Company Overview - Opera (OPRA) is an AI-powered technology company primarily recognized for its web browser solutions and related services [1] - The stock has experienced a decline of 27% year-to-date, despite the management delivering steady and stable performance [1] Performance Analysis - The company has shown consistent operational performance, which contrasts with the significant drop in stock price [1]

Summary of Opera's Conference Call Company Overview - **Company**: Opera - **Industry**: Internet Browsers - **Headquarters**: Norway - **User Base**: Approximately 300 million monthly users - **Public Since**: 2018 - **CAGR Growth**: Over 20% since going public - **Profitability**: The company is profitable and pays a dividend with a recurring yield exceeding 5% [3][30][29] Core Business and Monetization - **Primary Product**: Opera browser, with a focus on driving traffic to partners such as search engines and advertisers [3][4] - **New Product**: Neon browser, which offers advanced agentic capabilities for a monthly subscription, targeting enthusiasts who want more control and automation in their browsing experience [11][12] Competitive Landscape - **Emerging Competitors**: AI-native companies like Perplexity and OpenAI are entering the browser space, which Opera views as an opportunity rather than a threat [4][5] - **Differentiation Strategy**: Opera aims to remain agnostic and independent, allowing users to utilize multiple AI platforms without being locked into one [6][30] Technological Advancements - **AI Integration**: Opera uses a combination of models, including Gemini and ChatGPT, to enhance user experience and browser capabilities [7][10] - **Agentic Capabilities**: The browser is designed to assist users in tasks such as research and e-commerce, with the goal of improving efficiency and user satisfaction [13][24] Revenue Streams - **Query Revenue**: Approximately one-third of revenue comes from query revenue, which has seen a tripling in growth over the past year [16][18] - **Advertising Revenue**: Roughly two-thirds of revenue, with e-commerce advertising growing rapidly, expected to represent half of advertising revenue by Q4 [19][21] - **Performance-Based Advertising**: Opera focuses on performance-based advertising, which is seen as more beneficial for partners compared to traditional display advertising [20][21] E-commerce Strategy - **Key Partners**: Major e-commerce partners include Amazon, Booking, Temu, and Shein, with a focus on driving traffic to these platforms [22][21] - **User Engagement**: The browser aims to present users with options while allowing agents to facilitate transactions, ensuring that advertising opportunities remain intact [23][25] Financial Discipline and Future Outlook - **Profitability**: Opera maintains a strong EBITDA margin of 24% and has returned approximately $500 million to shareholders since 2020 through buybacks and dividends [33][47] - **Opay Stake**: Opera holds a 9.4% stake in Opay, a successful mobile wallet in Nigeria, which is expected to go public, potentially generating significant gains for Opera [40][42] New Initiatives - **MiniPay**: A non-custodial wallet focused on stablecoins, aimed at emerging markets, which has quickly grown to 10 million wallets [34][35] - **Market Positioning**: Opera positions MiniPay as a trusted solution in regions where it has established a long-standing presence [36][38] Misunderstandings in the Market - **Market Perception**: Opera is not a direct competitor to large language models (LLMs) but rather aims to integrate and enhance user experiences through its browser [28][30] - **Partnerships**: The company emphasizes the importance of long-term partnerships, particularly with Google, which have been beneficial for its business model [31][32] This summary encapsulates the key points discussed during the conference call, highlighting Opera's strategic positioning, technological advancements, revenue generation, and future outlook in the competitive landscape of internet browsers.

Financial Data and Key Metrics Changes - The company reported a year-over-year revenue growth of 23%, reaching a record $152 million in the third quarter, exceeding the guidance of 18%-21% growth [11][12] - Annualized ARPU crossed $2 per user, growing 28% year over year to $2.13 [11] - Adjusted EBITDA reached $36.3 million, marking a new quarterly record and an adjusted EBITDA margin of 24% [11][12] Business Line Data and Key Metrics Changes - MiniPay's non-custodial wallets grew to over 10.5 million, with transactions increasing to almost 310 million [16] - Opera GX ended the quarter with 33 million users, up 3% year over year, and achieved a new ARPU record of $3.69 [17] Market Data and Key Metrics Changes - E-commerce revenue streams have doubled year-over-year, indicating strong growth potential [34] - Advertising revenue grew 27% year-over-year to $95.9 million, with e-commerce being the primary driver [22] Company Strategy and Development Direction - The company is focusing on AI integration within its browsers, particularly with the launch of Opera Neon, which aims to enhance user experience through advanced AI functionalities [10][15] - The strategic positioning emphasizes a browser-agnostic approach to AI, allowing users to utilize various large language models without being locked into a single provider [9][68] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory, raising the revenue guidance for 2025 to $600 million-$603 million, reflecting a 25% growth over 2024 [25][26] - The company is well-positioned to capitalize on the increasing demand for alternative browsers as users consider switching [11][12] Other Important Information - The company was recognized by Fortune magazine as one of the 100 fastest-growing companies in 2025 based on revenue, profits, and stock returns [12] - The launch of Opera Neon is seen as a significant step towards transforming web browsing, with a focus on user feedback and community building [31][33] Q&A Session Summary Question: What traction has Opera Neon seen since its launch? - The launch has been well-received, with significant media coverage and positive feedback from early users, although it remains invitation-based for now [31][33] Question: How does the company view the growth of e-commerce? - E-commerce revenue streams have been rapidly scaling, with expectations of continued growth as the company is still under-indexing in the online advertising market [34] Question: What are the adoption trends for the Neon browser? - Early feedback indicates that users appreciate the efficiency and task-based architecture of Neon, which allows for faster execution of tasks compared to competitors [39][40] Question: How is the current demand environment for digital advertising? - The company sees a growing trend in performance-based e-commerce advertising, with year-over-year growth exceeding 100% [48] Question: What is the outlook for MiniPay's growth? - MiniPay is already generating revenue and is expected to expand further through partnerships, with plans to enhance its integration into various markets [50][71] Question: What are the competitive advantages of Opera Neon? - The browser's horizontal approach allows it to work with various AI models, providing users with flexibility and efficiency without being locked into a single provider [68]

Financial Data and Key Metrics Changes - The company reported a year-over-year revenue growth of 23%, reaching a record $152 million in the third quarter, exceeding the guidance of 18% to 21% growth [10][19] - The annualized ARPU crossed $2 per user, growing 28% year over year to $2.13 [10] - Adjusted EBITDA reached $36.3 million, marking a new quarterly record and translating to an adjusted EBITDA margin of 24% [10][19] - The updated revenue guidance for 2025 is now between $600 million and $603 million, representing a 25% growth over 2024 [24] Business Line Data and Key Metrics Changes - MiniPay has grown the number of non-custodial wallets to over 10.5 million, up from 9 million, with transactions increasing to almost 310 million from 250 million [16] - Opera GX ended the quarter with 33 million users, up 3% year over year, and achieved a new ARPU record of $3.69 on an annualized basis [17] Market Data and Key Metrics Changes - E-commerce revenue streams have doubled year-over-year, indicating strong growth potential in this segment [33] - Advertising revenue grew 27% year-over-year to $95.9 million, with e-commerce being the primary driver [21] Company Strategy and Development Direction - The company is focusing on AI integration within its browsers, particularly with the launch of Opera Neon, which showcases a task-based system for AI assistance [12][14] - Opera aims to maintain a competitive edge by being agnostic to underlying large language models, allowing for a more flexible and user-friendly browsing experience [6][63] - The company is positioning itself to capture a growing segment of users who are considering switching browsers, emphasizing innovation and reliability [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strategic position in the evolving AI landscape and the potential for growth in browser usage [4][10] - The company noted that the broader recognition of web browsers' strategic importance is increasing, with significant investments from AI companies [5] - Management highlighted the importance of user feedback in shaping the future of Opera Neon and the overall product strategy [30][40] Other Important Information - The company was recognized by Fortune magazine as one of the 100 fastest-growing companies in 2025 based on revenue, profits, and stock returns [11] - The company maintains a solid financial position with cash at $119 million and no financial debt [23] Q&A Session Summary Question: What traction has Opera Neon seen since its launch? - The launch of Opera Neon has been well received, with significant media coverage and positive feedback from early users, although it remains invitation-based for now [30][32] Question: How does the company view the growth of e-commerce? - E-commerce revenue streams have been rapidly scaling, with expectations of continued growth as the company develops deeper partnerships with leading players in the market [33][34] Question: What is the current demand environment for digital advertising? - The demand for performance-based e-commerce advertising remains strong, with the company experiencing over 100% year-over-year growth in this segment [47][48] Question: What are the plans for MiniPay's growth and monetization? - MiniPay is already generating revenue through partnerships, with plans to reinvest earnings into marketing and expanding its user base [66] Question: What is the outlook for Opera GX's user base? - While the user base for Opera GX has plateaued, there are still growth opportunities in various regions, and the company is optimistic about future developments [68]

Core Viewpoint - Google has avoided being dismantled due to a favorable court ruling and the rise of artificial intelligence (AI), which poses a significant threat to its advertising revenues [1][11]. Legal Ruling - The court ruled that Google will not be required to divest Chrome or Android, and it must share certain data with "qualified competitors" [2][3]. - Judge Mehta's final ruling contrasts sharply with a previous 2024 decision that found Google maintained a monopoly in the search engine market [4][5]. Market Dynamics - The search engine market's nature, where user data enhances search quality, has made it difficult for competitors to challenge Google [5]. - The rise of AI models like ChatGPT and Claude has shifted the competitive landscape, with these models now seen as primary competitors rather than traditional search engines like Microsoft Bing [12]. Advertising Revenue Impact - Google's advertising revenue, which constitutes approximately 80% of its total revenue, is threatened by the increasing acceptance of AI-generated answers, leading to fewer clicks on traditional search results [11][10]. Antitrust Considerations - The judge concluded that while Google monopolized the search engine market, the issue may resolve itself as AI continues to evolve, reducing the justification for penalizing Google [13]. - Historical parallels are drawn to the Internet Explorer case, where regulatory efforts to dismantle a monopoly were rendered moot by market evolution [14]. Competitive Landscape - The article suggests that in winner-takes-all markets, significant innovation is necessary for competitors to challenge established players like Google [15]. - The dominance of tech giants raises concerns about accountability and the potential for future market behavior [16].

Core Viewpoint - Opera's shares increased following a significant revenue surge and positive guidance, despite a year-to-date decline in stock price [1] Group 1: Company Overview - Opera operates a range of web and mobile browsers aimed at optimizing speed and battery life, with a focus on emerging markets and higher-valued users from developed markets [2] - The fastest-growing browser is Opera GX, which is tailored for gaming performance [2] Group 2: Revenue and Growth - In Q1, Opera's revenue surged 40% to $142.7 million, exceeding guidance of $130 million to $133 million [4] - Advertising revenue increased by 63% to $95.6 million, while search revenue rose 8% to $46.6 million [4] - E-commerce led the advertising growth, with revenue from this vertical more than doubling [5] Group 3: User Metrics and Innovations - The annualized average revenue per user (ARPU) increased by 45% year over year to $1.94, although monthly active users (MAU) decreased by 4% from 304 million to 293 million [6] - Opera GX's user base grew by 14% in the quarter to 34 million MAUs [6] - The new Opera Air browser targeting Western users was downloaded 500,000 times in its first two months [7] - Opera introduced agentic AI features in its Browser Operator to assist users with tasks like travel bookings [8] Group 4: Profitability and Future Guidance - Adjusted EPS rose 35% to $0.27, and adjusted EBITDA climbed 29% to $32.3 million [9] - For Q2, the company forecasts revenue growth of around 24%, projecting between $134 million to $138 million [9] - Full-year revenue guidance was raised to a range of $567 million to $582 million, indicating a 20% annual growth at the midpoint [10] Group 5: Market Position and Valuation - Opera is optimistic about navigating the uncertain macro environment and sees potential opportunities from big tech antitrust cases [11] - The stock trades at a forward P/E ratio of 14.6 times with a projected 20% revenue growth, indicating it is not expensive [13] - The company holds $103.5 million in net cash and an investment in OPay valued at $258.3 million, which is a fast-growing fintech company in Africa [13][14]

Group 1 - Opera Ltd (NASDAQ: OPRA) reported a first-quarter earnings beat and raised its fiscal-year forecast for 2025, leading to a 4.4% increase in share price to $16.21 [1] - The stock has gained 13.1% over the past five trading sessions, although it remains below its 18-month high of $22.50 reached on February 18 [1] - Year-to-date, OPRA shares are down 14.6%, but they have increased by 21% year-over-year [1] Group 2 - All analysts covering OPRA maintain "buy" ratings, with only 2.2% of the stock's float sold short, despite a 35% increase in short interest recently [2] - The options market for OPRA has become active, with call options trading at three times the average intraday volume and put options trading at eight times the average [3] - The July 17.50 call option is seeing significant selling activity, along with the popular May 17.50 call option [3]