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    Earnings call· Jun 2026(Q2 FY26)

    Agora Q2 FY26 earnings call API

    Aug 14, 2026 Source

    Executive summary

    Agora Q2 FY26 — Accelerating Revenue Growth Driven by Conversational AI and Continued Profitability

    Agora delivered a strong quarter, marked by accelerating revenue growth and sustained GAAP profitability, primarily driven by the increasing adoption of its conversational AI solutions. The company is strategically investing in its voice AI agent technology and real-time infrastructure, aiming for significant market penetration in call centers while maintaining disciplined cost management and an active share repurchase program.

    Highlights

    5

    • Total revenues increased 18% year-over-year to $40.4 million, marking the third consecutive quarter of accelerating growth.

    • Achieved seventh consecutive quarter of GAAP profitability, with net profit up 50.3% year-over-year to $2.2 million.

    • Dollar-based net retention rate improved significantly to 104%, up from 94% in Q2 FY25.

    • GAAP operating loss narrowed to $1 million from $3.1 million in the prior year, demonstrating improved operating leverage.

    • Repurchased $3.7 million of ADS in Q2, contributing to a total of $159.9 million repurchased under the current program.

    Concerns

    2

    • Gross margin declined year-over-year to 63.7% from 66.8% due to product mix shift towards conversational AI products at a subscale stage.

    • Operating cash flow was negative $2.1 million, compared to negative $0.4 million in Q2 FY25.

    Guidance & targets

    3
    CategoryTargetConfidence
    Total Revenue
    $41M-$42M
    high materiality
    High
    GAAP Operating Profitability
    Achieve quarterly GAAP operating profitability
    high materiality
    Medium
    Conversational AI Revenue Contribution
    5%
    medium materiality
    Medium

    Operational metrics

    14
    GAAP Net Profit
    $2.2Mup 50.3% YoY
    Q2 FY26

    Seventh consecutive quarter of GAAP profitability.

    GAAP Gross Profit
    $25.7Mup 12.5% YoY
    Q2 FY26
    GAAP Gross Margin
    63.7%vs 66.8% YoY, vs 63.4% QoQ
    Q2 FY26

    Decline primarily due to product mix change as conversational AI products continue to see growing usage during the quarter, but has remained at a subscale stage. Sequential increase mainly driven by technical optimization.

    R&D Expenses
    $15.4Mup 10.2% YoY
    Q2 FY26

    Primarily due to continued investment in conversational AI products.

    Sales and Marketing Expenses
    $6.4Mdown 1.5% YoY
    Q2 FY26

    Primarily due to disciplined expense management.

    General and Administrative Expenses
    $5.5Mdown 9.5% YoY
    Q2 FY26

    Primarily due to a lower allowance for current expected credit loss as customer credit conditions and collection outcomes improved.

    GAAP Operating Loss
    $1.0Mvs loss of $3.1M YoY
    Q2 FY26

    Thanks to continued improvement in operating leverage.

    Net Income Margin
    5.4%
    Q2 FY26
    Cash and investments balance
    $361.7M
    Q2 FY26

    Includes cash, cash equivalents, bank deposits and financial products issued by banks. Decrease mainly due to annual bonus payments and share repurchase.

    Share Buyback
    $3.7M
    Q2 FY26

    Amount repurchased during Q2 FY26.

    Total Share Repurchase Program
    $159.9M
    cumulative as of Q2 FY26

    Total repurchased under the current program as of June 30, 2026.

    ADS Outstanding
    83.8Mvs 87.3M at end of 2025
    Q2 FY26
    Share Repurchase Program Expiration
    February 2027
    N/A

    The current share repurchase program will expire at the end of February 2027.

    Insider Share Repurchase
    $20M
    future

    Tony Zhao's planned personal repurchase, not yet started due to blackout/legal restrictions.

    Industry KPIs

    2
    MetricValueDetails
    Revenue growth$40.4MUSD
    Net revenue net dollar retention104%%

    Product announcements

    2
    ProductTypeDetails
    Agora Skillslaunch
    Agora CLIlaunch

    Deals & partnerships

    1
    GradiumStrategic partnership to integrate Gradium TTS within Agora's conversational AI engine.

    Gradium is a leading voice AI platform founded by the research team behind WuXi and TBK. The partnership allows developers to enable Gradium TTS through simple configuration without additional latency costs, strengthening Agora's technology ecosystem.

    Risks & headwinds

    2
    Gross margin pressure from conversational AI product mixQ2 FY26

    Gross margin declined to 63.7% from 66.8% YoY

    Mitigation: Technical optimization and achieving scale for conversational AI products are expected to improve margins in the future.

    Subscale stage of conversational AI productsCurrent

    Gross margin is not high for conversational AI products

    Mitigation: Focus on achieving larger scale and technical optimization to improve gross margin to be similar to or higher than RTE business.

    What to watch in Q3 FY26

    5

    Conversational AI Revenue Contribution

    by end of FY26
    Target5% of total revenue (Q4 run rate)

    Why it matters

    This metric indicates the pace of monetization and adoption of Agora's key growth driver, conversational AI.

    So overall, we are still targeting a 5% revenue contribution from conversational AI by the end of this year.

    Q&A highlights

    4

    What are the demand trends in overseas and domestic markets? What are other meaningful conversational AI use cases beyond call centers, and what is the projected AI revenue contribution and gross margin trend? What is the competitive landscape?

    Demand for RTE is stable across China (social, entertainment, education) and international markets (shopping, financial services, gaming). For AI, call centers are a broad category with many use cases, and the company is expanding into companionship devices in Japan. They target 5% AI revenue contribution by year-end. Gross margin for AI is currently low due to subscale but expected to improve with scale and optimization. Competition is diverse, with players attacking different technology layers, but Agora is confident due to its audio processing expertise.

    “So overall, we are still targeting a 5% revenue contribution from conversational AI by the end of this year.”

    asked by Harry Zhuang · answered by Jingbo Wang

    2 min read5 chapters

    Detailed Narrative

    01

    Conversational AI Momentum and Market Opportunity

    Agora reported strong momentum in the adoption of its voice AI agent, particularly in call centers. These agents are demonstrating performance matching or surpassing human representatives in tasks like outbound marketing and market surveys, delivering substantial cost savings and consistent quality. Management believes this marks the beginning of a significant shift from human to AI agents in call centers globally, freeing people from tedious and stressful work. The market is segmented into simple IVR tasks, complex human-handled tasks, and a large middle segment for AI agents.

    02

    Product and Ecosystem Development

    The company launched Agora Skills and Agora CLI to enhance its developer ecosystem. Agora Skills provides platform knowledge for AI coding assistants (e.g., Claude Code, Cursor, Codex) to work with Agora's SDKs. Agora CLI offers a unified command-line interface for coding agents. Additionally, Agora partnered with Gradium, a leading voice AI platform, to integrate Gradium TTS within its conversational AI engine, aiming for seamless and low-latency text-to-speech capabilities.

    03

    Strategic Investments in Infrastructure

    Agora continues to invest in its software-defined real-time network (SD-RTN), which is a foundational advantage. As the company expands into human-to-AI interactions, the SD-RTN's importance grows for ensuring ultra-low latency inference and transmission, critical for smooth conversational AI experiences. These investments are seen as a decisive factor in competing and succeeding in the conversational AI arena.

    04

    Financial Performance and Cost Management

    Revenue growth was driven by continued expansion of real-time engagement services across sectors like e-commerce, shopping, financial services, and gaming, alongside growing adoption of conversational AI solutions. The company maintained disciplined cost management, with sales and marketing expenses down 1.5% year-over-year and G&A expenses down 9.5% year-over-year. The GAAP operating loss narrowed significantly, and the company aims for quarterly GAAP operating profitability by year-end.

    05

    Capital Allocation and Share Repurchase

    Agora continued its share repurchase program, buying back approximately 1 million ADS for $3.7 million in Q2. Cumulatively, the company has repurchased 44.6 million ADS for $159.9 million under the program, which expires in February 2027. CEO Tony Zhao also announced plans for a personal $20 million share repurchase, expected to commence in September or October, subject to legal restrictions.

    AI-generated summary of the company’s earnings call. Not investment advice.