Core Viewpoint - Agora, Inc. reported its first quarter 2024 financial results, highlighting a focus on product performance improvements despite a challenging operating environment. The company anticipates that advancements in real-time engagement technology will align with the growing use of generative AI models in voice and video interactions [1]. Financial Performance - Total revenues for Q1 2024 were $33.0 million, a decrease of 9.4% from $36.4 million in Q1 2023 [2][3]. - Agora's revenue was $15.8 million, an increase of 4.6% from $15.1 million in Q1 2023, driven by business expansion and growth in sectors like live shopping [2][3]. - Shengwang's revenue was RMB122.6 million ($17.2 million), a decrease of 16.0% from RMB145.9 million ($21.3 million) in Q1 2023, attributed to a challenging macroeconomic and regulatory environment [2][3]. Customer Metrics - Active customers for Agora increased to 1,720 as of March 31, 2024, up 16.1% from 1,481 a year earlier [2]. - Shengwang had 3,833 active customers, a decrease of 2.2% from 3,919 as of March 31, 2023 [2]. Profitability and Loss - The net loss for Q1 2024 was $9.5 million, compared to a net loss of $16.8 million in Q1 2023 [2][10]. - Non-GAAP net loss for the quarter was $4.8 million, compared to a non-GAAP net loss of $9.1 million in Q1 2023 [2][10]. - Adjusted EBITDA for the quarter was negative $6.1 million, an improvement from negative $6.4 million in Q1 2023 [2][10]. Cash Flow and Liquidity - Total cash, cash equivalents, and financial products as of March 31, 2024, amounted to $380.8 million [2]. - Net cash used in operating activities for the quarter was $6.5 million, down from $8.9 million in Q1 2023 [2]. - Free cash flow for the quarter was negative $7.1 million, an improvement from negative $9.1 million in Q1 2023 [2]. Share Repurchase Program - During Q1 2024, the company repurchased approximately 4.8 million Class A ordinary shares for about $3.2 million, representing 1.6% of its $200 million share repurchase program [11]. - As of March 31, 2024, the company had repurchased approximately 118.6 million Class A ordinary shares for about $107.5 million, representing 54% of its share repurchase program [11]. Financial Outlook - The company expects total revenues for Q2 2024 to be between $34 million and $36 million, reflecting current market and operational conditions [12].

SANTA CLARA, Calif., May 22, 2024 (GLOBE NEWSWIRE) -- Agora, Inc. (NASDAQ: API) (the “Company”), a pioneer and leader in real-time engagement technology, today announced its unaudited financial results for the first quarter ended March 31, 2024. “Despite a challenging operating environment, we continued to focus on enhancing the fundamental performance of our products, for example, launching our new Adaptive Video Optimization technology and improving the stability of our SDKs to highest levels in our histo ...

SANTA CLARA, Calif., May 10, 2024 (GLOBE NEWSWIRE) -- Agora, Inc. (NASDAQ:API), a pioneer and leader in real-time engagement technology, will release its financial results for the first quarter ended March 31, 2024 after the close of U.S. markets on May 22, 2024. Agora, Inc. will host a conference call to discuss the financial results at 6 p.m. Pacific Time / 9 p.m. Eastern Time on the same day. Details for the conference call are as follows: Event title: Agora, Inc. 1Q 2024 Financial Results The call will ...

Agora's Adaptive Video Optimization™ (AVO) technology dynamically optimizes performance at every step, from capture to playback, to deliver exceptional live video quality. SANTA CLARA, Calif., May 1, 2024 /PRNewswire/ -- Agora, Inc. (NASDAQ: API), a pioneer and leading platform for real-time engagement APIs, today unveiled its latest innovation, Adaptive Video Optimization™ (AVO) along with support for the AV1 video codec. This advanced technology harnesses the power of machine learning to dynamically adju ...

VIE Structure and Regulatory Risks - In 2021, 2022, and 2023, revenues generated by the VIEs accounted for 68.2%, 53.3%, and 56.7% of total revenues, respectively[17]. - The contractual arrangements with the VIE have not been tested in court in China, posing risks to the enforceability of these agreements[17]. - The company has controlling financial interest over Zhaoyan through a series of contractual arrangements, allowing it to direct Zhaoyan's activities and receive economic benefits[20]. - The company does not hold any equity interests in Zhaoyan, which is owned by nominee shareholders, increasing risks related to enforcement of contractual rights[21]. - The company has maintained a VIE structure to comply with Chinese regulations on foreign investment in telecommunications[15]. - The legal counsel has indicated that the ownership structures do not violate current PRC laws, but uncertainties remain regarding future interpretations[30]. - The company faces significant uncertainty regarding potential future actions by the Chinese government that could affect the legality of its corporate structure[17]. - The company may face administrative penalties if it fails to obtain or maintain necessary licenses and approvals from PRC regulators[36]. - The M&A Rules create substantial uncertainty regarding the need for CSRC approval for offshore special purpose vehicles, which could impact the company's operations[34]. - PRC subsidiaries are required to set aside at least 10% of after-tax profits for statutory reserves, potentially limiting dividend payments to Agora, Inc.[66]. - The ability to pay dividends is contingent on the distributable profits of PRC subsidiaries, which may not be sufficient in the near future[66]. - The PCAOB's ability to conduct inspections of auditors in China is uncertain, which could affect the trading of Agora's ADSs in the U.S.[70]. - If the PCAOB cannot inspect auditors for two consecutive years, Agora's ADSs may be prohibited from trading on U.S. exchanges[69]. - The company faces potential penalties if its contractual arrangements do not comply with PRC regulatory restrictions on foreign investment[213]. Financial Performance and Position - As of December 31, 2023, Agora, Inc. had made cumulative capital contributions of US$259.0 million to its PRC subsidiary[39]. - The VIEs transferred US$48.6 million, US$24.4 million, and US$38.6 million to the PRC subsidiaries as payment of service fees in 2023, 2022, and 2021 respectively[41]. - The aggregated payment of service fees from the VIEs to the PRC subsidiaries amounted to US$217.9 million as of December 31, 2023, up from US$169.3 million in 2022[40]. - The outstanding balance of service fees owed by the VIEs to the PRC subsidiaries decreased from US$41.8 million in 2022 to US$26.1 million in 2023[40]. - The company has not declared or paid any cash dividends and intends to retain most of its available funds for business operations and expansion[42]. - The company has not made any loans to the VIEs in 2021, 2022, and 2023, with the VIEs funding their operations primarily through cash generated from activities[37]. - Total third-party revenues for the year ended December 31, 2022, were $160.67 million, an increase from $141.54 million in 2021, representing a growth of approximately 13.5%[49][50]. - The net loss for the year ended December 31, 2022, was $120.38 million, compared to a net loss of $87.22 million in 2021, indicating a decline of approximately 37.9%[49][50]. - Total current assets as of December 31, 2023, amounted to $261.43 million, with cash and cash equivalents at $36.89 million[54]. - The company reported a loss before income tax expenses of $119.72 million for the year ended December 31, 2022, compared to a loss of $86.80 million in 2021, reflecting an increase of approximately 37.9%[49][50]. - Total liabilities as of December 31, 2023, were $69.85 million, with total shareholders' equity at $604.75 million[54]. - The total assets as of December 31, 2023, were $674.60 million, with non-current assets amounting to $413.17 million[54]. - The company incurred other costs and expenses totaling $268.19 million for the year ended December 31, 2022[49]. - The company experienced a foreign currency translation gain of $94 thousand during the fiscal year[59]. - The company recorded a total of $94,159 thousand in long-term investments, with $39,000 thousand in Agora, Inc. and $46,659 thousand in other subsidiaries[56]. - The total amount of cash paid for services from group companies was $(48,587) thousand, while sales of services amounted to $24,636 thousand[61]. Operational Challenges and Market Conditions - The company faces significant risks in expanding its international operations, including regulatory compliance, currency fluctuations, and political instability[103]. - The RTE-PaaS market is at an early stage, with considerable uncertainty regarding its growth and the adoption of the company's platform[92]. - The company must attract new customers cost-effectively and retain existing customers to increase usage of its products, which is critical for revenue generation[93]. - Competition in the RTE-PaaS market is expected to intensify, with larger vendors potentially entering the market and offering competing products[98]. - The company has encountered a history of operating and net losses, making it difficult to evaluate its current business and future prospects[109]. - The company relies on developers to choose and promote its platform, and failure to maintain their acceptance could harm the business[102]. - The company must continuously adapt its products to evolving technologies and customer needs to remain competitive in the market[112]. - The company generated a substantial portion of its revenues from a limited number of customers, indicating a dependency that could impact future revenue stability[127]. - The company faces significant compliance costs and potential liabilities due to evolving privacy and data protection regulations, including the GDPR and CCPA, which may increase operational expenses[118]. - The introduction of the California Privacy Rights Act (CPRA) in 2023 has expanded consumer rights and may lead to increased compliance costs for the company[118]. - The company must manage its suppliers and contractors effectively to ensure compliance with data protection laws, as failures could result in liability[123]. - The company's operating results may fluctuate significantly due to various factors, including customer retention and market acceptance of its products[125]. - The complexity of sales cycles for larger organizations may lead to higher costs and longer sales processes, impacting revenue generation[132]. - The company relies on strategic relationships with third-party sales partners to drive substantial revenues, and failure to establish these could adversely affect financial results[134]. - The company’s ability to recruit and retain skilled sales personnel is critical for achieving significant revenue growth[133]. - The company’s business reputation and customer support quality are vital for maintaining customer relationships and overall financial health[139]. - The company faces potential risks from deteriorating China-U.S. relations, which could impact its operations and market perception[141]. Investment and Financial Strategy - The company has a tax planning strategy in place to mitigate potential double taxation risks associated with VIE earnings[46]. - The likelihood of incurring double taxation due to stranded cash in the VIE is considered remote by management[46]. - The company may require additional capital for product development and international expansion, which could lead to shareholder dilution if raised through equity financing[197]. - Currency exchange rate fluctuations could adversely affect the company's operating results, particularly as it conducts business in multiple currencies[199]. - Significant fluctuations in the Renminbi against the U.S. dollar could impact the company's financial condition and dividend payments[200]. - The company may pursue acquisitions or investments in businesses, technologies, and products, which could divert management's attention and incur debt or shareholder dilution[152]. - Integration of acquired businesses may face challenges, including retaining key personnel and adapting products to the company's platform, potentially disrupting operations[154]. Legal and Compliance Risks - The company faces various legal and operational risks due to its business operations in multiple jurisdictions, including the U.S. and China[74]. - Changes in PRC government policies could adversely impact the company's operations and the value of its ADSs[82]. - The company is subject to FCC regulations which may impose product design and compliance obligations, potentially affecting its ability to operate and sell products[179]. - The company offers products in over 100 countries, exposing it to various international telecommunications laws and regulations[180]. - International operations may face increased costs and regulatory challenges, particularly in countries where IP communications are restricted or illegal[181]. - The company must comply with U.S. export controls and economic sanctions, which could impact its market competitiveness and result in penalties for non-compliance[183]. - Encryption technology in products may face import and export regulations, potentially harming international sales and revenues[185]. - The company is subject to complex tax regulations across multiple jurisdictions, which could lead to additional tax liabilities and affect financial results[190]. - Negative publicity and regulatory investigations could harm the company's reputation and market share[195]. - The company has not recorded any contingent liabilities related to pending litigation for the years 2021, 2022, and 2023, but future estimates may be inaccurate due to uncertainties[212]. - Legal or administrative proceedings against the company or its management could harm reputation and user base, distracting from daily operations[211]. Internal Controls and Reporting - The company must maintain effective internal control over financial reporting as per the Sarbanes-Oxley Act, with independent testing required to confirm effectiveness[203]. - As of December 31, 2023, the company's internal control over financial reporting was deemed effective by management and an independent registered public accounting firm[203]. - Failure to maintain effective internal controls could lead to material misstatements in financial statements and loss of investor confidence, potentially affecting the market price of the company's ADSs[205]. Cybersecurity and Data Protection - The company faces risks related to cybersecurity breaches that could compromise business operations and result in significant data losses[165]. - Increased prevalence of computer malware and data security breaches poses risks to the company's platform and could harm customer retention[208]. - The company is subject to cybersecurity reviews if it holds personal information of more than one million users and intends to go public in a foreign country[119]. - The company may face penalties and fines for noncompliance with data protection laws, which could adversely affect its business operations[124].

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Investment Rating - The report maintains a "Recommendation" rating for Agora (API.NASDAQ) [1] Core Views - The company achieved a revenue of 36 million USD in Q4 2023, a year-on-year decrease of 10.2% but a quarter-on-quarter increase of 2.9% [2] - The net loss for the quarter was 2.61 million USD, while the Non-GAAP net profit was 1.4 million USD [2] - The overall revenue decline in Q4 2023 is expected to be offset by accelerated growth in the second half of 2024 due to domestic digital business and overseas live e-commerce development [2] - Cost reduction and efficiency improvement measures have shown significant results, with expectations of achieving breakeven in 2024 [2] - The overseas market has become the main growth driver for the company, with competitors like Twilio exiting the cloud video communication segment, allowing Agora to expand its market share [2][3] Financial Summary - In Q4 2023, Agora's overseas revenue was 15.3 million USD, a decrease of 3.16% year-on-year, primarily due to a slowdown in emerging markets and reduced global venture capital [2] - The company's domestic revenue was 20.7 million USD, reflecting a stable decline of 10.39% year-on-year [2] - The gross margin for Q4 2023 was 62.9%, with a decrease of 1.1 percentage points from the previous quarter [2] - Research and development expenses were 16.31 million USD, accounting for 45.3% of revenue, a decrease of 7.7 percentage points year-on-year [2] - Sales and management expenses also saw reductions, contributing to an overall decrease in the expense ratio [2] Revenue Forecast - The company forecasts revenues of 146.8 million USD in 2024, with a growth rate of 3.7%, followed by 172.0 million USD in 2025 and 205.5 million USD in 2026, with respective growth rates of 17.2% and 19.4% [3][4] - The projected net losses for the next three years are -11.0 million USD in 2024, -2.5 million USD in 2025, and -2.2 million USD in 2026 [3][4]

Core Viewpoint - Agora, Inc. Sponsored ADR (API) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Outlook - The Zacks Consensus Estimate for Agora, Inc. indicates an expected earnings per share (EPS) of -$0.23 for the fiscal year ending December 2024, reflecting a year-over-year change of 73.9% [5]. - Over the past three months, the consensus estimate for Agora has increased by 28.6%, suggesting a positive trend in earnings expectations [5]. Impact of Earnings Estimates on Stock Prices - Changes in earnings estimates are strongly correlated with near-term stock price movements, primarily due to institutional investors who adjust their valuations based on these estimates [3]. - The upgrade in Agora's earnings estimates and the corresponding Zacks rating upgrade signal an improvement in the company's underlying business, which is likely to drive the stock price higher [3][7]. Zacks Rating System - The Zacks Rank system categorizes stocks based on earnings estimate revisions, with a proven track record of generating significant returns, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [4]. - Agora's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [6][7].

Agora, Inc. Reports Fourth Quarter and Fiscal Year 2023 Financial Results SANTA CLARA, Calif., February 26, 2024 (GLOBE NEWSWIRE) – Agora, Inc. (NASDAQ: API) (the "Company"), a pioneer and leader in real-time engagement technology, today announced its unaudited financial results for the fourth quarter and the fiscal year ended December 31, 2023. "We ended 2023 with strong financial results in the fourth quarter, as we delivered sequential quarterly revenue growth and a non-GAAP net income of $1.4 million, a ...

Financial Data and Key Metrics Changes - Total revenues for Q4 2023 were $36 million, a 2.9% increase quarter-over-quarter but a 10.2% decrease year-over-year [14] - Agora's revenues were $15.3 million, flat compared to the previous quarter and down 3.2% year-over-year [14] - Shengwang revenues were RMB 148.7 million, a 5% increase quarter-over-quarter but a 9.6% decrease year-over-year [15] - Non-GAAP net income was $1.4 million in Q4, translating to a 3.9% net income margin, a significant improvement from a non-GAAP net loss margin of 39.3% in Q4 last year [18] Business Line Data and Key Metrics Changes - Agora had close to 1,700 active customers, an 18% increase year-over-year, while Shengwang had over 4,100 active customers, a 12% increase [4] - Dollar-based net retention rate was 93% for Agora and 82% for Shengwang, excluding revenues from discontinued business [15] Market Data and Key Metrics Changes - The company noted a challenging macroeconomic environment affecting customer usage in emerging markets, contributing to revenue declines [14] - The competitive landscape in the U.S. and international markets showed strong growth momentum in media and entertainment, telehealth, and IoT sectors [31] Company Strategy and Development Direction - The company aims to focus on creating customer value and enhancing competitive advantage to expand market share globally [13] - The introduction of new products and features, such as the virtual sound card and mini games, is part of the strategy to drive user engagement and monetization [11][10] Management Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the macroeconomic environment and regulatory changes but expressed optimism about achieving profitability and revenue growth in 2024 [23] - The company expects Q1 2024 revenues to be between $32 million and $34 million, reflecting seasonal impacts and a lower usage period due to the Lunar New Year [20] Other Important Information - The company ended Q4 with $371.8 million in cash and equivalents, with a share repurchase program returning approximately $104.3 million to shareholders [19] - The board has authorized a 12-month extension of a $200 million share repurchase program, indicating confidence in the company's financial strength [19] Q&A Session Summary Question: What is the management outlook for 2024 profitability? - Management indicated that while Q1 may see a revenue decline, they expect to achieve year-on-year revenue growth starting from Q2 and aim for double-digit growth by Q4 [22][23] Question: Can Agora benefit from domestic Internet companies going abroad? - Management believes they are well-positioned to assist Chinese Internet companies in expanding globally, leveraging their existing customer base and market knowledge [24] Question: What will be the revenue model for the partnership with Vision Pro? - The revenue model will be API-based, tied to consumer usage, with potential for diverse pricing models as new use cases emerge [26] Question: What is the demand outlook and competitive landscape? - Management noted strong growth in developed markets, particularly in media and entertainment, while facing price pressures in emerging markets [31][32] Question: What is the impact of Twilio's exit on Agora? - Management sees Twilio's exit as an opportunity to gain market share, with ongoing efforts to convert Twilio's customer base to Agora's services [35][38]