Agora's Parent Company Turns Around in 2024, with Q4 Net Income of $160,000

(Image credit: Photo by Lin Zhijia, TMTPost AGI Editor)

AsianFin -- Agora, Inc. (NASDAQ: API), the parent company of the real-time interaction technology firm, announced on Monday net profts of $160,000 in the fourth quarter, the first quarter to report positive earning profits.

The Q4 2024 and annual financial report, released on Monday, shows that in the fourth quarter of 2024, Agora, Inc. achieved a total revenue of $34.5 million, a decrease of 4.4% compared to $36 million in the fourth quarter of 2023; after adjustments for low-margin business, the revenue was $34.45 million, marking a year-over-year increase of 3.6%; under the Generally Accepted Accounting Principles (GAAP), Agora, Inc. reported a net profit of $160,000 (approximately RMB 1.1597 million) for the fourth quarter, marking the first time in over four years that the company has returned to profitability on a year-over-year basis, with the last occurrence being in the first fiscal quarter of 2020 before its IPO.

For the fiscal year 2024, Agora, Inc. reported total revenue of $133.3 million, a decrease of 5.9% from the previous year, which included $6.6 million from certain discontinued products, compared to $10.7 million in 2023; the net loss narrowed, with the company reporting a net loss of $42.7 million in 2024, compared to a loss of $87.2 million in 2023.

During the earnings call on the morning of February 25, Beijing time, Bin Zhao, founder and CEO of Agora, Inc., stated, "We are pleased to announce that thanks to revenue growth from new application scenarios and effective cost control, the company achieved profitability under GAAP in the fourth quarter of 2024."

Zhao Bin pointed out that generative AI presents us with transformative opportunities, especially in achieving real-time voice interaction between humans and AI models. Many large language models have yet to offer voice interaction capabilities, and those that do have not optimized the experience. To bridge this gap, the company has launched a Beta version of its conversational AI engine. This solution aims to provide natural conversational dynamics, including intelligent pausing and interruption handling, advanced voice processing features, and ultra-low latency.

"The generative AI revolution is advancing at an incredible pace. In recent months, we have witnessed groundbreaking developments from AI inference models to Google's multimodal breakthroughs, as well as remarkable open-source innovations like DeepSeek. This transformation presents extraordinary opportunities for our business," Zhao Bin stated during the earnings call. "We firmly believe that this groundbreaking innovation will accelerate the adoption of conversational AI across various industries and become a core driver of the company's future growth."

Specifically, Agora, Inc.'s business primarily consists of two segments: the domestic Shengwang and the overseas Agora.

In the fourth quarter, Agora reported revenues of $17.4 million, a 13.7% increase from $15.3 million in the fourth quarter of 2023; Shengwang's revenue was RMB 122.2 million ($17.1 million), a 17.6% decrease from RMB 148.3 million ($20.7 million) in the fourth quarter of 2023, which included revenue of RMB 19 million ($2.7 million) from certain terminal sales products.

Regarding customer scale, as of December 31, 2024, Shengwang's active customer count reached 1,979, an 8% year-over-year increase, with over 931,000 registered applications globally, a 25% year-over-year increase. Additionally, in the fourth quarter of 2024, the group generated net cash from operating activities of $4.5 million, compared to $3.7 million in the fourth quarter of 2023. Free cash flow for the quarter was $4.3 million, compared to $3.4 million in the same period.

For the full year of 2024, the company intensified efforts to reduce costs and enhance efficiency, with Shengwang's revenue reaching RMB 489.6 million (approximately $68.8 million), a 13.7% decrease from 2023, which included revenue of RMB 47.4 million (approximately $6.6 million) from certain terminal sales products, compared to RMB 75.3 million (approximately $10.7 million) in 2023.

It is worth noting that Agora, Inc. is increasing its investment in research and development. According to the financial report, the R&D expenses for 2024 are projected to be $80.3 million, reflecting a 3.4% increase compared to 2023. On the other hand, sales and marketing expenses are expected to be $27.2 million, a 19.8% decrease from $34 million in 2023. This reduction is primarily attributed to factors such as restructuring, optimization, equity incentives, and severance costs.

Currently, both Shengwang and Agora are focused on building the "critical infrastructure for AI voice agents" (We are a Critical Infra for AI Voice Agents). The company’s TEN (Transformative Extensions Network) service has already been adopted by AI enterprises and products such as DeepSeek, Alibaba's Tongyi Qwen, Step's Jiexue Xingchen, MiniMax, Amazon Bedrock, Baidu, and iFlytek.

On February 25, during the earnings call, Zhao Bin stated that AI is bringing more activity globally and unlocking the potential of the international market. Following the launch of TEN, the company has received significant interest from customers and is actively exploring opportunities for collaboration. Overall, in terms of demand, especially with the release of many open-source models, there is growing interest from developers and customers around artificial intelligence.

"Our conversational AI engine products are highly suitable for building application-based voice AI agents or exploring opportunities in voice artificial intelligence. We see tremendous potential in several use cases, such as companionship in applications and IoT devices, including companion robots and smart toys for children," Zhao Bin said.

Zhao Bin further explained that conversational AI enablement can be categorized into two types: improving the efficiency of service agents and saving time. Meanwhile, companionship is primarily for entertainment, potentially allowing people to spend more time receiving better emotional support or fulfilling other social needs.

"We’ve observed that companionship applications are particularly active, especially in IoT devices, and educational use cases are also emerging as a trend. As a result, the company has identified a genuine growth trajectory that will enable our financial performance to continue improving over the next two years," Zhao Bin stated.

Looking ahead to 2025, Agora, Inc. announced that it will continue focusing on improving operational efficiency and driving sustainable and profitable business growth. For the first quarter of 2025, Agora, Inc. has provided revenue guidance of $31 million to $33 million, representing a year-over-year growth rate of 4.4% to 11.1%, which is an acceleration compared to the revenue growth in Q4 2024.

Bin Zhao emphasized that Agora, Inc. will continue to enhance the quality capabilities of its language models. Over the next two years, including advancements in multimodal or voice-based conversations, AI experiences are expected to evolve into more practical use cases,with multimodal understanding further improving AI interaction capabilities and efficiency.

Driven by the AI boom, Agora, Inc.'s stock price has been steadily recovering. As of the close of trading on February 24, the stock has risen 28.15% year-to-date and achieved a 103.64% increase over the past 12 months.

(Author: Lin Zhijia)