Opera Limited (OPRA) Q2 Earnings call transcript Aug 22, 2024

Opera Limited, a leading browser and AI technology company, recently held its second quarter earnings call, revealing a robust financial performance and strategic outlook for the future. The call, led by Co-CEO Song Lin and CFO Frode Jacobsen, highlighted a number of key themes and trends, offering valuable insights into the company's growth prospects and challenges.

Financial Performance and Outlook

Opera Limited reported a strong second quarter, with revenue growth of 17% year-over-year and adjusted EBITDA of $27 million, translating to a margin of 24%. The company's revenue outperformance was attributed to the continued growth of its products and user adoption, leading to a significant increase in ARPU (Average Revenue Per User) to $1.46. Advertising revenue, a key driver of the company's growth, grew by 20% year-over-year, underscoring Opera's ability to monetize its user base effectively.

The company's financial performance was further bolstered by a tighter focus on monetizable users, which resulted in a 25% year-over-year increase in ARPU. This focus on high-value users has positioned Opera to capitalize on e-commerce opportunities, which are expected to continue driving revenue growth.

Market Position and Strategic Direction

Opera Limited's strategic direction was a key focus of the earnings call. The company's position as an independent browser provider in a market dominated by major players like Google has become increasingly valuable, as regulatory efforts like the Digital Markets Act (DMA) aim to level the playing field for competitors. Opera's success in navigating this landscape has been evident in its user adoption figures, particularly in Europe, where the company has seen significant growth in both new user adoption and user retention.

The company's focus on innovation and user experience has also been a major factor in its success. The launch of Opera One, a fully redesigned flagship browser, and the collaboration with game developer CD PROJEKT RED on the official Cyberpunk 2077 browser mod for Opera GX are testament to Opera's commitment to staying ahead of the competition.

Investment in AI and E-commerce

Opera Limited's investment in artificial intelligence (AI) and e-commerce has been a significant factor in its growth. The company's AI-driven browsing experience, which includes features like Aria, has been well received by users and partners alike, leading to increased revenue and user engagement. Opera's focus on e-commerce has also paid off, with the company's e-commerce vertical becoming its biggest and fastest-growing vertical.

Challenges and Opportunities

The earnings call also touched on the challenges and opportunities facing Opera Limited. The company acknowledged the impact of regulatory changes, particularly the DMA, on its operations and growth prospects. However, Opera remains optimistic about the future, with plans to invest in product development and marketing to capitalize on the growing e-commerce market and the increasing focus on independent browsers.

Conclusion

Opera Limited's second quarter earnings call painted a picture of a company that is not only financially robust but also strategically well-positioned for the future. With a focus on innovation, user experience, and strategic partnerships, Opera is well on its way to realizing its growth potential in a rapidly evolving digital landscape. As the company looks towards the second half of the year, investors and analysts will be eagerly watching to see how Opera continues to navigate the challenges and opportunities ahead.