Core Insights - The Zacks Internet - Content industry is facing challenges due to adverse macroeconomic conditions affecting ad spending, which is the primary revenue source for industry participants [1] - Despite these challenges, there is solid demand for digital offerings, particularly in video content and cloud-based applications, aided by the proliferation of AI and Generative AI [1] - Companies like Yelp and Opera Limited are expanding their presence in social media, display, connected TV, and search, contributing to top-line growth [1] Industry Description - The Zacks Internet - Content industry includes providers of video encoding platforms, personal services, Internet content, staffing, publishing, and online travel companies [2] - Advertising remains a major revenue source, prompting companies to enhance their digital presence and expand across various platforms [2] - The industry is experiencing rapid changes in consumer behavior and ongoing digitalization, with significant players located in the U.S., Israel, the U.K., Germany, Russia, and China [2] Trends Shaping the Industry - There is a growing demand for digital offerings, driven by technological advancements and the introduction of new products and services [3] - The proliferation of smart devices and increased automation in application development are positive indicators for industry growth [3] Industry Prospects - Marketing efforts are being intensified to boost website traffic, with advertising and subscriptions as key revenue sources [4] - The industry is sensitive to consumer spending trends, particularly during holiday seasons, but faces headwinds from macroeconomic challenges, persistent inflation, and higher interest rates [4] Regulatory Environment - Increased regulatory pressure is impacting industry participants, especially in China and the EU, with regulations affecting direct advertising and data protection [5] - The implementation of the Digital Markets Act in the EU aims to curb the market power of large online platforms, adding to the challenges faced by Internet content providers [5] Industry Ranking and Performance - The Zacks Internet - Content industry ranks 194, placing it in the bottom 21% of over 250 Zacks industries, indicating dull near-term prospects [6][7] - The industry's earnings outlook is negative, with a 2.8% decline in the Zacks Consensus Estimate for 2025 earnings since November 30, 2024 [8] Market Performance - The industry has underperformed compared to the broader Zacks Computer and Technology sector and the S&P 500, returning 6.1% over the past year versus 18.1% and 25.3% respectively [10] Current Valuation - The industry is currently trading at a trailing 12-month price-to-sales ratio of 6.49X, higher than the S&P 500's 5.62X but lower than the sector's 8.31X [13] Notable Companies - **Yelp**: Benefiting from higher ad spending and improved customer retention, but shares have declined 20.9% year-to-date [16][17] - **Opera Limited**: Experiencing an 8% year-over-year increase in search revenues, with a stable user base of 293 million, but shares have dropped 17.1% year-to-date [19][20]

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]

Group 1: Company Performance - Opera Limited's shares have declined by 15.3% over the past three months, underperforming the Zacks Computer and Technology sector's decline of 6% and the Internet–Content industry's increase of 0.8% [1] - The company has faced challenges due to rising cost pressures, with first-quarter operating expenses increasing by 47% year over year [1] - A significant 49% decline in operating cash flow year over year raises concerns about near-term liquidity and capital efficiency [1][6] Group 2: User Growth and Market Position - Opera's management has indicated stagnation in its monthly active user (MAU) base, which is hovering around 300 million, suggesting potential market saturation [3] - The stagnation in MAU growth could adversely affect Opera's monetization strategies, particularly in high-margin areas like advertising and search revenues that depend on user engagement [3] - Despite efforts to innovate with products like Opera Air and updates to Opera One and GX, the effectiveness of these initiatives in driving sustainable user growth remains uncertain [4] Group 3: Financial Challenges - The surge in operating expenses, driven by increased investments in personnel, infrastructure, and product development, is exerting downward pressure on operating margins and overall profitability [5] - The decline in operating cash flow and rising share-based compensation further complicate Opera's financial outlook, raising concerns about funding future initiatives [7] - To stabilize its financial position and create long-term value for shareholders, Opera must successfully drive user growth and manage costs effectively [7]

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]