Agora : Q3 2021 Earnings Prepared Remarks

Q3 2021 Earnings Prepared Remarks

November 15, 2021

Legal Disclaimer

This document contains 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. We will discuss them 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 assumes no obligation to update any forward-looking statements we may make on this document.

Zhao Bin, founder, chairman and CEO

Thanks, Fionna, and welcome everyone to our earnings call.

In the past two months we hosted our RTE2021 conference in both the US and China, which attracted thousands of developers, product managers, entrepreneurs, and investors worldwide.

At the conference, we announced the "atlas of real-time engagement use cases", which covers over twenty industries and more than two hundred use cases in entertainment, social, IoT, education, finance, healthcare, enterprise collaboration, and even smart cities. We also released important new products such as Fusion CDN Livestreaming, which I will talk about later.

Now, about our Q3 performance.

We delivered another quarter with outstanding results. I'm pleased to report that our revenues for the third quarter were 45 million dollars, up 46% year-over-year. At the end of September, we had more than 372 thousand registered apps on our platform. Our number of active customers reached more than 2,500, adding over 700 year-over-year.

Next, I want to highlight our advancements on product and use cases in Q3.

On the product side, we released two important new products this quarter.

First, we recently unveiled full-path accelerator, or FPA, our global end-to-end network acceleration product. Unlike traditional network accelerators that mainly improve backbone transmission from one region to another, FPA takes the entire transmission path into consideration, including backbone and last mile, and optimizes the speed and reliability of transmission in a holistic fashion. FPA is based on our proprietary Software-DefinedReal-Time Network, and can accelerate any kind of data, not just video or audio, and for any application, whether it's gaming, e-commerce, collaboration, or metaverse. With just a few lines of code, developers can integrate FPA into their application and let all their users enjoy a smooth and responsive experience, no matter where they are.

Second, we announced our Fusion CDN Livestreaming product at the RTE 2021 conference. Together with our current interactive live streaming product, we can now deliver a complete solution for live

streaming use cases, from low-latency streaming with our interactive live streaming API, and standard latency streaming with our Fusion CDN product. It is important to note that our Fusion CDN is not a mere repackaging of traditional CDN, or content delivery network. Our Fusion CDN leverages our proprietary SD-RTN network to enhance the resilience of uplink transmission, and adaptively chooses the best CDN for downlink distribution depending on end users' location, therefore achieving superior end-to-end performance compared to traditional CDN. It also works seamlessly with our existing products, reducing the complexity of integration for developers.

Currently, both FPA and Fusion CDN Livestreaming products are available in China and we are working very hard to bring both products to developers in US, Europe, and other markets in the coming quarters.

In addition, we also launched our brand-new Extensions Marketplace at RTE 2021 conference. Our Extensions Marketplace gives developer access to an ecosystem of partner extensions which enhance real- time-engagement, such as AI-based noise filter from Bose, Face Filters from Banuba and Voice Changer from Voicemod. This marketplace is the first of its kind in the RTE category, allowing developers to instantly activate extension capabilities, and accelerate time to market for their innovative applications.

Moving onto new use cases.

We are very happy to see that social deduction games are gaining popularity in more and more regions.

Wildlife Studios is one of the largest mobile gaming companies in the world. They recently launched the Suspects game using Agora to power the native voice chat among players. The voice chat provides players with a frictionless experience and saves them from having to use a third-party tool to talk to each other during a game, and helps to differentiate Suspects from other social deduction games. We see this as one evidence of the convergence of social deduction games, we believe there will be more in other regions.

Recently, we have seen an accelerating trend of real-time engagement in extended reality environment, creating the infrastructure of Metaverses.

A good example is our partnership with Dreamland Maker, a leading virtual idol operator in China. We worked jointly to deliver a best-in-

class solution for virtual idol concert. Performance of the virtual idol is driven by a human performer through motion capture, and Agora powers the transmission of motion data and audio data to the physical concert site, and simultaneously streams the concert to audience online.

Virtual idols can engage with their audience in detailed 3D environments, which bridges the gap between the physical and virtual worlds, creating a beautiful fantasy world for users.

We are also working closely with several metaverse operators to build a fully interactive spatial audio solution. In the real world, we can easily distinguish sound coming from different directions, and such direction changes when we move our body or when the speaker moves. If we were to build a truly immersive metaverse, its audio must take into account the locations and directions of all users and the surrounding environment. And this is exactly what we are working

on. Our solution constantly tracks users' movements in real time,

synchronizes every user's location with others, and updates the spatial audio they hear accordingly.

If we extend our horizon a little bit, people always talk about a metaverse like the one we saw in "Ready Player One".

In my view, the industry needs to solve the at least following three problems, namely, real-time media connectivity, virtual environment construction, and large-scale control signaling, before we can have a "Ready Player One" like experience.

Agora has built industry leading technology in all these three areas. For example, we have been raising the bar for real-time video and audio experiences. Our content moderation, virtual background and spatial audio products, together with extensions from our partners, can significantly simplify virtual environment construction. And our full-path accelerator and signaling products are designed exactly for enabling low-latency control signals at scale. Our plan is to further enhance our capabilities in these areas and become an instrumental infrastructure provider for metaverse.

Next, I want to update everyone on our business in the US&RoW market.

US&RoW has been a key strategic focus for Agora. In the past three years, we have invested significant resources into this market, and have increased its revenue contribution from less than 10% to nearly