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Agora, Inc. Reports First Quarter 2025 Financial Results

1. Agora achieved GAAP profitability for the second straight quarter. 2. Total revenues increased by 0.8% year-over-year, driven by growth in several sectors. 3. Company investing heavily in conversational AI, indicating technological expansion. 4. Customer base growth to 1,806, with a strong Dollar-Based Net Retention Rate of 96%. 5. Financial outlook suggests a revenue increase for Q2 2025 between $33M and $35M.

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Why Bullish?

Strong revenue growth and profitable second quarter indicate positive financial health. Historical growth patterns suggest similar circumstances led to stock price increases in tech sectors.

How important is it?

The financial performance and investment strategies reveal growth potential affecting API’s market sentiment. Angle on new technologies enhances relevance among developers and potential customers.

Why Long Term?

Investment in conversational AI likely to yield significant returns over time as market expands. Previous tech innovations led to sustained growth beyond immediate financial results.

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SANTA CLARA, Calif., May 27, 2025 (GLOBE NEWSWIRE) -- Agora, Inc. (NASDAQ: API) (the “Company”), a pioneer and leader in real-time engagement technology, today announced its unaudited financial results for the first quarter ended March 31, 2025. “We are pleased to report our second consecutive quarter of GAAP profitability in Q1, fueled by double-digit revenue growth year-over-year, excluding revenue from certain end-of-sale products, and disciplined cost management,” said Tony Zhao, Founder, Chairman, and CEO of Agora, Inc. “Our continued profitability and solid cash position enable us to proactively invest in promising areas, particularly conversational AI. Since launching our Conversational AI Engine in March, we’ve seen significant interest from developers and customers building voice agents for use cases from companion toys to language tutoring. As performance of large language models and our conversational AI solution continues to advance, we expect adoption of this technology to ramp up, leading to a growing contribution to revenue over time.” First Quarter 2025 Highlights Total revenues for the quarter were $33.3 million, an increase of 0.8% from $33.0 million in the first quarter of 2024, which included revenue from certain end-of-sale products of $3.3 million. Agora: $18.6 million for the quarter, an increase of 17.7% from $15.8 million in the first quarter of 2024.Shengwang: RMB105.5 million ($14.7 million) for the quarter, a decrease of 13.9% from RMB122.6 million ($17.2 million) in the first quarter of 2024. Certain end-of-sale products generated revenue of nil for the quarter and RMB23.7 million ($3.3 million) in the first quarter of 2024. Active Customers Agora: 1,806 as of March 31, 2025, an increase of 5.0% from 1,720 as of March 31, 2024.Shengwang: 1,994 as of March 31, 2025, an increase of 5.2% from 1,896 as of March 31, 2024. Dollar-Based Net Retention Rate Agora: 96% for the trailing 12-month period ended March 31, 2025.Shengwang: 85% for the trailing 12-month period ended March 31, 2025. Net income for the quarter was $0.4 million, compared to net loss of $9.5 million in the first quarter of 2024.Total cash, cash equivalents, bank deposits and financial products issued by banks as of March 31, 2025 was $388.0 million.Net cash provided by operating activities for the quarter was $17.6 million, which included $17.8 million in interest proceeds from maturity of bank deposits and financial products issued by banks, compared to net cash used in operating activities of $6.5 million in the first quarter of 2024. First Quarter 2025 Financial Results RevenuesTotal revenues were $33.3 million in the first quarter of 2025, an increase of 0.8% from $33.0 million in the same period last year. Revenues of Agora were $18.6 million in the first quarter of 2025, an increase of 17.7% from $15.8 million in the same period last year, primarily due to our business expansion and usage growth in sectors such as live shopping. Revenues of Shengwang were RMB105.5 million ($14.7 million) in the first quarter of 2025, a decrease of 13.9% from RMB122.6 million ($17.2 million) in the same period last year, primarily due to a decrease in revenues from certain end-of-sale products, which generated revenue of nil for the quarter and RMB23.7 million ($3.3 million) in the first quarter of 2024. Cost of RevenuesCost of revenues was $10.6 million in the first quarter of 2025, a decrease of 16.9% from $12.8 million in the same period last year, primarily due to the end-of-sale of certain products. Gross Profit and Gross MarginGross profit was $22.6 million in the first quarter of 2025, an increase of 11.9% from $20.2 million in the same period last year. Gross margin was 68.0% in the first quarter of 2025, an increase of 6.8% from 61.2% in the same period last year, mainly due to the end-of-sale of certain low-margin products. Operating ExpensesOperating expenses were $26.5 million in the first quarter of 2025, a decrease of 20.5% from $33.3 million in the same period last year. Research and development expenses were $14.0 million in the first quarter of 2025, a decrease of 22.7% from $18.1 million in the same period last year, primarily due to a decrease in personnel costs as the Company optimized its global workforce, including a decrease in share-based compensation from $3.0 million in the first quarter of 2024 to $1.4 million in the first quarter of 2025.Sales and marketing expenses were $6.2 million in the first quarter of 2025, a decrease of 8.5% from $6.8 million in the same period last year, primarily due to a decrease in personnel costs as the Company optimized its global workforce.General and administrative expenses were $6.2 million in the first quarter of 2025, a decrease of 25.6% from $8.4 million in the same period last year, primarily due to a decrease in personnel costs as the Company optimized its global workforce, including a decrease in share-based compensation from $1.0 million in the first quarter of 2024 to $0.3 million in the first quarter of 2025. Loss from OperationsLoss from operations was $3.7 million in the first quarter of 2025, compared to $12.6 million in the same period last year. Interest IncomeInterest income was $3.6 million in the first quarter of 2025, compared to $4.7 million in the same period last year, primarily due to the decrease in average interest rate. Net Income (Loss)Net income was $0.4 million in the first quarter of 2025, compared to net loss of $9.5 million in the same period last year. Net Income (Loss) per American Depositary Share attributable to Ordinary ShareholdersBasic and diluted net income per American Depositary Share (“ADS”)1 attributable to ordinary shareholders was $0.004 in the first quarter of 2025, compared to basic and diluted net loss per ADS of $0.10 in the same period last year. Share Repurchase Program During the three months ended March 31, 2025, the Company repurchased approximately 1.2 million of its Class A ordinary shares (equivalent to approximately 0.3 million ADSs) for approximately US$1.2 million under its share repurchase program, representing 0.6% of its US$200 million share repurchase program. As of March 31, 2025, the Company had repurchased approximately 131.8 million of its Class A ordinary shares (equivalent to approximately 33.0 million ADSs) for approximately US$116.4 million under its share repurchase program, representing 58.2% of its US$200 million share repurchase program. As of March 31, 2025, the Company had 374.0 million ordinary shares (equivalent to approximately 93.5 million ADSs) outstanding, compared to 449.8 million ordinary shares (equivalent to approximately 112.5 million ADSs) outstanding as of January 31, 2022 before the share repurchase program commenced. The current share repurchase program will expire at the end of February 2026. Financial Outlook Based on currently available information, the Company expects total revenues for the second quarter of 2025 to be between $33 million and $35 million, compared to $30.9 million in the second quarter of 2024 if revenues from certain end-of-sale low-margin products were excluded. This outlook reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change. Earnings Call The Company will host a conference call to discuss the financial results at 6 p.m. Pacific Time / 9 p.m. Eastern Time on May 27, 2025. Details for the conference call are as follows:Event title: Agora, Inc. 1Q 2025 Financial ResultsThe call will be available at https://edge.media-server.com/mmc/p/kxr3jgpdInvestors who want to hear the call should log on at least 15 minutes prior to the broadcast. Participants may register for the call with the link below.https://register-conf.media-server.com/register/BI1c2b9f834eb9480294d6e640989a25aePlease visit the Company’s investor relations website at https://investor.agora.io on May 27, 2025 to view the earnings release and accompanying slides prior to the conference call. Operating Metrics The Company also uses other operating metrics included in this press release and defined below to assess the performance of its business. Active Customers An active customer at the end of any period is defined as an organization or individual developer from which the Company generated more than $100 of revenue during the preceding 12 months, excluding customers from Easemob. Customers are counted based on unique customer account identifiers. Generally, one software application uses the same customer account identifier throughout its life cycle while one account may be used for multiple applications. Dollar-Based Net Retention Rate Dollar-Based Net Retention Rate is calculated for a trailing 12-month period by first identifying all customers in the prior 12-month period, and then calculating the quotient from dividing the revenue generated from such customers in the trailing 12-month period by the revenue generated from the same group of customers in the prior 12-month period. As the vast majority of revenue generated from Agora’s customers is denominated in U.S. dollars, while the vast majority of revenue generated from Shengwang’s customers is denominated in Renminbi, Dollar-Based Net Retention Rate is calculated in U.S. dollars for Agora and in Renminbi for Shengwang, which has substantially removed the impact of foreign currency translations. Shengwang excluded the revenues from certain end-of-sale products and Easemob’s CEC business. The Company believes Dollar-Based Net Retention Rate facilitates operating performance comparisons on a period-to-period basis. Safe Harbor Statements This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current fact included in this press release are forward-looking statements, including but not limited to statements regarding the Company’s financial outlook, beliefs and expectations. Forward-looking statements include statements containing words such as “expect,” “anticipate,” “believe,” “project,” “will” and similar expressions intended to identify forward-looking statements. Among other things, the Financial Outlook in this announcement contain forward-looking statements. These forward-looking statements are based on the Company’s current expectations and involve risks and uncertainties. The Company’s actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to the growth of the RTE-PaaS market; the Company’s ability to manage its growth and expand its operations; the Company’s ability to attract new developers and convert them into customers; the Company’s ability to retain existing customers and expand their usage of its platform and products; the Company’s ability to drive popularity of existing use cases and enable new use cases, including through quality enhancements and introduction of new products, features and functionalities; the Company’s fluctuating operating results; competition; the effect of broader technological and market trends on the Company’s business and prospects; general economic conditions and their impact on customer and end-user demand; and other risks and uncertainties included elsewhere in the Company’s filings with the Securities and Exchange Commission (“SEC”), including, without limitation, the final prospectus related to the IPO filed with the SEC on June 26, 2020. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and the Company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date hereof. About Agora, Inc. Agora, Inc. is the Cayman Islands holding company of two independent divisions, under Agora brand and Shengwang brand, respectively, whose businesses are conducted through separate entities. Headquartered in Santa Clara, California, Agora is a pioneer and global leader in Real-Time Engagement Platform-as-a-Service (PaaS), providing developers with simple, flexible, and powerful application programming interfaces, or APIs, to embed real-time conversational AI, video, voice, chat and interactive streaming into their applications. Headquartered in Shanghai, China, Shengwang is a pioneer and leading Real-Time Engagement PaaS provider in the China market. For more information on Agora, please visit: www.agora.ioFor more information on Shengwang, please visit: www.shengwang.cn Agora, Inc.Condensed Consolidated Balance Sheets(Unaudited, in US$ thousands)  As of  As of  March 31,  December 31,  2025  2024 Assets     Current assets:     Cash and cash equivalents42,611  27,083 Short-term bank deposits35,077  168,327 Short-term financial products issued by banks65,423  71,464 Short-term investments2,781  2,787 Restricted cash230  3,745 Accounts receivable, net27,199  30,952 Prepayments and other current assets7,546  22,593 Contract assets1,034  1,099 Total current assets181,901  328,050 Property and equipment, net4,256  4,680 Construction in progress in relation to the headquarters project45,635  44,486 Operating lease right-of-use assets3,365  3,866 Intangible assets481  611 Long-term bank deposits189,501  35,500 Long-term financial products issued by banks55,400  61,400 Long-term investments40,483  40,710 Land use right, net160,775  161,395 Other non-current assets21,962  18,956 Total assets703,759  699,654 Liabilities and shareholders’ equity     Current liabilities:     Accounts payable11,095  12,965 Advances from customers9,061  8,738 Taxes payable1,195  2,210 Current operating lease liabilities1,711  1,749 Payables for construction costs5,091  12,834 Accrued expenses and other current liabilities23,662  19,839 Total current liabilities51,815  58,335 Long-term payable2  1 Long-term operating lease liabilities1,481  1,922 Deferred tax liabilities72  92 Long-term borrowings in relation to the headquarters project57,158  46,469 Advance in relation to the headquarters project20,203  20,174 Total liabilities130,731  126,993 Shareholders’ equity:     Class A ordinary shares39  39 Class B ordinary shares8  8 Additional paid-in-capital1,144,702  1,144,238 Treasury shares, at cost(72,574) (72,739)Accumulated other comprehensive loss(12,926) (12,257)Accumulated deficit(486,221) (486,628)Total shareholders’ equity573,028  572,661 Total liabilities and shareholders’ equity703,759  699,654        Agora, Inc.Condensed Consolidated Statements of Comprehensive Loss(Unaudited, in US$ thousands, except share and per ADS amounts)  Three Month Ended March 31, 2025 2024 Real-time engagement service revenues32,673 32,222 Real-time engagement on-premise solution and other revenues596 799 Total revenues33,269 33,021 Cost of revenues10,635 12,797 Gross profit22,634 20,224 Operating expenses:  Research and development14,018 18,139 Sales and marketing6,235 6,814 General and administrative6,238 8,380 Total operating expenses26,491 33,333 Other operating income154 476 Loss from operations(3,703)(12,633)Exchange gain (loss)71 (45)Interest income3,635 4,734 Interest expense(5)(60)Investment income (loss)689 (2,035)Income (loss) before income taxes687 (10,039)Income taxes(42)(140)(Losses) income from equity in affiliates(238)716 Net income (loss)407 (9,463)Net income (loss) attributable to ordinary shareholders407 (9,463)Other comprehensive loss:  Foreign currency translation adjustments(669)(340)Total comprehensive loss attributable to ordinary shareholders(262)(9,803)   Net income (loss) per ADS attributable to ordinary shareholders, basic and diluted0.004 (0.10)Weighted-average shares used in computing net income (loss) per ADS attributable to ordinary shareholders:  Basic377,173,029 372,186,672 Diluted406,087,244 372,186,672    Share-based compensation expenses included in:  Cost of revenues47 101 Research and development expenses1,359 3,045 Sales and marketing expenses214 303 General and administrative expenses328 985  Agora, Inc.Condensed Consolidated Statements of Cash Flows(Unaudited, in US$ thousands)  Three Month Ended March 31, 20252024Cash flows from operating activities:  Net income (loss)407 (9,463)Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:  Share-based compensation expenses1,948 4,434 Allowance for current expected credit losses1,684 2,291 Depreciation of property and equipment592 1,008 Amortization of intangible assets130 273 Amortization of land use right849 858 Deferred tax expense(20)(42)Amortization of right-of-use asset and interest on lease liabilities538 660 Investment (income) loss(689)2,035 Losses (income) from equity in affiliates238 (716)Losses (gain) on disposal of property and equipment1 (2)Changes in assets and liabilities, net of effect of acquisition:  Accounts receivable2,099 (4,507)Contract assets66 (29)Prepayments and other current assets14,817 (10,358)Other non-current assets(1,215)7,246 Accounts payable(1,520)2,448 Advances from customers313 501 Taxes payable(1,018)441 Deferred income111 (257)Operating lease liabilities(572)(883)Accrued expenses and other liabilities(1,182)(2,425)Net cash provided by (used in) operating activities17,577 (6,487)Cash flows from investing activities:  Purchase of property and equipment(555)(587)Purchase of short-term bank deposits(25,077)(31,100)Purchase of short-term financial products issued by banks(10,279)- Proceeds from maturity of short-term bank deposits158,327 23,143 Proceeds from maturity of short-term financial products issued by banks23,013 10,029 Purchase of long-term bank deposits(154,001)- Purchase of long-term financial products issued by banks- (6,000)Purchase of construction in progress for the headquarters project(10,281)(6,778)Disposal of property and equipment26 7 Refundable deposit received in relation to disposal of subsidiaries4,410 - Net cash used in investing activities(14,417)(11,286)Cash flows from financing activities:  Proceeds from long-term borrowings10,627 6,744 Proceeds from exercise of employees’ share options296 208 Deposit received in relation to headquarters project- 19,280 Repurchase of Class A ordinary shares(1,241)(3,408)Net cash provided by financing activities9,682 22,824 Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash(829)(43)Net increase in cash, cash equivalents and restricted cash12,013 5,008 Cash, cash equivalents and restricted cash at beginning of period *30,828 37,174 Cash, cash equivalents and restricted cash at end of period **42,841 42,182 Supplemental disclosure of cash flow information:  Income taxes paid40 108 Cash payments included in the measurement of operating lease liabilities572 883 Right-of-use assets obtained in exchange for operating lease obligations- 336 Non-cash financing and investing activities:  Proceeds receivable from exercise of employees’ share options21 90 Payables for property and equipment34 1 Payables for construction in progress in relation to the headquarters project641 1,796 Payables for treasury shares, at cost47 25    * Includes restricted cash balance3,745 280 ** includes restricted cash balance230 280  __________________________________1 One ADS represents four Class A ordinary shares.

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