Agora, Inc. (NASDAQ: API) (“Agora”), a pioneer and leading platform
for real-time engagement APIs, today announced its financial
results for the third quarter ended September 30, 2020.
“Agora is empowering software developers around
the world to bring contextual video engagement to more and more
online activities, such as taking a class or exam, attending a
virtual event, meeting new friends and competing in a game. Such
innovations are far beyond traditional video conferencing and still
have a long way to go,” said Tony Zhao, founder, chairman and CEO
of Agora. “Our performance in this quarter demonstrates the steady
adoption of contextual video engagement across industries and we
will continue to invest in the depth and breadth of our platform to
better serve developers.”
Third Quarter 2020 Highlights
- Total revenues for
the quarter were $30.8 million, an increase of 80.8% from $17.1
million in the third quarter of 2019.
- Active Customers
as of September 30, 2020 were 1,815, an increase of 95.4% from 929
as of September 30, 2019.
- Constant Currency
Dollar-Based Net Expansion Rate was 187.9% for the
trailing 12-month period ended September 30, 2020.
- Net loss for the
quarter was $2.9 million, compared to net loss of $1.1 million in
the third quarter of 2019. After excluding share-based compensation
expense, non-GAAP net loss for the quarter was $0.4 million,
compared to the non-GAAP net loss of $0.3 million in the third
quarter of 2019. Adjusted EBITDA for the quarter
was negative $0.1 million, compared to $0.2 million in the third
quarter of 2019.
- Total
cash, cash equivalents
and short-term investments as of
September 30, 2020 was $635.4 million.
- Net cash used in operating
activities for the quarter was $1.9 million, compared to
$0.1 million in the third quarter of 2019. Free cash
flow for the quarter was negative $5.1 million, compared
to negative $1.3 million in the third quarter of 2019.
Third Quarter 2020 Financial
Results
RevenuesTotal revenues were
$30.8 million in the third quarter of 2020, an increase of 80.8%
from $17.1 million in the same period last year, primarily due to
increased usage of our video and voice products as result of our
business expansion.
Cost of RevenuesCost of
revenues was $11.6 million in the third quarter of 2020, an
increase of 120.7% from $5.2 million in the same period last year,
primarily due to increase in bandwidth and co-location costs as we
continued to scale our business.
Gross Profit and Gross
MarginGross profit was $19.3 million in the third quarter
of 2020, an increase of 63.1% from $11.8 million in the same period
last year. Gross margin was 62.5% in the third quarter of 2020, a
decrease of 6.7% from 69.2% in the same period last year, primarily
due to international expansion to regions with higher
infrastructure costs.
Operating ExpensesOperating
expenses were $23.2 million in the third quarter of 2020, an
increase of 78.3% from $13.0 million in the same period last
year.
- Research and development
expenses were $12.4 million in the third quarter of 2020,
an increase of 89% from $6.6 million in the same period last year,
primarily due to increased personnel costs as we continue to build
our research and development team, including an increase in
share-based compensation from $0.2 million in the third quarter of
2019 to $0.9 million in the third quarter of 2020.
- Sales and marketing
expenses were $6.4 million in the third quarter of 2020,
an increase of 33.4% from $4.8 million in the same period last
year, primarily due to increased personnel costs as we continue to
build our team and advertising expenses.
- General and administrative
expenses were $4.4 million in the third quarter of 2020,
an increase of 165.4% from $1.7 million in the same period last
year, primarily due to increased personnel costs as we continue to
build our team and professional services expenses, including an
increase in share-based compensation from $0.3 million in the third
quarter of 2019 to $1.1 million in the third quarter of 2020.
Other Operating IncomeOther
operating income was $181 thousand in the third quarter of 2020,
compared to $58 thousand in the same period last year, primarily
due to additional value added tax deductions.
Loss from OperationsLoss from
operations was $3.8 million in the third quarter of 2020, compared
to loss from operations of $1.2 million in the same period last
year.
Interest and Investment
IncomeInterest and investment income were $960 thousand in
the third quarter of 2020, an increase of 266.4% from $262 thousand
in the same period last year, primarily due to an increase in the
average balance of cash and cash equivalents and an increase in
short-term investments purchased due to our initial public offering
and concurrent private placement.
Income Taxes Income taxes were
$74 thousand in the third quarter of 2020, a decrease of 71.8% from
$0.3 million in the same period last year, primarily due to
decrease in pre-tax income generated by our subsidiaries.
Net LossNet loss was $2.9
million in the third quarter of 2020, compared to net loss of $1.1
million in the same period last year.
Net loss attributable to ordinary
shareholdersNet loss attributable to ordinary shareholders
for the quarter was $2.9 million, compared to net loss attributable
to ordinary shareholders of $18.8 million in the same period last
year.
Net loss per American Depositary
ShareNet loss per American Depositary Share (“ADS”)1 was
$0.03, compared to net loss of $0.65 per ADS in the same period
last year.
Financial Outlook
Based on currently available information, Agora
expects that the estimated total revenues for the full fiscal year
ending December 31, 2020 remain to be between $125 million and $130
million. This forecast reflects the Company’s current and
preliminary views on the market and operational conditions, and the
outlook ranges for full year 2020 reflect a number of assumptions
that are subject to change based on uncertainties related to the
impact of the COVID-19 pandemic.
Earnings Call
Agora will host a conference call to discuss the
financial results at 5 p.m. Pacific Time / 8:00 p.m. Eastern Time
on the same day. Details for the conference call are as
follows:Event title: Agora, Inc. 3Q 2020 Financial
ResultsConference ID: 3351435Direct Event online registration:
http://apac.directeventreg.com/registration/event/3351435Please
register in advance of the conference using the link provided
above. Upon registering, you will be provided with participant
dial-in numbers, Direct Event passcode and unique registrant ID.A
digital recording of the conference call will be available for
replay two hours after the call’s completion (dial-in number: US
18554525696, International +61 2 81990299; same conference ID as
shown above).Please visit Agora’s investor relations website at
https://investor.agora.io/investor-relations on November 16, 2020
to view the earnings release and accompanying slides prior to the
conference call.
Use of Non-GAAP Financial
Measures
Agora has provided in this press release
financial information that has not been prepared in accordance with
generally accepted accounting principles in the United States
(GAAP). Agora uses these non-GAAP financial measures internally in
analyzing its financial results and believes that use of these
non-GAAP financial measures is useful to investors as an additional
tool to evaluate ongoing operating results and trends and in
comparing Agora’s financial results with other companies in its
industry, many of which present similar non-GAAP financial
measures. Besides free cash flow (as defined below), each of these
non-GAAP financial measures represents the corresponding GAAP
financial measure before share-based compensation expenses. We
believe that such non-GAAP financial measures help identify
underlying trends in our business that could otherwise be distorted
by the effect of such share-based compensation expenses that we
include in cost of revenues, total operating expenses and net
income (loss). We believe that all such non-GAAP financial measures
also provide useful information about our operating results,
enhance the overall understanding of our past performance and
future prospects and allow for greater visibility with respect to
key metrics used by our management in its financial and operational
decision-making.
Non-GAAP financial measures are not meant to be
considered in isolation or as a substitute for comparable GAAP
financial measures and should be read only in conjunction with
Agora’s consolidated financial statements prepared in accordance
with GAAP. A reconciliation of Agora’s historical non-GAAP
financial measures to the most directly comparable GAAP measures
has been provided in the tables captioned “Reconciliation of GAAP
to Non-GAAP Measures” included at the end of this press release,
and investors are encouraged to review the reconciliation.
Definitions of Agora’s non-GAAP financial
measures included in this press release are presented below.
Non-GAAP Net Income (Loss)
Agora defines non-GAAP net income (loss) as net
income (loss) adjusted to exclude share-based compensation
expense.
Adjusted EBITDA
Agora defines Adjusted EBITDA as net income
(loss) before exchange gain (loss), interest and investment income,
income taxes, depreciation and amortization, and adjusted to
exclude the effects of share-based compensation expense.
Free Cash Flow
Agora defines free cash flow as net cash
provided by operating activities less purchases of property and
equipment. Agora considers free cash flow to be a liquidity measure
that provides useful information to management and investors
regarding net cash provided by operating activities and cash used
for investments in property and equipment required to maintain and
grow the business.
Operating Metrics
Agora also uses other operating metrics included
in this press release and defined below to assess the performance
of its business.
Active Customers
Agora defines an active customer at the end of
any particular period as an organization or individual developer
from which Agora generated more than $100 of revenue during the
preceding 12 months. Agora counts customers based on unique
customer account identifiers. Generally, one software application
uses the same customer account identifier throughout its life cycle
while one account may be used for multiple applications.
Constant Currency Dollar-Based Net
Expansion Rate
Agora calculates Dollar-Based Net Expansion Rate
for a trailing 12-month period by first identifying all customers
in the prior 12-month period, and then calculating the quotient
from dividing the revenue generated from such customers in the
trailing 12-month period by the revenue generated from the same
group of customers in the prior 12-month period. Constant Currency
Dollar-Based Net Expansion Rate is calculated the same way as
Dollar-Based Net Expansion Rate but using fixed exchange rates
based on the daily average exchange rates prevailing during the
prior 12-month period to remove the impact of foreign currency
translations. Agora believes Constant Currency Dollar-Based Net
Expansion Rate facilitates operating performance comparisons on a
period-to-period basis as Agora does not consider the impact of
foreign currency fluctuations to be indicative of its core
operating performance.
Safe Harbor Statements
This press release contains ‘‘forward-looking
statements’’ within the meaning of Section 27A of the Securities
Act of 1933, as amended and Section 21E of the Securities Exchange
Act of 1934, as amended and the Private Securities Litigation
Reform Act of 1995. All statements other than statements of
historical or current fact included in this press release are
forward-looking statements, including but not limited to statements
regarding Agora’s financial outlook, beliefs and expectations.
Forward-looking statements include statements containing words such
as “expect,” “anticipate,” “believe,” “project,” “will” and similar
expressions intended to identify forward-looking statements. Among
other things, the Financial Outlook in this announcement contain
forward-looking statements. These forward-looking statements are
based on Agora’s current expectations and involve risks and
uncertainties. Agora’s actual results and the timing of events
could differ materially from those anticipated in such
forward-looking statements as a result of these risks and
uncertainties, which include, without limitation, risks related to
the growth of the RTE-PaaS market; Agora’s ability to manage its
growth and expand its operations; the continued impact of the
COVID-19 pandemic on global markets and Agora’s business,
operations and customers; Agora’s ability to attract new developers
and convert them into customers; Agora’s ability to retain existing
customers and expand their usage of Agora’s platform and products;
Agora’s ability to drive popularity of existing use cases and
enable new use cases, including through quality enhancements and
introduction of new products, features and functionalities; Agora’s
fluctuating operating results; competition; the effect of broader
technological and market trends on Agora’s business and prospects;
general economic conditions and their impact on customer and
end-user demand; and other risks and uncertainties included under
the caption “Risk Factors” and elsewhere in our filings with the
Securities and Exchange Commission, including, without limitation,
the final prospectus related to the IPO filed with the SEC on June
26, 2020. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. All forward-looking statements are qualified in
their entirety by this cautionary statement, and Agora undertakes
no obligation to revise or update any forward-looking statements to
reflect events or circumstances after the date hereof.
About Agora
Agora’s mission is to make real-time engagement
ubiquitous, allowing everyone to interact with anyone, in any
application, anytime and anywhere. Agora’s platform provides
developers simple, flexible and powerful application programming
interfaces, or APIs, to embed real-time video and voice engagement
experiences into their applications.
For more information, please visit:
www.agora.io.
Investor Contact:Fionna
Cheninvestor@agora.io
Media Contact:Suzanne
Nguyenpress@agora.io
__________________________1 One ADS represents four
Class A ordinary shares.
|
Agora, Inc.Condensed Consolidated Balance
Sheets(Unaudited, in US$ thousands) |
|
|
|
|
|
As of |
|
As of |
|
September 30, |
|
December 31, |
|
2020 |
|
2019 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
409,782 |
|
|
105,603 |
|
Short-term investments |
225,584 |
|
|
- |
|
Accounts receivable, net |
28,921 |
|
|
16,248 |
|
Prepayments and other current assets |
5,725 |
|
|
1,381 |
|
Total current assets |
670,012 |
|
|
123,232 |
|
Property and equipment, net |
12,755 |
|
|
6,282 |
|
Deferred tax assets |
876 |
|
|
836 |
|
Other non-current assets |
1,036 |
|
|
809 |
|
Total assets |
684,679 |
|
|
131,159 |
|
|
|
|
|
Liabilities, mezzanine equity and shareholders' equity
(deficit) |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
4,558 |
|
|
4,088 |
|
Advances from customers |
1,132 |
|
|
921 |
|
Taxes payable |
2,792 |
|
|
2,493 |
|
Accrued expenses and other current liabilities |
20,123 |
|
|
10,979 |
|
Total current liabilities |
28,605 |
|
|
18,481 |
|
Total liabilities |
28,605 |
|
|
18,481 |
|
|
|
|
|
Mezzanine equity |
- |
|
|
239,970 |
|
|
|
|
|
Shareholders' equity (deficit): |
|
|
|
Ordinary shares |
- |
|
|
12 |
|
Class A ordinary shares |
33 |
|
|
- |
|
Class B ordinary shares |
8 |
|
|
- |
|
Additional paid-in-capital |
813,670 |
|
|
- |
|
Accumulated other comprehensive loss |
128 |
|
|
(988 |
) |
Accumulated deficit |
(157,765 |
) |
|
(126,316 |
) |
Total shareholders' equity (deficit) |
656,074 |
|
|
(127,292 |
) |
Total liabilities, mezzanine equity and shareholders’ equity
(deficit) |
684,679 |
|
|
131,159 |
|
|
|
|
|
|
|
|
Agora, Inc.Condensed Consolidated
Statements of Comprehensive Income
(Loss)(Unaudited, in US$ thousands, except share
and per ADS amounts) |
|
|
|
|
|
Three Month Ended |
|
Nine Month Ended |
|
September 30, |
|
September 30, |
|
2020 |
2019 |
|
2020 |
2019 |
Real-time engagement service revenues |
30,620 |
|
16,936 |
|
|
99,738 |
|
45,085 |
|
Other revenues |
227 |
|
125 |
|
|
573 |
|
239 |
|
Total revenues |
30,847 |
|
17,061 |
|
|
100,311 |
|
45,324 |
|
Cost of revenues |
11,583 |
|
5,248 |
|
|
34,042 |
|
13,983 |
|
Gross profit |
19,264 |
|
11,813 |
|
|
66,269 |
|
31,341 |
|
Operating expenses: |
|
|
|
|
|
Research and development |
12,449 |
|
6,588 |
|
|
35,056 |
|
16,495 |
|
Sales and marketing |
6,372 |
|
4,778 |
|
|
18,287 |
|
13,851 |
|
General and administrative |
4,401 |
|
1,658 |
|
|
11,342 |
|
4,756 |
|
Total operating expenses |
23,222 |
|
13,024 |
|
|
64,685 |
|
35,102 |
|
Other operating income |
181 |
|
58 |
|
|
974 |
|
77 |
|
Income (loss) from operations |
(3,777 |
) |
(1,153 |
) |
|
2,558 |
|
(3,684 |
) |
Exchange gain |
(34 |
) |
40 |
|
|
(34 |
) |
53 |
|
Interest and investment income |
960 |
|
262 |
|
|
1,177 |
|
386 |
|
Income (loss) before income taxes |
(2,851 |
) |
(851 |
) |
|
3,701 |
|
(3,245 |
) |
Income taxes |
(74 |
) |
(262 |
) |
|
(633 |
) |
(590 |
) |
Net income (loss) |
(2,925 |
) |
(1,113 |
) |
|
3,068 |
|
(3,835 |
) |
Less: cumulative undeclared dividends on convertible redeemable
preferred shares |
- |
|
(2,490 |
) |
|
(6,715 |
) |
(7,471 |
) |
Less: accretion on convertible redeemable preferred shares to
redemption value |
- |
|
(15,246 |
) |
|
(193,466 |
) |
(33,974 |
) |
Net loss attributable to ordinary shareholders |
(2,925 |
) |
(18,849 |
) |
|
(197,113 |
) |
(45,280 |
) |
Other comprehensive loss: |
|
|
|
|
|
Foreign currency translation adjustments |
1,587 |
|
(602 |
) |
|
1,117 |
|
(686 |
) |
Total comprehensive loss attributable to ordinary shareholders |
(1,338 |
) |
(19,451 |
) |
|
(195,996 |
) |
(45,966 |
) |
|
|
|
|
|
|
Net loss per ADS attributable to ordinary shareholders, basic and
diluted |
(0.03 |
) |
(0.65 |
) |
|
(3.55 |
) |
(1.58 |
) |
|
|
|
|
|
|
Weighted-average shares used in computing net loss per ADS
attributable to ordinary shareholders, basic and diluted |
407,297,929 |
|
116,512,788 |
|
|
222,127,507 |
|
114,878,676 |
|
|
|
|
|
|
|
Share-based compensation expenses included in: |
|
|
|
|
|
|
Cost of revenues |
31 |
|
21 |
|
|
99 |
|
60 |
|
Research and development expenses |
894 |
|
169 |
|
|
1,565 |
|
1,290 |
|
Sales and marketing expenses |
434 |
|
370 |
|
|
1,336 |
|
1,281 |
|
General and administrative expenses |
1,117 |
|
260 |
|
|
2,574 |
|
775 |
|
|
|
|
|
|
|
|
|
|
|
|
Agora, Inc.Condensed Consolidated
Statements of Cash Flows(Unaudited, in US$
thousands) |
|
|
|
|
|
Three Month Ended |
|
Nine Month Ended |
|
September 30, |
|
September 30, |
|
2020 |
2019 |
|
2020 |
2019 |
Cash flows from operating activities: |
|
|
|
|
|
Net income (loss) |
(2,925 |
) |
(1,113 |
) |
|
3,068 |
|
(3,835 |
) |
Adjustments to reconcile net income (loss) to net cash generated
from (used in) operating activities: |
|
|
|
|
|
Share-based compensation expense |
2,476 |
|
820 |
|
|
5,574 |
|
2,558 |
|
Depreciation of property and equipment |
1,196 |
|
520 |
|
|
2,946 |
|
1,291 |
|
Change in the fair value of short-term investments |
(33 |
) |
- |
|
|
(33 |
) |
- |
|
Changes in assets and liabilities: |
|
|
|
|
|
Accounts receivable |
(7 |
) |
(614 |
) |
|
(12,133 |
) |
(1,619 |
) |
Prepayments and other current assets |
(1,084 |
) |
15 |
|
|
(4,230 |
) |
83 |
|
Other non-current assets |
(601 |
) |
(31 |
) |
|
(599 |
) |
(14 |
) |
Accounts payable |
(661 |
) |
(239 |
) |
|
891 |
|
(324 |
) |
Advances from customers |
138 |
|
36 |
|
|
184 |
|
462 |
|
Taxes payable |
664 |
|
477 |
|
|
265 |
|
571 |
|
Accrued expenses and other current liabilities |
(1,097 |
) |
75 |
|
|
8,664 |
|
(544 |
) |
Net cash generated from (used in) operating activities |
(1,934 |
) |
(54 |
) |
|
4,597 |
|
(1,371 |
) |
Cash flows from investing activities: |
|
|
|
|
|
Purchase of short-term investments |
(225,143 |
) |
(4,294 |
) |
|
(225,143 |
) |
(13,899 |
) |
Proceeds from sale and maturity of short-term investments |
- |
|
2,862 |
|
|
- |
|
10,949 |
|
Purchase of property and equipment |
(3,210 |
) |
(1,213 |
) |
|
(9,531 |
) |
(3,622 |
) |
Net cash generated from (used in) investing activities |
(228,353 |
) |
(2,645 |
) |
|
(234,674 |
) |
(6,572 |
) |
Cash flows from financing activities: |
|
|
|
|
|
Proceeds from issuance of Series C+ convertible redeemable
preferred shares, net of the issuance costs of nil |
- |
|
- |
|
|
50,000 |
|
- |
|
Proceeds from the IPO and concurrent private placement, net of
underwriter discounts and commissions and other offering costs
paid |
(1,419 |
) |
- |
|
|
483,905 |
|
- |
|
Net cash provided by financing activities |
(1,419 |
) |
- |
|
|
533,905 |
|
- |
|
Effect of foreign exchange rate changes on cash, cash equivalents
and restricted cash |
634 |
|
(299 |
) |
|
351 |
|
(316 |
) |
Net increase (decrease) in cash, cash equivalents and restricted
cash |
(231,072 |
) |
(2,998 |
) |
|
304,179 |
|
(8,259 |
) |
Cash, cash equivalents and restricted cash at beginning of period
* |
640,934 |
|
103,337 |
|
|
105,683 |
|
108,598 |
|
Cash, cash equivalents and restricted cash at end of period ** |
409,862 |
|
100,339 |
|
|
409,862 |
|
100,339 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
Income taxes paid |
18 |
|
- |
|
|
742 |
|
411 |
|
Non-cash financing and investing activities: |
|
|
|
|
|
Accretion to redemption value of convertible redeemable preferred
shares |
- |
|
15,246 |
|
|
193,466 |
|
33,974 |
|
Payables for property and equipment |
173 |
|
341 |
|
|
173 |
|
341 |
|
Payables for deferred initial public offering cost |
277 |
|
- |
|
|
277 |
|
- |
|
|
|
|
|
|
|
* includes restricted cash balance |
80 |
|
80 |
|
|
80 |
|
80 |
|
** includes restricted cash balance |
80 |
|
80 |
|
|
80 |
|
80 |
|
|
|
|
|
|
|
|
|
|
|
|
Agora, Inc.Reconciliation of GAAP to
Non-GAAP Measures(Unaudited, in US$ thousands,
except share and per ADS amounts) |
|
|
|
|
|
Three Month Ended |
|
Nine Month Ended |
|
September 30, |
|
September 30, |
|
2020 |
2019 |
|
2020 |
2019 |
GAAP net income (loss) |
(2,925 |
) |
(1,113 |
) |
|
3,068 |
|
(3,835 |
) |
Add: |
|
|
|
|
|
Share-based compensation expense |
2,476 |
|
820 |
|
|
5,574 |
|
3,405 |
|
Non-GAAP net income (loss) |
(449 |
) |
(293 |
) |
|
8,642 |
|
(430 |
) |
|
|
|
|
|
|
Net income (loss) |
(2,925 |
) |
(1,113 |
) |
|
3,068 |
|
(3,835 |
) |
Excluding: |
|
|
|
|
|
Exchange rate gains (loss) |
(34 |
) |
40 |
|
|
(34 |
) |
53 |
|
Interest and investment income |
960 |
|
262 |
|
|
1,177 |
|
386 |
|
Income taxes |
(74 |
) |
(262 |
) |
|
(633 |
) |
(590 |
) |
Depreciation and amortization expense |
1,196 |
|
520 |
|
|
2,946 |
|
1,291 |
|
Share-based compensation expense |
2,476 |
|
820 |
|
|
5,574 |
|
3,405 |
|
Adjusted EBITDA |
(105 |
) |
187 |
|
|
11,078 |
|
1,012 |
|
|
|
|
|
|
|
Net cash generated from (used in) operating activities |
(1,934 |
) |
(54 |
) |
|
4,597 |
|
(1,371 |
) |
Purchase of property and equipment |
(3,210 |
) |
(1,213 |
) |
|
(9,531 |
) |
(3,622 |
) |
Free Cash Flow |
(5,144 |
) |
(1,267 |
) |
|
(4,934 |
) |
(4,993 |
) |
Net cash generated from (used in) investing activities |
(228,353 |
) |
(2,645 |
) |
|
(234,674 |
) |
(6,572 |
) |
Net cash provided by financing activities |
(1,419 |
) |
- |
|
|
533,905 |
|
- |
|
|
|
|
|
|
|
|
|
|
|
Agora (NASDAQ:API)
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From Mar 2024 to Apr 2024
Agora (NASDAQ:API)
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From Apr 2023 to Apr 2024