Earnings call: Agora's Q3 results mixed with strategic AI focus By ...
Agora, Inc. (API) recently reported mixed financial results for the third quarter of 2024. The total revenues for the quarter reached CNY 31.6 million, reflecting a decrease from previous periods. However, when excluding low-margin products, there was an increase in revenue. The company has strategically focused on conversational AI, leading to a collaboration with OpenAI. This collaboration resulted in the launch of an innovative software development kit (SDK) with multimodal capabilities. Agora has also implemented organizational changes aimed at cost management, with expectations of saving millions in the upcoming quarters.
Strategic AI Focus
The company's strategic focus on conversational AI has been a key driver in its recent initiatives. The partnership with OpenAI and the introduction of the new conversational AI SDK demonstrate Agora's commitment to innovation in the AI space. The SDK, developed in collaboration with OpenAI, utilizes the GPT-4.0 model, enabling voice-driven AI experiences without the need to convert voice to text. This advancement allows for better understanding and response to human emotions compared to previous text-based models.
Moreover, Agora's SDK incorporates advanced noise suppression, echo cancellation features, and low-latency conversation capabilities, enhancing user experiences even under challenging network conditions.
Organizational Changes for Cost Management
Agora's organizational changes, including workforce restructuring, aim to improve financial health in the short term. The company anticipates revenue growth in the fourth quarter of 2024 and aims for GAAP breakeven by 2025. The recent changes align the organization to leverage the opportunities in conversational AI more effectively and operate in a faster and responsive manner.
Financial Results and Outlook
During the third quarter of 2024, Agora reported total revenues of CNY 31.6 million, reflecting a decrease from previous periods. However, excluding revenues from certain low-margin products, there was a quarter-over-quarter increase. The company's gross margin for the quarter was 66.7%, showing an improvement compared to previous quarters.
Looking ahead to the fourth quarter, Agora anticipates further revenue growth and cost savings resulting from the organizational changes. The company remains focused on driving innovation in the conversational AI space and strengthening its position as a key infrastructure provider for real-time engagement technology.
For more information, you can access the company's earnings results, press releases, and SEC filings on its IR website at investor. Agora. Io.
