Agora, Inc. (NASDAQ:API) reported fourth‑quarter 2025 revenue of $38.2 million, up 10.7% from $34.5 million a year earlier, and net income of $4.9 million, translating to earnings per share of $0.05 versus $0.002 in the same quarter last year. The revenue lift was driven by a 12% year‑over‑year increase in the core Agora real‑time engagement segment and a 150% quarter‑over‑quarter surge in conversational‑AI usage, which has more than doubled each quarter since its March 2025 launch. The company’s gross margin contracted from 66.6% to 65.1% in Q4, reflecting the lower‑margin profile of the new AI products that are still ramping up.
Operating expenses fell 8.3% to $26.1 million, a reduction that helped narrow the operating loss to $1.0 million from $4.9 million a year earlier. The expense decline was largely driven by a $1.5 million reduction in sales and marketing spend and a $0.8 million decrease in research and development, both part of a broader cost‑control program aimed at preserving profitability while scaling the AI platform.
For the full year, Agora generated $141.1 million in revenue, a 5.9% increase over 2024, and net income of $9.5 million, the first full‑year GAAP profit since 2018. The year‑long growth was supported by a 14.4% rise in the Agora segment and a modest 3.5% decline in the Shengwang segment, which is undergoing a strategic realignment. Gross margin for the year slipped to 65.0% from 66.4% in 2024, again reflecting the mix shift toward lower‑margin conversational‑AI products.
The company highlighted the rapid adoption of its conversational‑AI engine, noting that usage has more than doubled each quarter since launch. Management emphasized that the engine is moving from proof‑of‑concept to production across several verticals, including physical AI at CES 2026, and that the platform’s scalability was validated during a high‑profile Super Bowl live‑shopping event.
Looking ahead, Agora guided first‑quarter 2026 revenue to $36–$37 million, an 8–11% year‑over‑year increase, and reiterated its focus on expanding AI adoption while maintaining profitability in its real‑time platform. The guidance signals confidence in continued demand for the AI engine and a disciplined cost structure as the company scales its new product lines.
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