Opera(OPRA) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported record revenue of $77.8 million, representing a 29% year-over-year growth, exceeding previous guidance of $71 million to $74 million [32] - Adjusted EBITDA reached $16.6 million, significantly above the guidance range of $8 million to $12 million, resulting in a margin of 21% [34] - The company raised its full-year revenue guidance to $313 million to $319 million, indicating a 26% year-over-year growth at the midpoint [40] Business Line Data and Key Metrics Changes - Revenue from advertising grew to represent 55% of overall revenue, with a year-over-year growth of 49% compared to the same quarter in 2021 [16] - The Opera GX browser achieved 14.5 million desktop users and 2.5 million mobile users, with a year-over-year user growth of 78% [27] - The annualized ARPU from browsers and Opera News increased over 80%, contributing to over 70% revenue growth from the user base [11] Market Data and Key Metrics Changes - The company noted a significant increase in user resources in Europe (over 100%) and the Americas (nearly 70%), while user base in Asia was reduced [10] - Eastern Europe showed resilience, contributing to better-than-expected revenue performance [32] Company Strategy and Development Direction - The company focuses on improving the quality and value of its user base, investing in products and markets that allow for higher monetization rates [10] - A segmentation strategy is employed to meet specific audience needs, allowing Opera to compete effectively in various markets [12] - The company is exploring new segments and products, particularly in Western markets, to drive additional adoption [26] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about the broader economic environment but believes that being a smaller player allows for growth independent of total market trends [45] - The company is optimistic about its growth trajectory, with strong performance in advertising and user engagement [17] Other Important Information - The company divested its equity stakes in Nanobank and StarMaker, with proceeds expected to enhance its focus on core business [35][36] - A buyback program is in place, with 1.26 million ADSs repurchased for $6.7 million during the second quarter [38] Q&A Session Summary Question: What drives the divergence of business performance versus macro conditions? - Management indicated that being a smaller player allows for growth independent of total market trends, contributing to better-than-expected performance [45] Question: Any impact from the end of remote learning on the gaming business? - Management noted that gamer patterns are more affected by school schedules than pandemic-related changes, with continuous growth observed [46] Question: Insights on lower marketing spend relative to strong growth in North America? - Management explained that smarter resource allocation led to higher ROI, and marketing spend was adjusted based on expected returns [51][52] Question: Impact of exposure to Russia and Ukraine on future performance? - Management acknowledged a $4 million headwind per quarter but noted that the actual impact was less than expected, leading to improved revenue outlook [59][60] Question: Thoughts on revenue per MAU trends? - Management highlighted strong ARPU growth driven by geographic mix and monetization strategies, indicating a positive outlook for future quarters [62] Question: Capital allocation and potential for more aggressive buyback strategies? - Management confirmed that buyback programs are limited by trading volume but has not made decisions on more aggressive actions [65]