Q1 2021 Agora Inc Earnings Call
[music].
Good day, and thank you for standing by and welcome to the Agora incorporate that first quarter of 'twenty 'twenty 1 financial results. At this time all participants are in a listen only mode. After the speaker's presentation, there will be of question and answer session.
I asked the question around during the session you will need the press star 1 of your telephone. Please be advised at the day conference is being recorded if you require any further assistance. Please press star zero and I would now like to hand, the conference over to our first speaker today Ms. Anna and thank you. Please go ahead.
Thank you operator.
Good morning, Good evening and good morning, everyone. My name is down the channel.
And the Investor Relations director of Agora.
And joining our growth first quarter of 2021 earnings Conference call. Joining me today are Tony Zhao founder Chairman and CEO and as you go along CFO. Our earnings result press release and a slide deck can be found on our IR website at Investor day other of the aisle reconciliation.
Between our GAAP and the non-GAAP results can be found in our earnings press release. During this call. We will make forward looking statements about our future financial performance and the other future events and trends, including guidance. These statements are only predictions that are based on what we believe today and the actual reserve results made.
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 details in our filings with SEC, including todays earnings press release and the risk factor.
And the other information contained in the final prospectus relating to our initial public offering a garage and has no obligation to update any forward looking statements. We may make all of today's call.
With that let me turn it over to Tony Tony Please.
Thanks Philip.
And welcome everyone to our earnings call.
Like to start by saying that all of the horse and force of the people in India and the.
The other parts of the world dealing with the current pandemic.
Some of our own team members and their families affected.
But together, we will help each other some of this difficult period.
The World has changed.
1 is looking for ways to stay connected to their loved ones.
All of our real time engagement platform.
And is committed to making this meaningful human connection and possible.
And as I said, let's talk about the growth performance for Q1 and put it on the wall.
We had another quarter of strong growth in Q1 turned it around the world.
Developers and the wafers around the war continue to create new immersive engagement experience with our real time voice video chat and the streaming products transforming all industries.
And this quarter the amount of real time voice and video engagement part by our Guara exceeded 50 billion minutes per month for the first time.
As we watch the bloom of innovative new use cases, and build a base of GOR over the Pos here and.
And it's clear that the war is evolving from a consumer and economy and knowledge economy towards a greater economy, the economy, where people make a living by sharing their skills hobbies and interests on line.
This creators and crude for a long list of teachers Yoga instructors tour guides tour guides share Djs musicians and many more.
Interestingly this creators of leveraging the internet and the power of of course real time engagement network to enable those experiences and engage with their audience.
For example, we recently partnered with the virtual tour of platform in Europe to enable tour guys too so cosmos from thousands of miles of it here.
Here tourists and joined the large screening livestream detour, where local guys and introduce the destination and.
Sure the.
Sure the sites and the culture according to tourists.
Interest through real time interactions and.
And all of those happens.
Right and the tourists living room. Another example is on education platform based in San Francisco, the illegals artist to teach each other to teach other creative skills, such as how to D. J sort of we are.
We believe this and examples of just the beginning of the creator economy.
We will continue to invest R&D effort to reduce the friction for more and more of creditors to engage with their audience.
On the enterprise side real time engagement has evolved far beyond video conferencing.
With so many aspects of business Horst online towards the total shutdown and the speed of digital transformation for enterprise has accelerated.
For example of closings and north of the listen not all of the regulations.
That used to require in person meetings and all of the performance by the service by services like Apple cash, which use of course rte platform to provide clarification and enablement services to legal and the financial providers.
With our powerful combination of BR.
With the.
With the powerful combination of.
With the powerful combination of AI and real time video ballpark partner of repo developed for the solution that enable real time export of constellation constellation for a wide range of enterprise customers from medicine, 2 of manufacturing hunting and.
We're seeing the benefit of RP, driven digital transformation and the price will continue to you know it and the leverage <unk> platform to increase productivity and the customer engagement.
Another example of <unk> innovation, and XR or extended the reality.
Just 2 weeks ago and.
And our partnership was actually see wildcard.
And they announced their latest way or has that for enterprise the.
And I actually see and the Aurora of partnership will enable not just the real time interactions between the way our devices, but also ex our live streaming which allows users to share in the same in the.
Sales and immersive experience on any device with all of the required we our headset, making the way our experience more accessible and productive and the enjoyable for all participants.
And we feel strongly that XR coppola with real time engagement will drive the next generation of workplace collaboration.
In particular and <unk>.
Excited about the potential of ISR and live streaming.
Cost and enables seamless connection between the real world and the metal ores.
What's the award and between different in other words, all through the power of our core of our network.
On the product side, we recently released Agora, SDK and $3, 4 which is packed with many important and technical enhancements.
Especially on the video fluency.
By video policy remains a stable framework low driller and falling audio video and think that must be in place for the fashion to be at Natura and the structure of free as life and personal conversation.
And the path most of the legal belief 1 kind of either have good fluency with smartphone second latency.
Sub second latency with poor fluency.
But not good fluency and subsequent latency at the same time.
This is because subset and literally means the playback buffer is extremely small and making the payback more prone to each other.
Through our end to end engineering improvements and adaptive transmission and strategies.
And extremely proud to say that we are now able to achieve sub second latency, while maintaining the same potency compared to traditional long within the content the deliberate technology such as CDN.
This is an important milestone because it removes needs for our customer to make trade offs between the interactivity and video quality.
Recently, this technology enable our major as Chris and customer to deliver to deliver live lecturer with excellent video quality to solve and of students in lung hospital.
While keeping the ability to interact with each other at anytime.
Here I invite developers around the world require our latest SDK to see for yourself.
In addition to the core voice and video Apis, we have added chat and the whiteboard Apis to our platform through the acquisition of the small and Netherlands.
We have now complete we have now completed post acquisition integration for the China market.
And the integration effort for U S and other markets are well underway.
And looking forward to Supercharging of course global developer community with our combined offering.
The first more innovation Agora platform, we launched the Agora I'll start our program. This year can power of global startups with inclusive and exclusive back and the support and the benefits like free minutes and drive access to recede and accelerators.
The program has gained tremendous traction in the first quarter with 96, accelerators and incubators and investment partners globally.
I would like to invite all founders will speak of ideas to join the program and let US help you pursue European.
Lastly, I would like to take the opportunity to serve our customers and our developer community for their innovation and passion to help people stay connected.
I also want to sales. Thank you to all of the agreement of Gordon's for their hard work and dedication to our customers' success.
The first quarter or the great start to the year.
And I'm very excited about all of the opportunities in front of US as we continue to help build the future of real time engagement.
Now, let me turn things over to Jim Moore, who will review our financial results.
Thank you Tony Hello, everyone let.
Let me start by reviewing our financial results from Q1, and then I will discuss our outlook for the full year.
Total revenues of 13% year over year, and 21% quarter over quarter.
$42 million in the first quarter of 2021.
The number of active customers reached more than 2300, excluding growth for his model.
98% year over year.
The growth and revenue and the customer.
Driven by the continued adoption of our technology by developers and.
And the emergence and growth of new use cases.
We reached more than 300000 registered app accounts at the.
The end of March excluding growth 20 small adding.
Adding about 11000 per month in the quarter.
We also saw significant user growth from use cases, such as in the rocket natural hall, and audio and our cost during the quarter.
Additionally, if not contributed approximately 1 million dollar product line.
As we mentioned last earnings call and all.
To help investors better understand the organic growth, excluding the impact from 1 off event.
Such as the complete lockdown in China, and the first half of 2020 due to COVID-19.
We calculated adjusted total revenues for the period.
When comparing to the adjusted total revenues in Q1 last year.
Our revenue grew 81% year over year in this quarter.
Our trailing 12 months of constant currency dollar base net expansion rate is 131%.
Including this month.
If we use adjusted total revenues.
The expansion rate would be 146%.
Moving on the cost of expenses.
From my following comments and.
And the folks on non-GAAP results.
<unk> excludes share based compensation expense and <unk>.
<unk> related expenses.
Amortization expense of acquired intangible assets and.
And income tax related to acquired intangible assets.
Please note that a significant portion of the consideration paid or payable to the management team and employees of these mob and Netlist is accounted for as the acquisition related expense.
The income statement under U S GAAP.
Non-GAAP gross margin for the first quarter was 50.
<unk> 58, 4%, which was 10, 7% lower and Q1 last year and 2.1% over from Q4 of last year.
This was mainly due to the strong growth and new international markets and where it is.
Pending.
The infrastructure cups the higher.
In addition, we continue to expand the capacity of around the work and.
The patient of future growth driven by the accelerated digital transformation and worldwide.
We should net to higher depreciation of.
4.7% revenue and this quarter compared.
2.1% and Q1 of housing.
Non-GAAP R&D expenses were $17.4 minute and cure.
Up 65% year over year.
As we continue to hire talented employees and.
<unk> R&D team.
Non-GAAP R&D expense was 43, 3% of total revenue in the quarter.
Compared to 29, 7% and Q1 last year.
Here, our strategy is to focus on long term growth opportunities and innovation instead of maximizing short term profitability.
We intend to continue to invest significant resources.
D capabilities in order to further strengthen our technology leadership and provider and more diverse product portfolio to develop run and the work.
Non-GAAP sales and marketing expenses were.
$7.5 million and Q1.
Up 38% year over year.
Attributable to team expansion and.
Advertising and event expenses.
Sales and marketing expenses represented 18, 6% of total revenue in the quarter.
And bear to 15, 3% and Q1 of hockey.
Non-GAAP G&A expenses.
Our $4.5 million and Q1.
67.
The 7% year over year, mainly due to the team expansion and professional service fees.
G&A expenses represented 11, 1% of total revenue in the quarter compared to 7.6% in Q1 last year.
Non-GAAP operating loss was $5.6 million.
Operating between 13, 9% non-GAAP operating loss of <unk> fourth quarter.
Compared to the.
Operating loss margin of 14, 4% in Q4 last year and.
And operating income margin of 16, 6% in Q1 last year.
Turning to cash flow.
Operating cash flow was negative <unk> 7 million and Q1 cash.
Compared to negative $3.9 million last year.
Free cash flow was negative 8 minutes compared to negative $3.4 million last year.
Net cash outflow in the quarter was mainly due to capital expenditure as we continue to scale the network and the consideration paid for Netlist acquisition.
Moving onto the balance sheet, we ended Q1 with 877 million and cash cash equivalents and short term investments.
Compared to the 635 minute and in Atlanta.
Increased primarily due to the proceeds from 250 million.
Private placement of ordinary shares.
Now turning to guidance.
COVID-19 is due and unprecedented powerful business model.
The historical experience may not the pot.
Our guidance our full year revenue.
A number of assumptions and are subject to change with the uncertainties related to the related.
Related to the impact of the COVID-19 pandemic.
With that for the full year 2020, we maintain our previous guidance of total revenues for the full year I expect it to be in the range of 178 million.
282 million.
In closing, we delivered very strong first quarter of the year.
You to the entire authority at the.
Developers and customers and investors.
And hope you are healthy and safe.
Let's open it up for questions.
As a reminder to ask the question you will need the press star 1 and your telephone the withdraw your question. Please press the founder of Husky. Please standby wildwood compile the Q&A roster.
Our first question comes from the line of young from Morgan Stanley. Please ask your question.
Yeah.
The central for the opportunity.
I have 3 questions here.
The first is.
On the education regulation, and we noticed that there are a lot of noise and you've seen the market does.
Some of your customer could be.
Subject to new regulations on the customer acquisition and order of content et cetera.
Based on your day.
Crusher ongoing discussion with your customers what should it be the <unk>.
The impact from this.
Regulation changes.
And also what is the.
Revenue from this sector.
In the past quarter.
The second question is.
Uh huh.
How should we look at the gross margin.
The recent calls of its 58% and.
And Oh, what should be the outlook for the full year and of what will drive the.
A potential stabilization and turnaround of the gross margin.
And the third.
The other question is do.
With the intensifying competition from public cloud and the.
The other smaller players.
And what is the recent competitive dynamic in the market. Thank you.
Okay.
Yes.
The first question.
I think as we're hard to talk about the impact.
From the regulations and this wound the government the steel dropping more details of the new regulations and the consulting the cigar as stakeholders in the education industry. It is unclear what the final regulation will look like and at what pace. The government will enforce the new rules.
Besides those regulations being discussed.
Think of government has made clear that.
They are trying to promote the so called the <unk> III costume initiative, which is the leaning towards leveraging more online classroom services.
And to help.
The improved the overall education services and.
Therefore, we think no matter how regulatory change.
Would happen the overall public and the private sector used cases.
For online education should.
Online education with continued growth.
And if we think and long term I kind of of also offer a few more perspectives.
I think 1 of the overall education system based on Merit and exams is unlikely to change which means the demand for our school children is hard to diminish and.
And the shift from offline to online is likely to continue given the convenience and cost advantage of the online.
And then the shift from 1 way for cutting to interact to of course is like likely to accelerate given the better experience and the.
Learning outcome of interactive costs.
Who as to who will organize and the provides the actual tutor and service.
And whether it's education companies or public schools or even individual teachers I think this does.
Something will depend on the new regulation.
For Us we will just continue to focus on the things that will not change, which is more and more and better experience with <unk>.
Online class room solutions.
And we will be dedicated to try and to provide the best.
All such online classroom solutions for all of education providers.
And just to add in Q1 education sector contributed about 75% of total revenue.
The margin.
The second question so on the cross marketing and era of few factors that play here on the <unk>.
And 1 hand and are continuing to optimize our <unk>.
Income and cost and technology architecture.
And the other 1 of the other head of global expansion and the seemed like initiatives like starter program.
Incur additional cost and so on balance we.
We expect gross margin to remain relatively stable in the coming quarters.
With that said I want to highlight that the weekly we are still in the early days of new type of engagement and technology use.
The use cases geography.
The cost structure of changing very rapidly, which means gross margin will fluctuate from quarter to quarter.
At this stage.
The more focused on expanding our scale and use cases.
Are we saying that as long as we keep innovating and delivering high quality credits. There is no reason to worry about our margin and the long term.
Yeah.
The question is about the intensifying competition from public cloud and other small players.
Thinking of.
The competition with public cloud and the start ups has been happening for many years I think.
And we're early days.
5 years ago.
And some of those giant public cloud companies start to offer similar of pro.
Our EPS and triangle competed with us.
And the competition is naturally going to strengthen as the market growth or the in the industry growth.
The competition, we are seeing and the market today is not really out of the other.
It's just a net of natural development of the growing market.
<unk>.
And for Us.
And as the industry progress and completion growth.
And we will just continue to stay focused on the needs from the <unk> customers and create value for them. We will also focus on product and technology innovations so to provide a better and the professional offerings to all of our person and the customer base.
As I mentioned in my opening remarks.
Interactive live streaming product to now achieve sub second latency with video fluids, the same as long latency technologies such as CDN.
Is this kind of breakthrough is the innovation that help us with competition.
And we will continue to rollout more products lapses.
Thank you, Matt just a follow up of income of the global.
Revenue contribution.
We know this will be a little bit negative for gross margin, but definitely it's a huge market opportunity for agora.
Would you please update us in terms of the revenue contribution from <unk>.
The global market also China. Thank you.
And in Q1.
Revenue contribution from you as the other international markets.
It was about 27% to 28% of total revenue.
And thank you.
Our next question comes from the line of Emerson Chan from Wolf of Securities. Please ask your question.
Okay.
Hi, Thank you management I have the question. My first question is the follow up.
The revelation of the education market.
Given the.
Regulatory outlook I wonder.
Missions of the requisite impact built into our full year revenue guidance.
And also debt.
Narrowed cheap debt our reputation on the edge.
The case, and we'll save that those market needs and I just want to understand what will be the impact to us.
Some are getting bigger or in case of market.
Consolidated.
Will they be more incentivized to do it in house.
Cheaper alternative this is my first question.
My second question is related to R&D investment and given our R&D cost increased quite a bit in Q1.
So could management give us more color of the trend of R&D spending relative to revenue and this year.
And what areas of the RF DBS and messaging.
So when do we expect seeds.
Vestments translate into growth in the future.
My last question is how we can increase customer stickiness.
And.
I notice that we have more than 20.
<unk> thousand 300 active customer and now we also provide some.
<unk> got a program to encourage our LTE adoption.
As a platform.
EBITDA what value of features we are providing that can increase the stickiness of our customer.
I just wonder if there's anything that our competitors.
They go to Oprah.
Our customer will stay with our platform. Thank you.
Sure.
In terms of the assumption under the.
Guidance I will say.
For education sector.
Assuming a modest tightening regulation and we have revised our revenue growth rate.
Downward accordingly.
Well the other.
And a very drastic change in the.
Current industry.
So on the.
Customer consolidation point.
Right.
The other part I think of in a period of time customer conservation and education.
More or less change the composition of our agile efficient and customer base, but it will be dynamic because there will be continued innovations and there will be also continued changes in our element.
As you all aware of as.
As to the impact of our consolidation.
I think you know our current education and customer base includes already quite some established large education companies. Therefore.
I don't think there will be too much.
Impact.
And in there.
And also further elaborate of thoughts around just the and general competition with the DIY our in house solutions.
First I think this question.
Almost like applies to all of all paths of SaaS providers.
Theyre all my face the situations out there of customers when they grow bigger and trying to be assumption of 1 of the 1 <unk>.
For US My view is that real time engagement platform and the service is still a very young call service is still has a long way to you all of the quality of the experience we will get a better cost will get cheaper new features will be added every year, even the form and the format of the product is.
Steel has the.
Many of.
No.
Manny.
The sales to <unk> pool are to be defined in the next few years. So it will get harder and harder to do something to seeing halls, with the same quality and cost and completing the all of those offerings no matter. How big you are if you cant build it better and cheaper.
Why would you do it.
And in the and I think it's about the boundary of companies.
Each company should have a clear core competency for example, education companies should focus on education, not hardcore technologies like real time engagement will which will be used widely and also.
Side of the education itself.
And as time goes on every company needs to stay focused and 2 to make the competition power in their own sector better so.
I think it will be of Natura <unk>.
Tom.
The second question on the R&D.
The first of all I would advise investors to really.
Look at the non-GAAP R&D number because the GAAP number includes the 1 off of expenses such as acquisition related expense.
And then can portion of all of the.
The acquisition because duration to it teams of is mop and Netlist was classified as is it.
R&D expense in the income.
And the statement so in term of the non-GAAP R&D expense.
And it was 43% of revenue this quarter and the.
We actually expect this to remain at the around 40% level.
Well this year and we continue to invest very heavily and R&D.
So right now we have close to 1000 employees.
That's excluding the small which has about 200.
And all of that of 100 total employee base and about 2 sir.
And R&D employees.
And they are working on.
And.
A lot of things.
I can.
Roughly divide the sand industry categories. The first 1 is of the quality improvements.
On the front end of the SDK is the end user software side right you already of compression.
And the minimizing.
Video size, while keeping hospitality huddle of our computer usage.
And to reduce the size of the SDK.
Become more compatible with the.
Thousands of new devices.
Coming out of all coming out of.
Every year.
All of the things the front end and team is working on.
And then the pack and team I think we're kind of the global natural and routing algorithms how to deal with the packet loss loss how to deal with the failure of the web server and data center and transmission line.
1 part of all the <unk>.
The network.
Total scale up and down with our fact and user experience how to optimize the cost structure.
All of these things.
The second category would be new product.
It seems like the tactical possible.
And.
The content moderation from video.
Such as for example, as of the new product suite and East recently and.
And also of 'twenty you talk about in his opening remarks.
These new products and the 3 category would be to support new use cases when the.
The new used case and often require.
New features we developed a new terminals tablets.
And.
The deep optimization of all of the technical details with the.
And customers.
At the certain direction all of the thing that you can see income.
And I translate and 1 on 1 to revenue of Oh.
And the royalty and trucking.
<unk> and.
And you see.
Overall price gaps on the platform. So there will be a gradual.
Gradual revenue impact.
And as we scale.
Yes.
The use cases proliferate, we do expect <unk> R&D.
Expense will.
Well will come down as a percentage of revenue.
We do not.
And to change significantly.
And of course of this year.
As a student base all of that.
Investment.
Okay. I think there is the question around the stimulus right, yes and kicks off.
And so on Holly.
And increase the stickiness of our customers I think as the Tennessee.
And C J.
And just to keep rolling out.
New technologies features with the bigger product portfolio and also more professional services or.
As a result of the keep focusing on creating value for developers and in.
In addition to that.
Also a few things, we always try to 2 and agora.
At the start of the relationship early the offers.
Nice growth.
<unk> need our hubs and the most when they are very small and there.
This is why we had large gold price <unk> team in place and the recently launched and the startup program.
And for technical support industry best practices, New Rte use cases from minutes or even financial advisors.
And this kind of compulsory of engagement help us build trust with our developers.
And for our larger customers, we offer work with <unk>.
Often of work closely with them to deep deeply.
Deeply integrate our software with their apps to create fast and cost and user experience. We also co explore or code developer solutions for new use cases, such as the recent electro haul used cases, where such effort is successful we will both and to deepen our relationship.
And drive usage and <unk>.
Lastly, we also try to create value for.
For all of tens of customers many of customers don't see Aurora as just the technology provider, but a partner that can help make their business more successful.
Thank you.
Our next question comes from the line of Vincent Yu from Needham and company. Please ask your question.
Thank you management for taking my question and congrats on the strong quarter I have 2 questions. The first 1 is oh.
The progress of incorporating the east more services into our product offering how is the.
The initial responses by customers and the should we still think about the annual run rate to be around $10 million.
And the second question is about the new business expansions.
Are we looking for a new acquisition target and 2000 of new 1 or other business like the.
Thanks.
Pension areas and if so which of these.
Which are the areas to enhance our capabilities.
And you.
Thank you.
<unk>.
I'll take both questions. So.
And the initial response from developers and customers of arms each month of attrition has been very positive.
We are now able to pitch new customers and with the combined the video voice and chat offering and when.
We have also integrated the smart chat chat.
Chad.
Flexible classroom and such.
Starting with personal and predict and deal and.
Several of the open source projects such as the flat.
As Tony mentioned in the opening remarks, where the integration and China market has been completed.
And we are working very hard with the small team to make the chat product ready for the global market.
And that work and how things like.
English documentation.
And the API convention and also.
Teekay parent and price.
Currently we plan to launch it globally as.
Of course at the end of this year.
And in terms of revenue run rate the assessment, we can street and.
Used $10 million from.
From now.
So in terms of the new acquisitions.
We are certainly looking at opportunities.
And.
Obviously and they make and.
The mature.
And.
So highly uncertain.
And to be more specific and we are looking for 3 seconds.
The 1 technology and.
And looking for technology that can.
Makeup product better for example video.
The audio codecs or if you do the intelligence algorithms.
And secondly product that can complete complement.
And our existing product portfolio.
Can be either horizontal or vertical.
And certainly.
We're also interested in Richmond presence.
The company inventory problem.
Uh huh.
Yes.
Okay.
Thank you Thanks mentioned management.
Our next question comes from the line.
The key that Yadkin from China Securities. Please ask your question.
Thank you for taking my question and just have a question about the overseas.
The management just mentioned that the revenue contribution.
Around 27 day, 28% correct me, if I'm wrong and just.
I'm wondering what is the revenue and structure or contribution of different when he comes back and I have known.
The market Okay.
Application control and containment and so on and and also and it's 1 range.
And the global market, what is the customer acquisition strategy.
And it would be helpful and if we can share a bit more about the current needs.
And customers and if there is any true.
The change in terms of sales traction and the global markets. Thank you.
Sure.
Yes.
<unk> correct and <unk>.
In terms of the.
We see ourselves as a global company. So it is true.
Lee.
None of the overseas.
And the 3 primary markets, the China market the U S market and the.
The call rest of the world of international markets. So.
For the U S and rest of world market.
Actually we see the.
And more diverse.
Set of use cases.
<unk> seen very strong growth in many use cases that to have a strong.
Presence of strong.
The strong usage volume in China things like Watch party.
We have of customer call center right.
We had a virtual event, which is very big oxide ores and China.
Customers like Army.
If the customer and partner and we have the.
Thanks, guys.
We have them.
Several of our customers in the space.
All of these use cases.
And <unk>.
Yeah.
And of course of the also the.
And all of the lack of cash use case, we have several large customers in that vertical already so.
Broadly speaking it's still.
Entertainment and social application plus.
Enterprise.
But the mix is actually a lot more of them are averse.
So in terms of the.
The market model right.
Pretty much.
Okay first of all we have been in the market for the long part of it. So it's not that we recently expanded and.
Hard the team the team has been there for a long time.
Our growth market is.
Some of both.
The grassroot developer community developer driven sales motion and also the.
And the proactive outbound.
Huntington motion and we have the sales team and goodbye.
Out of.
Plenty of people.
Most of the folks on all of that and we have a very strong.
The volcker oriented sales and marketing team developer of interest.
Providing developers CT and map of Berry.
Is it is self serve portal for the.
<unk>.
The first of all.
And Oh.
It's quite.
Hi, Paul.
Yeah.
Thank you.
Our next question comes from the line being the 1 from Nomura. Please ask your question.
Hi.
I think of your medical and Florida, taking my questions I.
I have the.
2 questions. So first is the follow up question.
About the development of our large customers.
Are we seeing like.
For example of our top 5 customers.
And who which have already started or accelerated their in house development.
The the real time engagement solutions.
And the gaming like all of our education, and social media of saturation of the first quarter and.
So what's the.
Kind of solutions.
Solutions, we have or at the other out of service, we have to to help repair and the growth is kind of our customers and the.
The future of my second question is that could you.
Elaborate to more of the extended the reality opportunities or use cases.
Like what kind of the technology barriers and the.
Those kind of and.
And those kind of vertical and.
Are there any new.
And the or different.
Solutions, we need to.
Provide and how how does the management look at of the future opportunities and this segment. Thank you.
Yeah.
Alright.
I think for the first question on.
The other discusses enhanced developer in the 4 large customers from the beginning of our growth would've been and.
The constant.
Battle with and haul solutions.
Thanks.
As you all know.
Initially there is no such accounts out of third party professional providers. So almost all of our business of winning from in house solution.
It's just the something our customers are too few of our platform.
In the and the history of our business the.
Growth, we've been seeing customers, who will switch to in house as well as customer of school again and switch back from the horse to us.
And in multiple cases, we saw customers, who switched to enhance first and they had to switch back again to us, but overall I would say more and more customers start to realize the value of professionals, who are part of the providers does not just call him and the cost but also the fact the BRC.
We are.
We're saving them from all of the troubles and the focus so that they can focus on their core business. This has been reflected our steady revenue growth despite sort of on customer switch in halls switching to the in house as to how to maintain large customers I think the answer is always to build the best solution.
Or more professional solution for them.
Showing them, how big of a qualitative difference, we can make and how professional our product and service offering and we can deliver.
And.
Paul.
How much of those differences leads to business success to them.
Addition, we also offer work with our large customers to co develop and explore some.
<unk> on new use cases, such as the recent lecture hall.
Use case with such a <unk>.
The effort.
222 to become successful and it.
They will both deepen the relationship and drive usage and making the partnership not just about technology and service rather on.
Innovation.
So in terms of the extended reality.
Obviously, we feel very.
Optimistic about the potential of the.
All of these new developments in ex.
Extended reality or AR and virtual reality augmented reality all of the.
The U devices new experiences.
And our strategies and.
And we want to really help both of the.
And the vast manufacturers and also of the software developers.
As Tony mentioned, the Israel opening remark right, we recently announced the partnership with.
And with FTC and.
And as part of that.
The partnership our SDK will be pre installed and all of the HTC Vive devices. So it will become a default choice for any software developers to use and kind of engagement capability of net of that so that.
Uh huh.
As we continue to build more and more partnerships like that.
Oh, we want to really become a standard or the go to the solution for Archie.
Technology and VR AR.
<unk> XR devices.
And as to the the use cases, we have.
As Tommy mentioned, the first of all of them we can enable.
Different device users to connect to video voice and the <unk>.
Additionally, and probably more importantly, we can't and allows them to live stream there.
The experience with AC in the.
Virtual work to other people.
Outside of the people sitting in front of other mobile flow or people and other matters, you kind of screens as to another.
Well control work and become a connector between the 2 major work, we see a lot of potential use cases like this obviously this is all in very very early stage and we believe the imagination.
And of our behalf.
Yeah, I want to add a little bit.
And to that because I'm personally very excited about the potential of our billing such solutions are used cases, although at 2 more pointed out.
The overall growth is going to be of long term, it's not going to be something just happened or met all the although we do see evidence of that.
The the the growth of the improvements and our goals are.
<unk> ER experiences accelerating in the past few quarters.
The reason we are so much.
<unk>.
Looking at the action is because real time engagement for any XR or E. R experiences is.
Super important to make sure the overall fluency or real time news and all.
After experience and.
And with that I think of Cora is that going to be critical for enabling our insurer and such a serious to the immersive and a moment.
And so that's where we see the strategic value and we can offer for such use cases I think you can also see such a statement.
From the press release.
Of our partnership with the with the different.
And the partners.
Thank you very much.
Yeah.
Our next question comes from the line of China, and Wang from Macquarie. Please ask your question.
Hey, Thanks for taking the questions and congratulations on the impressive.
Impressive results.
Okay.
Roughly cash.
She was here so.
And so firstly can management share some colors on the user acquisition, which verticals are we getting more new customers and do we have more of a high.
Proportionally more clients in the U S and the rest of world markets.
And the second question is.
No.
And in your prospectus, you mentioned that the <unk>.
More than the 40 billion minutes or the partner engagement and lost.
March Kevin management, maybe update that number of course.
And thirdly.
What can we expect the floor is small revenue contributions in the following quarters.
Okay.
Sure.
So.
First of all in.
In terms of use of our position yes.
And as I mentioned in the opening remarks, right we added about 11000.
<unk> thousand and apps.
And you asked registered and platform per month in this quarter and.
Maturity.
I'm from <unk>.
And the rest of world markets.
And in terms of the verticals, we got lots of interest from the education sector, not just in China and actually.
And the U S addressable market as well, particularly on the new flexible classroom and product.
And we also got a lot of inquiries from.
Several of leading Internet companies on the audio line cost can use case.
And he lecture hall use case.
And obviously has huge revenue potential because it can transform the whole large class experience.
And.
Okay and question, obviously, we saw a lot of the.
Interest from non.
Next generation of use cases.
Oh, they are they are and also.
And like immersive gaming platforms.
People say mattress.
The other interesting use cases or emerging use cases.
Interesting.
Virtual event of virtual office.
And for toward what the party.
Uh huh.
Just to name some examples.
So the second question on the minutes.
We.
We enabled more than 50 billion minutes of video and voice engagement per month.
On average in Q1 this year that compares to the 40 per minute and number.
In March last year.
Please note that the 48 billion number of happened given the total lockdown in China.
And that number was more than double.
And the number of minutes in December 2019, so if we compare.
The 50 billion.
This quarter with December 2019 minutes of almost tripled in the last 15 months.
Okay.
And what's the last question Avi can you the.
The the revenue contribution potential revenue contribution from the small Oh, yes.
And yes, we're still guiding EBITDA run rate of all of that.
About 1 million per per months.
Thanks.
Yeah.
There's no more question at this time I would now like to hand, the conference Backflow of today's presenter. Please continue.
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