Agora Inc (NASDAQ:API) stock is seen slightly lower in Tuesday’s early premarket deals, trading at US$2.79, after the Zoom-challenger video communications app failed to meet Street expectations on the top or bottom line with its second-quarter results.
The Zoom rival posted revenue of $34 million, down 17% year-over-year and below expectations of $39 million.
The Agora division brought in $15.3 million, down 5.6% from $16.2 million, which the company attributed to declining consumer spending. Its Shengwang division, which serves China, saw revenue decline nearly 20% to $18.7 million.
The company’s net loss per share was $0.45, compared to $0.27 a year earlier and well wider than an expected $0.12.
CEO Tony Zhao acknowledged the difficulty.
“We continued to face a very challenging operating environment this quarter,” Zhao said in a statement. “The Agora business was impacted by the tightening financing conditions of certain customers, while the Shengwang business navigated a slowing economy and fast evolving regulations in certain downstream markets.”
He continued: “In light of these challenges, we have taken steps to focus our resources on fewer projects with clear customer value, such as our high-definition video initiative, and target emerging use cases, such as vertical social networks. As a result, our non-GAAP net loss and operating cash outflow further narrowed this quarter, both sequentially and year-on-year.”
To that point, Agora’s adjusted EBITDA was negative $6.6 million, compared to negative $15.3 million in the same quarter of 2022.
Perhaps clinging to that glint of optimism, investors have sent shares of Agora 2% higher in extended trading to $2.89.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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