Agora (API.US) achieves GAAP profitability for seven consecutive quarters; Q2 revenue rises 18% to $40.4 million

According to Zhitong Finance APP, conversational AI and real-time interactive technology company Agora (API.US) announced its unaudited financial results for the second quarter ended June 30, 2026, on Thursday. Total revenue reached $40.4 million, representing an 18.0% year-over-year increase from $34.3 million, mainly attributed to continued expansion of real-time interactive services in areas such as live shopping and financial services. Net income was $2.2 million, compared to $1.5 million in the same period last year. Basic and diluted EPS per ADS in the quarter were $0.03 and $0.02, respectively, versus $0.02 and $0.01 a year ago. This marks the company’s seventh consecutive quarter of GAAP profitability.

As of press time, Agora shares were down 0.71% in after-hours trading.

Cost of revenue for the quarter was $14.7 million, up 28.9% year-over-year (compared to $11.4 million in the same period last year), mainly due to increases in bandwidth and server costs, as well as rising costs related to conversational AI products.

Gross profit was $25.7 million, up 12.5% year-over-year (compared to $22.9 million in the same period last year). Gross margin was 63.7%, down from 66.8% last year, mainly due to changes in product mix, with conversational AI products still in their initial scaling phase.

Total operating expenses were $27.3 million, a slight year-over-year increase of 2.8% (compared to $26.5 million last year). R&D expenses were $15.4 million, a 10.2% increase year-over-year (compared to $14 million), mainly due to increased investment in conversational AI products. Sales and marketing expenses were $6.4 million, down 1.5% year-over-year (compared to $6.5 million last year), benefiting from strict cost controls. General and administrative expenses totaled $5.5 million, down 9.5% year-over-year (compared to $6 million), primarily due to improved customer credit quality and better collections, resulting in reduced provisions for expected credit losses in the period.

Operating loss for the quarter was $1 million, significantly narrowed from $3.1 million in the same period last year. Interest income was $3.4 million, compared to $3.7 million last year, mainly due to lower average principal balances. Investment loss for the quarter was $0.4 million, compared to $0.8 million in investment gains in the same period last year, primarily driven by changes in the fair value of equity investments.

In the second quarter of 2026, the company repurchased approximately 3.8 million Class A ordinary shares (equivalent to about 1 million ADSs) at a total cost of approximately $3.7 million. As of June 30, 2026, under the current buyback program, the company had cumulatively repurchased approximately 178.5 million Class A ordinary shares (equivalent to about 44.6 million ADSs) for a total of approximately $159.9 million. As of June 30, 2026, the total outstanding ordinary shares were 335.1 million (about 83.8 million ADSs), compared to 449.8 million shares (about 112.4 million ADSs) at the start of the program. The current buyback plan is set to expire at the end of February 2027.

As of June 30, 2026, the company had 3,892 active customers, up 0.4% from 3,877 in the same period last year.

The company's net dollar retention rate for the quarter was 104%, up from 94% a year ago. As of June 30, 2026, the combined balance of cash and cash equivalents, bank deposits, and bank-issued financial products totaled $361.7 million. Net cash outflow from operating activities in the quarter was $2.1 million, compared to $0.4 million in the same period last year.

For guidance, based on currently available information, the company expects total revenue for the third quarter of 2026 to be between $41 million and $42 million, representing a year-over-year increase of approximately 15.8% to 18.6%. This guidance reflects the company’s current preliminary view of market and operating conditions, and actual results may be adjusted if there are changes.

Agora, Inc. is a holding company with two independent business segments operating under the Agora and Shengwang brands. Agora is headquartered in Santa Clara, California, USA, and is a global pioneer and leader in conversational AI and real-time interaction Platform-as-a-Service (PaaS), providing developers with simple, flexible, and powerful APIs to embed real-time conversational AI, video, voice, chat, and interactive live streaming into various applications. Shengwang is based in Shanghai, China, and is a pioneer and leading provider of conversational AI and real-time interactive PaaS in the Chinese market.

Zhao Bin, founder, chairman, and CEO of Agora, stated, “We are pleased to report another quarter of accelerated growth, driven by the strong performance of both our real-time interaction and conversational AI businesses, while also achieving our seventh consecutive quarter of GAAP profitability. Our voice AI agents are being deployed in an increasingly diverse range of application scenarios—including market research, buyer intent capture, and customer service—and we are now beginning to see them match or even surpass human performance in an ever-growing number of tasks.”

“We believe that the continuous optimization of our AI agent solutions will unlock new demand and accelerate the industry’s shift towards AI-driven call center workflows. Looking ahead, while maintaining strict financial discipline, we will continue to invest in real-time infrastructure and developer ecosystem development, so as to serve both human-to-human and human-to-AI interaction scenarios effectively.”