API - Earnings call transcript Q4 2021

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Operator

Good day and thank you for standing by. Welcome to Agora, Inc. Fourth Quarter 2021 Financial Results Conference Call. [Operator Instructions]. I would now like to hand the call over to your first speaker today, Ms. Chen. Fionna you. Thank ahead. Please go

Fionna Chen

operator. joining Good year thank you, everyone, earnings morning, for Agora's for us full call. you fourth conference Thank and quarter XXXX and

of SEC Our press at investor.agora.io. on filings, today's website call and our earnings IR can release, a results found be replay

Joining are earnings can results be Founder, in our Tony Chairman Jingbo CEO; and non-GAAP me our GAAP CFO. and release. today press Wang, Reconciliations Zhao, and between our found

financial forward-looking and business predictions with materially. During other we obligation initial the contained any and performance that filings statements on this future to will to prospectus, about affect These may detail Hi, SEC, and release only may make financial These we turn to events are forward-looking in statements what of are factors subject call, factors Tony. could relating call. including our that in risks, trends. and and and differ performance our and Tony? today discuss statements today's over actual remains results future our our assumptions, we uncertainties, other results forward-looking based we statements believe no press are let information offering. Agora me on that, other final to risk earnings which With update in the public have today's our and

Tony Zhao

App much Agora am is for team board, I vertical earnings to was our drive forward. a XXXX across Agora. the to data.ai, proud that I year how call. have to to how you, globally video opportunities exciting course, Thank and our welcome in great large have and end SDK and innovation our or real-time fostered much according It every together the see a as real-time Yes. voice challenges everyone more Agora say, Fionna, to to engagement how we installed worked am of platform. of hard of extremely Annie. see with than previously margin, applications other were known XXXX, of and any by the SDK we proud as very accomplished

what and connection, a norm real-life. are pioneer Our and virtually and leader human emotional and powering product real-time innovation are Today, technology in in distinguish we the the both new of engagement. as engagement the

let's earnings; quarter we our shift Now strong to result. another of delivered

for reached than the year-over-year. $XX.X quarter XXX,XXX revenue of Our the was number up our million, our nearly year-over-year. first nearly on adding platform, apps had X,XXX, we XXX active XX% and customers more registered of At December, end

minutes total full quarter. APAC key XXXX, our the excluding growth increase from billion and For engagement real-time we If more $XXX China, United this States strongest which revenue million, markets, XXX of from our in year revenue in of at than of was the look an we powered XXXX. recorded XX% and represents

a with online number platforms recent metaverse etcetera, tutoring report, our K-XX companies video audio this next cast, Asia, from leading many event IDC powering in many China, providers In and on than seven which Korea, leadership sectors now new revenues impact In one and are interactive the demonstrated leading e-commerce, many clearly and the South We remained platforms other education live combined. as South after-school the provider despite API was in U.S. share in market highly ranked real-time the of by market Agora greater healthy. regulation voice the quarter, our virtual innovative

XX%, China our case our diversified. across to use source regions, usage outside history. more the revenue revenue also of expand continued was real-time become this in highest contribution from engagement quarter, As In have

In across nearly Agora has this amazing and Blue the technology, a the students the it doctors teachers, Frog, most is between and you providers and and expanding between from France, friends all leveraged across to Agora They platform powered on through cases important XXXX focused a TelePort for the on In In platform the named term, as revenue, global well way their patients, longer robot bit scientific interact by built been to France company double Frog for Netherlands, Robotics. closer the interactive new better. system use Moving this the changing metaverse technology Clara, Lady use their the powering with in to Buddy. one cases; was is will families hybrid supporter Agora. staff. obtain to headquarters, of live this system case is to in my Maryland's Conference across embedded hospitalized XXXX, medical In named classmates, in this, and Buddy the children how California back-end is X,XXX a favorite This of deployed emotional and information. Agora integrated world of program Blue patient University app is First and more event video country country. believe Buddy will Agora's from used audio a as into medical I our the school be conferences, the use and engagement Santa departments. engagement TelePort. seeing much become home, XX Compass, XXX and robot of streaming one for all fully

solutions in for investment and metaverse; field MetaKTV We have recently MetaChat. for example, several made tailor-built significant and this announced

solution in based all and enables on lights that solution this karaoke hundreds MetaKTV call, our to sing of and are In stage an of usage able earnings users karaoke singers copyright world, cheer expansion is room, in virtual hear soundtracks. for in old-school and the sing audiences, the each our time. on thousands dance front latency and of wave to or I ultra-low our users at rendering. and party online real top virtual screens, with an together previous technology mentioned other MetaKTV reproduces XD karaoke stages, solution it and Our in one-stop of that with beautiful and of avatar see room

session latest and customize other each chat hundreds Both MetaKTV through are and space. with bar by a spatial different avatars to of environment inside very I audio technical the game a investments which sound technology play. engage because XD a virtual as feel and options, in move audio, customers. spatial makes our is user our fast have the sounds the the the create virtual all go-to-market is or users technology space. real. by These locations from believe technology, audio and with real-time Despite the in important perceive XD friends supported by challenging voice task, during coming shared will this users Technically, descents allows to more users virtual generated for in Our that's they around challenge, live engaged, largest users and MetaKTV spatial updated or enabled users virtual -- a to R&D cast world MetaChat spatial whether space. meet in an With solution be audio present are the the that XD and feel cafe, virtual our in need allows

cases RTE the We leveraging many technology. from our all over innovative are seeing use world, metaverse

all experience we built helped A AR at Brazil devices. karaoke this and the XRSPACE PartyOn, enable in on and you I It's to Oasis, example, solution. by platform welcome called home, company popular metaverse a users' an smartphones for yourself. powered online available For MetaKTV platform to called virtual our house parties

success. security, our system. ISO-XXXXX were information certificate Now, protection; compliance, Recently, awarded we privacy on they to as moving onto management security our and the critical always, are

Fox, attacks. our to to with partnered We also improve defend Bishop ability real-world sophisticated

forward, with to practice that security best experts, to ensure will continue Looking in we work our leading class. remains

want innovation confident feel customers their our and future passion Agorans real-time the their I embrace like RTE I to thank developer say community to incredibly build to would engagement. to for for I way customers' you and our of dedication our Lastly, also opportunity all and hard to work all thank the take to us. the to success. the with promising

and create enjoy Let's it together.

review results. turn to me Jingbo will financial who over let Now our things

Jingbo Wang

Thank you, Tony. Hello, everyone.

exceeded will XX% results financial for represented reviewing XXXX our quarter and Total the year XXXX. revenues QX outlook first of for growth and growth XX% $XX.X range year were new Easemob, adoption revenues discuss continued X,XXX, and fiscal to I $XXX more million. technology growth for the a by reached worldwide fourth our revenue year-over-year of for mainly our than active start high guidance of of customers in of me grew by which year-over-year Total was use The million, up and of growth $X fiscal developers, as as active by customers by driven XXXX. XX% Number emergence the the year-over-year. million in of then cases. end excluding Let well

was our growth sector revenue mentioned the regulation quarter impacted new earnings in academic tutoring As on by in K-XX in the negatively China. calls, we previous

We first quarter expect continue the bottom hopefully out to impact XXXX. of and such in

excluding dollar-based Our net trailing expansion XXXX. of at Easemob end currency XXX% the XX-month is constant rate

be expansion impact the from and We rate, first XXX%. adjusted also of adjusted in exclude would half the XXXX, expansion to calculated COVID-XX the rate

on costs expenses. to Moving and

compensation exclude was amortization will quarter Non-GAAP following comments, X.X% acquired XXXX. my For share-based tax XX%, assets. intangible gross acquired expenses, which than focus acquisition-related which higher non-GAAP I was the QX expenses, to margin expenses fourth and on related income assets, intangible of for results,

expenses last in quarter previous XX.X% year. XX.X% we of as since in Non-GAAP year-over-year, the QX, we strengthen the R&D as have R&D of million compared were Easemob's continue of implementing calls, were increase As team. technical beginning been mainly R&D to by driven team, earnings Non-GAAP expenses we mentioned XXXX. employees XX.X% and up optimizations consolidation revenues and in was as infrastructure $XX.X to well hire the QX talented our R&D total in

on and innovation, maximizing to short-term growth is long-term focus strategy profitability. opportunities of Our instead

to operating increased Sales leadership, in in more Non-GAAP portfolio, attributable in to in margin XX.X% due year. XX.X% a quarter, million, our XX.X% quarter to QX, use QX XX.X% credit related QX compared XX.X% XXXX last total $X.X cases of technology expenses, continue up invest total revenues strengthen year. represented XX.X% diverse marketing credit of to to to million the expenses to G&A and expansion mainly were expenses non-GAAP year-over-year, compared a event and of marketing $XX.X will -- provide and and to year-over-year, and in expected year. in revenues our significant and losses operating an were world. QX RTE the in $XX.X capabilities, the XX% R&D loss million conferences. expansion expenses around in XX.X% provisions. up emerging team Non-GAAP margin further expenses including team expenses loss mainly QX, loss translating to advertising Non-GAAP quarter represented last fourth empower in compared sales was last We our resources order operating product loss G&A

cash QX to flow, to cash positive year. cash million compared $X negative was million, flow $X.X last flow was positive operating million year. Free compared to positive last million in $X.X Turning $X.X

of end ended in QX. Net sheet. and million compared cash, with QX to balance of due paid $XXX We as to investments $XXX $XX.X in equivalents mainly million. short-term was on consideration we outflow to quarter cash for acquisition Moving the million cash Easemob

turning apply. still historical variable where model to may business is to Now unprecedented guidance; an experience our not COVID-XX

Our on full revenues on impact that various guidance uncertainties of subject pandemic. the year based to COVID-XX the related to change reflect are assumptions

expect In and in you tutoring revenues continue Today, are mentioned $XXX of Agora regulation marked new cash end to to invest hand range enhancing commitment of and technology and and execution to program the impact which on our XXXX revenues for on The to confident repurchase total at has believe $XXX hard a team we of Directors X.X% growth very attending will million. we strategies, With With proud have approximately year. Regardless addition, year program your be of Hope the midpoint. than share safe. in we strong we healthy year-over-year we at in confidence able challenges, business. the In more up million the you we of Agora today. before, the million, everyone K-XX difficulties remarkable we fiscal business significant Board a same announced the term. fundamentals, China to the value. our to continue near all time. would the to about in shareholder our be expansion at expect will for $XXX that potential in and authorized our call the to XXXX, of work of performance in as of million demonstrates sector this growth $XXX closing, that, and entire currently long-term our are our are Thank the long-term and of of prospect represent

up it open Let's for questions.

Operator

Instructions]. [Operator

line on the First question Stanley. from comes Morgan Liu from Yang

Yang Liu

questions the for on Thanks two overseas have opportunity. business -- to regarding I opportunities. the

or the term how current what second growth in full first opportunities? margin market for outlook? could of the contribution year do XXXX overseas question you. The Thank one update about management management the overseas XQ is, think is, and growing us guidance and in revenue the in gross for -- And market overseas XXXX is range, With profile the market? contribution

Tony Zhao

talk will economies, China. outlook excited regions Many in I'm I on APAC excluding have North Sure. like part, about about opportunities very reopened actually for opportunities. countries largely but and the America, their these how work, in me continue study. a overseas the to It changed us, first enormous Europe see we opportunities. people see numbers. where that, mention we is usage permanently areas collaborate few has to clear I'll strong pandemic and growth

kinds platform. celebrity events work. to casts virtual we documents, platforms, graphics, and past of many and music event for creating team office all trade platforms, on. virtual year, our added of would that online include future through shows collaboration the First, from This virtual In hold so customers, event platforms

several to We also on a while project. design working live users, collaborative enable design have between platform, discussions

believe, with working work company are Loop launch platform future. workplace, opportunities recently, office we the now this in available as to rigorous apps. audio that open can and customer, enterprise large will the that define the a cap trend I only many world of virtual selection we in market of meet the us apps, U.S. teams of VirBELA an proved, our such Most engagement in a by have one reflecting of together and went have customers in cast product process enterprise in in door distributed live real-time this coming the We for proven With previously and requirements features -- how the more platforms, the are for social the through very the largest lot to also future. to vendor helped will professional

these We we Middle even in power Asia. replicating and is in education. China, the conferencing for usage huge capabilities many South and that that, RTE past build the experience see This penetration after online did now online around What U.S., and from which see revenue has Asia, education is offer low, we of successfully to in -- in strong South means leverage reopening. growth markets market huge still basically largest education are they Europe, apps. than proprietary empowered branded better potential have Agora. education Second, and Recently, classroom East, unicorns of is customers population is the Agora's there standard EDU the what the very apps which technology TAL huge

Third, my I metaverse related a talked use cases. remarks. already opening lot in about metaverse

in and we leading we Now platforms Korea -- announced and and will several have just already MetaKTV such as Brazil MetaChat. we metaverse solutions powered and South also

year live However, people are their I that online. of a lives will trend the we at multiple beginning change how only believe

outcome. and us clear. As It's business may Jingbo to I financial for are side. into summarize, on opportunities very to well the up our add now to on strategy Agora these execute more opportunities convert

Jingbo Wang

Tony. Thank you,

X% down growth, need a what to what -- understand really the into we our midpoint it means parts. yes, guidance three about to but year-over-year represent So guidance means, break the think at business the I

non-China and as non-K-XX is the discussed; then business, First it's China finally business, Tony China just business. the K-XX

So last XXXX. revenues the of lose almost business XX% revenue of about K-XX entirely represented we stream, expect year in almost and in total all China that to

A more revenue, the in comparison was China. between apple-to-apple guidance year. range next imply healthy be, versus for XXXX So it's excluding apple-to-apple would that an the a rate. and in $XXX XXXX guided not to case, guidance million really growth the And comparison K-XX

digital China parts MetaChat. products break of transformation, by enterprises, released by and we the down in business, XXXX, new and [indiscernible] we also do IoT, recently and CDN if lot driven and such traditional growth like to the non-K-XX moderate a record as solutions Fusion business, like three verticals also expect our So new the of MetaKTV

So very able talked to will in we policy Tony be that's are even of deliver outside sort the this, China. China, the we China. of about growth Out confident quite strong so

actually continue China in we get higher outside GP to footprint our margins as are China. the the we would end, quarter, terms we we benefit and So the cost and we in expand before, same. -- to in scale mentioned be the the different expect gross regions infrastructure, And our latest in margins, outside continue expect should of as almost additional actually

Yang Liu

Thanks a lot.

Operator

questions. the Instructions]. for you [Operator Thank

comes line from Next Company. from of the question Vincent Needham Yu & ahead. Please go

Vincent Yu

Hi, can hear me? you

Tony Zhao

Yes.

Vincent Yu

Sure. I management question. Okay. -- I have for thank you two. taking have my

of and more second the How expenses, because expenses. make the the And of viewing development? cash. in think some the development first to -- we for more like the especially I is more in this question of expect plan of market? lower or or -- non-China growth we investments to part, we the on know, Thank forward? do expenses the business expenses marketing have on utilization addition is overseas our So the idea going on stock marketing would expand business question acquire My you. Should to any just to overseas the

Jingbo Wang

I I'll Sure. both take guess questions.

United in near markets marketing So the community, at continue pace I expenses absolute first moderate marketing, the in especially one, developer sales a in in invest branding, dollar terms, the to increase our States. as like think and will term, we

So becomes much our we'll customers' enjoy leverage marketing to Once as strong operating we expense platform with won't we now. developer take and in we that sales compared medium our or is sticky and term, -- long -- apps, but once a adopted here. quite integrated think the it mindshare into need

our products. as marketing be percentage you in of nature should and the we especially of if the longer do think revenue level, lower So consider a and sales at a term, developer-driven expenses complex

investing pretty continue sheet localization, business, community, developer customer compliance markets on. our balance to in the in We're marketing, and have product sheet, things On especially security and like support, and do yes, outside will brand China. invest so in balance a strong we

rapidly We expect headcount Silicon total flat. in size would remain Singapore, the here, in while of China Valley, to grow the the team less India or more

not product -- needs terms acquisition, it to in product strategy. will but current portfolio complement we and out not rule possibility, We of the will our

So there able is no suitable we be target. guarantee, will a find to

Vincent Yu

Thank Got it. you.

Operator

Bing We've Thank Please line the new questions [Operator Duan from for Instructions]. Nomura. questions. of from go the ahead. you got

Bing Duan

you, you hear Hi. me? management. Thank Can

Tony Zhao

Yes.

Bing Duan

Thank you. management asking the questions. Thank you for

remarks two you've is So the opening I of landscape. the that the now share. -- XX% Agora mentioned market the One questions. competition -- in has have about over We

on give And market going do in the forward? is think you pressure pricing market for competition you question we like also any, us -- about colors in about see of competitors more in change can in market, how more and the demand the the do couple So expect in this And future? do so overseas expansion. the overseas next -- quarters? And second RTE we my China about

continue say the be So the the opportunity can expense to next margins Thank market? to will pressure that we quarters, overseas couple profiles because you. we do new the under and of gross need into in within tap

Tony Zhao

Yes.

talk Let competition the me about side.

wasn't expect quarters don't more few overall market past trying angles. to it and the that I did see With said, players I enter competitive different the going changed think I the to from much in landscape RTE change forward. drastically

from CDN an and a from live-streaming Cloudflare example, Dolby For processing audio angle, angle.

think our of competitors I portfolio. none our complete far product of set the can match overall QOE so and feature However,

example, every understand I This integrated App Agora by as than who was choose be competitors In which the Annie unique Difficulty]. been -- data technology, more Agora. that other million and invested a will the tend In the more apps to the geography. developers large by has really latest actually confirmed, any to space. Hello? R&D, into competitors RTE other mentioned, in SDK we latest for data, margin, $XXX [Technical serious shows such, As RTE the any in future, most XXXX, we continue in almost very than

Fionna Chen

Telephone Give us problem. a few... line

Jingbo Wang

Why Yeah. the don't question I answer first? second

Tony Zhao

right? off cutting was I

Jingbo Wang

you Yes, are back.

Tony Zhao

part can From from which Sorry, which part? continue? I

Fionna Chen

from just we don't Why beginning? start the

Tony Zhao

Okay.

Okay...

Jingbo Wang

Annie App you were data, the off. about talked cut you After

Tony Zhao

the in and company we to R&D, data more invested the the on focused actually of In speak right. future, the in most R&D resources. Annie continue data $XXX a trying market-leading will we XXXX, industry our to App prove of most continue any RTE I that than was was space. and latest other All competitors million Okay. sort RTE positions, kind to be on the invest to

Agora Jingbo? And that to confident very this market. will are we So continue lead

Jingbo Wang

Yeah, sure.

this cause the in So year in to as this year, profit our China, terms on the term. we to priority -- pressure margin we right, in the of earlier, especially mentioned invest the expect do outlook in is near and markets for outside this

As expenses, marketing revenue. R&D lot imagine, expenses, can not the directly correlated a with these the are expense, expense, of you G&A the the

we But so the through as the to balance term, and think of our With continue weather best sector expand I invest -- to in will we pressure near the that answered think loss your expenses, so we question? revenue interest in with don't as and be do shareholders our the company will K-XX on from cause on sheet, it's to net we the period that if of future. this able know the the for margin.

Fionna Chen

Sorry the We're currently hotel, in locations. technological this China. actually doing previous separate two the is coming to call in problem. back Tony quarantine about

we line, So operator, telephone please me know. let experience outage if of this another

Operator

Duan, Mr. have you. questions? follow-up do you Thank

Bing Duan

much. questions. No. Thank my you That's all very

Operator

of Li the questions your next go on line We'll to Please you Allen ahead. question. of from the Thank move for Morgan. J.P.

Allen Li

a management on I you for competition the follow-up have taking Thank Yeah. question and pricing. question. my

macro strategy, I that shift Thank overseas increasingly. especially still in So edge slowdown? revenue I'm revenue in what's but And have clear sense you drivers get China, price in seem to technology, pricing due what's understand trend a to regulation the to wondering, the market, weak on you. also relatively given want all your and a the demand given to overseas

Jingbo Wang

take question. Maybe I'll this Okay.

market leader quoting and cheap. no that Europe, see we States -- said, He sales in like a far, more non-China are especially So the Agora. we markets am choose because I in is developed customer so within what Agora United

and experience many And very success fact participants our the to choose difference that the that because customer RTE so Agora session So always set. market have feel the all is can our clearly. applications clearly. perceive will you that quality, hiccup, very of feature that this a Once of users critical immediately in because in

So actually, and a better security and these pay a stable higher are [indiscernible] protection privacy more to for customers willing quality, service, standards.

we think it's think I price -- -- say the these markets, In factor, the into we pricing of fair don't markets, of number kind in developed we is developed to So in more do competition. sometimes less terms one competition. run

year. many year-on-year last However, orderly -- past People is it's XX% terms around are very still for and largely into the we do pricing similar take now, to several as other into have been pricing China, what seeing cutoff but in consideration, -- fashion. range year been take was mentioned in no in market it's types normal discount of has In every four, different. years five services, considerations. in the this we to has we almost of of the change and pricing years The before, is XX%

similar so at the a Our to, strategy cost relatively pace, our time, try we stable same can cut margin. a that is incremental at maintain

Allen Li

Got Thank you. you. Okay.

Operator

Thank hand closing you would this to further are remarks. the call time. [Operator There at no I the for management question for Instructions]. like the back questions. to

Fionna Chen

call. Well, thank website, you posted a to you have also the operator on, Later day attending you. be will of Have this ahead. along is filings call. the presentation the our on for earnings our of thank great everyone investor.agora.io, call with thank Well, we and today's which and transcript

Jingbo Wang

you. Thank

Tony Zhao

you. Thank

Operator

for Thank conference concludes This participating. call. today's you

disconnect. You may now

Agora (API) 23 Feb 222021 Q4 Earnings call transcript