Opera (OPRA) Q1 2025 Earnings Call April 28, 2025 08:00 AM ET Company Participants Matthew Wolfson - VP - IRLin Song - Co-Chief Executive OfficerFrode Jacobsen - CFONaved Khan - Managing Director - Equity ResearchEric Sheridan - Managing DirectorMark Argento - President & Co-FounderJames Callahan - Vice President - Equity Research Conference Call Participants Lance Vitanza - MD & Senior Analyst Operator Welcome to the Opera Limited First Quarter twenty twenty five Earnings Call. At this time, all participan ...

"Our growth acceleration continued in the first quarter of 2025, leading to both revenue and profitability outperformance well beyond our guidance ranges. The continued scaling of revenue from both our browser products and the Opera Ads platform allows us to raise expectations for the remaining quarters of the year beyond our prior guidance," said co-CEO Lin Song. "On the product side, highlights include the launch of Opera Air, our mindfulness-oriented browser, and the introduction of our agentic Browser O ...

Core Insights - Opera Limited (OPRA) is expected to report first-quarter 2025 earnings on April 28, with anticipated revenues between $130 million and $133 million, reflecting a 29% year-over-year growth [1] - The consensus estimate for earnings is set at 26 cents per share, indicating a significant year-over-year increase of 52.94% [2] Revenue Growth Factors - The advertising business is projected to have continued its strong performance, growing 38% year-over-year in Q4 2024, driven by e-commerce segments and performance-based advertising models [3] - Solid growth in Western markets, particularly in Europe and the U.S., is attributed to increased iOS downloads and favorable regulatory shifts [4] User Engagement and Technology - Investments in AI technologies and the integration of AI features into new browser versions like Opera R2 and Opera One have enhanced user experience and engagement [5] - Opera GX, the gaming browser, has seen a 22% year-over-year increase in its user base, reaching 33.9 million monthly active users, contributing to revenue growth [6] Operational Considerations - Rising operational expenses, which increased from 27.1% in Q4 2024, may impact overall profitability in the upcoming quarter [7] Earnings Expectations - Opera Limited currently has an Earnings ESP of 0.00% and a Zacks Rank 1 (Strong Buy), indicating mixed signals regarding the likelihood of an earnings beat [8]

Core Insights - Opera is integrating its AI, Aria, into Opera Mini, enhancing the browser's functionality for over 100 million users globally, particularly in Africa [1][10] - The integration of Aria allows users to access real-time information, generate text and images, and summarize content, all while maintaining data efficiency [3][4] Group 1: AI Integration - Aria is designed to enhance user interaction through features like information retrieval, text and code generation, and image creation, powered by Opera's Composer AI engine utilizing OpenAI and Google technologies [3] - The AI integration is available at no additional cost and does not increase the app's size, making it accessible for users [1][4] Group 2: Market Position and User Base - Opera Mini is the leading browser in Africa with over 1 billion downloads, attributed to its lightweight design and data-saving technologies [5][8] - The browser has a strong user base, with a 4.6-star rating on Google Play and over 100 million active users [8][10] Group 3: Addressing Data Costs - High mobile data costs in Africa, particularly highlighted by a survey indicating that 59% of Nigerian respondents find data too expensive, underscore the importance of Opera Mini's affordable access to AI features [6][10] - Opera Mini's data compression technology and partnerships for free data offers help bridge the digital divide in regions with high data costs [5][6]

OSLO, Norway, April 10, 2025 /PRNewswire/ -- Opera Limited (NASDAQ: OPRA), one of the world's major browser developers and a leading internet consumer brand, today announced that its annual report on Form 20-F for the fiscal year ended December 31, 2024, has been filed with the U.S. Securities and Exchange Commission (the "SEC").The annual report can be accessed on Opera's investor relations website at investor.opera.com or the SEC's website at www.sec.gov. Opera will provide a hard copy of its annual repor ...

AI Tools and Technologies - The company launched an initial set of generative AI tools in its PC flagship browser in March 2023, expanding to other mobile and PC browsers[36]. - The company launched various generative AI tools and services throughout 2023 and 2024, including the Aria browser AI[50]. - The company opened a green energy-powered AI data cluster in Iceland in 2024, featuring a NVIDIA DGX SuperPOD, indicating significant investment in technology infrastructure[87]. - The company has key partnerships with Google and OpenAI to enhance its AI capabilities, which are crucial for its growth strategy[110]. - Opera's browser AI, Aria, connects to multiple LLM models and allows users to select from approximately 2,000 local LLM variants[196]. Financial Performance and Revenue - Revenue generated from customers and monetization partners in Russia accounted for 5.2%, or $20.7 million, of total revenue in 2023[61]. - Approximately 5.7% of the company's revenue in 2023 and 3.4% in 2024 was generated from monetizing the user base in Russia, indicating potential future revenue growth challenges due to the ongoing crisis[62]. - Revenue from customers in Ireland accounted for 44.1%, 41.1%, and 38.5% in 2022, 2023, and 2024, respectively[107]. - Revenue generated from users' search activity accounted for 42.3%, 40.9%, and 38.7% in 2022, 2023, and 2024, respectively[108]. - Annualized ARPU increased by 37% from Q4 2023 to Q4 2024, driven by strong growth in advertising and search revenues[183]. User Engagement and Growth - Opera reported an average of 296 million monthly active users (MAUs) in Q4 2024, with 268 million from its browser products[173]. - The Opera News platform achieved 368 million average MAUs in Q4 2024, including 27 million from standalone news apps[177]. - The Opera GX gaming browser reached 34 million MAUs in Q4 2024, highlighting its growth in the gaming segment[176]. - The company experienced a 9.9% increase in its total user base in Western markets from Q4 2023 to Q4 2024, while emerging markets saw an 8.5% decrease[183]. - Opera Mini averaged 113 million users worldwide during Q4 2024, with over 79 million MAU in its Android version alone[194]. Legal and Regulatory Risks - The company is exposed to risks related to AI technologies, including potential reputational harm and legal liabilities[40]. - The company has been subject to intellectual property infringement claims, which could be costly and time-consuming to defend[31]. - The company is subject to various legal and regulatory risks when expanding into diverse and fragmented markets[44]. - The company faces risks related to litigation, including intellectual property claims, which have increased as its products and services have grown in complexity[65]. - The company is subject to various laws and regulations regarding user privacy and data protection, particularly in the European Economic Area, which could impact business operations[97]. Competition and Market Position - The company faces intense competition from major players like Google, Apple, and Microsoft, which may affect its market position[34]. - The company’s ability to compete effectively depends on various factors, including the usefulness and reliability of its products compared to competitors[38]. - The company relies on third-party distribution channels, including Google Play and Apple's App Store, which may change unilaterally and affect product availability[117]. Investment and Capital Needs - The company may require additional capital for future growth and investments, which may not be available on favorable terms[55]. - The company has invested in OPay, a fintech company focused on financial inclusion in emerging markets, particularly Nigeria and Egypt[51]. - The carrying amount of the investment in OPay was $258.3 million as of December 31, 2024, with unrealized fair value gains of $89.8 million in 2023 and $5.0 million in 2024[86]. Operational Challenges - The company is affected by macroeconomic and geopolitical conditions, including the unpredictable impacts of the war in Ukraine[26]. - The ongoing war in Ukraine has resulted in significant volatility in financial markets and has affected the company's operations and future financial performance[60]. - The company may face service interruptions due to reliance on third-party data centers and cloud services, which could impact user experience and revenue[119]. - The company may need to invest substantially to improve performance and prevent service disruptions[105]. Cybersecurity and Data Protection - Cybersecurity threats, including data breaches and hacking attempts, pose significant risks to the company's operations and user trust[98]. - The company has not suffered material costs from cybersecurity incidents to date, but future breaches could adversely impact user willingness to use its services[100]. - The company is exposed to potential claims regarding open source software, which could lead to litigation and additional costs[92]. Corporate Governance and Shareholder Rights - The company qualifies as a "controlled company" under Nasdaq rules, which may exempt it from certain corporate governance requirements, potentially affecting public shareholders[143]. - Shareholders of the company have limited rights to inspect corporate records under Cayman Islands law, which may hinder their ability to obtain necessary information[152]. - The company's memorandum and articles of association contain anti-takeover provisions that could limit shareholders' opportunities to sell shares at a premium[150]. Miscellaneous - The company launched MiniPay, a non-custodial stablecoin wallet built on the Celo blockchain, in September 2023[36]. - The company adopted a recurring semi-annual cash dividend program, with the first dividend of $0.40 per ADS paid on June 30, 2023, and subsequent dividends declared for January 3, 2024, July 2, 2024, and January 6, 2025[136]. - The company has extended its search distribution agreement with Google until December 31, 2026, and renewed its agreement with Yandex effective January 1, 2025[210].

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