Agora, Inc. Reports Fourth Quarter and Fiscal Year 2023 Financial Results

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]