Agora, Inc. Reports Fourth Quarter and Fiscal Year 2023 Financial Results
- Strong financial results in Q4 2023 with sequential revenue growth and non-GAAP net income of $1.4 million.
- Returned $104.3 million to shareholders through share repurchases, reducing share count by 18%.
- Total revenues for Q4 2023 were $36.0 million, a decrease of 10.2% from the previous year.
- Net loss for Q4 2023 was $2.6 million, significantly lower than $35.1 million in Q4 2022.
- Gross margin improved to 62.9% in Q4 2023, up from 60.8% in the same period last year.
- Operating expenses decreased by 26.8% in Q4 2023, contributing to better financial performance.
- Extended share repurchase program and positive financial outlook for Q1 2024 demonstrate confidence in future growth.
- Non-GAAP financial measures used to analyze ongoing operating results and trends.
- Free cash flow improved to $3.4 million in Q4 2023 from negative $6.1 million in Q4 2022.
- Revenue decline in certain segments impacted overall financial performance.
- Net loss in FY 2023 was $87.2 million, compared to $120.4 million in 2022.
- Adjusted EBITDA in FY 2023 was negative $19.5 million, a decrease from negative $56.6 million in 2022.
- Impairment of goodwill recorded in 2023 due to challenging global macroeconomic environment and regulatory changes.
- Net cash used in operating activities increased to $13.6 million in 2023 from $52.4 million in 2022.
Insights
The recent financial results released by Agora, Inc. show a company navigating a challenging economic environment with a mixed performance. The announcement of achieving non-GAAP profitability for the first time in over three years is a significant milestone, indicating a potential turnaround in the company's operational efficiency. The extension of the share repurchase program suggests confidence from the board in the company's financial health and long-term prospects. However, the reported decrease in total revenues year-over-year, both quarterly and annually, raises concerns about the company's growth trajectory.
From a financial perspective, the improved gross margin, which now stands at 62.9% for Q4 2023, is a positive sign. This improvement is attributable to technical and infrastructural optimizations, which could indicate a sustainable reduction in direct costs moving forward. The reduction in operating expenses, particularly in research and development and sales and marketing, reflects aggressive cost-cutting measures. However, investors should also consider the potential impact of these reductions on the company's innovation capacity and market competitiveness.
Furthermore, the net loss narrowing significantly from the previous year demonstrates better cost management, but the continued net losses signal ongoing challenges. The increase in active customers for both Agora and Shengwang divisions is a positive development, yet the Dollar-Based Net Retention Rate, especially the 82% for Shengwang, suggests potential issues with customer retention or spend. This metric is crucial as it indicates the long-term value and satisfaction of the existing customer base.
The technology sector, particularly companies specializing in real-time engagement solutions like Agora, Inc., is highly sensitive to macroeconomic conditions. The reported revenue decline in both Agora and Shengwang segments can be attributed to such external factors, including tightening financing conditions in emerging markets and regulatory changes in the education sector affecting Shengwang. These factors highlight the vulnerability of Agora's business model to external economic pressures.
The increase in interest income due to higher interest rates is a financial environment factor that has positively impacted Agora's results. However, the significant impairment of goodwill recorded in 2023, largely due to a challenging global macroeconomic environment, indicates a reduction in the expected future cash flows from acquired businesses. This adjustment can affect investor confidence as it reflects a downward revision of growth expectations.
Investors and stakeholders should also note the strategic focus on share repurchases, which has led to a substantial reduction in share count, potentially indicating an attempt to support the stock price or a belief by management that the stock is undervalued. The authorization of the share repurchase program extension aligns with this strategy, but it is essential to monitor whether these buybacks will lead to increased shareholder value in the long term.
The financial results of Agora, Inc. provide insights into broader economic trends affecting the tech industry. The decrease in revenue, particularly in emerging markets, could be reflective of a broader economic slowdown affecting global tech spending. The tightening of financing conditions mentioned in the report suggests that Agora's customer base may be experiencing liquidity issues, which could lead to reduced spending on Agora's services.
On a positive note, the increase in interest income for Agora indicates an environment of rising interest rates, which can benefit companies with significant cash reserves. However, this same environment can increase the cost of borrowing for both the company and its customers, potentially leading to a contraction in investment and spending. The reported investment loss in 2023, primarily due to a decrease in the fair value of equity investments and impairment losses, reflects the risks associated with volatile market conditions and the need for prudent investment management.
Looking at the operational cash flow, the shift from cash used in operating activities to cash generated is encouraging. It suggests improved operational efficiency and better working capital management. The positive free cash flow in Q4 2023, as opposed to the negative free cash flow in the same period last year, is indicative of the company's ability to generate cash from its core operations, which is essential for sustaining operations without relying on external financing.
SANTA CLARA, Calif., Feb. 26, 2024 (GLOBE NEWSWIRE) -- Agora, Inc. (NASDAQ: API) (the “Company”), a pioneer and leader in real-time engagement technology, today announced its unaudited financial results for the fourth quarter and the fiscal year ended December 31, 2023.
“We ended 2023 with strong financial results in the fourth quarter, as we delivered sequential quarterly revenue growth and a non-GAAP net income of
Fourth Quarter 2023 Highlights
- Total revenues for the quarter were
$36.0 million , a decrease of10.2% from$40.1 million in the fourth quarter of 2022.- Agora:
$15.3 million for the quarter, a decrease of3.2% from$15.8 million in the fourth quarter of 2022. - Shengwang: RMB148.3 million (
$20.7 million ) for the quarter, a decrease of13.9% from RMB172.3 million ($24.3 million ) in the fourth quarter of 2022, or a decrease of9.6% from RMB164.0 million ($23.1 million ) in the fourth quarter of 2022 if excluding revenue from the disposed Customer Engagement Cloud (“CEC”) business.
- Agora:
- Active Customers
- Agora: 1,683 as of December 31, 2023, an increase of
18.4% from 1,422 as of December 31, 2022. - Shengwang: 4,144 as of December 31, 2023, an increase of
11.8% from 3,705 as of December 31, 2022.
- Agora: 1,683 as of December 31, 2023, an increase of
- Dollar-Based Net Retention Rate
- Agora:
93% for the trailing 12-month period ended December 31, 2023. - Shengwang:
82% for the trailing 12-month period ended December 31, 2023 (excluding revenues from terminated businesses due to regulatory changes in the education sector).
- Agora:
- Net loss for the quarter was
$2.6 million , compared to net loss of$35.1 million in the fourth quarter of 2022. After excluding share-based compensation expenses, acquisition related expenses, financing related expenses, amortization expenses of acquired intangible assets, income tax related to acquired intangible assets and impairment of goodwill, non-GAAP net income for the quarter was$1.4 million , compared to the non-GAAP net loss of$15.7 million in the fourth quarter of 2022. - Adjusted EBITDA for the quarter was negative
$2.0 million , compared to negative$8.5 million in the fourth quarter of 2022. - Total cash, cash equivalents, bank deposits and financial products issued by banks as of December 31, 2023 was
$371.8 million . - Net cash generated from operating activities for the quarter was
$3.7 million , compared to net cash used in operating activities of$4.6 million in the fourth quarter of 2022. Free cash flow for the quarter was$3.4 million , compared to negative$6.1 million in the fourth quarter of 2022.
Fiscal Year 2023 Highlights
- Total revenues in 2023 were
$141.5 million , a decrease of11.9% from$160.7 million in 2022.- Agora:
$61.0 million in 2023, a decrease of2.4% from$62.5 million in 2022. - Shengwang: RMB567.1 million (
$80.5 million ) in 2023, a decrease of14.0% from RMB659.4 million ($98.2 million ) in 2022, or a decrease of9.1% from RMB623.7 million ($92.8 million ) in 2022 if excluding revenue from the disposed CEC business.
- Agora:
- Net loss in 2023 was
$87.2 million , compared to net loss of$120.4 million in 2022. After excluding share-based compensation expenses, acquisition related expenses, financing related expenses, amortization expenses of acquired intangible assets, income tax related to acquired intangible assets and impairment of goodwill, non-GAAP net loss in 2023 was$29.9 million , compared to non-GAAP net loss of$71.1 million in 2022. - Adjusted EBITDA in 2023 was negative
$19.5 million , compared to negative$56.6 million in 2022. - Net cash used in operating activities in 2023 was
$13.6 million , compared to$52.4 million in 2022. Free cash flow in 2023 was negative$14.5 million , compared to negative$56.5 million in 2022.
Fourth Quarter 2023 Financial Results
Revenues
Total revenues were
Cost of Revenues
Cost of revenues was
Gross Profit and Gross Margin
Gross profit was
Operating Expenses
Operating expenses were
- Research and development expenses were
$16.3 million in the fourth quarter of 2023, a decrease of23.3% from$21.3 million in the same period last year, primarily due to a decrease in personnel costs as the Company optimized its global workforce, including a decrease in share-based compensation from$3.7 million in the fourth quarter of 2022 to$2.0 million in the fourth quarter of 2023. - Sales and marketing expenses were
$7.1 million in the fourth quarter of 2023, a decrease of42.1% from$12.2 million in the same period last year, primarily due to a decrease in personnel costs as the Company optimized its global workforce. - General and administrative expenses were
$7.9 million in the fourth quarter of 2023, a decrease of14.7% from$9.2 million in the same period last year, primarily due to decreased professional services expenses and a decrease in personnel costs as the Company optimized its global workforce, including a decrease in share-based compensation from$1.8 million in the fourth quarter of 2022 to$1.2 million in the fourth quarter of 2023.
Other Operating Income
Other operating income was
Loss from Operations
Loss from operations was
Interest Income
Interest income was
Other income
Other income was
Net Loss
Net loss was
Net Loss per American Depositary Share attributable to ordinary shareholders
Net loss per American Depositary Share (“ADS”)1 attributable to ordinary shareholders was
Fiscal Year 2023 Financial Results
Revenues
Total revenues in 2023 were
Cost of Revenues
Cost of revenues in 2023 was
Gross Profit and Gross Margin
Gross profit in 2023 was
Operating Expenses
Operating expenses in 2023 were
- Research and development expenses in 2023 were
$77.7 million , a decrease of32.2% from$114.5 million in 2022, primarily due to a decrease in personnel costs as the Company optimized its global workforce, including a decrease in share-based compensation from$18.1 million in 2022 to$12.7 million in 2023. - Sales and marketing expenses in 2023 were
$34.0 million , a decrease of36.8% from$53.8 million in 2022, primarily due to a decrease in personnel costs as the Company optimized its global workforce, including a decrease in share-based compensation from$6.1 million in 2022 to$4.1 million in 2023. - General and administrative expenses in 2023 were
$35.0 million , a decrease of9.6% from$38.7 million in 2022, primarily due to decreased professional services expenses and a decrease in personnel costs as the Company optimized its global workforce.
Other Operating Income
Other operating income in 2023 was
Impairment of Goodwill
An impairment of goodwill for
Loss from Operations
Loss from operations in 2023 was
Interest Income
Interest income in 2023 was
Investment Loss
Investment loss was
Net Loss
Net loss in 2023 was
Net Loss per ADS attributable to ordinary shareholders
Net loss per ADS attributable to ordinary shareholders in 2023 was
________________
1 One ADS represents four Class A ordinary shares.
Share Repurchase Program
During the three months ended December 31, 2023, the Company repurchased approximately 14.1 million of its class A ordinary shares (equivalent to approximately 3.5 million ADSs) for approximately US
As of December 31, 2023, the Company had repurchased approximately 113.8 million of its class A ordinary shares (equivalent to approximately 28.5 million ADSs) for approximately US
As of December 31, 2023, the Company had 368.8 million ordinary shares (equivalent to approximately 92.2 million ADSs) outstanding, compared to 449.8 million ordinary shares (equivalent to approximately 112.5 million ADSs) outstanding as of January 31, 2022 before the share repurchase program commenced.
The board of directors has authorized an extension of the existing share repurchase program through February 28, 2025, with all other terms remaining unchanged.
Financial Outlook
Based on currently available information, the Company expects total revenues for the first quarter of 2024 to be between
Earnings Call
The Company will host a conference call to discuss the financial results at 5 p.m. Pacific Time / 8 p.m. Eastern Time on February 26, 2024. Details for the conference call are as follows:
Event title: Agora, Inc. 4Q 2023 Financial Results
The call will be available at https://edge.media-server.com/mmc/p/p29mk9bu
Investors who want to hear the call should log on at least 15 minutes prior to the broadcast. Participants may register for the call with the link below.
https://register.vevent.com/register/BI4b1e0c6631eb43448b9f00444ac7cff4
Please visit the Company’s investor relations website at https://investor.agora.io on February 26, 2024 to view the earnings release and accompanying slides prior to the conference call.
Use of Non-GAAP Financial Measures
The Company has provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company uses these non-GAAP financial measures internally in analyzing its financial results and believe that the use of these non-GAAP financial measures is useful to investors as an additional tool to evaluate ongoing operating results and trends and in comparing its financial results with other companies in its industry, many of which present similar non-GAAP financial measures. Besides free cash flow (as defined below), each of these non-GAAP financial measures represents the corresponding GAAP financial measure before share-based compensation expenses, acquisition related expenses, financing related expenses, amortization expenses of acquired intangible assets, income tax related to acquired intangible assets and impairment of goodwill. The Company believes that such non-GAAP financial measures help identify underlying trends in its business that could otherwise be distorted by the effects of such share-based compensation expenses, acquisition related expenses, financing related expenses, amortization expenses of acquired intangible assets, income tax related to acquired intangible assets and impairment of goodwill that it includes in its cost of revenues, total operating expenses and net income (loss). The Company believes that all such non-GAAP financial measures also provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.
Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with the Company’s consolidated financial statements prepared in accordance with GAAP. A reconciliation of its historical non-GAAP financial measures to the most directly comparable GAAP measures has been provided in the tables captioned “Reconciliation of GAAP to Non-GAAP Measures” included at the end of this press release, and investors are encouraged to review the reconciliation.
Definitions of the Company’s non-GAAP financial measures included in this press release are presented below.
Non-GAAP Net Income (Loss)
Non-GAAP net income (loss) is defined as net income (loss) adjusted to exclude share-based compensation expenses, acquisition related expenses, financing related expenses, amortization expenses of acquired intangible assets, income tax related to acquired intangible assets and impairment of goodwill.
Adjusted EBITDA
Adjusted EBITDA is defined as net income (loss) before exchange gain (loss), interest income, investment income (loss), other income, equity in income of affiliates, income taxes, depreciation of property and equipment, amortization of land use right, and adjusted to exclude the effects of share-based compensation expenses, acquisition related expenses, financing related expenses, amortization expenses of acquired intangible assets and impairment of goodwill.
Free Cash Flow
Free cash flow is defined as net cash provided by operating activities less purchases of property and equipment (excluding the acquisition of land use right and the construction in progress for the headquarters project). The Company considers free cash flow to be a liquidity measure that provides useful information to management and investors regarding net cash provided by operating activities and cash used for investments in property and equipment required to maintain and grow the business.
Operating Metrics
The Company also uses other operating metrics included in this press release and defined below to assess the performance of its business.
Active Customers
An active customer at the end of any particular period is defined as an organization or individual developer from which the Company generated more than
Dollar-Based Net Retention Rate
Dollar-Based Net Retention Rate is calculated for a trailing 12-month period by first identifying all customers in the prior 12-month period, and then calculating the quotient from dividing the revenue generated from such customers in the trailing 12-month period by the revenue generated from the same group of customers in the prior 12-month period. As the vast majority of revenue generated from Agora’s customers is denominated in U.S. dollars, while the vast majority of revenue generated from Shengwang’s customers is denominated in Renminbi, Dollar-Based Net Retention Rate is calculated in U.S. dollars for Agora and in Renminbi for Shengwang, which has substantially removed the impact of foreign currency translations. The Company believes Dollar-Based Net Retention Rate facilitates operating performance comparisons on a period-to-period basis.
Safe Harbor Statements
This press release contains ‘‘forward-looking statements’’ within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current fact included in this press release are forward-looking statements, including but not limited to statements regarding the Company’s financial outlook, beliefs and expectations. Forward-looking statements include statements containing words such as “expect,” “anticipate,” “believe,” “project,” “will” and similar expressions intended to identify forward-looking statements. Among other things, the Financial Outlook in this announcement contain forward-looking statements. These forward-looking statements are based on the Company’s current expectations and involve risks and uncertainties. The Company’s actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to the growth of the RTE-PaaS market; the Company’s ability to manage its growth and expand its operations; the continued impact of COVID-19 on global markets and the Company’s business, operations and customers; the Company’s ability to attract new developers and convert them into customers; the Company’s ability to retain existing customers and expand their usage of its platform and products; the Company’s ability to drive popularity of existing use cases and enable new use cases, including through quality enhancements and introduction of new products, features and functionalities; the Company’s fluctuating operating results; competition; the effect of broader technological and market trends on the Company’s business and prospects; general economic conditions and their impact on customer and end-user demand; and other risks and uncertainties included elsewhere in the Company’s filings with the Securities and Exchange Commission (“SEC”), including, without limitation, the final prospectus related to the IPO filed with the SEC on June 26, 2020. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and the Company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date hereof.
About Agora, Inc.
Agora, Inc. is the holding company of two independent businesses, Agora and Shengwang.
Headquartered in Santa Clara, California, Agora is a pioneer and global leader in Real-Time Engagement Platform-as-a-Service (PaaS), providing developers with simple, flexible, and powerful application programming interfaces, or APIs, to embed real-time voice, video, interactive live-streaming, chat, whiteboard, and artificial intelligence capabilities into their applications.
Headquartered in Shanghai, China, Shengwang is a pioneer and leading Real-Time Engagement PaaS provider in the China market.
For more information on Agora, please visit: www.agora.io
For more information on Shengwang, please visit: www.shengwang.cn
| Agora, Inc. Condensed Consolidated Balance Sheets (Unaudited, in US$ thousands) | |||||
| As of | As of | ||||
| December 31, | December 31, | ||||
| 2023 | 2022 | ||||
| Assets | |||||
| Current assets: | |||||
| Cash and cash equivalents | 36,894 | 45,673 | |||
| Short-term bank deposits | 86,924 | 334,537 | |||
| Short-term financial products issued by banks | 84,853 | 33,359 | |||
| Short-term investments | 7,983 | 14,143 | |||
| Accounts receivable, net | 34,668 | 32,803 | |||
| Prepayments and other current assets | 9,059 | 7,326 | |||
| Contract assets | 1,048 | 634 | |||
| Held-for-sale assets | - | 17,004 | |||
| Total current assets | 261,429 | 485,479 | |||
| Property and equipment, net | 22,708 | 12,946 | |||
| Operating lease right-of-use assets | 4,011 | 2,344 | |||
| Intangible assets | 1,274 | 2,727 | |||
| Goodwill | - | 31,928 | |||
| Long-term bank deposits | 143,127 | - | |||
| Long-term financial products issued by banks | 20,000 | 39,000 | |||
| Long-term investments | 43,893 | 55,159 | |||
| Land use right, net | 167,246 | - | |||
| Prepayment for land use right | - | 168,244 | |||
| Other non-current assets | 10,907 | 2,888 | |||
| Total assets | 674,595 | 800,715 | |||
| Liabilities and shareholders’ equity | |||||
| Current liabilities: | |||||
| Accounts payable | 12,996 | 10,103 | |||
| Advances from customers | 7,765 | 8,352 | |||
| Taxes payable | 906 | 1,867 | |||
| Current operating lease liabilities | 2,447 | 1,932 | |||
| Accrued expenses and other current liabilities | 32,777 | 47,011 | |||
| Held-for-sale liabilities | - | 2,388 | |||
| Total current liabilities | 56,891 | 71,653 | |||
| Long-term payable | 3 | 55 | |||
| Long-term operating lease liabilities | 1,726 | 340 | |||
| Deferred tax liabilities | 196 | 407 | |||
| Long-term borrowings | 11,027 | - | |||
| Total liabilities | 69,843 | 72,455 | |||
| Shareholders’ equity: | |||||
| Class A ordinary shares | 39 | 39 | |||
| Class B ordinary shares | 8 | 8 | |||
| Additional paid-in-capital | 1,138,346 | 1,134,704 | |||
| Treasury shares, at cost | (79,716 | ) | (41,815 | ) | |
| Accumulated other comprehensive loss | (10,027 | ) | (7,994 | ) | |
| Accumulated deficit | (443,898 | ) | (356,682 | ) | |
| Total shareholders’ equity | 604,752 | 728,260 | |||
| Total liabilities and shareholders’ equity | 674,595 | 800,715 |
| Agora, Inc. Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited, in US$ thousands, except share and per ADS amounts) | |||||||||
| Three Months Ended | Year Ended | ||||||||
| December 31, | December 31, | ||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||
| Real-time engagement service revenues | 32,300 | 37,766 | 133,098 | 152,886 | |||||
| Real-time engagement on-premise solution and other revenues | 3,741 | 2,352 | 8,440 | 7,784 | |||||
| Total revenues | 36,041 | 40,118 | 141,538 | 160,670 | |||||
| Cost of revenues | 13,370 | 15,727 | 52,063 | 61,247 | |||||
| Gross profit | 22,671 | 24,391 | 89,475 | 99,423 | |||||
| Operating expenses: | |||||||||
| Research and development | 16,310 | 21,255 | 77,666 | 114,502 | |||||
| Sales and marketing | 7,055 | 12,189 | 33,958 | 53,769 | |||||
| General and administrative | 7,876 | 9,232 | 34,976 | 38,671 | |||||
| Total operating expenses | 31,241 | 42,676 | 146,600 | 206,942 | |||||
| Other operating income | 214 | 104 | 1,729 | 3,697 | |||||
| Impairment of goodwill | - | (11,941 | ) | (31,928 | ) | (11,941 | ) | ||
| Loss from operations | (8,356 | ) | (30,122 | ) | (87,324 | ) | (115,763 | ) | |
| Exchange gain (loss) | 40 | (52 | ) | (151 | ) | (5,021 | ) | ||
| Interest income | 4,810 | 3,168 | 18,816 | 9,636 | |||||
| Investment loss | (29 | ) | (7,754 | ) | (19,756 | ) | (8,813 | ) | |
| Other income | 1,099 | - | 1,649 | - | |||||
| Loss before income taxes | (2,436 | ) | (34,760 | ) | (86,766 | ) | (119,961 | ) | |
| Income taxes | (99 | ) | (279 | ) | (422 | ) | (663 | ) | |
| Equity in income (loss) of affiliates | (76 | ) | (20 | ) | (31 | ) | 244 | ||
| Net loss | (2,611 | ) | (35,059 | ) | (87,219 | ) | (120,380 | ) | |
| Net loss attributable to ordinary shareholders | (2,611 | ) | (35,059 | ) | (87,219 | ) | (120,380 | ) | |
| Other comprehensive income (loss): | |||||||||
| Foreign currency translation adjustments | 2,678 | 3,670 | (3,419 | ) | (9,856 | ) | |||
| Gain (loss) on available-for-sale debt securities | - | (147 | ) | 1,385 | (1,286 | ) | |||
| Total comprehensive income (loss) attributable to ordinary shareholders | 67 | (31,536 | ) | (89,253 | ) | (131,522 | ) | ||
| Net loss per ADS attributable to ordinary shareholders, basic and diluted | (0.03 | ) | (0.32 | ) | (0.88 | ) | (1.08 | ) | |
| Weighted-average shares used in computing net loss per ADS attributable to ordinary shareholders, basic and diluted | 379,033,868 | 439,557,186 | 398,384,385 | 446,426,914 | |||||
| Share-based compensation expenses included in: | |||||||||
| Cost of revenues | 46 | 146 | 621 | 906 | |||||
| Research and development expenses | 2,027 | 3,713 | 12,696 | 18,055 | |||||
| Sales and marketing expenses | 440 | 1,090 | 4,145 | 6,140 | |||||
| General and administrative expenses | 1,197 | 1,770 | 7,150 | 7,262 | |||||
| Agora, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited, in US$ thousands) | |||||||||
| Three Months Ended | Year Ended | ||||||||
| December 31, | December 31, | ||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||
| Cash flows from operating activities: | |||||||||
| Net loss | (2,611 | ) | (35,059 | ) | (87,219 | ) | (120,380 | ) | |
| Adjustments to reconcile net loss to net cash generated from (used in) operating activities: | |||||||||
| Share-based compensation expenses | 3,710 | 6,719 | 24,612 | 32,363 | |||||
| Allowance for current expected credit losses | 1,688 | 1,694 | 7,046 | 5,391 | |||||
| Depreciation of property and equipment | 1,416 | 2,266 | 7,096 | 9,497 | |||||
| Amortization of intangible assets | 348 | 590 | 1,384 | 2,322 | |||||
| Amortization of land use right | 853 | - | 3,165 | - | |||||
| Deferred tax expense (benefit) | (53 | ) | (84 | ) | (212 | ) | (336 | ) | |
| Amortization of right-of-use asset and interest on lease liabilities | 717 | 940 | 2,935 | 4,064 | |||||
| Investment loss | 29 | 7,746 | 19,756 | 8,607 | |||||
| Interest income on debt securities and investments | - | (101 | ) | (105 | ) | (401 | ) | ||
| Equity in loss (income) of affiliates | 76 | 20 | 31 | (244 | ) | ||||
| Loss (gain) on disposal of property and equipment | (1 | ) | - | (11 | ) | - | |||
| Impairment of goodwill | - | 11,941 | 31,928 | 11,941 | |||||
| Return on investment from equity affiliates | 21 | - | 21 | - | |||||
| Interest expense | 20 | - | 20 | - | |||||
| Changes in assets and liabilities, net of effect of acquisition: | |||||||||
| Accounts receivable | (1,244 | ) | (1,488 | ) | (9,100 | ) | (8,033 | ) | |
| Contract assets | 420 | (66 | ) | (522 | ) | (564 | ) | ||
| Prepayments and other current assets | (793 | ) | (509 | ) | (1,801 | ) | (515 | ) | |
| Other non-current assets | (2,118 | ) | 34 | (7,278 | ) | 3,146 | |||
| Accounts payable | (393 | ) | 1,495 | 3,246 | 5,526 | ||||
| Advances from customers | 76 | 587 | (483 | ) | 1,371 | ||||
| Taxes payable | (355 | ) | 1,118 | (1,157 | ) | (391 | ) | ||
| Operating lease liabilities | (780 | ) | (877 | ) | (2,649 | ) | (4,212 | ) | |
| Deferred income | - | 257 | (160 | ) | 402 | ||||
| Accrued expenses and other liabilities | 2,654 | (1,863 | ) | (4,154 | ) | (1,934 | ) | ||
| Net cash generated from (used in) operating activities | 3,680 | (4,640 | ) | (13,611 | ) | (52,380 | ) | ||
| Cash flows from investing activities: | |||||||||
| Purchase of short-term bank deposits | (31,924 | ) | (20,000 | ) | (219,445 | ) | (424,627 | ) | |
| Purchase of short-term financial products issued by banks | - | (5,512 | ) | (29,899 | ) | (19,787 | ) | ||
| Purchase of short-term investments | (2 | ) | (6,645 | ) | (791 | ) | (14,650 | ) | |
| Proceeds from maturity of short-term bank deposits | 33,000 | 104,056 | 467,058 | 538,765 | |||||
| Proceeds from maturity of short-term financial products issued by banks | 9,212 | - | 17,522 | 3,549 | |||||
| Purchase of long-term bank deposits | - | (39,000 | ) | (143,127 | ) | (40,657 | ) | ||
| Purchase of long-term financial products issued by banks | - | - | (20,000 | ) | - | ||||
| Purchase of long-term investments | - | (56 | ) | (15 | ) | (18,160 | ) | ||
| Prepayment for long-term investments | - | - | - | (1,949 | ) | ||||
| Withdrawal of long-term investments | - | - | - | 2,113 | |||||
| Purchase of property and equipment | (268 | ) | (1,416 | ) | (924 | ) | (4,123 | ) | |
| Purchase of land use right | - | - | (5,133 | ) | - | ||||
| Deposit for land use rights purchase | - | - | - | (34,159 | ) | ||||
| Withdrawal of deposit for land use right purchase | - | - | - | 34,159 | |||||
| Prepayment for land use right purchase | - | - | - | (171,592 | ) | ||||
| Purchase of construction in progress for the headquarters project | (6,466 | ) | - | (10,792 | ) | - | |||
| Cash received for business disposal | - | - | 5,769 | - | |||||
| Disposal of property and equipment | 5 | - | 92 | - | |||||
| Cash paid for a business combination | - | - | (3,680 | ) | - | ||||
| Return of investment from equity affiliates | 8 | 56 | 8 | 56 | |||||
| Advance payment received for business disposal | - | 7,000 | - | 7,000 | |||||
| Net cash provided by (used in) investing activities | 3,565 | 38,483 | 56,643 | (144,062 | ) | ||||
| Cash flows from financing activities: | |||||||||
| Proceeds from long-term borrowings | 10,909 | - | 10,909 | - | |||||
| Deposits received for business disposal | - | 1,000 | - | 1,000 | |||||
| Deposits returned for business disposal | - | - | (1,000 | ) | - | ||||
| Proceeds from exercise of employees’ share options | 44 | 126 | 634 | 1,096 | |||||
| Payment of financing cost | - | (738 | ) | - | (2,111 | ) | |||
| Repurchase of Class A ordinary shares | (10,082 | ) | (18,296 | ) | (62,911 | ) | (41,135 | ) | |
| Net cash provided by (used in) financing activities | 871 | (17,908 | ) | (52,368 | ) | (41,150 | ) | ||
| Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | 481 | 408 | (805 | ) | (918 | ) | |||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 8,597 | 16,343 | (10,141 | ) | (238,510 | ) | |||
| Cash balance recorded in held-for sale assets at beginning of period | - | (1,488 | ) | 1,488 | (1,488 | ) | |||
| Cash, cash equivalents and restricted cash at beginning of period * | 28,577 | 30,972 | 45,827 | 285,825 | |||||
| Cash, cash equivalents and restricted cash at end of period ** | 37,174 | 45,827 | 37,174 | 45,827 | |||||
| Supplemental disclosure of cash flow information: | |||||||||
| Income taxes paid | 87 | - | 152 | 55 | |||||
| Interest paid | 24 | - | 24 | - | |||||
| Cash payments included in the measurement of operating lease liabilities | 780 | 877 | 2,649 | 4,212 | |||||
| Right-of-use assets obtained in exchange for operating lease obligations | 500 | - | 4,588 | 198 | |||||
| Non-cash financing and investing activities: | |||||||||
| Proceeds receivable from exercise of employees’ share options | 116 | 90 | 116 | 90 | |||||
| Deposits utilized for employees’ share option exercises | - | 6 | 13 | ||||||
| Payables for property and equipment | 12 | 227 | 12 | 227 | |||||
| Payables for construction in progress for the headquarters project | 7,098 | - | 7,098 | - | |||||
| Payables for interest | 11 | - | 11 | - | |||||
| Payables for treasury shares, at cost | 211 | 680 | 211 | 680 | |||||
| * includes restricted cash balance | 280 | 154 | 154 | 156 | |||||
| ** includes restricted cash balance | 280 | 154 | 280 | 154 | |||||
| Agora, Inc. Reconciliation of GAAP to Non-GAAP Measures (Unaudited, in US$ thousands, except share and per ADS amounts) | |||||||||
| Three Months Ended | Year Ended | ||||||||
| December 31, | December 31, | ||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||
| GAAP net loss | (2,611 | ) | (35,059 | ) | (87,219 | ) | (120,380 | ) | |
| Add: | |||||||||
| Share-based compensation expenses | 3,710 | 6,719 | 24,612 | 32,363 | |||||
| Acquisition related expenses | 8 | 179 | (392 | ) | 928 | ||||
| Financing related expenses | - | - | - | 2,166 | |||||
| Amortization expenses of acquired intangible assets | 345 | 556 | 1,380 | 2,224 | |||||
| Income tax related to acquired intangible assets | (53 | ) | (84 | ) | (212 | ) | (336 | ) | |
| Impairment of goodwill | - | 11,941 | 31,928 | 11,941 | |||||
| Non-GAAP net income (loss) | 1,399 | (15,748 | ) | (29,903 | ) | (71,094 | ) | ||
| GAAP net loss | (2,611 | ) | (35,059 | ) | (87,219 | ) | (120,380 | ) | |
| Excluding: | |||||||||
| Exchange (gain) loss | (40 | ) | 52 | 151 | 5,021 | ||||
| Interest income | (4,810 | ) | (3,168 | ) | (18,816 | ) | (9,636 | ) | |
| Investment loss | 29 | 7,754 | 19,756 | 8,813 | |||||
| Equity in loss (income) of affiliates | 76 | 20 | 31 | (244 | ) | ||||
| Other income | (1,099 | ) | - | (1,649 | ) | - | |||
| Income taxes | 99 | 279 | 422 | 663 | |||||
| Depreciation of property and equipment | 1,416 | 2,266 | 7,096 | 9,497 | |||||
| Amortization of land use right | 853 | - | 3,165 | - | |||||
| Share-based compensation expenses | 3,710 | 6,719 | 24,612 | 32,363 | |||||
| Acquisition related expenses | 8 | 179 | (392 | ) | 928 | ||||
| Financing related expenses | - | - | - | 2,166 | |||||
| Amortization expenses of acquired intangible assets | 345 | 556 | 1,380 | 2,224 | |||||
| Impairment of goodwill | - | 11,941 | 31,928 | 11,941 | |||||
| Adjusted EBITDA | (2,024 | ) | (8,461 | ) | (19,535 | ) | (56,644 | ) | |
| Net cash generated from (used in) operating activities | 3,680 | (4,640 | ) | (13,611 | ) | (52,380 | ) | ||
| Purchase of property and equipment | (268 | ) | (1,416 | ) | (924 | ) | (4,123 | ) | |
| Free Cash Flow | 3,412 | (6,056 | ) | (14,535 | ) | (56,503 | ) | ||
| Net cash provided by (used in) investing activities | 3,565 | 38,483 | 56,643 | (144,062 | ) | ||||
| Net cash provided by (used in) financing activities | 871 | (17,908 | ) | (52,368 | ) | (41,150 | ) | ||
FAQ
What were Agora's total revenues in Q4 2023?
What was Agora's net loss in Q4 2023?
How did Agora's gross margin change in Q4 2023?
What was the total revenue decline for Agora in FY 2023?
What was Agora's net loss in FY 2023?
