UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2021

Commission File Number: 001-39340

 

 

AGORA, INC. 

 

 

Floor 8, Building 12

Phase III of ChuangZhiTianDi

333 Songhu Road

Yangpu District, Shanghai

People’s Republic of China

(Address of registrant’s principal executive office) 

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F  ☒ Form 40-F  ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b) (1): ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b) (7): ☐

 

 

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

 

 

Date: August 11, 2021

 

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EXHIBIT INDEX

 

 

 

 

Exhibit 99.1

 

Agora, Inc. Reports Second Quarter 2021 Financial Results

 

August 9, 2021

 

SANTA CLARA, Calif. – (Globe Newswire) – Agora, Inc. (NASDAQ: API) (“Agora”), a pioneer and leading platform for real-time engagement APIs, today announced its financial results for the second quarter ended June 30, 2021.

 

“We have been a public company for one year now. Looking back at the past year, we are very proud to have helped people around the world stay connected during this challenging period. Together with developers on our platform, we are changing the way people work and study, and how people play and live their lives,” said Tony Zhao, founder, chairman and CEO of Agora. “I would like to thank our developers, customers, and partners for their trust in Agora. We will continue to invest in enabling meaningful human connections and creating more real-time engagement possibilities.”

 

Second Quarter 2021 Highlights

 

 

Second Quarter 2021 Financial Results

 

Revenues

Total revenues were $42.3 million in the second quarter of 2021, an increase of 24.9% from $33.9 million in the same period last year, primarily due to increased usage of our video and voice products as a result of our business expansion and usage growth in emerging use cases.

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Cost of Revenues

Cost of revenues was $16.5 million in the second quarter of 2021, an increase of 44.8% from $11.4 million in the same period last year, primarily due to increase in bandwidth and co-location costs and depreciation of servers and network equipment as we continue to scale our business.

 

Gross Profit and Gross Margin

Gross profit was $25.9 million in the second quarter of 2021, an increase of 14.8% from $22.5 million in the same period last year. Gross margin was 61.1% in the second quarter of 2021, a decrease of 5.3% from 66.4% in the same period last year, primarily due to international expansion to regions with higher infrastructure costs and capacity expansion in anticipation of future usage growth.

 

Operating Expenses

Operating expenses were $45.3 million in the second quarter of 2021, an increase of 123.9% from $20.2 million in the same period last year.

 

 

Other Operating Income

Other operating income was $0.3 million in the second quarter of 2021, compared to $0.8 million in the same period last year, primarily due to less VAT related deductions.

 

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(Loss) Income from Operations

Loss from operations was $19.1 million in the second quarter of 2021, compared to income from operations of $3.1 million in the same period last year.

 

Interest and Investment Income

Interest and investment income were $3.4 million in the second quarter of 2021, compared to $0.1 million in the same period last year, primarily due to an increase in the average balance of cash and cash equivalents and short-term investments due to proceeds from our initial public offering and concurrent private placement in the second quarter of 2020 and the private placement in the first quarter of 2021, as well as fair value change in equity investments of $1.3 million in the second quarter of 2021.

 

Income Taxes

Income taxes were $0.4 million in the second quarter of 2021, compared to $0.2 million in the same period last year.

 

Net (Loss) Income

Net loss was $15.4 million in the second quarter of 2021, compared to net income of $3.0 million in the same period last year.

 

Net Loss Attributable to Ordinary Shareholders

Net loss attributable to ordinary shareholders for the quarter was $15.4 million, compared to net loss attributable to ordinary shareholders of $157.8 million in the same period last year, primarily due to accretion of preferred shares to redemption value before the completion of our initial public offering.

 

Net Loss per American Depositary Share

Net loss per American Depositary Share (“ADS”)¹ was $0.14, compared to net loss of $4.60 per ADS in the same period last year.

 

Financial Outlook

 

Based on currently available information, Agora has adjusted the previous guidance and now expects total revenues for the year ending December 31, 2021 to be between $159 million and $161 million. This outlook reflects the company’s current and preliminary views on the market and operational conditions, and the outlook ranges for year 2021 reflect various assumptions that are subject to change based on uncertainties such as the impact of the COVID-19 pandemic and the new regulation on K12 academic tutoring sector in China.

 

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Earnings Call

 

Agora will host a conference call to discuss the financial results at 6 p.m. Pacific Time / 9:00 p.m. Eastern Time on the same day. Details for the conference call are as follows:

Event title: Agora, Inc. 2Q 2021 Financial Results

Conference ID: 8897989

Direct Event online registration: http://apac.directeventreg.com/registration/event/8897989

Please register in advance of the conference using the link provided above. Upon registering, you will be provided with participant dial-in numbers, Direct Event passcode and unique registrant ID.

A digital recording of the conference call will be available for replay two hours after the call’s completion (dial-in number: US 18554525696, International +61 2 81990299; same conference ID as shown above).

Please visit Agora’s investor relations website at https://investor.agora.io/investor-relations on August 9, 2021 to view the earnings release and accompanying slides prior to the conference call.

 

Use of Non-GAAP Financial Measures

 

Agora 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). Agora uses these non-GAAP financial measures internally in analyzing its financial results and believes that 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 Agora’s 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, amortization expense of acquired intangible assets and income tax related to acquired intangible assets. We believe that such non-GAAP financial measures help identify underlying trends in our business that could otherwise be distorted by the effect of such share-based compensation expenses, acquisition related expenses, amortization expense of acquired intangible assets and income tax related to acquired intangible assets that we include in cost of revenues, total operating expenses and net income (loss). We believe that all such non-GAAP financial measures also provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our 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 Agora’s consolidated financial statements prepared in accordance with GAAP. A reconciliation of Agora’s 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.

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Definitions of Agora’s non-GAAP financial measures included in this press release are presented below.

 

Non-GAAP Net Income (Loss)

 

Agora defines non-GAAP net income (loss) as net income (loss) adjusted to exclude share-based compensation expense, acquisition related expenses, amortization expense of acquired intangible assets and income tax related to acquired intangible assets.

 

Adjusted EBITDA

 

Agora defines Adjusted EBITDA as net income (loss) before exchange gain (loss), interest and investment income, income taxes, depreciation and amortization, and adjusted to exclude the effects of share-based compensation expense, acquisition related expenses, amortization expense of acquired intangible assets and income tax related to acquired intangible assets.

 

Free Cash Flow

 

Agora defines free cash flow as net cash provided by operating activities less purchases of property and equipment. Agora 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

 

Agora also uses other operating metrics included in this press release and defined below to assess the performance of its business.

 

Active Customers

 

Agora defines an active customer at the end of any particular period as an organization or individual developer from which Agora generated more than $100 of revenue during the preceding 12 months. Agora counts customers based on unique customer account identifiers. Generally, one software application uses the same customer account identifier throughout its life cycle while one account may be used for multiple applications.

 

Constant Currency Dollar-Based Net Expansion Rate

 

Agora calculates Dollar-Based Net Expansion Rate 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. Constant Currency Dollar-Based Net Expansion Rate is calculated the same way as Dollar-Based Net Expansion Rate but using fixed exchange rates based on the daily average

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exchange rates prevailing during the prior 12-month period to remove the impact of foreign currency translations. Agora believes Constant Currency Dollar-Based Net Expansion Rate facilitates operating performance comparisons on a period-to-period basis as Agora does not consider the impact of foreign currency fluctuations to be indicative of its core operating performance.

 

Impact of the Recently Adopted Accounting Pronouncement

 

Agora adopted ASU 2016-02, Leases (“ASC 842”) beginning January 1, 2021 and elected to use the modified retrospective method with the optional transition that allows for a cumulative-effect adjustment to the opening balance of retained earnings recorded on January 1, 2021, with no adjustments to prior periods presented. No cumulative effect adjustment to the opening balance of retained earnings was required. Upon adoption of ASC 842 on January 1, 2021, Agora recognized right of use assets as well as lease liabilities of $6.5 million for operating leases. Agora does not have any finance leases. The adoption of the new guidance did not have a material effect on our results of operations, financial condition or liquidity.

 

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 Agora’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 Agora’s current expectations and involve risks and uncertainties. Agora’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; Agora’s ability to manage its growth and expand its operations; the continued impact of the COVID-19 pandemic on global markets and Agora’s business, operations and customers; Agora’s ability to attract new developers and convert them into customers; Agora’s ability to retain existing customers and expand their usage of Agora’s platform and products; Agora’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; Agora’s fluctuating operating results; competition; the effect of broader technological and market trends on Agora’s business and prospects; general economic conditions and their impact on customer and end-user demand; and other risks and uncertainties included under the caption “Risk Factors” and elsewhere in our filings with the Securities and Exchange Commission, 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

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cautionary statement, and Agora undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date hereof.

 

About Agora

 

Agora’s mission is to make real-time engagement ubiquitous, allowing everyone to interact with anyone, in any app, anytime and anywhere. Agora’s cloud platform provides developers simple, flexible and powerful application programming interfaces, or APIs, to embed real-time video, voice and chat experiences into their applications. Agora maintains dual headquarters in Shanghai, China and Santa Clara, California.

 

For more information, please visit: www.agora.io.

 

Investor Contact:

Fionna Chen

investor@agora.io

 

Media Contact:

Suzanne Nguyen

press@agora.io

 

 

 

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Agora, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, in US$ thousands)

 

 

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Agora, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited, in US$ thousands, except share and per ADS amounts)

 

 

* In the fourth quarter of 2020, Agora formally implemented the Venture Partners Plan, which was a new incentive plan that can be settled in shares or cash at the discretion of the plan administrator. Therefore, $1.2M, $1.1M and $1.1M accrued in the first, second and third quarter of 2020, respectively, was reclassified from cash bonus expenses to share-based compensation expenses to reflect the costs related to the new incentive plan.

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Agora, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in US$ thousands)

 

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Agora, Inc.

Reconciliation of GAAP to Non-GAAP Measures

(Unaudited, in US$ thousands, except share and per ADS amounts)