Opera(US:OPRA)2024-10-29 16:05Financial Data and Key Metrics Changes - Revenue for Q3 2024 was $123 million, growing 20% year-over-year, an acceleration from the 17% growth rate in the first half of the year [5] - Annualized ARPU increased by 27% year-over-year to a record $1.66, with adjusted EBITDA at $31 million, representing a margin of 25% [6] - Advertising revenue reached $77 million, growing 26% year-over-year, marking the highest growth rate since 2022 [7] Business Line Data and Key Metrics Changes - E-commerce and travel categories were significant contributors to revenue growth, with e-commerce benefiting from PC browser monetization and Opera Ads platform expansion [8] - Search revenue was $46 million, up 13% year-over-year, with a return to 15% annual growth in September [9] - Opera GX, the gaming browser, saw a 22% increase in MAUs to 31.9 million, with ARPU rising to $3.68, a 12% increase year-over-year [19] Market Data and Key Metrics Changes - The user base in Western markets showed stable growth, with ARPU growth in these markets significantly outpacing overall ARPU growth [11] - The inflow of new iOS users increased by 33% year-over-year, with a notable 66% increase in the EU from August to September [14][15] - The company observed strong momentum in retail and travel sectors, contributing to enhanced revenues [12][13] Company Strategy and Development Direction - The company is focusing on high-ARPU users and expanding monetization opportunities, with confidence in continued growth into Q4 [5][34] - Upcoming product launches, including Opera One R2 and the next generation of Opera GX, are expected to drive marketing activities and user engagement [35][22] - The strategy includes leveraging AI features in the browser to enhance user experience and engagement [16][55] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operating environment, highlighting strong underlying growth and the potential for increased monetization during the holiday season [34][40] - The company anticipates a revenue guidance for Q4 of $135 million to $138 million, representing a 21% year-over-year growth at the midpoint [36] - Management emphasized the importance of maintaining a balance between growth opportunities and cautious guidance in a competitive environment [26] Other Important Information - The company introduced a new non-IFRS metric, adjusted net income, to provide a clearer view of underlying profitability [32] - Operating cash flow reached an all-time high of $34.9 million, representing 113% of adjusted EBITDA [30] - The company plans to reassess the valuation of its OPay stake at year-end, maintaining the current valuation of approximately $250 million [49] Q&A Session Summary Question: E-commerce advertisement revenue growth - Management indicated that e-commerce is growing faster than the overall advertising growth rate and is becoming a material part of the advertising mix [43] Question: Q4 EBITDA and marketing spend - The increase in Q4 marketing spend is a strategic decision to capitalize on new product launches and ensure higher EBITDA for the year [44] Question: OPay stake valuation and monetization - The valuation of the OPay stake remains unchanged, with plans for potential divestment either before or after a future IPO [50] Question: AI opportunity and product roadmap - Management sees AI as a long-term differentiator and is focused on enhancing user engagement through AI features in the browser [55] Question: iOS opportunity in Europe - The company is pleased with the growth in iOS users, particularly in Europe, and sees significant potential for further growth [66]