Agora Q4 Earnings Report Preview: What To Look For

Radek Strnad /
2022/02/21 6:09 am EST

Communications infrastructure platform Agora (NASDAQ:API) will be reporting earnings tomorrow afternoon. Here's what to look for.

Last quarter Agora reported revenues of $45 million, up 46% year on year, beating analyst revenue expectations by 13.5%. It was a strong quarter for the company, with a significant improvement in gross margin and an impressive beat of analyst estimates. The company added 115 customers to a total of 2,564.

Is Agora buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Agora's revenue to grow 14.1% year on year to $37.9 million, slowing down from the 74% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.14 per share.

Agora Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time since going public on average by 12.3%.

Looking at Agora's peers in the software development segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. Twilio (NYSE:TWLO) delivered top-line growth of 53.7% year on year, beating analyst estimates by 9.53% and JFrog (NASDAQ:FROG) reported revenues up 38.7% year on year, exceeding estimates by 2.06%. Twilio traded up 1.75% on results, JFrog was down 6.97%. Read our full analysis of Twilio's results here and JFrog's results here.

Triggered by the Federal Reserve's hawkish stance on interest rates, shares of technology companies have been facing sell-off in 2022 and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 5.78% over the last month. Agora is down 19.5% during the same time, and is heading into the earnings with analyst price target of $34.8, compared to share price of $8.93.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.