API — Agora, Inc.

Summary of Agora, Inc. Q3 2025 Earnings Call

1. Key Financial Results and Metrics:

• Total Revenue: $35.4 million, up 12% year-over-year.
• GAAP Net Profit: $2.7 million, with a net margin of 7.8%, marking the fourth consecutive quarter of profitability.
• Core Revenues: $18.2 million, a 15.9% increase year-over-year, flat quarter-over-quarter.
• Shunghwa Revenues: RMB 122.4 million, up 8.4% year-over-year and 6% sequentially.
• Gross Margin: 66%, slightly decreased from the previous year.
• R&D Expenses: $13.8 million, down 52.8% year-over-year, representing 39.1% of total revenues.
• Operating Cash Flow: Positive at $700,000, improving from a negative $4.6 million last year.
• Cash Position: $374.3 million in cash and equivalents, with a share repurchase of $4.8 million during the quarter.

2. Strategic Updates and Business Highlights:

• Agora's core real-time engagement business is rebounding, with expectations for full-year revenue growth for the first time since the pandemic.
• Significant investment in conversational AI, launching a new AI engine and a zero-code conversational AI studio to enhance developer capabilities.
• The recent Conva AI and RTE conference attracted over 3,000 attendees, indicating strong interest in AI technology.
• Growth in verticals such as live shopping, social entertainment, and IoT is driving demand.

3. Forward Guidance and Outlook:

• Q4 2025 revenue is expected between $37 million and $38 million, representing year-over-year growth of 10.1% to 77.2%.
• Continued growth in net income is anticipated for Q4, with expectations for GAAP operating profit breakeven.
• For FY 2026, the company aims for significant improvements in GAAP net profit, despite potential uncertainties related to interest rate changes.

4. Bad News, Challenges, or Points of Concern:

• While the company is experiencing growth, there are challenges in scaling conversational AI solutions due to the complexity of real-time interactions.
• The gross margin has slightly decreased, which could indicate rising costs or pricing pressures.
• The competitive landscape in AI and real-time engagement technologies remains intense, with ongoing challenges in user adoption and reliability of AI solutions.

5. Notable Q&A Insights:

• Management highlighted strong demand recovery in both domestic (China) and international markets, particularly in social entertainment and education.
• There is a strong pipeline for AI applications, especially in call centers and companionship toys, with expectations for meaningful revenue contributions in the first half of 2026.
• The company is not pursuing CDN strategies but is focused on real-time inference services for conversational AI, leveraging its existing infrastructure for ultra-low latency requirements.

Overall, Agora, Inc. demonstrated solid financial performance with a positive outlook, while also addressing the complexities and competitive pressures in the evolving AI landscape.