Agora's Q1 2025 Earnings Call: Contradictions in AI Strategy, Market Growth, and Global Expansion

AI application key areas, AI market growth rate, overseas e-commerce platforms strategy, AI application and demand trends, and growth expectations for China and overseas business are the key contradictions discussed in Agora's latest 2025Q1 earnings call.



Revenue Growth and Profitability:
- Agora Inc. reported total revenue of $33.3 million for Q1 2025, up 12% year-over-year.
- This growth was driven by double-digit revenue growth year-over-year on a comparable basis and disciplined cost management, leading to the company's second consecutive quarter of GAAP profitability.

Conversational AI Expansion:
- The company announced the general availability of its Conversational AI engine in China, enabling developers to create interactive voice experiences with large language models.
- This product has gained traction and delivered industry-leading performance, opening up new verticals and use cases, particularly in education, where it is expected to have a significant impact on student engagement.

Business and Customer Growth:
- At the end of Q1, Agora had more than 1,800 active customers, and Shengwang had close to 2,000 customers, both representing a 5% increase from the previous year.
- This growth is attributed to healthy business expansion and net retention rate recovery from both Agora and Shengwang sides.

Strong Cash Flow and Shareholder Value:
- The operating cash flow for Q1 was $17.6 million, up from the previous year's negative $6.5 million.
- This improvement is due to a $17.8 million interest proceeds from the maturity of bank deposits and financial products issued buybacks, demonstrating a commitment to shareholder value and financial flexibility.

Regional Demand and Market Conditions:
- In the U.S. and global markets, the company observed a growth rate of close to 20%, driven by increasing adoption among consumers for live video-based shopping and entertainment apps.
- In China, Shengwang revenues grew 6.7% year-over-year, reflecting continued business expansion and adoption in key verticals, with less regulatory impact compared to previous years.