Agora(API) - 2022 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company's revenue for Q3 2022 was $41 million, a decrease of 9% year-over-year and flat quarter-over-quarter [5][18] - The trailing 12 months constant currency dollar-based net expansion rate was 84%, with the US and international business above 130% and approximately 70% for the China business [19] - Non-GAAP gross margin for Q3 was 59.8%, down 5.7% from Q3 2021, primarily due to increased revenue from the broadcast streaming product [20] Business Line Data and Key Metrics Changes - The company registered 36,000 new applications on its platform, bringing the total to over 0.5 million [5] - The broadcast streaming product contributed approximately 80% of total revenues in Q3, but at a lower gross margin [20] Market Data and Key Metrics Changes - The company faced challenges in international markets, particularly in Southeast Asia and South Asia, where pricing pressure affected ARPU [30] - The appreciation of the US dollar negatively impacted non-US dollar-denominated revenues [6][18] Company Strategy and Development Direction - The company is focusing on improving operational efficiency and enhancing the user experience of core products [7][8] - New use cases such as live video shopping and professional social networking are being prioritized for growth [11][12] - The company aims to maintain a laser focus on key priorities and improve operational efficiency to gain market share [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging operating environment due to inflation, interest rate hikes, and restrictive regulations in certain markets [6][8] - The company remains optimistic about the long-term potential of its technology despite current macroeconomic challenges [7][17] - Guidance for full-year revenues is projected to be in the range of $160 million to $162 million [24] Other Important Information - The company made a difficult decision to restructure and reduce its global workforce, which is expected to yield approximately $9 million in cash savings in Q4 [20][38] - The next-generation real-time engagement SDK version 4.0 was launched, featuring major upgrades in flexibility, simplicity, and performance [9][10] Q&A Session Summary Question: Customer demand trends for domestic and overseas markets - Management noted that demand is driven by new use cases rather than COVID, with challenges arising from the macroeconomic environment [28][29] Question: ARPU and gross profit margin outlook - Management indicated that ARPU in the US market has been stable, but international markets face pricing pressure affecting ARPU [30][31] Question: Guidance for 2023 outlook - Management targets 20% to 30% growth in US and international markets, with a commitment to breakeven on a non-GAAP basis by the end of 2023 [35] Question: Headcount growth in the next few quarters - Management stated there will be no expansion in workforce in the near term, focusing instead on efficient operations [37][38]