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Agora, Inc. (API)
NASDAQ:API
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Agora
(NASDAQ:API)
54Neutral
Positive Factors
Profitability Improvement
Agora Inc. achieved a net profit of US$0.2 million in 4Q24, with a net profit margin of 0.5% compared to -7.2% in 4Q23.
Revenue Recovery
Solid 1Q25 guidance implies promising revenue recovery in FY25E.
Technological Advancements
Agora released a Conversational AI SDK for OpenAI, which can integrate with OpenAI’s new Realtime API to enable natural voice interaction with AI.
Negative Factors
Profitability Challenges
The company's profitability improvement is expected to take time due to limited room for operating expense reduction.
Stock Rating
The stock rating for Agora is reiterated as Neutral, indicating cautious optimism but not strong enough for a buy recommendation.
Agora (API) vs. S&P 500 (SPY)
Market Cap
$399.61M
Dividend YieldN/A
Average Volume (3M)964.48K
Price to Earnings (P/E)―
Beta (1Y)2.40
Revenue Growth-5.85%
EPS Growth47.08%
CountryUS
Employees790
SectorTechnology
Sector Strength43
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.46
Shares Outstanding91,975,000
10 Day Avg. Volume529,628
30 Day Avg. Volume964,481
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.02
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$7.10Price Target Upside63.59% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Agora Business Overview & Revenue Model
Company DescriptionAgora, Inc. provides Real-Time Engagement Platform-as-a-Service (RTE-PaaS) in the People's Republic of China, the United States, and internationally. The company RTE-PaaS offers developers with software tools to embed real-time video, voice, and messaging functionalities into applications. Its products include video calling, voice calling, interactive live streaming, chat, signaling. Acceleration products; and extensions, which comprise interactive whiteboard, recording, analytics, and extensions marketplace products to enable developers to launch RTE in specific use cases and verticals. The company also provides Flexible Classroom that offers a low-code application Platform as a Service; and App Builder, no-code application platform. Its real-time engagement products are delivered through its Software-Defined Real-Time Network, which is a virtual network overlay on top of the public internet. The company serves social, entertainment, gaming, education, enterprise solutions, e-commerce, financial services, healthcare, and IoT industries. Agora, Inc. was incorporated in 2013 and is headquartered in Shanghai, the People's Republic of China.
How the Company Makes MoneyAgora makes money through a usage-based pricing model, where customers pay based on the minutes of voice and video engagement facilitated by Agora's APIs. This model allows for scalable pricing tailored to the needs of different businesses, from startups to large enterprises. Key revenue streams include licensing fees for API usage and potential subscription models for ongoing access to premium features. Additionally, Agora may form partnerships with tech companies and app developers to integrate their services, which can drive significant revenue through increased API usage. Factors contributing to its earnings include the growing demand for real-time communication solutions, the proliferation of digital platforms requiring interactive features, and the company's ability to provide reliable, low-latency connectivity across various devices and networks.
Agora Financial Statement Overview
Summary
Agora faces significant financial challenges, characterized by persistent losses and declining revenue growth. Despite a strong equity position and low leverage, the company struggles with profitability and cash flow generation, raising concerns about its ability to sustain operations without improvements in revenue and cost management. The negative trends in key financial metrics necessitate strategic interventions to drive growth and enhance operational efficiency.Income Statement
Agora's income statement reveals a challenging financial trajectory with consistent net losses over the past periods. The gross profit margin for TTM is 63.17%, which is strong, indicating efficient cost management. However, the net profit margin remains negative at -33.73% in TTM, showing a struggle to achieve profitability. Revenue has decreased by approximately 4.74% from 2023 to TTM, highlighting a downward trend in growth. The consistent negative EBIT and EBITDA margins reflect ongoing operational challenges.45
Neutral
Balance Sheet
Agora's balance sheet shows a solid financial position with a high equity base. The debt-to-equity ratio is low at 0.066, indicating minimal leverage and a strong reliance on equity financing. However, return on equity is negative due to persistent net losses. The equity ratio is 83.38%, suggesting strong financial stability with significant asset backing from equity.60
Neutral
Cash Flow
Cash flow analysis highlights significant challenges in generating positive cash flows. The operating cash flow to net income ratio is unfavorable at -0.33 for TTM, indicating inefficiency in converting earnings to cash. Free cash flow remains negative, highlighting potential liquidity concerns. The free cash flow to net income ratio is also negative, consistent with operational inefficiencies.40
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 134.84M | 141.54M | 160.67M | 167.98M | 133.56M | 64.43M | Gross Profit |
| 85.17M | 89.47M | 99.42M | 104.01M | 86.36M | 44.01M | EBIT |
| -57.26M | -87.32M | -103.82M | -80.69M | -5.19M | -6.09M | EBITDA |
| -69.82M | -78.27M | -104.08M | -61.63M | -731.00K | -4.22M | Net Income Common Stockholders |
| -45.50M | -87.22M | -120.62M | -72.69M | -3.11M | -6.18M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 260.77M | 216.65M | 427.71M | 755.30M | 635.44M | 105.60M | Total Assets |
| 759.31M | 674.60M | 800.72M | 945.00M | 692.90M | 131.16M | Total Debt |
| 5.16M | 15.20M | 2.27M | 7.41M | 0.00 | 0.00 | Net Debt |
| -45.06M | -21.69M | -43.40M | -278.26M | -111.22M | -105.60M | Total Liabilities |
| 56.85M | 69.85M | 72.45M | 78.74M | 36.44M | 18.48M | Stockholders Equity |
| 702.46M | 604.75M | 728.26M | 866.26M | 656.46M | 112.68M |
| Cash Flow | Free Cash Flow | ||||
| -46.68M | -30.46M | -254.25M | -32.47M | -6.31M | -4.10M | Operating Cash Flow |
| -15.09M | -13.61M | -44.38M | -20.00M | 6.56M | 706.42K | Investing Cash Flow |
| -15.62M | 56.64M | -151.06M | -57.69M | -535.05M | -3.35M | Financing Cash Flow |
| 33.32M | -52.37M | -42.15M | 251.94M | 533.64M | 0.00 |
Agora Technical Analysis
Negative
4.34
Price Trends
5.45
Negative
4.97
Negative
3.72
Positive
Market Momentum
-0.28
Positive
36.45
Neutral
5.15
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For API, the sentiment is Negative. The current price of 4.34 is below the 20-day moving average (MA) of 5.10, below the 50-day MA of 5.45, and above the 200-day MA of 3.72, indicating a neutral trend. The MACD of -0.28 indicates Positive momentum. The RSI at 36.45 is Neutral, neither overbought nor oversold. The STOCH value of 5.15 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for API.
Agora Risk Analysis
Agora disclosed 86 risk factors in its most recent earnings report. Agora reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Agora Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $22.84B | 23.37 | 11.92% | ― | 3.05% | 55.96% | |
63 Neutral | $15.11B | ― | -1.24% | ― | 7.32% | 88.51% | |
62 Neutral | $2.10B | ― | -2.21% | ― | 14.44% | 84.58% | |
60 Neutral | $2.32B | ― | 16.58% | ― | 8.99% | 63.84% | |
60 Neutral | $382.70M | ― | -2.14% | ― | 24.52% | 61.08% | |
58 Neutral | $21.03B | 10.28 | -16.29% | 2.47% | 4.45% | -23.80% | |
54 Neutral | $399.61M | ― | -7.26% | ― | -5.85% | 47.08% |
* Technology Sector Average
Performance Comparison
API
Agora
4.34
1.79
70.20%
RNG
RingCentral
25.57
-8.17
-24.21%
FIVN
Five9
27.75
-33.60
-54.77%
TWLO
Twilio
98.98
36.53
58.49%
BAND
Bandwidth
13.37
-4.13
-23.60%
ZM
Zoom Video Communications
74.84
10.11
15.62%
Agora Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: -22.50% | Next Earnings Date: May 26, 2025
Earnings Call Sentiment Positive
The earnings call presents a generally positive outlook for Agora, with significant achievements such as reaching GAAP profitability, strong revenue growth in core areas, and the launch of an innovative AI product. However, challenges remain, particularly in maintaining revenue growth for Xiong Wang amidst regulatory and economic pressures. Despite these challenges, the company's strong cash position and strategic initiatives in AI and share repurchases suggest a positive trajectory.Highlights
GAAP Profitability Achieved
Agora achieved GAAP profitability for the first time in several years, marking a significant milestone for the company.
Revenue Growth
Total revenue in the fourth quarter was $34.5 million, up 4% year over year and 9.1% quarter over quarter, driven by new use cases such as live shopping and entertainment.
Growth in Core Revenues
Core revenues were $17.4 million in Q4, an increase of 10.8% quarter over quarter and 13.7% year over year.
Launch of Conversational AI Engine
Agora launched a new Conversational AI engine, which allows developers to create interactive voice experiences with AI models, potentially accelerating AI adoption across industries.
Strong Cash Position
Agora ended Q4 with $363.8 million in cash, cash equivalents, bank deposits, and financial products issued by banks.
Share Repurchase Program Extension
The board authorized a 12-month extension of the share repurchase program, reflecting confidence in the company's long-term growth potential.
Lowlights
Decreased Revenue from Xiong Wang
Xiong Wang revenue decreased 5.4% year over year, primarily due to slowing demand from social and entertainment verticals due to regulation and general economic conditions.
Slight Decrease in Gross Margin
The gross margin slightly decreased by 0.1% quarter over quarter and 0.8% year over year, after excluding certain end-of-sale products.
Limited Growth Forecast
The revenue guidance for Q1 2025 is between $31 million and $33 million, reflecting only a moderate increase from the previous year when excluding certain low-margin products.
Company Guidance
During the Agora, Inc. Fourth Quarter and Fiscal Year 2024 Financial Results Conference Call, the company provided guidance for the first quarter of 2025, projecting total revenues between $31 million and $33 million, compared to $29.7 million in the first quarter of 2024. This expectation excludes revenues from certain end-of-sale low-margin products. Agora aims to maintain sustained profitability throughout 2025, driven by strategic initiatives, operational efficiency, and opportunities in the generative AI market. The company achieved GAAP profitability in the fourth quarter of 2024 with a total revenue of $34.5 million, marking a 9.1% increase quarter over quarter and 3.6% year over year, excluding revenues from certain low-margin products. Agora's core revenues for the fourth quarter were $17.4 million, reflecting a 10.8% increase quarter over quarter and a 13.7% increase year over year. Gross margin for the quarter stood at 66.6%, with operating expenses at $28.5 million, down from $32.6 million in Q2 2024. Net income was $0.2 million, achieving a 0.5% net income margin. The company also extended its share repurchase program through February 2026, underscoring confidence in long-term growth potential.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.