Opera Limited (OPRA) 28 Apr 222022 Q1 Earnings call transcript

Welcome to the Opera Limited First Quarter, 2022, Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's call is being recorded. Instructions]. [Operator like Wolfson, call Head now speaker to turn Matt today, of to would over the your I Investor Relations. ahead. go Please,

Thank me With Song CFO, joining have Jacobsen. for Frode co-CEO, our Lin today, our and you I us.

constitute Such Act. Song economic meaning statements based the about Before inherently Private like I and its the the Reform call future to of management. call will company which in would today, that we results other Lin, the current Litigation expectations control current the subject I and how forward-looking everyone beyond environment are be the and the and competitive, Securities hand conference on are over contingencies uncertainties of statements to to perceive economic, within remind and making expectations statements

cautioned You statements these guarantees are performance. of that should be future not

harbor may in statement the the company's to You results details. refer safe for earnings

including are measures trends. provides prepared consolidated not Our financial measures use for also include an financial for will considered financial in to non-IFRS in of measures based our presented and statements which adjusted believe financial IFRS. non-IFRS on commentary that EBITDA We the a our with information from that today be different as isolation substitute These in or should results operating prepared additional evaluating ongoing use accordance tool and investors are IFRS.

then from live there highlights historical and of along on Opera who call highlights forward. tweeting Relations Lin, the call and please With quarterly discuss We'll over results that, co-CEO call and and Frode financial will in have audited be posted Song our the will We our also future. going me our Investor @InvestorOpera during website. financials cover turn follow operational the so expectations who conference the let strategy and to

thanks, Matt. So,

above scale have with for and in joining achieved momentum excited and XXXX, continuing terms both that strong another quarter off. everyone to we come the you, revenue adjusted We're today. EBITDA report to expectations pay us in in thank So of here

a XX% revenue. has in Our revenue of total gross largely revenue such year, Western of of deal year advertising strengths the revenue XX% in these growth XX% representing and now, acceleration markets, supported by what rose to over XX% by

Our advertising underlying from the same benefits revenue trends.

it though the to additionally, tech inventory we advertising. such, as is advertisers magnified As only Opera our as through apps, throughout [Indiscernible] leverage monetize [Indiscernible] as can of platforms. And we [Indiscernible]

users We are continue those with focusing on in markets our mostly providing users ample strategy, which high believe all opportunities. upper engaged, us we and monetization

ARPU the on XX% As which run an in greatly initiatives. we year selectively marketing user our basis, base, of grow a year strategy, as over our the annualized offset result [Indiscernible] reduction overall

in GX Our News And user from successful. region for the base Opera one continued except that's the the saw and then we key trajectory focus Americas, users We and Europe U.S., pretty in while rest user mix. very of in Eastern of strong products geography. those to the in a emerging like and growth results our been our represents products market have differentiated every The Europe. revenue western compounding XXXX growth appeal every that a based validation developing on of and across clear [Indiscernible] as delivering combination base see

online revenue on We while the services generate meaningful of an are immediate able and from emerging underlying in to incremental growth benefiting newer products, markets.

confident strategic value. I'm have will that core Opera's increasing So in product this offering context,

and or meet zero [Indiscernible] one company of use services specific independent increasing as user we user We'll our and specific see products thing launched are innovation. the ago, always perhaps been who gamers. through long we of technology and gaming. personalization. and browser actively designed The security, defined browsing While of communications, different is launched more lead in the cases is objective future of we specifically the can't privacy for in in the building that success that be [Indiscernible], browsers. news, a an will than digital segments. is trend GX browser our future, clear has have people Not example differentiating for that's by developed needs certain GX history Whether chose ourselves One gaming, stronger and choice or ever.

over higher course of a As roughly any products double other XX of monetization than users. identify an This case use with a those the this and products, $X.X when year as threat mobile well game is GX to clear increase value, million to our tailored the revenue begin on users. then we GX tap mix than game structures. have ago. monthly such our other has year, in advertising output and almost annualized PC both well, GX over While fraction we're sequential into GX times the are of developers basis. contains compared a existing browser, our three of over scale install to GX the and The common games studio the call, and economic from beyond XXX,XXX launch other as its Opera and the financial we we and a developers ramp more cautious active advertising as this two near-term only relative year. to for models XX% over million it, we Opera And A of a to extended introduce new we is we amongst million and browsers. have and impact, [Indiscernible] whole, Later one And all will Opera now for game-maker is on

pleased as now aspects for Web continues to Opera our regions trends. News there ahead, particularly are X.X of is grow monetization relating it taking hold higher and with in we in is are foot As multiple to we a applications the product also Brazil. meaningful modal look how clear also

introduced and sports well sites. we verticals generic domains of terms the remains as XX based other also news but the as past technology core the and have board popular cricket In the same on as the for focus, vertical such most over months, basketball

Web content So news or gaming have services to than these GX AI-driven to a well We're X.X news, up best browser users. more relevant VPN features, at profit social out, [Indiscernible] in examples our as of share are [Indiscernible] of the spray Web becoming mobile in plans to is being both constant average range stack XX for enhanced to develop into integrity for X ensure addition And wallet, are same that disruptions landscape website the products. data million show that related with introduce of market show in interactions. the begin These to tech and as our security market users Starting trend concerns section our the improvements dolls. browser our in stay analysis. and news desktop have all and rolled engine our while total, as And in new we Please our asked into crucial for bringing aggregating privacy as sales. tuned postnatal not online across Brazos.

the to to our advertising We our ensuring continue monetize in particular, And tech stack. right ability to us that are audiences. also have to maximize we improve our

to advertiser audiences late and with of our our as building business a revenue in Although higher a I our way percent overall that trend advertising combined continued [Indiscernible]. leverage to increasing to athletic demand. That's continue make value our improvements to revenues wage way grow inventory, expect markets. Non-native noted

on us. Since remain in Recently, we to with you The our core are a our desire So laser-focused, all or our quarter length sales market. to the shareholders locking way was those ahead. monetize Nanobank to gains fourth were see the financial last our have assets talk, we for decision of our [Indiscernible]. kind all cost investments volatile presented stakes in given we results, opportunity business also front businesses, opportunities, and both the liquid we sold the in opportunities the in during of equity take core on and seeing and

say more will chose continue never Again, think initiatives cash it the so and two to results show over years flexibility. than to our today. that the operational offer momentum, well-detailed the that been And products us payments resulting we significant we to next has relevant our browser though, through and act. is great the Opera will I

have turn let We very time that, exciting me with Frode. [Indiscernible] a and And Opera. ahead to

do resulting aggregate proceeds came our in associated us of materialize in war to of million expenses Starting Ukraine particularly the estimate impacts maintain previously as our changes turn of already million taking sales revenue. ahead in war guidance has our million or We realize million over marketable nearly is first have in guidance. XXX we are amount quarter to the former of million, range. both year [Indiscernible] with issued This headwinds of came million million up any of $X of the ownership and according in allowing parts And ultimately collect with headwind the the rates in in later the the partial common to most expectations question the performing of still cap. $XX.X to how that of a other seen generate a the $XX significant in strong will revenue for resulted of year. securities top previous underlying also what from to stands creation our affects our was cash Star The relative a to adds StarMaker, current with I in the we to the including guidance expectations. course, received of U.S. the $XXX when quarter. our dollar expectations machinery million exceeding Recently, time the Nanobank of ahead the strengthened divest intend them Song stakes predominantly cash collecting in and which A which we us and the light $XX together million This and business core revenue ahead affected in and less in million, adjusted our as the which due was Thanks, Nanobank quarter. only market to in largely at Lin. to QX you sale $XXX in the whole for to a guidance at EBITDA last and regional have monetization in it exchange about sales. we reason value maker, $XXX XX has that and relative Opera's indeed Operational the currencies exceeded our able with $X.X as

In held line business, on addition, ownership our core All classified and a in hold as in these implied of X.XX% our for focus fixed with stake hold this interesting multiples. pay also shares to trading makes in sale. our calculations are value we some decision enterprise for still our attention and all,

our for in million be we which place QX. XXX,XXX to shares repurchasing by a shareholders. million We an of now, $X buybacks $XX For excellent buyback contributor utilized have ROI to in our program we've consider

have realization In we of our and of potential of in efforts resulting opportunities investment gains to Opera proceeds. returns. in urgency context our can flexibility our of the our the strategic our dominating with terms on value-creation only broader business, of perspective, the a to chosen in is The drive committing terms having very the sense sheet prioritize see strong to adds balance core And position. this we from investor less

quarterly our of with represented essentially we cash our terms operating In flow, generated reduction combined adjusted which million, a working in capital. slight EBITDA $XX.X

our moving to guidance. Now,

guidance at We the of million, are million XX% $XXX revenue $XXX increase full-year maintaining a to our midpoint.

XXXX. between $XX to an an at to the to EBITDA representing and XX% $XX expect increase adjusted midpoints, be million, continue million XX% of to margin compared We

below Ukraine the the in about to million around quarterly midpoints first expect approximately remainder $X and represents headwind the headwinds guidance. of total million quarter, double impact the invasion $XX of X% the for million bringing We $XX year, the Russia from from in just of to our of or the

performance year. the current offset beyond business very healthy consider looking is indication this in strong we However, also effects, underlying our to expected core when and a those the

is cost to combined the quarter, items. items representing to expected overall. million represent stable cost XX%, expected of be we a compensation to increase of growth This expect $XX we to and is second at to slight $XX XX% the reduction following to approximately net expected marketing team spend Cash increase and revenue to revenue base midpoints. other year-over-year by total revenue. are declining reduced growth million, adjustments. And salary cost offset within about QX, For of Relative XX% the a assumed

happy our results to adjusted a of result, Overall to very move $X but call strategic now in EBITDA we're lot direction. expect to are As these million this and we to cover I with with QX. in and we today, hope was a to useful conjunction sum, $XX release, you our be million found in pleased and There questions.

from We'll take our Vitanza Cowen. Instructions]. Lance first [Operator question with

strong basic have I guess and for I a X Thanks quarter. questions you. guys. Hi, on congratulations

the just the I'm Russia-Ukraine in just in and Russian implications each could you to appreciate is I population presumably us you revenue for on on the specific this of And you sort X a hand, total help Ukrainians that that right? the But I impact. the bit about sanctions. one wondering currency try you talked on is playing relevant presumably is human have more want of just your global out terms that beyond guidance rate how numbers the have prepared if of granularity exchange gave we The problems standpoint hand, we could to the more I remarks. the due one that to impact. understand add Opera's up economically quantify situation during in is first talk it's are revenue of other suppose that maybe how displaced drag through think the tragedy. bankrupt little the on kind issues from the then is to these or business, or there And latter the hand, percentage

here. Frode Lance, Hey,

the In be looking FX that mentioned, quarter, can business the So at impact the essentially of the best a was estimate, we I remainder underlying you will from and as dollar. are the just it foreign as currency the size. say the as right. the U.S. first strengthening let's year, impact, about And same translation of

of X/X X/X about and the $XX about impact. business So year, remainder I FX versus for the million mentioned

Okay.

there still there community? until words, until So Russia global are thoughts In of resolved? rejoins any the doing you are business suspending and in operations the is conflict other Russia

of and it's We chime offer also home region a -- here. availability do kind continue our obviously, the probably both do to wrong being our European seems take. like it of to footprint lot in very limiting Swedish, Polish, in about became in to it, what's thinking spent close can time but terms Song position of the Russia. thing right so the to step products in We've information

how it. we that's So about thought

would gown given a the said region, that the we equation and come if I'm removal you've forecast. again, that should QX the the XX% about to in way worse, we from if And were to full be Is that revenue stop get -- is case? there away that outlook out that year, to any simply case us base get for simply how would for to meet cost your of opposed trying look or realistic That the conservative stress to to you've is stress of take or think full as the something a revenues go test at? the to your that test take things too

a Probably course opening to base correct XX% into our this build will our expectation invest an we European say, things do of forecast right? as worse markets. we of also mean, on that, with across revenue European do, in both around there Eastern year. and because was of user margin XX% I our that So get representing you XX%

see So, we with of costs going there's zero scenario the as associated now, the unfold. but X to don't

So, we as the what we consider most expectation. presented realistic today

thanks. Okay,

us the Let me a bit gone a turn missed value you remarks way business, it it. have for for and the how OPay, remaining what's remaining it's you the of the of about monetization out The story that, think discuss and towards partial you've potential I streamlining stake, stake that talked something classifying maybe the held the sale. Nanobank hopeful. and your but long to StarMaker timeline you in of called divestitures OPay monetization prepared book obviously might obviously and of I more you're the stake? little Could remind streamlining

on To begin million our We think OPay. latter, have can I from $XX about check with double $XX, it's the later. books that we

within of classify timeline terms XX In for as months. held expectation we is implicit the when sale, something

expectation. implicit the is XXXX within within So

if then use Of about just take then stake. I'm actually even as cash, the XXX value, million out book at of a I rather the I the $XXX but I I PV If steak PV. of going right, the There's a my started million the that And the sales ADS's any back if implied share. on math wondering you the the call. right? opposed just with OPay market each cap. through I that And million to back low recap. I out a to million XX - saw. to about for for you just valuation start lastly, browser I correctly? doing just XXX the mean, the too I like business. I get sort to I if ish have was market to at you or $XXX seems be getting five comments. walk me, question, And for that I'm am then out

trading far and point are X.X we at we're X.X adjusted like EBITDA X.X or X%, As maybe. something like X times like that, XXXX, X, of point X% revenue

going your at margin revenue I to higher be you're than multiple. the mean, going, is rate EBITDA your

[Indiscernible].

guys for in back thanks I'll questions. Yeah, queue. get taking the

Sure. Thanks, Lance.

you. Thank

will Lake Mark Our Street. Argentino from next with come question

guys. good Hey, morning,

Just the a forward. on the quick and little with strategy we've capitalization question -- bit a [Indiscernible] going

browser then have and leverage business, that technology then areas. model, the you you in So have other and you'd the core

and of doing something how You think the could forward, deploying investing strategy. anticipated about It and capital you or do similar more [Indiscernible] businesses. going established Just larger, more strategy? be type buying a substantial maybe

comment Hey, it. on Mark. It to is a broad question

these investments them you mentioned, we create and co-founding, companies, great think a Opera value able we we were we of like we in are Opera that deal, to that to [Indiscernible] have by I that because left, the had participating for etc. proud

services good browser strategic that asset a that it can is and business of we is the example how launch products we have from. so a And

internally we focus News for initiatives we earlier and Opera we in on well do with years but what some course, mostly specific opportunities have these us. were that our done gaming had Of

we participating separate I situations now look same don't what internally the and it's of definitely of companies. as indication there focus. ahead, so part see that Opera of on of more opportunities are we have space focused I think in internal that don't launch when more an right the and create in can are I we an

in just [Indiscernible]. monetizing one terms follow-up of And as Great. we

or $XXX you tax that so at all Do guys incremental that is should -- after a you that effect receive of And proceeds? and you collect all the actual that that million so. actually need

tax no that. on There's

So these entities, a shares not which essentially sold, are that taxable we gain. is

it. appreciate been We've [Indiscernible] I for you difficult guys, Great. actually going exposure your and been a know it’s forward. locked, I to just environment given

you. Thank

[Operator Instructions].

come will with from question Alicia next Our Citibank. Yap

Good on and Thank have results the for congrats question despite management. Hi. or evening of you. Europe. headwinds having Thanks also good morning in I questions. some my couple a taking solid

some reiterate the we the of First about -- that's follow on in, Would on their impact be the cash acquiring especially you or you we the Thank advertisers cash in special into soon, the search will interested from well, and first plan and business? fit question. will all came maybe the up are you impact on of incoming How as into dividend any in dollars? cash, become very And then have any think the browser So all, also acquisition guidance targets wondering, expand think or that future will studio, like plans region. GX second But that. your doing example? spending the be cautious Europe And some actually based you you there use? also you. about has been there question for receive. that advertisers [Indiscernible] I I you're with more cash be I'm Russia on game advertising just to they also And which wanted other use any mentioned received the on then should that would

Sure. Yes.

quite the I the feel those we strong question guess see, we I'll are your strong But and can do way Europe also going is with advertiser strong. the impact being answer advertisers the guidance. what your of exceeding a for All -- we and Frode still the see Beijing. The And that's level look a we guess sentiments, is how it. you're keeps either U.S. path. maybe that's ever compared changes to guidance. bit, all we course, if cash what keep answer exchange Lin general be think bit I so Song reduce, about. of The feel are that the course, it's talking guess rates closer U.S.. we that mail all is And that over only it's with impact a why first that bit So high of about keeps see have already high and more in also level, Europe try yes, for we you indication go, which that to what that more I And we in pretty we that see to weaker and saying, I still will the towards actually to then yeah, have general so much the has then

I to investment demonstrate into then we're good the importance be us passive has able think are is to bring to that that also And to these cash. value. bring able that lapse to

I'd bringing more value clear to walk it's the guess I I'm demonstration be that maybe of the which I the down company. So can to

this end online just some that us if that give it be it don't game guess flexibility. more that, able stuff for flexibility will but to is the strategy there other potential hopefully say, to us on invest mind to a we and see And -- this investment gaming able or more into easier community to than wouldn't anything have think a the happy so will I give or more be it. target we're we are to anything. Way like to instance. And we be for acquire, I fair it's focusing

all target, and this we what on the little few be about strategy but of, thinking and kind at like, can kind -- from Thank -- moment, you Song. business at if you needs are or I bit identified next wondering focusing may what of help especially your a look a you to you're guess the search just strengthened, further after the things business, I right? the adjusting feel that not understand, into what then you, the look us you these specific maybe have I'm non-core years, advertising, your as --

Okay.

So -- yeah.

And then, the you opportunity also into you region that explore have feel explore to Yeah. you you. or wanted into. Thank to

Yes. Sure. yes. So

So it's a very question. relevant

I growing line So would the high GX browser and orders gaming perhaps fast is segments for with field very our initiatives possible there a postmates say offers level to and in provide is also strategy gamers. particular overall

they also, certain a way with gaming way to both getting it. better and company work if more terms quite [Indiscernible] deliver as in we along give I'm partners to base, platform. economies gaming our do the you studios I'll our So our or continues will and grow GX And have of that expand growing but those in provide to also will growing, gaming the continue user and on sector

the our And more vessels can they it something confident and so as have a of also we're not we as or more, in it's strategy That obviously that could proud right? we feel company, we difference, So, like could huge So, day don't into [Indiscernible] gaming, able mentioned WebX to think you see in I a product be like think I continuation tech more quite we wise, think important maybe other. they're invest for probably we passed we're actually we a will there, even verticals difference. also say similar a think [Indiscernible] do potential yes, announcements and, that than make our we on almost then have very really make that good we I tech, end there's like that, where instance, top will this it, getting of year.

I think those also appealing to be should similar, be customized attractive, end-users. the products, able some to create very which will hopefully, we So, of

this think really I thinking are what we So, about. is

And I some it's and buy [Indiscernible]. focus if bought not be it's course, we it -- on course, or That's technology, we is not by mean. good yeah, the of about engines, have our rest, really Like our as The when when we the by should We spent what acquisition to still case will a technology, us by of to there's -- candidate. the because it, have We the but we to there thinking company, and very time win -- have you'd game do win focus, if bought when innovation. that I that's probably should -- buy. maker guess. we important

I see.

Okay. Thank Song. you,

Thank Sure. you.

today's you. closing for Thank to concludes over This back remarks. the would now to call Lin turn Song I like Q&A.

Sure.

again So today. for for again, us thank an you joining just It's exciting time Opera.

still As think always, more ways initiatives our to able gaming is content and to all demonstrate get we to browser that And the that integrates core [Indiscernible] were always business come. and I good and -- even also demonstrate we company. which divestitures, access numerous our will visibility balance at visibility we a much cash to us have think strong I about and from trends also more good cash those now were now payments about our able growths give

way, So to we we expectations. deliver continue hope above will

speaking you with again your all to forward way you appreciate in future. the we So look and time

ladies This event. gentlemen. you, concludes and Thank today's

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