• Agora, Inc. Reports Third Quarter 2021 Financial Results

    ソース: Nasdaq GlobeNewswire / 15 11 2021 17:30:00   America/New_York

    SANTA CLARA, Calif., Nov. 15, 2021 (GLOBE NEWSWIRE) -- 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, 2021.

    “We delivered another quarter of strong revenue growth, underpinned by the continued adoption of our real-time engagement platform by developers,” said Tony Zhao, founder, chairman and CEO of Agora. “At our recent RTE 2021 conferences in the United States and China, I was overwhelmed by the enthusiasm from developers around the world for real-time engagement technology, and I’m very excited about the innovative applications they are building with our platform, such as live audio cast, virtual concert and metaverse. In this quarter, we released several important new products, such as the full-path accelerator, and we will continue to expand our product portfolio to empower more real-time engagement possibilities.”

    Third Quarter 2021 Highlights

    • Total revenues for the quarter were $45.0 million, an increase of 46.0% from $30.8 million in the third quarter of 2020.
    • Active Customers as of September 30, 2021 were 2,564, excluding those for Easemob, an increase of 41.3% from 1,815 as of September 30, 2020.
    • Constant Currency Dollar-Based Net Expansion Rate, excluding Easemob, was 104% for the trailing 12-month period ended September 30, 2021.
    • Net loss for the quarter was $21.1 million, compared to net loss of $2.9 million in the third quarter of 2020. After excluding share-based compensation expenses, acquisition related expenses, amortization expenses of acquired intangible assets and income tax related to acquired intangible assets, non-GAAP net loss for the quarter was $11.4 million, compared to non-GAAP net income of $0.6 million in the third quarter of 2020. Adjusted EBITDA for the quarter was negative $9.1 million, compared to $1 million in the third quarter of 2020.
    • Total cash, cash equivalents and short-term investments as of September 30, 2021 was $767.4 million.
    • Net cash used in operating activities for the quarter was $14.0 million, compared to net cash generated from operating activities of $1.9 million in the third quarter of 2020. Free cash flow for the quarter was negative $15.6 million, compared to negative $5.1 million in the third quarter of 2020.

    Third Quarter 2021 Financial Results

    Revenues
    Total revenues were $45.0 million in the third quarter of 2021, an increase of 46.0% from $30.8 million in the same period last year, primarily due to increased usage of our video and voice products as a result of our business expansion and usage growth in emerging use cases.

    Cost of Revenues
    Cost of revenues was $15.7 million in the third quarter of 2021, an increase of 35.5% from $11.6 million in the same period last year, primarily due to increase in bandwidth and co-location costs and depreciation of servers and network equipment as we continue to scale our business.

    Gross Profit and Gross Margin
    Gross profit was $29.3 million in the third quarter of 2021, an increase of 52.4% from $19.3 million in the same period last year. Gross margin was 65.2% in the third quarter of 2021, an increase of 2.8% from 62.4% in the same period last year, primarily due to the implementation of technical and infrastructural optimizations.

    Operating Expenses
    Operating expenses were $50.4 million in the third quarter of 2021, an increase of 116.9% from $23.2 million in the same period last year.

    • Research and development expenses were $29.7 million in the third quarter of 2021, an increase of 138.3% from $12.4 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 $1.6 million in the third quarter of 2020 to $5.9 million in the third quarter of 2021, as well as the consolidation of Easemob’s research and development team.
    • Sales and marketing expenses were $12.7 million in the third quarter of 2021, an increase of 99.9% from $6.4 million in the same period last year, primarily due to increased personnel costs as we continue to build our sales and marketing team, including an increase in share-based compensation from $0.5 million in the third quarter of 2020 to $1.3 million in the third quarter of 2021, as well as higher advertising expenses compared to the prior year.
    • General and administrative expenses were $8.0 million in the third quarter of 2021, an increase of 81.7% from $4.4 million in the same period last year, primarily due to increased personnel costs as we continue to build our administration team, as well as higher professional services expenses compared to the prior year.

    Other Operating Income
    Other operating income was $0.2 million in the third quarter of 2021, flat compared to the same period last year.

    Loss from Operations
    Loss from operations was $20.8 million in the third quarter of 2021, compared to $3.8 million in the same period last year.

    Interest Income
    Interest income was $2.2 million in the third quarter of 2021, compared to $1.0 million in the same period last year, primarily due to an increase in the average balance of cash and cash equivalents and short-term investments due to proceeds from the private placement in the first quarter of 2021.

    Investment Loss
    Investment loss was $2.3 million in the third quarter of 2021, primarily due to an investment loss of an equity investment sold in the third quarter of 2021, whereas there were no material investments in the same period last year.

    Net Loss
    Net loss was $21.1 million in the third quarter of 2021, compared to $2.9 million in the same period last year.

    Net Loss Attributable to Ordinary Shareholders
    Net loss attributable to ordinary shareholders was $21.1 million in the third quarter of 2021, compared to $2.9 million in the same period last year.

    Net Loss per American Depositary Share
    Net loss per American Depositary Share (“ADS”)1 was $0.19 in the third quarter of 2021, compared to $0.03 in the same period last year.

    Executive Leadership Update

    Agora today announced that Reggie Yativ, Chief Revenue Officer and Chief Operating Officer of Agora Lab, Inc., a wholly owned subsidiary of Agora, will depart at the end of the year for personal reasons. Mr. Yativ will transition his operational responsibilities to Stanley Wei, Agora’s Chief Strategy Officer, effective November 15, 2021.

    “Working closely with Tony and the team around the world over the past four years, I feel extremely proud of what we have accomplished,” said Reggie Yativ. “We have been able to bring the vision of real-time engagement to life, and I feel very fortunate to be able to participate in this amazing journey of turning Agora into a real global organization. I wish Agora and all my colleagues the very best.”

    “We thank Reggie for his dedication and hard work,” said Tony Zhao, founder, chairman and CEO of Agora, “Reggie’s helped us develop leaders across the organization who are ready to take on additional responsibilities, and we will continue to strengthen our team in the US and key international markets. We wish Reggie success in his future endeavors.”

    1 One ADS represents four Class A ordinary shares of Agora.

    Financial Outlook

    Based on currently available information, Agora expects total revenues for the year ending December 31, 2021 to be between $163 million and $165 million. This outlook reflects Agora’s current and preliminary views on the market and operational conditions, and the outlook ranges for the year ending December 31, 2021 reflect various assumptions that are subject to change based on uncertainties, including but not limited to the impact of the COVID-19 pandemic and the new regulation on the K12 academic tutoring sector in China.

    Earnings Call

    Agora will host a conference call to discuss the financial results at 5:00 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 2021 Financial Results
    Conference ID: 5319139
    Direct Event online registration: http://apac.directeventreg.com/registration/event/5319139
    Please 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 15, 2021 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 the 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, acquisition related expenses, amortization expenses of acquired intangible assets and income tax related to acquired intangible assets. Agora believes that such non-GAAP financial measures help identify underlying trends in its business that could otherwise be distorted by the effects of such share-based compensation expenses, acquisition related expenses, amortization expenses of acquired intangible assets and income tax related to acquired intangible assets that it includes in its cost of revenues, total operating expenses and net income (loss). Agora believes that all such non-GAAP financial measures also provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by its 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 expenses, acquisition related expenses, amortization expenses of acquired intangible assets and income tax related to acquired intangible assets.

    Adjusted EBITDA

    Agora defines Adjusted EBITDA as net income (loss) before exchange gain (loss), interest income, investment income (loss), income taxes, depreciation and amortization, and adjusted to exclude the effects of share-based compensation expenses, acquisition related expenses, amortization expenses of acquired intangible assets and income tax related to acquired intangible assets.

    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.

    Impact of the Recently Adopted Accounting Pronouncement

    Agora adopted ASU 2016-02, Leases (“ASC 842”) beginning January 1, 2021 and elected to use the modified retrospective method with the optional transition that allows for a cumulative-effect adjustment to the opening balance of retained earnings recorded on January 1, 2021, with no adjustments to prior periods presented. No cumulative effect adjustment to the opening balance of retained earnings was required. Upon adoption of ASC 842 on January 1, 2021, Agora recognized right of use assets as well as lease liabilities of $6.5 million for operating leases. Agora does not have any finance leases. The adoption of the new guidance did not have a material effect on our results of operations, financial condition or liquidity.

    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 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 app, anytime and anywhere. Agora’s cloud platform provides developers simple, flexible and powerful application programming interfaces, or APIs, to embed real-time video, voice and chat experiences into their applications. Agora maintains dual headquarters in Shanghai, China and Santa Clara, California.

    For more information, please visit: www.agora.io.


    Agora, Inc.
    Condensed Consolidated Balance Sheets
    (Unaudited, in US$ thousands)

     As of As of
     September 30, December 31,
     2021  2020 
    Assets   
    Current assets:   
    Cash and cash equivalents219,249  111,218 
    Short-term investments548,190  524,220 
    Accounts receivable, net35,967  27,840 
    Prepayments and other current assets8,406  7,459 
    Contract assets978  - 
    Total current assets812,790  670,737 
    Property and equipment, net18,954  16,754 
    Operating lease right-of-use assets7,562  - 
    Intangible assets7,252  209 
    Goodwill56,142  3,089 
    Long-term investments53,396  - 
    Deferred tax assets514  511 
    Other non-current assets2,529  1,604 
    Total assets959,139  692,904 
        
    Liabilities and shareholders' equity   
    Current liabilities:   
    Accounts payable5,059  7,721 
    Advances from customers7,934  1,339 
    Taxes payable1,525  2,172 
    Current operating lease liabilities3,378  - 
    Accrued expenses and other current liabilities56,661  25,075 
    Total current liabilities74,557  36,307 
    Long-term payable838  82 
    Long-term operating lease liabilities3,984  - 
    Deferred tax liabilities1,073  52 
    Total liabilities80,452  36,441 
        
    Shareholders' equity:   
    Class A ordinary shares37  33 
    Class B ordinary shares8  8 
    Additional paid-in-capital1,090,794  818,428 
    Accumulated other comprehensive income2,975  1,941 
    Accumulated deficit(215,127) (163,947)
    Total shareholders' equity878,687  656,463 
    Total liabilities and shareholders’ equity959,139  692,904 
          

    Agora, Inc.
    Condensed Consolidated Statements of Comprehensive Income (Loss)
    (Unaudited, in US$ thousands, except share and per ADS amounts)

     Three Months Ended Nine Months Ended
     September 30, September 30,
     20212020  2021 2020 
    Real-time engagement service revenues42,390 30,620  122,234 99,738 
    Other revenues2,648 227  5,362 573 
    Total revenues45,038 30,847  127,596 100,311 
    Cost of revenues15,689 11,583  49,016 34,042 
    Gross profit29,349 19,264  78,580 66,269 
    Operating expenses:     
    Research and development29,668 12,449  81,887 35,056 
    Sales and marketing12,734 6,372  32,478 18,287 
    General and administrative7,996 4,401  20,988 11,342 
    Total operating expenses50,398 23,222  135,353 64,685 
    Other operating income210 181  840 974 
    (Loss) income from operations(20,839)(3,777) (55,933)2,558 
    Exchange loss(189)(34) (208)(34)
    Interest income2,154 960  6,280 1,177 
    Investment loss(2,314)-  (967)- 
    (Loss) income before income taxes(21,188)(2,851) (50,828)3,701 
    Income taxes93 (74) (353)(633)
    Net (loss) income(21,095)(2,925) (51,181)3,068 
    Less: cumulative undeclared dividends on convertible redeemable preferred shares- -  - (6,715)
    Less: accretion on convertible redeemable preferred shares to redemption value- -  - (193,466)
    Net loss attributable to ordinary shareholders(21,095)(2,925) (51,181)(197,113)
    Other comprehensive loss:     
    Foreign currency translation adjustments493 1,587  882 1,117 
    Unrealized gain on available-for-sale debt securities65 -  152 - 
    Total comprehensive loss attributable to ordinary shareholders(20,537)(1,338) (50,147)(195,996)
          
    Net loss per ADS attributable to ordinary shareholders, basic and diluted(0.19)(0.03) (0.47)(3.55)
          
    Weighted-average shares used in computing net loss per ADS attributable to ordinary shareholders, basic and diluted443,732,607 407,297,929  438,984,051 222,127,507 
          
    Share-based compensation expenses* included in:     
    Cost of revenues152 104  456 339 
    Research and development expenses5,873 1,613  15,053 3,902 
    Sales and marketing expenses1,326 502  3,603 1,558 
    General and administrative expenses1,179 1,318  4,017 3,229 

    * In the fourth quarter of 2020, Agora formally implemented the Venture Partners Plan, which was a new incentive plan that can be settled in shares or cash at the discretion of the plan administrator. Therefore, $1.2 million, $1.1 million and $1.1 million accrued in the first, second and third quarter of 2020, respectively, was reclassified from cash bonus expenses to share-based compensation expenses to reflect the costs related to the new incentive plan.


    Agora, Inc.
    Condensed Consolidated Statements of Cash Flows
    (Unaudited, in US$ thousands)

     Three Months Ended Nine Months Ended
     September 30, September 30,
     2021 2020  2021 2020 
    Cash flows from operating activities:     
    Net (loss) income(21,095)(2,925) (51,181)3,068 
    Adjustments to reconcile net (loss) income to net cash (used in) generated from operating activities:     
    Share-based compensation expenses8,530 3,537  23,129 9,028 
    Depreciation of property and equipment1,994 1,196  5,978 2,946 
    Amortization of intangible assets574 -  1,355 - 
    Deferred tax expense(84)-  (199)- 
    Amortization of right-of-use asset and interest on lease liabilities985 -  2,727 - 
    Change in the fair value of investments2,345 (33) 1,064 (33)
    Interest income on debt securities(101)-  (194)- 
    Share of results of equity method investments(66)-  (66)- 
    Changes in assets and liabilities, net of effect of acquisition:     
    Accounts receivable(2,698)(7) (7,528)(12,133)
    Contract assets(97)-  (273)- 
    Prepayments and other current assets(344)(1,084) (897)(4,230)
    Other non-current assets(344)(601) (299)(599)
    Accounts payable(1,611)(661) (1,476)891 
    Advances from customers49 138  (121)184 
    Taxes payable(167)664  (732)265 
    Operating lease liabilities(1,150)-  (2,972)- 
    Deferred income185 -  185 - 
    Accrued expenses and other liabilities(887)(2,158) 6,450 5,210 
    Net cash (used in) generated from operating activities(13,982)(1,934) (25,050)4,597 
    Cash flows from investing activities:     
    Purchase of short-term investments(42,298)(225,143) (432,745)(225,143)
    Proceeds from sale and maturity of short-term investments157,834 -  407,912 - 
    Purchase of property and equipment(1,638)(3,210) (10,081)(9,531)
    Purchase of intangible assets(42)-  (243)- 
    Purchase of long-term investment(20,759)-  (47,111)- 
    Cash paid for acquisition, net of cash received(20,902)-  (36,630)- 
    Net cash generated from (used in) investing activities72,195 (228,353) (118,898)(234,674)
    Cash flows from financing activities:     
    Proceeds from the private placement, net of issuance costs paid- -  249,950 - 
    Proceeds from issuance of Series C+ convertible redeemable preferred shares, net of 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 
    Proceeds from exercise of employees’ share options382 -  1,835 - 
    Net cash provided by (used in) financing activities382 (1,419) 251,785 533,905 
    Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash194 634  270 351 
    Net increase (decrease) in cash, cash equivalents and restricted cash58,789 (231,072) 108,107 304,179 
    Cash, cash equivalents and restricted cash at beginning of period *160,616 640,934  111,298 105,683 
    Cash, cash equivalents and restricted cash at end of period **219,405 409,862  219,405 409,862 
    Supplemental disclosure of cash flow information:     
    Income taxes paid- 18  966 742 
    Cash payments included in the measurement of operating lease liabilities1,150 -  2,972 - 
    Right-of-use assets obtained in exchange for operating lease obligations2,148 -  3,636 - 
    Non-cash financing and investing activities:     
    Payables for acquisition- -  18,539 - 
    Proceeds receivable from exercise of employees’ share options33 -  33 - 
    Payables for property and equipment917 173  917 173 
    Payables for long-term investment5,897 -  5,897 - 
    Accretion to redemption value of convertible redeemable preferred shares- -  - 193,466 
    Payables for deferred initial public offering cost- 277  - 277 


    * includes restricted cash balance    		156 80  80 80 
    ** includes restricted cash balance156 80  156 80 
              

    Agora, Inc.
    Reconciliation of GAAP to Non-GAAP Measures
    (Unaudited, in US$ thousands, except share and per ADS amounts)

     Three Months Ended Nine Months Ended
     September 30, September 30,
     2021 2020  2021 2020 
    GAAP net (loss) income(21,095)(2,925) (51,181)3,068 
    Add:     
    Share-based compensation expenses8,530 3,537  23,129 9,028 
    Acquisition related expenses656 -  5,355 - 
    Amortization expenses of acquired intangible assets556 -  1,305 - 
    Income tax related to acquired intangible assets(84)-  (199)- 
    Non-GAAP net (loss) income(11,437)612  (21,591)12,096 
          
    Net (loss) income(21,095)(2,925) (51,181)3,068 
    Excluding:     
    Exchange loss(189)(34) (208)(34)
    Interest income2,154 960  6,280 1,177 
    Investment loss(2,314)-  (967)- 
    Income taxes93 (74) (353)(633)
    Depreciation of property and equipment1,994 1,196  5,978 2,946 
    Share-based compensation expenses8,530 3,537  23,129 9,028 
    Acquisition related expenses656 -  5,355 - 
    Amortization expenses of acquired intangible assets556 -  1,305 - 
    Adjusted EBITDA(9,103)956  (20,166)14,532 
          
    Net cash (used in) generated from operating activities(13,982)(1,934) (25,050)4,597 
    Purchase of property and equipment(1,638)(3,210) (10,081)(9,531)
    Free Cash Flow(15,620)(5,144) (35,131)(4,934)
    Net cash generated from (used in) investing activities72,195 (228,353) (118,898)(234,674)
    Net cash provided by (used in) financing activities382 (1,419) 251,785 533,905 


    Investor Contact:
Fionna Chen
investor@agora.io

Media Contact:
Suzanne Nguyen
press@agora.io

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