Good day, and thank you for standing by. Welcome to the Agora Inc. Second Quarter 2025 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. The company's earnings results, press release, earnings presentation, SEC filings and a replay of today's call can be found on its IR website at investor.agora.io. Joining me today are Tony Zhao, Founder, Chairman and CEO; and Jingbo Wang, the company's CFO. During this call, the company will make forward-looking statements about its future financial performance and other future events and trends. These statements are only predictions and are based on what the company believes today. The actual results may differ materially. These forward-looking statements are subject to risks, uncertainties, assumptions and other factors that could affect the company's financial results and the performance of its business in which the company discussed in detail in its filings with the SEC, including today's earnings press release and the risk factors and other information contained in the final prospectus relating in its initial public offering. Agora Inc. remains no obligation to update any forward-looking statements the company may make on today's call. With that, let me turn it over to Tony. Hi, Tony.

Okay. Thanks, operator, and welcome, everyone, to our earnings call. I'll first review our operating results from the past quarter. We're proud to deliver our third consecutive quarter of GAAP profitability in Q2, with expanding margins driven by solid revenue growth and continued efficiency improvement. Total revenue in Q2 reached $34.3 million, up 11% year-over-year. Excluding revenues from certain end of sales, low-margin products with healthy growth momentum from both the Agora and Shengwang site. Our GAAP net profit for the quarter was $1.5 million, more than triple the previous quarter with a GAAP net margin of 4.3%. Considering seasonality and our strong business outlook, we are confident in our ability to continue improving GAAP profitability through the remainder of the year. At end of Q2, we had close to 1,900 active customers for Agora and approximately 2,000 for Shengwang excluding Easemob, representing an increase of 12% and 1%, respectively, compared to 1 year ago. Now turning to our business product and technology updates for the quarter. Since the launch of our Conversational AI engine product a few months ago, we have rapidly iterated based on our road map and customer feedback. At the World Artificial Intelligence Conference last month, we unveiled a major upgrade with 3 new features. First, we added an advanced attention locking feature, which allows an AI agent to focus on specific users' voice to stay on topic. Even when there are other people talking in the background, this feature is important because without it, those background voices would be fed into the large language model, confusing the model and sometimes making the conversational -- making the conversation impossible to continue. Second, we added real-time vision-based intelligence to our conversational AI engine enabling the AI to understand visual context along with spoken conversation. For example, a…

Thank you, Tony. Hello, everyone. Let me start by first reviewing financial results for the second quarter of 2025. And then I will discuss outlook for the third quarter. Total revenues for the second quarter reached $34.3 million. Excluding revenues from certain end-of-sale low-margin products, revenues grew 11% year-over-year, representing our second consecutive quarter of double-digit organic growth. Agora revenues reached $18.2 million in Q2, representing 16.7% year-over-year growth and 2.2% quarter-over- quarter decline. The strong year-over-year growth reflects our successful market penetration and growing adoption, particularly in high-growth verticals such as live shopping and entertainment. A marginal sequential decrease is mainly due to usage fluctuation of customers. Shengwang revenues reached RMB 115.5 million in Q2. Excluding certain end of sale low margin products, Shengwang revenues grew 6.7% year-over-year and 9.5% sequentially, driven by continued business expansion and adoption in key verticals such as digital transformation and IoT. Dollar-based net retention rate is 97% for Agora and 87% for Shengwang, marking the second consecutive quarter of improvement for both businesses. Gross margin for the second quarter was 66.8%. If we exclude gross profit from certain end-of-sale low-margin products, gross margin of continuing business slightly decreased 1.2% year-over-year and sequentially. Moving on to expenses. R&D expenses were $14 million in Q2, decreased 23% year-over-year. R&D expenses represented 40.8% of total revenues in the quarter compared to 53% in Q2 last year. Sales and marketing expenses were $6.5 million in Q2, increased 4% year-over-year. Sales and marketing expenses represented 19% of revenues in the quarter, compared to 18.3% in Q2 last year. G&A expenses were $6 million in Q2, decreased 26.6% year-over-year. G&A expenses represented 17.6% of total revenues in the quarter compared to 24% in Q2 last year. Moving on to the bottom line. We delivered net income of $1.5 million…

[Operator Instructions] Our first question will come from the line of David Lee with BofA.

Firstly, congrats on the strong results and solid growth. And I have 2 questions. Number one, regarding the AI-related business. You mentioned like for the downstream demand from the IoT and also the AI companion toys. Do we expect which application area will see the faster application and the potential revenue contribution to us going forward? My second question is about the gross profit margin in Q2 achieved of 4.8 percentage points year-over-year expansion. Well, quarter- on-quarter, see some -- suddenly drop. And is this a seasonality or any other reasons? How do you see the future trend for gross profit margin and net profit margin?

Thank you for the question. So for AI use cases, in conversational AI applications, currently, 3 use cases have progressed to a more advanced stage, namely call centers, education and companionship toys. For these use cases, we already see some customers have moved from proof of concept phase to real world production. Given the vast scale and potential usage of those verticals, we expect the success then of those customers will drive broader adoption.

Okay. So in terms of margins, so the gross margin of the current RDCO RTE business has been quite stable in the past year, fluctuating between 66% and 68%. And I expect this to continue in the coming quarters, and the sequential and year-over-year decline of 1% in this quarter is more due to like normal fluctuation. And as to the new products, the conversational AI products, I think it's still too early to say about gross margin. We might have a lower margin initially due to ramp-up and testing and prototyping cost. But once we reach a more steady state, I expect the gross margin on this product to be at least same as RTC, if not higher, because of the higher value and higher technical sophistication of this new product. So in terms of net margin, we expect the expenses to be relatively stable. So as we ramp up on revenues, we do expect the net margin to improve in the coming quarters this year. And in the longer term, as we guided before, we do think we should be able to achieve an operating margin of between 15% and 20%, but that's for the medium to long term.

[Operator Instructions] Our next question comes from the line of Chenyuan Wang with CICC.

I'm Chenyuan Wang from CICC. My question concerns the market reception of your newly launched the advanced attention locking and the avatar feature? So could you please share the early adoption trends and also the client feedback on these innovations.

Okay. Thank you for the question. When we initially planned and designed these features, we have already taken real-world applications and customer needs into consideration. This actually comes from some of the corner cases received we from early adoption of our conversational AI engine. Advanced attention locking is an essential feature in a noisy environment, especially with other people talking in the background. For example, our customers AI companion toy, Fuzozo will naturally be carried around by users. When users want to talk to Fuzozo in a place like subway station or shopping mall, attention locking is crucial to ensure a seamless user experience. Interactive avatars, on the other hand, must-have to -- for users -- for use cases like education and customer service, as they enable more lifelike engaging interruptions. So those are all coming from demand of solving certain corner case or providing a better expense experience for certain use cases.

[Operator Instructions] I am showing no further questions. This concludes today's question-and-answer session. Thank you, everybody, for attending the company's call today. As a reminder, the recording is in the earnings release and will be available on the company's website at investor.agora.io. And if there are any questions, feel free to e-mail the company. You may now disconnect. Everyone, have a great day.