Agora, Inc. Announces First Quarter 2025 Financial Results

Agora Inc. (NASDAQ: API) Reports Second Consecutive Quarter of GAAP Profitability

SANTA CLARA, CA – Agora Inc. (API), a frontrunner in real-time engagement technology, today announced its financial results for the first quarter of 2025, revealing a continuation of its turnaround strategy. Key highlights include a second consecutive quarter of GAAP profitability and a strong cash position, despite the complexities of the current market.

For the quarter ending March 31, 2025, Agora reported a net income of $0.4 million, a significant improvement from a net loss of $9.5 million in the same period last year. Total revenues reached $33.3 million, a modest 0.8% increase year-over-year. The Agora segment saw robust growth, with revenues surging 17.7% to $18.6 million, while Shengwang revenue decreased by 13.9% to $14.7 million.

The company’s financial health remains a key strength. Agora maintained a substantial cash position of $388 million and generated $17.6 million in operating cash flow. This healthy balance sheet provides Agora with the resources needed to invest in future growth areas, particularly conversational AI.

Active customer numbers increased across both segments: Agora saw a 5.0% increase to 1,806 customers, and Shengwang saw a 5.2% boost to 1,994 customers. Furthermore, the gross margin improved substantially, reaching 68.0%, up from 61.2% year-over-year, primarily due to a shift away from lower-margin product offerings. During the quarter, the company repurchased 1.2 million Class A shares for $1.2 million as part of its ongoing share repurchase program, demonstrating commitment to shareholder value.

Agora’s Founder, Chairman, and CEO, Tony Zhao, commented on these results: “We are pleased to report our second consecutive quarter of GAAP profitability… Our continued profitability and solid cash position enable us to proactively invest in promising areas, particularly conversational AI.”

## Key Takeaways:

**Positive:**

* Achieved GAAP profitability with a $0.4M net income versus a $9.5M loss year-over-year
* Operating expenses decreased 20.5% to $26.5M through workforce optimization
* Gross margin improved to 68.0% from 61.2% year-over-year
* Strong cash position of $388M with positive operating cash flow of $17.6M
* Active customers grew for both segments: Agora (+5.0%) and Shengwang (+5.2%)
* Agora segment revenue increased 17.7% to $18.6M

**Negative:**

* Overall revenue growth was minimal at 0.8% year-over-year
* Shengwang segment revenue declined 13.9% to $14.7M
* Dollar-Based Net Retention Rate below 100% for both segments (Agora: 96%, Shengwang: 85%)
* Operating loss of $3.7M despite improvement from previous year

## Expert Insights:

**Agora’s Path to Profitability: A Deep Dive**

Agora’s Q1 2025 results paint a picture of a company in strategic transition. The shift from a loss-making position to a profitable one, with a net income of $0.4 million compared to a $9.5 million loss in Q1 2024, is a primary indicator of the company’s strong cost management. The decrease in operating expenses by 20.5% to $26.5 million year-over-year is especially noteworthy.

The revenue landscape is one of mixed signals. While total revenue saw only a slight increase of 0.8% to $33.3 million, the positive performance of the Agora segment is very significant, with an increase of 17.7% to $18.6 million. The improvement of the Agora segment is largely attributed to the increase in demand in live shopping.

Agora’s strong financial footing, including $388 million in cash and investments, provides a buffer for navigating market uncertainties and funding strategic initiatives. Management has emphasized conversational AI as a growth opportunity, and the potential for the future in this area seem promising to investors.

Customer growth was modest, with active customers up around 5% for both Agora and Shengwang. However, the dollar-based net retention rates of 96% for Agora and 85% for Shengwang indicate that there is an ongoing challenge of growing revenue from existing customers.

For Q2 2025, Agora projects revenue between $33-35 million, indicating optimism within the core business.

## Looking Ahead

Agora is projecting continued revenue growth for Q2 2025, with an estimated range of $33-35 million. This positive outlook, along with the company’s sustained profitability and robust financial position, suggests a strategic direction.

## FAQ:

### What were Agora’s (API) key financial results for Q1 2025?

Agora reported total revenues of $33.3M (+0.8% YoY), net income of $0.4M, and a gross margin of 68.0%. The company maintained $388M in cash and generated $17.6M in operating cash flow.

### How did Agora’s (API) segments perform in Q1 2025?

Agora segment revenue grew 17.7% to $18.6M, while Shengwang revenue decreased 13.9% to $14.7M. Active customers increased for both segments: Agora (+5.0% to 1,806) and Shengwang (+5.2% to 1,994).

### What is Agora’s (API) financial outlook for Q2 2025?

Agora expects total revenues for Q2 2025 to be between $33 million and $35 million, compared to $30.9M in Q2 2024 (excluding certain end-of-sale products).

### What is the status of Agora’s (API) share repurchase program?

In Q1 2025, Agora repurchased 1.2M Class A shares for $1.2M. Total repurchases reached $116.4M (58.2% of $200M program), with the program set to expire in February 2026.

### How did Agora’s (API) operating expenses change in Q1 2025?

Operating expenses decreased 20.5% to $26.5M YoY, primarily due to workforce optimization across R&D, sales and marketing, and general administrative departments.