Agora: Total revenue in 2Q20 increased by 128% year-on-year, and the number of active customers continued to grow

On August 18, 2020, Agora (NASDAQ: API), a global real-time interactive cloud service provider, released its second quarter 2020 financial report. The financial report shows that Agora's total revenue this quarter reached US$33.9 million, compared with US$14.9 million in the same period of 2019, a year-on-year increase of 128%; net profit this quarter was US$3.01 million, with a net profit margin of 8.9%; free cash flow under non-U.S. generally accepted accounting principles was US$3.63 million.

Agora went public on the Nasdaq on June 26, 2020, becoming the world's first real-time interactive cloud stock. The release of its financial report is its first performance since its listing. In this regard, Agora founder and CEO Zhao Bin said, "In the first quarter after listing, Agora achieved outstanding results, with total revenue increasing by 128% year-on-year. Our efficient business model rooted in serving developers also helped us achieve positive net profit and free cash flow this quarter.

Our API is empowering developers around the world, providing end users with an immersive experience and building emotional connections between people. The successful listing has increased our brand awareness among global developers. In the future, we will stay true to our original aspiration and continue to strive to achieve our mission of 'making real-time interaction anytime, anywhere, and ubiquitous.'"

Total revenue grew strongly by 128% year-on-year

The financial report shows that Agora's total revenue increased significantly in the second quarter, mainly due to the increase in the use of real-time audio and video products caused by business expansion. Behind this is also the change in global users' acceptance of online interaction and the growth brought by Agora's efficient and scalable business model.

The outbreak of the global COVID-19 pandemic has led to a surge in demand for online interactions, resulting in a continued and substantial increase in Agora's revenue this year. The prospectus shows that Agora's revenue in the first quarter was US$35.56 million, a year-on-year increase of 166%. As the domestic epidemic situation improves, online demand has declined, but the epidemic has also made users more accepting and using online real-time interactions. At the same time, with the continuous optimization of the experience and quality of real-time interactive technology, users' demand for real-time audio and video products is significantly higher than before the epidemic, which has become an important reason why Agora's real-time audio and video usage continued to grow significantly in the second quarter.

It is worth mentioning that the efficient and scalable business model gradually formed by Agora has contributed to the rapid growth of revenue in the second quarter. As the pioneer of the global real-time interactive cloud, Agora provides developers with easy-to-use, highly customized, and highly compatible APIs. Developers can embed real-time audio and video interactive capabilities into applications without technical research and development or building the underlying architecture themselves. At the same time, Agora provides developers with 10,000 minutes of free use time per month. This transparent pay-as-you-go pricing model allows Agora to grow with developers' products from 0 to 1. For large customers, Agora provides integration and customization services through dedicated engineers to create differentiated experiences and services for them worldwide.

Released the industry's first experience quality standard and implemented innovative scenarios in multiple fields

In the second quarter, Agora took the lead in launching the RTE (real-time interactive cloud) industry's first experience quality standard - XLA (Experience Level Agreement). It is understood that XLA includes indicators in four dimensions: 5s login success rate, 600ms video freeze rate, 200ms audio freeze rate and 400ms network delay compliance rate.

Agora has effectively solved the pain points of the RTE industry's real-time interactive experience quality that is unregulated, unmeasurable, and unguaranteed by releasing the XLA quality standard, further promoting the RTE industry to establish standardized and transparent experience quality standards, and is expected to promote the RTE industry to start the XLA standardized service model in the future. In this regard, Zhao Bin said, "We believe that XLA will be a must-have for every real-time interactive cloud service provider in the future. Its launch will help developers and enterprises better provide services to end users, and further enhance Agora's industry competitiveness."

In addition, Agora continues to deepen its exploration of user needs in the fields of social entertainment and education, and deeply optimizes the user experience in different scenarios. For example, in terms of entertainment, it provides better experience and richer gameplay for voice chat and singing scenes, and launches the industry's first real-time beautiful voice solution; in terms of cloud games, it releases ultra-low latency cloud game solutions, breaking through the restrictions on regions and operators, and supports real-time interactive gameplay such as interactive live broadcast, cloud battle, and cloud assist; in education, it adds support for educational eye protection mode, which helps online classroom students protect their eyesight by combining computer vision to correct sitting posture + software anti-blue light. At the same time, the cloud proctoring scene is launched to help graduate re-examinations and art admissions exams move from offline to online.

In the fields of finance, insurance, and healthcare, Agora cooperated with Tianfu Bank, Sanxiang Bank, ZhongAn Insurance, and Huazhuo Medical during the epidemic, providing them with remote and real-time solutions for handling related businesses based on real-time video cloud services, helping traditional scenarios to achieve online transformation and upgrading.

We have made comprehensive arrangements in the AIoT field, fully leveraging the advantages of cooperation with Xiaomi and its ecosystem, and gradually delivering smart screens, smart speakers, children's watches, smart cameras and other devices to enable real-time interaction and the interconnection of all things in all scenarios and all terminals.

Improve developer experience and continue to grow the number of active customers

Agora was founded in 2013 by a group of senior developers. Adhering to the concept of "By Developers For Developers", it provides developers with professional and efficient real-time interactive cloud services. The continuous discovery of new real-time interactive scenarios has led to an increase in the number of developers and active customers on the Agora platform. Financial report data shows that as of June 30, 2020, the number of active customers reached 1,486. Zhao Bin said, "We see more and more innovative application scenarios emerging on the platform, such as watching movies together, listening to music together, video cloud proctoring, etc. They appear in various vertical fields."

At the same time, Agora's developer community continued to flourish in the second quarter. The RTC 2020 Programming Challenge attracted more than 300 developers from more than 70 universities and development teams to sign up for the competition, which was successfully concluded in the cloud in May. In addition, the Agora Beta Program, which was launched in the second quarter, further narrowed the distance between developers and Agora, listened to the voices of developers, and ensured that product planning was more in line with the most real needs of developers.

While continuously providing developers with an efficient experience, the stable and reliable service guarantee also enabled Agora to continue to grow the number of active customers in the second quarter while maintaining a stable customer renewal rate. In order to ensure the quality of experience of real-time interactive services, on the one hand, Agora continues to improve its expertise and provide developers and enterprises with higher quality, high availability, high concurrency, and low-latency real-time audio and video technologies; on the other hand, through the "Customer Success" team, Agora provides 7*24 hours of real-time audio and video services in multiple time zones and languages ​​to corporate customers around the world, focusing on the full life cycle value of corporate customers. During the epidemic, Agora stably supported the online courses of many educational institutions such as New Oriental and Xiaoheiban, ensuring that teachers and students can successfully complete their studies throughout the spring semester even at home, and always helping to continue learning even when classes are suspended.

via Alpha Factory Research Institute