pipeline.
We believe that this strategy to put our resources in EngageLab for overseas customers or for Chinese companies going overseas is the right one, and definitely will deliver positive results in the near future. I hope this answer your question.
Oh, that... [crosstalk]
If you look at my note... [crosstalk] Okay, sure. The second question you have is with regards to BYD in Europe, and that's the one of the press release that we have made recently. I can give you some background in terms of the cooperation. This is in late, I think it's late September, we have entered into this agreement with BYD for them to launch their services in Northern Europe, in particular in the country of Norway, where they have delivered more than 1,000 pure electric SUV in Norway.
Leveraging on our messaging cloud solution, we are able to help BYD effectively carry out their user reach in that particular market and improve their messaging experience for their users. As, apart from the so-called messaging delivery system, we believe the Chinese company face various security compliance requirement, especially in Europe, where GDPR is very stringent. I believe our solution is well catered for Chinese company-based, Chinese-based companies going overseas, and in particular with our experiences in stable and quality messaging and data compliance competency.
I think we believe we are the pro-service provider of choice without any doubts. I guess with this project with BYD, we think that it will open more doors for us in securing more similar contracts overseas, and do look out for our future press releases in this matter. Calvin, what was your third question?
Okay. The third question, again, two things. One is about the trend, the coming trend of your OpEx. Because, you know, you've done a very good job in managing the OpEx over the past few quarters. We'd like to hear from you about the trend of OpEx in the coming few quarters. Secondly, very straightforward, when are we going to expect the EBITDA to turn, adjusted EBITDA to turn positive?
Sure, sure. Yeah, that's a tough question. I guess based on the financials that we have released for the past few quarters, you have seen we have proactively controlling our operating expenses over the past four to five quarters, and we have made really good progress. As mentioned by Chris and myself, for the third quarter this year, we have the lowest operating expenses for the past 16 quarters. We have the record low net loss since third quarter of 2019. Our adjusted EBITDA continue to improve by 58% year-over-year.
I must say that all these achievement are by no means easy nor straightforward, and it was all due to our team's effort to execute this cost reduction plan continuously quarter-over-quarter. Probably as you are aware, our cost control initiative is an ongoing process.
The operating expenses perspective, we believe we are at a pretty optimized level now. Still, internally, we are challenging all departmental heads to keep the company's expenses at the lean and a more effective level. Having said that, I think there could be some unforeseen events at this moment that might potentially tilt the scale. With the overall global macroeconomic uncertainty, at this point, we do not give any specific timing as to when we'll turn positive for our adjusted EBITDA.
I guess, so long as we keep our operating expenses at the optimal level, and we believe that when the economy recovers, and in turn revenue continue to grow, and turning adjusted EBITDA positive is the only natural course of event. Back to, yeah, that's my answer to your question, Calvin.
Okay, very clear. Thanks.
Thank you for the questions. At this time, there are no further questions from the line. I would like to hand the call back to Rene for closing remarks.
Thank you everyone for joining our call tonight. If you have any further questions or comments, please don't hesitate to reach out to the IR team. This concludes the call. Have a good night. Thank you.
Thank you, ladies and gentlemen. You may now disconnect your lines.