Financial Data and Key Metrics Changes - Total revenue for Q1 reached $33.3 million, up 12% year over year, excluding revenues from certain low-margin products, indicating a recovery in business momentum [3][11] - GAAP net profit for the quarter was $400,000, representing a 1.2% net income margin, a significant turnaround from a net loss margin of 28.7% in Q1 last year [16][17] - Operating cash flow was $17.6 million in Q1 compared to negative $6.5 million last year, reflecting improved financial health [17] Business Line Data and Key Metrics Changes - Core revenues reached $18.6 million in Q1, growing 17.7% year over year, driven by market expansion in high-potential verticals like live shopping and entertainment [12] - Shunlong revenues were RMB 105.5 million in Q1, with a year-over-year growth of 6.7%, although it declined 13.7% sequentially due to seasonal factors [12][13] - The net retention rate improved to 96% for Agora and 85% for Shunlong, indicating better customer retention [13] Market Data and Key Metrics Changes - The growth rate in the U.S. and global markets is around 18% to 20%, with increasing adoption of live video-based shopping and entertainment apps, particularly in North America and Europe [28][30] - Demand recovery is noted in Asian markets, including India, for both education and entertainment use cases [30] Company Strategy and Development Direction - The company is focusing on conversational AI, particularly in education, IoT, and customer service sectors, which are seen as key growth drivers [25][26] - The strategy includes maximizing penetration in live commerce and improving video quality for better customer experiences [35] - The company aims to maintain profitability while investing in future growth opportunities, including share repurchase programs [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining GAAP profitability for the remainder of the year, supported by current business momentum [4][17] - The competitive landscape in China is consolidating, with fewer players remaining, which may enhance the company's market position [46][48] Other Important Information - The company launched a Conversational AI Device Kit, enabling manufacturers to integrate conversational AI into IoT devices, which could reduce R&D costs and time to market [7] - The open-source project for building real-time conversational AI agents is gaining traction, with significant support from leading cloud providers [8] Q&A Session Summary Question: What are the key areas for AI application? - Management highlighted education, IoT, and customer service as the most active use cases for AI applications [25][26] Question: What is the demand trend for China and overseas business? - Management noted a solid demand recovery in the U.S. and global markets, with stable pricing trends in developed markets [28][30] Question: What is the strategy for overseas e-commerce platforms? - The company is focusing on maximizing penetration in live commerce and improving video quality for better user experiences [35] Question: What is the timing for massive adoption of conversational AI? - Management indicated that the tipping point for adoption will depend on the maturity of product-market fit across various verticals [40][42] Question: How is the competitive landscape in China affecting pricing trends? - The competitive landscape is consolidating, with fewer players, and the company is focusing on higher value use cases to maintain margins [46][49]

Financial Data and Key Metrics Changes - Total revenue in Q1 2025 reached $33.3 million, up 12% year over year, excluding revenues from certain low-margin products [3][11] - GAAP net profit for the quarter more than doubled from the previous quarter, marking the second consecutive quarter of GAAP profitability [4][15] - Operating cash flow was $17.6 million in Q1, compared to negative $6.5 million last year [16] - Gross margin for Q1 was 68%, with an increase of 0.6% year over year and 1.4% quarter over quarter [13] Business Line Data and Key Metrics Changes - Core revenues reached $18.6 million in Q1, growing 17.7% year over year [12] - Shunlong revenues were RMB 105.5 million in Q1, with a year-over-year growth of 6.7% [12] - The base net retention rate improved to 96% for Agora and 85% for Shunlong [12] Market Data and Key Metrics Changes - Growth rate in the US and global markets is around 18% to 20%, with increasing adoption of live video-based shopping and entertainment apps, particularly in North America and Europe [26][28] - Demand recovery is observed in Asian markets, including India, for both education and entertainment use cases [28] Company Strategy and Development Direction - The company is focusing on conversational AI, particularly in education, IoT, and customer service sectors [24][25] - The launch of the Conversational AI Device Kit aims to enable device manufacturers to integrate conversational AI into various IoT devices [7] - The company is committed to maintaining profitability while investing in future growth opportunities through share repurchase programs [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining GAAP profitability throughout 2025, supported by current business momentum [4][16] - The company anticipates a revenue range of $33 million to $35 million for Q2 2025, reflecting a year-over-year growth rate of 6.8% to 13.3% [18] Other Important Information - The conversational AI engine launched in March is expected to unlock innovation across multiple verticals, particularly in education [6] - The company has seen record-high product registrations and inquiries following recent product launches [9] Q&A Session Summary Question: AI demand and future growth drivers - Management highlighted key use cases for AI applications, including education, IoT, and customer service [24][25] Question: Breakdown of China and overseas business demand trends - Management noted a growth rate of about 18% in the US and global markets, with demand recovery in Asian markets [26][28] Question: Overseas e-commerce business strategy - Management discussed ongoing efforts to penetrate the live commerce space and improve video quality for better customer experience [33] Question: Shifts in downstream demand for AI-powered interaction capabilities - Management emphasized the importance of product market fit for various verticals to achieve growth [40][41] Question: Timing for massive adoption of conversational AI - Management indicated that the tipping point for adoption will depend on the maturity of product market fit across different use cases [40][41] Question: Competitive landscape in China and pricing trends - Management acknowledged the competitive nature of the Chinese market but noted a trend towards consolidation among major players [44][46]

Business Highlights - Agora launched a Conversational AI Engine, an enterprise-grade solution for human-AI voice experiences[5] - The company offers a ConvoAI Device Kit, a turnkey solution for adding voice AI to any device, combining software, cloud services, and chips from Beken[8, 10] - TEN (a voice activities detection) continues gaining traction and adds VAD and Turn Detection, outperforming existing open-source alternatives[11, 14] - Agora's Conversational AI Extension is available on the Dify Marketplace[15] Customer Base & Revenue - Agora had 3,800 active customers in March 2025, including 1,994 Agora customers and 1,806 Shengwang customers[35] - Total revenues for Q1 2025 were $33.3 million, with a year-over-year growth of 12.1%[39] - Agora revenues in Q1 2025 were $18.6 million[42] - Shengwang revenues in Q1 2025 were ¥105.5 million, equivalent to $14.7 million[43] Financial Performance - The dollar-based net retention rate for Agora was 96% and for Shengwang was 85% in March 2025[46] - Gross profit for Q1 2025 was $22.6 million, resulting in a gross margin of 68.0%[50] - Loss from operations in Q1 2025 was $3.7 million, representing a loss from operations margin of (11.1%) [57] Share Repurchase Program - As of March 31, 2025, Agora repurchased 33.0 million ADSs for approximately $116.4 million, representing 58% of the $200 million share repurchase program[63]

Core Viewpoint - Agora, Inc. reported its second consecutive quarter of GAAP profitability in Q1 2025, driven by disciplined cost management and double-digit revenue growth year-over-year, excluding certain end-of-sale products [2][4]. Financial Performance - Total revenues for Q1 2025 were $33.3 million, a 0.8% increase from $33.0 million in Q1 2024 [4]. - Agora's revenues were $18.6 million, up 17.7% from $15.8 million in the same period last year, attributed to business expansion and growth in sectors like live shopping [4]. - Shengwang's revenues were RMB105.5 million ($14.7 million), down 13.9% from RMB122.6 million ($17.2 million) in Q1 2024, mainly due to a decline in revenues from certain end-of-sale products [4]. Cost Management - Cost of revenues decreased to $10.6 million, down 16.9% from $12.8 million in Q1 2024, primarily due to the end-of-sale of certain products [5]. - Gross profit increased to $22.6 million, an 11.9% rise from $20.2 million in the same period last year, with a gross margin of 68.0%, up 6.8% from 61.2% [6]. Operating Expenses - Operating expenses were $26.5 million, a decrease of 20.5% from $33.3 million in Q1 2024 [7]. - Research and development expenses were $14.0 million, down 22.7% from $18.1 million in the same period last year [17]. - Sales and marketing expenses decreased to $6.2 million, an 8.5% reduction from $6.8 million [17]. - General and administrative expenses were $6.2 million, down 25.6% from $8.4 million [17]. Profitability Metrics - Net income for Q1 2025 was $0.4 million, compared to a net loss of $9.5 million in Q1 2024 [11]. - Loss from operations was $3.7 million, improved from a loss of $12.6 million in the same period last year [9]. Cash Flow and Financial Position - Total cash, cash equivalents, and financial products as of March 31, 2025, amounted to $388.0 million [4]. - Net cash provided by operating activities was $17.6 million, compared to a net cash used of $6.5 million in Q1 2024 [4]. Share Repurchase Program - The company repurchased approximately 1.2 million Class A ordinary shares for about $1.2 million during Q1 2025, representing 0.6% of its $200 million share repurchase program [13]. - As of March 31, 2025, the company had repurchased approximately 131.8 million Class A ordinary shares for about $116.4 million, representing 58.2% of its share repurchase program [14]. Future Outlook - The company expects total revenues for Q2 2025 to be between $33 million and $35 million, compared to $30.9 million in Q2 2024, excluding revenues from certain end-of-sale low-margin products [16].

Core Viewpoint - Needham analyst Joshua Reilly maintains a Buy rating on Twilio (TWLO) with a price target of $125, expressing positive sentiment after attending the Twilio Signal customer conference, highlighting increased product usage and favorable customer feedback [1][2]. Group 1: Company Performance and Strategy - Reilly noted an increasing pipeline of projects and a more efficient implementation process utilizing AI, which positions Twilio strategically for cross-selling opportunities, particularly with the recent Microsoft partnership [2][4]. - The collaboration with Microsoft enhances Twilio's capabilities in building multi-channel AI agents and improving customer engagement through advanced features like Twilio Agent Copilot [3][7]. - Twilio has addressed many operational challenges over the past 24 months, allowing a stronger focus on product development and customer benefits moving forward [4][9]. Group 2: Product Development and Customer Experience - Twilio is working to streamline the billing process for its services, which currently operate on separate platforms, to improve customer experience and facilitate easier bundling [5][6]. - The company launched several new products at the Signal 2025 event, with Verify and Lookup receiving particularly positive feedback from customers [7][8]. - Discussions with management indicated a projected growth trajectory for voice volumes that could significantly exceed 2024 levels, reflecting sustained optimism among partners and customers [9][10]. Group 3: Financial Projections - Reilly projects fiscal 2025 revenue for Twilio at $4.82 billion and earnings per share (EPS) at $4.45, indicating confidence in the company's financial outlook [10].

Core Insights - Cerence Inc. is a global leader in conversational AI-powered user experiences, focusing on the automotive and transportation sectors [3] - The company will participate in two investor conferences in May and June 2025, showcasing its commitment to engaging with investors [1][2] Company Overview - Cerence Inc. (NASDAQ: CRNC) specializes in creating intuitive, AI-powered experiences, leveraging voice technology, generative AI, and large language models [3] - The company has shipped over 500 million cars equipped with its technology, partnering with leading automakers and technology firms [3] - Cerence is headquartered in Burlington, Massachusetts, and operates globally with a dedicated team focused on AI innovation [3]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $64.7 million, above the midpoint of guidance, with adjusted EBITDA of $200,000 exceeding the high end of guidance [9][25][26] - Revenue from hosted services was $55.1 million, down 23% year-over-year, while recurring revenue was $60.4 million, accounting for 93% of total revenue and down 22% year-over-year [26] - Average revenue per customer increased by 2% year-over-year to $640,000, while net revenue retention decreased to 80% from 82% in the previous quarter [27] Business Line Data and Key Metrics Changes - The company signed a total of 50 deals in Q1, including five new logos and 45 expansions and renewals, representing a 25% quarter-over-quarter increase [22] - Professional services revenue was $9.6 million, down 30% year-over-year [26] Market Data and Key Metrics Changes - U.S. revenue was $40 million, while international revenue was $24.7 million, representing 38% of total revenue [26] - The company observed increasing demand for AI agents and orchestration, with significant renewals and expansions from major clients in regulated industries [23][24] Company Strategy and Development Direction - The company focuses on delivering a unified AI-powered platform for voice and digital engagement, emphasizing innovation without disruption [5][6][7] - Partnerships are a key part of the go-to-market strategy, with an expected launch of integration with Amazon Connect in Q2 [17][18] Management's Comments on Operating Environment and Future Outlook - Management noted that while the macro environment is uncertain, it has not led to deal shrinkage, and many deals have expanded in size [36][37] - The company expects positive net new annual recurring revenue (ARR) in the second half of the year, driven by improved renewal rates and new logos [20][30] Other Important Information - The company reaffirmed its full-year revenue guidance range of $240 million to $255 million, with approximately 93% expected to be recurring [28] - Cash on the balance sheet at the end of Q1 was $176 million, including proceeds from a previous transaction [28] Q&A Session Summary Question: Can you talk about the progress on the slipped Q1 deals in Q2 and any potential additional deal slippage? - Management indicated that they are on track to close the slipped deals in Q2, which have actually expanded in size [34][35] Question: Can you discuss the enthusiasm for the Amazon Connect integration and its potential impact? - Management expressed optimism about early interest in the integration, viewing it as a positive alignment with their strategy [39][41] Question: Can you elaborate on the trend in renewal rates over the last few quarters? - Management noted a significant improvement in renewal rates for Q2, approaching industry norms, and attributed this to changes in customer success efforts [46][48]

Financial Data and Key Metrics Changes - The company reported Q2 revenue of $78 million, exceeding the high end of guidance which was $74 million to $77 million [4][17] - Adjusted EBITDA for the quarter was $29.5 million, surpassing the guidance range of $18 million to $22 million [4][20] - Free cash flow was $13.1 million, marking the fourth consecutive quarter of positive free cash flow [4][20] - Net income for Q2 was $21.7 million, a significant improvement from a net loss of $278 million in the same quarter last year [20][21] Business Line Data and Key Metrics Changes - Variable license revenue increased to $29.9 million, up 19% year-over-year [21] - Fixed license revenue was $21.5 million, compared to $10.4 million for Q2 last fiscal year [21] - Connected services revenue decreased to $12.6 million, down 7% from $13.6 million in the same quarter last year [21][22] - Professional services revenue declined by approximately $4.8 million year-over-year, attributed to increased standardization of solutions [22] Market Data and Key Metrics Changes - The penetration of global auto production for the trailing twelve months was 51%, with approximately 11.6 million cars using Cerence technology shipped in Q2 [25] - Worldwide IHS production increased by 1.3% year-over-year but decreased by 10.9% quarter-over-quarter [25] - The number of cars produced using connected services increased by 10% on a trailing twelve-month basis compared to the previous year [26] Company Strategy and Development Direction - The company is focused on technology innovation, expanding partnerships, and diversifying its business beyond automotive [5][9] - Cerence is strategically investing in IP protection, with ongoing lawsuits against Samsung, Microsoft, and Nuance for patent and copyright infringement [10][60] - The company is enhancing its hybrid agentic AI platform, Cerence XUI, with new multimodal capabilities and partnerships with major automakers [11][12] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing macro challenges in the automotive industry but expressed confidence in the company's positioning and customer support [5][6] - The impact of tariffs on business remains limited, with expectations of minimal effects for the fiscal year [6][7] - Management is optimistic about the future, citing strong customer interest in new technologies and solutions [13][33] Other Important Information - The company plans to repay $60.1 million of convertible notes due in June and maintain a cash balance above $70 million for the rest of the fiscal year [30] - The five-year backlog metric is approximately $960 million, consistent with previous quarters [28] Q&A Session Summary Question: Can you walk through the metrics and what is driving the changes? - Management indicated that overall volumes were in line with expectations, with an increase in connected car shipments expected to drive future revenue [35][36] Question: What is driving the sequential uptick in new connected revenue? - Management confirmed that the increase is due to previous billings amortizing into revenue, with expectations for continued growth in connected revenue [37][38] Question: How is AI impacting connected services and pricing? - AI is integrated into both connected and non-connected vehicles, driving consumer demand and increasing pricing per unit [41][42] Question: Where are macro impacts being felt? - Management noted some pricing pressure from OEMs and potential impacts on volume due to market conditions [46][48] Question: Can you elaborate on the unchanged fiscal year guidance? - The guidance remains unchanged due to higher technology revenue offsetting headwinds in professional services [52][53] Question: What is the goal of the lawsuit against Microsoft? - The lawsuit aims to protect the company's intellectual property related to foundational technologies [60][88] Question: How is the partnership with MediaTek enhancing offerings? - The partnership focuses on optimizing automotive SoCs for better performance and cost efficiency [56][57] Question: What are the non-automotive opportunities being explored? - The company is leveraging its technology for applications in kiosks and other verticals, aiming for cost-effective market entry through partnerships [102][103]

Financial Performance - Total revenue for the first quarter of 2025 was $64.7 million, a decrease of 24.0% compared to the same period last year, primarily due to customer cancellations and downsells [2][5] - Net loss for the first quarter of 2025 was $14.1 million, or $0.15 per share, compared to a net loss of $35.6 million, or $0.40 per share, for the first quarter of 2024 [5][24] - Adjusted EBITDA for the first quarter of 2025 was $0.2 million, down from $0.5 million in the first quarter of 2024 [6][24] Customer Activity - The company signed a total of 50 deals in the first quarter, including 45 expansions and renewals and 5 new customers [3][5] - The trailing-twelve-months average revenue per enterprise and mid-market customer increased by 2.4% to $640,000 from approximately $625,000 in the prior year [3] Strategic Initiatives - The CEO highlighted the company's "innovation without disruption" approach, which allows customers to adopt AI and digital capabilities seamlessly [4] - The company is advancing strategic partnerships, including a planned integration with Amazon Connect in the second quarter [4] Financial Guidance - For the second quarter of 2025, total revenue is expected to range from $57 million to $60 million, representing a year-over-year decline of 29% to 25% [11] - For the full year 2025, total revenue is projected to be between $240 million and $255 million, reflecting a year-over-year decline of 23% to 18% [12] Cash Position - The company's cash balance was $176.3 million at March 31, 2025, down from $183.2 million at December 31, 2024 [9][32]

Core Viewpoint - Cerence Inc. reported strong financial results for Q2 FY2025, exceeding revenue and adjusted EBITDA guidance, and achieving its fourth consecutive quarter of positive free cash flow, indicating robust performance amid industry challenges [4][6]. Financial Performance - GAAP revenue for Q2 FY2025 was $78.0 million, up from $67.8 million in Q2 FY2024, representing a year-over-year increase of approximately 1.8% [2][27]. - GAAP gross margin improved to 77.1% in Q2 FY2025 from 69.2% in Q2 FY2024 [2][32]. - GAAP net income for Q2 FY2025 was $21.7 million, a significant recovery from a net loss of $278.0 million in Q2 FY2024 [2][27]. - Adjusted EBITDA for Q2 FY2025 was $29.5 million, compared to a loss of $0.3 million in Q2 FY2024 [2][32]. Key Performance Indicators - Cerence's technology was present in 51% of worldwide auto production over the trailing twelve months [5]. - The number of Cerence connected cars shipped increased by 10% year-over-year [5]. - Adjusted Total Billings remained unchanged year-over-year [5][7]. Future Outlook - For Q3 FY2025, revenue is projected to be between $52 million and $56 million, with gross margins expected to be between 66% and 68% [8][9]. - The full-year revenue guidance remains unchanged, but the net loss is now projected to be between $35 million and $29 million, with adjusted EBITDA expected to range from $28 million to $34 million [9]. Company Overview - Cerence Inc. is a leader in AI-powered user experiences in the automotive sector, with over 500 million cars shipped with its technology [25]. - The company focuses on enhancing user experiences through innovations like Cerence xUI, which supports automakers in developing next-generation infotainment platforms [4].