Jianpu Technology Inc. Reports Third Quarter 2023 Unaudited Financial Results

 

Jianpu Technology Inc. (“Jianpu,” or the “Company”) (NYSE: JT), a leading independent open platform for the discovery and recommendation of financial products in China, today announced its unaudited financial results for the third quarter ended September 30, 2023.

Third Quarter 2023 Operational and Financial Highlights:

• Revenues from recommendation services for the third quarter of 2023 decreased by 9.6% to RMB191.2 million (US$26.2 million) from RMB211.6 million in the same period of 2022. Revenues from recommendation services for loans increased by 25.3% to RMB102.9 million (US$14.1 million) in the third quarter of 2023 from RMB82.1 million in the same period of 2022, primarily due to the increase in the number of loan applications. Revenues from recommendation services for credit cards decreased by 31.8% to RMB88.3 million (US$12.1 million) in the third quarter of 2023 from RMB129.5 million in the same period of 2022, primarily due to the decrease in the credit card volume.
• Revenues from big data and system-based risk management services decreased by 24.4% to RMB18.9 million (US$2.6 million) in the third quarter of 2023 from RMB25.0 million in the same period of 2022, primarily due to the deconsolidation of Newsky Wisdom Treasure (Beijing) Co., Ltd (“Newsky Wisdom”) in the second quarter of 2023. The decline was also caused by a gradual shift of our business model of data-based risk management services towards the cooperation with the licensed credit reporting agencies.
• Revenues from marketing and other services^[1] increased by 41.3% to RMB45.5 million (US$6.2 million) in the third quarter of 2023 from RMB32.2 million in the same period of 2022. The increase was mainly attributable to the growth of insurance brokerage services and other new businesses.
• Loss from operations was RMB8.7 million (US$1.2 million) in the third quarter of 2023, compared with RMB31.9 million in the same period of 2022. Operating loss margin was 3.4% in the third quarter of 2023, compared with 11.9% in the same period of 2022. The improvement of loss from operations was mainly attributable to the decrease in costs and expenses resulting from efficiency improvement and cost optimization.
• Net loss was RMB6.4 million (US$0.9 million) in the third quarter of 2023, compared with RMB25.1 million in the same period of 2022. Net loss margin was 2.5% in the third quarter of 2023, compared with 9.3% in the same period of 2022.
• Non-GAAP adjusted net loss^[2] was RMB5.6 million (US$0.8 million) in the third quarter of 2023, compared with RMB9.4 million in the same period of 2022. Non-GAAP adjusted net loss margin^[2] was 2.2% in the third quarter of 2023, compared with 3.5% in the same period of 2022.

First Nine Months 2023 Operational and Financial Highlights:

• Revenues from recommendation services was RMB566.4 million (US$77.6 million) in the first nine months of 2023, compared with RMB560.4 million in the same period of 2022. Revenues from recommendation services for loans increased by 27.3% to RMB248.4 million (US$34.0 million) in the first nine months of 2023 from RMB195.2 million in the same period of 2022, primarily due to the increase in the number of loan applications. Revenues from recommendation services for credit cards decreased by 12.9% to RMB318.0 million (US$43.6 million) in the first nine months of 2023 from RMB365.2 million in the same period of 2022, primarily due to the decrease in the credit card volume.
• Revenues from big data and system-based risk management services was RMB69.6 million (US$9.5 million) in the first nine months of 2023, compared with RMB68.0 million in the same period of 2022.
• Revenues from marketing and other services^[1] increased by 72.1% to RMB194.5 million (US$26.7 million) in the first nine months of 2023 from RMB113.0 million in the same period of 2022. The increase was mainly attributable to the growth of insurance brokerage services and other new businesses.
• Loss from operations was RMB42.9 million (US$5.9 million) in the first nine months of 2023, compared with RMB122.4 million in the same period of 2022. Operating loss margin was 5.2% in the first nine months of 2023, compared with 16.5% in the same period of 2022. The improvement of loss from operations was mainly attributable to the increase in revenues and the decrease in operating expenses resulting from efficiency improvement and cost optimization.
• Net loss was RMB28.1 million (US$3.9 million) in the first nine months of 2023, compared with RMB114.1 million in the same period of 2022. Net loss margin was 3.4% in the first nine months of 2023, compared with 15.4% in the same period of 2022.
• Non-GAAP adjusted net loss^[2] was RMB32.3 million (US$4.4 million) in the first nine months of 2023, compared with RMB92.2 million in the same period of 2022. Non-GAAP adjusted net loss margin^[2] was 3.9% in the first nine months of 2023, compared with 12.4% in the same period of 2022.

Mr. David Ye, Co-founder, Chairman and Chief Executive Officer of Jianpu, commented, “We have made progress in navigating the challenging environment and executing our diversification strategy since earlier this year, resulting in an increase of 12.0% year-over-year of our total revenue to RMB830.5 million (US$113.8 million) during the first nine months. Through our continued efforts to enhance operational efficiency and to optimize cost structure, our ROI^[3] experienced a remarkable 5.9 percentage points increase year-over-year, reaching 141.2%, and our net loss was RMB6.4 million (US$0.9 million) in the third quarter of 2023.”

“Moreover, we are cognizant of the immense opportunities coming with the advancement of AI, and will target to develop flexible and low-coupling AI solutions with coverage in AI product architecture, and will continue to empower our ecosystem partners in their digital transformation with digital technology and artificial intelligence,” concluded Mr. Ye.

“During the third quarter of 2023, we persistently focused on achieving a diversified revenue structure, improving operating efficiency and executing cost optimization initiatives. In this quarter, our loan recommendation services and marketing and other services^[1] continued to grow, leading to a more balanced revenue structure. Driven by our improved productivity and continued efficiency improvement, we trimmed our Non-GAAP adjusted net loss^[2] significantly by 40.4% year-over-year to RMB5.6 million (US$0.8 million) in the third quarter of 2023,” said Oscar Chen, Chief Financial Officer of Jianpu.

Third Quarter 2023 Financial Results

Total revenues for the third quarter of 2023 decreased by 4.9% to RMB255.6 million (US$35.0 million) from RMB268.8 million in the same period of 2022. The decrease was mainly attributable to the decrease in revenues from recommendation services, partially offset by the increase of revenues from marketing and other services^[1].

Revenues from recommendation services decreased by 9.6% to RMB191.2 million (US$26.2 million) in the third quarter of 2023 from RMB211.6 million in the same period of 2022.

Revenues from recommendation services for credit cards decreased by 31.8% to RMB88.3 million (US$12.1 million) in the third quarter of 2023 from RMB129.5 million in the same period of 2022. As certain credit card issuers lowered their marketing budget from the second quarter of 2023, credit card volume decreased by 27.3% to approximately 0.8 million in the third quarter of 2023 from 1.1 million in the same period of 2022. The average fee per credit card was RMB115.2 (US$15.8) and RMB116.4 in the third quarters of 2023 and 2022, respectively.

Revenues from recommendation services for loans increased by 25.3% to RMB102.9 million (US$14.1 million) in the third quarter of 2023 from RMB82.1 million in the same period of 2022, primarily due to an increase in the number of loan applications. The number of loan applications was approximately 7.4 million in the third quarter of 2023, representing a 48.0% increase from that in the same period of 2022. The average fee per loan application was RMB14.0 (US$1.9) and RMB16.5 in the third quarters of 2023 and 2022, respectively.

Revenues from big data and system-based risk management services decreased by 24.4% to RMB18.9 million (US$2.6 million) in the third quarter of 2023 from RMB25.0 million in the same period of 2022, primarily due to the deconsolidation of Newsky Wisdom in the second quarter of 2023. The decline was also caused by a gradual shift of our business model of data-based risk management services towards the cooperation with the licensed credit reporting agencies. Through the cooperation, which is mandated by the relevant PRC regulation, we, together with the licensed credit reporting agencies, provide data-based risk management services to the financial institutions and share the economic interests accordingly.

Revenues from marketing and other services^[1] increased by 41.3% to RMB45.5 million (US$6.2 million) in the third quarter of 2023 from RMB32.2 million in the same period of 2022, primarily due to the growth of the Company’s insurance brokerage services and other new businesses.

Cost of promotion and acquisition decreased by 7.0% to RMB167.6 million (US$23.0 million) in the third quarter of 2023 from RMB180.2 million in the same period of 2022. The decrease was primarily due to the efficiency improvements and, to a lesser extent, the decrease in revenues from recommendation services.

Cost of operation decreased by 30.5% to RMB14.6 million (US$2.0 million) in the third quarter of 2023 from RMB21.0 million in the same period of 2022. The decrease was primarily attributable to the decrease in data acquisition costs, as well as the decrease in software development and maintenance costs related to the big data and system-based risk management services, which partially resulted from the deconsolidation of Newsky Wisdom.

Sales and marketing expenses was RMB33.2 million (US$4.6 million) in the third quarter of 2023, compared with RMB34.5 million in the same period of 2022. The decrease was primarily due to the decreases in payroll expenses, rental expenses, and travel and entertainment expenses, partially offset by an increase in client service-related expenses.

Research and development expenses decreased by 8.4% to RMB26.2 million (US$3.6 million) in the third quarter of 2023 from RMB28.6 million in the same period of 2022, primarily due to the decreases in payroll expenses and rental expenses resulting from the Company’s continued efforts in cost optimization.

General and administrative expenses was RMB22.6 million (US$3.1 million) in the third quarter of 2023, compared with RMB23.0 million in the same period of 2022. The change was primarily due to the decreases in rental expenses and travel and entertainment expenses, partially offset by the increases in allowance for credit losses and payroll expenses.

Impairment of goodwill and intangible assets was RMB13.3 million in the third quarter of 2022 related to the impairment of the goodwill and intangible assets of Newsky Wisdom, which experienced a decline in revenue due to the impact of COVID-19 prevention and control measures. There was no such impairment loss in the same period of 2023.

Loss from operations was RMB8.7 million (US$1.2 million) in the third quarter of 2023, compared with RMB31.9 million in the same period of 2022. Operating loss margin was 3.4% in the third quarter of 2023, compared with 11.9% in the same period of 2022. The decrease in operating loss was mainly attributable to the decrease in costs and expenses resulting from efficiency improvement and cost optimization.

Others, net decreased by 97.3% to RMB0.2 million (US$0.0 million) in the third quarter of 2023 from RMB7.5 million in the same period of 2022. The decrease was mainly attributable to the decrease in tax benefits for value-added tax.

Net loss was RMB6.4 million (US$0.9 million) in the third quarter of 2023 compared with RMB25.1 million in the same period of 2022. Net loss margin was 2.5% in the third quarter of 2023, compared with 9.3% in the same period of 2022.

Non-GAAP adjusted net loss^[2], which excluded share-based compensation expenses, investment impairment loss, impairment of goodwill and intangible assets, investment gain of deconsolidation of subsidiaries and tax effects of above Non-GAAP adjustments, was RMB5.6 million (US$0.8 million) in the third quarter of 2023, compared with RMB9.4 million in the same period of 2022. Non-GAAP adjusted net loss margin^[2] was 2.2% in the third quarter of 2023 compared with 3.5% in the same period of 2022.

Non-GAAP adjusted EBITDA^[5], which excluded share-based compensation expenses, investment impairment loss, impairment of goodwill and intangible assets, investment gain of deconsolidation of subsidiaries, depreciation and amortization, interest income and expenses, and income tax benefits from net loss, for the third quarter of 2023 was a loss of RMB6.6 million (US$0.9 million), compared with a loss of RMB7.2 million in the same period of 2022.

As of September 30, 2023, the Company had cash and cash equivalents, time deposits and restricted cash and time deposits of RMB687.3 million (US$94.2 million) and working capital of approximately RMB350.0 million (US$48.0 million). Compared to those as of December 31, 2022, cash and cash equivalents, time deposits and restricted cash and time deposits increased by RMB3.1 million.

First Nine Months 2023 Financial Results

Total revenues for the first nine months of 2023 increased by 12.0% to RMB830.5 million (US$113.8 million) from RMB741.4 million in the same period of 2022. The increase was mainly attributable to the increase in revenues from marketing and other services^[1].

Revenues from recommendation services was RMB566.4 million (US$77.6 million) in the first nine months of 2023, compared with RMB560.4 million in the same period of 2022.

Revenues from recommendation services for credit cards decreased by 12.9% to RMB318.0 million (US$43.6 million) in the first nine months of 2023 from RMB365.2 million in the same period of 2022. As certain credit card issuers lowered their marketing budget from the second quarter of 2023, credit card volume in the first nine months of 2023 decreased by 12.5% to approximately 2.8 million from 3.2 million in the same period of 2022. The average fee per credit card were RMB114.3 (US$15.7) and RMB113.4 in the first nine months of 2023 and 2022, respectively.

Revenues from recommendation services for loans increased by 27.3% to RMB248.4 million (US$34.0 million) in the first nine months of 2023 from RMB195.2 million in the same period of 2022, primarily due to the increase in the number of loan applications. The number of loan applications was approximately 17.1 million in the first nine months of 2023, representing a 29.5% increase from that in the same period of 2022. The average fee per loan application was RMB14.6 (US$2.0) and RMB14.8 in the first nine months of 2023 and 2022, respectively.

Revenues from big data and system-based risk management services was RMB69.6 million (US$9.5 million) in the first nine months of 2023, compared with RMB68.0 million in the same period of 2022.

Revenues from marketing and other services^[1] increased by 72.1% to RMB194.5 million (US$26.7 million) in the first nine months of 2023 from RMB113.0 million in the same period of 2022, primarily due to the growth of the Company’s insurance brokerage services and other new businesses.

Cost of promotion and acquisition increased by 9.1% to RMB569.1 million (US$78.0 million) in the first nine months of 2023 from RMB521.5 million in the same period of 2022, primarily due to the growth of the Company’s revenues from marketing and other services^[1].

Cost of operation decreased by 11.5% to RMB53.0 million (US$7.3 million) in the first nine months of 2023 from RMB59.9 million in the same period of 2022. The decrease was primarily attributable to the decreases in data acquisition costs, as well as the decrease in software development and maintenance costs related to the big data and system-based risk management services, which partially resulted from the deconsolidation of Newsky Wisdom.

Sales and marketing expenses was RMB97.9 million (US$13.4 million) in the first nine months of 2023, compared with RMB101.6 million in the same period of 2022. The decrease was primarily due to the decreases in payroll expenses, rental expenses and marketing and advertising expenses, partially offset by an increase in client service-related expenses.

Research and development expenses decreased by 13.5% to RMB75.9 million (US$10.4 million) in the first nine months of 2023 from RMB87.7 million in the same period of 2022, primarily due to the decreases in payroll expenses, rental expenses and share-based compensation expenses resulting from our continued efforts in cost optimization.

General and administrative expenses was RMB77.5 million (US$10.6 million) in the first nine months of 2023 from RMB79.9 million in the same period of 2022, the change was primarily due to the decreases in rental expenses, share-based compensation expenses and travel and entertainment expenses, partially offset by an increase in professional fees.

Impairment of goodwill and intangible assets was RMB13.3 million in the first nine months of 2022 related to the impairment of the goodwill and intangible assets of Newsky Wisdom. There was no such impairment loss in the same period of 2023.

Loss from operations was RMB42.9 million (US$5.9 million) in the first nine months of 2023, compared with RMB122.4 million in the same period of 2022. Operating loss margin was 5.2% in the first nine months of 2023, compared with 16.5% in the same period of 2022. The decrease in operating loss was mainly attributable to the increase in revenues and the decrease in operating expenses resulting from efficiency improvement and cost optimization.

Others, net decreased by 9.5% to RMB10.5 million (US$1.4 million) in the first nine months of 2023 from RMB11.6 million in the same period of 2022. The decrease was mainly attributable to the decrease in tax benefits of value-added tax, partially offset by the investment gain from the deconsolidation of Newsky Wisdom^[4] in the first nine months of 2023.

Net loss was RMB28.1 million (US$3.9 million) in the first nine months of 2023 compared with RMB114.1 million in the same period of 2022. Net loss margin was 3.4% in the first nine months of 2023 compared with 15.4% in the same period of 2022.

Non-GAAP adjusted net loss^[2], which excluded share-based compensation expenses, investment impairment loss, impairment of goodwill and intangible assets, investment gain of deconsolidation of subsidiaries and tax effects of above Non-GAAP adjustments, was RMB32.3 million (US$4.4 million) in the first nine months of 2023, compared with RMB92.2 million in the same period of 2022. Non-GAAP adjusted net loss margin^[2] was 3.9% in the first nine months of 2023 compared with 12.4% in the same period of 2022.

Non-GAAP adjusted EBITDA^[5], which excluded share-based compensation expenses, investment impairment loss, impairment of goodwill and intangible assets, investment gain of deconsolidation of subsidiaries, depreciation and amortization, interest income and expenses, and income tax benefits from net loss, for the first nine months of 2023 was a loss of RMB33.3 million (US$4.6 million), compared with a loss of RMB84.7 million in the same period of 2022.

Subsequent Event

In August 2023, the Group entered into a share transfer agreement with a third-party buyer to sell its remaining 15% equity interests in Newsky Wisdom. The transaction was completed in late October 2023. The Group received all of the considerations and recognized the related investment gains in October 2023.

Conference Call 

The Company’s management will host an earnings conference call at 8:00 AM U.S. Eastern Time on November 24, 2023 (9:00 PM Beijing/Hong Kong Time on November 24, 2023).

Dial-in details for the earnings conference call are as follows:

Participants should dial-in at least 5 minutes before the scheduled start time and ask to be connected to the call for “Jianpu Technology Inc.”

Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at http://ir.jianpu.ai.