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Agora, Inc.

Agora, Inc.API決算レポート

Nasdaq · Software - Application

Agora, Inc. provides Real-Time Engagement Platform-as-a-Service (RTE-PaaS) in the People's Republic of China, the United States, and internationally. The company RTE-PaaS offers developers with software tools to embed real-time video, voice, and messaging functionalities into applications. Its products include video calling, voice calling, interactive live streaming, chat, signaling. Acceleration products; and extensions, which comprise interactive whiteboard, recording, analytics, and extens...

What changed in Agora, Inc.'s 20-F — 2023 vs 2024

Top changes in Agora, Inc.'s 2024 20-F

468 paragraphs added · 557 removed · 393 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

178 edited+33 added−114 removed529 unchanged
Any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless.
Any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless.
However, we may fail, on acceptable terms and in a timely manner, or at all, to obtain, maintain or update the permits and licenses we may need to operate and expand our business from time to time and as required by the supervisory authorities.
However, we may fail, on acceptable terms and in a timely manner, or at all, to obtain, maintain or update the permits and licenses we may need to operate and expand our business from time to time and as required by the supervisory authorities.
Other Subsidiaries Primary Beneficiary of VIEs VIEs and VIEs’ Subsidiaries Elimination Adjustments Consolidated Total (in US$ thousands) Purchase of service from Group companies (4) — — (17,327) (48,587) 65,914 — Sales of service from Group Companies (4) — 23,951 24,636 17,327 (65,914) — Operating activities with external parties 4,874 (38,117) (7,763) 27,395 — (13,611) Net cash generated from (used in) operating activities 4,874 (14,166) (454) (3,865) — (13,611) Investment in inter-company-others (5) 50,692 19,016 23,103 — (92,811) — Other investing activities (14,675) 61,312 (83) 10,089 — 56,643 Net cash generated from (used in) investing activities 36,017 80,328 23,020 10,089 (92,811) 56,643 Proceeds (used in) generated from inter-financing-others (5) — (73,795) (19,016) — 92,811 — Other financing activities (63,277) 10,909 — — — (52,368) Net cash provided by financing activities (63,277) (62,886) (19,016) — 92,811 (52,368) For the Year Ended December 31, 2022 Agora, Inc.
Other Subsidiaries Primary Beneficiary of VIEs VIEs and VIEs’ Subsidiaries Elimination Adjustments Consolidated Total (in US$ thousands) Purchase of service from Group companies (4) — — (17,327) (48,587) 65,914 — Sales of service from Group Companies (4) — 23,951 24,636 17,327 (65,914) — Operating activities with external parties 4,874 (38,117) (7,763) 27,395 — (13,611) Net cash provided by (used in) operating activities 4,874 (14,166) (454) (3,865) — (13,611) Investment in inter-company-others (5) 50,692 19,016 23,103 — (92,811) — Other investing activities (14,675) 61,312 (83) 10,089 — 56,643 Net cash provided by (used in) investing activities 36,017 80,328 23,020 10,089 (92,811) 56,643 Proceeds (used in) provided by inter-financing-others (5) — (73,795) (19,016) — 92,811 — Other financing activities (63,277) 10,909 — — — (52,368) Net cash used in financing activities (63,277) (62,886) (19,016) — 92,811 (52,368) For the Year Ended December 31, 2022 Agora, Inc.
In addition, we will face risks in doing business internationally that could adversely affect our business, including: • the difficulty of managing and staffing international operations and the increased operations, travel, infrastructure and legal compliance costs associated with numerous international locations; • challenges to our corporate culture resulting from a dispersed workforce; • our ability to effectively price our products in competitive international markets; • new and different sources of competition; • our ability to comply with the applicable laws and regulations in different jurisdictions; • the need to adapt and localize our products for specific countries; • the need to offer customer support in various languages; • difficulties in understanding and complying with local laws, regulations and customs in foreign jurisdictions; • difficulties with differing technical and environmental standards, privacy, cybersecurity, data protection and telecommunications regulations and certification requirements outside our home markets, the United States and China, which could prevent customers from deploying our products or limit their usage; • compliance with various export controls, economic sanctions and various anti-bribery and anti-corruption laws in other jurisdictions; • tariffs and other non-tariff trade barriers, such as quotas and local content rules; • more limited protection for intellectual property rights in some countries; • adverse tax consequences; • fluctuations in currency exchange rates, which could increase the price of our products in certain markets, increase the expenses of our international operations and expose us to foreign currency exchange rate risk or the cost and risk of hedging transaction if we choose to enter into such transactions in the future; • currency control regulations or restrictions on the transfer of funds; • deterioration of relations among China, the United States and other countries; • exposure to uncertain political and economic environment that causes instability for businesses and volatility in global financial markets; and 20 • political or social unrest or economic instability in a specific country or region in which we operate, which could have an adverse impact on our operations in that location.
In addition, we will face risks in doing business internationally that could adversely affect our business, including: • the difficulty of managing and staffing international operations and the increased operations, travel, infrastructure and legal compliance costs associated with numerous international locations; • challenges to our corporate culture resulting from a dispersed workforce; • our ability to effectively price our products in competitive international markets; • new and different sources of competition; • our ability to comply with the applicable laws and regulations in different jurisdictions; • the need to adapt and localize our products for specific countries; • the need to offer customer support in various languages; • difficulties in understanding and complying with local laws, regulations and customs in foreign jurisdictions; • difficulties with differing technical and environmental standards, privacy, cybersecurity, data protection and telecommunications regulations and certification requirements outside our home markets, the United States and China, which could prevent customers from deploying our products or limit their usage; • compliance with various export controls, economic sanctions and various anti-bribery and anti-corruption laws in other jurisdictions; • tariffs and other non-tariff trade barriers, such as quotas and local content rules; • more limited protection for intellectual property rights in some countries; • adverse tax consequences; • fluctuations in currency exchange rates, which could increase the price of our products in certain markets, increase the expenses of our international operations and expose us to foreign currency exchange rate risk or the cost and risk of hedging transaction if we choose to enter into such transactions in the future; • currency control regulations or restrictions on the transfer of funds; • deterioration of relations among China, the United States and other countries; 21 • exposure to uncertain political and economic environment that causes instability for businesses and volatility in global financial markets; and • political or social unrest or economic instability in a specific country or region in which we operate, which could have an adverse impact on our operations in that location.
Some factors that may cause our operating results to fluctuate from period to period include: • our ability to attract, retain and increase revenues from customers; • fluctuations in the amount of revenues from our customers; • market acceptance of our products and our ability to introduce new products and enhance existing products; • end-user demand for applications with real-time engagement features; • competition and the actions of our competitors, including pricing changes and the introduction of new products, services and geographies; • our ability to control costs and operating expenses, including the fees that we pay network and cloud service providers for data delivery and data centers for additional bandwidth; • our investments in research and development activities; • changes in our pricing as a result of our optimization efforts or otherwise; • reductions in pricing as a result of negotiations with our larger customers; • the rate of expansion and productivity of our sales force; • changes in the mix of products that our customers use; 24 • changes in end user and customer demand as end users increase and decrease their time online or changes in end user or customer demand for our products; • the expansion of our business, particularly in international markets; • changes in foreign currency exchange rates; • changes in laws, regulations or regulatory enforcement in the United States, China or other countries that impact our ability to market, sell or deliver our products; • the amount and timing of operating costs and capital expenditures related to the operations and expansion of our business, including investments in international expansion; • significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our products on our platform; • general economic and political conditions that may adversely affect a prospective customer’s ability or willingness to adopt our products, delay a prospective customer’s adoption decision, reduce the revenues that we generate from the use of our products or impact customer retention; • extraordinary expenses such as litigation or other dispute-related settlement payments; • sales tax and other tax determinations by authorities in the jurisdictions in which we conduct business; • the impact of new accounting pronouncements; • expenses incurred in connection with mergers, acquisitions or other strategic transactions and integrating acquired business, technologies, services, products and other assets; and • fluctuations in share-based compensation expenses.
Some factors that may cause our operating results to fluctuate from period to period include: • our ability to attract, retain and increase revenues from customers; • fluctuations in the amount of revenues from our customers; • market acceptance of our products and our ability to introduce new products and enhance existing products; • end-user demand for applications with real-time engagement features; • competition and the actions of our competitors, including pricing changes and the introduction of new products, services and geographies; • our ability to control costs and operating expenses, including the fees that we pay network and cloud service providers for data delivery and data centers for additional bandwidth; • our investments in research and development activities; • changes in our pricing as a result of our optimization efforts or otherwise; • reductions in pricing as a result of negotiations with our larger customers; 25 • the rate of expansion and productivity of our sales force; • changes in the mix of products that our customers use; • changes in end user and customer demand as end users increase and decrease their time online or changes in end user or customer demand for our products; • the expansion of our business, particularly in international markets; • changes in foreign currency exchange rates; • changes in laws, regulations or regulatory enforcement in the United States, China or other countries that impact our ability to market, sell or deliver our products; • the amount and timing of operating costs and capital expenditures related to the operations and expansion of our business, including investments in international expansion; • significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our products on our platform; • general economic and political conditions that may adversely affect a prospective customer’s ability or willingness to adopt our products, delay a prospective customer’s adoption decision, reduce the revenues that we generate from the use of our products or impact customer retention; • extraordinary expenses such as litigation or other dispute-related settlement payments; • sales tax and other tax determinations by authorities in the jurisdictions in which we conduct business; • the impact of new accounting pronouncements; • expenses incurred in connection with mergers, acquisitions or other strategic transactions and integrating acquired business, technologies, services, products and other assets; and • fluctuations in share-based compensation expenses.
In addition, under our memorandum and articles of association, for the purposes of determining those shareholders who are entitled to attend and vote at any general meeting, our directors may close our register of members or fix in advance a record date for such meeting, and such closure of our register of members or the setting of such a record date may prevent you from withdrawing the underlying Class A ordinary shares represented by your ADSs and becoming the registered holder of such shares prior to the record date, so that you would not be able to attend the general meeting or to vote directly.
In addition, under our memorandum and articles of association, for the purposes of determining those shareholders who are entitled to attend and vote at any general meeting, our directors may close our register of members or fix in advance a record date for such meeting, and such closure of our register of members or the setting of such a record date may prevent you from withdrawing the underlying Class A ordinary shares represented by your ADSs and becoming the registered holder of such shares 50 prior to the record date, so that you would not be able to attend the general meeting or to vote directly.
Taxation.” Implication of the Holding Foreign Companies Accountable Act According to the Holding Foreign Companies Accountable Act, or the HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for two consecutive years, the SEC shall prohibit our shares or ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States.
Taxation.” 8 Implication of the Holding Foreign Companies Accountable Act According to the Holding Foreign Companies Accountable Act, or the HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for two consecutive years, the SEC shall prohibit our shares or ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States.
See “—Risks Related to Doing Business in China—It may be difficult for overseas regulators to conduct investigations or collect evidence within China,” and “—You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts 51 may be limited, because we are incorporated under Cayman Islands law and conduct a significant portion of our business operations in emerging markets” for risks associated with investing in us as a Cayman Islands company.
See “—Risks Related to Doing Business in China—It may be difficult for overseas regulators to conduct investigations or collect evidence within China,” and “—You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law and conduct a significant portion of our business operations in emerging markets” for risks associated with investing in us as a Cayman Islands company.
In light of the various requirements imposed by PRC regulations on loans to, and direct investment in, PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals in a timely manner, if at all, with respect to future loans to our PRC subsidiaries or the VIE or future capital contributions by us to our PRC subsidiaries.
In light of the various requirements imposed by PRC regulations on loans to, and direct investment in, PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals in a timely manner, if at all, with respect to future loans to our PRC subsidiaries or future capital contributions by us to our PRC subsidiaries.
If we are or were a PFIC for any taxable year during which a U.S. investor holds or held an ADS or an ordinary share, and unless the U.S. Holder makes or has made a mark-to-market election (as described below in the section of this annual report captioned “Item 10. 54 Additional Information—E. Taxation-U.S.
If we are or were a PFIC for any taxable year during which a U.S. investor holds or held an ADS or an ordinary share, and unless the U.S. Holder makes or has made a mark-to-market election (as described below in the section of this annual report captioned “Item 10. Additional Information—E. Taxation—U.S.
See “—Risks Related to Doing Business in China—We may be adversely affected by the complexity, uncertainties and changes in PRC laws, rules and regulations, particularly of internet businesses” of this annual report. 32 Almost all access to the internet in China is maintained through state-owned telecommunication operators under the administrative control and regulatory supervision of the MIIT.
See “—Risks Related to Doing Business in China—We may be adversely affected by the complexity, uncertainties and changes in PRC laws, rules and regulations, particularly of internet businesses” of this annual report. Almost all access to the internet in China is maintained through state-owned telecommunication operators under the administrative control and regulatory supervision of the MIIT.
Since a significant amount of our future revenues and cash flow will be denominated in Renminbi, any existing and future restrictions on currency exchange may limit our ability to utilize cash generated in Renminbi to fund our business activities outside of the PRC or pay dividends in foreign currencies to our shareholders, and may limit our ability to obtain foreign currency through debt or equity financing for our PRC subsidiaries and the VIE.
Since a significant amount of our future revenues and cash flow will be denominated in Renminbi, any existing and future restrictions on currency exchange may limit our ability to utilize cash generated in Renminbi to fund our business activities outside of the PRC or pay dividends in foreign currencies to our shareholders, and may limit our ability to obtain foreign currency through debt or equity financing for our PRC subsidiaries.
Such a failure could result in our inability to acquire new customers demanding capacity not available on our platform. If we are unable to provide sufficient bandwidth, we may also become contractually obligated to provide affected customers with service credits under service level commitments in our customer agreements. Seasonality may cause fluctuations in our sales and operating results.
Such a failure could result in our inability to acquire new customers demanding capacity not available on our platform. If we are unable to provide sufficient bandwidth, we may also become contractually obligated to provide affected customers with service credits under service level commitments in our customer agreements. 31 Seasonality may cause fluctuations in our sales and operating results.
The failure of our beneficial owners who are PRC residents to register or amend their foreign exchange registrations in a timely manner pursuant to SAFE Circular 37 and subsequent implementation rules, or the failure of future beneficial owners of our company who are PRC residents to comply with the registration procedures set forth in SAFE Circular 37 and subsequent implementation rules, may subject such beneficial owners, our PRC subsidiaries or the VIE to fines and legal sanctions.
The failure of our beneficial owners who are PRC residents to register or amend their foreign exchange registrations in a timely manner pursuant to SAFE Circular 37 and subsequent implementation rules, or the failure of future beneficial owners of our company who are PRC residents to comply with the registration procedures set forth in SAFE Circular 37 and subsequent implementation rules, may subject such beneficial owners, our PRC subsidiaries to fines and legal sanctions.
Currently, our PRC 47 subsidiaries may purchase foreign currency for settlement of “current account transactions,” including payment of dividends to us, without the approval of the SAFE by complying with certain procedural requirements. However, the relevant PRC governmental authorities may limit or eliminate our ability to purchase foreign currencies in the future for current account transactions.
Currently, our PRC subsidiaries may purchase foreign currency for settlement of “current account transactions,” including payment of dividends to us, without the approval of the SAFE by complying with certain procedural requirements. However, the relevant PRC governmental authorities may limit or eliminate our ability to purchase foreign currencies in the future for current account transactions.
CFC rules. A U.S. investor should consult its advisors regarding the potential application of these rules. 35 Negative publicity about us, our services, operations and our management may adversely affect our reputation and business. We may, from time to time, receive negative publicity, including negative internet and blog postings about our company, our business, our management or our services.
CFC rules. A U.S. investor should consult its advisors regarding the potential application of these rules. Negative publicity about us, our services, operations and our management may adversely affect our reputation and business. We may, from time to time, receive negative publicity, including negative internet and blog postings about our company, our business, our management or our services.
Our new products or enhancements and changes to our existing products could fail to attain sufficient market acceptance for many reasons, including: • failure to accurately predict and meet market demand by launching products or functionalities desired by customers; • defects, errors, or failures in our products and solutions; • negative publicity about our platform’s performance or effectiveness; • developments in the legal or regulatory landscape that could adversely affect our platform, such as increased legal or regulatory scrutiny; • emergence of competitors whose products and technologies achieve earlier or wider market acceptance than us; • delays in releasing enhancements to our platform to the market, or failure to achieve adequate market acceptance for our platform and its enhancements; and • introduction or anticipated introduction of competing products by our competitors. 19 It is important that we maintain and increase the acceptance of our platform among the developers that work for our customers.
Our new products or enhancements and changes to our existing products could fail to attain sufficient market acceptance for many reasons, including: • failure to accurately predict and meet market demand by launching products or functionalities desired by customers; • defects, errors, or failures in our products and solutions; • negative publicity about our platform’s performance or effectiveness; • developments in the legal or regulatory landscape that could adversely affect our platform, such as increased legal or regulatory scrutiny; • emergence of competitors whose products and technologies achieve earlier or wider market acceptance than us; • delays in releasing enhancements to our platform to the market, or failure to achieve adequate market acceptance for our platform and its enhancements; and • introduction or anticipated introduction of competing products by our competitors. 20 It is important that we maintain and increase the acceptance of our platform among the developers that work for our customers.
The rapid growth in our business has offset this seasonal trend to date, but its impact on revenues may be more pronounced in future periods. 30 Defects or errors in our products could diminish demand for our products, harm our business and operating results and subject us to liability.
The rapid growth in our business has offset this seasonal trend to date, but its impact on revenues may be more pronounced in future periods. Defects or errors in our products could diminish demand for our products, harm our business and operating results and subject us to liability.
This concentrated control will limit your ability to influence corporate matters for the foreseeable future, and, as a result, the trading price of our ADSs could be adversely affected. We are a “controlled company” as defined under the Nasdaq Stock Market corporate governance rules.
This concentrated control will limit your ability to influence corporate matters for the foreseeable future, and, as a result, the trading price of our ADSs could be adversely affected. 48 We are a “controlled company” as defined under the Nasdaq Stock Market corporate governance rules.
Internationally, we currently offer our products in more than 100 countries. Our international operations are subject to country-specific governmental regulations and related actions that may continue to increase our costs or impact our products and platform or prevent us from offering or providing our products in certain countries.
Internationally, we currently offer our products in more than 100 countries. 34 Our international operations are subject to country-specific governmental regulations and related actions that may continue to increase our costs or impact our products and platform or prevent us from offering or providing our products in certain countries.
For example, Shanghai Dayin, Zhaoyan and Shanghai Shengwang enjoy a reduced enterprise tax rate of 15%, because they are qualified as the “high and new technology enterprises strongly supported by the state,” or HNTEs, under the modified Enterprise Income Tax Law of the PRC, or the EIT Law.
For example, Shanghai Dayin and Shanghai Shengwang enjoy a reduced enterprise tax rate of 15%, because they are qualified as the “high and new technology enterprises strongly supported by the state,” or HNTEs, under the modified Enterprise Income Tax Law of the PRC, or the EIT Law.
This would result in the double taxation of earnings: one at the VIE level (for non-deductible expenses) and one at the PRC subsidiaries level (for presumptive earnings on the transfer). Such a transfer and the related tax burdens would reduce our after-tax loss to approximately 4.8% of the pre-tax loss.
This would result in the double taxation of earnings: one at the VIE level (for non-deductible expenses) and one at the PRC subsidiaries level (for presumptive earnings on the transfer). Such a transfer and the related tax burdens would reduce our after-tax loss to approximately 4.4% of the pre-tax loss.
The depositary of the ADSs has agreed to distribute, subject to the terms of the deposit agreement, the cash dividends or other distributions it or the custodian receives on our Class A ordinary shares or other deposited securities underlying the ADSs, after 52 deducting its fees and expenses.
The depositary of the ADSs has agreed to distribute, subject to the terms of the deposit agreement, the cash dividends or other distributions it or the custodian receives on our Class A ordinary shares or other deposited securities underlying the ADSs, after deducting its fees and expenses.
It is difficult to predict how market forces or PRC or U.S. government policies may impact the exchange rate between the Renminbi and the U.S. dollar in the future. We may rely on dividends paid by our PRC subsidiaries.
It is difficult to predict how market forces or PRC or U.S. government policies may impact the exchange rate between the Renminbi and the U.S. dollar in the future. 37 We may rely on dividends paid by our PRC subsidiaries.
Accordingly, holders of ADSs may be unable to participate in our rights offerings and may experience dilution of their holdings as a result. You may be subject to limitations on the transfer of your ADSs. Your ADSs are transferable on the books of the depositary.
Accordingly, holders of ADSs may be unable to participate in our rights offerings and may experience dilution of their holdings as a result. 51 You may be subject to limitations on the transfer of your ADSs. Your ADSs are transferable on the books of the depositary.
If our efforts to comply with GDPR, the UK GDPR, or other applicable EU or UK laws and regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and operating results, and our ability to conduct business in the EU and UK could be significantly impaired. 22 Outside of the EU, we continue to see increased regulation of privacy cybersecurity and data protection, including the adoption of more strict laws with more stringent subject matter specific state laws in the United States and with a broader scope in the PRC.
If our efforts to comply with GDPR, the UK GDPR, or other applicable EU or UK laws and regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and operating results, and our ability to conduct business in the EU and UK could be significantly impaired. 23 Outside of the EU, we continue to see increased regulation of privacy cybersecurity and data protection, including the adoption of more strict laws with more stringent subject matter specific state laws in the United States and with a broader scope in the PRC.
This may happen because of broad market and industry factors, including the performance and 48 fluctuation of the market prices of other companies with business operations located mainly in China that have listed their securities in the United States.
This may happen because of broad market and industry factors, including the performance and fluctuation of the market prices of other companies with business operations located mainly in China that have listed their securities in the United States.
See also “—Risks Related to the ADSs—You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law and conduct a significant portion of our business operations in emerging markets.” 46 Dividends paid to our non-PRC investors and gains on the sale of our ADSs by our non-PRC investors may be subject to PRC tax.
See also “—Risks Related to the ADSs—You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law and conduct a significant portion of our business operations in emerging markets.” 44 Dividends paid to our non-PRC investors and gains on the sale of our ADSs by our non-PRC investors may be subject to PRC tax.
In addition, if new technologies emerge that are able to deliver competitive products and services at lower prices, more efficiently, more conveniently or more securely, such technologies could adversely impact our ability to compete effectively. 21 Our platform needs to be compatible with a variety of network, hardware, mobile and software platforms and technologies, and thus we need to continuously modify and enhance our products and platform to adapt to changes and innovation in these technologies.
In addition, if new technologies emerge that are able to deliver competitive products and services at lower prices, more efficiently, more conveniently or more securely, such technologies could adversely impact our ability to compete effectively. 22 Our platform needs to be compatible with a variety of network, hardware, mobile and software platforms and technologies, and thus we need to continuously modify and enhance our products and platform to adapt to changes and innovation in these technologies.
When our PRC subsidiaries or the VIE incur additional debt, the instruments governing the debt may restrict their ability to pay dividends, make loans or make other distributions or remittances to us.
When our PRC subsidiaries incur additional debt, the instruments governing the debt may restrict their ability to pay dividends, make loans or make other distributions or remittances to us.
These contractual arrangements, as described in more detail below, collectively allow us to (i) direct the activities of Zhaoyan that most significantly impact Zhaoyan’s economic performance, (ii) receive substantially all of the economic benefits of Zhaoyan, and (iii) have an exclusive option to purchase all or part of the equity interests in Zhaoyan when and to the extent permitted by laws of China.
These contractual arrangements, as described in more detail below, collectively allowed us to (i) direct the activities of Zhaoyan that most significantly impact Zhaoyan’s economic performance, (ii) receive substantially all of the economic benefits of Zhaoyan, and (iii) have an exclusive option to purchase all or part of the equity interests in Zhaoyan when and to the extent permitted by laws of China.
This will continue to be the case even if we cease to be a PFIC in a later taxable year, unless one of certain elections is made. See the section of this annual report captioned “Item 10. Additional Information—E. Taxation–U.S. Federal Income Tax Considerations—Passive Foreign Investment Company Rules.” 55
This will continue to be the case even if we cease to be a PFIC in a later taxable year, unless one of certain elections is made. See the section of this annual report captioned “Item 10. Additional Information—E. Taxation–U.S. Federal Income Tax Considerations—Passive Foreign Investment Company Rules.” 53
Although Circular 82 only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by foreign enterprises or individuals, the determining criteria set forth in Circular 82 may reflect the SAT’s general position on how the “de facto management body” test should be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises or PRC enterprise groups.
Although Circular 82 only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by foreign enterprises or individuals, the determining criteria set forth in Circular 82 may reflect the STA’s general position on how the “de facto management body” test should be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises or PRC enterprise groups.
We believe we likely were a passive foreign investment company, or PFIC, for 2023, and there is a significant risk that we will be a PFIC for the current taxable year, and possibly future taxable years, in which case U.S. investors owning the ADSs or Class A ordinary shares will generally be subject to adverse U.S. federal income tax consequences.
We believe we likely were a passive foreign investment company, or PFIC, for 2024, and there is a significant risk that we will be a PFIC for the current taxable year, and possibly future taxable years, in which case U.S. investors owning the ADSs or Class A ordinary shares will generally be subject to adverse U.S. federal income tax consequences.
Risk Factors—Risks Related to Doing Business in China—We are subject to restrictions on currency exchange.” 8 For the purpose of illustration, the below table reflects the hypothetical taxes that might be required to be paid within China, assuming that (i) we have taxable earnings, and (ii) we determine to pay a dividend in the future.
Risk Factors—Risks Related to Doing Business in China—We are subject to restrictions on currency exchange.” 10 For the purpose of illustration, the below table reflects the hypothetical taxes that might be required to be paid within China, assuming that (i) we have taxable earnings, and (ii) we determine to pay a dividend in the future.
We are a holding company and may rely on dividends, loans and other distributions on equity paid by our principal operating subsidiaries and on remittances from the VIE for our offshore cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders, fund inter-company loans, service any debt we may incur outside of China and pay our expenses.
We are a holding company and may rely on dividends, loans and other distributions on equity paid by our principal operating subsidiaries and on remittances from our PRC subsidiaries for our offshore cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders, fund inter-company loans, service any debt we may incur outside of China and pay our expenses.
For details, please see page 50. • You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law and conduct a significant portion of our business operations in emerging markets.
For details, please see page 49. • You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law and conduct a significant portion of our business operations in emerging markets.
If usage levels fail to meet our expectations, our business, operating results and growth prospects would be adversely affected. 18 The market in which we participate is competitive, and if we do not compete effectively, our business, operating results and financial condition could be harmed. The global market for RTE-PaaS is relatively new and rapidly evolving.
If usage levels fail to meet our expectations, our business, operating results and growth prospects would be adversely affected. 19 The market in which we participate is competitive, and if we do not compete effectively, our business, operating results and financial condition could be harmed. The global market for RTE-PaaS is relatively new and rapidly evolving.
Should the IRS, the SAT or other tax authorities assess additional taxes as a result of audits or examinations, we may be required to record charges to operations that could adversely affect our business, operating results and financial condition. Our global operations and structure subject us to potentially adverse tax consequences.
Should the IRS, the STA or other tax authorities assess additional taxes as a result of audits or examinations, we may be required to record charges to operations that could adversely affect our business, operating results and financial condition. Our global operations and structure subject us to potentially adverse tax consequences.
As a result of this decline and the amount of passive assets held by us throughout our 2023 taxable year, we believe we likely were a PFIC for our 2023 taxable year, and there is a significant risk that we will be a PFIC for the current and possibly future taxable years if the market price of the ADSs does not increase.
As a result of this decline and the amount of passive assets held by us throughout our 2024 taxable year, we believe we likely were a PFIC for our 2024 taxable year, and there is a significant risk that we will be a PFIC for the current and possibly future taxable years if the market price of the ADSs does not increase.
For details, please see pages 21 and 22. • Our business is subject to a variety of laws and regulations in the jurisdictions where we operate, including those regarding privacy, cybersecurity and data protection, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidential information.
For details, please see pages 22 and 23. • Our business is subject to a variety of laws and regulations in the jurisdictions where we operate, including those regarding privacy, cybersecurity and data protection, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidential information.
We also may enter into relationships with other businesses to expand our products and platform, which could involve preferred or exclusive licenses, additional channels of distribution, discount pricing or investments in other companies. 29 Any acquisition, investment or business relationship may result in unforeseen operating difficulties and expenditures.
We also may enter into relationships with other businesses to expand our products and platform, which could involve preferred or exclusive licenses, additional channels of distribution, discount pricing or investments in other companies. 30 Any acquisition, investment or business relationship may result in unforeseen operating difficulties and expenditures.
We could also face customer terminations, which could significantly affect both our current and future revenues. Any service or experience level failures could harm our business. 26 We have incurred and may continue to incur substantial share-based compensation expenses. We use share-based compensation to award our management members and employees, and we have incurred share-based compensation expenses.
We could also face customer terminations, which could significantly affect both our current and future revenues. Any service or experience level failures could harm our business. 27 We have incurred and may continue to incur substantial share-based compensation expenses. We use share-based compensation to award our management members and employees, and we have incurred share-based compensation expenses.
To the extent we expand our international activities outside of the United States and China, our exposure to unauthorized copying, transfer and use of our proprietary technology or information may increase. 28 Preventing any unauthorized use of our intellectual property is difficult and costly and the steps we take may be inadequate to prevent the misappropriation of our intellectual property.
To the extent we expand our international activities outside of the United States and China, our exposure to unauthorized copying, transfer and use of our proprietary technology or information may increase. 29 Preventing any unauthorized use of our intellectual property is difficult and costly and the steps we take may be inadequate to prevent the misappropriation of our intellectual property.
Due to the uncertainty of the application of Bulletin 7 and SAT Circular 37, we face uncertainties as to the reporting and other implications of certain past and future transactions where PRC taxable assets are involved, such as offshore restructuring, sale of the shares in our offshore subsidiaries or investments.
Due to the uncertainty of the application of Bulletin 7 and STA Circular 37, we face uncertainties as to the reporting and other implications of certain past and future transactions where PRC taxable assets are involved, such as offshore restructuring, sale of the shares in our offshore subsidiaries or investments.
For details, please see page 18. • The market in which we participate is competitive, and if we do not compete effectively, our business, operating results and financial condition could be harmed. For details, please see page 19. • If our platform does not achieve sufficient market acceptance, our financial results and competitive position will suffer.
For details, please see page 19. • The market in which we participate is competitive, and if we do not compete effectively, our business, operating results and financial condition could be harmed. For details, please see page 20. • If our platform does not achieve sufficient market acceptance, our financial results and competitive position will suffer.
For details, please see pages 19 and 20. • We are subject to a variety of uncertainties, costs and risks associated with our business operation in international markets outside the United States and China. For details, please see pages 20 and 21. • We may not successfully achieve expected growth.
For details, please see pages 20 and 21. • We are subject to a variety of uncertainties, costs and risks associated with our business operation in international markets outside the United States and China. For details, please see pages 21 and 22. • We may not successfully achieve expected growth.
Where we can make a reasonable estimate of the liability relating to pending litigation and determine that an adverse liability resulting from such litigation is probable, we will record a related contingent liability. In 2021, 2022 and 2023, we did not record any contingent liabilities relating to pending litigation.
Where we can make a reasonable estimate of the liability relating to pending litigation and determine that an adverse liability resulting from such litigation is probable, we will record a related contingent liability. In 2022, 2023 and 2024, we did not record any contingent liabilities relating to pending litigation.
Each Class B ordinary share is convertible into one Class A ordinary share at any time by its holder, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. As of March 31, 2024, our chief executive officer beneficially owned all of our issued Class B ordinary shares.
Each Class B ordinary share is convertible into one Class A ordinary share at any time by its holder, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. As of March 31, 2025, our chief executive officer beneficially owned all of our issued Class B ordinary shares.
For details, please see page 44. • Our ADSs will be prohibited from trading in the United States under the HFCAA if the PCAOB is unable to inspect or fully investigate auditors located in China for two consecutive years.
For details, please see page 42. • Our ADSs will be prohibited from trading in the United States under the HFCAA if the PCAOB is unable to inspect or fully investigate auditors located in China for two consecutive years.
For details, please see page 50. • If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding the ADSs, the market price for the ADSs and trading volume could decline.
For details, please see page 49. • If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding the ADSs, the market price for the ADSs and trading volume could decline.
In addition, an independent registered public accounting firm must attest to and report on the effectiveness of the company’s internal control over financial reporting. Our management and independent registered public accounting firm have concluded that our internal control over financial reporting as of December 31, 2023 was effective.
In addition, an independent registered public accounting firm must attest to and report on the effectiveness of the company’s internal control over financial reporting. Our management and independent registered public accounting firm have concluded that our internal control over financial reporting as of December 31, 2024 was effective.
Failure to register or comply with relevant requirements may also limit our ability to contribute additional capital to our PRC subsidiaries and the VIE and limit our PRC subsidiaries’ ability to distribute dividends to our company. These risks could adversely affect our business, operating results and financial condition.
Failure to register or comply with relevant requirements may also limit our ability to contribute additional capital to our PRC subsidiaries and limit our PRC subsidiaries’ ability to distribute dividends to our company. These risks could adversely affect our business, operating results and financial condition.
As a result of these contractual arrangements, Agora, Inc. is considered the primary beneficiary of the VIE for accounting purposes and is able to consolidate the financial results of the VIE in the consolidated financial statements in accordance with U.S. GAAP.
As a result of these contractual arrangements, Agora, Inc. was considered the primary beneficiary of the VIE for accounting purposes and was able to consolidate the financial results of the VIE in the consolidated financial statements in accordance with U.S. GAAP.
The related irrevocable powers of attorney will remain effective until the expiration or early termination of the Voting Rights Proxy Agreement. Agreement that Allows us to Receive Economic Benefits from Zhaoyan Exclusive Technology Consulting and Services Agreement.
The related irrevocable powers of attorney will remain effective until the expiration or early termination of the Voting Rights Proxy Agreement. Agreement that Allowed us to Receive Economic Benefits from Zhaoyan Exclusive Technology Consulting and Services Agreement.
For details, please see page 21. • If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations and changing customer needs, requirements or preferences, our products may become less competitive.
For details, please see page 22. • If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations and changing customer needs, requirements or preferences, our products may become less competitive.
PRC regulation of loans to, and direct investment in, PRC entities by offshore holding companies and governmental control of currency conversion may restrict or prevent us from making loans to our PRC subsidiaries and the VIE, or to make additional capital contributions to our PRC subsidiaries.
PRC regulation of loans to, and direct investment in, PRC entities by offshore holding companies and governmental control of currency conversion may restrict or prevent us from making loans to our PRC subsidiaries, or to make additional capital contributions to our PRC subsidiaries.
For details, please see page 45. Risks Related to the ADSs • The trading price of our ADSs has been and is likely continue to be volatile, which could result in substantial losses to investors holders of our ADSs.
For details, please see page 43. Risks Related to the ADSs • The trading price of our ADSs has been and is likely continue to be volatile, which could result in substantial losses to investors holders of our ADSs.
Increased demand for customer support without corresponding revenues could increase costs and adversely affect our business, operating results and financial condition. 27 If relations between China and the United States deteriorate, our business, operating results and financial condition could be adversely affected.
Increased demand for customer support without corresponding revenues could increase costs and adversely affect our business, operating results and financial condition. 28 If relations between China and the United States deteriorate, our business, operating results and financial condition could be adversely affected.
In determining the adequacy of income taxes, we assess the likelihood of adverse outcomes if our tax positions were challenged by the Internal Revenue Service, or IRS, the State Administration of Taxation, or SAT, and other tax authorities.
In determining the adequacy of income taxes, we assess the likelihood of adverse outcomes if our tax positions were challenged by the Internal Revenue Service, or IRS, the State Taxation Administration, or STA, and other tax authorities.
Directors, Senior Management and Employees—E.Share Ownership.” Upon any sale, transfer, assignment or disposition of any Class B ordinary shares by their holder or a change of ultimate beneficial ownership of any Class B ordinary shares will generally result in the automatic and immediate conversion of such Class B ordinary shares into Class A ordinary shares, except for transfers to certain permitted transferees, which include Agora Partners L.P., an exempted limited partnership to be established in the Cayman Islands (the limited partners of which shall consist primarily of members of management of our company and its affiliates, and which we refer to as the Management Partnership), and affiliates controlled by our 49 chief executive officer, Mr.
Share Ownership.” Upon any sale, transfer, assignment or disposition of any Class B ordinary shares by their holder or a change of ultimate beneficial ownership of any Class B ordinary shares will generally result in the automatic and immediate conversion of such Class B ordinary shares into Class A ordinary shares, except for transfers to certain permitted transferees, which include Agora Partners L.P., an exempted limited partnership to be established in the Cayman Islands (the limited partners of which shall consist primarily of members of management of our company and its affiliates, and which we refer to as the Management Partnership), and affiliates controlled by our chief executive officer, Mr.
As a result of these laws, rules and regulations, our PRC subsidiaries and the VIE are restricted in their ability to transfer a portion of their respective net assets to their shareholders as dividends, loans or advances.
As a result of these laws, rules and regulations, our PRC subsidiaries are restricted in their ability to transfer a portion of their respective net assets to their shareholders as dividends, loans or advances.
On October 17, 2017, the SAT promulgated the Announcement on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source, or SAT Circular 37, which amends certain provisions in Bulletin 7.
On October 17, 2017, the STA promulgated the Announcement on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source, or STA Circular 37, which amends certain provisions in Bulletin 7.
See “—D. Risk Factors—Risks Related to Our Business and Industry—Our business is subject to a variety of laws and regulations in the jurisdictions where we operate, including those regarding privacy, cybersecurity and data protection, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidential information.
Risk Factors—Risks Related to Our Business and Industry—Our business is subject to a variety of laws and regulations in the jurisdictions where we operate, including those regarding privacy, cybersecurity and data protection, and our customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidential information.
For details, please see page 42. • We may be adversely affected by the complexity, uncertainties and changes in PRC laws, rules and regulations, particularly of internet businesses.
For details, please see page 40. • We may be adversely affected by the complexity, uncertainties and changes in PRC laws, rules and regulations, particularly of internet businesses.
The fees pertain to the research and development services between the VIEs and our wholly foreign-owned subsidiaries in China under the VIE agreements, as well as technical consulting services between the VIEs and our other PRC subsidiaries. Cash flow between Agora, Inc., its subsidiaries, and the consolidated VIEs in 2021, 2022 and 2023 is summarized as follows.
The fees pertain to the research and development services between the VIEs and our wholly foreign-owned subsidiaries in China under the VIE agreements, as well as technical consulting services between the VIEs and our other PRC subsidiaries. 9 Cash flow between Agora, Inc., its subsidiaries, and the consolidated VIEs in 2022, 2023 and 2024 is summarized as follows.
We have controlling financial interest over Zhaoyan through a series of contractual arrangements by and among Shanghai Dayin Network Technology Co., Ltd., or Shanghai Dayin, Zhaoyan and Zhaoyan’s shareholders.
We had controlling financial interest over Zhaoyan through a series of contractual arrangements by and among Shanghai Dayin Network Technology Co., Ltd., or Shanghai Dayin, Zhaoyan and Zhaoyan’s shareholders.
For details, please see page 18. • Our operating results and growth prospects depend on acquiring and retaining customers and increasing usage of customers’ applications that integrate our products.
For details, please see page 19. • Our operating results and growth prospects depend on acquiring and retaining customers and increasing usage of customers’ applications that integrate our products.
Agora, Inc. does not conduct operations by itself. We conduct our operations primarily through (i) our subsidiaries in the United States, Singapore and other jurisdictions for our global business; and (ii) the VIE, with which we have maintained contractual arrangements, and our PRC subsidiaries for our business in China.
Agora, Inc. does not conduct operations by itself. We conduct our operations primarily (i) through our subsidiaries in the United States, Singapore and other jurisdictions for our global business; and (ii) for our business in China,through our PRC subsidiaries and the VIE with which we have maintained contractual arrangements until January 2025.
There were no other assets transferred between Agora, Inc., its subsidiaries, and the consolidated VIEs in 2021, 2022 and 2023 except as disclosed below.
There were no other assets transferred between Agora, Inc., its subsidiaries, and the consolidated VIEs in 2022, 2023 and 2024 except as disclosed below.
Financial Information Related to the VIEs The following tables present the summary financial information for the VIEs and their subsidiaries, our wholly foreign-owned subsidiaries in China that are the primary beneficiary of VIEs, and other entities within the Group for the periods presented. 9 Selected Condensed Consolidating Statements of Comprehensive Loss Data For the Year Ended December 31, 2023 Agora, Inc.
Financial Information Related to the VIEs The following tables present the summary financial information for the VIEs and their subsidiaries, our wholly foreign-owned subsidiaries in China that are the primary beneficiary of VIEs, and other entities within the Group for the periods presented. 11 Selected Condensed Consolidating Statements of Comprehensive Loss Data For the Year Ended December 31, 2024 Agora, Inc.
Such a delisting would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition, and prospects. 44 PRC regulations relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners, our PRC subsidiaries or the VIE to liability or penalties, limit our ability to inject capital into our PRC subsidiaries and the VIE or limit our PRC subsidiaries’ and the VIE’s ability to increase their registered capital or distribute profits.
Such a delisting would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition, and prospects. 42 PRC regulations relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners, or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries or limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits.
Any failure by us, our subsidiaries and the VIE in China, even inadvertently, to maintain compliance with applicable PRC laws and regulations, or obtain and maintain required licenses and permissions, in a timely manner or at all, may result in the suspension or termination of our business activities in China, and even subject us, our subsidiaries or the VIE to administrative penalties.
Any failure by us and our subsidiaries in China, even inadvertently, to maintain compliance with applicable PRC laws and regulations, or obtain and maintain required licenses and permissions, in a timely manner or at all, may result in the suspension or termination of our business activities in China, and even subject us, or our subsidiaries to administrative penalties. See “—D.
For details, please see page 43. • We may be required to obtain and maintain permits and licenses to operate our business in China.
For details, please see page 41. • We may be required to obtain and maintain permits and licenses to operate our business in China.
For details, please see page 21. • Our limited operating history and our history of operating and net losses make it difficult to evaluate our current business and prospects and may increase the risks associated with your investment.
For details, please see page 22. 17 • Our limited operating history and our history of operating and net losses make it difficult to evaluate our current business and prospects and may increase the risks associated with your investment.
Zhao. Because of the 20-to-one voting ratio between our Class B ordinary shares and Class A ordinary shares, Mr.
Zhao. Because of the 20-to-1 voting ratio between our Class B ordinary shares and Class A ordinary shares, Mr.
For details, please see pages 48 and 49. • Our dual-class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.
For details, please see page 47. • Our dual-class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.
Under PRC laws, rules and regulations, our Shanghai Dayin, the WFOE, and the VIE are required to set aside at least 10% of their net income each year to fund certain statutory reserves until the cumulative amount of such reserves reaches 50% of their registered capital. These reserves, together with the registered capital, are not distributable as cash dividends.
Under PRC laws, rules and regulations, our PRC subsidiaries are required to set aside at least 10% of their net income each year to fund certain statutory reserves until the cumulative amount of such reserves reaches 50% of their registered capital. These reserves, together with the registered capital, are not distributable as cash dividends.
Other Subsidiaries Primary Beneficiary of VIEs VIEs and VIEs’ Subsidiaries Elimination Adjustments Consolidated Total (in US$ thousands) Assets Current assets: Cash and cash equivalents 5,341 18,101 5,093 8,359 — 36,894 Short-term deposits 51,924 35,000 — — — 86,924 Short-term financial products issued by banks 84,500 353 — — — 84,853 Short-term investments 7,983 — — — — 7,983 Accounts receivable, net — 11,319 — 23,349 — 34,668 Prepayments and other current assets 2,905 3,506 391 2,257 — 9,059 Contract Asset — 1,048 — — — 1,048 Amounts due from intercompany (3) 634,051 177,556 54,783 12,320 (878,710) — Total current assets 786,704 246,883 60,267 46,285 (878,710) 261,429 Property and equipment, net — 20,713 208 1,787 — 22,708 Operating lese right-of-use assets — 3,743 — 268 — 4,011 Intangible Assets — 1,192 — 82 — 1,274 Long-term deposits — 143,127 — — — 143,127 Long-term financial products issued by banks 20,000 — — — — 20,000 Long-term investments — 36,834 — 7,059 — 43,893 Other non-current assets 907 7,570 436 1,994 — 10,907 Land use right, net — 167,246 — — — 167,246 Investments in subsidiaries (2) (93,103) (18,654) — — 111,757 — Investments in VIEs (2) — — (22,930) — 22,930 — Total non-current assets (72,196) 361,771 (22,286) 11,190 134,687 413,166 Total assets 714,508 608,654 37,981 57,475 (744,023) 674,595 Liabilities and shareholders’ equity (deficit) Current liabilities: Accounts payable — 2,937 — 10,059 — 12,996 Advances from customers — 6,055 — 1,710 — 7,765 Taxes payable — 884 22 — — 906 Current operating lease liabilities — 2,105 — 342 — 2,447 Accrued expenses and other current liabilities 681 25,983 2,615 3,501 — 32,780 Amounts due to intercompany (3) 109,078 650,951 53,998 64,683 (878,710) — Total current liabilities 109,759 688,915 56,635 80,295 (878,710) 56,894 Long term borrowings — 11,027 — — — 11,027 Long term payables — 3 — —— — 3 Long-term operating lease liabilities — 1,636 — 90 — 1,726 Deferred tax liabilities — 176 — 20 — 196 Total non-current liabilities — 12,842 — 110 — 12,952 Total liabilities 109,759 701,757 56,635 80,405 (878,710) 69,846 Total shareholders’ equity (deficit) 604,749 (93,103) (18,654) (22,930) 134,687 604,749 Total liabilities, mezzanine equity and shareholders’ equity (deficit) 714,508 608,654 37,981 57,475 (744,023) 674,595 11 As of December 31, 2022 Agora, Inc.
Other Subsidiaries Primary Beneficiary of VIE VIE and VIE’s Subsidiary Elimination Adjustments Consolidated Total (in US$ thousands) Assets Current assets: Cash and cash equivalents 5,341 18,101 5,093 8,359 — 36,894 Short-term deposits 51,924 35,000 — — — 86,924 Short-term financial products issued by banks 84,500 353 — — — 84,853 Short-term investments 7,983 — — — — 7,983 Accounts receivable, net — 11,319 — 23,349 — 34,668 Prepayments and other current assets 2,905 3,506 391 2,257 — 9,059 Contract Asset — 1,048 — — — 1,048 Amounts due from intercompany (3) 634,051 177,556 54,783 12,320 (878,710) — Total current assets 786,704 246,883 60,267 46,285 (878,710) 261,429 Property and equipment, net — 20,713 208 1,787 — 22,708 Operating lease right-of-use assets — 3,743 — 268 — 4,011 Intangible Assets — 1,192 — 82 — 1,274 Long-term deposits — 143,127 — — — 143,127 Long-term financial products issued by banks 20,000 — — — — 20,000 Long-term investments — 36,834 — 7,059 — 43,893 Other non-current assets 907 7,570 436 1,994 — 10,907 Land use right, net — 167,246 — — — 167,246 Investments in subsidiaries (2) (93,103) (18,654) — — 111,757 — Investments in VIE (2) — — (22,930) — 22,930 — Total non-current assets (72,196) 361,771 (22,286) 11,190 134,687 413,166 Total assets 714,508 608,654 37,981 57,475 (744,023) 674,595 Liabilities and shareholders’ equity (deficit) Current liabilities: Accounts payable — 2,937 — 10,059 — 12,996 Advances from customers — 6,055 — 1,710 — 7,765 Taxes payable — 884 22 — — 906 Current operating lease liabilities — 2,105 — 342 — 2,447 Accrued expenses and other current liabilities 681 25,983 2,615 3,501 — 32,780 Amounts due to intercompany (3) 109,078 650,951 53,998 64,683 (878,710) — Total current liabilities 109,759 688,915 56,635 80,295 (878,710) 56,894 Long term borrowings — 11,027 — — — 11,027 Long term payables — 3 — —— — 3 14 As of December 31, 2023 Agora, Inc.
In 2021, 2022 and 2023, our research and development expenses were US$110.7 million, US$114.5 million and US$77.7 million, respectively. If we are unable to develop products internally due to inadequate research and development resources, we may not be able to address our customers’ needs in a timely manner, or at all.
In 2022, 2023 and 2024, our research and development expenses were US$114.5 million, US$77.7 million and US$80.3 million, respectively. If we are unable to develop products internally due to inadequate research and development resources, we may not be able to address our customers’ needs in a timely manner, or at all.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

92 edited+27 added−34 removed218 unchanged
With an open and modular architecture, our SDK breaks down the entire end-to-end transmission path into dozens of loosely coupled components with standardized interfaces for each module, so that developers can enjoy much more granular control over the media pipeline to create the optimal experience for their specific use case.
With an open and modular architecture, our SDK breaks down the entire end-to-end transmission path into dozens of loosely coupled components with standardized interfaces for each module, so that developers can enjoy much more granular control over the media pipeline to create the optimal experience for their specific use case.
Our SDK has comprehensive features and is easy to be integrated into applications across development frameworks with good documentation and simple codes. Our SDK is customizable based on the functionalities needed by the developer and runs on end users’ devices as part of the developer’s application.
Our SDK has comprehensive features and is easy to be integrated into applications across development frameworks with good documentation and simple codes. Our SDK is customizable based on the functionalities needed by the developer and runs on end users’ devices as part of the developer’s application.
Domestic companies seeking to list abroad must carry out relevant security review procedures if their businesses involve such supervision. It further requires that, subsequent securities offerings and listings of an issuer in other overseas markets than where it has offered and listed shall be filed with the CSRC within 3 working days after the relevant application in submitted overseas.
Domestic companies seeking to list abroad must carry out relevant security review procedures if their businesses involve such supervision. It further requires that, subsequent securities offerings and listings of an issuer in other overseas markets than where it has offered and listed shall be filed with the CSRC within 3 working days after the relevant application in submitted overseas.
And upon the occurrence of any of the material events specified below after an issuer has offered and listed securities in an overseas market, the issuer shall submit a report thereof to CSRC within 3 working days after the occurrence and public disclosure of the event: (i) change of control; (ii) investigations or sanctions imposed by overseas securities regulatory agencies or other relevant competent authorities; (iii) change of listing status or transfer of listing segment; (iv) voluntary or mandatory delisting.
And upon the occurrence of any of the material events specified below after an issuer has offered and listed securities in an overseas market, the issuer shall submit a report thereof to CSRC within 3 working days after the occurrence and public disclosure of the event: (i) change of control; (ii) investigations or sanctions imposed by overseas securities regulatory agencies or other relevant competent authorities; (iii) change of listing status or transfer of listing segment; (iv) voluntary or mandatory delisting.
There remain substantial uncertainties as to the interpretation, application and enforcement of the Overseas Listing Trial Measures and how they will affect our operations and our future financing.
There remain substantial uncertainties as to the interpretation, application and enforcement of the Overseas Listing Trial Measures and how they will affect our operations and our future financing.
On February 17, 2023, the CSRC circulated the Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic Enterprises and the relevant CSRC Answers to Reporter Questions on the official website of CSRC which, among others, state that the companies that have already been listed on overseas stock exchanges are not required to make immediate filings for its listing yet need to make filings for subsequent offerings in accordance with the Overseas Listing Trial Measures and the relevant guidelines.
On February 17, 2023, the CSRC circulated the Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic Enterprises and the relevant CSRC Answers to Reporter Questions on the official website of CSRC which, among others, state that the companies that have already been listed on overseas stock exchanges are not required to make immediate filings for its listing yet need to make filings for subsequent offerings in accordance with the Overseas Listing Trial Measures and the relevant guidelines.
U.S. Regulation We are subject to a number of U.S. federal and state laws and regulations that involve matters central to our business. These laws and regulations may involve privacy, cybersecurity, data protection, intellectual property, competition, consumer protection, export taxation, telecommunications or other subjects.
Regulation We are subject to a number of U.S. federal and state laws and regulations that involve matters central to our business. These laws and regulations may involve privacy, cybersecurity, data protection, intellectual property, competition, consumer protection, export taxation, telecommunications or other subjects.
We utilize adaptive artificial intelligence in various modules of our SDK to deliver an optimized end user experience while maintaining a balanced power consumption for device processing. The SD-RTN is a virtual network overlay on top of the public internet that handles real-time data transmission between end-user devices when using our SDK.
We utilize adaptive artificial intelligence in various modules of our SDK to deliver an optimized end user experience while maintaining a balanced power consumption for device processing. 57 The SD-RTN is a virtual network overlay on top of the public internet that handles real-time data transmission between end-user devices when using our SDK.
It delivers high accuracy even with overlapping speech, regional accents, and poor network conditions. 61 • Extensions Marketplace . Our Extension Marketplace is a one-stop shop offering a series of third-party solutions and services, such as featured extensions, video/audio modifiers and other tools, that can be easily incorporated into the developers’ own applications.
It delivers high accuracy even with overlapping speech, regional accents, and poor network conditions. • Extensions Marketplace . Our Extension Marketplace is a one-stop shop offering a series of third-party solutions and services, such as featured extensions, video/audio modifiers and other tools, that can be easily incorporated into the developers’ own applications.
Save for the foregoing, we lease all our facilities and do not own any real property. We believe our facilities are adequate and suitable for our current needs and that, should it be needed, suitable additional or alternative space will be available to accommodate our operations. Item 4A. Unresolved Staff C omments None.
Save for the foregoing, we lease all our facilities and do not own any real property. We believe our facilities are adequate and suitable for our current needs and that, should it be needed, suitable additional or alternative space will be available to accommodate our operations. 77 Item 4A. Unresolved Staff C omments None.
Pursuant to the Revised Review Measures, in addition to “critical information infrastructure operators” who procure internet products and services that affect or may affect national security shall be subject to a cybersecurity review, any “network platform operators” carrying out data processing activities that affect or may affect national security 69 should also be subject to the cybersecurity review requirements.
Pursuant to the Revised Review Measures, in addition to “critical information infrastructure operators” who procure internet products and services that affect or may affect national security shall be subject to a cybersecurity review, any “network platform operators” carrying out data processing activities that affect or may affect national security should also be subject to the cybersecurity review requirements.
On February 17, 2023, the CSRC, as approved by the State Council, released Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Overseas Listing Trial Measures and relevant guidelines, which came into effect on March 31, 2023. 76 The Overseas Listing Trial Measures, among others, lays out specific requirements for filing.
On February 17, 2023, the CSRC, as approved by the State Council, released Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Overseas Listing Trial Measures and relevant guidelines, which came into effect on March 31, 2023. The Overseas Listing Trial Measures, among others, lays out specific requirements for filing.
We offer our products to developers through a suite of simple-to-use, highly customizable and widely compatible APIs, which allows developers to easily and efficiently integrate key RTE functionalities into their proprietary applications by leveraging our products and capabilities as building blocks. 60 Core Products • Video Calling .
We offer our products to developers through a suite of simple-to-use, highly customizable and widely compatible APIs, which allows developers to easily and efficiently integrate key RTE functionalities into their proprietary applications by leveraging our products and capabilities as building blocks. Core Products • Video Calling .
Our value proposition lies in helping developers bring innovative use cases to reality using our products because we ultimately share in their success. 64 Intellectual Property Intellectual property is an important aspect of our business and we seek protection for our intellectual property as appropriate.
Our value proposition lies in helping developers bring innovative use cases to reality using our products because we ultimately share in their success. Intellectual Property Intellectual property is an important aspect of our business and we seek protection for our intellectual property as appropriate.
Pursuant to an Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, or the Double Tax Avoidance Arrangement, promulgated by the SAT on August 21, 2006, and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions and requirements under such Double Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5%.
Pursuant to an Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, or the Double Tax Avoidance Arrangement, promulgated by the STA on August 21, 2006, and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions and requirements under such Double Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5%.
Because these laws and regulations have continued to develop and evolve rapidly, it is possible that we may not be, or may not have been, compliant with each such applicable law or regulation. 77 C.
Because these laws and regulations have continued to develop and evolve rapidly, it is possible that we may not be, or may not have been, compliant with each such applicable law or regulation. C.
Business operators may not (1) collect or use personal information of consumers without their consent, (2) unlawfully divulge, sell or provide personal information of consumers to others or (3) send commercial information to consumers without their consent or request, or when a consumer has explicitly declined to receive such information. 72 On October 16, 2023, the State Council issued the Regulation on the Protection of Minors in Cyberspace which took effect on January 1, 2024.
Business operators may not (1) collect or use personal information of consumers without their consent, (2) unlawfully divulge, sell or provide personal information of consumers to others or (3) send commercial information to consumers without their consent or request, or when a consumer has explicitly declined to receive such information. 69 On October 16, 2023, the State Council issued the Regulation on the Protection of Minors in Cyberspace which took effect on January 1, 2024.
Potential CSRC Approval Required for the Listing of our ADSs 57 On December 24, 2021, the CSRC published the draft Regulations of the State Council on the Administration of Overseas Issuance and Listing of Securities by Domestic Companies (Draft for Comments), or the Administrative Provisions, and the draft Measures for the Record-Filing of Overseas Issuance and Listing of Securities by Domestic Companies (Draft for Comments), or the Filing Measures, or collectively, the Draft Overseas Listing Regulations for public comments, which set out the new regulatory requirements and filing procedures for domestic companies seeking direct or indirect listing in overseas markets.
Potential CSRC Approval Required for the Listing of our ADSs 55 On December 24, 2021, the CSRC published the draft Regulations of the State Council on the Administration of Overseas Issuance and Listing of Securities by Domestic Companies (Draft for Comments), or the Administrative Provisions, and the draft Measures for the Record-Filing of Overseas Issuance and Listing of Securities by Domestic Companies (Draft for Comments), or the Filing Measures, or collectively, the Draft Overseas Listing Regulations for public comments, which set out the new regulatory requirements and filing procedures for domestic companies seeking direct or indirect listing in overseas markets.
Pursuant to the FITE Regulations and the 2021 Negative List, subject to undertakings for opening telecommunication industries made by China for joining World Trade Organization, the ultimate foreign equity ownership in a value-added telecommunications services provider cannot exceed 50%, except for e-commerce, domestic multiparty communications, store-and-forward and call centers.
Pursuant to the FITE Regulations and the 2024 Negative List, subject to undertakings for opening telecommunication industries made by China for joining World Trade Organization, the ultimate foreign equity ownership in a value-added telecommunications services provider cannot exceed 50%, except for e-commerce, domestic multiparty communications, store-and-forward and call centers.
These contractual arrangements, as described in more detail below, collectively allow us to (1) exercise controlling financial interest over Zhaoyan, (2) receive substantially all of the economic benefits of Zhaoyan and (3) purchase all or part of the equity interests in Zhaoyan pursuant to exclusive call option exercisable when so permitted under PRC laws.
These contractual arrangements, as described in more detail below, collectively allowed us to (1) exercise controlling financial interest over Zhaoyan, (2) receive substantially all of the economic benefits of Zhaoyan and (3) purchase all or part of the equity interests in Zhaoyan pursuant to exclusive call option exercisable when so permitted under PRC laws.
Industries that are not listed in the 2021 Negative List are permitted areas for foreign investments and are generally open to foreign investment unless specifically restricted by other PRC regulations. Some restricted industries are limited to equity or contractual joint ventures, while in some cases Chinese partners are required to hold majority interests in such joint ventures.
Industries that are not listed in the 2024 Negative List are permitted areas for foreign investments and are generally open to foreign investment unless specifically restricted by other PRC regulations. Some restricted industries are limited to equity or contractual joint ventures, while in some cases Chinese partners are required to hold majority interests in such joint ventures.
Our company was founded to solve these problems. 58 We want to empower every developer – whether working as a solo entrepreneur or as part of a larger organization – to leverage real-time engagement to create innovative products, elevate end user experiences and differentiate themselves from their competition.
Our company was founded to solve these problems. 56 We want to empower every developer – whether working as a solo entrepreneur or as part of a larger organization – to leverage real-time engagement to create innovative products, elevate end user experiences and differentiate themselves from their competition.
For taxpayers providing value-added telecommunication services, a rate of 6% applies, according to the Notice on Fully Promoting the Pilot Plan for Replacing Business Tax by Value-Added Tax, which was jointly promulgated by the MOF and the SAT on March 23, 2016 and became effective on May 1, 2016, as amended.
For taxpayers providing value-added telecommunication services, a rate of 6% applies, according to the Notice on Fully Promoting the Pilot Plan for Replacing Business Tax by Value-Added Tax, which was jointly promulgated by the MOF and the STA on March 23, 2016 and became effective on May 1, 2016, as amended.
During the same periods, research and development expenses represented 65.9%, 71.3% and 54.9% of our total revenue, respectively. We actively respond to developers’ needs to drive positive end user experiences and our engineers aim to stay on the cutting edge of real-time engagement technologies.
During the same periods, research and development expenses represented 71.3%, 54.9% and 60.3% of our total revenue, respectively. We actively respond to developers’ needs to drive positive end user experiences and our engineers aim to stay on the cutting edge of real-time engagement technologies.
The provision of value-added telecommunications services falls in the restricted category under the 2021 Negative List and the percentage of foreign ownership cannot exceed 50%, except for e-commerce, domestic multi-party communications, store-and-forward and call centers.
The provision of value-added telecommunications services falls in the restricted category under the 2024 Negative List and the percentage of foreign ownership cannot exceed 50%, except for e-commerce, domestic multi-party communications, store-and-forward and call centers.
On April 4, 2018, the MOF and the SAT issued the Notice on Adjustment of VAT Rates, which came into effect on May 1, 2018. According to the notice, the taxable goods previously subject to VAT rates of 17% and 11% become subject to lower VAT rates of 16% and 10% starting from May 1, 2018.
On April 4, 2018, the MOF and the STA issued the Notice on Adjustment of VAT Rates, which came into effect on May 1, 2018. According to the notice, the taxable goods previously subject to VAT rates of 17% and 11% become subject to lower VAT rates of 16% and 10% starting from May 1, 2018.
Regulations on Dividend Distribution The principal laws and regulations regulating the dividend distribution of dividends by FIEs in the PRC include the Company Law of the PRC, as amended in 2018 and further amended on December 29, 2023 which will take effective on July 1, 2024 and Foreign Investment Law promulgated by SCNPC on March 15, 2019 and came into effect on January 1, 2020 and its implementation regulations that took effect the same day.
Regulations on Dividend Distribution The principal laws and regulations regulating the dividend distribution of dividends by FIEs in the PRC include the Company Law of the PRC, as amended in 2018 and further amended on December 29, 2023 which became effective on July 1, 2024 and Foreign Investment Law promulgated by SCNPC on March 15, 2019 and came into effect on January 1, 2020 and its implementation regulations that took effect the same day.
The related irrevocable powers of attorney will remain effective until the expiration or early termination of the Voting Rights Proxy Agreement. Agreement that Allows us to Receive Economic Benefits from Zhaoyan Exclusive Technology Consulting and Services Agreement.
The related irrevocable powers of attorney will remain effective until the expiration or early termination of the Voting Rights Proxy Agreement. Agreement that Allowed us to Receive Economic Benefits from Zhaoyan Exclusive Technology Consulting and Services Agreement.
On February 24, 2023, the CSRC, the MOF, National Administration of State Secrets Protection and National Archives Administration of China jointly issued the Provisions on Strengthening Confidentiality and Archives Administration in Respect of Overseas Issuance and Listing of Securities by Domestic Enterprises, or the Confidentiality and Archives Provisions, which took effect on March 31, 2023, regulating the secrets protection and archives administration behaviors relevant to the overseas listing.
On February 24, 2023, the CSRC, the MOF, National Administration of State Secrets Protection and National Archives Administration of China jointly issued the Provisions on Strengthening Confidentiality and Archives Administration in Respect of Overseas Issuance and Listing of Securities by Domestic Enterprises, or the Confidentiality and Archives Provisions, which took effect on March 31, 2023, regulating the secrets protection and archives administration behaviors relevant to the overseas listing. 74 U.S.
As of the date of this annual report, our principal subsidiaries and variable interest entity include the following entities: • AGORA.IO INC., or Agora Delaware, a Delaware corporation and our wholly-owned subsidiary, which is a holding company of subsidiaries relating to our Agora business. • Agora Lab, Inc., or Agora Lab, a California corporation and a wholly-owned subsidiary of Agora Delaware, which provides services under our Agora business. • Agora.IO Singapore PTE.
As of the date of this annual report, our principal subsidiaries include the following entities: • AGORA.IO INC., or Agora Delaware, a Delaware corporation and our wholly-owned subsidiary, which is a holding company of subsidiaries relating to our Agora business. • Agora Lab, Inc., or Agora Lab, a California corporation and a wholly-owned subsidiary of Agora Delaware, which provides services under our Agora business. • Agora.IO Singapore PTE.
We define active customers as customers from whom we generate more than US$100 of revenue during the preceding 12 months. The active customers of Agora were 1,125, 1,422 and 1,683 as of December 31, 2021, 2022 and 2023, respectively.
We define active customers as customers from whom we generate more than US$100 of revenue during the preceding 12 months. The active customers of Agora were 1,422, 1,683 and 1,723 as of December 31, 2022, 2023 and 2024, respectively.
D. Property, Plants and Equipment The headquarters of our Shengwang business are in Shanghai, where we lease office space with an area of approximately 8,278 square meters. The headquarters of our Agora business are in Santa Clara, where we lease office space with an area of approximately 525 square meters.
D. Property, Plants and Equipment The headquarters of our Shengwang business are in Shanghai, where we lease office space with an area of approximately 6,737 square meters. The headquarters of our Agora business are in Santa Clara, where we lease office space with an area of approximately 525 square meters.
The Negative List and Encouraging Catalog classify the industries into three categories with regard to foreign investment: (i) “encouraged”, (ii) “restricted” and (iii) “prohibited”. The current effective negative list is the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Version), or the 2021 Negative List, which became effective on January 1, 2022.
The Negative List and Encouraging Catalog classify the industries into three categories with regard to foreign investment: (i) “encouraged”, (ii) “restricted” and (iii) “prohibited”. The current effective negative list is the Special Administrative Measures (Negative List) for Foreign Investment Access (2024 Version), or the 2024 Negative List, which became effective on November 1, 2024.
In each of February 2023 and 2024, our board of directors authorized the extension of the foregoing share repurchase program for another 12 months, respectively, with all other terms remaining unchanged. The share repurchase program is expected to expire on February 28, 2025. See “Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers” for more details.
In each of February 2023, 2024 and 2025, our board of directors authorized the extension of the foregoing share repurchase program for another 12 months, respectively, with all other terms remaining unchanged. See “Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers” for more details.
If the enacted version of the Network Data Security Management Regulations mandates clearance of a cybersecurity review and other specific actions to be completed by China-based companies listed on a foreign stock exchange like us, we face uncertainties as to whether such clearance can be timely obtained, or at all.
If the enacted regulations and rules mandates clearance of a cybersecurity review and other specific actions to be completed by China-based companies listed on a foreign stock exchange like us, we face uncertainties as to whether such clearance can be timely obtained, or at all.
We have controlling financial interest over Zhaoyan through a series of contractual arrangements by and among Shanghai Dayin, Zhaoyan and Zhaoyan’s shareholders.
Historically, we had controlling financial interest over Zhaoyan through a series of contractual arrangements by and among Shanghai Dayin, Zhaoyan and Zhaoyan’s shareholders.
The Overseas Listing Trial Measures further stipulates that a fine between RMB 1 million and RMB 10 million may be imposed if an applicant fails to fulfill the filing requirements with the CSRC.
The Overseas Listing Trial Measures further stipulates that a fine between RMB1 million and RMB10 million may be imposed if an applicant fails to fulfill the filing requirements with the CSRC.
Regulations on Social Insurance and Housing Fund Under the Social Insurance Law of the PRC that was promulgated by the SCNPC on October 28, 2010, came into force as of July 1, 2011 and was amended on December 29, 2018 and the Interim Regulations on the Collection and Payment of Social Insurance Premiums that was promulgated by the State Council on January 22, 1999 and was amended on March 24, 2019, employers are required to pay basic endowment insurance, unemployment insurance, basic medical insurance, employment injury insurance, maternity insurance and other social insurance for its employees at specified percentages of the salaries of the employees, up to a maximum amount specified by the local government regulations from time to time.
Violations of the Labor Contract Law and the Labor Law may result in the imposition of fines and other administrative and criminal liability in the case of serious violations. 72 Regulations on Social Insurance and Housing Fund Under the Social Insurance Law of the PRC that was promulgated by the SCNPC on October 28, 2010, came into force as of July 1, 2011 and was amended on December 29, 2018 and the Interim Regulations on the Collection and Payment of Social Insurance Premiums that was promulgated by the State Council on January 22, 1999 and was amended on March 24, 2019, employers are required to pay basic endowment insurance, unemployment insurance, basic medical insurance, employment injury insurance, maternity insurance and other social insurance for its employees at specified percentages of the salaries of the employees, up to a maximum amount specified by the local government regulations from time to time.
We maintain a formal and comprehensive security program designed to protect against security threats and data breaches. Sales and Marketing As of December 31, 2023, our Agora business had 57 employees in its sales and marketing team and our Shengwang business had 108 employees in its sales and marketing team.
We maintain a formal and comprehensive security program designed to protect against security threats and data breaches. Sales and Marketing As of December 31, 2024, our Agora business had 39 employees in its sales and marketing team and our Shengwang business had 72 employees in its sales and marketing team.
Regulations on Foreign Exchange Under the Foreign Currency Administration Rules of the PRC promulgated by the State Council on January 29, 1996 and amended on August 5, 2008 and various regulations issued by the State Administration of Foreign Exchange, or the SAFE, and other relevant PRC government authorities, Renminbi is convertible into other currencies for current account items, such as trade-related receipts and payments and payment of interest and dividends.
The applicants will become the holder of such domain names upon the completion of the registration procedure. 70 Regulations on Foreign Exchange Under the Foreign Currency Administration Rules of the PRC promulgated by the State Council on January 29, 1996 and amended on August 5, 2008 and various regulations issued by the State Administration of Foreign Exchange, or the SAFE, and other relevant PRC government authorities, Renminbi is convertible into other currencies for current account items, such as trade-related receipts and payments and payment of interest and dividends.
Furthermore, the data processor shall conduct a self-assessment on the risk of data cross-border transfer prior to applying for the foregoing security assessment, under which the data processor shall focus on certain factors including, among others, the legitimacy, fairness and necessity of the purpose, scope and method of data cross-border transfer and the data processing of overseas recipients, the risks that the cross-border data transfer may bring to national security, public interests and the legitimate rights and interests of individuals or organizations as well as whether the cross-border data transfer related contracts or the other legally binding documents to be entered with overseas recipients have fully included the data security protection responsibilities and obligations.
Furthermore, the data processor shall conduct a self-assessment on the risk of data cross-border transfer prior to applying for the foregoing security assessment, under which the data processor shall focus on certain factors including, among others, the legitimacy, fairness and necessity of the purpose, scope and method of data cross-border transfer and the data processing of overseas recipients, the risks that the cross-border data transfer may bring to national security, public interests and the legitimate rights and interests of individuals or organizations as well as whether the cross-border data transfer related contracts or the other legally binding documents to be entered with overseas recipients have fully included the data security protection responsibilities and obligations. 67 On February 22, 2023, the CAC issued the Measures for the Standard Contract for Outbound Transfer of Personal Information, which took effect on June 1, 2023.
SD-RTN SD-RTN is our back-end infrastructure, is a virtual network overlay on top of the public internet based on proprietary algorithm. Our SD-RTN acts as a traffic controller that handles and routes real-time data transmissions between end user applications using our SDK. The public internet is an open and best effort network with no assurance of service quality.
Our SD-RTN acts as a traffic controller that handles and routes real-time data transmissions between end user applications using our SDK. The public internet is an open and best effort network with no assurance of service quality.
In addition, the relevant PRC governmental authorities may initiate cybersecurity review if they determine certain network products, services, or data processing activities affect or may affect national security. 70 On July 7, 2022, the CAC promulgated the Measures for the Security Assessment of Cross-Border Data Transfer, which took effect on September 1, 2022 and requires the data processor providing data overseas and falling under any of the following circumstances apply for the security assessment of cross-border data transfer by the national cybersecurity authority through its local counterpart: (1) where the data processor intends to provide important data overseas; (2) where the critical information infrastructure operator and any data processor who has processed personal information of more than 1,000,000 individuals intend to provide personal information overseas; (3) where any data processor who has provided personal information of 100,000 individuals or sensitive personal information of 10,000 individuals to overseas recipients accumulatively since January 1 of the last year intends to provide personal information overseas; and (4) other circumstances where the security assessment of data cross-border transfer is required as prescribed by the CAC.
On July 7, 2022, the CAC promulgated the Measures for the Security Assessment of Cross-Border Data Transfer, which took effect on September 1, 2022 and requires the data processor providing data overseas and falling under any of the following circumstances apply for the security assessment of cross-border data transfer by the national cybersecurity authority through its local counterpart: (1) where the data processor intends to provide important data overseas; (2) where the critical information infrastructure operator and any data processor who has processed personal information of more than 1,000,000 individuals intend to provide personal information overseas; (3) where any data processor who has provided personal information of 100,000 individuals or sensitive personal information of 10,000 individuals to overseas recipients accumulatively since January 1 of the last year intends to provide personal information overseas; and (4) other circumstances where the security assessment of data cross-border transfer is required as prescribed by the CAC.
Unless otherwise agreed pursuant to the agreement, this agreement will remain effective until the earlier of: (1) the end of a ten-year term, which will automatically extend annually unless Shanghai Dayin provides 30 days’ prior written notice to Zhaoyan; (2) Shanghai Dayin terminates the agreement because of Zhaoyan’s breach of the agreement; and (3) the termination of the term of operation of Zhaoyan.
Unless otherwise agreed pursuant to the agreement, this agreement will remain effective until the earlier of: (1) the end of a ten-year term, which will automatically extend annually unless Shanghai Dayin provides 30 days’ prior written notice to Zhaoyan; (2) Shanghai Dayin terminates the agreement because of Zhaoyan’s breach of the agreement; and (3) the termination of the term of operation of Zhaoyan. 76 Agreement that Provided us with the Option to Purchase the Equity Interest in Zhaoyan Exclusive Option Agreement.
Pursuant to the Share Pledge Agreement, dated June 18, 2015, by and among Shanghai Dayin, Zhaoyan and Zhaoyan’s then shareholders, and a joinder agreement entered into by and among Ms.
Pursuant to the Exclusive Option Agreement, dated as of June 18, 2015, by and among Shanghai Dayin, Zhaoyan and Zhaoyan’s then shareholders, and a joinder agreement entered into by and among Ms.
In the opinion of King & Wood Mallesons, our PRC legal counsel: • the ownership structures of Shanghai Dayin and Zhaoyan in China do not and will not violate any applicable PRC law, regulation or rule currently in effect; and 79 • the contractual arrangements among Shanghai Dayin, Zhaoyan and Zhaoyan’s shareholders governed by PRC laws are valid, binding and enforceable in accordance with their terms and applicable PRC laws, rules and regulations currently in effect, and will not violate any applicable PRC law, regulation or rule currently in effect.
In the opinion of King & Wood Mallesons, our PRC legal counsel: • the ownership structures of Shanghai Dayin and Zhaoyan in China had not violated any applicable PRC law, regulation or rule then in effect before the termination of the VIE structure; and • the contractual arrangements among Shanghai Dayin, Zhaoyan and Zhaoyan’s shareholders governed by PRC laws had been valid, binding and enforceable in accordance with their terms and applicable PRC laws, rules and regulations then in effect, and had not violated any applicable PRC law, regulation or rule then in effect before the termination of the VIE structure.
As of December 31, 2023, we had 485 employees in our global research and development team with extensive knowledge and experience in RTE technologies, representing 61.4% of our total employees. In 2021, 2022 and 2023, research and development expenses represented 59.1%, 55.3% and 53.0% of our operating expenses, respectively.
As of December 31, 2024, we had 386 employees in our global research and development team with extensive knowledge and experience in RTE technologies, representing 63.5% of our total employees. In 2022, 2023 and 2024, research and development expenses represented 55.3%, 53.0% and 57.3% of our operating expenses, respectively.
The Dollar-Based Net Retention Rate of Agora was 171%, 144% and 93% for 2021, 2022 and 2023, respectively. The Dollar-Based Net Retention Rate of Shengwang was 84%, 96% and 82% for 2021, 2022 and 2023, respectively, excluding the revenues from Easemob’s CEC business and K12 academic tutoring sector.
The Dollar-Based Net Retention Rate of Agora was 144%, 93% and 95% for 2022, 2023 and 2024, respectively. The Dollar-Based Net Retention Rate of Shengwang was 96%, 82% and 79% for 2022, 2023 and 2024, respectively, excluding the revenues from certain end-of-sale products, Easemob’s CEC business and K12 academic tutoring sector.
Third-party providers of RTE-PaaS primarily include pure-play RTE-PaaS companies, such as us, public cloud providers that offer RTE-PaaS services as a small subset among a wide range of products, as well as communication PaaS providers who focus on phone call and Short Message Service APIs through traditional telecommunication network and provide RTE-PaaS through the internet as auxiliary services. 63 Currently, our competitors mainly include: • Pure-play RTE-PaaS companies; • Cloud communication platforms that offer RTE capabilities along with other communication service solutions in their broader product portfolio; and • Public cloud providers that offer RTE-PaaS services.
Third-party providers of RTE-PaaS primarily include pure-play RTE-PaaS companies, such as us, public cloud providers that offer RTE-PaaS services as a small subset among a wide range of products, as well as communication PaaS providers who focus on phone call and Short Message Service APIs through traditional telecommunication network and provide RTE-PaaS through the internet as auxiliary services.
The active customers of Shengwang were 3,727, 3,705 and 4,144 as of December 31, 2021, 2022 and 2023, respectively, excluding customers of Easemob’s CEC business. As our customers succeed, we share in their success through our usage-based revenue model. We believe a useful indicator of the increased activity from our customers is our Dollar-Based Net Retention Rate.
The active customers of Shengwang were 1,624, 1,835 and 1,979 as of December 31, 2022, 2023 and 2024, respectively, excluding customers of Easemob business. As our customers succeed, we share in their success through our usage-based revenue model. We believe a useful indicator of the increased activity from our customers is our Dollar-Based Net Retention Rate.
Headquartered in Santa Clara, California, Agora is a pioneer and global leader in Real-Time Engagement PaaS, providing developers with simple, flexible, and powerful application programming interfaces, or APIs, to embed real-time voice, video, interactive live-streaming, chat, whiteboard, and artificial intelligence capabilities into their applications.
Headquartered in Santa Clara, California, Agora is a pioneer and global leader in Real-Time Engagement PaaS, providing developers with simple, flexible, and powerful application programming interfaces, or APIs, to embed real-time conversational AI, video, voice, chat and interactive streaming into their applications. Headquartered in Shanghai, China, Shengwang is a pioneer and leading Real-Time Engagement PaaS provider in the China market.
In addition, pursuant to the Notice of Issues Related to the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Listed Company, or SAFE Circular 7, which was issued by the SAFE on February 15, 2012, employees, directors, supervisors, and other senior management participating in any share incentive plan of an overseas publicly-listed company who are PRC citizens or who are non-PRC citizens residing in China for a continuous period of not less than one year, subject to a few exceptions, are required to register with SAFE through a domestic agency as regulated in SAFE Circular 7. 75 In addition, the SAT has issued certain circulars concerning employee stock options and restricted shares, including the Circular on Issues Concerning the Individual Income Tax on Share-option Incentives, or the Circular 461, which was promulgated and took effective on August 24, 2009 and was amended on April 18, 2011.
In addition, pursuant to the Notice of Issues Related to the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Listed Company, or SAFE Circular 7, which was issued by the SAFE on February 15, 2012, employees, directors, supervisors, and other senior management participating in any share incentive plan of an overseas publicly-listed company who are PRC citizens or who are non-PRC citizens residing in China for a continuous period of not less than one year, subject to a few exceptions, are required to register with SAFE through a domestic agency as regulated in SAFE Circular 7.
However, based on the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, or the SAT Circular 81, issued on February 20, 2009 by the SAT, if the relevant PRC tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment. 74 Value-added Tax The Provisional Regulations of the PRC on Value-added Tax, or the VAT Regulations, were promulgated by the State Council on December 13, 1993 and were last amended on November 19, 2017.
However, based on the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, or the STA Circular 81, issued on February 20, 2009 by the STA, if the relevant PRC tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment.
In order to further implement the Computer Software Protection Regulations, promulgated by the State Council on June 4, 1991 and amended on January 30, 2013, which provides a software copyright owner may register with the software registration institution recognized by the copyright administration department of the State Council.
In addition, there is a voluntary registration system administered by the China Copyright Protection Center. The Computer Software Protection Regulations, promulgated by the State Council on June 4, 1991 and last amended on January 30, 2013, provides a software copyright owner may register with the software registration institution recognized by the copyright administration department of the State Council.
The conversion of Renminbi into other currencies and remittance of the converted foreign currency outside the PRC for of capital account items, such as direct equity investments, loans and repatriation of investment, requires the prior approval from the SAFE or its local office. 73 Pursuant to the Circular of the SAFE on Further Improving and Adjusting Foreign Exchange Administration Policies for Direct Investment, or the SAFE Circular 59 promulgated by SAFE on November 19, 2012, which became effective on December 17, 2012 and was further amended on May 4, 2015, October 10, 2018 and December 30, 2019, approval is not required for opening a foreign exchange account and depositing foreign exchange into the accounts relating to the direct investments.
Pursuant to the Circular of the SAFE on Further Improving and Adjusting Foreign Exchange Administration Policies for Direct Investment, or the SAFE Circular 59 promulgated by SAFE on November 19, 2012, which became effective on December 17, 2012 and was further amended on May 4, 2015, October 10, 2018 and December 30, 2019, approval is not required for opening a foreign exchange account and depositing foreign exchange into the accounts relating to the direct investments.
In accordance with the Measures for the Reporting of Foreign Investment Information, which was promulgated by the Ministry of Commerce and State Administration for Market Regulation on December 30, 2019 and came into effect on January 1, 2020, foreign investors or foreign investment enterprises shall submit investment information to the commerce administrative authorities through the Enterprise Registration System and the National Enterprise Credit Information Publicity System.
While silent on specific issues including the discussion on the contractual arrangement with variable interest entities, the Foreign Investment Law and its implementation regulations emphasize the principle of applying “national treatment” to foreign investors. 63 In accordance with the Measures for the Reporting of Foreign Investment Information, which was promulgated by the Ministry of Commerce and State Administration for Market Regulation on December 30, 2019 and came into effect on January 1, 2020, foreign investors or foreign investment enterprises shall submit investment information to the commerce administrative authorities through the Enterprise Registration System and the National Enterprise Credit Information Publicity System.
It provides full-cycle monitoring dashboard to developers so that they can quickly see trends, monitor potential issues and solve problems accordingly in real-time, thereby providing operational transparency and efficiency and enhancing end user experience. • Recording . Our Recording product records and saves video and voice interactions, either on our platform or on servers designated by the developers.
Our Analytics product provides customers with the tools to track video and voice quality, performance and streaming usage. It provides full-cycle monitoring dashboard to developers so that they can quickly see trends, monitor potential issues and solve problems accordingly in real-time, thereby providing operational transparency and efficiency and enhancing end user experience. • Recording .
It enables a wide range of use cases such as session recording in our Interactive Live Streaming and Interactive Whiteboard products, regulatory compliance, record keeping and customer service quality evaluations. • AI Noise Suppression.
Our Recording product records and saves video and voice interactions, either on our platform or on servers designated by the developers. It enables a wide range of use cases such as session recording in our Interactive Live Streaming and Interactive Whiteboard products, regulatory compliance, record keeping and customer service quality evaluations. • AI Noise Suppression.
The data handlers in the field of industry and information technology, refer to industrial enterprises, software and information technology service providers, telecommunications business operators obtaining a license for operation of telecommunications business, entities using radio frequencies and stations and other subjects in the field of industry and information technology that independently determine handling purposes and handling methods in the data handling activities, shall file their catalogues of important data and core data with the local industrial regulatory authorities for the record. 71 On March 22, 2024, the CAC issued the Provisions on Promoting and Regulating the Cross-border Flow of Data, or the Cross-border Flow of Data Provisions, which took effect on the same day and provides that unless the otherwise provided, the data processor shall apply for security assessment for cross-border data transfer to the CAC through the local cyberspace administration at the provincial level if any of the following conditions is met (i) the critical information infrastructure operator transfers personal information or important data abroad, or (ii) the data processor other than a critical information infrastructure operator transfers important data abroad, or has, since January 1 of the current year, transferred the personal information of more than 1 million users (excluding sensitive personal information) or the sensitive personal information of more than 10,000 users abroad cumulatively.
On March 22, 2024, the CAC issued the Provisions on Promoting and Regulating the Cross-border Flow of Data, or the Cross-border Flow of Data Provisions, which took effect on the same day and provides that unless the otherwise provided, the data processor shall apply for security assessment for cross-border data transfer to the CAC through the local cyberspace administration at the provincial level if any of the following conditions is met (i) the critical information infrastructure operator transfers personal information or important data abroad, or (ii) the data processor other than a critical information infrastructure operator transfers important data abroad, or has, since January 1 of the current year, transferred the personal information of more than 1 million users (excluding sensitive personal information) or the sensitive personal information of more than 10,000 users abroad cumulatively.
SAFE Circular 37 Under the Circular of the State Administration of Foreign Exchange on Issues Concerning the Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles, or the SAFE Circular 37, issued by the SAFE and effective on July 4, 2014, PRC residents are required to register with the local SAFE branch prior to the establishment or control of an offshore special purpose vehicle, or the SPV, which is defined as offshore enterprises directly established or indirectly controlled by PRC residents for offshore equity financing with the enterprise assets or interests they hold in China.
The M&A Rules, among other things, requires that offshore special purpose vehicles that are controlled by PRC companies or individuals and that have been formed for overseas listing purposes through acquisitions of PRC domestic interest held by such PRC companies or individuals using shares of such special purpose vehicles or shares held by its shareholders as considerations to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. 73 SAFE Circular 37 Under the Circular of the State Administration of Foreign Exchange on Issues Concerning the Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles, or the SAFE Circular 37, issued by the SAFE and effective on July 4, 2014, PRC residents are required to register with the local SAFE branch prior to the establishment or control of an offshore special purpose vehicle, or the SPV, which is defined as offshore enterprises directly established or indirectly controlled by PRC residents for offshore equity financing with the enterprise assets or interests they hold in China.
Withholding Tax The EIT Law provides that since January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident enterprise investors which do not have an establishment or place of business in the PRC, or which have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within the PRC.
However, if non-resident enterprises have not formed permanent establishments or premises in the PRC, or if they have formed permanent establishment or premises in the PRC but there is no actual relationship between the relevant income derived in the PRC and the established institutions or premises set up by them, enterprise income tax is set at the rate of 10% with respect to their income sourced from inside the PRC. 71 Withholding Tax The EIT Law provides that since January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident enterprise investors which do not have an establishment or place of business in the PRC, or which have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within the PRC.
Ltd., or Agora Singapore, a private company limited by shares incorporated in Singapore and a wholly-owned subsidiary of Agora Delaware, which provides services under our Agora business. • Agora Labs India Private Limited, or Agora India, a private company incorporated in India and jointly owned by Agora Lab and Agora Singapore, which provides services under our Agora business. • ShengWang HongKong Limited, or ShengWang HK (previously known as Agora IO Hongkong Limited), a private company limited by shares incorporated in Hong Kong and our wholly-owned subsidiary, which is a holding company of subsidiaries and the VIE relating to our Shengwang business. • Shanghai Shengwang Technology Co., Ltd., or Shanghai Shengwang (previously known as Shanghai Jiyin Network Technology Co., Ltd.), a PRC limited liability company and a wholly-owned subsidiary of ShengWang HK, which provides services under our Shengwang business. • Shanghai Dayin Network Technology Co., Ltd., or Shanghai Dayin, a PRC limited liability company and a wholly-owned subsidiary of ShengWang HK, which provides services under our Shengwang business. • Shanghai Zhaoyan Network Technology Co., Ltd., or Zhaoyan, a PRC limited liability company.
Ltd., or Agora Singapore, a private company limited by shares incorporated in Singapore and a wholly-owned subsidiary of Agora Delaware, which provides services under our Agora business. • Agora Labs India Private Limited, or Agora India, a private company incorporated in India and jointly owned by Agora Lab and Agora Singapore, which provides services under our Agora business. • Agora (Shanghai) Technology Co., Ltd., or Agora Shanghai, a PRC limited liability company and a wholly-owned subsidiary of Agora Singapore, which provides services under our Agora business. • ShengWang HongKong Limited, or ShengWang HK (previously known as Agora IO Hongkong Limited), a private company limited by shares incorporated in Hong Kong and our wholly-owned subsidiary, which is a holding company of subsidiaries relating to our Shengwang business. • Shanghai Shengwang Technology Co., Ltd., or Shanghai Shengwang (previously known as Shanghai Jiyin Network Technology Co., Ltd.), a PRC limited liability company and a wholly-owned subsidiary of ShengWang HK, which provides services under our Shengwang business. • Shanghai Dayin Network Technology Co., Ltd., or Shanghai Dayin, a PRC limited liability company and a wholly-owned subsidiary of ShengWang HK, which provides services under our Shengwang business. • API Investment Limited, or API Investment (previously known as Agora IO, Inc.), a Cayman Islands exempted company with limited liability and our wholly-owned subsidiary, which is a holding company of subsidiaries relating to certain of our long-term investments. • Shanghai Shengshi Chuangtuo Construction and Development Co., Ltd., a PRC limited liability company in which API Investment indirectly holds 46.39% equity ownership and 100% economic interest.
Technology and Infrastructure We built our cloud-native platform to enable worldwide, real-time video and voice engagement and messaging for up to millions of concurrent users. The key components of our platform are our SDK and the SD-RTN. Our SDK. Our SDK contains all the front-end software modules a developer needs to embed real-time engagement capabilities into an application.
The key components of our platform are our SDK and the SD-RTN. Our SDK Our SDK contains all the front-end software modules a developer needs to embed real-time engagement capabilities into an application.
Organizational Structure We conduct our business through a number of operating entities in the U.S., China and other countries and regions as we continue to expand our global presence. The following diagram illustrates our corporate structure as of the date of this annual report, including primarily our significant subsidiaries and Zhaoyan (1) : (1) Mr.
Organizational Structure We conduct our business through a number of operating entities in the U.S., China and other countries and regions as we continue to expand our global presence.
However, we have been further advised by King & Wood Mallesons that there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, rules and regulations.
However, we have been further advised by King & Wood Mallesons that there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, rules and regulations. Accordingly, the PRC regulatory authorities may in the future take a view that is contrary to the opinion of our PRC legal counsel.
Agreement that Provides us with the Option to Purchase the Equity Interest in Zhaoyan Exclusive Option Agreement. Pursuant to the Exclusive Option Agreement, dated as of June 18, 2015, by and among Shanghai Dayin, Zhaoyan and Zhaoyan’s then shareholders, and a joinder agreement entered into by and among Ms.
Agreements that Provided us with Controlling Financial Interest over Zhaoyan Share Pledge Agreement. Pursuant to the Share Pledge Agreement, dated June 18, 2015, by and among Shanghai Dayin, Zhaoyan and Zhaoyan’s then shareholders, and a joinder agreement entered into by and among Ms.
Organizational Structure—Contractual Arrangements among Shanghai Dayin, Zhaoyan and Zhaoyan’s Shareholders.” As a result of our contractual arrangements with Zhaoyan and Zhaoyan’s shareholders, we are the primary beneficiary of Zhaoyan, and, therefore, have consolidated the financial results of Zhaoyan in our consolidated financial statements in accordance with U.S. GAAP. Zhaoyan provides services under our Shengwang business.
As a result of our contractual arrangements with Zhaoyan and Zhaoyan’s shareholders, we were the primary beneficiary of Zhaoyan, and, therefore, had consolidated the financial results of Zhaoyan in our consolidated financial statements in accordance with U.S. GAAP. Zhaoyan provided services under our Shengwang business. See the section of this annual report captioned “—C.
On July 13, 2006, the MIIT issued the Notice of the Ministry of Information Industry on Intensifying the Administration of Foreign Investment in Value-added Telecommunications Services, or the MIIT Notice, which reiterate the regulations on foreign investment in telecommunications businesses and require foreign investors to set up foreign investment enterprises, or FIEs and obtain telecommunications business operating licenses to conduct any value-added telecommunications business in China. 66 Due to a lack of interpretative materials from the relevant PRC governmental authorities, there are uncertainties regarding whether PRC governmental authorities would consider our corporate structure and contractual arrangements to constitute foreign ownership of a value-added telecommunications business.
On July 13, 2006, the MIIT issued the Notice of the Ministry of Information Industry on Intensifying the Administration of Foreign Investment in Value-added Telecommunications Services, or the MIIT Notice, which reiterate the regulations on foreign investment in telecommunications businesses and require foreign investors to set up foreign investment enterprises, or FIEs and obtain telecommunications business operating licenses to conduct any value-added telecommunications business in China.
Regulations on Value-added Telecommunications Services The Telecommunications Regulations of the PRC, or the Telecom Regulations, implemented on September 25, 2000 and amended on July 29, 2014 and February 6, 2016, are the primary PRC law governing telecommunication services and set out the general framework for the provision of both “basic telecommunication services” and “value-added telecommunication services” by domestic PRC companies.
Regulations on Value-added Telecommunications Services The Telecommunications Regulations of the PRC, or the Telecom Regulations, implemented on September 25, 2000 and amended on July 29, 2014 and February 6, 2016, are the primary PRC law governing telecommunication services and set out the general framework for the provision of both “basic telecommunication services” and “value-added telecommunication services” by domestic PRC companies. 64 “Value-added telecommunication services” is defined as telecommunications and information services provided through public networks, and, according to the Telecom Regulations, operators of value-added telecommunications services shall obtain operating licenses prior to commencing operations from the MIIT or its provincial level counterparts.
Our Platform Our cloud platform enables real-time engagement for millions of concurrent end users worldwide. The key components of our platform are our SDK and the SD-RTN, which are the foundation of the products we offer developers such as Video Calling, Voice Calling, Interactive Live Streaming, Broadcast Streaming, Chat, Signaling, Recording and Analytics, among others.
The key components of our platform are our SDK and the SD-RTN, which are the foundation of the products we offer developers such as Video Calling, Voice Calling, Interactive Live Streaming, Broadcast Streaming, Chat, Signaling, Interactive Whiteboard, Conversational AI Engine and Conversational AI Toolkit for IoT Devices, among others.
We conduct our Agora business mainly through our subsidiaries in the U.S., the U.K., Singapore and India, and our Shengwang business mainly through our subsidiaries in China as well as Zhaoyan. In addition, we hold certain long-term investments mainly through API Investment.
The following diagram illustrates our corporate structure as of the date of this annual report, including primarily our significant subsidiaries: 75 We conduct our Agora business mainly through our subsidiaries in the U.S., Singapore and India, and our Shengwang business mainly through our subsidiaries in China. In addition, we hold certain long-term investments mainly through API Investment.
We have developed our SDK to be as compact as possible once embedded within an application, to ensure compatibility with major operating systems, development frameworks and programming languages, and a wide variety of phones, PCs and other connected devices, including relatively older and less sophisticated models. 62 We also utilize adaptive artificial intelligence, or adaptive AI, in various modules of our SDK, such as encoding, transmission, processing and rendering, to deliver an optimized end user experience while maintaining a balanced power consumption for device processing.
We have developed our SDK to be as compact as possible once embedded within an application, to ensure compatibility with major operating systems, development frameworks and programming languages, and a wide variety of phones, PCs and other connected devices, including relatively older and less sophisticated models.
The Foreign Investment Law grants national treatment to FIEs, except for those FIEs that operate in industries deemed to be either “restricted” or “prohibited” in the “negative list.” The Foreign Investment Law provides that FIEs operating in foreign restricted industries shall meet the investment conditions set out in the “negative list”. 65 On December 26, 2019, the State Council issued the Implementation Rules of the Foreign Investment Law of the PRC, which came into effect on January 1, 2020, to clarify and elaborate relevant provisions of the Foreign Investment Law.
The Foreign Investment Law grants national treatment to FIEs, except for those FIEs that operate in industries deemed to be either “restricted” or “prohibited” in the “negative list.” The Foreign Investment Law provides that FIEs operating in foreign restricted industries shall meet the investment conditions set out in the “negative list”.
Intellectual property laws, procedures and restrictions provide only limited protection and any of our intellectual property rights may be challenged, invalidated, circumvented, infringed or misappropriated.
We own two trademarks in the United States, 86 trademarks in China, one trademark in Hong Kong, and one trademark in Japan. 62 Intellectual property laws, procedures and restrictions provide only limited protection and any of our intellectual property rights may be challenged, invalidated, circumvented, infringed or misappropriated.
Furthermore, the Cross-border Flow of Data Provisions also provides that unless the otherwise provided therein, the data processor other than a critical information infrastructure operator who has, since January 1 of the current year, transferred the personal information of more than 100,000 users, less than 1 million users (excluding sensitive personal information) or the sensitive personal information of more than 10,000 users abroad cumulatively shall conclude a standard contract for outbound transfer of personal information with overseas recipients or go through the authentication for protection of personal information in accordance with the law.
Furthermore, the Cross-border Flow of Data Provisions also provides that unless the otherwise provided therein, the data processor other than a critical information infrastructure operator who has, since January 1 of the current year, transferred the personal information of more than 100,000 users, less than 1 million users (excluding sensitive personal information) or the sensitive personal information of more than 10,000 users abroad cumulatively shall conclude a standard contract for outbound transfer of personal information with overseas recipients or go through the authentication for protection of personal information in accordance with the law. 68 On September 24, 2024, the State Council of the PRC promulgated the Regulation on Network Data Security Management, which took effect on January 1, 2025 and apply to network data processing activities carried out within the territory of the People’s Republic of China as well as the supervision and management of their security, and which stipulates that data processors engaging in data processing activities that affect or may affect national security shall be subject to network security review in accordance with the relevant laws and regulations.
If a communication network operator violates these measures, the MIIT or its local counterparts may order rectification or impose a fine up to RMB30,000 in case a violation is not duly rectified.
If a communication network operator violates these measures, the MIIT or its local counterparts may order rectification or impose a fine up to RMB30,000 in case a violation is not duly rectified. 65 On December 16, 1997, the Ministry of Public Security issued the Administration Measures on the Security Protection of Computer Information Network with International Connections which was amended on January 8, 2011.
On December 15, 2019, Cyberspace Administration of China, or the CAC, promulgated the Provisions on Ecological Governance of Network Information Content, which became effective on March 1, 2020, to further regulate the network information and content. 67 Regulation on Cybersecurity and Data Security Internet security in China is regulated and restricted from a national security standpoint.
These obligations are reinforced by the Provisions on Ecological Governance of Network Information Content, effective since March 2020. Regulation on Cybersecurity and Data Security Internet security in China is regulated and restricted from a national security standpoint.
If any operating license holder violates these measures, the PRC government may revoke its operating license and shut down its websites.
Such administration measures prohibit using the internet to leak state secrets or to spread socially destabilizing materials. If any operating license holder violates these measures, the PRC government may revoke its operating license and shut down its websites.
The Administrative Provisions on Security Vulnerability of Network Products, or the Provisions on Security Vulnerability, was jointly promulgated by the MIIT, the CAC and the Ministry of Public Security on July 12, 2021 and became effective on September 1, 2021.
The PRC Data Security Law, among other things, provides for a security review procedure for the data activities that may affect national security and imposes export restrictions on certain data and information. 66 The Administrative Provisions on Security Vulnerability of Network Products, or the Provisions on Security Vulnerability, was jointly promulgated by the MIIT, the CAC and the Ministry of Public Security on July 12, 2021 and became effective on September 1, 2021.
“Network operators,” who are broadly defined as owners and administrator of networks and network service providers, shall meet their cybersecurity obligations and shall take technical measures and other necessary measures to protect the safety and stability of their networks. 68 On November 15, 2018, the Cyberspace Administration issued the Provisions on Security Assessment of the Internet Information Services with Public Opinion Attributes or Social Mobilization Capacity, which came into effect on November 30, 2018.
“Network operators,” who are broadly defined as owners and administrator of networks and network service providers, shall meet their cybersecurity obligations and shall take technical measures and other necessary measures to protect the safety and stability of their networks.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

76 edited+10 added−10 removed69 unchanged
We believe this is a useful indicator of liquidity that provides information to management and investors about the amount of cash generated from our core operations that, after the purchases of property and equipment, can be used for strategic initiatives, including investing in our business and strengthening our balance sheet.
We believe this is a useful indicator of liquidity that provides information to management and investors about the amount of cash generated from our core operations that, after the purchases of property and equipment, can be used for strategic initiatives, including investing in our business and strengthening our balance sheet.
We expect our free cash flow to fluctuate in future periods as we invest in our business to support our plans for growth. Free cash flow is not a measure calculated in accordance with U.S. GAAP.
We expect our free cash flow to fluctuate in future periods as we invest in our business to support our plans for growth. Free cash flow is not a measure calculated in accordance with U.S. GAAP.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section of this annual report captioned “Item 3. Key Information—D. Risk Factors” and in other parts of this annual report. Our fiscal year ends on December 31. 80 A.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section of this annual report captioned “Item 3. Key Information—D. Risk Factors” and in other parts of this annual report. Our fiscal year ends on December 31. A.
Starting from January 1, 2021, we make estimates of expected credit and collectability trends for the allowance for credit losses based upon assessment of various factors, including historical collection trends, the age of the accounts receivable balances, the customer’s risk characteristics, current economic conditions, and other factors that may affect its ability to collect from the customers.
Starting from January 1, 2021, we make estimates of expected credit and collectability trends for the allowance for credit losses based upon assessment of various factors, including historical collection trends, the age of the accounts receivable balances, the customer’s risk 91 characteristics, current economic conditions, and other factors that may affect its ability to collect from the customers.
We believe that by investing in our brand and developer relationships, we can continuously drive awareness and attract more customers to our platform. 81 Expanding Usage of Existing Customers We believe that there are significant opportunities for growth with many of our existing customers. Many customers adopt our products through self-managed deployments and often significantly expand their usage over time.
We believe that by investing in our brand and developer relationships, we can continuously drive awareness and attract more customers to our platform. Expanding Usage of Existing Customers We believe that there are significant opportunities for growth with many of our existing customers. Many customers adopt our products through self-managed deployments and often significantly expand their usage over time.
General and administrative expenses also include costs related to current expected credit loss, legal and other professional services fees and an allocation of our general overhead expenses. 86 We expect to incur additional expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a national securities exchange, costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC and increased expenses for insurance, investor relations and professional services.
General and administrative expenses also include costs related to current expected credit loss, legal and other professional services fees and an allocation of our general overhead expenses. 83 We expect to incur additional expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a national securities exchange, costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC and increased expenses for insurance, investor relations and professional services.
Trend Information Other than as disclosed in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year of 2023 that are reasonably likely to have a material adverse effect on our revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial condition.
Trend Information Other than as disclosed in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year of 2024 that are reasonably likely to have a material adverse effect on our revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial condition.
The equity holders of our PRC operating subsidiaries who are incorporated in Hong Kong may be able to benefit from the 5% withholding tax rate for the dividends received from PRC subsidiaries, if they satisfy the conditions prescribed under SAT Circular 81 and other relevant tax rules and regulations.
The equity holders of our PRC operating subsidiaries who are incorporated in Hong Kong may be able to benefit from the 5% withholding tax rate for the dividends received from PRC subsidiaries, if they satisfy the conditions prescribed under STA Circular 81 and other relevant tax rules and regulations.
Other than as discussed above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2023. Inflation To date, inflation in China and other regions in which we operate has not materially impacted our results of operations.
Other than as discussed above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2024. Inflation To date, inflation in China and other regions in which we operate has not materially impacted our results of operations.
Results of Operations The following tables set forth our results of operations in 2021, 2022 and 2023 and express the relationship of certain line items as a percentage of total revenue for those periods. The period-to-period comparison of financial results is not necessarily indicative of future results.
Results of Operations The following tables set forth our results of operations in 2022, 2023 and 2024 and express the relationship of certain line items as a percentage of total revenue for those periods. The period-to-period comparison of financial results is not necessarily indicative of future results.
Our research and development expenses consist primarily of personnel costs for research and development personnel, third-party software testing services and an allocation of general overhead expenses. Except for immaterial capitalized internal-use software development costs in 2021, 2022 and 2023, all development costs have been expensed as incurred.
Our research and development expenses consist primarily of personnel costs for research and development personnel, third-party software testing services and an allocation of general overhead expenses. Except for immaterial capitalized internal-use software development costs in 2022, 2023 and 2024, all development costs have been expensed as incurred.
We have provided a reconciliation below of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure. We have included Adjusted EBITDA in this annual report because it is a key measure used by management to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital.
We have provided a reconciliation below of non-GAAP net loss to net income (loss), the most directly comparable GAAP financial measure. We have included non-GAAP net loss in this annual report because it is a key measure used by management to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital.
Risk Factors.” We may not be able to secure additional financing to meet our operating requirements on acceptable terms, or at all. Source of Liquidity Since our inception, we have financed our operations and capital expenditures primarily through cash flows generated by operations and private sales of equity securities.
Key Information—D. Risk Factors.” We may not be able to secure additional financing to meet our operating requirements on acceptable terms, or at all. Source of Liquidity Since our inception, we have financed our operations and capital expenditures primarily through cash flows generated by operations and private sales of equity securities.
Recent Accounting Policies See Note 2(ii) to the audited consolidated financial statements included elsewhere in this annual report for additional information regarding recent accounting pronouncements. 90 B.
Recent Accounting Policies See Note 2(ii) to the audited consolidated financial statements included elsewhere in this annual report for additional information regarding recent accounting pronouncements. 87 B.
In 2023, we powered approximately 620 billion minutes of real-time engagement for end users through applications. These applications power more than 200 use cases in a wide range of industries, including social, entertainment, gaming, education, enterprise solutions, e-commerce, financial services, healthcare and IoT.
In 2024, we powered approximately 850 billion minutes of real-time engagement for end users through applications. These applications power more than 200 use cases in a wide range of industries, including social, entertainment, gaming, education, enterprise solutions, e-commerce, financial services, healthcare and IoT.
The applicable U.S. federal corporate tax rate is 21% and the California corporate franchise tax rate is 8.84% in 2021, 2022 and 2023. 87 United Kingdom Our subsidiary in the United Kingdom is subject to the UK corporate income tax rate of 25%.
The applicable U.S. federal corporate tax rate is 21%, the California corporate franchise tax rate is 8.84% in 2022, 2023 and 2024. United Kingdom Our subsidiary in the United Kingdom is subject to the UK corporate income tax rate of 25%.
See “—Non-GAAP Financial Measure” for a discussion of the limitations of free cash flow and a reconciliation of free cash flow to as net cash generated from (used in) operating activities, the most comparable U.S. GAAP measurement, for the periods presented.
See “—Non-GAAP Financial Measure” for a discussion of the limitations of free cash flow and a reconciliation of free cash flow to as net cash provided by (used in) operating activities, the most comparable U.S. GAAP measurement, for the periods presented.
See “—Non-GAAP Financial Measure” for a discussion of the limitations of free cash flow and a reconciliation of free cash flow to as net cash generated from (used in) operating activities, the most comparable U.S. GAAP measurement, for the periods presented.
See “—Non-GAAP Financial Measure” for a discussion of the limitations of free cash flow and a reconciliation of free cash flow to as net cash provided by (used in) operating activities, the most comparable U.S. GAAP measurement, for the periods presented.
In particular, the exclusion of share-based compensation expenses, acquisition related expenses, financing related expenses, amortization expenses of acquired intangible assets, income tax related to acquired intangible assets and impairment of goodwill in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis and excludes an item that we do not consider to be indicative of our core operating performance.
In particular, the exclusion of share-based compensation expenses, acquisition related expenses, financing related expenses, amortization expenses of acquired intangible assets, income tax related to acquired intangible assets and impairment of goodwill in calculating non-GAAP net loss facilitates operating performance comparisons on a period-to-period basis and excludes an item that we do not consider to be indicative of our core operating performance.
However, changes in these estimates and assumptions could materially affect the accounts receivable provision. 94
However, changes in these estimates and assumptions could materially affect the accounts receivable provision. 92
We believe a useful indicator of the increased activity from our customers is our Dollar-Based Net Retention Rate. The Dollar-Based Net Retention Rate of Agora was 171%, 144% and 93% for 2021, 2022 and 2023, respectively.
We believe a useful indicator of the increased activity from our customers is our Dollar-Based Net Retention Rate. The Dollar-Based Net Retention Rate of Agora was 144%, 93%, and 95 % for 2022, 2023 and 2024, respectively.
Shanghai Dayin obtained its High and New Tech Enterprise certificate in 2022 and is entitled to preferential EIT rate of 15% for the years of 2022, 2023 and 2024. Zhaoyan obtained its High and New Tech Enterprise certificate in 2021 and is entitled to preferential EIT rate of 15% for the years of 2021, 2022 and 2023.
Shanghai Dayin obtained its High and New Tech Enterprise certificate in 2022 and is entitled to preferential EIT rate of 15% for the years of 2022, 2023 and 2024. Zhaoyan renewed its High and New Tech Enterprise certificate in 2024 and is entitled to preferential EIT rate of 15% for the years of 2024, 2025 and 2026.
We plan to renew such certificate in 2024 for a three-year period. Shanghai Shengwang obtained its High and New Tech Enterprise certificate in 2023 and is entitled to preferential EIT rate of 15% for the years of 2023, 2024 and 2025. As a Cayman Islands holding company, we may receive dividends from our PRC subsidiaries.
Shanghai Shengwang obtained its High and New Tech Enterprise certificate in 2023 and is entitled to preferential EIT rate of 15% for the years of 2023, 2024 and 2025. As a Cayman Islands holding company, we may receive dividends from our PRC subsidiaries.
From our inception in 2013 through December 31, 2023, we have raised US$629.3 million of equity capital, net of share and option repurchases, in connection with such financings. Cash Flow The following table sets forth a summary of our cash flows for the periods indicated.
From our inception in 2013 through December 31, 2024, we have raised US$618.5 million of equity capital, net of share and option repurchases, in connection with such financings. Cash Flow The following table sets forth a summary of our cash flows for the periods indicated.
Free Cash Flow Free cash flow is a non-GAAP financial measure that we calculate as net cash generated from (used in) operating activities less purchases of property and equipment.
Free Cash Flow Free cash flow is a non-GAAP financial measure that we calculate as net cash provided by (used in) operating activities less purchases of property and equipment.
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income and our other GAAP results.
Because of these limitations, you should consider non-GAAP net loss alongside other financial performance measures, including various cash flow metrics, net income and our other GAAP results.
Singapore Our subsidiary in Singapore is subject to the corporate income tax rate of 17% for the year ended December 31, 2021, 2022 and 2023. India Our subsidiary in India is subject to the India corporate income tax rate of 25.17%.
Singapore Our subsidiary in Singapore is subject to the corporate income tax rate of 17% for the years ended December 31, 2022, 2023 and 2024. India Our subsidiary in India is subject to the India corporate income tax rate of 25.17%.
Results of Operations—Comparison of Years Ended December 31, 2021 and 2022” beginning on page 96 of our Form 20-F for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission on April 26, 2023 (Securities Act File No. 001-39340) incorporated by reference into this annual report.
Results of Operations—Comparison of Years Ended December 31, 2022 and 2023” beginning on page 89 of our Form 20-F for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission on April 24, 2024 (Securities Act File No. 001-39340) incorporated by reference into this annual report.
Our active customers, defined as customers from whom we generate more than US$100 of revenue during the preceding 12 months, excluding customers of Easemob’s CEC business, reached 1,683 and 4,144 for Agora and Shengwang, respectively, as of December 31, 2023. As our customers succeed, we share in their success through our usage-based revenue model.
Our active customers, defined as customers from whom we generate more than US$100 of revenue during the preceding 12 months, excluding customers of Easemob business, reached 1,723 and 1,979 for Agora and Shengwang, respectively, as of December 31, 2024. As our customers succeed, we share in their success through our usage-based revenue model.
Adjusted EBITDA is a key measure used by management to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital.
Non-GAAP net loss is a key measure used by management to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital.
Year Ended December 31, 2021 2022 2023 (in US$ thousands) Net cash used in operating activities (20,000) (52,380) (13,611) Purchases of property and equipment (12,211) (4,123) (924) Free cash flow (32,211) (56,503) (14,535) 85 Components of Our Results of Operations Revenue We derive substantially all of our revenue from usage-based fees earned from customers using video, voice, and other products.
Year Ended December 31, 2022 2023 2024 (in US$ thousands) Net cash used in operating activities (52,380) (13,611) (14,129) Purchases of property and equipment (4,123) (924) (2,546) Free cash flow (56,503) (14,535) (16,675) 82 Components of Our Results of Operations Revenue We derive substantially all of our revenue from usage-based fees earned from customers using video, voice, and other products.
Liquidity and Capital Resources The following table shows our cash, short-term bank deposits, short-term financial products issued by banks, short-term investments, accounts receivable and working capital as of the dates indicated: As of December 31, 2021 2022 2023 (in US$ thousands) Cash and cash equivalents 285,668 45,673 36,894 Short-term bank deposits 449,468 334,537 86,924 Short-term financial products issued by banks 20,168 33,359 84,853 Short-term investments — 14,143 7,983 Accounts receivable, net 32,619 32,803 34,668 Working capital (1) 723,883 413,826 204,535 (1) Working capital is defined as current assets less current liabilities.
Liquidity and Capital Resources The following table shows our cash, short-term bank deposits, short-term financial products issued by banks, short-term investments, accounts receivable and working capital as of the dates indicated: As of December 31, 2022 2023 2024 (in US$ thousands) Cash and cash equivalents 45,673 36,894 27,083 Short-term bank deposits 334,537 86,924 168,327 Short-term financial products issued by banks 33,359 84,853 71,464 Short-term investments 14,143 7,983 2,787 Accounts receivable, net 32,803 34,668 30,952 Working capital (1) 413,826 204,535 269,715 (1) Working capital is defined as current assets less current liabilities.
In particular, the exclusion of share-based compensation expenses, acquisition related expenses, financing related expenses, amortization expenses of acquired intangible assets, income tax related to acquired intangible assets and impairment of goodwill in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis and excludes an item that we do not consider to be indicative of our core operating performance.
In particular, the exclusion of share-based compensation expenses, acquisition related expenses, financing related expenses, amortization expenses of acquired intangible assets, income tax related to acquired intangible assets and impairment of goodwill in calculating non-GAAP net loss facilitates operating performance comparisons on a period-to-period basis and excludes an item that we do not consider to be indicative of our core operating performance. non-GAAP net loss is not a measure calculated in accordance with U.S.
Non-GAAP Financial Measure Adjusted EBITDA To provide investors with additional information regarding our financial results, we have disclosed in the table below Adjusted EBITDA, a non-GAAP financial measure that we calculate as net income (loss) before exchange gain (loss), interest income, investment income (loss), other income, equity in income of affiliates, income taxes, depreciation and amortization, amortization of land use right and adjusted to exclude the effects of share-based compensation expenses, acquisition related expenses, financing related expenses, amortization expenses of acquired intangible assets, income tax related to acquired intangible assets and impairment of goodwill.
Non-GAAP Financial Measure Non-GAAP net loss To provide investors with additional information regarding our financial results, we have disclosed in the table below non-GAAP net loss, a non-GAAP financial measure that we calculate as net income adjusted to exclude the effects of share-based compensation expenses, acquisition related expenses, financing related expenses, amortization expenses of acquired intangible assets, income tax related to acquired intangible assets and impairment of goodwill.
Acquiring New Customers We are focused on growing the number of developers that use our platform. Our operating results and growth prospects will depend in part on our ability to attract new developers and convert them into paying customers as well as active customers. Our self-service model allows us to more efficiently leverage our investments in sales and marketing activities.
Our operating results and growth prospects will depend in part on our ability to attract new developers and convert them into paying customers as well as active customers. Our self-service model allows us to more efficiently leverage our investments in sales and marketing activities.
Investment Loss Of the increase in investment loss, US$6.4 million was primarily due to the fair value decrease in an equity investment and US$$3.0 million was due to the impairment losses on investments in certain private companies.
Investment Loss Of the decrease in investment loss, US$2.0 million was primarily due to the fair value decrease in an equity investment and US$$11.3 million was due to the impairment losses on investments in certain private companies, which was nil in 2024.
The Dollar-Based Net Retention Rate of Shengwang was 84%, 96% and 82% for 2021, 2022 and 2023, respectively, excluding the revenues from Easemob’s CEC business and K12 academic tutoring sector. Our total revenue decreased by 4.4% from US$168.0 million in 2021 to US$160.7 million in 2022, and further decreased by 11.9% to US$141.5 million in 2023.
The Dollar-Based Net Retention Rate of Shengwang was 96%, 82%, and 79% for 2022, 2023 and 2024, respectively, excluding the revenues from certain end-of-sale products, Easemob’s CEC business and K12 academic tutoring sector. Our total revenue decreased by 11.9% from US$160.7 million in 2022 to US$141.5 million in 2023, and further decreased by 5.9% to US$133.3 million in 2024.
As a result, our ability to pay dividends depends on dividends paid by Agora Lab, Shanghai Dayin and our international subsidiaries. If Agora Lab, Shanghai Dayin or any newly formed subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.
If Agora Lab, Shanghai Dayin or any newly formed subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.
Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP. See “– Non-GAAP Financial Measure” for a discussion of the limitations of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income (loss), the most comparable U.S. GAAP measurement, for the periods presented.
GAAP. See “– Non-GAAP Financial Measure” for a discussion of the limitations of non-GAAP net loss and a reconciliation of non-GAAP net loss to net income, the most comparable U.S. GAAP measurement, for the periods presented.
We believe that our existing cash and cash equivalents will be sufficient to meet our anticipated cash needs for at least the next 12 months.
We intend to increase our capital expenditures to support the growth in our business and operations. We believe that our existing cash and cash equivalents will be sufficient to meet our anticipated cash needs for at least the next 12 months.
If inflation were a significant factor in our financial performance, certain operating costs and expenses may increase. Holding Company Structure Agora, Inc. is a holding company with no material operations of its own. We conduct our operations through our subsidiary in the United States, and our subsidiaries and the VIE in the PRC and our other international subsidiaries.
If inflation were a significant factor in our financial performance, certain operating costs and expenses may increase. 90 Holding Company Structure Agora, Inc. is a holding company with no material operations of its own.
We may seek to raise additional funds at any time through equity, equity-linked or debt financing arrangements. Our future capital requirements and the adequacy of available funds will depend on many factors, including those described in “Item 3. Key Information—D.
However, our liquidity assumptions may prove to be incorrect, and we could exhaust our available financial resources sooner than we currently expect. We may seek to raise additional funds at any time through equity, equity-linked or debt financing arrangements. Our future capital requirements and the adequacy of available funds will depend on many factors, including those described in “Item 3.
Net Cash Provided by (Used in) Financing Activities Net cash used in financing activities was US$52.4 million in 2023, primarily due to US$62.9 million in repurchase of Class A ordinary shares, offset in part by US$10.9 million in proceeds from long-term borrowings.
Net Cash Provided by (Used in) Financing Activities Net cash provided by financing activities was US$46.0 million in 2024, primarily due to US$35.8 million in proceeds from long-term borrowings for headquarters project and US$20.4 million in deposit received in relation to headquarters project, offset in part by US$11.1 million in repurchase of Class A ordinary shares. 89 Net cash used in financing activities was US$52.4 million in 2023, primarily due to US$62.9 million in repurchase of Class A ordinary shares, offset in part by US$10.9 million in proceeds from long-term borrowings.
Payments Due by Total Less than one year One to three years (in US$ thousands) Operating lease commitments 37 37 -- Contractual purchase obligations 104,496 55,752 48,744 Total 104,533 55,789 48,744 We intend to fund our existing and future material cash requirements with our existing cash balance, bank borrowings and other financing alternatives.
Payments Due by Total Less than one year One to three years (in US$ thousands) Operating lease commitments 184 184 — Contractual purchase obligations 75,361 28,020 47,341 Total 75,545 28,204 47,341 We intend to fund our existing and future material cash requirements with our existing cash balance, bank borrowings and other financing alternatives.
At the same time, we will further expand our research and development capabilities by investing in our research and development team, recruiting and retaining industry leading developers. Our results of operation may be affected by the level of investment we make to further grow our research and development capabilities.
At the same time, we will further expand our research and development capabilities by investing in our research and development team, recruiting and retaining industry leading developers.
The following table sets forth a reconciliation of free cash flow to net cash generated from operating activities, as well as information regarding net cash used in investing activities and net cash provided by financing activities, for each of the periods indicated.
The following table sets forth a reconciliation of free cash flow to net cash used in operating activities for each of the periods indicated.
Year Ended December 31, 2021 2022 2023 Dollar-Based Net Retention Rate: Agora 171% 144% 93% Shengwang (1) 84% 96% 82% Active customers: Agora 1,125 1,422 1,683 Shengwang (2) 3,727 3,705 4,144 (1) excluding the revenues from Easemob’s CEC business and K12 academic tutoring sector (2) excluding customers of Easemob’s CEC business Year Ended December 31, 2021 2022 2023 (in US$ thousands, except for percentage) Adjusted EBITDA (33,290) (56,644) (19,535) Free cash flow (32,211) (56,503) (14,535) Dollar-Based Net Retention Rate Our ability to drive growth and generate incremental revenue depends, in part, on our ability to maintain and grow our relationships with existing customers and to increase their usage of our platform.
Year Ended December 31, 2022 2023 2024 Dollar-Based Net Retention Rate: Agora 144% 93% 95% Shengwang (1) 96% 82% 79% Active customers: Agora 1,422 1,683 1,723 Shengwang (2) 1,624 1,835 1,979 (1) excluding the revenues from certain end-of-sale products, Easemob’s CEC business and K12 academic tutoring sector (2) excluding customers of Easemob business Year Ended December 31, 2022 2023 2024 (in US$ thousands, except for percentage) Non-GAAP net loss (71,094) (29,903) (19,432) Free cash flow (56,503) (14,535) (16,675) Dollar-Based Net Retention Rate Our ability to drive growth and generate incremental revenue depends, in part, on our ability to maintain and grow our relationships with existing customers and to increase their usage of our platform.
This was partially offset by a US$31.5 million increase in share-based compensation expenses and US$14.1 million increase in accrued expenses and other liabilities, mainly due to an increase in accrued employee wages and benefits expense, US$4.8 million in allowance for current expected credit losses, US$8.3 million in depreciation and amortization, US$3.7 million in amortization of right-of-use asset and interest on lease liabilities and US$1.9 million in amortization of intangible assets.
This was partially offset by a US$22.7 million increase in share-based compensation expenses, US$8.7 million in allowance for current expected credit losses, US$5.9 million decrease in other non-current assets, US$3.5 million in losses from equity in affiliates, US$3.5 million in depreciation and amortization, US$3.4 million in amortization of land use right, US$3.3 million in investment loss and US$2.6 million in amortization of right-of-use asset and interest on lease liabilities.
We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.
Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.
Generally, one software application uses the same customer account identifier throughout its life cycle while one account may be used for multiple applications.
Generally, one software application uses the same customer account identifier throughout its life cycle while one account may be used for multiple applications. In each of the periods presented, revenue from active customers represented substantially all of our revenue.
If our holding company in the Cayman Islands or any of our subsidiaries outside of China were deemed to be a “resident enterprise” under the PRC EIT Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%.
If our holding company in the Cayman Islands or any of our subsidiaries outside of China were deemed to be a “resident enterprise” under the PRC EIT Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. 84 United States Our subsidiary in California, United States is subject to U.S. federal corporate tax and California corporate franchise tax on its taxable income as reported in its statutory financial statements and adjusted in accordance with relevant U.S. tax laws.
Net cash used in operating activities was US$20.0 million in 2021, as a result of net loss of US$72.4 million, a US$8.5 million increase in accounts receivable, which primarily resulted from the growth of our business and the timing of cash receipts from customers, and a US$4.0 million decrease in operating lease liabilities.
Net cash used in operating activities was US$13.6 million in 2023, as a result of net loss of US$87.2 million, a US$9.1 million increase in accounts receivable, which primarily resulted from the growth of our business and the timing of cash receipts from customers, a US$7.3 million decrease in other non-current assets, a US$4.2 million decrease in accrued expenses and other liabilities, and a US$2.6 million decrease in operating lease liabilities.
Sales and Marketing Expenses Years Ended December 31, Change 2022 2023 US$ % (in US$ thousands, except for percentages) Sales and marketing expenses 53,769 33,958 (19,811) (36.8) Percentage of total revenues 33.5% 24.0% — — Of the decrease in sales and marketing expenses, US$13.8 million was due to the decrease in employee wages and benefits expense as we optimized our global workforce, US$2.1 million was due to the decrease in advertising expenses and US$2.0 million was due to the decrease in share-based compensation. 89 General and Administrative Expenses Years Ended December 31, Change 2022 2023 US$ % (in US$ thousands, except for percentages) General and administrative expenses 38,671 34,976 (3,695) (9.6) Percentage of total revenues 24.1% 24.7% — — Of the decrease in general and administrative expenses, US$4.5 million was due to the decrease in employee wages and benefits expense as we optimized our global workforce, US$2.2 million was due to the decrease in financing related expenses, partially offset by US$3.2 million due to the increase in amortization of land use right.
Sales and Marketing Expenses Year Ended December 31, Change 2023 2024 US$ % (in US$ thousands, except for percentages) Sales and marketing expenses 33,958 27,220 (6,738) (19.8) Percentage of total revenues 24.0% 20.4% — — Of the decrease in sales and marketing expenses, as the Company optimized its global workforce, US$3.4 million was due to the decrease in share-based compensation and US$2.0 million was due to the decrease in employee wages and benefits expense. 86 General and Administrative Expenses Year Ended December 31, Change 2023 2024 US$ % (in US$ thousands, except for percentages) General and administrative expenses 34,976 32,772 (2,204) (6.3) Percentage of total revenues 24.7% 24.6% — — Of the decrease in general and administrative expenses, as the Company optimized its global workforce, US$2.5 million was due to the decrease in share-based compensation and US$1.5 million was due to the decrease in employee wages and benefits expense , partially offset by US$1.7 million due to the increase in allowance for current expected credit losses.
Year Ended December 31, 2021 2022 2023 (in US$ thousands) Net cash used in operating activities (20,000) (52,380) (13,611) Net cash provided by (used in) investing activities (57,690) (144,062) 56,643 Net cash provided by (used in) financing activities 251,937 (41,150) (52,368) Net increase (decrease) in cash, cash equivalents and restricted cash 174,526 (238,510) (10,141) 91 Net Cash Used in Operating Activities Net cash used in operating activities was US$13.6 million in 2023, as a result of net loss of US$87.2 million, a US$9.1 million increase in accounts receivable, which primarily resulted from the growth of our business and the timing of cash receipts from customers, a US$7.3 million decrease in other non-current assets, a US$4.2 million decrease in accrued expenses and other liabilities, and a US$2.6 million decrease in operating lease liabilities.
Year Ended December 31, 2022 2023 2024 (in US$ thousands) Net cash used in operating activities (52,380) (13,611) (14,129) Net cash provided by (used in) investing activities (144,062) 56,643 (38,049) Net cash provided by (used in) financing activities (41,150) (52,368) 45,994 Net decrease in cash, cash equivalents and restricted cash (238,510) (10,141) (6,346) 88 Net Cash Used in Operating Activities Net cash used in operating activities was US$14.1 million in 2024, as a result of net loss of US$42.7 million, a US$13.9 million increase in prepayments and other current assets, which primarily due to the increase of interests receivable, a US$5.9 million decrease in accrued expenses and other liabilities and a US$5.0 million increase in accounts receivable.
Net cash used in investing activities was US$57.7 million in 2021.
Net cash used in investing activities was US$38.0 million in 2024.
Some of these limitations are: • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; • Adjusted EBITDA does not consider interest income, other income and equity in income of affiliates; • Adjusted EBITDA does not reflect changes in exchange gain (loss) and investment income (loss); • Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; • Adjusted EBITDA does not consider the potentially dilutive impact of share-based compensation; 84 • Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; • Adjusted EBITDA does not consider investing or financing activities and should not be considered as a measure of our liquidity; and • other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
Some of these limitations are: • Non-GAAP net loss does not consider the potentially dilutive impact of share-based compensation; • Non-GAAP net loss does not reflect changes in, or cash requirements for, our working capital needs; 81 • Non-GAAP net loss does not consider investing or financing activities and should not be considered as a measure of our liquidity; and • other companies, including companies in our industry, may calculate non-GAAP net loss differently, which reduces its usefulness as a comparative measure.
We expect to continue to expand our international go-to-market and collaboration efforts with ecosystem partners in other global markets in the future.
The majority of our revenue in 2022, 2023 and 2024 was generated from customers operating primarily in the PRC and United States. We expect to continue to expand our international go-to-market and collaboration efforts with ecosystem partners in other global markets in the future.
We intend to continue to invest in our engineering capabilities and marketing activities to maintain our strong competitive position and brand perception among the developer community when it comes to real-time-engagement technology providers. As a result, our results of operations may reflect high levels of sustained investments to drive increased developer adoption and usage.
We believe we must maintain our technology, product and market leadership position and the strength of our brand to drive further revenue growth. We intend to continue to invest in our engineering capabilities and marketing activities to maintain our strong competitive position and brand perception among the developer community when it comes to real-time-engagement technology providers.
In each of February 2023 and 2024, our board of directors authorized the extension of the foregoing share repurchase program for another 12 months, respectively, with all other terms remaining unchanged. The share repurchase program is expected to expire on February 28, 2025.
In each of February 2023, 2024 and 2025, our board of directors authorized the extension of the foregoing share repurchase program for another 12 months, respectively, with all other terms remaining unchanged. As of December 31, 2024 and March 31, 2025, we had repurchased US$115.2 million of ADSs and US$116.4 million of ADSs, respectively, under the share repurchase program.
Material Cash Requirements Our material cash requirements as of December 31, 2023 and any subsequent interim period primarily include working capital needs, capital expenditures, operating lease obligations, purchase commitments and capital commitments. Our capital expenditures were US$12.2 million, US$4.1 million and US$11.7 million in 2021, 2022 and 2023, respectively.
Net cash used in financing activities was US$41.2 million in 2022, primarily due to US$41.1 million in repurchase of Class A ordinary shares. Material Cash Requirements Our material cash requirements as of December 31, 2024 and any subsequent interim period primarily include working capital needs, capital expenditures, operating lease obligations, purchase commitments and capital commitments.
Active Customers We believe that our ability to expand our customer base is an important indicator of market acceptance of our platform, the growth of our business and future business opportunities.
We calculate our Dollar-Based Net Retention Rate on a 12 month-over-12 month basis because our revenue is subject to fluctuations from quarter to quarter. 80 Active Customers We believe that our ability to expand our customer base is an important indicator of market acceptance of our platform, the growth of our business and future business opportunities.
Our capital expenditures were mainly used for purchases of servers, network equipment, other hardware and construction in progress for the headquarters project. We will continue to make capital expenditures to meet the expected growth of our business. The following table sets forth the details of our material cash requirements (other than capital expenditure) as of December 31, 2023.
Our capital expenditures were US$4.1 million, US$11.7 million and US$37.8 million in 2022, 2023 and 2024, respectively. Our capital expenditures were mainly used for purchases of construction in progress for the headquarters project, servers, network equipment and other hardware. We will continue to make capital expenditures to meet the expected growth of our business.
Year Ended December 31, 2021 2022 2023 US$ % US$ % US$ % (in US$ thousands, except for percentages) Real-time engagement service revenues 159,943 95.2 152,886 95.2 133,098 94.0 Other revenues 8,039 4.8 7,784 4.8 8,440 6.0 Total revenues 167,982 100.0 160,670 100.0 141,538 100.0 Cost of revenues (63,975) (38.1) (61,247) (38.1) (52,063) (36.8) Gross profit 104,007 61.9 99,423 61.9 89,475 63.2 Operating expenses: Research and development expenses (110,666) (65.9) (114,502) (71.3) (77,666) (54.9) Sales and marketing expenses (46,276) (27.5) (53,769) (33.5) (33,958) (24.0) General and administrative expenses (30,326) (18.1) (38,671) (24.1) (34,976) (24.7) Total operating expenses (187,268) (111.5) (206,942) (128.8) (146,600) (103.6) Other operating income 2,568 1.5 3,697 2.3 1,729 1.2 Impairment of goodwill — — (11,941) (7.4) (31,928) (22.6) Loss from operations (80,693) (48.1) (115,763) (72.1) (87,324) (61.7) Exchange gain (loss) 558 0.3 (5,021) (3.1) (151) (0.1) Interest expense — — — — (20) — Losses from extinguishment of convertible note — — — — (1,230) (0.9) Interest income 8,353 5.0 9,636 6.0 18,836 13.3 Investment loss (1,659) (1.0) (8,813) (5.5) (18,526) (13.1) Other income 1,597 1.0 — — 1,649  Loss before income taxes (71,844) (42.8) (119,961) (74.7) (86,766) (61.3) Income taxes (840) (0.5) (663) (0.4) (422)  Equity in income of affiliates 329 0.2 244 0.2 (31) 0.0 Net loss (72,355) (43.1) (120,380) (74.9) (87,219) (61.6) 88 Comparison of Years Ended December 31, 2022 and 2023 Revenue Years Ended December 31, Change 2022 2023 US$ % (in US$ thousands, except for percentages) Revenues of Agora 62,507 60,997 (1,510) (2.4) Revenues of Shengwang 98,163 80,541 (17,622) (18.0) Total revenues 160,670 141,538 (19,132) (11.9) The decrease our total revenues in 2023 was attributable to (i) the decrease in the revenues of Agora in 2023, primarily due to the decrease in usage from and pricing to certain customers in emerging markets due to their tightening financing conditions, and (ii) the decrease in revenues of Shengwang in 2023, primarily due to the appreciation of Renminbi against the U.S. dollar based on the foreign exchange rate, the change of macroeconomic conditions, fast evolving regulations in certain downstream markets and the disposal of the CEC business in the first quarter of 2023.
Year Ended December 31, 2022 2023 2024 US$ % US$ % US$ % (in US$ thousands, except for percentages) Real-time engagement service revenues 152,886 95.2 133,098 94.0 127,624 95.8 Real-time engagement on-premise solution and other revenues 7,784 4.8 8,440 6.0 5,632 4.2 Total revenues 160,670 100.0 141,538 100.0 133,256 100.0 Cost of revenues (61,247) (38.1) (52,063) (36.8) (47,809) (35.9) Gross profit 99,423 61.9 89,475 63.2 85,447 64.1 Operating expenses: Research and development expenses (114,502) (71.3) (77,666) (54.9) (80,344) (60.3) Sales and marketing expenses (53,769) (33.5) (33,958) (24.0) (27,220) (20.4) General and administrative expenses (38,671) (24.1) (34,976) (24.7) (32,772) (24.6) Total operating expenses (206,942) (128.8) (146,600) (103.6) (140,336) (105.3) Other operating income 3,697 2.3 1,729 1.2 1,578 1.2 Impairment of goodwill (11,941) (7.4) (31,928) (22.6) — — Loss from operations (115,763) (72.1) (87,324) (61.7) (53,311) (40.0) Exchange gain (loss) (5,021) (3.1) (151) (0.1) 168 0.1 Interest expense — — (20) — (253) (0.2) Losses from extinguishment of convertible note — — (1,230) (0.9) — — Interest income 9,636 6.0 18,836 13.3 16,941 12.7 Investment loss (8,813) (5.5) (18,526) (13.1) (3,328) (2.5) Other income — — 1,649  793 0.6 Loss before income taxes (119,961) (74.7) (86,766) (61.3) (38,990) (29.3) Income taxes (663) (0.4) (422)  (258) (0.2) Income (losses) from equity in affiliates 244 0.2 (31) 0.0 (3,479) (2.6) Net loss (120,380) (74.9) (87,219) (61.6) (42,727) (32.1) 85 Comparison of Years Ended December 31, 2023 and 2024 Revenue Year Ended December 31, Change 2023 2024 US$ % (in US$ thousands, except for percentages) Revenues of Agora 60,997 64,503 3,506 5.7 Revenues of Shengwang 80,541 68,753 (11,788) (14.6) Total revenues 141,538 133,256 (8,282) (5.9) The decrease in total revenues in 2024 was attributable to the decrease in revenues of Shengwang in 2024, primarily due to a decrease in revenues of US$4.1 million due to the end-of-sale of certain products and reduced usage from customers in certain sectors such as social and entertainment as a result of challenging macroeconomic and regulatory environment, partially offset by the increase in the revenues of Agora in 2024, primarily due to our business expansion and usage growth in sectors such as live shopping.
In each of the periods presented, revenue from active customers represented substantially all of our revenue. 83 Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that we calculate as net income (loss) before exchange gain (loss), interest income, investment income (loss), other income, equity in income of affiliates, income taxes, depreciation of property and equipment, amortization of land use right, and adjusted to exclude the effects of share-based compensation expenses, acquisition related expenses, financing related expenses, amortization expenses of acquired intangible assets and impairment of goodwill.
Non-GAAP net loss Non-GAAP net loss is a non-GAAP financial measure that we calculate as net income adjusted to exclude the effects of share-based compensation expenses, acquisition related expenses, financing related expenses, amortization expenses of acquired intangible assets and impairment of goodwill.
Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. Adjusted EBITDA has limitations as an analytical tool, and it should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.
Accordingly, we believe that non-GAAP net loss provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
Other Income The US$1.6 million increase in other income was primarily due to the income of incentive payments from a depositary bank in 2023. Comparison of Years Ended December 31, 2021 and 2022 See “Item 5. Operating and Financial Review and Prospects—A.
Losses from equity in affiliates The US$3.4 million decrease in losses from equity in affiliates was primarily due to an impairment loss on an investment in certain private company of US$4.1 million in 2024. Comparison of Years Ended December 31, 2022 and 2023 See “Item 5. Operating and Financial Review and Prospects—A.
Gross margin in 2023 was 63.2%, an increase of 1.3% from 61.9% in 2022 mainly due to the implementation of technical and infrastructural optimizations.
Gross margin in 2024 was 64.1%, an increase of 0.9% from 63.2% in 2023 mainly due to the end-of-sale of certain low-margin product.
A reconciliation of non-GAAP Adjusted EBITDA to net income (loss) is as follows: Year Ended December 31, 2021 2022 2023 (in US$ thousands) Net loss (72,355) (120,380) (87,219) Excluding: Exchange (gain) loss (558) 5,021 151 Interest income (8,353) (9,636) (18,816) Investment loss 1,659 8,813 19,756 Other income (1,597) — (1,649) Equity in (income) loss of affiliates (329) (244) 31 Income taxes 840 663 422 Depreciation and amortization 8,281 9,497 7,096 Amortization of land use right — — 3,165 Share-based compensation expenses 31,481 32,363 24,612 Financing related expenses — 2,166 — Acquisition related expenses 5,780 928 (392) Impairment of goodwill — 11,941 31,928 Amortization expense related to intangible assets acquired through business acquisitions 1,861 2,224 1,380 Adjusted EBITDA (33,290) (56,644) (19,535) Free Cash Flow Free cash flow is a non-GAAP financial measure that we calculate as net cash generated from (used in) operating activities less purchases of property and equipment.
A reconciliation of non-GAAP net loss to net loss is as follows: Year Ended December 31, 2022 2023 2024 (in US$ thousands) Net loss (120,380) (87,219) (42,727) Excluding: Share-based compensation expenses 32,363 24,612 22,737 Amortization expense related to intangible assets acquired through business acquisitions 2,224 1,380 660 Income tax related to intangible assets acquired through business acquisitions (336) (212) (102) Impairment of goodwill 11,941 31,928 — Financing related expenses 2,166 — — Acquisition related expenses 928 (392) — Non-GAAP net loss (71,094) (29,903) (19,432) Free Cash Flow Free cash flow is a non-GAAP financial measure that we calculate as net cash provided by (used in) operating activities less purchases of property and equipment.
Cost of Revenues; Gross Margin Years Ended December 31, Change 2022 2023 US$ % (in US$ thousands, except for percentages) Cost of revenues 61,247 52,063 (9,184) (15.0) Gross margin 61.9% 63.2% — — The decrease in cost of revenues in 2023 was attributable to the decrease in bandwidth and co-location costs, which was in line with total revenues as a result of usage changes.
Cost of Revenues; Gross Margin Year Ended December 31, Change 2023 2024 US$ % (in US$ thousands, except for percentages) Cost of revenues 52,063 47,809 (4,254) (8.2) Gross margin 63.2% 64.1% — — The decrease in cost of revenues in 2024 was attributable to the end-of-sale of certain products and the decrease in bandwidth usage and costs.
Factors Affecting Our Performance Product and Market Leadership We are committed to delivering market-leading products to continue to build and maintain credibility with the global developer community. We believe we must maintain our technology, product and market leadership position and the strength of our brand to drive further revenue growth.
We recorded net loss of US$120.4 million, US$87.2 million and US$42.7 million in 2022, 2023 and 2024, respectively. 78 Factors Affecting Our Performance Product and Market Leadership We are committed to delivering market-leading products to continue to build and maintain credibility with the global developer community.
As a result, as the Renminbi depreciates or appreciates against the U.S. dollar, our revenue presented in U.S. dollars will be negatively or positively affected. 82 Key Operating and Financial Metrics The following table sets forth the key financial and operating metrics we use for the years indicated.
Revenue and expense items are translated at average exchange rates prevailing during the fiscal year. As a result, as the Renminbi depreciates or appreciates against the U.S. dollar, our revenue presented in U.S. dollars will be negatively or positively affected.
As of December 31, 2023, our cash and cash equivalents include cash and time deposits which have original maturities of three months or less at the time of purchase and which were held for working capital purposes. We intend to increase our capital expenditures to support the growth in our business and operations.
As of December 31, 2024, our cash and cash equivalents include cash in bank, money market funds and time deposits placed with banks which have original maturities of three months or less at the time of purchase and are readily convertible to known amounts of cash.
Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by SAFE.
Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by SAFE. Our subsidiaries in the PRC have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds.
Research and Development Expenses Years Ended December 31, Change 2022 2023 US$ % (in US$ thousands, except for percentages) Research and development expenses 114,502 77,666 (36,836) (32.2) Percentage of total revenues 71.3% 54.9% — — Of the decrease in research and development expenses, US$28.5 million was due to the decrease in employee wages and benefits expense as we optimized our global workforce and US$5.4 million was due to the decrease in share-based compensation.
Research and Development Expenses Year Ended December 31, Change 2023 2024 US$ % (in US$ thousands, except for percentages) Research and development expenses 77,666 80,344 2,678 3.4 Percentage of total revenues 54.9% 60.3% — — Of the increase in research and development expenses, as the Company optimized its global workforce, US$9.0 million was due to the cancellation of certain employees’ equity awards and immediate recognition of relevant remaining unrecognized compensation expenses, US$3.6 million was due to severance expenses, partially offset by US$4.1 million due to the decrease in personnel costs.
Our subsidiaries in the PRC have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. 93 Off-balance Sheet Arrangement We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties.
Off-balance Sheet Arrangement We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity, or that are not reflected in our consolidated financial statements.
Interest Income The US$9.2 million increase in interest income was primarily due to the increase in interest rate.
Interest Income The US$1.9 million decrease in interest income was primarily due to the decrease in the average balance of cash, cash equivalents, bank deposits and financial products issued by banks and the decrease in average interest rate.
Removed
If excluding the impact of regulation change in K12 academic tutoring sector in China, our total revenue would have increased by 23.5% from US$127.8 million in 2021 to US$158.9 million in 2022, then decreased by 11.0% to US$141.5 million in 2023. We recorded net loss of US$72.4 million, US$120.4 million and US$87.2 million in 2021, 2022 and 2023, respectively.
Added
When combined with state-of-the-art technologies in artificial intelligence (“AI”), real-time engagement can greatly influence or even transform various industries, inspiring and enriching a wide range of use cases. In recent years, generative AI has been advancing at an incredible pace, demonstrated by groundbreaking developments such as OpenAI’s end-to-end multimodal GPT-4o model and remarkable open-source innovations like DeepSeek.
Removed
International Growth A component of our growth strategy involves the further expansion of our operations and customer base worldwide. The majority of our revenue in 2021, 2022 and 2023 was generated from customers operating primarily in the PRC and United States.
Added
Our technology is uniquely positioned to enable seamless, voice-based interactions between humans and AI models. By moving beyond basic text chat to multimodal conversations, we provide the critical infrastructure to enable and ensure more intuitive and expressive communication experiences, as well as to introduce entirely new use cases where text input is impractical or inefficient.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Transfer Restrictions Unless determined otherwise by the administrator, awards may not be sold, pledged, assigned, hypothecated or otherwise transferred in any manner other than by will or by the laws of descent and distribution. In addition, during an applicable participant’s lifetime, only that participant may exercise their award.
Transfer Restrictions Unless determined otherwise by the administrator, awards may not be sold, pledged, assigned, hypothecated or otherwise transferred in any manner other than by will or by the laws of descent and distribution. In addition, during an applicable participant’s lifetime, only that participant may exercise their award.
Internal Revenue Code of 1986, as amended, or the Code, to our employees and any of our parent and subsidiary corporations’ employees, and for the grant of non-statutory share options, share appreciation rights, restricted shares, restricted share units, and performance awards to our employees, directors and consultants and our parent and subsidiary corporations’ employees and consultants. 96 Authorized Shares The number of our ordinary shares reserved for issuance pursuant to the Global Plan is equal to (1) 16,000,000 ordinary shares plus (2) a number of ordinary shares equal to (a) the number of shares that were not granted under awards under our 2014 Plan as of the date the Global Plan became effective, (b) the number of shares subject to awards granted under the 2014 Plan that after the date the Global Plan became effective are canceled, expire or otherwise terminate without having been exercised in full or would have otherwise become available again for grant under the 2014 Plan, and (c) the number of shares that, after the date the Global Plan became effective, are forfeited to us, tendered to or withheld by us for payment of an exercise price or for tax withholding, or repurchased by us due to failure to vest (provided that the maximum number of shares that may be added to the Global Plan pursuant to clause (2) is 400,000,000 shares) plus (3) any ordinary shares added to the Global Plan through the automatic annual increases described below.
Internal Revenue Code of 1986, as amended, or the Code, to our employees and any of our parent and subsidiary corporations’ employees, and for the grant of non-statutory share options, share appreciation rights, restricted shares, restricted share units, and performance awards to our employees, directors and consultants and our parent and subsidiary corporations’ employees and consultants. 94 Authorized Shares The number of our ordinary shares reserved for issuance pursuant to the Global Plan is equal to (1) 16,000,000 ordinary shares plus (2) a number of ordinary shares equal to (a) the number of shares that were not granted under awards under our 2014 Plan as of the date the Global Plan became effective, (b) the number of shares subject to awards granted under the 2014 Plan that after the date the Global Plan became effective are canceled, expire or otherwise terminate without having been exercised in full or would have otherwise become available again for grant under the 2014 Plan, and (c) the number of shares that, after the date the Global Plan became effective, are forfeited to us, tendered to or withheld by us for payment of an exercise price or for tax withholding, or repurchased by us due to failure to vest (provided that the maximum number of shares that may be added to the Global Plan pursuant to clause (2) is 400,000,000 shares) plus (3) any ordinary shares added to the Global Plan through the automatic annual increases described below.
If we are required to prepare an accounting restatement due to our material noncompliance, as a result of misconduct, with any financial reporting requirement under securities laws, any participant who (1) knowingly or through gross negligence engaged in the misconduct or who knowingly or through gross negligence failed to prevent the misconduct or (2) is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, must reimburse us the amount of any payment in settlement of an award earned or accrued during the 12-month period following the first public issuance or filing with the SEC (whichever first occurred) of the financial document embodying such financial reporting requirement. 99 Amendment; Termination The board or compensation committee of the board has the authority to amend, suspend or terminate the Global Plan, except that such action may not materially impair the existing rights of any participant with a signed, written agreement between the participant and us, subject to certain exceptions in the Global Plan.
If we are required to prepare an accounting restatement due to our material noncompliance, as a result of misconduct, with any financial reporting requirement under securities laws, any participant who (1) knowingly or through gross negligence engaged in the misconduct or who knowingly or through gross negligence failed to prevent the misconduct or (2) is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, must reimburse us the amount of any payment in settlement of an award earned or accrued during the 12-month period following the first public issuance or filing with the SEC (whichever first occurred) of the financial document embodying such financial reporting requirement. 97 Amendment; Termination The board or compensation committee of the board has the authority to amend, suspend or terminate the Global Plan, except that such action may not materially impair the existing rights of any participant with a signed, written agreement between the participant and us, subject to certain exceptions in the Global Plan.
No amendment or alteration of the 2014 Plan may impair the rights of a participant, unless mutually agreed otherwise between the participant and the administrator in writing. 2018 Equity Incentive Plan In January 2020, as part of the Corporate Reorganization, we assumed all awards granted by API Investment Limited (previously known as Agora IO, Inc.) pursuant to the 2018 Plan first adopted by API Investment Limited in January 2019.
No amendment or alteration of the 2014 Plan may impair the rights of a participant, unless mutually agreed otherwise between the participant and the administrator in writing. 100 2018 Equity Incentive Plan In January 2020, as part of the Corporate Reorganization, we assumed all awards granted by API Investment Limited (previously known as Agora IO, Inc.) pursuant to the 2018 Plan first adopted by API Investment Limited in January 2019.
Prior to that, he worked for Ericsson China as a Senior Solution Manager from 2006 to 2012. He received a master’s degree from Beijing University of Posts and Telecommunications. Non-Employee Directors Mr. Qin Liu has served as our director since December 2014. Mr. Liu co-founded 5Y Capital (formerly known as Morningside Venture Capital) in June 2007.
Prior to that, he worked for Ericsson China as a Senior Solution Manager from 2006 to 2012. He received a master’s degree from Beijing University of Posts and Telecommunications. 93 Non-Employee Directors Mr. Qin Liu has served as our director since December 2014. Mr. Liu co-founded 5Y Capital (formerly known as Morningside Venture Capital) in June 2007.
The functions and powers of our board of directors include, among others: • convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such meetings; • declaring dividends and distributions; 106 • appointing officers and determining the term of office of the officers; • exercising the borrowing powers of our company and mortgaging the property of our company; and • approving the transfer of shares in our company, including the registration of such shares in our share register.
The functions and powers of our board of directors include, among others: • convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such meetings; • declaring dividends and distributions; • appointing officers and determining the term of office of the officers; • exercising the borrowing powers of our company and mortgaging the property of our company; and • approving the transfer of shares in our company, including the registration of such shares in our share register.
Evolution Special Opportunity Fund I, L.P. and Evolution Fund I Co-investment, L.P. are controlled by 5Y Capital GP Limited, their general partner. 5Y Capital GP Limited is controlled by its board consisting of three individuals, including Qin Liu, Ting Yue Liow and Claris Enereta Ruwende, who have the voting and dispositive powers over the shares held by Evolution Special Opportunity Fund I, L.P. and Evolution Fund I Co-investment, L.P.
Evolution Special Opportunity Fund I, L.P. and Evolution Fund I Co-investment, L.P. are controlled by 5Y Capital GP Limited, their general partner. 5Y Capital GP Limited is controlled by its board consisting of three individuals, including Qin Liu, Ting Yue Liow and Claris Ruwende, who have the voting and dispositive powers over the shares held by Evolution Special Opportunity Fund I, L.P. and Evolution Fund I Co-investment, L.P.
The ESPP will automatically terminate in 2040, unless we terminate it sooner. 101 2014 Equity Incentive Plan The 2014 Plan was originally adopted in August 2014 to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants, and promote the success of our business. The 2014 Plan was amended in February 2020.
The ESPP will automatically terminate in 2040, unless we terminate it sooner. 2014 Equity Incentive Plan The 2014 Plan was originally adopted in August 2014 to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants, and promote the success of our business. The 2014 Plan was amended in February 2020.
The administrator will notify each participant that the exercise date has been changed and that the participant’s option will be exercised automatically on the new exercise date unless prior to such date the participant has withdrawn from the offering period. Amendment; Termination The administrator has the authority to amend, suspend or terminate the ESPP.
The administrator will notify each participant that the exercise date has been changed and that the participant’s option will be exercised automatically on the new exercise date unless prior to such date the participant has withdrawn from the offering period. 99 Amendment; Termination The administrator has the authority to amend, suspend or terminate the ESPP.
Mr. Zhang is the chairperson of our compensation committee. Our board of directors has determined that each of Steve Zhang, Qin Liu and Eric He satisfies the “independence” requirements of the corporate governance rules of the Nasdaq Stock Market.
Compensation Committee Our compensation committee consists of Steve Zhang, Qin Liu and Eric He. Mr. Zhang is the chairperson of our compensation committee. Our board of directors has determined that each of Steve Zhang, Qin Liu and Eric He satisfies the “independence” requirements of the corporate governance rules of the Nasdaq Stock Market.
The administrator also has the authority to institute and determine the terms and conditions of an exchange program by which (1) outstanding awards may be surrendered or canceled in exchange for awards of the same type (which may have a higher or lower exercise price or different terms), awards of a different type and/or cash; (2) participants have the opportunity to transfer outstanding awards to a financial institution or other person or entity selected by the administrator; and/or (3) the exercise price of an outstanding award is increased or reduced. 97 Share Options Share options may be granted under the Global Plan.
The administrator also has the authority to institute and determine the terms and conditions of an exchange program by which (1) outstanding awards may be surrendered or canceled in exchange for awards of the same type (which may have a higher or lower exercise price or different terms), awards of a different type and/or cash; (2) participants have the opportunity to transfer outstanding awards to a financial institution or other person or entity selected by the administrator; and/or (3) the exercise price of an outstanding award is increased or reduced. 95 Share Options Share options may be granted under the Global Plan.
Under these agreements, we agree to indemnify our directors and executive officers against all liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company to the fullest extent permitted by law with certain limited exceptions. 107 Board Diversity The board diversity matrix is set out below.
Under these agreements, we agree to indemnify our directors and executive officers against all liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company to the fullest extent permitted by law with certain limited exceptions. 105 Board Diversity The board diversity matrix is set out below.
In making such determination, our board of directors considered the relationships that each non-employee director has with us and all other facts and circumstances our board of directors deemed relevant in determining the director’s independence, including the number of ordinary shares beneficially owned by the director. 104 Controlled Company Exemption Our chief executive officer controls a majority of the voting power represented by our ordinary shares.
In making such determination, our board of directors considered the relationships that each non-employee director has with us and all other facts and circumstances our board of directors deemed relevant in determining the director’s independence, including the number of ordinary shares beneficially owned by the director. 102 Controlled Company Exemption Our chief executive officer controls a majority of the voting power represented by our ordinary shares.
We believe that allowing our employees to participate in the ESPP will provide them with a further incentive towards promoting our success and accomplishing our corporate goals. As of December 31, 2023, we had not granted any awards under the ESPP. Authorized Shares A total of 3,000,000 of our ordinary shares are available for sale under the ESPP.
We believe that allowing our employees to participate in the ESPP will provide them with a further incentive towards promoting our success and accomplishing our corporate goals. As of December 31, 2024, we had not granted any awards under the ESPP. Authorized Shares A total of 3,000,000 of our ordinary shares are available for sale under the ESPP.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 31, 2024 by: • each of our directors and executive officers; and • each person known to us to own beneficially 5% or more of our ordinary shares on an as-converted basis.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 31, 2025 by: • each of our directors and executive officers; and • each person known to us to own beneficially 5% or more of our ordinary shares on an as-converted basis.
Unless determined otherwise by the administrator, VPPs may not be sold, pledged, assigned, hypothecated or otherwise transferred in any manner. As of December 31, 2023, we had granted a certain number of VPPs, which may be settled by cash or shares. See Note 19 to our audited consolidated financial statements included elsewhere in this annual report. C.
Unless determined otherwise by the administrator, VPPs may not be sold, pledged, assigned, hypothecated or otherwise transferred in any manner. As of December 31, 2024, we had granted a certain number of VPPs, which may be settled by cash or shares. See Note 18 to our audited consolidated financial statements included elsewhere in this annual report. C.
Prior to his China endeavor, Mr. He had gained and accumulated 18-year financial and capital markets experience in the US and in Taiwan working for world renowned organizations, such as, Fidelity Research & Management, Merrill Lynch and AIGIC, etc. Mr. He received a MBA degree from Warton School of Business at the University of Pennsylvania. Mr.
He had gained and accumulated 18-year financial and capital markets experience in the US and in Taiwan working for world renowned organizations, such as, Fidelity Research & Management, Merrill Lynch and AIGIC, etc. Mr. He received a MBA degree from Warton School of Business at the University of Pennsylvania. Mr.
As of March 31, 2023 As of March 31, 2024 Female Male Female Male Number of Directors Directors 0 5 0 5 Number of Directors who identify in Any of the Categories Below: Asian 0 5 0 5 D. Employees We had 1,311, 1,001 and 790 employees as of December 31, 2021, 2022 and 2023, respectively.
As of March 31, 2024 As of March 31, 2025 Female Male Female Male Number of Directors Directors 0 5 0 5 Number of Directors who identify in Any of the Categories Below: Asian 0 5 0 5 D. Employees We had 1,001, 790 and 608 employees as of December 31, 2022, 2023 and 2024, respectively.
The audit committee is responsible for, among other things: • approving the hiring, discharging and compensation of our independent registered public accounting firm; • overseeing the work of our independent registered public accounting firm; • approving engagements of our independent registered public accounting firm to render any audit or permissible non-audit services; • reviewing the qualifications, independence and performance of our independent registered public accounting firm; • reviewing our consolidated financial statements and reviewing our critical accounting policies and estimates; • developing procedures for employees to anonymously submit concerns about questionable accounting or audit matters; • reviewing the adequacy and effectiveness of our internal controls; and • reviewing and discussing the scope and results of the audit with our independent registered public accounting firm and reviewing, with management and the independent accountants, our interim and annual operating results. 105 Compensation Committee Our compensation committee consists of Steve Zhang, Qin Liu and Eric He.
The audit committee is responsible for, among other things: • approving the hiring, discharging and compensation of our independent registered public accounting firm; • overseeing the work of our independent registered public accounting firm; • approving engagements of our independent registered public accounting firm to render any audit or permissible non-audit services; • reviewing the qualifications, independence and performance of our independent registered public accounting firm; • reviewing our consolidated financial statements and reviewing our critical accounting policies and estimates; • developing procedures for employees to anonymously submit concerns about questionable accounting or audit matters; • reviewing the adequacy and effectiveness of our internal controls; and 103 • reviewing and discussing the scope and results of the audit with our independent registered public accounting firm and reviewing, with management and the independent accountants, our interim and annual operating results.
Mr. Zhang received his master’s degree in computer science from Rice University, his doctorate’s degree in information science from the University of Pisa, and his bachelor’s degree in science from Tsinghua University. B. Compensation Compensation of Directors and Executive Officers In 2023, the aggregate cash compensation to our directors and executive officers was approximately US$1.4 million.
Mr. Zhang received his master’s degree in computer science from Rice University, his doctorate’s degree in information science from the University of Pisa, and his bachelor’s degree in science from Tsinghua University. B. Compensation Compensation of Directors and Executive Officers In 2024, the aggregate cash compensation to our directors and executive officers was approximately US$0.8 million.
The following paragraphs describe the principal terms of the 2018 Plan. 102 Types of Awards The 2018 Plan allows us to grant incentive share options, nonstatutory share options, share appreciation rights, restricted share awards and restricted share units Administration The 2018 Plan is administered by our board of directors or one or more committees appointed by our board of directors.
Types of Awards The 2018 Plan allows us to grant incentive share options, nonstatutory share options, share appreciation rights, restricted share awards and restricted share units Administration The 2018 Plan is administered by our board of directors or one or more committees appointed by our board of directors.
In connection with the assumption, the 2018 Plan was terminated, and accordingly no further options will be available for issuance under the 2018 Plan. The 2018 Plan will continue to govern outstanding awards granted thereunder.
In connection with the assumption, the 2018 Plan was terminated, and accordingly no further options will be available for issuance under the 2018 Plan. The 2018 Plan will continue to govern outstanding awards granted thereunder. The following paragraphs describe the principal terms of the 2018 Plan.
(2) Represents (a) 2,000,000 Class A ordinary shares held by Morningside China TMT Fund II, L.P.; (b) 23,260,188 Class A ordinary shares held by Morningside China TMT Top Up Fund, L.P.; (c) 12,558,748 Class A ordinary shares held by Morningside China TMT Special Opportunity Fund II, L.P.; (d) 1,255,875 Class A ordinary shares held by Morningside China TMT Fund IV Co-Investment, L.P.; (e) 7,740,611 Class A ordinary shares held by Evolution Special Opportunity Fund I, L.P.; and (f) 1,161,092 Class A ordinary shares held by Evolution Fund I Co-investment, L.P., as reported in a Schedule 13G filed by them on February 16, 2021.
(2) Represents (a) 859,408 Class A ordinary shares held by Morningside China TMT Fund II, L.P.; (b) 9,994,880 Class A ordinary shares held by Morningside China TMT Top Up Fund, L.P.; (c) 12,558,748 Class A ordinary shares held by Morningside China TMT Special Opportunity Fund II, L.P.; (d) 1,255,875 Class A ordinary shares held by Morningside China TMT Fund IV Co-Investment, L.P.; (e) 7,740,611 Class A ordinary shares held by Evolution Special Opportunity Fund I, L.P.; and (f) 1,161,092 Class A ordinary shares held by Evolution Fund I Co-investment, L.P., as reported in a Schedule 13G/A filed by them on February 7, 2025.
The calculations in the table below are based on 288,948,416 Class A ordinary shares and 76,179,938 Class B ordinary shares outstanding as of March 31, 2024. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The calculations in the table below are based on 297,863,025 Class A ordinary shares and 76,179,938 Class B ordinary shares outstanding as of March 31, 2025. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
After the grant of a performance award, the administrator, in its sole discretion, may reduce or waive any performance criteria or other vesting provisions for such options, share appreciation rights, restricted shares or restricted share units. The administrator, in its sole discretion, may pay earned performance awards in the form of cash, in shares or in some combination thereof.
After the grant of a performance award, the administrator, in its sole discretion, may reduce or waive any performance criteria or other vesting provisions for such options, share appreciation rights, restricted shares or restricted share units.
However, an employee may not be granted rights to purchase ordinary shares under the ESPP if such employee: • immediately after the grant would own capital shares and/or hold outstanding options to purchase such shares possessing 5% or more of the total combined voting power or value of all classes of capital shares of ours or of any parent or subsidiary of ours; or • holds rights to purchase ordinary shares under all employee share purchase plans of ours or any parent or subsidiary of ours that accrue at a rate that exceeds US$25,000 worth of ordinary shares for each calendar year in which such rights are outstanding at any time. 100 Offering Periods The ESPP includes a component that allows us to make offerings intended to qualify under Section 423 of the Code and a component that allows us to make offerings not intended to qualify under Section 423 of the Code to designated companies, as described in the ESPP.
However, an employee may not be granted rights to purchase ordinary shares under the ESPP if such employee: • immediately after the grant would own capital shares and/or hold outstanding options to purchase such shares possessing 5% or more of the total combined voting power or value of all classes of capital shares of ours or of any parent or subsidiary of ours; or 98 • holds rights to purchase ordinary shares under all employee share purchase plans of ours or any parent or subsidiary of ours that accrue at a rate that exceeds US$25,000 worth of ordinary shares for each calendar year in which such rights are outstanding at any time.
The following table sets forth the number of our employees categorized by function as of December 31, 2023: Functions Number of Employees Research and development 485 Sales and marketing 165 Customer solutions and services 56 General and administrative (including executives) 84 Total 790 We believe we offer our employees competitive compensation packages and a dynamic work environment.
The following table sets forth the number of our employees categorized by function as of December 31, 2024: Functions Number of Employees Research and development 386 Sales and marketing 111 Customer solutions and services 39 General and administrative (including executives) 72 Total 608 We believe we offer our employees competitive compensation packages and a dynamic work environment.
Liu received his bachelor’s degree in industrial electrical automation from University of Science and Technology Beijing in July 1993, and his master’s degree in business administration from China Europe International Business School in April 2000. Mr. Eric He has served as an independent director and audit committee chairman of Agora Inc.
Liu received his bachelor’s degree in industrial electrical automation from University of Science and Technology Beijing in July 1993, and his master’s degree in business administration from China Europe International Business School in April 2000. Mr. Eric He has served as our director since June 2020. Mr.
Information is solely derived from a Schedule 13G/A filed by such person on February 14, 2024. 109 To the Company’s knowledge, as of March 31, 2024, a total of 315,879,344 Class A ordinary shares are held by one record holder in the United States, The Bank of New York Mellon, the depositary bank of our ADR program, which represents approximately 86.5% of our total outstanding shares.
Information is solely derived from a Schedule 13G/A filed by such person on February 10, 2023. 107 To the Company’s knowledge, as of March 31, 2025, a total of 291,426,832 Class A ordinary shares are held by one record holder in the United States, The Bank of New York Mellon, the depositary bank of our ADR program, which represents approximately 77.9% of our total outstanding shares.
Except as otherwise noted below, the address for each person or entity listed in the table is c/o Agora, Inc., 2804 Mission College Blvd, Santa Clara, California 95054, United States. 108 Class A Ordinary Shares Class B Ordinary Shares Percentage of Beneficial Ownership Percentage of Aggregate Voting Power** Number Number % % Directors and Executive Officers Bin (Tony) Zhao (1) 13,709,441 76,179,938 24.6 84.8 Sheng (Shawn) Zhong * — * * Roger Hale * — * * Bin (Robbin) Liu * — * * Jingbo Wang * — * * Qin Liu — — — — Eric He * — * * Steve Zhang * — * * All directors and executive officers as a group 21,167,533 76,179,938 26.7 85.2 Principal Shareholders Entities affiliated with Bin (Tony) Zhao (1) 13,709,441 76,179,938 24.6 84.8 Entities affiliated with 5Y Capital (2) 47,976,514 — 13.1 2.6 Susquehanna Securities, LLC (3) 27,539,688 — 7.5 1.5 HHLR Fund, L.P.
Except as otherwise noted below, the address for each person or entity listed in the table is c/o Agora, Inc., 2804 Mission College Blvd, Santa Clara, California 95054, United States. 106 Class A Ordinary Shares Class B Ordinary Shares Percentage of Beneficial Ownership Percentage of Aggregate Voting Power** Number Number % % Directors and Executive Officers Bin (Tony) Zhao (1) 13,709,441 76,179,938 24.0 84.4 Sheng (Shawn) Zhong * — * * Bin (Robbin) Liu * — * * Jingbo Wang * — * * Qin Liu — — — — Eric He * — * * Steve Zhang * — * * All directors and executive officers as a group 15,620,174 76,179,938 24.5 84.5 Principal Shareholders Entities affiliated with Bin (Tony) Zhao (1) 13,709,441 76,179,938 24.0 84.4 Entities affiliated with 5Y Capital (2) 33,570,614 — 9.0 1.8 Susquehanna Securities, LLC (3) 27,539,688 — 7.4 1.5 * Represents beneficial ownership or voting power of less than 1%. ** For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our outstanding Class A ordinary shares and Class B ordinary shares as a single class.
Name Age Position Executive Officers Bin (Tony) Zhao 53 Director, Chief Executive Officer and Chairman Sheng (Shawn) Zhong 58 Director, Chief Technology Officer and Chief Scientist Jingbo Wang 42 Chief Financial Officer Roger Hale 56 Chief Security Officer Bin (Robbin) Liu 48 Vice President and Chief Operating Officer of Shengwang Non-Employee Directors Qin Liu 51 Director Eric He 64 Director Steve Zhang 60 Director Executive Officers Mr.
Name Age Position Executive Officers Bin (Tony) Zhao 54 Director, Chief Executive Officer and Chairman Sheng (Shawn) Zhong 59 Director, Chief Technology Officer and Chief Scientist Jingbo Wang 43 Chief Financial Officer Bin (Robbin) Liu 49 Vice President and Chief Operating Officer of Shengwang Non-Employee Directors Qin Liu 52 Director Eric He 65 Director Steve Zhang 61 Director Executive Officers Mr.
Number of Ordinary Shares Name Underlying Awards Exercise Price (US$/Share) Date of Grant Date of Expiration Sheng (Shawn) Zhong * * * US$0.10 US$0.00 US$0.00 March 30, 2018 August 19, 2021 March 1, 2023 March 29, 2028 August 18, 2031 February 28, 2033 Jingbo Wang * * * US$0.10 US$0.10 US$0.00 February 12, 2020 June 17, 2020 November 28, 2022 February 11, 2030 June 16, 2030 November 27, 2032 Roger Hale * US$0.00 June 30, 2022 June 29, 2032 Eric He * * US$0.10 US$0.00 June 17, 2020 November 28, 2022 June 16, 2030 November 27, 2032 Steve Zhang * US$0.00 November 28, 2022 November 27, 2032 Bin (Robbin) Liu * * * * US$0.10 US$0.00 US$0.00 US$0.00 June 17, 2020 August 13, 2021 August 19, 2022 August 25, 2023 June 16, 2030 August 12, 2031 August 18, 2032 August 24, 2033 * Represents less than 1% of our total outstanding shares.
The following table summarizes, as of December 31, 2024, the outstanding awards granted under our share incentive plans to our directors and executive officers, excluding awards that were exercised, forfeited or canceled after the relevant grant dates. 101 Number of Ordinary Shares Name Underlying Awards Exercise Price (US$/Share) Date of Grant Date of Expiration Sheng (Shawn) Zhong * * US$0.10 US$0.00 March 30, 2018 March 1, 2023 March 29, 2028 February 28, 2033 Jingbo Wang * US$0.00 December 1, 2022 November 30, 2032 Eric He * * US$0.10 US$0.00 June 17, 2020 November 28, 2022 June 16, 2030 November 27, 2032 Steve Zhang * US$0.00 November 28, 2022 November 27, 2032 Bin (Robbin) Liu * * * * US$0.10 US$0.00 US$0.00 US$0.00 June 17, 2020 August 13, 2021 August 19, 2022 August 25, 2023 June 16, 2030 August 12, 2031 August 18, 2032 August 24, 2033 * Represents less than 1% of our total outstanding shares.
As of December 31, 2023, 690 of our employees were located in China, 64 were located in the United States and 36 were located in other countries.
As of December 31, 2024, 493 of our employees were located in China, 45 were located in the United States and 70 were located in other countries.
(Nasdaq: YY) from August 2011 to April 2017. He had served as chief financial officer of Giant Interactive Group, Inc. from March 2007 to August 2011. He was elected as the outstanding CFO in 2007 in China by CFO Magazine. He had served as chief strategy officer of Ninetowns Internet Technology Group from March 2004 to March 2007.
He was elected as the outstanding CFO in 2007 in China by CFO Magazine. He had served as chief strategy officer of Ninetowns Internet Technology Group from March 2004 to March 2007. Prior to his China endeavor, Mr.
Outside Directors The Global Plan provides that all non-employee directors are eligible to receive all types of awards, except for incentive share options, under the Global Plan. 98 Non-Transferability Unless the administrator provides otherwise, the Global Plan generally does not allow for the transfer of awards and only the recipient of an award may exercise an award during his or her lifetime.
Non-Transferability Unless the administrator provides otherwise, the Global Plan generally does not allow for the transfer of awards and only the recipient of an award may exercise an award during his or her lifetime.
Our company has the right to seek damages if a duty owed by our directors is breached. In certain limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by our directors is breached.
Our company has the right to seek damages if a duty owed by our directors is breached.
(Nasdaq: API) since June 2020, a global leader in real-time engagement platform-as-a-services. Mr. He has also served as an independent director and audit committee chairman of Bilibili (Nasdaq: BILI) since March 2018, a leading video community in China often dubbed as “Chinese YouTube”.
He has also served as an independent director and audit committee chairman of Bilibili (Nasdaq: BILI) since March 2018, a leading video community in China often dubbed as “Chinese YouTube”. He has also served as an independent director of 51job (Nasdaq: JOBS) since July 2014, a leading provider of integrated human resource services in China. From 2004 to 2017, Mr.
As of December 31, 2023, awards to purchase 32,726,830 Class A ordinary shares under our equity incentive plans had been granted and outstanding. 103 The following table summarizes, as of December 31, 2023, the outstanding awards granted under our share incentive plans to our directors and executive officers, excluding awards that were exercised, forfeited or canceled after the relevant grant dates.
In 2024, no awards have been granted to our directors and executive officers under the 2018 Plan. As of December 31, 2024, awards to purchase 32,667,241 Class A ordinary shares under our equity incentive plans had been granted and outstanding.
He has also served as an independent director of 51job (Nasdaq: JOBS) since July 2014, a leading provider of integrated human resource services in China. From 2004 to 2017, Mr. He had successfully led three Chinese internet IPOs in Nasdaq and NYSE. Mr. He had served as chief financial officer of JOYY Inc.
He had successfully led three Chinese internet IPOs in Nasdaq and NYSE. Mr. He had served as chief financial officer of JOYY Inc. (Nasdaq: YY) from August 2011 to April 2017. He had served as chief financial officer of Giant Interactive Group, Inc. from March 2007 to August 2011.
Our board of directors has all the powers necessary for managing, and for directing and supervising, our business affairs.
In certain limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by our directors is breached. 104 Our board of directors has all the powers necessary for managing, and for directing and supervising, our business affairs.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation None.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. For the purpose of expressing confidence in the long term value of the Company, Mr. Bin (Tony) Zhao, Mr. Sheng (Shawn) Zhong, Mr. Jingbo Wang, and Mr.
Removed
Roger Hale has served as our Chief Security Officer since April 2022. Mr. Hale has more than 25 years of technology experience and 15 years of information security, risk and privacy experience. Mr. Hale was the Vice President and Chief Security Officer for BiglD, a data discovery and protection start-up, from February 2020 to March of 2022. Previously, Mr.
Added
The administrator, in its sole discretion, may pay earned performance awards in the form of cash, in shares or in some combination thereof. 96 Outside Directors The Global Plan provides that all non-employee directors are eligible to receive all types of awards, except for incentive share options, under the Global Plan.
Removed
Hale was the Vice President and Chief Information Security Officer at Informatica, a global enterprise cloud data management company, from January 2017 to September 2019. Prior to Informatica, Mr. Hale brought his experience to various technology companies including Inkling Systems, Lending Club, Symantec, and Brocade Communications. 95 Mr.
Added
Offering Periods The ESPP includes a component that allows us to make offerings intended to qualify under Section 423 of the Code and a component that allows us to make offerings not intended to qualify under Section 423 of the Code to designated companies, as described in the ESPP.
Removed
In 2023, no awards have been granted to our directors and executive officers under the 2018 Plan.
Added
Robbin Liu, who comprise all executive officers of the Company, voluntarily undertook, pursuant to the terms contained in the letters of undertaking given to the Company, that they and entities controlled by them shall not in their discretions sell any shares of the Company directly or indirectly beneficially owned by them, until December 31, 2025. Save for the foregoing, Mr.
Removed
(4) 19,287,300 — 5.3 1.1 * Represents beneficial ownership or voting power of less than 1%. ** For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our outstanding Class A ordinary shares and Class B ordinary shares as a single class.
Added
Sheng (Shawn) Zhong was permitted to sell 0.4 million ADSs (representing 1.6 million Class A ordinary shares of the Company) for personal financial reasons, and this sale was completed by December 31, 2024. F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation None.
Removed
Information is solely derived from a Schedule 13G/A filed by such person on February 10, 2023. (4) Represents 19,287,300 Class A Ordinary Shares beneficially owned by HHLR Advisors, Ltd. which acts as the sole investment manager of HHLR Fund, L.P.
Removed
The address of the business office of HHLR Advisors, Ltd is Office #122, Windward 3 Building, Regatta Office Park, West Bay Road, Grand Cayman, Cayman Islands, KY1-9006.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

6 edited+1 added−0 removed8 unchanged
In 2021, 2022 and 2023, we paid rent to this entity of US$216 thousand, US$207 thousand and US$198 thousand, respectively. See Note 25 to our audited consolidated financial statements included elsewhere in this annual report.
In 2022, 2023 and 2024, we paid rent to this entity of US$207 thousand, US$198 thousand and US$ 196 thousand, respectively. See Note 24 to our audited consolidated financial statements included elsewhere in this annual report.
Demand Registration Rights At any time after the earlier of (1) the fourth anniversary of October 1, 2018 or (2) the completion of our initial public offering, holders of at least 20% of the registrable securities then outstanding have the right to demand that we file a registration statement covering all registrable securities that the holders request to be registered and included in such registration by written notice.
Registration Rights Set forth below is a description of the registration rights granted to certain shareholders under the shareholders agreement. 108 Demand Registration Rights At any time after the earlier of (1) the fourth anniversary of October 1, 2018 or (2) the completion of our initial public offering, holders of at least 20% of the registrable securities then outstanding have the right to demand that we file a registration statement covering all registrable securities that the holders request to be registered and included in such registration by written notice.
We are obligated to effect no more than two demand registration, other than demand registrations to be effected pursuant to registration statements on Form F-3 or Form S-3, for which an unlimited number of demand registrations shall be permitted. 110 Registration on Form F-3 or Form S-3 Any holder is entitled to request us to file a registration statement on Form F-3 or Form S-3 if we qualify for registration on Form F-3 or Form S-3.
We are obligated to effect no more than two demand registration, other than demand registrations to be effected pursuant to registration statements on Form F-3 or Form S-3, for which an unlimited number of demand registrations shall be permitted.
Piggyback Registration Rights If we propose to file a registration statement for a public offering of our securities, we must offer holders of registrable securities an opportunity to include in the registration all or any part of their registrable securities.
We shall effect the registration of the securities on Form F-3 as soon as practicable, except in certain circumstances. Piggyback Registration Rights If we propose to file a registration statement for a public offering of our securities, we must offer holders of registrable securities an opportunity to include in the registration all or any part of their registrable securities.
As of the date of this annual report, the material outstanding shareholders’ rights are set forth below. Registration Rights Set forth below is a description of the registration rights granted to certain shareholders under the shareholders agreement.
As of the date of this annual report, the material outstanding shareholders’ rights are set forth below.
The holders are entitled to an unlimited number of registrations on Form F-3 or Form S-3. We shall effect the registration of the securities on Form F-3 as soon as practicable, except in certain circumstances.
Registration on Form F-3 or Form S-3 Any holder is entitled to request us to file a registration statement on Form F-3 or Form S-3 if we qualify for registration on Form F-3 or Form S-3. The holders are entitled to an unlimited number of registrations on Form F-3 or Form S-3.
Added
Interests of Experts and Counsels Not applicable. 109

Other API 10-K year-over-year comparisons