Sound Network (API.US) has seven consecutive quarters of GAAP profit, and Q2 revenue increased 18% to $40.4 million

Zhitong Finance App learned that conversational AI and real-time interactive technology Enterprise Voice Network (API.US) announced unaudited financial results for the second quarter ended June 30, 2026 on Thursday. Total revenue reached US$40.4 million, up 18.0% from US$34.3 million in the same period last year, mainly due to the continued expansion of real-time interactive services in the fields of live shopping and financial services. Net profit was $2.2 million, compared to $1.5 million in the same period last year. Basic and diluted ADS net earnings per share for the quarter were $0.03 and $0.02, respectively, compared to $0.02 and $0.01, respectively, for the same period last year. This is the seventh consecutive quarter that the company has earned GAAP profits.

As of press release, Sound Network had a slight drop of 0.71% after the market.

Revenue costs for the quarter were US$14.7 million, up 28.9% year over year (US$11.4 million in the same period last year), mainly due to increased bandwidth and server costs, as well as increased costs associated with conversational AI products.

Gross profit was US$25.7 million, up 12.5% year over year (US$22.9 million in the same period last year). The gross margin was 63.7%, compared to 66.8% in the same period last year. The decline was mainly due to changes in product structure. Among them, conversational AI products are still in the early stages of scale.

Operating expenses totaled US$27.3 million, a slight increase of 2.8% year over year (US$26.5 million in the same period last year). R&D expenses were US$15.4 million, up 10.2% year on year (US$14 million in the same period last year), mainly due to increased investment in conversational AI products. Sales and marketing expenses were US$6.4 million, down 1.5% year on year (US$6.5 million in the same period last year), thanks to strict cost control. General and administrative expenses of US$5.5 million, a year-on-year decrease of 9.5% (US$6 million in the same period last year), mainly due to improved customer credit conditions and improved repayments, the anticipated credit loss provision for the current period decreased.

Operating losses for the quarter were US$1 million, a significant decrease from US$3.1 million in the same period last year. Interest income was $3.4 million, compared to $3.7 million in the same period last year, mainly due to a decrease in average principal balance. The investment loss for the quarter was US$400,000, and the investment income for the same period last year was US$800,000, mainly due to changes in the fair value of equity investments.

In the second quarter of 2026, the company repurchased approximately 3.8 million Class A common shares (approximately 1 million ADS shares) for approximately US$3.7 million. As of June 30, 2026, the company has repurchased approximately 178.5 million Class A common shares (approximately 44.6 million ADS shares) under the current repurchase plan, at a total cost of about US$159.9 million. As of June 30, 2026, the company issued 335.1 million shares of common stock (approximately 83.8 million ADS shares), compared to 449.8 million shares (approximately 113.4 million ADS shares) when the plan was launched. The current buyback program expires at the end of February 2027.

As of June 30, 2026, the number of active customers was 3,892, up 0.4% from 3,877 in the same period last year.

The net retention rate in dollars for the quarter was 104%, compared to 94% in the same period last year. As of June 30, 2026, the total balance of cash and cash-like assets, cash equivalents, bank deposits and financial products issued by banks was US$361.7 million. The net cash flow from operating activities for the quarter was US$2.1 million, compared with a net outflow of US$400,000 in the same period last year.

In terms of performance outlook, based on currently available information, the company expects total revenue for the third quarter of 2026 to be between 41 million US dollars and 42 million US dollars, an increase of about 15.8% to 18.6% year over year. The outlook reflects the company's current initial judgment on the market and operating conditions, and actual results may be adjusted due to changes.

Agora, Inc. (Agora, Inc.) is a holding company. It has two separate business segments, operating under the Agora brand and the Sound Network brand, respectively. Agora, headquartered in Santa Clara, California, USA, is a global pioneer and leader in conversational AI and real-time interactive platform-as-a-service (PaaS). It provides developers with simple, flexible, and powerful APIs to help them embed real-time conversational AI, video, voice, chat, and interactive live streaming into various applications. Headquartered in Shanghai, China, Sound Network is a pioneer and leading provider of conversational AI and real-time interactive PaaS for the Chinese market.

Zhao Bin, founder, chairman and CEO of Sound Network, said, “We are happy to report another quarter of accelerated growth. This is due to the strong performance of the two major businesses, real-time interactive and conversational AI, and we have achieved profit under GAAP for the seventh consecutive quarter.” “Our voice AI agents are being deployed in more and more diverse application scenarios — including market research, buyer intent capture, and customer service — we are beginning to see them achieve or surpass human performance in a growing number of tasks.”

“We believe that the continuous optimization of AI smart solutions will unlock new demand and accelerate the industry's transformation to an AI-led call center workflow. Looking forward to the future, we will continue to invest in real-time infrastructure and developer ecosystem construction while maintaining strict financial discipline to simultaneously serve human-to-human and human-AI interaction scenarios.”