Agora, Inc.

Ladies and gentlemen, thank you for standing by and welcome to Agora, Inc., second quarter 2020 financial results. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. And to ask questions during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded, and I would now like to hand the conference over to your first speaker today, and Fiona Chen. Thank you. Please go ahead.

Thank you, operator. Good evening and good morning, everyone. My name is Fiona Chen. I am the investor relations director at Agora. Thank you for joining Agora's second quarter 2020 earnings conference call. Joining me today are Tony Zhao, our founder, chairman and the CEO, and Jingbo, our CFO. Our earnings results press release and a slide deck can be found on our IR website at ir.agora.io. Reconciliations between our GAAP and non-GAAP results can be found in our earnings press release. During this call, we will make forward-looking statements about our future financial performance and other future events and trends, including guidance. These statements are only predictions that are based on what we believe today, and actual results may differ materially. These forward-looking statements are subject to risks, uncertainties, assumptions, and other factors that could affect our financial results. and the performance of our business, which we discuss in detail in our filings with SEC, including today's earnings press release and the risk factors and other information contained in the final prospectus relating to our initial public offering. As there is no obligation to update any forward-looking statements we may make on today's call. With that, let me turn it over to Tony.

Thank you, Fiona. First, I'd like to thank you and welcome all of you for joining us today for our first earnings announcement as a public company. Before walking through our Q2 performance and highlights, please let me spend a few moments describing our business. As more aspects of our lives are moving online, there is tremendous demand for real-time video engagement. Historically, users would need to install a dedicated app to use video engagement, such as Skype, FaceTime or Zoom. However, in more and more cases, users are looking for contextual real-time video engagement that is directly embedded in the application they are already using, whether that is for education, dating, or game purpose, enabling richer context and more seamless and immersive user experience with no need for switching between apps. This is exactly what we do. The Agora platform provides developers simple, flexible, and powerful application programming interfaces, or ATIs, to embed real-time video engagement experience into any application. Ultimately, our mission is to make real-time engagement ubiquitous, allowing everyone to interact with anyone in an app, anytime and anywhere. The key components of our platform on our software-defined real-time network, or SDRTM, and our software development kit, or SDK. On top of the SDRTM and SDK, we offer developers products such as real-time video, real-time voice, real-time messaging, real-time recording, and many other use case-specific products. All these products can be accessed through simple APIs and are fully programmable. Our technology makes developers work more efficient and effective, helping them bring in new apps to market and deliver a better end-user experience, resulting in stickier user relationships. Traditionally, it takes a team of multiple developers several months to build real-time video engagement functionalities with high upfront infrastructure costs and without a guarantee on quality and compatibility. With Agora APIs, you just need one or two developers. For most cases, only one week of coding and testing, no server to be deployed or infrastructure to be built, and you get global coverage with stable quality and wide range of functionalities and broad compatibility cross-platform. This is why tens of thousands of developers around the globe have chosen Aurora. We are focused on building developer community enthusiasm and innovation. We designed our platform so that it's easy to adopt and enables self-serve, ensuring a flexible, no-touch experience for developers. We offer 10,000 free minutes per app per month. so that developers can experiment with our platform. We have a transparent pay-as-you-go pricing model so that we can grow with our developers as they grow and scale their offerings. For large customers, we deploy our own engineers to help them integrate it and customize our products, creating differentiated user experience for them. As you can see, this business model is very efficient and scalable and have allowed us to deliver very strong financial results this quarter. Now, let me tell you about our Q2 performance and a few key business highlights. I'm pleased to report that we delivered revenue of $34 million for the second quarter, an increase of 128% year-over-year. This was driven by significant usage growth across geographics and verticals as the demand for real-time video and voice engagement increased significantly in light of the COVID-19. At Aurora, we are proud to see our platform was used by developers around the world to help people collaborate, learn, play, have fun, or just stay connected across distance during these challenging times. In addition to tremendous revenue growth, our high-efficient business model contributed to positive GAAP net income, operating cash flow and free cash flow. Our active customers reached nearly 1,500 at the end of the second quarter, up 86% year-over-year, and our constant currency dollar-based net expansion rate was 183% for the trading 12-month period. In this quarter, Our platform continues to attract developers with more than 30,000 new apps registered on our platform, bringing cumulative registrations to more than 210,000. Working with our developers around the world, we have seen many innovative and promising use cases emerging across various verticals. For example, we recently announced our partnership with Simr, a watch party platform that enables anyone to connect and interact over video chat while watching streaming content together. Users can host either public or private co-watching sessions or watch parties where content is synchronized with participants. With real-time video chat powered by Agora, Simr has seen have seen 100 times growth since March because of the novel shared experience that it creates to bring people together in the same virtual theater at the comfort of their own home. Another example is a co-listening service launched by a leading online music entertainment platform. After creating a public or private virtual room, the host becomes a DJ and chooses and choose what music to play. On top of the original HD soundtrack streaming to all members in the virtual room overlays a real-time voice engagement layer powered by Agora. It brings users the intimate experience of listening to music and share their thoughts together with friends without any compromise on music quality. Online exam on text proctoring also emerged in this quarter as a promising use case. Here, candidates are monitored online during the test duration through a real-time video connection and access the screen of the candidate, both powered by our technology. This kind of online proctoring and remote invigilation is expanding at a fast pace in both education and corporate training. Those are just three out of hundreds contextual real-time engagement use cases that are impossible to achieve without Agora platform. I'm also excited to announce that we are in the process of launching the first ever experience level agreement, or XLA, in real-time engagement. Without industry standard or benchmarks of service quality, customers used to be operating in the dark, not knowing how good or bad the quality of service are. A lot of times had to guess the experience of their end users and their overall business result being impacted by the experience. While our XLA covers metrics such as successful log-on rate, data rate, and latency, that focus on not only service availability but also on end-user experience. Now with XRA, the key metrics associated with it, we can provide transparency on service quality down to every minute in every engagement session. We will also provide future platform usage credit to our customers if they fail to deliver the level of XRA quality we have guaranteed. The XRA will help our developers better serve their end user, understand the quality they are experiencing, and also further differentiate our products from the competition. Weekly, it will be a must-have for any real-time engagement API provider going forward. Finally, I'd like to thank our 600-plus agorians around the globe for their exceptional performance in our first quarter as a public company. and thank you to our developers and partners for their unwavering trust in us. We will continue to create value for our developers and customers through innovation and together I believe we will one day make real-time engagement ubiquitous. Now let me turn things over to Jingbo.