Agora (API) Q3 2024 earnings summary

Executive summary

• Total revenues for Q3 2024 were $31.6 million, down 9.8% year-over-year, but up sequentially when excluding end-of-sale low-margin products.

• Agora segment revenue grew 2.6% year-over-year to $15.7 million, driven by live shopping and business expansion; active customers increased 5.9%.

• Shengwang segment revenue declined 20% year-over-year to $15.7 million, mainly due to regulatory and macroeconomic challenges; active customers declined 9.7%.

• Launched Conversational AI SDK in partnership with OpenAI, targeting voice-driven AI experiences and IoT applications.

• Announced organizational restructuring and leadership changes, including the departure of Chief Security Officer Roger Hale, to align with AI opportunities.

Financial highlights

• Excluding end-of-sale low-margin products, total revenues increased 2.3% quarter-over-quarter and decreased 3.1% year-over-year.

• Gross margin for Q3 was 66.7%, up 2.7% year-over-year and 4.7% sequentially; pro forma gross margin (excluding severance) was 67.7%.

• Net loss for Q3 was $24.2 million; pro forma net loss (excluding severance, equity award cancellation, and affiliate losses) was $3.9 million, with a 12.4% net loss margin.

• Operating cash flow was -$4.6 million; free cash flow was -$6 million.

• Ended Q3 with $362.6 million in cash, cash equivalents, and bank deposits.

Outlook and guidance

• Q4 2024 revenue guidance: $34–36 million, up from $31.6 million in Q3, driven by demand in both international and China markets.

• Expect significant improvement in net income/loss in Q4.

• Targeting GAAP break-even for full year 2025 under conservative revenue assumptions, supported by operating expense reductions.