Agora Inc (API) 2022 Q1 法說會逐字稿

Good day, everyone. Thank you for standing by. Welcome to Agora, Inc. First Quarter 2022 Financial Results Conference Call. (Operator Instructions) Please be advised that today's conference call is being recorded. (Operator Instructions).

今天是個好日子。謝謝你的支持。歡迎來到 Agora, Inc. 2022 年第一季度財務業績電話會議。 （操作員說明）請注意，今天的電話會議正在錄音中。 （操作員說明）。

I would now like to hand the call over to your first speaker today, Ms. Fionna Chen. Thank you. Please go ahead.

我現在想把電話轉給今天的第一位發言人陳菲奧娜女士。謝謝你。請繼續。

Thank you, operator. Good morning, everyone, and thank you for joining us for Agora's First Quarter 2022 Earnings Conference Call. Our earnings results press release, SEC filings and a replay of today's call can be found on our IR website at investor.agora.io.

謝謝你，接線員。大家早上好，感謝您參加 Agora 2022 年第一季度收益電話會議。我們的收益結果新聞稿、SEC 文件和今天電話會議的重播可以在我們的投資者關係網站investor.agora.io 上找到。

Joining me today are Tony Zhao, Founder, Chairman and CEO; Jingbo Wang, CFO. Reconciliations between our GAAP and the non-GAAP results can be found in our earnings press release.

今天加入我的是創始人、董事長兼首席執行官Tony Zhao；王靜波，首席財務官。我們的 GAAP 和非 GAAP 結果之間的調節可以在我們的收益新聞稿中找到。

During this call, we will make forward-looking statements about our future financial performance and other future events interim. 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 and which we discuss in detail in our filings with the 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. Agora remains no obligation to update any forward-looking statements we may make on today's call.

在本次電話會議中，我們將對我們未來的財務業績和其他未來中期事件做出前瞻性陳述。這些陳述只是基於我們今天所相信的預測，實際結果可能存在重大差異。這些前瞻性陳述受風險、不確定性、假設和其他因素的影響，這些因素可能會影響我們的財務業績和我們的業務表現，我們在提交給美國證券交易委員會的文件中詳細討論了這些因素，包括今天的收益新聞稿和風險因素，以及最終招股說明書中包含的與我們的首次公開募股有關的其他信息。 Agora 沒有義務更新我們在今天的電話會議上可能做出的任何前瞻性陳述。

With that, let me turn it over to Tony. Hi, Tony.

有了這個，讓我把它交給托尼。嗨，托尼。

Thanks, Fionna, and welcome, everyone, to our earnings call. As many of you may have known, one of our global headquarters, Shanghai was hit by an outbreak of Omicron in March. The city has been in lockdown for nearly 2 months now and has just started the process of resuming off-line business activities. During this time, our teams in Shanghai have been working remotely, and there has been no interruption of our business operations, our research and development efforts. Here, I would like to express my sincere gratitude and care to all of our team members impacted by COVID.

謝謝，菲奧娜，歡迎大家參加我們的財報電話會議。眾所周知，我們的全球總部之一上海在 3 月份爆發了 Omicron 疫情。這座城市已經封鎖了近兩個月，剛剛開始恢復線下商業活動。在此期間，我們在上海的團隊一直在遠程工作，我們的業務運營和研發工作沒有中斷。在此，我要向所有受新冠疫情影響的團隊成員表示衷心的感謝和關懷。

Before going through our performance in Q1, let's take a look at our leading market position and recognition by independent market observers. According to a recent industry report from CIC, Agora continued to be the undisputed leader in the global real-time engagement platform as a service market with more than twice market share than our nearest competitor both in terms of revenue and number of minutes delivered in 2021. As of March 2022, we maintained our #1 market share in RTE SDK installation globally.

在回顧我們在第一季度的表現之前，讓我們先來看看我們領先的市場地位和獨立市場觀察家的認可度。根據 CIC 最近的一份行業報告，在 2021 年的收入和交付分鐘數方面，Agora 繼續成為全球實時互動平台即服務市場無可爭議的領導者，市場份額是我們最接近的競爭對手的兩倍以上. 截至 2022 年 3 月，我們在全球 RTE SDK 安裝方面保持了第一的市場份額。

In regions like the North America, Southeast Asia and Middle East, our SDK installation market share is dominant compared to other RTE or public cloud service provider. For example, if we look at the top 10 social dating apps globally, all of them have RTE features embedded and half of them are powered by Agora. And if we further look at different regions, we power 5 out of the top 10 social dating apps in North America and 7 out of the top 10 in China.

在北美、東南亞和中東等地區，與其他 RTE 或公共雲服務提供商相比，我們的 SDK 安裝市場份額佔據主導地位。例如，如果我們看看全球排名前 10 的社交約會應用程序，它們都嵌入了 RTE 功能，其中一半由 Agora 提供支持。如果我們進一步研究不同的地區，我們為北美前 10 名社交約會應用中的 5 個和中國前 10 名中的 7 個提供支持。

Also in this quarter, Agora was selected as a finalist for Fast Company's World Changing Ideas 2022. Every year, Fast Company owners, the businesses and organizations driving change in the world. This year, in the workplace category, Fast Company selected Agora as a finalist to recognize our innovations in connecting virtual worlds of the metaverse to the physical one. None of this would be possible without our team's strong commitment to driving technology and product innovations, and our customers' trust and the confidence in us.

同樣在本季度，Agora 被選為 Fast Company 2022 年世界變革理念的決賽入圍者。每年，Fast Company 的所有者、推動世界變革的企業和組織。今年，在工作場所類別中，Fast Company 選擇 Agora 作為決賽入圍者，以表彰我們在將虛擬世界連接到物理世界方面的創新。如果沒有我們團隊對推動技術和產品創新的堅定承諾，以及客戶對我們的信任和信心，這一切都不可能實現。

Next, let's move to our business update in Q1. Our revenue for the first quarter was $38.6 million, 4% year-over-year. During this quarter, 34,000 new applications rejected on our platform. At end of March, our number of active customers exceeded 2,700, adding nearly 400 compared to 1 year ago. Our results in this quarter were impacted by the drop in demand from K-12 academic tutoring customers in China due to regulation. On the other hand, we continue to see strong growth momentum in markets such as Middle East, Southeast Asia and Europe, which not only offset most of the shortfall from K-12 use case but further diversified our revenue mix and enhanced our business resilience.

接下來，讓我們轉到第一季度的業務更新。我們第一季度的收入為 3860 萬美元，同比增長 4%。在本季度，我們的平台拒絕了 34,000 份新申請。截至 3 月底，我們的活躍客戶數量超過 2,700 家，比一年前增加了近 400 家。我們本季度的業績受到監管導致中國 K-12 學術輔導客戶需求下降的影響。另一方面，我們繼續看到中東、東南亞和歐洲等市場的強勁增長勢頭，這不僅彌補了 K-12 用例的大部分不足，而且進一步多元化了我們的收入組合併增強了我們的業務彈性。

More importantly, we are excited to see solid evidence of a long-lasting shift in people's mindset and behavior as they continue to move their lives online and spend more time in virtual engagement sessions. Even in countries where lives have largely returned to pre-pandemic norms, we believe this is an irreversible trend across all regions and verticals, which will bring tremendous market opportunities for us.

更重要的是，我們很高興看到確鑿的證據表明人們的心態和行為發生了長期的轉變，因為他們繼續在網上生活，並在虛擬參與會議上花費更多時間。即使在生活已基本恢復到大流行前常態的國家，我們相信這在所有地區和垂直領域都是不可逆轉的趨勢，這將為我們帶來巨大的市場機會。

Next, I will walk you through some important updates on our use case solutions and technology and product advancements during this quarter. In our last earnings call, we talked about our Meta Chat, Meta Live and MetaKTV solutions that enable developers to easily create immersive and entertaining voice chat, live streaming and karaoke experience within 3D virtual space.

接下來，我將向您介紹本季度我們的用例解決方案以及技術和產品進步的一些重要更新。在我們上次的財報電話會議中，我們談到了我們的 Meta Chat、Meta Live 和 MetaKTV 解決方案，這些解決方案使開發人員能夠在 3D 虛擬空間內輕鬆創建身臨其境和娛樂性的語音聊天、直播和卡拉 OK 體驗。

Recently, we launched Meta interactive game to further strengthen our metaverse product offerings. Through partnership with game developers, we bring lightweight party games to video and voice chat room or live streaming sessions, which add another dimension of fun and engagement to the users. In addition to video and voice engagement, our customers can seamlessly embedded such game -- can seamlessly embed such games in their social and entertainment applications to enhance user experience and engagement.

最近，我們推出了元互動遊戲，以進一步加強我們的元界產品。通過與遊戲開發商的合作，我們將輕量級的派對遊戲帶到視頻和語音聊天室或直播會話中，為用戶增加了另一個維度的樂趣和參與度。除了視頻和語音參與之外，我們的客戶還可以無縫嵌入此類游戲——可以將此類游戲無縫嵌入到他們的社交和娛樂應用程序中，以增強用戶體驗和參與度。

Moving to another vertical where we see many new use cases that strive to make the world a better place, the Internet of Things or IoT. We recently launched a turn-key software solution for IP cameras such as video doorbell or smart speakers. Our solution powers critical functions of the device including real-time monitoring, two-way video calling, remote control and recording, leveraging our knowledge and expertise in RTE devices with our solution can establish video session in just 1 or 2 seconds with very low latency. Our module is efficient in power usage and its compact enough to fit on almost any small and low-cost devices.

轉移到另一個垂直領域，我們看到許多新的用例致力於讓世界變得更美好，即物聯網或物聯網。我們最近為視頻門鈴或智能揚聲器等 IP 攝像頭推出了交鑰匙軟件解決方案。我們的解決方案支持設備的關鍵功能，包括實時監控、雙向視頻通話、遠程控制和錄製，利用我們在 RTE 設備方面的知識和專業知識，我們的解決方案可以在 1 或 2 秒內以極低的延遲建立視頻會話.我們的模塊在電力使用方面非常高效，而且它的結構足夠緊湊，幾乎可以安裝在任何小型和低成本的設備上。

Another interesting use case in the IoT space is NuEyes, a leading augmented reality smart glass that allows user hand-free access to the visualization of real-time information, including 3D modules, designs and data whether being used for an [underground] utility safety check or on the construction site of sky scrapers, workers can leverage our video APIs to safely transmit visual information to make informed decisions quickly.

物聯網領域的另一個有趣用例是 NuEyes，這是一種領先的增強現實智能眼鏡，允許用戶免提訪問實時信息的可視化，包括 3D 模塊、設計和數據，是否用於 [地下] 公用事業安全檢查或在摩天大樓的施工現場，工人可以利用我們的視頻 API 安全地傳輸視覺信息，從而快速做出明智的決策。

Our local and local platform continued to gain traction among developers globally. For example, Study.com, a leading online education platform is using our local solution, App Builder, to accelerate its digital transformation. Study.com has traditionally been an on-demand off-line course powerhouse, but will soon enable live children as a part of their offerings using App Builder.

我們的本地和本地平台繼續在全球開發人員中獲得關注。例如，領先的在線教育平台 Study.com 正在使用我們的本地解決方案 App Builder 來加速其數字化轉型。 Study.com 傳統上一直是按需離線課程的強國，但很快將使用 App Builder 將現場兒童作為其產品的一部分。

On the technology front, we launched our proprietary AI-powered noise suppression algorithm in this quarter. Traditional noise suppression algorithm works fine on general occasions, but sometimes fails to catch unique noises in specific use cases, such as the sound of breathing and swallowing when singing a song. Our AI-powered algorithm can deal with over 100 types of background noises, which gives developers the flexibility to build the best noise suppression for very specific use cases. In addition, our algorithm is designed to be compact and efficient. And therefore, performs very well on web browsers.

在技術方面，我們在本季度推出了我們專有的人工智能驅動的噪聲抑制算法。傳統的噪聲抑制算法在一般情況下效果很好，但有時在特定用例中無法捕捉到獨特的噪聲，例如唱歌時的呼吸聲和吞嚥聲。我們的 AI 驅動算法可以處理 100 多種背景噪聲，這使開發人員可以靈活地為非常特定的用例構建最佳噪聲抑制。此外，我們的算法被設計為緊湊和高效。因此，在網絡瀏覽器上表現非常好。

Lastly, on our team, I'm glad to announce that Mr. Roger Hale, former Chief Security Officer, a personal data privacy and protection company, BigID, has joined Agora in the same role. Roger will work with our executive team to navigate compliance and security and determined risk management and security best practices for the organization. He will also serve as a process owner of our business -- of our assurance activities related to the availability, integrity and confidentiality of customers, business partners, employees and business information.

最後，在我們的團隊中，我很高興地宣布，個人數據隱私和保護公司 BigID 的前首席安全官 Roger Hale 先生已加入 Agora，擔任同樣的職務。 Roger 將與我們的執行團隊合作，了解合規性和安全性，並為組織確定風險管理和安全最佳實踐。他還將擔任我們業務的流程負責人，負責我們與客戶、業務合作夥伴、員工和業務信息的可用性、完整性和機密性相關的保證活動。

Security and compliance have never been more critical than they are today, with an impressive track record and many years of experience and expertise, we are very excited to welcome Roger to the team. In addition to the hiring of Roger, we're also growing our executive team through internal promotions, including Chief Strategy Officer, Chief Revenue Officer and Chief Experience Officer. This moves are aimed at streamlining our global go-to-market efforts and further enhancing our developer experience. I'm confident that our expanded executive team will continue to drive innovations at Agora and help create a world where real-time engagement is ubiquitous.

安全性和合規性從未像現在這樣重要，憑藉令人印象深刻的業績記錄以及多年的經驗和專業知識，我們非常高興地歡迎 Roger 加入團隊。除了聘用 Roger，我們還通過內部晉升來壯大我們的執行團隊，包括首席戰略官、首席營收官和首席體驗官。此舉旨在簡化我們的全球上市工作，並進一步提升我們的開發者體驗。我相信，我們擴大後的執行團隊將繼續推動 Agora 的創新，並幫助創建一個實時參與無處不在的世界。

With that, let me turn things over to Jingbo, who will review our financial results.

有了這個，讓我把事情交給靜波，他將審查我們的財務業績。

Thank you, Tony. Hello, everyone. Let me start by first reviewing financial results for the Q1, and then I will discuss our outlook for the fiscal year of 2022. Total revenues were $38.6 million in the first quarter of 2022, a decrease of $1.6 million or 4.1% year-over-year. Our revenue growth in this quarter was negatively impacted by the new regulation on K-12 academic tutoring sector in China. Our revenues from K-12 academic tutoring sector in China were approximately $40 million in the fiscal year of 2021. Our revenues from the sector were approximately $1.3 million in the first quarter of 2022, a decrease of approximately $10 million from the same quarter last year.

謝謝你，托尼。大家好。讓我首先回顧一下第一季度的財務業績，然後我將討論我們對 2022 財年的展望。2022 年第一季度的總收入為 3860 萬美元，同比下降 160 萬美元或 4.1%。年。我們本季度的收入增長受到中國 K-12 學術輔導行業新法規的負面影響。 2021 財年，我們在中國 K-12 學術輔導行業的收入約為 4000 萬美元。2022 年第一季度，我們在該行業的收入約為 130 萬美元，比去年同期減少了約 1000 萬美元.

On the other hand, our growth momentum in other geographies and sectors remained strong in the quarter. In particular, revenue from U.S. and other markets outside China grew almost 50% year-over-year and 16% quarter-over-quarter to $16.4 million in Q1, representing 42.5% of total revenues. As we continue to expand globally, our revenue base also became more balanced and resilient. In this quarter, revenue contributed from top 10 customers were 22% compared to 35% in the same quarter last year.

另一方面，本季度我們在其他地區和行業的增長勢頭依然強勁。特別是，第一季度來自美國和中國以外其他市場的收入同比增長近 50%，環比增長 16%，達到 1640 萬美元，佔總收入的 42.5%。隨著我們繼續在全球擴張，我們的收入基礎也變得更加平衡和有彈性。本季度，來自前 10 名客戶的收入貢獻率為 22%，而去年同期為 35%。

Our trailing 12 months constant currency dollar-based net expansion rate is 95% in the quarter, excluding Easemob. The expansion rate was also negatively impacted by the K-12 sector, and expansion rate in other sectors and geographies remain very healthy.

本季度我們過去 12 個月的固定貨幣美元淨擴張率為 95%，不包括 Easemob。擴張率也受到 K-12 部門的負面影響，其他部門和地區的擴張率仍然非常健康。

Moving on to costs and expenses. For my following comments, I will focus on non-GAAP results, which exclude share-based compensation expenses, acquisition-related expenses, amortization expenses of acquired intangible assets, and income tax related to acquired intangible assets. Non-GAAP gross margin, fourth quarter was 63%, 4.6% higher than Q1 last year. As we mentioned in previous earnings calls, the increase was mainly driven by technical and infrastructure optimizations we have been implementing since the beginning of 2021.

繼續討論成本和費用。對於我的以下評論，我將重點關注非公認會計原則的結果，其中不包括股權補償費用、收購相關費用、收購無形資產的攤銷費用以及與收購無形資產相關的所得稅。 Non-GAAP 毛利率，第四季度為 63%，比去年第一季度高 4.6%。正如我們在之前的財報電話會議中提到的那樣，這一增長主要是由我們自 2021 年初以來一直在實施的技術和基礎設施優化推動的。

Non-GAAP R&D expenses were $25.3 million in Q1, up 45.3% year-over-year as we continue to hire talented employees and strengthen our R&D team. Non-GAAP R&D expenses were 65.6% of total revenues in the quarter compared to 43.3% in Q1 last year. With the enormous opportunities RTE technology presents globally, we will continue to invest heavily in R&D to strengthen our technology leadership and empower emerging use cases. In the near term, our plan is to keep R&D expenses at a relatively stable level in dollar terms and focus our resources on high ROI projects to maximize long-term impact.

第一季度非 GAAP 研發費用為 2530 萬美元，同比增長 45.3%，因為我們繼續聘用有才華的員工並加強我們的研發團隊。本季度非美國通用會計準則研發費用佔總收入的 65.6%，而去年第一季度為 43.3%。憑藉 RTE 技術在全球範圍內呈現的巨大機遇，我們將繼續大力投資於研發，以加強我們的技術領先地位並為新興用例提供支持。在短期內，我們的計劃是將研發費用以美元計算保持在相對穩定的水平，並將我們的資源集中在高投資回報率的項目上，以最大限度地發揮長期影響。

Non-GAAP sales and marketing expenses were $11.6 million in Q1, up 34.5% year-over-year, mainly attributable to team expansion and increased advertising and event expenses as we continue to step up our go-to-market efforts globally. Sales and marketing expenses represented 30% of total revenues in the quarter compared to 18.6% in Q1 last year. Non-GAAP G&A expenses were $7.4 million in June, up 64.7% year-over-year, mainly due to team expansion and expected credit loss provisions. G&A expenses represented 19.1% of total revenue in the quarter compared to 11.1% in Q1 last year. Non-GAAP operating loss was $18.9 million translating to a 49% non-GAAP operating loss margin fourth quarter compared to an operating loss margin of 13.9% in Q1 last year.

第一季度非 GAAP 銷售和營銷費用為 1160 萬美元，同比增長 34.5%，主要歸因於團隊擴張以及隨著我們繼續加大全球市場進入力度而增加的廣告和活動費用。銷售和營銷費用佔本季度總收入的 30%，而去年第一季度為 18.6%。 6 月份非美國通用會計準則 G&A 費用為 740 萬美元，同比增長 64.7%，主要是由於團隊擴張和預期信用損失準備金。 G&A 費用佔本季度總收入的 19.1%，而去年第一季度為 11.1%。非 GAAP 營業虧損為 1890 萬美元，相當於第四季度非 GAAP 營業虧損率為 49%，而去年第一季度的營業虧損率為 13.9%。

Turning to cash flow. Operating cash flow was negative $15.9 million in Q1 compared to a negative $2.7 million last year. Free cash flow was negative $17 million compared with negative $8 million last year. Moving on to balance sheet. We ended Q1 with $718 million in cash, cash equivalents and certain investments compared to $755 million at the end of Q4 last year. Net cash also in the quarter was mainly due to free cash flow of negative $17 million, cash paid for long-term investments of $13.9 million and share repurchase of $7.6 million.

轉向現金流。第一季度經營現金流為負 1590 萬美元，而去年為負 270 萬美元。自由現金流為負 1700 萬美元，而去年為負 800 萬美元。繼續資產負債表。我們在第一季度末擁有 7.18 億美元的現金、現金等價物和某些投資，而去年第四季度末為 7.55 億美元。本季度的淨現金也主要是由於自由現金流為負 1700 萬美元，長期投資支付的現金為 1390 萬美元，股票回購為 760 萬美元。

Now turning to guidance. COVID-19 is still an unprecedented variable to our business model where historical experience may not apply. Our guidance on full year revenues reflect various assumptions that are subject to change based on uncertainties related to the impact of the COVID-19 pandemic. With that, for the full year 2022 we maintain our previous guidance, the total revenues for the full year are expected it to be in the range of $176 million to $178 million.

現在轉向指導。對於我們的商業模式而言，COVID-19 仍然是一個前所未有的變量，歷史經驗可能並不適用。我們對全年收入的指導反映了各種假設，這些假設可能會因與 COVID-19 大流行影響相關的不確定性而發生變化。因此，對於 2022 年全年，我們維持之前的指導，預計全年總收入將在 1.76 億美元至 1.78 億美元之間。

Now turning to the update on the status under Holding Foreign Companies Accountable Act, or the HFCAA. On May 4, 2022, the SEC provisionally named Agora as a commission-identified issuer under the HFCAA, following our filing of annual report on Form 20-F for the fiscal year ended December 31, 2021. We understand that the SEC made such identification pursuant to the HFCAA and its implementation rules issued around it. And this indicates that the SEC determines that Agora used auditor who's working paper cannot be inspected or investigated completely by the PCAOB to issue the auditing for our financial statements included in the 2021 Form 20-F.

現在轉向《控股外國公司責任法案》或 HFCAA 下的狀態更新。 2022 年 5 月 4 日，在我們提交了截至 2021 年 12 月 31 日的財政年度的 20-F 表格年度報告後，美國證券交易委員會臨時將 Agora 命名為 HFCAA 下的委員會認定發行人。我們了解美國證券交易委員會作出了此類認定根據 HFCAA 及其圍繞它發布的實施規則。這表明 SEC 確定 Agora 使用了 PCAOB 無法完全檢查或調查工作底稿的審計師來對我們 2021 年 20-F 表格中包含的財務報表進行審計。

In accordance with HFCAA, the SEC determined that Agora file audit report is by a registered public accounting firm that has not been subject to inspection for the PCAOB for 3 consecutive years beginning in 2021, the SEC shall prohibit growth share or ADS from being traded on a national securities exchange or in over-the-counter trading markets in the U.S. We will continue to monitor market developments, actively explore possible solutions to protect interest of stakeholders and strive to maintain our listing status only NASDAQ.

根據 HFCAA，SEC 認定 Agora 文件審計報告由註冊會計師事務所出具，自 2021 年起連續 3 年未接受 PCAOB 檢查，SEC 將禁止增長股或 ADS 交易我們將繼續關注市場發展，積極探索可能的解決方案以保護利益相關者的利益，並努力保持我們僅在納斯達克上市的地位。

In closing, we delivered a strong first quarter performance in this challenging year. We are excited and very confident about the long-term prospects of our global business. Thank you to the entire Agora team for your hard work and everyone attending the call today, and hope you're healthy and safe. Let's open it up for questions.

最後，我們在這個充滿挑戰的一年中實現了強勁的第一季度業績。我們對我們全球業務的長期前景感到興奮和充滿信心。感謝整個 Agora 團隊的辛勤工作以及今天參加電話會議的每個人，希望您身體健康。讓我們打開它來提問。

(Operator Instructions)

（操作員說明）

We have a question from the line of Yang Liu from Morgan Stanley.

我們有一個來自摩根士丹利的楊柳的問題。

I have 3 questions. The first one, could management share what is the revenue growth outlook for the 3 business lines that is overseas business, the China K-12 and also China non-K-12 in the next few quarters? Is it fair to say that first quarter this year should be the last quarter to see negative impact from the education regulation? And also, we are curious about the outlook for the China non-K-12 business as well. That is the first one. The second one is on the gross margin because we see that a 62.4% gross margin in first quarter is quite good, considering losing some education-related volume.

我有 3 個問題。第一個問題，管理層能否分享未來幾個季度海外業務、中國 K-12 和中國非 K-12 三個業務線的收入增長前景如何？可以說今年一季度應該是最後一個受到教育監管負面影響的季度嗎？此外，我們也對中國非 K-12 業務的前景感到好奇。那是第一個。第二個是毛利率，因為我們看到第一季度 62.4% 的毛利率相當不錯，考慮到損失了一些與教育相關的銷量。

Do you think this number will be a relatively sustainable in future? Or there will be some fluctuation either on the downside or upside on gross margin, especially given the overseas parties growing very rapidly? And the third question is regarding the renminbi depreciation recently. I know the company's revenue have both China part and the non-China part and also the cost and OpEx also have China and non-China part, what is the overall impact of the FX to the future P&L? Could management share a little bit on that?

你認為這個數字在未來會是一個相對可持續的數字嗎？或者毛利率會出現上下波動，尤其是在海外業務增長非常迅速的情況下？第三個問題是關於最近人民幣貶值的問題。我知道公司的收入有中國部分和非中國部分，成本和運營支出也有中國和非中國部分，外匯對未來損益的整體影響是什麼？管理層可以分享一點嗎？

I guess these are all for me. So on the first question regarding 3 business lines. So if you look at the last 12 months, so basically, roughly speaking, China K-12 was down 90% in Q1 versus Q1 last year, and non-K-12 business in China was up around 15%, and U.S. and other international markets was up about 50%. So that's the loss on loss. So I guess you are right that hopefully this will be the bottom for the K-12 impact in China. We still have some revenue in that sector about $1.3 million in the quarter, but that's much less significant now.

我想這些都是給我的。所以關於3個業務線的第一個問題。所以如果你看過去 12 個月，基本上，粗略地說，中國 K-12 在第一季度與去年第一季度相比下降了 90%，中國的非 K-12 業務增長了約 15%，美國和其他國家國際市場上漲約 50%。所以這就是損失中的損失。所以我想你是對的，希望這將是 K-12 在中國影響的最低點。本季度我們在該領域仍有一些收入，約為 130 萬美元，但現在已經不那麼重要了。

And if we look forward in the next 12 months, we'd expect something similar, say, around 50% growth in the U.S. and other international markets and around 15% to 20% growth in China. Obviously, there are a lot of macro uncertainties both in China and also in the U.S. So these numbers are obviously subjected a lot of assumptions, but that would be the current expectation.

如果我們展望未來 12 個月，我們預計會出現類似的情況，例如，美國和其他國際市場將增長 50% 左右，中國將增長 15% 至 20% 左右。顯然，中國和美國都存在很多宏觀不確定性。所以這些數字顯然受到了很多假設，但這將是目前的預期。

The second question on gross margin, so actually, we think the technical optimization has been very effective. There was some net impact from the loss of the K-12 model, which caused the reduction in utilization rate of our infrastructure, but that was compensated by a very efficient cost optimization. And as K-12 is largely gone now, we don't expect this impact to continue in the future. So actually, we are expecting K-12 margin to remain relatively stable in the remainder of the year compared to Q1. Obviously, there will still be some period-to-period fluctuation. But we don't expect it to be very significant.

第二個關於毛利率的問題，所以實際上我們認為技術優化非常有效。 K-12 模型的損失產生了一些淨影響，這導致我們基礎設施的利用率降低，但這被非常有效的成本優化所彌補。由於 K-12 現在已基本消失，我們預計這種影響不會在未來繼續存在。因此，實際上，與第一季度相比，我們預計今年剩餘時間內 K-12 的利潤率將保持相對穩定。很明顯，還是會有一些時期的波動。但我們並不認為它非常重要。

The third question on RMB depreciation. It's completely right that, that impact on both the top line and the bottom line. So roughly speaking, RMB has depreciated by about 5% in Q2 so far compared to Q1. On the revenue side, about 60% of our revenue is currently denominated in RMB. So assuming the FX rates stayed where it is today, it will have a negative effect of about 3% on our revenue in Q2. And cost and expenses will be effectively in a similar fashion. But net-net, as in impact on the bottom line, will be much less significant.

第三個關於人民幣貶值的問題。這是完全正確的，這對頂線和底線都有影響。所以粗略地說，到目前為止，人民幣在第二季度與第一季度相比貶值了約 5%。在收入方面，我們目前約 60% 的收入以人民幣計價。因此，假設外匯匯率保持在今天的水平，它將對我們第二季度的收入產生約 3% 的負面影響。成本和費用將以類似的方式有效。但是 net-net 對底線的影響將不那麼重要。

(Operator Instructions)

（操作員說明）

Our next question comes from the line of Bing Duan from Nomura.

我們的下一個問題來自野村的 Bing Duan。

So my first question is about the impact from the COVID-19 and the lockdown in China since March. And how do you think about the impact to the demand and the volume growth in different verticals, whether it's good or bad? Whether it's positive or a negative impact? My second question is about the competition. So I'm glad to see that we still maintain a global leading position in the global RTE market.

所以我的第一個問題是關於 COVID-19 的影響以及自 3 月以來中國的封鎖。您如何看待不同垂直領域對需求和銷量增長的影響，無論是好是壞？是正面影響還是負面影響？我的第二個問題是關於比賽的。所以我很高興看到我們在全球RTE市場仍然保持著全球領先地位。

But do you see that the -- going forward, the competition in China will intensify, especially for the large Internet or tech companies, which may ramp up their product launch or their other strategies in this market, in this RTE market? The last question is about the stock repurchase plan. I see we have completed 4% of total $200 million program in 1Q. So can we -- so just want to get your thoughts on how we are going to proceed with the stock repurchase plan in the next couple of months, will we accelerate the repurchase in 2Q and 3Q?

但是你是否看到——未來，中國的競爭會加劇，特別是對於大型互聯網或科技公司，它們可能會在這個 RTE 市場加大他們在這個市場的產品發布或其他策略？最後一個問題是關於股票回購計劃的。我看到我們在第一季度完成了 2 億美元計劃總額的 4%。那麼我們能否——所以只是想了解一下我們將如何在未來幾個月內進行股票回購計劃，我們會在第二季度和第三季度加速回購嗎？

All right. I'll take the first 2. One is on the COVID and lockdown in China. I think the recent lockdown in Shanghai and other cities has been -- has a small positive impact on our revenue, mostly from education sector. The reason why it's only a small impact is twofold. First, this time, only a few cities were affected, not an entire country compared to 2020. Second, K-12 after-school tutoring is gone. So the number of incremental online classes is also much smaller than 2020. In the near term, the overall macro environment in China is very challenging.

好的。我會選擇前兩個。一個是關於中國的 COVID 和封鎖。我認為最近上海和其他城市的封鎖對我們的收入產生了小的積極影響，主要來自教育部門。影響很小的原因是雙重的。首先，與 2020 年相比，這次只有少數幾個城市受到影響，而不是整個國家。其次，K-12 課外輔導已經消失。所以增量網課的數量也比2020年少很多。短期內，中國的整體宏觀環境非常具有挑戰性。

We see that general business activities are slowing down, which will affect our customers and their end users. There is also some debate on regulation of social and entertainment apps, and it's unclear how it will play out. In summary, we are very bullish about the long-term perspective of RTE. But there is a lot of macro uncertainties in the near term. We're watching closely and we'll adjust our strategy and operations if needed.

我們看到一般業務活動正在放緩，這將影響我們的客戶及其最終用戶。關於社交和娛樂應用程序的監管也存在一些爭論，目前尚不清楚它將如何發揮作用。綜上所述，我們非常看好 RTE 的長期前景。但短期內存在很多宏觀不確定性。我們正在密切關注，如果需要，我們將調整我們的戰略和運營。

And second, about the competition, there hasn't been too much change in strategy from our main competitors, such as Twilio in the U.S. and Tencent in China. On the RTE side, we are not seeing any big difference from operations. We have a lot of competition already in China markets especially, but we did notice that some competitors is making efforts in the low-latency live streaming area. This proves that our earlier prediction that a lot of streaming services will turn to low-latency technology.

其次，在競爭方面，我們的主要競爭對手，例如美國的 Twilio 和中國的騰訊，在戰略上並沒有太大的變化。在 RTE 方面，我們沒有看到與運營有任何大的不同。尤其是在中國市場，我們已經有很多競爭，但我們確實注意到一些競爭對手正在低延遲直播領域發力。這證明了我們之前的預測，很多流媒體服務將轉向低延遲技術。

This prediction is actually correct. The industry is embracing it. We think this is an important market with huge potential, and our technology is actually well positioned to capture opportunities in this market. But we did see a few start-ups also raising more funds in this industry. trying to build similar offerings, mostly on the local side.

這個預測實際上是正確的。該行業正在接受它。我們認為這是一個具有巨大潛力的重要市場，我們的技術實際上已經準備好抓住這個市場的機會。但我們確實看到一些初創公司也在這個行業籌集了更多資金。試圖建立類似的產品，主要是在本地方面。

Overall, I think this is a good thing for the industry with more choices for customers and more ideas to drive the industry forward. Together, we will create more vibrant market and accelerate the adoption of RTE technology in general. With growing competition, we also see that some companies went out of business. Overall, competitive landscape remains largely the same. We're still the clear leader in this space in terms of technology performance and completeness of features.

總的來說，我認為這對行業來說是一件好事，給客戶更多的選擇和更多的想法來推動行業向前發展。我們將共同創造更有活力的市場並加速 RTE 技術的普遍採用。隨著競爭的加劇，我們也看到一些公司倒閉了。總體而言，競爭格局基本保持不變。在技術性能和功能完整性方面，我們仍然是該領域的明顯領導者。

Okay. I'll take the third question on stock repurchase. Yes, we repurchased about $8 million worth of shares in Q1 and repurchase continued in Q2. However, we must add that we do not anticipate that we will accelerate the repurchase given what happened in the past 1.5 months, the lockdown and the general economic uncertainties in China and also the U.S. macroeconomic environment possible recession. So we will be more prudent in terms of the stock repurchase. So that's all I have to share at this point.

好的。我來回答第三個關於股票回購的問題。是的，我們在第一季度回購了價值約 800 萬美元的股票，並在第二季度繼續回購。但是，我們必須補充的是，鑑於過去 1.5 個月發生的事情、中國的封鎖和總體經濟不確定性以及美國宏觀經濟環境可能出現的衰退，我們預計不會加速回購。所以我們在股票回購方面會更加謹慎。這就是我現在要分享的全部內容。

(Operator Instructions) We have a follow-up question from Yang Liu of Morgan Stanley.

（操作員說明）我們有來自摩根士丹利的楊柳的後續問題。

I have a quick follow-up in terms of the overall demand in overseas markets because we see that several major countries are moving back to normal after the COVID semi lockdown, whatever. And I just want to have an update whether this will impact overseas demand? And what is the current observation from those key markets like U.S. or Middle East and ASEAN markets?

我對海外市場的整體需求進行了快速跟進，因為我們看到幾個主要國家在 COVID 半封鎖之後正在恢復正常，無論如何。我只想知道這是否會影響海外需求？美國或中東和東盟市場等主要市場目前的觀察結果是什麼？

Yes. Sure. Life in most countries have returned to normal. This does have a negative impact on the demand for our services for certain use cases. For example, usage from online events industry is now lower than 1 year ago during the peak of the pandemic. However, if you look at our numbers, our revenue growth in U.S. and other international markets actually accelerated in Q1 that's because there is a much stronger shift in people's mindset and behavior here.

是的。當然。大多數國家的生活已經恢復正常。這確實對某些用例對我們服務的需求產生了負面影響。例如，在線活動行業的使用量現在低於大流行高峰期的一年前。但是，如果您查看我們的數據，我們在美國和其他國際市場的收入增長實際上在第一季度加速，這是因為這里人們的心態和行為發生了更強烈的轉變。

During the past 2 years, people have learned that interactive video engagement can be useful on many occasions outside of video conference. Now a lot of businesses find out ways to leveraging real-time video engagement to conduct their business online, enhance user experience or increase efficiency. For example, we saw strong usage growth from education customers in Southeast Asia, Middle East and Europe, even after the reopening because live video class is a very effective and low-cost way of teaching.

在過去的 2 年中，人們了解到交互式視頻參與在視頻會議之外的許多場合都非常有用。現在，許多企業找到了利用實時視頻參與在線開展業務、增強用戶體驗或提高效率的方法。例如，我們看到東南亞、中東和歐洲的教育客戶的使用量增長強勁，即使在重新開放後也是如此，因為視頻直播課是一種非常有效且成本低廉的教學方式。

We now power many of the largest education technology unicorns in South Asia. These markets have huge population and the penetration of RTE-powered online education is still very low, which means there is huge revenue potential for Agora.

我們現在為南亞許多最大的教育技術獨角獸提供支持。這些市場人口眾多，RTE 驅動的在線教育的滲透率仍然很低，這意味著 Agora 有巨大的收入潛力。

Another exciting example is media. We finally see that the media industry is starting to embrace RTE technology. Recently, our technology was used to broadcast live sports games to thousands of audience with low latency and highly synchronized viewing experience. We believe this is a large and almost untapped market for us. The last example I want to mention is interactive e-commerce. One of our customers in the U.S. is leveraging our technology to enable video social buying where users can discuss and buy things as a group through video. This offers a very different and more engaging experience compared to traditional online shopping based on broadening catalogs.

另一個令人興奮的例子是媒體。我們終於看到媒體行業開始接受 RTE 技術。最近，我們的技術被用於以低延遲和高度同步的觀看體驗向數千名觀眾直播體育比賽。我們相信這對我們來說是一個巨大且幾乎未開發的市場。我要提到的最後一個例子是交互式電子商務。我們在美國的一位客戶正在利用我們的技術實現視頻社交購買，用戶可以通過視頻集體討論和購買商品。與基於擴大目錄的傳統在線購物相比，這提供了非常不同且更具吸引力的體驗。

To summarize, I think the pandemic has accelerated the adoption of RTE technology across industries. Today, the penetration of RTE is still very low, and there is definitely a long way to go for us.

總而言之，我認為大流行加速了 RTE 技術在各行業中的採用。今天，RTE的滲透率還很低，我們肯定還有很長的路要走。

(Operator Instructions) We have a follow-up question from Bing Duan from Nomura.

（操作員說明）我們有來自野村的 Bing Duan 的後續問題。

I have 2 follow-up questions. One is about the regulations on the social entertainment sector in China. Do we -- currently, do we see any potential tightening policies that may affect the demand in this sector? For example, the short video sector. And second one is about our margins growth trend. So I heard that management commented that the GP margin may remain largely stable in the next couple of quarters. Just wonder what would be the trend for R&D and sales and marketing expense in the next couple of quarters? Do we expect to add more headcount in the next few quarters?

我有 2 個後續問題。一是關於中國社交娛樂行業的規定。我們 - 目前，我們是否看到任何可能影響該行業需求的潛在緊縮政策？例如，短視頻領域。第二個是關於我們的利潤率增長趨勢。所以我聽說管理層評論說，未來幾個季度的 GP 利潤率可能會基本保持穩定。只是想知道未來幾個季度研發、銷售和營銷費用的趨勢是什麼？我們是否期望在接下來的幾個季度增加更多的員工？

Yes, there are notable in the past 1, 2 years, many regulation actions. And as I mentioned just now, there is also some different direction sort of the debate on regulations of social and entertainment apps. For example, there are reissue of game titles and there are ways about stabilizing the overall policy in those areas, but also certain restrictions might roll out for [gifting]. So there are still many changes in this space. And I think as we mentioned earlier, it's a little unclear how it will finally play out. And we are working closely with our customers and related bodies to find out what would be the best for us to help customers and developers.

是的，在過去的 1 年、2 年中，有許多值得注意的監管行動。正如我剛才提到的，關於社交和娛樂應用程序的監管也存在一些不同方向的爭論。例如，有遊戲名稱的重新發行，並且有一些方法可以穩定這些領域的整體政策，但也可能會針對 [gifting] 推出某些限制。所以這個空間還是有很多變化的。而且我認為正如我們之前提到的，它最終將如何發揮還不清楚。我們正在與我們的客戶和相關機構密切合作，以找出最適合我們幫助客戶和開發人員的方法。

The second question on margin. So yes, as I said, we expect margin to remain relatively stable. In terms of R&D and sales and marketing, we will improve the R&D efficiency and focus on projects, high ROI projects. So we will also control the headcount. We do not expect R&D head count to further increase. What I mean is that in dollar terms, we want to keep expenses were stable, honestly, in percentage terms, that will depend on revenue growth.

關於保證金的第二個問題。所以是的，正如我所說，我們預計利潤率將保持相對穩定。在研發和營銷方面，我們將提高研發效率，重點關注項目、高投資回報率的項目。所以我們也會控制人數。我們預計研發人員數量不會進一步增加。我的意思是，以美元計算，我們希望保持支出穩定，老實說，以百分比計算，這將取決於收入增長。

Sales and marketing. Sales and marketing, we do not plan to expand in China. However, we do have plans to further expand our go-to-market efforts outside China. As Tony explained that we still see a lot of opportunities in many markets and many verticals. So there, we will continue to invest. So in the near term, we'll see sales and marketing expenses continue to increase. But we will be more cautious about the efficiency and internal investment, and we intend to immediate next month or quarters that might have some pressure on the bottom line. But we do plan to improve the or control the overall operating margin towards the end of the year.

銷售和營銷。銷售和營銷，我們不打算在中國擴張。但是，我們確實有計劃進一步擴大我們在中國以外的市場推廣工作。正如托尼解釋的那樣，我們仍然在許多市場和許多垂直領域看到了很多機會。因此，我們將繼續投資。因此，在短期內，我們將看到銷售和營銷費用繼續增加。但我們對效率和內部投資會更加謹慎，我們打算立即在下個月或可能對底線有一定壓力的季度。但我們確實計劃在年底前提高或控制整體營業利潤率。

(Operator Instructions)

（操作員說明）

At this time, there are no further questions. I'd like to hand the call back to the management for closing.

此時，沒有進一步的問題。我想把電話交還給管理層以完成結案。

Thank you, operator. Thank you, everyone, for attending today's call. The replay and the presentation of this call are already posted on our website and the prepared remarks will be posted later after this call. Thank you again. If there is anything, please feel free to reach out to us. Thank you.

謝謝你，接線員。謝謝大家參加今天的電話會議。本次電話會議的重播和演示已經發佈在我們的網站上，準備好的評論將在本次電話會議之後發布。再次感謝你。如果有任何事情，請隨時與我們聯繫。謝謝你。

That does conclude today's conference call. Thank you for participating. You may now disconnect your lines.

這確實結束了今天的電話會議。感謝您的參與。您現在可以斷開線路。