Agora, Inc. American Depositary Shares

**$API** reported Q3 earnings, with a mix of good and bad news.

**The good**:
* Revenue growing 81% YoY — good albeit slowing down from original covid-driven boost
* Net expansion rate is a best-in-class 188% — the acceleration is a strong signal that their end customers are likely growing with Agora

![image](https://s3.amazonaws.com/media-service.production.commonstock.com/8a2a4a3e5ebd7f2fa5fba1913805d3c7772c69f6435f99b1298cd95cbf325f02-828x922.png)

**The bad:**
* Gross margins dropped from 69% last quarter to 62.5% as a result of expanding to markets with higher infrastructure costs
* Weak guidance on next quarter suggests that their post-covid growth may look less compelling

Still a believer here in the long-term value of real-time video infrastructure though it could be a slowdown in the next few quarters as growth post-covid will come down.

ARK Invest was buying up shares a couple of weeks ago - that net expansion rate is wild...as a potential buyer of their shares I'm not too concerned with the drop in margin as I'd think that would revert over time.   

I wonder over the next week or so, as more and more vaccine related news seems to come out, the market discounts $API further or if it's near a bottom?

Eric Pelnik

Agora sending mixed signals

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