Over the next weeks, Opera will be launching new versions of its flagship browsers with an upgraded free browser AI, which will bring faster models, better browser integration, higher usage limits as well as access to open source local models. This week, Opera started shipping its new, premium offering: the new Opera Neon browser. While Aria offers everyday AI support to hundreds of millions of Opera users, Opera Neon is built around agentic AI, which allows AI power-users to move beyond basic AI capabiliti ...

Core Thesis - Opera Limited is viewed positively due to its strong growth, innovative products, and attractive valuation, presenting a compelling investment opportunity in the mid-cap software sector [1][4]. Company Overview - Opera Limited is a global software and internet company founded in 1995, listed on Nasdaq, and focuses on delivering browsers and AI-driven products [2]. - The company has a diversified portfolio including Opera One, Opera GX, Opera Mini, and Opera Neon, catering to various user segments [2]. - As of Q2 2025, Opera reported 289 million monthly active users, with 206 million on mobile and 83 million on desktop, including 58 million in high-value Western markets [2]. Financial Performance - In Q2 2025, Opera's advertising revenue increased by 44% year-over-year, while search revenue grew by 11%, leading to an annualized ARPU of $1.97 [3]. - The company's MiniPay stablecoin wallet saw a 255% increase in activations, and VPN Pro upgrades contributed to monetization efforts [3]. - Opera has returned $477 million to shareholders since 2020 through buybacks and dividends, and holds $392 million in cash and investments, including a $258 million stake in OPay [3]. Valuation and Market Position - Despite facing challenges such as declining gross margins and rising operating expenses, Opera's valuation remains attractive, trading below five-year averages with a PEG ratio of 0.93 [4]. - The stock offers a 42% upside to its fair value of $33.32, supported by strong solvency, diversified revenue streams, and high ARPU growth [4]. - The company has maintained 17 consecutive quarters above the Rule of 40, indicating scalable and profitable growth [3][4]. Recent Developments - The bullish thesis on Opera has been reinforced by its core browser strength, user growth in Opera GX, and disciplined shareholder returns, with the stock appreciating approximately 10% since March 2025 [5]. - The emphasis on AI integration, MiniPay growth, and consistent performance under the Rule of 40 highlights the company's ongoing potential [5].

Summary of Opera FY Conference Call - September 10, 2025 Company Overview - **Company**: Opera (NasdaqGS: OPRA) - **Industry**: Consumer Internet, Browser Development - **User Base**: Approximately 300 million users - **Revenue**: Approximately $600 million, growing over 20% year-over-year [2][3] Core Products - **Opera One**: Targeted at tech-savvy and design-oriented users [4] - **Opera GX**: Designed specifically for gamers, featuring high engagement and the highest Average Revenue Per User (ARPU) [5][6] Financial Performance - **EBITDA**: Positive around 23% with good cash conversion [3] - **Advertising Growth**: Over 100% year-over-year growth in e-commerce initiatives, with a focus on major partners like Amazon [10][12] - **Search Revenue**: Accounts for roughly one-third of total revenue, typically outgrowing Google's search revenue [20][21] Market Position and Strategy - **Market Share**: 4% in key regions, with significant growth potential [12] - **User Acquisition**: Focus on high ARPU user bases, particularly in Western markets [21] - **Advertising Strategy**: Performance-based partnerships with major global and regional players [15] Competitive Landscape - **Google Antitrust Case**: Recent ruling allows Google to continue paying revenue shares to traffic sources like Opera, which is beneficial for Opera's search revenue [24][28] - **Browser Competition**: Opera differentiates itself by focusing on niche markets rather than competing for the majority market share [4][43] Innovations and Future Growth - **AI Integration**: Launching a native AI browser called Neon, which enhances user productivity and monetization opportunities [37][38] - **MiniPay**: A stablecoin wallet with 9 million wallets and 250 million transactions, showing rapid growth in emerging markets [47][48] Capital Return Strategy - **Shareholder Returns**: Nearly $500 million returned since 2020 through buybacks and dividends, with a focus on maintaining a recurring dividend [58][59] Key Takeaways - Opera is positioned for continued growth in the browser market, leveraging its unique products and strong user engagement - The company is actively expanding its advertising and e-commerce initiatives, with a focus on high-value partnerships - Innovations in AI and financial services like MiniPay are expected to drive future growth and enhance user experience

Summary of Opera's 2025 Conference Call Company Overview - **Company**: Opera (NasdaqGS: OPRA) - **Industry**: Web Browsers and Internet Services - **User Base**: Approximately 300 million monthly users, with a significant presence in both emerging and Western markets [4][6] - **Revenue**: Close to $600 million, with a growth guidance of 23% for the year [4][5] Key Points and Arguments User Demographics and Growth - **Geographic Split**: 20% of users in Western markets, up from 6-7% previously, indicating successful market penetration [6][12] - **ARPU Growth**: Average Revenue Per User (ARPU) has tripled over the past four years, driven by higher monetization in Western markets [6][12] - **Target Audience**: Focus on tech-savvy users who appreciate feature-rich browsers, particularly in the gaming segment [6][10] Competitive Landscape - **EU Regulations**: The Digital Markets Act has positively impacted Opera, leading to a doubling of new iOS users in the EU [12][13] - **U.S. Market**: Ongoing partnership with Google for search revenue, with no expected changes following recent regulatory rulings [15][19] Artificial Intelligence Integration - **AI Features**: Introduction of AI functionalities in the flagship browser, Opera One, allowing users to interact with an AI agent [20][21] - **Opera Neon**: Upcoming AI-native browser designed to enhance user experience by integrating AI capabilities directly into the browsing process [24][27] Gaming Browser Opportunity - **User Base**: 33 million users of the gaming browser (Opera GX), with an average ARPU of $3.50, representing about 20% of total revenue [32][33] - **Market Expansion**: Plans to expand into key Asian markets like Japan and South Korea, which present significant growth potential [32][33] Growth Investments and Financial Strategy - **Investment Focus**: Prioritizing high-value user growth and product development, particularly for Opera One and Opera GX [34][41] - **Capital Return**: Nearly $500 million returned to shareholders since 2020, with a preference for dividends over buybacks to maintain liquidity [40][41] Future Outlook - **Strategic Priorities**: Focus on leveraging AI and enhancing browser capabilities to attract more users and increase brand awareness [44][47] - **Long-term Vision**: Emphasis on the evolving role of browsers in users' daily lives, with aspirations to innovate and provide alternatives in the market [46][47] Additional Important Insights - **Marketing Effectiveness**: Data-driven marketing strategies are in place to assess ROI and optimize campaigns for user acquisition [35][36] - **AI Partnerships**: Collaborations with Google and OpenAI for backend AI functionalities, while maintaining control over local processing [29][30] This summary encapsulates the key insights from Opera's conference call, highlighting the company's strategic direction, market positioning, and future growth opportunities.

Summary of Opera (OPRA) 2025 Conference Call Company Overview - **Company**: Opera - **Industry**: Internet and Software - **Monthly Active Users**: 289 million globally [1][8] - **Revenue Guidance**: Close to $600 million for the year, with a growth rate of approximately 23% [8][55] - **Profitability**: Company has maintained a "Rule of 40" status for 16-17 quarters, balancing growth and profitability [8] Product Portfolio - **Browsers**: Opera has developed a portfolio of browsers catering to different user needs, including Opera One, GX (for gamers), Air (mindfulness-focused), and Neon (AI-oriented) [21][27] - **AI Integration**: Opera Neon aims to integrate AI functionalities directly into the browsing experience, enhancing productivity for users [29][32] - **Target Audience**: Focus on tech-savvy users and specific segments like gamers, rather than a broad audience [27][54] Market Dynamics - **Partnership with Google**: Opera has a long-standing partnership with Google, which accounts for about one-third of its total revenue. Recent rulings allow Google to continue paying for traffic, which is beneficial for Opera [10][14] - **Browser Market**: The browser market is gaining more attention, with Opera positioning itself as a valuable player in the space, especially as AI companies highlight the importance of browsers [18][20] Financial Performance - **Revenue Composition**: Advertising revenue has grown significantly, now accounting for two-thirds of total revenue, while search revenue has become a smaller portion [71] - **ARPU Growth**: The average revenue per user (ARPU) has quadrupled over the past four years, with a 30% increase in the Western user base [55] Marketing Strategy - **Brand Awareness**: Opera spends approximately 30% of its revenue on marketing, focusing on influencers and tech media to build brand identity [59][60] - **Targeted Marketing**: The company targets specific user groups, such as gamers, to improve retention and engagement [66] Future Outlook - **Product Launch**: Opera Neon is set to launch soon, with expectations that it will leverage AI to enhance user productivity [43][45] - **E-commerce Growth**: E-commerce partnerships have seen over 100% year-over-year growth, indicating a strong revenue potential moving forward [76] Additional Insights - **User Base Strategy**: Opera has shifted focus from feature phone users in emerging markets to higher ARPU potential users in developed regions [53] - **Predictability in Revenue**: The company has a high degree of predictability in revenue generation due to the vast amounts of data collected from user interactions [78] Conclusion - **Overall Positioning**: Opera is strategically positioned in the browser market with a diverse product portfolio and a strong focus on integrating AI to enhance user experience. The company is also leveraging its long-term partnership with Google to maintain revenue growth and market presence.

Financial Data and Key Metrics Changes - The company reported a year-over-year revenue growth of 30%, exceeding the guidance of 22% to 26% and significantly higher than the 17% growth in the same quarter last year [5][17] - Adjusted EBITDA reached $32,000,000, surpassing the high end of previously issued guidance [7] - Operating cash flow was $33,000,000, representing 103% of adjusted EBITDA [19] - Free cash flow from operations was $29,000,000, or 91% of adjusted EBITDA [20] - Adjusted diluted EPS was $0.26 for the quarter [20] Business Line Data and Key Metrics Changes - Advertising revenue grew 44% year-over-year to $93,000,000, with e-commerce being the fastest-growing vertical, increasing over 100% year-over-year [6] - Search revenue returned to double-digit growth, up 11% year-over-year to $50,000,000 [6] - The user base for Opera GX reached 33,000,000 MAUs, an 11% increase year-over-year [12] Market Data and Key Metrics Changes - The company noted strong growth in the Western market, particularly in Europe, which contributed to user acquisition [35] - The e-commerce vertical is expected to continue growing, although comparisons will become more challenging in the second half of the year [71] Company Strategy and Development Direction - The company is focusing on AI integration within its browser, positioning itself as a key player in the emerging AI landscape [9][10] - Opera Neon, an AI browser, is set to be released, combining major AI use cases into a single user interface [10][11] - The company is also expanding its presence in the gaming sector with Opera GX and plans to soft launch in South Korea and Japan [12][63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of advertising revenue despite macroeconomic volatility [18] - The company anticipates continued growth in search revenue and is optimistic about the broader search landscape evolving with AI [57] - Management acknowledged tariff-related headwinds but noted that global growth has offset these challenges [60][61] Other Important Information - The company has distributed $2.8 in dividends per share since January 2023 and has repurchased 30% of its outstanding stock in the previous three years [21] - MiniPay, a stablecoin wallet, has reached 9,000,000 activated wallets and exceeded 250 million transactions, indicating strong growth potential in the fintech space [15][50] Q&A Session Summary Question: What drove the sequential growth in the Western market user base? - Management indicated that seasonality and marketing strategies played a role, with expectations for more growth in Q3 and Q4 [33] Question: How should we think about the pricing and cost structure of Opera Neon? - Management stated that product marketing is the primary focus, with a combination of advertisement sponsorship and subscription models anticipated for monetization [44] Question: How does MiniPay monetize engagement? - MiniPay is generating revenue through ecosystem partnerships and integrations, leveraging its nature as a fintech product [50] Question: What are the expectations for search revenue growth? - Management expects search revenue to continue performing well, driven by changes in the broader search landscape and user engagement [57] Question: What is the outlook on tariff-related headwinds? - Management noted that while tariffs have created challenges, there is potential for recovery and growth as conditions stabilize [61] Question: How significant is the opportunity in launching Opera GX in South Korea and Japan? - Management sees strong potential in these markets, particularly due to partnerships with popular games like League of Legends [63]

Financial Performance & Guidance - Opera achieved 17 consecutive quarters of Rule of 40 performance, driven by organic growth[11] - The company's 2025 revenue guidance is $591 million, representing a 23% growth[14] - The 2025 adjusted EBITDA guidance is $138 million, with a 23% margin[20, 21] - Q3 2025 revenue guidance is $148 million, representing 20% growth[89] - Since 2020, Opera has returned approximately $477 million to shareholders[16, 17, 98] User Base & Monetization - Opera has approximately 289 million average monthly active users (MAUs) in Q2 2025[12, 13] - Western markets account for 58 million MAUs[13] - ARPU has grown 3.1x over the last 4 years[18, 19] - Advertising accounts for 65% of revenue in Q2 2025, with 44% year-over-year growth[66, 69] - Search accounts for 35% of revenue in Q2 2025, with 11% year-over-year growth[66, 73] Opera GX - Opera GX has 33 million users[45] - Opera GX users represent 8% penetration of web users[52]

Core Insights - Opera Limited reported a 30% year-over-year revenue growth to $143.0 million, exceeding guidance [1][8] - Adjusted EBITDA reached $32.1 million, representing a 22% margin, also surpassing expectations [1][13] - The company raised its full-year revenue guidance to $585 – 597 million with a 23% adjusted EBITDA margin at the midpoints [1][21] Financial Performance - Revenue for the second quarter of 2025 was $143.0 million, a 30% increase from $109.7 million in the same quarter of 2024 [4][8] - Net income decreased by 19% to $15.7 million, with a net income margin of 11% compared to 18% in Q2 2024 [4][13] - Adjusted net income increased by 14% to $23.7 million, with an adjusted net income margin of 17% [4][13] - Adjusted EBITDA rose by 21% to $32.1 million, with a margin of 22% [4][13] Revenue Breakdown - Advertising revenue grew by 44% year-over-year to $92.9 million, accounting for 65% of total revenue [12] - Search revenue increased by 11% year-over-year to $49.6 million, representing 35% of total revenue [12] - The annualized average revenue per user (ARPU) was $1.97, a 35% increase compared to Q2 2024 [12] Operating Expenses - Operating expenses increased by 40% to $124.9 million [9] - Share-based compensation expenses surged by 354% to $8.8 million due to the granting of approximately 1.9 million share-equivalent RSUs [12] - Personnel expenses, excluding share-based compensation, rose by 5% to $18.7 million [12] Cash Flow and Dividends - Net cash flow from operating activities was $33.1 million, representing 103% of adjusted EBITDA [12][14] - Free cash flow from operations was $29.1 million, or 91% of adjusted EBITDA [14] - A dividend of $0.40 per share was announced and paid in July [12] Business Outlook - The company anticipates continued growth in AI-powered intent-based advertising, particularly in e-commerce [2] - Opera expects to maintain momentum in search revenue, contributing to the raised guidance for the year [17]

Core Insights - Opera has launched Opera Translate, a built-in translation feature for its browsers Opera One and Opera GX, aimed at breaking down language barriers for users globally [1][2] - The translation feature supports over 40 languages and is designed to enhance user experience by allowing instant translation of web pages [2][3] - Opera GX has introduced custom animated cursors and improved tab management features, enhancing personalization and usability for gamers [5][10] Opera Translate - Opera Translate is integrated natively into Opera One and Opera GX, detecting different languages on web pages and offering instant translation [2] - The feature is powered by Lingvanex's AI technology and ensures data privacy by processing translations on Opera's European servers [3] - Users can choose to translate pages once or set preferences for automatic translation of specific languages [2] Opera One Updates - Opera One has improved its Split Screen feature, allowing users to access the toolbar in each tab while in Split Screen mode [4][8] - The update includes the ability to group tabs into Tab Islands, enhancing organization and navigation [10] - Users can now save entire Tab Islands as Speed Dials for easier access to frequently used tabs [10][15] Opera GX Enhancements - Opera GX has launched a "Browser Booster" update, introducing fully customizable animated cursors, enhancing the aesthetic experience for users [5][14] - The update includes over 30 cursor packs available for easy application without the need for third-party tools [5][15] - Tab Islands feature is now stable, allowing users to name and color-code their tab groups for better organization [10][15] User Experience Focus - The introduction of custom cursors aims to provide visual consistency across the browser, enhancing the overall user experience [7][14] - The updates reflect Opera's commitment to user-centric design, catering to the needs of gamers and general users alike [6][17] - Opera continues to innovate by integrating features that prioritize both functionality and personalization [16][17]

Core Insights - Opera Limited has launched a revamped version of its premium VPN service, VPN Pro, which offers device-wide protection and privacy for users on multiple devices [1][5] - The upgraded VPN Pro features improved server infrastructure, providing a minimum of 10Gb/s connectivity and access to 48 global locations, an increase of 15 locations from the previous version [2] - The new VPN Pro integrates the Lightway protocol, enhancing security and reliability while ensuring faster performance and battery efficiency, with built-in post-quantum protection [3][4] Product Features - VPN Pro allows users to protect up to six devices, including Windows, MacOS, and Android, and is available on Opera One, Opera GX, and Opera for Android [1][5] - The service maintains a strict no-log policy, ensuring that user data, personal information, and browsing activity are not collected or stored [4] - Existing users will automatically upgrade to the new version, while new users can try the enhanced service with a 7-day free trial [5] Company Background - Opera is a user-centric software company focused on providing a secure and innovative internet browsing experience, with a significant user base across mobile and desktop platforms [6] - Founded in 1995 and headquartered in Oslo, Norway, Opera is publicly traded on the Nasdaq under the ticker symbol OPRA [6]