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01/11 16:00
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary reflects positive financial performance, including a revenue increase and GAAP profitability, alongside strategic initiatives in AI and operational efficiency. The share repurchase extension indicates confidence in long-term growth. Despite competitive pressures and seasonality, the Q&A reveals strong demand trends, particularly in North America and Europe. The management's focus on high-value use cases and cost management supports stable margins. These factors, combined with optimistic guidance and strategic growth plans, suggest a positive stock price movement over the next two weeks.
Total Revenue $33.3 million, up 12% year-over-year, excluding revenues from certain end of sale low margin products, driven by healthy business expansion and net retention rate recovery.
Agora Revenue $18.6 million, up 17.7% year-over-year, reflecting successful market expansion and growing adoption in high potential verticals.
Shengwang Revenue RMB 105.5 million, up 6.7% year-over-year, due to continued business expansion and adoption in key verticals, but down 13.7% sequentially due to normal seasonality.
Gross Margin 68%, with a 0.6% year-over-year increase in gross margin of continuing business, reflecting cost management efforts.
Operating Expenses $26.5 million, down from $32.6 million in Q2 2024, due to workforce restructuring.
R&D Expenses $14 million, representing 22.7% year-over-year increase, but decreased as a percentage of total revenue from 54.5% to 42.1%.
Marketing Expenses $6.2 million, down 8.5% year-over-year, representing 18.7% of total revenues, down from 20.5%.
G&A Expenses $6.2 million, down 25.6% year-over-year, representing 18.8% of total revenues, down from 25.2%.
Net Income $0.4 million, representing a 1.2% net income margin, a turnaround from a 28.7% net loss margin in Q1 last year.
Operating Cash Flow $17.6 million, compared to negative $6.5 million last year, driven by interest proceeds from bank deposits.
Cash Position million in cash, cash equivalents, bank deposits, and financial products, with a net cash inflow of $17.6 million.
Share Repurchase $1.2 million in share repurchases during the quarter, with a total of $116.4 million repurchased since February 2022.
Conversational AI Engine: Launched general availability in China, enabling developers to create interactive voice experiences with any large language model. Currently in public beta for the U.S. and global markets.
Conversational AI Device Kit: Introduced a turnkey IoT module that combines software, call service, and high-performance chips, allowing manufacturers to add conversational AI to IoT devices.
TEN Open Source Project: Continues to gain traction with 6000 stars, launched new voice activity detection and turn detection modules.
Revenue Growth: Total revenue in Q1 reached $33.3 million, up 12% year-over-year, with Agora revenues at $18.6 million, growing 17.7% year-over-year.
Customer Base Expansion: Over 1800 active customers for Agora and close to 2000 for Shenwang, both up 5% year-over-year.
Cost Management: Operating expenses decreased to $26.5 million, down from $32.6 million in Q2 2024.
Gross Margin: Gross margin for Q1 was 68%, with an increase in gross margin of continuing business by 0.6% year-over-year.
Share Repurchase Program: Since February 2022, repurchased $116.4 million worth of shares, with over $8 million in Q2 2025.
Profitability Outlook: Anticipate maintaining GAAP profitability throughout 2025.
Forward-looking statements: The company acknowledges that forward-looking statements about future financial performance are subject to risks, uncertainties, and assumptions that could materially affect actual results.
Regulatory issues: The company refers to risk factors and other information in its SEC filings, indicating potential regulatory challenges.
Seasonality: Q1 is typically a seasonal low point for the company, with fewer calendar days and reduced online activity due to the New Year holiday, which may impact revenue.
Competitive pressures: The company is expanding in high-potential verticals like live shopping and entertainment, indicating competitive pressures in these markets.
Supply chain challenges: The company is launching new products and services, which may face supply chain challenges as they scale, particularly in the IoT and AI sectors.
Economic factors: The company’s performance is influenced by economic conditions, as indicated by the seasonal decline in Q1 due to holidays affecting customer activity.
Conversational AI Engine Launch: In March, we announced the general availability of our conversational AI engine in China, enabling developers to create interactive voice experiences with any large language model.
Conversational AI Device Kit Launch: We launched our conversational AI device kit, a turnkey IoT module that combines our software, call service, and high-performance chips, allowing device manufacturers to add conversational AI to any IoT devices.
Open Source Initiatives: TEN, our sponsored open source project for building real-time conversational AI agents, continues to gain traction with 6000 stars, and we launched new modules that outperform existing alternatives.
Q2 2025 Revenue Guidance: For the second quarter of 2025, we expect total revenues to be between $33 million and $35 million, representing year-over-year growth of 6.8% to 13.3%.
Profitability Outlook: We anticipate maintaining GAAP profitability throughout 2025, supported by current business momentum and visibility.
Cash Flow: Operating cash flow was $17.6 million in Q1, indicating a positive trend compared to negative cash flow last year.
Share Repurchase Program: Since the board approved the share repurchase program in February 2022, Agora has repurchased $116.4 million worth of shares through March 31, 2025. In Q2 2025, over $8 million worth of shares have already been bought back.
The earnings call shows strong revenue growth, improved profitability, and efficient cost management. Despite a slight decline in gross margin, the company is experiencing significant demand growth in key sectors and markets. The Q&A highlights positive trends in AI and international markets, with promising future revenue contributions. The company's strategic focus on conversational AI and improved financial outlook further support a positive sentiment. Although the market cap is not available, the overall positive indicators suggest a stock price increase in the range of 2% to 8%.
The earnings call reveals positive financial performance with revenue growth and profitability, but concerns arise from a slight gross margin decline and unclear guidance on new product margins. The Q&A section highlights potential in AI applications, though management's vague responses on margins and future targets create uncertainty. The share repurchase program supports shareholder value, but impacts cash reserves. Overall, the balanced factors suggest a neutral sentiment for stock price movement.
The earnings call reflects strong financial performance with a 12% revenue increase and continued GAAP profitability. The launch of the conversational AI engine and market expansion efforts are positive indicators. The share repurchase program extension further boosts confidence. Despite competitive and regulatory risks, the guidance remains optimistic. The Q&A revealed positive sentiment towards AI applications and market growth, though management was vague on adoption timing. Overall, these factors suggest a positive stock price movement, with strong financial metrics and optimistic guidance outweighing uncertainties.
The earnings call summary reflects positive financial performance, including a revenue increase and GAAP profitability, alongside strategic initiatives in AI and operational efficiency. The share repurchase extension indicates confidence in long-term growth. Despite competitive pressures and seasonality, the Q&A reveals strong demand trends, particularly in North America and Europe. The management's focus on high-value use cases and cost management supports stable margins. These factors, combined with optimistic guidance and strategic growth plans, suggest a positive stock price movement over the next two weeks.
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