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Briefing Aug 6, 2020 12:15 pm EqualOcean

Sino-American Tech Tensions Warm Up, Agora Might Be Banned

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Aug 18, 2020 01:17 pm ·

After a Booming Growth amid COVID-19, Agora.io Returns to Normal in 2Q 2020

The real-time-engagement (RTE) company Agora.io (API:NASDAQ) announced its second-quarter earnings on August 17. For the three-month period, the company reported a revenue of USD 33.9 million, with year-over-year growth of 128%; free cash flow increased to USD 3.63 million and the cash and cash equivalent reached a new height of USD 641 million. Agora.io has experienced a booming season in the first quarter of the year when the pandemic started to sweep over the world. The COVID-19 changed the way people work and hence yielded a strong growth driver for remote working environment builder companies: Zoom, Slack, G Suite and so on experienced a sharp user growth. Agora.io, as an RTE solution provider, benefited from the remote workstyle as the online communication behavior becoming a norm. The pandemic has severely exacerbated the global economic development and companies have been affected and shut down during the period. Though the first-quarter revenue in 2020 nearly doubled the Agora.io’s earning in the fourth quarter in 2019 from USD 19.1 million to USD 35.6 million, the slowdown and even backsliding in the economic environment were inevitably reflected in the company’s second-quarter earnings. The first-quarter revenue was boosted by the pandemic and the second quarter cooled down and brought the company back to the normal growth curve. In the second quarter, the constant currency dollar-based expansion rated increased from 166% for the TTM ended March 2020 to 183% for the TTM ended June 2020, performing beyond the industry average of 100% and proving a solid customer success strategy. Agora.io went public in June this year with an IPO price of USD 50.50 and the share price started to experience a roller coaster ride during the Sino-American tension, especially during the time when the ‘Cold War’ extended from embassy shut-downs to the widened ‘China Tech Attack.’ The company was asked during the hearing whether if the tension between the two countries influenced its business, Agora responded as being not aware of any impacts at the moment. However, things may go out of their control if the situation changes. The Sino-American tension has expanded to involve many Chinese tech companies, including ByteDance (parent company of TikTok), Huawei, Tencent (00700:HK) as well as those earlier black-listed companies like the AI unicorns Megvii and SenseTime. While ByteDance was forced to launch M&A talks with Microsoft, Oracle and other potential TikTok buyers, Huawei has faced a semiconductor supply chain shortage and even a breakdown as its major suppliers like TSMC bore the geopolitical pressure.

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Aug 18, 2020 10:04 am ·

Agora 2Q 2020 Earnings Drops 5% from 1Q

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Analysis EO
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Analysis EO
Jun 17, 2020 03:45 pm ·

Real-Time Communication Supporter Agora.io Files for IPO on NASDAQ

► Agora.io's CEO Zhao Bing served as CTO of JOYY, whose business is featured by RTC products. ► With a dollar-based expansion rate of 130+% in 2018 and 2019, Agora.io is scaling up. ► Agora.io's key clients, who are capable of developing RTC independently, contributed substantially to its revenue. ► IaaS providers like Alibaba Cloud step into API services to compete with companies like Agora.io. The seven-year-old Shanghai-based RTC (Real-Time Communication) BaaS (Backend-as-a-Service) company Agora.io (声网) plans to raise USD 100 million from its IPO on NASDAQ. BaaS is an intermediate architecture between PaaS (Platform-as-a-Service) and SaaS (Software-as-a-Service) aiming to meet the rapid development needs and provide backend capabilities as services. Being a BaaS company, Agora.io provides real-time communication solutions for application developers. With its SDK (Software Development Kit) and RTC products such as audio/video chat, live streaming, recording and instant messaging, Agora.io has built business partnerships with OPPO, Xiaomi, Lenovo and other companies at different development stages. The company was founded in 2013 by Chinese entrepreneur Zhao Bin (赵斌). Prior to his CEO position at Agora.io, Zhao was the former CTO of YY.com (YY语音), a subsidiary of JOYY (欢聚集团, YY:NASDAQ). JOYY is a communication group featuring live streaming products including YY.com, Huya TV and Bigo.live. The company has attracted millions of users and it has a strong presence in the gaming live streaming industry in China. Meanwhile, it is stretching to overseas markets. With decades of experience in real-time communications services, Zhao founded Agora to provide RTE PaaS services for app companies or independent developers.  The real-communication services’ market is scaling up, with increasing user interactions within apps and in IoT scenarios. According to IDC, the communication PaaS market is forecasted to grow from USD 3.3 billion in 2018 to USD 17.2 billion in 2023, at a compound annual growth rate of 39.3%. With ongoing commercial adoptions of the 5G technology and increasing Internet penetration rate, the demand for RTC services will accordingly grow. Being an enterprise services company, Agora.io’s net-dollar expansion rates in 2018 and 2019 were 135% and 127% respectively. Meanwhile, Agora.io’s competitor Twilio (TWLO:NYSE) reported a net-dollar expansion rate of 140% and 136% for the years ending December 31, 2018 and 2019. However, the standards defining active users/customers vary from case to case: Agora.io’s active users are those that generated more than USD 100 in the preceding 12 months, while Twilio treats users that have spent at least USD 5 in the last month of the period as active. While the median of enterprise services companies’ dollar expansion rate fluctuates at 100%, Agora.io is performing above par. Excepting competitors from the same industry, Agora.io faces pressure from IaaS (Infrastructure-as-a-Service) providers like Tencent Cloud and Alibaba Cloud. The online conference product Tencent Meeting that has high requirements on RTC services is supported by Tencent Cloud, and Alibaba Cloud provides RTC services on its platform, which is a better development ecosystem for application makers. Agora.io’s revenue levels were USD 44 million and USD 64 million for the years 2018 and 2019. For the same period, its top ten customers yielded substantial portions of its revenue, 51% and 38% respectively. The decreased portion implies that either Agora.io introduced more accounts or failed to retain key customers. The former cause decreases Agora.io’s reliance on top clients and lowers the risk of depending on key accounts. The later may hint that key customers, who employ Agora.io’s RTC services intensively, are driven to build their own RTC solutions to reduce the cost, or, simply, its competitors have won trust from its clients. For big companies that purchase RTC services on a large scale, there is the incentive and capability to develop solutions on their own. Agora.io’s ideal customers are small-to-medium developers – they need RTC solutions but cannot develop the function because of limited resources. RTC solutions and other APIs (application programming interfaces) help to create a development environment where developers can focus on projects and speed up the process.

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Jun 3, 2020 10:26 am · Uncle C

Agora.io Plans to Go Public in the US

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Apr 24, 2020 03:31 pm · TechWeb

Agora.io SDK supports 50ms ultra-low latency earback

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Sep 28, 2020 04:14 pm ·

Alibaba's DingTalk Re-Structures, CEO Leaves

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Sep 27, 2020 03:55 pm · Jiemian

AI Unicorn Megvii to Resume IPO and Consider Dual Listing

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