Q2 2026 Agora Inc Earnings Call Transcript
Key Points
- Total revenue reached $40.4 million, up 18% year-over-year, marking the third consecutive quarter of accelerating growth.
- GAAP net profit increased 50% year-over-year to $2.2 million, with a net income margin of 5.4%.
- Dollar-based net retention rate improved to 104% from 94% in the prior year, indicating stronger customer retention and expansion.
- Conversational AI products are gaining traction, with voice AI agents matching or surpassing human performance in tasks like outbound marketing and surveys, leading to cost savings for customers.
- The company repurchased approximately 1 million ADSs for $2.7 million in Q2, and has returned about $160 million to shareholders, demonstrating a commitment to capital returns.
- Gross margin declined to 63.7% from 66.8% year-over-year, primarily due to the product mix shift toward subscale Conversational AI products.
- Operating cash flow was negative $2.1 million in Q2, compared to negative $0.4 million in the prior year, indicating weaker cash generation.
- The company still recorded a GAAP operating loss of $1 million, though improved from a $3.1 million loss last year.
- Conversational AI revenue contribution is still small, with a target of only 5% of revenue by the end of 2026, and gross margins for these products remain low due to subscale operations.
- The company faces intense competition in the Conversational AI market from players like Twilio, which could pressure market share and pricing.
Good day and thank you for standing by. Welcome to the Agora Inc. second-quarter 2026 financial results conference call. (Operator Instructions)
Please be advised that today's conference is being recorded. The company's earnings results, press release, earnings presentation, SEC filings, and a replay of today's call can be found on its IR website at investor.agora.io. Joining me today are Tony Zhao, Founder, Chairman, and CEO; Jingbo Wang, the company's CFO.
During this call, the company will make forward-looking statements about its future financial performance and other future events and trends. These statements are only predictions that we based on what the company believes today, and actual results may differ materially. These forward-looking statements are subject to risks, uncertainties, assumptions, and other factors that could affect the company's financial results and the performance of its business and which the company discussed in detail in its filings with the SEC, including today's press release and the risk factors of other information contained in the final prospectus
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