Agora(US:API)2023-11-22 15:23Financial Data and Key Metrics Changes - Total revenues for Q3 2023 were $35 million, an increase of 2.9% quarter-over-quarter but a decrease of 14.6% year-over-year [14] - Agora revenues were $15.3 million, flat compared to the previous quarter and down 8.9% year-over-year, primarily due to reduced usage and increased pricing sensitivity in emerging markets [14][15] - Adjusted gross margin for Q3 was 66.9%, up 3.3% from Q3 2022, attributed to changes in product mix and infrastructure optimization [16] - Adjusted EBITDA was negative $4.4 million, translating to a 12.7% adjusted EBITDA loss margin [18] - Non-GAAP net loss, excluding investment loss, was $2.2 million, resulting in a 6.3% net loss margin for the quarter [19] Business Line Data and Key Metrics Changes - Shengwang's revenue increased by 7.4% quarter-over-quarter, but decreased by 9.2% year-over-year, excluding revenues from the disposed CIC business [15] - The digital transformation business for Shengwang grew more than 50% this year, indicating strong demand from large enterprises [26] - Dollar-based net retention rate was 98% for Agora and 89% for Shengwang, excluding revenues from discontinued business [15] Market Data and Key Metrics Changes - The U.S. live shopping market is projected to be worth $35 billion by 2024, with live shopping potentially accounting for 20% of e-commerce sales by 2026 [5] - The company noted stable demand from Internet customers in China, with some bright spots in online karaoke and premium broadcasting streaming products [27] Company Strategy and Development Direction - The company aims to stabilize existing business and expand into new regions and use cases, particularly in the digital transformation sector [26] - The focus remains on driving revenues and improving efficiency, with an emphasis on emerging AIGC use cases [21] - The company is positioned to become critical infrastructure for interactions between human users and AI models through video and audio [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about mid- to long-term demand despite current macroeconomic challenges [24] - The pandemic has shifted consumer behavior towards more real-time engagement activities, which is expected to drive growth [24] - Pricing pressure exists in emerging markets, but pricing remains stable in developed markets [27] Other Important Information - A change in the Board of Directors was announced, with Mr. Tuck Lye Koh resigning and Mr. Shawn Zhong appointed as a director [12][13] - The company has returned approximately $94.3 million to shareholders through share repurchase, reflecting confidence in long-term prospects [20] Q&A Session Summary Question: 2024 outlook and breakdown between Agora and Shengwang business - Management is optimistic about demand in the mid- to long-term, with growth in both Agora and Shengwang expected, particularly in digital transformation [24][26] Question: Competitive landscape in China and overseas - The macro environment is challenging, but some small competitors are facing financial difficulties, indicating potential opportunities for the company [25] Question: AI applications and revenue contribution - Management sees potential in various AI use cases, but emphasizes that development is ongoing and significant revenue contributions may take time [30]