Financial Data and Key Metrics Changes - Total revenue in Q3 reached $35.4 million, up 12% year over year, marking the fourth consecutive quarter of GAAP profitability [3][9] - GAAP net profit for the quarter was $2.7 million, with a GAAP net margin of 7.8% [3][10] - Gross margin for Q3 was 66%, slightly decreased by 0.7% year over year [10] - Operating cash flow was $0.7 million in Q3, compared to negative $4.6 million last year [11] - The company ended Q3 with $374.3 million in cash and equivalents [11] Business Line Data and Key Metrics Changes - Agora revenues reached $18.2 million in Q3, representing 15.9% year-over-year growth [9] - Shenghua revenues reached RMB 122.4 million in Q3, up 8.4% year-over-year [9] - Dollar-based net retention rate is 108% for Agora and 90% for Shenghua, marking the fourth consecutive quarter of improvement for both businesses [9] Market Data and Key Metrics Changes - Demand recovery trend continues in China, with growth in social entertainment and education sectors [16] - In the US and international markets, live commerce demand continued its rapid growth, with other verticals also showing growth [16] Company Strategy and Development Direction - The company is significantly increasing investment in conversational AI to address challenges in voice-based human-machine interaction [3][4] - Launched Conversational AI Engine 2.0, integrating advanced audio research and development [4][6] - Introduced Conversational AI Studio to help developers create voice agents through a zero-code interface [6] Management's Comments on Operating Environment and Future Outlook - Management expects revenue and net profit to continue growing on a quarter-over-quarter basis in Q4 [3][11] - Anticipates total revenues for Q4 to be between $37 million and $38 million, representing year-over-year growth of 7.2% to 10.1% [12] - Conversational AI applications are expected to drive meaningful revenue contributions towards the end of next year [18] Other Important Information - The company repurchased 5.2 million ordinary shares in Q3, representing 1.4% of outstanding shares at the beginning of the quarter [11][12] - The recent Convo AI and RTE conference attracted over 3,000 attendees, marking a record for the company [7] Q&A Session Summary Question: Demand outlook and key trends in domestic and international markets - Management noted a continued recovery trend in China, with growth in social entertainment and education sectors, and rapid growth in IoT and digital transformation customers [16] Question: Update on AI development and key scenarios for revenue contribution - Management highlighted three advanced use cases for conversational AI: call centers, education, and companionship toys, with expectations for revenue growth in the first half of next year [18] Question: Profitability outlook for Q4 and 2026 - Management expects GAAP operating profit in Q4, with net profit growing sequentially from Q3, and anticipates year-over-year net income improvement for 2026 [20]

Financial Data and Key Metrics Changes - Total revenue in Q3 reached $35.4 million, up 12% year-over-year, marking the fourth consecutive quarter of GAAP profitability [3][9] - GAAP net profit for the quarter was $2.7 million, with a GAAP net margin of 7.8% [3][10] - Gross margin for Q3 was 66%, slightly decreased by 0.7% year-over-year and 0.8% sequentially [10] - Operating cash flow was $0.7 million in Q3, compared to negative $4.6 million last year [11] - The company ended Q3 with $374.3 million in cash and equivalents, with a net cash outflow mainly due to share repurchase of $4.8 million [11][12] Business Line Data and Key Metrics Changes - Agora revenues reached $18.2 million in Q3, representing 15.9% year-over-year growth and flat quarter-over-quarter [9] - Shenghua revenues reached RMB 122.4 million in Q3, up 8.4% year-over-year and 6% sequentially [9] - Dollar-based net retention rate is 108% for Agora and 90% for Shenghua, marking the fourth consecutive quarter of improvement for both businesses [9] Market Data and Key Metrics Changes - Demand recovery in China is supported by stabilized regulatory environment and growth in social entertainment and education sectors [16] - In the US and international markets, live commerce demand continued its rapid growth, with other verticals also showing growth [16] Company Strategy and Development Direction - The company is significantly increasing investment in conversational AI to address challenges in voice-based human-machine interaction [3][4] - Launched conversational AI Engine 2.0, integrating advanced audio research and development to enhance user experience [4][6] - The company aims to empower the next chapter of AI innovation by building reliable and scalable voice agents [8] Management's Comments on Operating Environment and Future Outlook - Management expects revenue and net profit to continue growing on a quarter-over-quarter basis in Q4 [3] - For Q4, total revenues are expected to be between $37 million and $38 million, representing year-over-year growth of 7.2% - 10.1% [12] - Management anticipates that conversational AI will become a meaningful revenue contributor towards the end of next year [18] Other Important Information - The company repurchased 5.2 million ordinary shares in Q3, representing 1.4% of outstanding shares at the beginning of the quarter [11] - The recent Convo AI and RTE Conference attracted over 3,000 attendees, marking it as the largest gathering focused on conversational AI technology globally [7] Q&A Session Summary Question: Demand outlook and key trends in domestic and international markets - Management noted that demand recovery continues in China, with growth in social entertainment and education, while live commerce demand in the US and international markets is also strong [16] Question: Update on AI development and key scenarios for revenue contribution - Management clarified the focus on conversational AI, with call centers, education, and companionship toys showing advanced use cases [18] Question: Profitability outlook for Q4 and 2026 - Management expects GAAP operating profit in Q4, with year-over-year net income improvement anticipated for 2026 [20]

Financial Data and Key Metrics Changes - Total revenue in Q3 reached $35.4 million, up 12% year over year, marking the fourth consecutive quarter of GAAP profitability [3][9] - GAAP net profit for the quarter was $2.7 million, with a GAAP net margin of 7.8% [3][10] - Gross margin for Q3 was 66%, slightly decreased by 0.7% year over year [10] - Operating cash flow was $0.7 million in Q3, compared to negative $4.6 million last year [11] - The company ended Q3 with $374.3 million in cash and equivalents, with a net cash outflow mainly due to share repurchase of $4.8 million [11] Business Line Data and Key Metrics Changes - Agora revenues reached $18.2 million in Q3, representing 15.9% year-over-year growth [9] - Shenghua revenues reached RMB 122.4 million in Q3, up 8.4% year-over-year [9] - Dollar-based net retention rate is 108% for Agora and 90% for Shenghua, marking the fourth consecutive quarter of improvement for both businesses [9] Market Data and Key Metrics Changes - Demand recovery in China continues, with growth in social entertainment and education sectors [16] - In the US and international markets, live commerce demand is growing rapidly, with other verticals also showing growth [16] - The IoT sector, including smart cameras and wearable devices, is experiencing rapid growth [23] Company Strategy and Development Direction - The company is significantly increasing investment in conversational AI to address challenges in voice-based human-machine interaction [3][4] - The launch of Conversational AI Engine 2.0 aims to improve reliability and scalability of AI solutions [4][5] - The company is focused on building a robust real-time infrastructure to support conversational AI applications [6][8] Management Comments on Operating Environment and Future Outlook - Management expects revenue and net profit to continue growing on a quarter-over-quarter basis in Q4 [3][11] - The company anticipates total revenues for Q4 to be between $37 million and $38 million, representing year-over-year growth of 7.2% to 10.1% [12] - Management highlighted the complexity of real-time conversational AI and the expected growth in applications such as call centers and companionship toys [18][24] Other Important Information - The company repurchased 5.2 million ordinary shares in Q3, representing 1.4% of outstanding shares at the beginning of the quarter [11] - The recent Convo AI and RTE conference attracted over 3,000 attendees, indicating strong interest in conversational AI technology [7] Q&A Session Summary Question: Demand outlook and key trends in domestic and international markets - Management noted a recovery trend in China and rapid growth in IoT and digital transformation sectors, with live commerce demand growing in the US and international markets [16] Question: Update on AI application development and revenue contribution scenarios - Management clarified the focus on conversational AI, with advanced use cases in call centers, education, and companionship toys expected to drive revenue growth [18] Question: Profitability outlook for Q4 and 2026 - Management expects GAAP operating profit in Q4 and year-over-year net income improvement for 2026 [19] Question: Drivers of solid Q3 performance - Strong demand from the US and international markets, particularly in live commerce and social apps, contributed to Q3 performance [23] Question: Adoption trend for AI companionship toys - Management reported strong momentum from customers like RoboPong, with expectations for these use cases to contribute to financial results in the coming months [24] Question: Sequential growth trend for AI-related usage - Conversational AI usage increased by over 150% quarter-over-quarter, indicating strong customer interest and pipeline [30] Question: Potential for offering edge-side inference or security features - Management highlighted opportunities in real-time inference services for conversational AI, leveraging their global distributed network [32]

Business Highlights - Agora highlights the challenges in building and scaling voice agents, emphasizing its SD-RTN's global coverage and enterprise-level customer service as key differentiators[7] - A Deepgram and Opus Research survey indicates that only 21% of users are very satisfied with current voice agent technology, highlighting significant room for improvement[10, 11] - Agora's Conversational AI Engine 2.0 supports STT, LLM, and TTS, featuring AI noise suppression, echo cancellation, and advanced attention locking[20] - Agora's Conversational AI Studio enables building voice AI agents with a zero-code visual interface and fast deployment[22, 25, 28] Financial Performance - Agora's active customers increased from 3,731 in September 2024 to 3,944 in September 2025[38] - Agora's dollar-based net retention rate improved, with Agora reaching 108% and Shengwang reaching 90% in September 2025[39] - Total revenues reached $35.4 million in 2025 Q3, with a year-over-year growth of 12%[43] - Agora revenues were $18.2 million in 2025 Q3[47] - Shengwang revenues were $17.2 million in 2025 Q3[49] - The company's cash, cash equivalents, bank deposits, and financial products totaled $374.3 million as of September 30, 2025[62]

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]