Agora, Inc. 2023 Q4 Earnings Disclaimer Information in this presentation contains forward-looking statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934, as amended. These forward-looking statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current fact included in this presentation a ...

Core Insights - Agora, Inc. reported strong financial results for Q4 2023, achieving non-GAAP net income of $1.4 million, marking quarterly profitability for the first time in over three years, despite a challenging operating environment [2][3][4] - The company returned approximately $104.3 million to shareholders through share repurchases over the past two years, reducing its share count by more than 18% [2][4] - The board has authorized a 12-month extension of its $200 million share repurchase program, reflecting confidence in the company's financial strength and growth prospects [2][4] Fourth Quarter 2023 Highlights - Total revenues for Q4 2023 were $36.0 million, a decrease of 10.2% from $40.1 million in Q4 2022 [3][6] - Agora's revenue was $15.3 million, down 3.2% from $15.8 million in the same period last year [3][6] - Shengwang's revenue was RMB148.3 million ($20.7 million), a decrease of 13.9% from RMB172.3 million ($24.3 million) in Q4 2022 [3][6] - Active customers for Agora increased by 18.4% year-over-year to 1,683, while Shengwang's active customers rose by 11.8% to 4,144 [3][4] - The net loss for Q4 2023 was $2.6 million, significantly improved from a net loss of $35.1 million in Q4 2022 [3][14] Fiscal Year 2023 Highlights - Total revenues for 2023 were $141.5 million, down 11.9% from $160.7 million in 2022 [4][16] - Agora's revenue for 2023 was $61.0 million, a decrease of 2.4% from $62.5 million in 2022 [4][16] - Shengwang's revenue was RMB567.1 million ($80.5 million), down 14.0% from RMB659.4 million ($98.2 million) in 2022 [4][16] - The net loss for 2023 was $87.2 million, an improvement from a net loss of $120.4 million in 2022 [4][24] Cash Flow and Financial Position - Total cash and cash equivalents as of December 31, 2023, were $371.8 million [3][4] - Net cash generated from operating activities for Q4 2023 was $3.7 million, compared to a net cash used of $4.6 million in Q4 2022 [3][5] - Free cash flow for Q4 2023 was $3.4 million, a significant improvement from negative $6.1 million in Q4 2022 [3][5] Operating Expenses and Profitability - Operating expenses in Q4 2023 were $31.2 million, down 26.8% from $42.7 million in Q4 2022 [9][19] - Research and development expenses decreased by 23.3% to $16.3 million, while sales and marketing expenses fell by 42.1% to $7.1 million [10][19] - Gross profit for Q4 2023 was $22.7 million, with a gross margin of 62.9%, an increase from 60.8% in the same period last year [8][19] Share Repurchase Program - During Q4 2023, the company repurchased approximately 14.1 million Class A ordinary shares for about $10.0 million, representing 5% of its $200 million share repurchase program [25][26] - As of December 31, 2023, the company had repurchased approximately 113.8 million Class A ordinary shares for about $104.3 million, representing 52% of the program [25][26] Financial Outlook - The company expects total revenues for Q1 2024 to be between $32 million and $34 million, reflecting current market and operational conditions [27]

Financial Data and Key Metrics Changes - Total revenues for Q3 2023 were $35 million, an increase of 2.9% quarter-over-quarter but a decrease of 14.6% year-over-year [14] - Agora revenues were $15.3 million, flat compared to the previous quarter and down 8.9% year-over-year, primarily due to reduced usage and increased pricing sensitivity in emerging markets [14][15] - Adjusted gross margin for Q3 was 66.9%, up 3.3% from Q3 2022, attributed to changes in product mix and infrastructure optimization [16] - Adjusted EBITDA was negative $4.4 million, translating to a 12.7% adjusted EBITDA loss margin [18] - Non-GAAP net loss, excluding investment loss, was $2.2 million, resulting in a 6.3% net loss margin for the quarter [19] Business Line Data and Key Metrics Changes - Shengwang's revenue increased by 7.4% quarter-over-quarter, but decreased by 9.2% year-over-year, excluding revenues from the disposed CIC business [15] - The digital transformation business for Shengwang grew more than 50% this year, indicating strong demand from large enterprises [26] - Dollar-based net retention rate was 98% for Agora and 89% for Shengwang, excluding revenues from discontinued business [15] Market Data and Key Metrics Changes - The U.S. live shopping market is projected to be worth $35 billion by 2024, with live shopping potentially accounting for 20% of e-commerce sales by 2026 [5] - The company noted stable demand from Internet customers in China, with some bright spots in online karaoke and premium broadcasting streaming products [27] Company Strategy and Development Direction - The company aims to stabilize existing business and expand into new regions and use cases, particularly in the digital transformation sector [26] - The focus remains on driving revenues and improving efficiency, with an emphasis on emerging AIGC use cases [21] - The company is positioned to become critical infrastructure for interactions between human users and AI models through video and audio [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about mid- to long-term demand despite current macroeconomic challenges [24] - The pandemic has shifted consumer behavior towards more real-time engagement activities, which is expected to drive growth [24] - Pricing pressure exists in emerging markets, but pricing remains stable in developed markets [27] Other Important Information - A change in the Board of Directors was announced, with Mr. Tuck Lye Koh resigning and Mr. Shawn Zhong appointed as a director [12][13] - The company has returned approximately $94.3 million to shareholders through share repurchase, reflecting confidence in long-term prospects [20] Q&A Session Summary Question: 2024 outlook and breakdown between Agora and Shengwang business - Management is optimistic about demand in the mid- to long-term, with growth in both Agora and Shengwang expected, particularly in digital transformation [24][26] Question: Competitive landscape in China and overseas - The macro environment is challenging, but some small competitors are facing financial difficulties, indicating potential opportunities for the company [25] Question: AI applications and revenue contribution - Management sees potential in various AI use cases, but emphasizes that development is ongoing and significant revenue contributions may take time [30]

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) Agora achieved sequential revenue growth in Q3 2023, significantly reducing adjusted EBITDA loss and operating cash outflow through disciplined cost control, and is strategically integrating generative AI - The company delivered **sequential revenue growth** and reduced **adjusted EBITDA loss** and **operating cash outflow** to the **lowest levels in over two years** due to **cost discipline**[2](index=2&type=chunk) - Agora is **strategically positioning itself** to enable interactions between human users and **AI models** through **video and audio**, targeting use cases like AI companions, social games, and AI tutors[2](index=2&type=chunk) Q3 2023 Key Metrics vs. Q3 2022 | Metric | Q3 2023 | Q3 2022 | Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | $35.0M | $41.0M | -14.6% | | **Agora Active Customers** | 1,664 | 1,319 | +26.2% | | **Shengwang Active Customers** | 4,034 | 3,796 | +6.3% | | **Agora Dollar-Based Net Retention** | 98% | N/A | N/A | | **Shengwang Dollar-Based Net Retention** | 89% | N/A | N/A | Q3 2023 Profitability and Cash Flow vs. Q3 2022 | Metric | Q3 2023 | Q3 2022 | | :--- | :--- | :--- | | **Net Loss** | $22.5M | $27.7M | | **Non-GAAP Net Loss** | $15.6M | $17.6M | | **Adjusted EBITDA** | -$4.4M | -$16.4M | | **Net Cash Used in Operating Activities** | $3.0M | $8.8M | | **Free Cash Flow** | -$3.2M | -$9.9M | [Detailed Financial Results](index=2&type=section&id=Third%20quarter%202023%20Financial%20Results) Total revenues declined 14.6% YoY to $35.0 million in Q3 2023, yet gross margin improved and operating expenses significantly decreased, narrowing the loss from operations despite an investment loss [Revenues](index=2&type=section&id=Revenues) Total revenues decreased 14.6% to $35.0 million in Q3 2023, with both Agora and Shengwang segments experiencing declines due to market pressures and business disposal Q3 2023 Revenue Breakdown (YoY) | Segment | Q3 2023 Revenue | Q3 2022 Revenue | Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | **Total** | $35.0M | $41.0M | -14.6% | - | | **Agora** | $15.3M | $16.8M | -8.9% | Decrease in usage and pricing in emerging markets | | **Shengwang** | $19.7M (RMB141.2M) | $24.2M (RMB165.3M) | -14.6% | Macroeconomic slowdown, regulations, and disposal of CEC business | [Profitability Analysis](index=2&type=section&id=Profitability%20Analysis) Gross margin improved to 64.0% in Q3 2023, and operating expenses significantly decreased, narrowing the loss from operations despite a substantial investment loss contributing to a $22.5 million net loss Q3 2023 Gross Profit and Margin (YoY) | Metric | Q3 2023 | Q3 2022 | Change | | :--- | :--- | :--- | :--- | | **Gross Profit** | $22.4M | $24.3M | -7.9% | | **Gross Margin** | 64.0% | 59.4% | +4.6% | Q3 2023 Operating Expenses (YoY) | Expense Category | Q3 2023 | Q3 2022 | Change | | :--- | :--- | :--- | :--- | | **Total Operating Expenses** | $36.9M | $55.6M | -33.7% | | Research and development | $20.0M | $29.8M | -32.7% | | Sales and marketing | $7.8M | $14.6M | -46.7% | | General and administrative | $9.1M | $11.3M | -19.4% | Q3 2023 Loss Summary (YoY) | Metric | Q3 2023 | Q3 2022 | | :--- | :--- | :--- | | **Loss from Operations** | $13.9M | $28.9M | | **Investment Loss** | $13.4M | $0.0M (not material) | | **Net Loss** | $22.5M | $27.7M | | **Net Loss per ADS** | $0.23 | $0.25 | [Corporate Developments](index=4&type=section&id=Corporate%20Developments) Agora actively repurchased shares, utilizing 47% of its $200 million program, and announced a board change with Mr. Sheng (Shawn) Zhong replacing Mr. Tuck Lye Koh [Share Repurchase Program](index=4&type=section&id=Share%20Repurchase%20Program) Agora repurchased 17.0 million shares for $12.3 million in Q3 2023, bringing total repurchases to 99.7 million shares for $94.3 million, utilizing 47% of the $200 million program Share Repurchase Program Status as of Sep 30, 2023 | Metric | Value | | :--- | :--- | | **Shares Repurchased in Q3 2023** | 17.0M (4.3M ADSs) | | **Cost of Q3 2023 Repurchases** | $12.3M | | **Total Shares Repurchased to Date** | 99.7M (24.9M ADSs) | | **Total Cost to Date** | $94.3M | | **Program Utilization** | 47% of $200M | | **Program Expiration** | End of February 2024 | [Change to Board of Directors](index=4&type=section&id=Change%20to%20Board%20of%20Directors) Mr. Tuck Lye Koh resigned from the Board of Directors and was replaced by Mr. Sheng (Shawn) Zhong, the company's Chief Technology Officer and Chief Scientist - Mr. Tuck Lye Koh **resigned** from the board of directors[13](index=13&type=chunk) - Mr. Sheng (Shawn) Zhong, the company's Chief Technology Officer and Chief Scientist, was **appointed as a new director**[13](index=13&type=chunk)[14](index=14&type=chunk) [Business Outlook](index=5&type=section&id=Financial%20Outlook) Agora projects Q4 2023 total revenues to be between $35.5 million and $37.5 million, based on current market and operational conditions Q4 2023 Revenue Guidance | Metric | Range | | :--- | :--- | | **Total Revenues** | $35.5M - $37.5M | [Financial Statements](index=10&type=section&id=Financial%20Statements) Unaudited financial statements for Q3 2023 show decreased total assets to $666.7 million, a narrowed net loss of $22.5 million, and improved net cash used in operating activities to $3.0 million [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2023, total assets decreased to $666.7 million, primarily due to lower cash, while total liabilities also decreased to $58.2 million, resulting in $608.5 million in shareholders' equity Key Balance Sheet Items (in thousands) | Account | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Cash, cash equivalents, bank deposits & financial products** | $373,444 | $401,256 | | **Total Assets** | $666,674 | $800,715 | | **Total Liabilities** | $58,173 | $72,455 | | **Total Shareholders' Equity** | $608,501 | $728,260 | [Condensed Consolidated Statements of Comprehensive Loss](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Q3 2023 total revenues were $35.0 million with a net loss of $22.5 million, or $0.23 per ADS, an improvement from the prior year due to reduced operating expenses Q3 Income Statement Summary (in thousands, except per ADS data) | Metric | Q3 2023 | Q3 2022 | | :--- | :--- | :--- | | **Total Revenues** | $35,016 | $40,988 | | **Gross Profit** | $22,422 | $24,349 | | **Loss from Operations** | $(13,857) | $(28,921) | | **Net Loss** | $(22,513) | $(27,699) | | **Net Loss per ADS** | $(0.23) | $(0.25) | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q3 2023 saw improved net cash used in operating activities to $3.0 million, net cash provided by investing activities of $5.7 million, and increased net cash used in financing activities to $12.4 million Q3 Cash Flow Summary (in thousands) | Cash Flow Activity | Q3 2023 | Q3 2022 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(3,033) | $(8,833) | | **Net cash provided by (used in) investing activities** | $5,677 | $(105,377) | | **Net cash used in financing activities** | $(12,388) | $(2,992) | | **Net decrease in cash** | $(9,691) | $(120,031) | [Non-GAAP Financial Measures & Metrics](index=5&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Metrics) Agora uses non-GAAP measures to assess operational performance, showing improved Q3 2023 Non-GAAP net loss of $15.6 million, Adjusted EBITDA of negative $4.4 million, and free cash flow outflow of $3.2 million [Reconciliation of GAAP to Non-GAAP Measures](index=15&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) Non-GAAP reconciliation shows significant improvement in Q3 2023, with non-GAAP net loss narrowing to $15.6 million, Adjusted EBITDA loss reduced to $4.4 million, and free cash flow outflow decreasing to $3.2 million Q3 Non-GAAP Reconciliation Summary (in thousands) | Metric | Q3 2023 | Q3 2022 | | :--- | :--- | :--- | | **GAAP Net Loss** | $(22,513) | $(27,699) | | **Non-GAAP Net Loss** | $(15,565) | $(17,595) | | **Adjusted EBITDA** | $(4,448) | $(16,399) | | **Free Cash Flow** | $(3,239) | $(9,918) | [Operating Metrics Definitions](index=7&type=section&id=Operating%20Metrics%20Definitions) Key operating metrics are defined, including 'Active Customer' as an entity generating over $100 in 12 months, and 'Dollar-Based Net Retention Rate' measuring cohort revenue changes over two 12-month periods - An **Active Customer** is defined as an organization or individual from whom the company generated more than **$100 of revenue** during the **preceding 12 months**[24](index=24&type=chunk) - **Dollar-Based Net Retention Rate** is calculated for a **trailing 12-month period** by dividing revenue from a **customer cohort** in the current period by the revenue from the same cohort in the prior period[25](index=25&type=chunk)

Agora, Inc. 2023 Q2 Earnings Disclaimer Information in this presentation contains forward-looking statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934, as amended. These forward-looking statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current fact included in this presentation a ...

Agora, Inc. (NASDAQ:API) Q2 2023 Results Conference Call August 21, 2023 9:00 PM ET Company Participants Tony Zhao - Co-Founder, Chief Executive Officer & Chairman Jingbo Wang - Chief Financial Officer Conference Call Participants Harry Zhuang - Bank of America Securities Operator Good day, and thank you for standing by. Welcome to Agora Inc. Second Quarter 2023 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. The company's earnings resu ...

Agora, Inc. Reports Second Quarter 2023 Financial Results SANTA CLARA, Calif., August 21, 2023 (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 second quarter ended June 30, 2023. "We continued to face a very challenging operating environment this quarter. The Agora business was impacted by the tightening financing conditions of certain customers, while the Shengwang business navigat ...

Agora, Inc. (NASDAQ:API) Q1 2023 Earnings Conference Call May 30, 2023 9:00 PM ET Company Participants Fionna Chen - Director of Investor Relations Tony Zhao - Co-Founder, Chief Executive Officer & Chairman Jingbo Wang - Chief Financial Officer Conference Call Participants Yang Liu - Morgan Stanley Daley Li - Bank of America Bing Duan - Nomura Securities Operator Good day and thank you for standing by. Welcome to the Agora, Inc. First Quarter 2023 Financial Results Conference Call. [Operator Instructions] P ...

Agora, Inc. Reports First Quarter 2023 Financial Results SANTA CLARA, Calif., May 30, 2023 (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, 2023. "Over the past few months, we have worked diligently to streamline our organizational structure and improve our operational efficiency. Going forward, we will operate two independent divisions under separate br ...

Financial Performance - The company recorded an impairment of goodwill amounting to US$11.9 million, reclassified from non-operating to operating expenses [583]. - The company received net proceeds of approximately US$483.6 million from its initial public offering, after incurring total expenses of US$28.9 million related to the issuance and distribution of ADSs [750]. - Approximately 20% of the net proceeds from the initial public offering and concurrent private placement were allocated for research and development, marketing, branding, technology infrastructure, working capital, and other general corporate purposes [751]. - The company intends to utilize the remainder of the net proceeds from the initial public offering as disclosed in the registration statements on Form F-1 [751]. Currency and Foreign Exchange Risk - The company does not hedge against foreign currency risk, with a substantial majority of revenue-generating transactions denominated in Renminbi [728]. - The company has experienced over a 10% appreciation of the Renminbi against the U.S. dollar since June 2010, impacting its foreign exchange risk exposure [729]. - As of December 31, 2022, the company held Renminbi-denominated cash and cash equivalents of RMB65.5 million, with a potential impact of US$0.9 million on cash equivalents from a 10% depreciation of Renminbi against the U.S. dollar [730]. Asset Management and Impairment - The company performs annual impairment tests for goodwill, with qualitative assessments determining if further quantitative tests are necessary [581]. - The company assesses expected credit losses based on historical collection trends and current economic conditions, indicating a proactive approach to managing accounts receivable [580]. - The company’s cash and short-term investments are primarily held in bank and time deposits, which are not significantly affected by interest rate fluctuations [731]. Financial Estimates and Compliance - The company’s financial estimates are based on historical experience and reasonable assumptions, with ongoing evaluations to ensure accuracy [578]. - The company has not made any payments to directors or officers from the net proceeds of the initial public offering, ensuring compliance with regulatory standards [750].