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Agora, Inc. (API)
NASDAQ:API
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Agora
(NASDAQ:API)
Rating:56Neutral
Price Target:
$4.00
▲(8.11%Upside)
Positive Factors
Business Expansion
Agora (International business) revenue increased 18% YoY to US$18.6mn, driven by business expansion and usage growth in live shopping & entertainment.
Earnings
Agora Inc reported revenue increased 1% YoY to US$33.3mn in 1Q25, exceeding the high-end of company’s guidance.
Negative Factors
Market Demand
Management saw strong interest in conversational AI for various use cases, which could lead to promising demand growth once widely adopted.
Agora (API) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$345.99M
Dividend YieldN/A
Average Volume (3M)593.87K
Price to Earnings (P/E)―
Beta (1Y)2.05
Revenue Growth-3.34%
EPS Growth56.44%
CountryUS
Employees608
SectorTechnology
Sector Strength84
IndustrySoftware - Application
Share Statistics
EPS (TTM)<0.01
Shares Outstanding74,465,760
10 Day Avg. Volume546,019
30 Day Avg. Volume593,874
Financial Highlights & Ratios
PEG Ratio-0.22
Price to Book (P/B)0.14
Price to Sales (P/S)0.00
P/FCF Ratio-1.52
Enterprise Value/Market Cap0.29
Enterprise Value/Revenue0.19
Enterprise Value/Gross Profit1.19
Enterprise Value/Ebitda-0.39
Forecast
1Y Price Target
$7.10Price Target Upside91.89% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Agora Business Overview & Revenue Model
Company DescriptionAgora, Inc. provides Real-Time Engagement Platform-as-a-Service (RTE-PaaS) in the People's Republic of China, the United States, and internationally. The company RTE-PaaS offers developers with software tools to embed real-time video, voice, and messaging functionalities into applications. Its products include video calling, voice calling, interactive live streaming, chat, signaling. Acceleration products; and extensions, which comprise interactive whiteboard, recording, analytics, and extensions marketplace products to enable developers to launch RTE in specific use cases and verticals. The company also provides Flexible Classroom that offers a low-code application Platform as a Service; and App Builder, no-code application platform. Its real-time engagement products are delivered through its Software-Defined Real-Time Network, which is a virtual network overlay on top of the public internet. The company serves social, entertainment, gaming, education, enterprise solutions, e-commerce, financial services, healthcare, and IoT industries. Agora, Inc. was incorporated in 2013 and is headquartered in Shanghai, the People's Republic of China.
How the Company Makes MoneyAgora makes money through a usage-based pricing model, where customers pay based on the minutes of voice and video engagement facilitated by Agora's APIs. This model allows for scalable pricing tailored to the needs of different businesses, from startups to large enterprises. Key revenue streams include licensing fees for API usage and potential subscription models for ongoing access to premium features. Additionally, Agora may form partnerships with tech companies and app developers to integrate their services, which can drive significant revenue through increased API usage. Factors contributing to its earnings include the growing demand for real-time communication solutions, the proliferation of digital platforms requiring interactive features, and the company's ability to provide reliable, low-latency connectivity across various devices and networks.
Agora Earnings Call Summary
Earnings Call Date:May 27, 2025
(Q1-2025)
| % Change Since: -2.37%|
Next Earnings Date:Aug 25, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Agora Inc.'s strong financial performance, including sustained profitability and revenue growth, alongside significant advancements in AI and IoT. However, challenges in the Shengwang segment and competitive pressures in China were noted.Q1-2025 Updates
Positive Updates
Second Consecutive Quarter of GAAP Profitability
Agora Inc. reported GAAP profitability for the second consecutive quarter in Q1 2025, driven by double-digit revenue growth and disciplined cost management.
Revenue Growth
Total revenue in Q1 2025 was $33.3 million, up 12% year-over-year, excluding revenues from certain end-of-sale, low-margin products.
Strong Performance in AI and IoT
Launched conversational AI engine and device kit, enabling developers to create interactive voice experiences and IoT devices, unlocking innovation across multiple verticals.
Improved Net Retention Rates
Dollar-based net retention rates improved to 96% for Agora and 85% for Shengwang compared to previous quarters.
Operating Cash Flow Improvement
Operating cash flow was $17.6 million in Q1 2025, a significant improvement from negative $6.5 million last year.
Negative Updates
Sequential Revenue Decline in Shengwang
Shengwang revenues declined 13.7% sequentially, primarily due to seasonality and reduced activity from social and education customers.
Competitive Market in China
China remains a highly competitive market, impacting pricing and margins, though the company focuses on high-value use cases to maintain stability.
Company Guidance
During the Agora Inc.'s first quarter 2025 financial results call, the company reported a second consecutive quarter of GAAP profitability, with total revenue reaching $33.3 million, a 12% year-over-year increase. The company highlighted significant achievements, including a net profit more than doubling from the previous quarter and an operating cash flow of $17.6 million. Agora's revenue grew by 17.7% year-over-year, while Shengwang's revenue increased by 6.7%. The company maintained a strong gross margin of 68% and reduced operating expenses to $26.5 million, down from $32.6 million in Q2 2024. For Q2 2025, Agora anticipates revenues between $33 million and $35 million, representing a year-over-year growth rate of 6.8% to 13.3%. The company also emphasized its robust financial position, with a net income margin of 1.2% and continued commitment to shareholder value through its share repurchase program.Agora Financial Statement Overview
Summary
Agora faces financial challenges with declining revenues and persistent losses as per the income statement. The balance sheet shows strong equity but poor profitability metrics, and the cash flow situation is strained with negative free cash flow and operating cash flow. Improvements are needed in revenue and operational efficiency to enhance financial health.Income Statement
Agora's income statement reveals significant challenges. The company has experienced declining revenue over the past few years, notably a decrease from $160.67 million in 2022 to $133.26 million in 2024, representing a negative growth trajectory. Additionally, gross profit margins have remained fairly stable but low, and net income has consistently been negative, indicating ongoing losses. The EBIT and EBITDA margins are also negative, underscoring operational inefficiencies and high expenses relative to revenue.45
Neutral
Balance Sheet
Agora's balance sheet shows a relatively strong equity position with a debt-to-equity ratio remaining low due to minimal debt. However, the return on equity is negative, reflecting the company's inability to generate profit from shareholders' investments. The equity ratio is high, indicating stability and a strong capital structure, but the persistent net losses are concerning for future equity valuation.60
Neutral
Cash Flow
The cash flow statement indicates significant challenges, primarily with negative free cash flow and operating cash flow over successive years. While there was a notable improvement in free cash flow from 2022 to 2023, it remains negative. The operating cash flow to net income ratio suggests that operating activities are not generating sufficient cash to support the company’s financial needs, which might affect liquidity.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 133.26M | 141.54M | 160.67M | 167.98M | 133.56M | Gross Profit |
| 85.45M | 89.47M | 99.42M | 104.01M | 86.36M | EBIT |
| -53.31M | -87.32M | -103.82M | -80.69M | -5.19M | EBITDA |
| -31.19M | -78.27M | -104.08M | -61.63M | -731.00K | Net Income Common Stockholders |
| -42.73M | -87.22M | -120.62M | -72.69M | -3.11M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 269.66M | 216.65M | 427.71M | 755.30M | 635.44M | Total Assets |
| 699.65M | 674.60M | 800.72M | 945.00M | 692.90M | Total Debt |
| 50.14M | 15.20M | 2.27M | 7.41M | 0.00 | Net Debt |
| 23.06M | -21.69M | -43.40M | -278.26M | -111.22M | Total Liabilities |
| 126.99M | 69.85M | 72.45M | 78.74M | 36.44M | Stockholders Equity |
| 572.66M | 604.75M | 728.26M | 866.26M | 656.46M |
| Cash Flow | Free Cash Flow | |||
| -49.38M | -30.46M | -254.25M | -32.47M | -6.31M | Operating Cash Flow |
| -14.13M | -13.61M | -44.38M | -20.00M | 6.56M | Investing Cash Flow |
| -38.05M | 56.64M | -151.06M | -57.69M | -535.05M | Financing Cash Flow |
| 45.99M | -52.37M | -42.15M | 251.94M | 533.64M |
Agora Technical Analysis
Positive
3.70
Price Trends
3.49
Positive
4.43
Negative
3.95
Negative
Market Momentum
0.04
Negative
54.41
Neutral
40.81
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For API, the sentiment is Positive. The current price of 3.7 is above the 20-day moving average (MA) of 3.55, above the 50-day MA of 3.49, and below the 200-day MA of 3.95, indicating a neutral trend. The MACD of 0.04 indicates Negative momentum. The RSI at 54.41 is Neutral, neither overbought nor oversold. The STOCH value of 40.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for API.
Agora Risk Analysis
Agora disclosed 86 risk factors in its most recent earnings report. Agora reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Agora Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $267.33M | 1.49 | -10.56% | 4.51% | -11.07% | 953.01% | |
65 Neutral | $198.21M | ― | -10.44% | ― | 7.65% | -96.35% | |
62 Neutral | $11.70B | 10.39 | -7.10% | 2.92% | 7.45% | -8.42% | |
56 Neutral | $345.99M | ― | -5.62% | ― | -3.34% | 56.44% | |
56 Neutral | $240.71M | 2.85 | 35.11% | 1.16% | 3828.94% | 129.01% | |
54 Neutral | $503.51M | ― | -101.69% | ― | -15.51% | -54.09% | |
51 Neutral | $215.17M | ― | -24.28% | ― | -2.23% | 19.48% |
* Technology Sector Average
Performance Comparison
API
Agora
3.81
1.33
53.63%
EGHT
8X8
1.75
-0.86
-32.95%
IMMR
Immersion
7.70
-1.88
-19.62%
APPS
Digital Turbine
4.43
2.73
160.59%
SSTI
SoundThinking Inc
15.92
1.34
9.19%
MKTW
MarketWise
17.30
-6.38
-26.94%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.