Agora, Inc. (API) stock was declining in the Pre-market following the release of second-quarter 2021 financial results. API stock price saw a downtrend of 5.97% to drop at $27.73 a share as of this writing. The stock was gaining in the previous trade and went up by 3% at closing.
Second Quarter 2021 Financial Results:
- Agora stock generated $42.3 million in revenue in the second quarter of 2021, 24.9% higher than the same prior-year period. This increase reflects the business expansion of the stock as demand for video and voice products has been increased.
- API stock reported a $16.5 million cost of revenues for the reported quarter which is 44.8% more than Q2 of 2020. These costs increase due to bandwidth and co-location costs along with depreciation of servers and equipment costs due to expansion in business.
- Gross profit for the stock was $25.9 million as compared to $22.5 million in the same quarter of last year.
- The gross margin decreased by 5.3% to a drop at 61.1% in the second quarter of 2021. This is also due to expansion in the business which resulted in high infrastructure costs.
- Operating expenses for the API stock in the second quarter were $45.3 million, representing a significant 123.9% from the prior year same quarter. Operating expenses for the previous year’s same quarter were $20.2 million.
- Other operating income reduced $0.5 million from Q2 2020 to drop at $0.3 million in Q2 2021.
- API stock suffered a huge loss from operations in the second quarter of 2021. This loss reached $19.1 million as compared to $3.1 million in the same tenure of the previous year.
- API stock suffered a net loss of $15.4 million in Q2,2021 as compared to net income of $3.0 million in Q2,2020.
- Agora stock suffered a $0.14 net loss per American deposit share as compared to $4.60 per ADS in Q2,2020.
Financial Outlook of API stock:
API stock estimated its revenue for the fiscal year 2021 would be in the range of $159 million to $161 million. This estimate is based on the current market condition and operation activities of the API stock. The outlook may vary depending on certain uncertainties like the varying situation of Covid-19 and new Chinese regulations on the K12 tutoring sector.
Conclusion:
API stock is facing bearish sentiment despite increased revenue in Q2 2021, compared to Q2,2020. The operating loss and net loss are significantly high in the reported quarter. Most of the Chinese stocks are suffering these days due to newly imposed Chinese regulations in different sectors. Moreover, the delta variant of Covid-19 has been reported in China recently. In a nutshell, investors must be fully aware of such happenings before making any decision.
