Agora, Inc. Reports Third Quarter 2025 Financial Results

Core Insights - Agora, Inc. reported its fourth consecutive quarter of GAAP profitability in Q3 2025, driven by double-digit revenue growth and expanding margins [2] - The company's core real-time engagement platform-as-a-service business is rebounding and is expected to deliver its first full-year revenue growth since the pandemic [2] - Significant investments are being made in conversational AI, with new product launches aimed at enhancing developer capabilities [2] Financial Performance - Total revenues for Q3 2025 were $35.4 million, a 12.0% increase from $31.6 million in Q3 2024 [4][8] - Agora's revenues were $18.2 million, up 15.9% from $15.7 million year-over-year, attributed to business expansion in sectors like live shopping [4][8] - Shengwang's revenues were RMB122.4 million ($17.2 million), an increase of 8.4% from RMB112.9 million ($15.9 million) in the same period last year [4][8] Cost and Profitability - Cost of revenues increased to $12.0 million, a 14.4% rise from $10.5 million in Q3 2024, mainly due to higher bandwidth usage [5] - Gross profit was $23.3 million, reflecting a 10.8% increase from $21.0 million year-over-year, with a gross margin of 66.0% [6] - Operating expenses decreased significantly to $25.3 million, down 44.8% from $45.9 million in the same period last year [7] Customer Metrics - Active customers for Agora increased to 1,968, an 11.7% rise from 1,762 a year ago [8] - Shengwang had 1,976 active customers, a slight increase of 0.4% from 1,969 [8] - Dollar-Based Net Retention Rate for Agora was 108%, while Shengwang's was 90% for the trailing 12-month period [8] Net Income and Cash Flow - Net income for Q3 2025 was $2.7 million, a significant turnaround from a net loss of $24.2 million in Q3 2024 [12][13] - Net cash provided by operating activities was $0.7 million, compared to a net cash used of $4.6 million in the same quarter last year [8] Share Repurchase Program - The company repurchased approximately 5.2 million Class A ordinary shares for about $4.8 million during Q3 2025, representing 2.4% of its $200 million share repurchase program [14] - As of September 30, 2025, approximately 150.1 million shares had been repurchased, accounting for 66.0% of the total program [15] Financial Outlook - For Q4 2025, Agora expects total revenues to be between $37 million and $38 million, indicating year-over-year growth of 7.2% to 10.1% [17]