Good day and thank you for standing by. Welcome to the Agora Inc.'s First Quarter 2025 Financial Results Conference Call. Please be advised that today's conference is being recorded. The company's earnings results, press release, earnings presentation, SEC filings and a replay of today's call can be found on its IR website at investor.agora.io. Joining me today are Tony Zhao, Founder, Chairman and CEO; and Jingbo Wang, the company's CFO. During this call, the company will make forward-looking statements about its future financial performance and other future events and trends. These statements are only predictions that are based on what the company believes today, and actual results may differ materially. These forward-looking statements are subject to risks, uncertainties, assumptions and other factors that could affect the company's financial results and the performance of its business and which the company discussed in detail in its filings with the SEC, including today's earnings press release and the risk factors and other information contained in the final prospectus relating to its initial public offering. Agora Inc. remains under no obligation to update any forward-looking statements the company may make on today's call. With that, let me turn it over to Tony. Please go ahead Tony.

Thanks operator, and welcome everyone to our earnings call. I'll first review our operating results from the past quarter. I'm very happy to report our second consecutive quarter of GAAP profitability in Q1, driven by double-digit revenue growth year-over-year on a comparable basis and disciplined cost management. This is a great achievement, and I want to thank Agora and Shenwang teams for their efforts and dedication. Total revenue in Q1 was $33.3 million, up 12% year-over-year, excluding revenues from certain end-of-sale, low-margin products, with healthy business expansion and a net retention rate recovery from both Agora and Shenwang sites. Our GAAP net profit for the quarter, though still at a modest base, more than doubled from the previous quarter. As you know, Q1 typically marks our seasonal low point with fewer calendar days and reduced online activity during the New Year holiday period. Considering the seasonal trend and our current business momentum, we're confident that we will maintain GAAP profitability for the remainder of the year. At the end of Q1, we had more than 1,800 active customers for Agora and close to 2,000 for Shenwang, excluding discontinued products, both representing an increase of 5% compared to one year ago. Now, let's turn to our business product and the technology updates for the quarter. In March, we announced the general availability of our conversational AI engine in China, enabling developers to create interactive voice experiences with any large language model. This product has been refined based on extensive customer feedback during the private and public beta phase. Today, this product is still in the public beta stage for the U.S. and global markets, and it already delivers industry-leading performance on latency, noise suppression, interruption handling, and network resilience. Our conversational AI engine unlocks innovation across multiple verticals and use cases from virtual companions and shopping assistants to customer service and outbound marketing. Particularly, we believe education is where the conversational AI experience can have a huge impact in boosting student engagement with personalized content and adaptive practice. Imagine an AI teaching assistant that talks in real time, adjusting to each student's needs and providing truly personalized instructions and skill development. We are already seeing this vision come to life. Several key customers such as Toshan AI in China are in the advanced stages of developing AI-powered language tutoring products with our solution. In Q1, we also launched our conversational AI device kit, our turnkey IoT module combining our software, call service, and high-performance chips from Beacon. This device kit enables device manufacturers to add conversational AI to any IoT devices, from toys and robotics to smart speakers. As a turnkey solution, it can significantly reduce upfront R&D costs and time to market for device manufacturers. For example, our customer Robopod announced their latest AI companion robot, a device at the Mobile World Congress, powered by our device kit. This device listens, senses, and responds in real-time, creating personalized support and even emotional connections with end users. We are also making exciting progress on our open-source initiatives and developer ecosystem. TEN, our sponsored open-source project for building real-time conversational AI agents continues to gain remarkable traction with 6,000 GitHub stars; it is the fastest growing project in its category globally. Leading cloud providers, including AWS and Oracle Cloud, are providing support for deploying TEN on their infrastructure. Recently, we launched voice activity detection and turn detection modules as part of our TEN projects, which outperform our existing open-source alternatives, further demonstrating our commitment to the community and the conversational AI ecosystem. Over the past few months, we have seen a tremendous amount of interest in our conversational AI products and open-source projects. Product registrations and inquiries following the product launch have reached record highs, and our developer workshops in Beijing, Tokyo, and San Francisco have attracted large, passionate audiences. Today, many customers are working closely with us in proof of concept development. Before I wrap up, I want to give special recognition to our incredible teams at Agora and Shengwang. In this fast-moving AI revolution, their dedication and innovative spirit are what allow us to pioneer the future of human AI interaction. Each day, we're not just keeping pace with changes; we are creating it, unlocking new possibilities, and shaping a new paradigm. The opportunities ahead are truly exciting, and I cannot wait to share our next chapter of progress with all of you. With that, let me turn things over to Jingbo, who will reveal our financial results.

Thank you, Tony. Hello, everyone. Let me start by first reviewing financial results for the first quarter of 2025. And then I will discuss the outlook for the second quarter. Total revenues for the first quarter reached $33.3 million exceeding the high end of our guidance range. On a year-over-year basis and excluding revenues from certain end-of-sale low-margin products, revenue growth accelerated to 12.1%, up from 3.6% in Q4 last year. This demonstrates a clear pickup in our business momentum. Agora revenues reached $18.6 million in Q1, growing 17.7% year-over-year and 6.9% sequentially. This sustained performance reflects our successful market expansion and growing adoption, particularly in high-potential verticals, such as live shopping and entertainment, where usage continues to grow. Shengwang revenues reached RMB 105.5 million in Q1, excluding certain end-of-sale low-margin products. Shengwang revenues grew 6.7% year-over-year and declined 13.7% sequentially. The year-over-year growth reflects continued business expansion and adoption in key verticals such as entertainment and IoT. While the sequential decline is mainly due to normal seasonality with Q4 historically seeing peak demand for digital transformation projects and Q1 experiencing slower activity from social and education customers due to holidays. Dollar-based net retention rate is 96% for Agora and 85% for Shengwang, both improved from previous quarters. Moving on to cost expenses. Gross margin for the first quarter was 68%. If we exclude gross profit from certain end-of-sale products, gross margin of continuing business increased by 0.6% year-over-year and 1.4% quarter-over-quarter. As we mentioned in previous earnings calls, we restructured and reduced our global workforce in November 2024. As a result, operating expenses decreased by $6.1 million from $32.6 million in Q2 2024 as a baseline and reached $26.5 million in the first quarter. R&D expenses were $14 million in Q1, equal to 22.7% year-over-year. R&D expenses represented 42.1% of total revenue in the quarter compared to 54.5% in Q1 last year. Marketing expenses were $6.2 million in Q1, decreased by 8.5% year-over-year, representing 18.7% of total revenues in the quarter compared to 20.5% in Q1 last year. G&A expenses were $6.2 million in Q1, decreased by 25.6% year-over-year, representing 18.8% of total revenues in the quarter compared to 25.2% in Q1 last year. Moving on to the bottom line, we delivered net income of $0.4 million in Q1, representing a 1.2% net income margin. This represents a substantial turnaround from the 28.7% net loss margin in Q1 last year and marks our second consecutive quarter of GAAP profitability. With our current business momentum and visibility, we anticipate maintaining profitability throughout 2025. Now turning to cash flow. Operating cash flow was $17.6 million in Q1 compared to negative $6.5 million last year. Positive cash flow included $17.8 million in interest proceeds from maturity of bank deposits and financial products issued by banks. Moving on to the balance sheet. We ended Q1 with a substantial amount in cash, cash equivalents, bank deposits, and financial products issued by banks. Net cash inflow in the quarter was mainly due to operating cash flow of $17.6 million and the release of $3.5 million in restricted cash, which was offset in part by a share repurchase of $1.2 million. Since our board approved the share repurchase program in February 2022, we have repurchased $116.4 million worth of shares through March 31, 2025. So far in Q2, we have already bought back over $8 million worth of shares. We remain committed to creating shareholder value through this program while preserving the financial flexibility needed to invest in future growth opportunities. Now, turning to guidance. For the second quarter of 2025, we currently expect total revenues to be between $33 million and $35 million compared to $30.9 million in the second quarter of 2024, representing a year-over-year growth rate of 6.8% to 13.3%, if revenues from certain end-of-sale, low-margin products are excluded. This all reflects our current and preliminary views on the market and operational conditions, which are subject to change. In closing, I want to take a moment to recognize the exceptional work of the Agora and Shengwang teams; both dedication and execution have made these outstanding results possible. This quarter, we are proud to have delivered revenue above expectations, achieved consecutive GAAP profitability, and maintained a robust financial position. Thank you all for joining in today's call. We appreciate your ongoing support. Let's open it up for questions.

Hi management. Thanks Tony and Jingbo for the introduction and the results. Firstly, congrats on the strong results in Q1 and the solid guidance. I have two questions here. Number one is about the AI demand and the language model is getting more powerful, we see more human-machine interaction. What are the key areas you see more AI application? I think you mentioned convenient toys and some edge AI devices as well. So, what could be the future growth drivers in the area of AI? That's number one. Number two is regarding the breakdown for China and the overseas business and how do we see the demand trend in the future, by volume or by the ASP trend?

I'll talk about AI. First of all, AI agents have been the biggest topic among tech communities this year. However, we will focus on the conversational AI side, which is more directly related to our business. What we see are several key use cases that are mostly active. First is education use cases, especially around language learning and practice, as I just mentioned in my opening remarks. Also, IoT, especially a lot of effort is going into building conversational toys that can interact meaningfully with kids or users. There's also clear demand around call center services, including outbound calling for marketing or other purposes, and customer service in call center use cases. Those are the most clear verticals or use cases in our recent engagement with developers.

Thank you, Tony. I'll talk about the demand trend. So in the U.S. and global market, as you can see, the growth rate has reached about 18% this quarter, so close to 20% already. We are seeing growing adoption not just among our customers, but more importantly, we are seeing growing adoption among consumers who are likely to use shopping and entertainment apps. Especially in North America and Europe, these apps have become dominant in China for some time, but now we are finally seeing them gaining traction in North America and Europe as well. That's one of the most important growth drivers for us this quarter. Secondly, for Asian customers, we are finally seeing some demand recovery, even including India, for both education and entertainment use cases. Overall, in the U.S. and global market, we see a pretty solid demand and believe there's still a lot of potential for further penetration. In terms of pricing, with the exception of certain Asian markets, overall pricing has been quite stable in more developed markets. In China, growth rates haven't reached the levels we see in the U.S. and global markets, but for the Shengwang business in Q1 year-over-year, it delivered 6.7% growth. Overall, the demand is recovering on several fronts; in social entertainment, regulation is more stable now, resulting in less regulatory impact than we saw last year and the year before. Education demand is also recovering healthily, and IoT and digital transformation have shown strong demand over the past two years. Pricing-wise, although it's still a competitive market compared to last year and the year before, pricing pressure is more moderate this year. Overall, it looks more positive than in previous years.

Hi, this is from CICC and thank you for taking my questions. My first question is about your overseas e-commerce business. We've noticed that live shopping and interactive features are gaining popularity in e-commerce, particularly in emerging markets. Could you provide more details on your current actions and strategy for overseas e-commerce platforms or applications? My second question is about the AI landscape. Can you elaborate on any issues you've observed regarding downstream demand for AI-powered real-time interaction capabilities?

On live commerce use case, we are deep diving into the use case and continuing to maximize our penetration into the space. There's clear demand, and we see a lot of value-creation potential for us to deliver to our customers, and we are continuing to gain new customers while the existing customer volume is stably growing. One side of this effort is trying to improve the video quality, which will give shoppers better experiences in the live shopping use case. Many of our customers are actually local live shopping platforms, so there has been almost no impact from the recent tariff situation. On AI, again, we will continue to focus on conversational AI, which is really directly related to our business. The recent interest in building conversational AI agents is very clear, and many of our customers who are in the proof of concept stage of their development are getting close to product launch. The key for our growth in terms of service volume or eventually the value created for the customer base is really through products that have already found a product-market fit. The key to that is all those customers' products actually did a lot of deep diving into the vertical use case and built a good product by finding out sufficient know-how in that vertical, so that the customer experience is smooth and compelling enough. That process is why a lot of customers have been working with us for a while, but still, before it can really achieve a product-market fit, it will take some time.

No, that's it. Thank you for those comprehensive answers. That was really helpful. Thank you Tony and Jingbo for giving me the opportunity to ask questions. I have two. First is also about AI. How do we think about the timing for the massive adoption of conversational AI? We think that currently, there are still some pricing premiums compared to the non-AI applications. When do we see this tipping point for massive adoptions? The second question is about the competition landscape in China. How do we think about the pricing trends for the overall business and the impact on gross margins?

All right, on the tipping point, I mean, I actually talked about a few use cases or verticals that are most active in our work with customers and developers. I want to point out further that even within each of those use cases, it's not one category of product. For example, each type of our call center service for different industries has different know-hows. So, the product market fit will happen gradually for each industry's specific call center use cases. We will achieve product market fit one by one down the road, really depending on how those products, like I said, find out all the necessary know-hows. So to build up a smooth user experience, the tipping point really relies on the maturity of product-market fit of those specific use cases. Once it's matured and has a market fit, the volume for that specific product will grow significantly and will naturally expand to all similar product providers in the same sector or use case, which will again grow our volume. However, I do want to mention that the maturity of such products is not decided by us, it's really decided by each individual vertical use case; their industry know-how, product designs, and even launching approaches will determine whether the product is successful. I cannot really give a specific timing for how those products will mature and start to grow exponentially. What I want to say is it's not going to be one product, and it's not going to be even ten or twenty products. It's going to be hundreds of different products gradually reaching the tipping point. That's my view.

Okay, I'll take the question on the competitive landscape. Yes, China is a very competitive market. In fact, all the major cloud providers have competed in this market really hard, but now only one remains truly competitive; the others are there without meaningful market impact. This shows how competitive the market is. Over the past few years, there has been clear consolidation. There are now fewer players, but just three of them really competing. As conversational AI becomes more and more important, we believe the competition will encompass traditional communication plus conversational AI, and we have invested heavily in this new area. We cannot say the same for our competitors. So, we hope this will give us a stronger competitive position in the future. In terms of margin, yes, competition is fiercer in China, and margins are lower compared to global and U.S. markets. However, we focus on higher-value use cases, which tend to have higher margins, and we continue to do a lot of technical optimization on the cost side, which is why we have maintained a relatively stable gross margin as you've seen in our earnings. This will continue to be our strategy going forward.

Thank you Tony and thank you Jingbo.

Our next question comes from the line of an analyst from Nomura. Please go ahead. Right, there are no further questions. Thank you everybody for attending the company's call today. As a reminder, the recording and the earnings release will be available on the company's website at investor.agora.io. And if there are any questions, please feel free to email the company. With that, we conclude the program today. You may now disconnect your lines.

Thank you. Bye-bye.

Thank you.