Real-time Interactive Service Provider Agora to Lay Off 30% of Employees
Agora, a Nasdaq-listed real-time voice and video engagement service provider, is carrying out a business adjustment with the “optimized” proportion of personnel positions to be about 30%, according to a report on October 25 by STAR Market Daily, who confirmed this news with people familiar with this matter. Some insiders pointed out that the online education business, also the pillar business of Agora, has performed poorly in recent years, while other Internet giants have entered the voice and video cloud field, which has greatly impacted Agora‘s development.
Agora was established in 2014. It mainly provides developers with easy-to-use, highly customized and compatible APIs (application programming interfaces). Developers can embed real-time voice and video interaction capabilities into applications without technical research and development or building their own underlying architecture.
Agora‘s services cover social networking, live-streaming, education, e-sports, enterprise collaboration and other fields, but it has long relied on customers in the education industry. When talking about the reasons for the decline in revenue and profits in its financial reports, the company made clear that it had been affected by the “Double Reduction” policy – which implemented tight restrictions on tutoring services – and its product usage in the K12 online education industry in China decreased.
In 2020, the pandemic boosted online education and further promoted the rise of online courses. According to public statistics, in March 2020 alone, the number of customers of Agora‘s online education business increased more than seven times. However, with the implementation of the “Double Reduction” policy in China’s education industry in July last year, the rapid growth of the company came to an abrupt end. This has had an important impact on its overall development.
On the other hand, comparing the revenue data of the second quarter of each year in recent four years, it can be seen that, since 2020, Agora‘s revenue growth rate in the same period has noticeably slowed down and this year it has begun to show negative growth.
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According to the company’s financial report, in the first quarter of 2022, the revenue of Agora declined by 4.08% year-on-year, which was the first decline since its listing on Nasdaq in June 2020. Looking at its performance in recent years, its revenue growth rate has obviously slowed down and some investors have expressed doubts about the sustainability of its future growth. In August this year, its second-quarter financial report showed that the revenue was still declining year-on-year. In the second quarter, Agora recorded a total revenue of $41 million, down 3.2% year-on-year.
In addition to the decline in revenue, Agora also began to lose money. In the second quarter of 2022, the net loss was $30.678 million, an increase of 99.29% over the net loss of $15.394 million in the same period of last year. Compared with the loss of $26.944 million in the first quarter, the figure increased by 13.86%.
To make matters worse, the share price of Agora is also falling. As of October 24, it traded for $2.57 per share giving it a total market value of only $297.79 million. According to public information, since last year, Shunwei Capital and Coatue PE Asia have disappeared from the major shareholders of Agora.
