The real-time video and audio communication solution provider Agora was valued as much as $10 billion earlier this year, but as the popularity of Clubhouse fades and the crackdown of Chinese K12 after-school tutoring continues, the stock has fallen by 70% from the peak. The company reported its quarterly earnings earlier this week, and the impact of the K12 tutoring crackdown shows up in the results. 

Education contributed 25% of total revenue in the second quarter compared to ~35% in prior periods, and the company lowered its 2021 revenue target from $180 million to $160 million. But even after the reduction, our rough math suggests the second half of 2021 revenue still includes a double-digit percentage contribution from the K12 tutoring market. It is a meaningful revenue that may be at risk of going to zero in the future. The company highlights its progress in other new uses cases, including online Karaoke, live streaming e-commerce, and gaming. However, they are still too early to make up for the loss of the online education business. 

Agora is still seeing healthy customer additions and making good progress in improving the products. Still, it will be a big challenge for the management team to navigate the challenging environment in the next few quarters.