Agora, Inc. Sponsored ADR Class A (API.US) has achieved GAAP profitability for seven consecutive quarters, with Q2 revenue increasing by 18% to $40.4 million.

Agora, Inc. Sponsored ADR Class A (API.US), a company specializing in conversational AI and real-time interaction technology, announced its unaudited financial results for the second quarter ending June 30, 2026, on Thursday. Total revenue reached $40.4 million, an 18.0% increase compared to $34.3 million in the same period last year, primarily driven by the continued expansion of real-time interactive services in live shopping, financial services, and other fields. Net profit was $2.2 million, up from $1.5 million a year earlier. Basic and diluted net earnings per ADS for the quarter were $0.03 and $0.02, respectively, compared to $0.02 and $0.01 a year ago. This marks the company's seventh consecutive quarter of GAAP profitability. As of the time of reporting, Agora, Inc. Sponsored ADR Class A's after-hours trading was down 0.71%. The cost of revenue for the quarter was $14.7 million, a year-on-year increase of 28.9% (compared to $11.4 million last year), primarily due to rising bandwidth and server costs and an increase in costs associated with conversational AI products. Gross profit was $25.7 million, a year-on-year increase of 12.5% (compared to $22.9 million last year). The gross margin was 63.7%, down from 66.8% a year ago, mainly due to changes in product mix, as conversational AI products are still in the early scaling phase. Total operating expenses amounted to $27.3 million, a slight increase of 2.8% year-on-year (compared to $26.5 million last year). Research and development expenses were $15.4 million, a year-on-year increase of 10.2% (compared to $14.0 million last year), primarily due to increased investment in conversational AI products. Sales and marketing expenses were $6.4 million, a year-on-year decrease of 1.5% (compared to $6.5 million last year), benefiting from stringent cost control. General and administrative expenses were $5.5 million, a year-on-year decrease of 9.5% (compared to $6.0 million last year), mainly due to improved customer credit conditions and better collection of receivables, resulting in a reduction in expected credit loss provisions for the period. The operating loss for the quarter was $1.0 million, significantly narrowing from $3.1 million in the same period last year. Interest income was $3.4 million, down from $3.7 million a year ago, mainly due to a decrease in the average principal balance. The investment loss for the quarter was $0.4 million, compared to an investment gain of $0.8 million in the same period last year, primarily due to changes in the fair value of equity investments. During the second quarter of 2026, the company repurchased approximately 3.8 million shares of Class A common stock for about $3.7 million (approximately 1 million ADS). As of June 30, 2026, the company had repurchased a total of approximately 178.5 million shares of Class A common stock (approximately 44.6 million ADS) under the current repurchase plan, with a total expenditure of approximately $159.9 million. As of June 30, 2026, the total outstanding common shares were 335.1 million (approximately 83.8 million ADS), down from 449.8 million shares (approximately 112.4 million ADS) when the plan began. The current repurchase plan is set to expire at the end of February 2027. As of June 30, 2026, there were 3,892 active clients, a 0.4% increase from 3,877 a year earlier. The dollar-based net retention rate for the quarter was 104%, compared to 94% a year earlier. As of June 30, 2026, the total balance of cash and cash-equivalents, bank deposits, and financial products issued by banks amounted to $361.7 million. The net cash outflow from operating activities for the quarter was $2.1 million, compared to a net outflow of $0.4 million in the same period last year. Regarding performance outlook, based on currently available information, the company expects total revenue for the third quarter of 2026 to be between $41.0 million and $42.0 million, representing a year-on-year growth of approximately 15.8% to 18.6%. This outlook reflects the company's current preliminary assessment of market and operating conditions, and actual results may vary due to changes. Agora, Inc. Sponsored ADR Class A (Agora, Inc.) is a holding company with two independent business segments operating under the Agora brand and the Agora, Inc. Sponsored ADR Class A brand. Agora is headquartered in Santa Clara, California, USA, and is a global pioneer and leader in the field of conversational AI and real-time interaction Platform as a Service (PaaS), providing developers with simple, flexible, and powerful APIs to integrate real-time conversational AI, video, voice, chat, and interactive live streaming functionalities into various applications. Agora, Inc. Sponsored ADR Class A is based in Shanghai, China, and is a pioneer and leading provider of conversational AI and real-time interactive PaaS in the Chinese market. Zhao Bin, the founder, chairman, and CEO of Agora, Inc. Sponsored ADR Class A, stated, "We are pleased to report another quarter of accelerated growth, driven by the robust performance of our real-time interaction and conversational AI businesses, while achieving GAAP profitability for the seventh consecutive quarter. Our voice AI agents are being deployed in a growing variety of application scenariosincluding market research, buyer intent capture, and customer serviceand we are starting to see them reach or exceed human performance in an increasing number of tasks." "We believe that continuous optimization of AI agent solutions will unlock new demand and accelerate the industry's transformation toward AI-led call center workflows. Looking ahead, we will continue to invest in real-time infrastructure and developer ecosystem development while maintaining strict financial discipline to effectively serve both human-to-human and human-to-AI interaction scenarios."