Agora, Inc. (China) Q4 FY2024 earnings call

• Achieved GAAP profitability in the fourth quarter, driven by strong revenue growth from new use cases like live shopping and entertainment and disciplined cost management. • Generative AI presents opportunities for Agora's real-time engagement technology, leading to the launch of the Transformative Expansions Network (TEN) framework and conversational AI engine. • Restructured and reduced global workforce in November 2024. • Fourth quarter gross margin was 66.6%, operating expenses decreased, and net income was $0.2 million with a 0.5% net income margin.

Total revenue in the fourth quarter was $34.5 million, up 4% year over year, excluding revenues from certain end-of-sale low-margin products. Core revenues for Agora were $17.4 million in the fourth quarter, an increase of 13.7% year over year. As of the end of 2024, Agora had over 1,700 active customers. Xiong Wang revenues in the fourth quarter were RMB 122.2 million, down 5.4% year over year, with close to 2,000 active customers.

• For the first quarter of 2025, expects total revenues to be between $31 million and $33 million. • Aims to maintain sustained profitability throughout 2025 driven by strategic initiatives, operational efficiency, and generative AI opportunities.

Q: On the demand side, trends in overseas and China markets and key sectors driving growth in 2025; AI-related demand and application scenarios; gross profit margin and GAAP profit targets for 2025.

A: On China, demand on IoT and digital transformation; global, live commerce, retail economy, Chinese companies going overseas. AI-related demand growing, with use cases in companionship, education, enterprise call centers. Expect gross margin to maintain around 67%, revenue growth to continue driving stronger bottom line.

Q: Agora's strong growth recovery in Q4 and continuation in 2025; impact of DeepSeq and focus areas for Agora and Xiong Wang in next two years.

A: Agora's growth driven by live commerce, creator economy, Chinese companies in global markets. DeepSeq boosts agent building, with multimodal/voice conversational AI, IoT devices, customer service, and copilot use cases as key focus areas for growth in next two years.