Agora, Inc. ((API)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Agora Inc. recently held its earnings call, revealing a generally positive sentiment despite some concerns. The company reported significant growth in revenue and profitability, successful AI deployments, and continued share repurchases. However, there were notable concerns regarding sequential revenue decline, gross margin fluctuations, and the resignation of a key executive.
Third Consecutive Quarter of GAAP Profitability
Agora Inc. achieved a GAAP net profit of $1.5 million in Q2, more than tripling its profit from the previous quarter. This accomplishment resulted in a GAAP net margin of 4.3%, marking the third consecutive quarter of profitability for the company.
Revenue Growth
The company’s total revenue in Q2 reached $34.3 million, reflecting an 11% year-over-year increase. This marks the second consecutive quarter of double-digit organic growth, showcasing Agora’s strong market performance.
Expansion in Active Customers
Agora reported having close to 1,900 active customers, while its subsidiary Shengwang had approximately 2,000. This represents a 12% and 1% increase, respectively, compared to the previous year, indicating a steady expansion in their customer base.
Introduction of New AI Features
Agora introduced three innovative AI features: advanced attention locking, real-time vision-based intelligence, and natural interactive avatars. These features were well received at the World AI Conference, highlighting Agora’s commitment to technological advancement.
Successful AI Deployments
The company successfully deployed AI applications in real-world scenarios, including a major food delivery platform in South America and the AI companion toy Fuzozo, demonstrating the practical applicability of its AI technologies.
Continued Share Repurchase Program
Agora continued its share repurchase program by buying back $10.9 million worth of shares in Q2. Since the program’s approval in February 2025, the company has repurchased a total of $127.2 million worth of shares.
Sequential Revenue Decline in Agora
Despite a 16.7% year-over-year growth, Agora’s revenues experienced a 2.2% quarter-over-quarter decline, raising concerns about the company’s short-term revenue trajectory.
Gross Margin Fluctuation
The gross margin for Q2 was 66.8%, experiencing a slight decrease of 1.2% both year-over-year and sequentially. These fluctuations are attributed to normal business operations.
Negative Operating Cash Flow
Agora reported a negative operating cash flow of $0.4 million in Q2, which is an improvement compared to the negative $7.6 million reported last year, indicating better cash management.
Resignation of Key Personnel
Sheng Zhong, the Director, Chief Technology Officer, and Chief Scientist, resigned due to personal reasons, marking a significant change in the company’s leadership.
Forward-Looking Guidance
Agora Inc. provided guidance for the third quarter of 2025, projecting total revenues between $34 million and $36 million, representing a year-over-year growth rate of 7.6% to 13.9%. The company aims to maintain stable expenses and improve net margins, with a long-term goal of achieving an operating margin between 15% and 20%.
In summary, Agora Inc.’s earnings call reflected a strong quarter with notable achievements in profitability and revenue growth, alongside successful AI initiatives. Despite some concerns about revenue decline and leadership changes, the company’s forward-looking guidance remains optimistic, aiming for continued growth and improved margins.