Agora, Inc. (China) Q3 FY2024 earnings call

• Launched conversational AI SDK in collaboration with OpenAI's real-time API, leveraging GPT 4.0's multimodal capabilities and Agora's network features for better emotion understanding and low-latency conversations. • Hosted Tenth Annual RTE Conference with record attendance, demoed conversational AI solution with Minimax, and sponsored open source project TEN for building AI agents. • Restructured organization, incurring $4.8 million severance costs and $11.4 million share-based compensation expense for canceled equity awards, expecting $4M Q4 and $7M Q1 operating expense savings post-restructuring. • Collaborating with OpenAI on Realtime API, seeing developer interest with POCs in progress and ongoing work to improve technology infrastructure.

Agora's revenues were $15.7 million in the third quarter, up 2.6% year-over-year, primarily driven by business expansion in certain verticals like live shopping. Shengwang's revenues were RMB 112.9 million in the third quarter, down 20% year-over-year excluding revenues from certain end-of-sale low-margin products, due to challenging regulatory and macro environment.

• Q4 2024 total revenues expected between $34 million and $36 million excluding certain low-margin products. • Significant improvement in net income loss expected. • Projected $4M Q4 and $7M Q1 operating expense savings post-restructuring based on baseline Q2 2024.

• Regulatory and macro environment challenges impacting Shengwang's revenues. • Uncertainties around market conditions and OpenAI's pricing changes affecting costs.

Q: What would be the impact of recent organization on the earnings of the upcoming quarters? And update on progress with OpenAI?

A: Restructuring expected to save ~$4M in Q4 and $7M in Q1 compared to Q2 baseline. Collaboration with OpenAI has seen developer interest, with POCs in progress and work on improving technology infrastructure for smoother conversational experiences.

Q: Outlook for next year and breakeven?

A: Target GAAP breakeven for full year 2025 with conservative revenue assumptions and operating expense savings from restructuring, leveraging moderate revenue growth and technological readiness for conversational AI use cases