Q2 2020 Opera Ltd Earnings Call
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I would now like to turn the call over to your speaker today, Derrick Nueman head of Investor Relations. Please go ahead.
Thank you and thanks, everyone for joining us.
With me today I have rcs outside of Jacobson.
And ours and that's Donlin, who today now holds they're all co CEO of opera.
Before I hand over to called Proto I would like to remind everyone that in a conference call today, the company will be making statements about its future results, an expectation, which constitute forward looking statement within the meaning of the private Securities Litigation Reform Act.
Such statements are based on current expectations and the current economic environment and are inherently subject economic had it in other uncertainties and contingencies beyond the control that management.
You should be cautioned that these statements are not a guarantee future performance.
You may refer to the safe Harbor statements in the Companys earnings release for details.
Our commentary today will also include non IRS financial measures, including adjusted EBITDA, which are different from our consolidated financial statements that are prepared and presented based on higher already.
We believe that the use of our non <unk> friends financial measures provides an additional school for investors to you and evaluating.
Ongoing operating result in trend.
These measures should not be considered in isolation, whereas they substituted for financial information prepared in accordance with IRS.
With that let me now front over the called for our CFO brought a jacobson.
Thanks, Eric and Hello, everyone. We have a lot of exciting stuff to cover today, two big announcements, which I'll address first and later I will cover our financial highlights and provide some color on how our business is recovering from cobot 19, and returning to growth.
Let's cover the first piece of news, namely the elevation of sung Lin from his role as Chief operating officer to his new role as co CEO stepping in alongside Yahoo, Joe who remains both CEO and chairman offer.
This promotion formalized sister wrong role sung min has been executing on for the past year basically overseeing everything is off from outside of the micro lending business.
And highlights the trust that Yahoo, We places in him and in the global Alpro leadership team.
That's context sung min joined off brought in Norway, 18 years ago and spent many years in key engineering roles. Later on he was instrumental in our private substation and transmission to new ownership and our strategy to accelerate our trajectory and leverage our our user base.
Nice to launch new businesses.
As many of you have realized in life face to face discussions. Some then knows everything there is to know about opera and the markets wherever we operate.
He said fast talker, and a quick thinker with good intuition.
And just like Yeah. We he has a tremendous drive an urgency and together the two of them have shaped our company and our ambitions over the past years.
On a personal level. He's also a fantastic I to work with and I know I speak for all of our stuff when I congratulate him on his expanded role.
Now to the second topic the formation of National Bank.
As many of you know we have been working towards massive fintech opportunities for several years.
First we incubated OPAY now, Nigeria largest mobile wallet company, both in transactions and value.
It has become a leader in that space and again doubled it transaction volumes over the past six month.
We structured OPAY as its own company from day, one that's we wanted to raise external capital to address the massive potential of building out such an offering across Africa without impacting our strong balance sheet.
Oh pay has raised 170 million to date and investor demand to take part in that journey has been very strong.
Separately, we have scaled our micro lending offerings from practically nothing to a massive business and just over a year.
It has continually exceeded our expectations with exponential growth and strong profitability and it's a great example of how off probably utilizes its platform and significant user base I say competitive advantage.
Last year, which was really the first year of operations. The business provided approximately 15 million loans, representing over 800 million dollarss in value and built a user base with tens of millions of registered users.
With that background, we are excited to be announcing nano bank, which is the combination of off for us micro lending business and the equivalent business off our closest partner in this space Moby Magic, which works with us in India and has a large growing micro lending business in Indonesia.
When operating together.
These businesses will form a significant power in the finpac space for emerging markets.
By creating nano bank, we are setting the stage for continued growth consolidating profitability and cash generation diversification on both the product side and in terms of geography, and finally, we are providing this business with the flexibility to operate as its own company.
The resulting national Bank will be one of the biggest global fin Tech company focused on emerging markets and a category leader.
No bank will single mindedly focus on increasing its leading position in the emerging markets Fintech space.
Combined the business will also benefit from shared technologies data aggregation and central functions, such as risk management and credit scoring through user profiling NK whites he efforts.
Shared operational know, how and the more holistic view and adaptation to regulation.
Further national Bank will have significant strategic flexibility for the future to calm such as taking in strategic investors or floating shares.
We are very proud of the business, we have built over such a short timeframe, including an efficient organization with strong operations and well managed business practices.
For opera and our shareholders. This transaction highlights the value we've created it simplifies our investment story provides us with additional flexibility and it creates a corporate framework that supports the business as it continues to scale as a category leader over the next several.
Yes.
Now, let's get into the details on Moby Magic, the combined company and the transaction.
Moby Magic launched micro lending operations in mid 2018 with the goal to be one of the largest fintech providers in southeast Asia.
Its initial markets was Indonesia.
Then Moby magic supported our launch and scale in India, as our technology and business partner, leading to results well in excess of our most optimistic forecast.
In 2019, Moby Magic generated 106 million enough revenue for a highly profitable business that had $48 million in pre tax profits.
Moby Magic shared a similar growth curve to offer micro lending efforts as Indonesia scaled throughout 2019, and I say participated index potential growth we saw in India.
In the same period opera generated 128 million and Fintech revenue and a pre tax profit up approximately $19 million in this business area.
The combined off Brian Imobilemagic businesses perform our results when adjusting for transactions between the company generated revenues of approximately 209 million and a pretax profit of approximately 68 million in 2019.
As well as provided it almost 20 million loans with an aggregate value well over $1 billion.
To provide some additional context on the scale and rapid growth of this business prior to the significant impact from Cobot 19, the combined businesses generated a combined $120 million in revenue in the first quarter of Twentytwenty alone.
On 10 million loans disbursed with a total value of 686 million.
This compares to a combined revenue of 22 million in less than 100 million in loans dispersed in the first quarter of 2019.
Further national Bank as a whole generated profits in the first half 2020, despite significant extraordinary credit loss provisions related to covert 19.
On that point the recovery from covert nine team is well underway.
The National Bank businesses have been increasing loans provided in all key markets, India, Indonesia in Kenya since the end of June.
Loans. This first were 44 million in July compared to 28 million in June.
This ramp has continued into August most notably in Indonesia that is already mirroring pre cold in levels.
While higher credit standards have been employed in the near term to ensure profitable loans nano bank expects to continue to reschedule volumes as it gains additional confidence.
While it's still remains difficult to predict when this business will return to early Q1 levels. It is clear that national bank is on that path.
Looking ahead, we have massive growth expectations for national bank to grow far beyond pre cobot 19 levels.
First India is a huge market and today nano bank has only interested with roughly 3% of the population or 18% of the on bank.
Second National Bank has just begun geographical expansion today, we can also announced the launch of a nother major markets prepared in color collaboration between opera and Moby Magic, namely, Mexico, which has a substantial unbanked population.
And as we look ahead, we expect National Bank, we launched several new countries to further increase its total addressable markets.
Finally National Bank will continue to develop and deployed fintech offerings beyond micro lending. This includes marketplace offers by now pay later products mobile payment and debit cards, some of which are now live and others that will be launched over the next year.
Overtime, we really believed that the potential to broaden the offering a substantial building national banks large registered base of 50 million plus users and enabling increased recurring engagement with our products.
The transaction itself and oppressed interests in particular have been overseen and closely reviewed by Alpros Audit Committee of independent directors as Moby Magic was controlled by our CEO.
Further upfront engaged an independent professional third party to value the respective national bank contributions and to help determine the ownership split.
The factors that determine the agreed ownership split where the forecasted cash flows multiples of most relevant public companies and provided working capital such as cash and loan book of each party.
The cash that was part of approach micro lending business as consolidated by opera in our June Thirtyth balance sheet was 31 million and our loan book was 14 million.
As part of our contribution to National Bank, the net cash in the business and the loan book will also transition to National Bank.
This resulted in an agreed ownership split of 42% off from 58% multi magic in this otherwise noncash transactions.
So looping back to the combined pro forma results if national Bank had been affected Jan one 2019.
Produced 42% share of pre tax profits would have been approximately 28 million in 2019 compared to the approximate 19 million that our standalone business generated.
From a reporting standpoint, we plan to be transparent and discuss the performance of National Bank in our quarterly results as it will be a key factor in our overall some of the parts valuation.
We expect to provide detailed such as revenue profit and key operating metrics on a quarterly basis, and we will make it easy to see what our revenue and adjusted EBITDA would be when including our 42% fair share of National Bank revenue and adjusted EBITDA.
In terms of I have for us reporting up for us share of the National Bank results will be reflected in the share of net income off associates and joint ventures line in our income statement.
Additionally approach will report a sizeable onetime gain as a result of this transaction currently estimated at over $100 million. This follows the recognition of our initial national bank ownership at fair value, representing a step up versus the book values of approach.
Contributed business.
Further we will conduct a PPA on the difference between fair and book value of National Bank as a whole and off probably will recognize amortization cost that's appropriate over the coming years as it relates to access values allocated to intangible assets, such as technology customer relationships and licenses.
To sum up we are really excited about national bank and expect it will demonstrate a highly attractive trajectory going forward as it continues to scale and expand into new geographies and products with the potential to be multiples bigger and generate hundreds of millions and profits.
This along with offers other growth initiatives, which.
Some men will speak about our key elements.
And our effort to drive strong returns for our approach for covering Q3 results and recent trends.
Hey, guys.
No.
So on you know I'm glad to be named as the call deal.
And you know I view, it as north myself, but really realization.
While the overall our team has accomplished over the past the deal yield.
Well you revenue you those and scaling not of on your businesses. So thank you guys.
It's an exciting 18, you all Johnny.
I look forward to taking on his new role and continuing the strong momentum to get all the products Ultra King.
So.
And I'll talk about some retuned trends and developments.
Yeah.
Third on real time, syphilis, Q2, yet historical highs Liberals become a key Walt.
Are you look at it difficult you well the recalled can you handle on 63 million monthly active any loss and increase well tell you those I'm thrilled to Q1.
This was driven by bill.
Yes.
Okay.
Uh huh.
Yes.
Well.
Great.
Welcome.
Good.
No.
Uh huh.
On a weekly for the breakdown on automobiles has achieved an important milestone many all 200 million monthly after the launch.
And averaged 200, plus what else would often come true.
The third cousins will Olivia.
Well, what could solve that often mills have Dupont critical information about the Colby nothing ultimately.
On the other angle.
Also continued to be until all the people that know how to grow 15% and yes, although Neil two identical also some to 5 million neutral to.
This was driven by both the skin, let's see the euro without PC, altering which ended becoming ever more relevant when people spend more time from the home that.
And also globally. Some opened yet we'll walk off when you were also Lake has rich for me then logcap given the don't recently and we will then doubled year to date.
On the mobile we also seems strong resulting Africa deal to all pro not relevance and also all increasing pinnacle's relationships.
Yeah, but happy to announce new corporations with leading Pellicles Interagency Nineeight MTN and also recently stuff I would come to happen.
So this is in several countries in Africa.
This partnerships absolutely.
For strong social use of wells.
Our focus is to continue our growth trajectory and in July.
Well, no 12 million mobile, but also new those visits June so I'm very excited mill.
Now also getting too.
We are seeing.
We don't recovery trend from the low point in April with each in all showing improved yield overall yield trends.
No well continue to be bullish on all alone jump monetization rates the offline to online transition as generation signaled by continued bills only with 60 minutes multi after that you will compel to a little over 4 million.
Probably.
Well, it's a very excited about all launch okay or couple of business in partnership with Google, which we're just now roughly.
It's well be cultish tuning house monetization encouraging.
And even in short term monetization has been slow Cobiz 19, the digital advertising ecosystem Africa represents very attractive long term goals.
Let me also assuming a big often use for instance.
That's pulled off have grown revenue was 65% year over year, despite all the monetization impact overall.
It has actually rich hopeless it results will not be didn't inventory worldwide.
No I will close it still minute regulated he officially this quarter will not continue trading Africa simply because it has less rich enough attention on global sales.
Well walking on his solving those problems everyday is all possible because he gave all scale and also the according to all of that's pulled up we believe the monetization potential can be huge.
And finally, well also extremely excited about all new European things have to be initiative, which may think has the potential can be very big and also accelerate our growth in turned it into one and beyond.
We have some real competitive advantages.
It is more than 50 million addressable you, though neither raging that make online transaction and purchases. So all but also which in fact, if the economy sale.
There are costs would have.
That give us a huge potential to kick start innovative national So this is.
I haven't been testing our digital wallet.
First a major new market span and have already acquired also you though.
Initially offerings well be monetized through buying all political products, which were janitor revenue through transaction Commission and credits is.
This product, while having similarities with current monopoly.
I'll play off such as cloud not will opt to pay well be unique asked it will focus on the universe, which isn't much and.
So you essentially a use all shouldn't be able tonight I apologize if there's any large and lastly would normally do you hope to also and then respectively decide how to people them.
So we expect to formally launch later this year and also to take additional steps neonatal.
Offering.
We have built up a great INTECH business emerging market. The last two years now as a company deeply rooted and headquartered in Europe.
We've also recently added strength.
I will now focus its acquisition and the rest of lithium bank. We are very excited about the potential and also opportunity that's missing in Europe.
This is all be the focus of the team for next steel mouse and we really look for to update you as we scale this new business.
So just to conclude.
Oprah has a lot going boss.
Fourth we are growing and have record high Jesus.
Second we are diligently focused on increasing monetization.
And so when you have exciting new initiatives that leverage our existing at scale assets and wells with additional revenue and on this growth in the years to come so with that let me hand back to the talk to food.
Okay, All Q2 financial results in detail.
Thanks Alan.
Given the extraordinary nature off the second quarter I'm going to keep our common short as the results aren't reflective of our business and focus on key highlights and trends. Additionally, Additionally, I would advise you to look at our press release for more detailed information.
Revenue for the second quarter was 55.4 million.
If this search was 17.6 million down 18% year over year.
Trends improved each month of the quarter PC has recovered quicker, whereas the mobile recovery is taking a little longer based than exposure to emerging markets.
However, both platforms are underway to recovery and in July search revenue had regained half of the year over year decline observed in Q2.
Advertising was 12.7 million down 22% year over year.
Advertising revenue also improved each month of the quarter and we benefited from strong E Commerce partners and sports leagues returning.
In July advertising revenue had regained two thirds of the year over year decline observed in Q2 and with respect to year over year growth when excluding the travel vertical.
Fintech revenue was 11.8 million and Thats discussed loan volumes began ramping in late June.
Finally, combined retail in Tech revenues were 13.3 million. That's a reminder, we expect combined retail in tech revenues to be between five and 6 million next quarter, though debt reduction is not expected to affect profits.
Our operating expenses were 59.4 million down considerably from the first quarter due to two primary factors.
One discipline around variable costs and to lower credit losses in microlending due to the smaller revenue base and stronger than expected collections on loans that were open at the end of Q1.
As a result, adjusted EBITDA was positive at $2.9 million in the quarter.
Net income was 17.1 million benefiting from financing come from marketable securities. The performance offer in the Steve and other income from our divestments often Nigerian subsidiary.
Our operating cash flow was positive at 7 million for the quarter, where the biggest components, where Mike for loan collections, adding to our cash and cash outflow related to costs of prior periods with greater Fintech volume.
The recent our total cash and marketable securities still fell by 55 million in the quarter was that we repaid 48 million of loans largely in market credit facilities, and repurchased $13 million of our own shares everything else more or less nets out.
In terms of our share buyback program at the end of Q2, we had repurchased two point 47 million adss year today for a total spend of 18.5 million.
Including repurchases in this quarter, we have repurchased three point 46 million Mds is for a total spend of 28 million.
Averaging 808 per Ats, and leaving 22 million additional repurchases under our announced 50 million buyback program.
Now looking forward.
Good news is that the year over year trends in our business have improved each month since bottoming in April.
While we are hesitant to give specific revenue guidance for the third quarter due to continued uncertainty around cobot 19, we think it's helpful to share several directional data points.
First combined search and advertising were down 8% year over year in July recovering from the 19% year over year decline, we saw for Q2 and we've seen further improvement in August month to date.
We expect the sequential revenue increase from Q2, two Q3 in our combined search and advertising business to materially exceed the 6% increase we had in the same period last year as our business continues to recover and user metrics remain strong.
Further we expect to see a similar benefit from Q3 two Q4.
Second as discussed earlier retail in tech revenue will be roughly five to 6 million combined.
This will be almost an 8 million dollar headwind on third quarter revenue versus this past quarter, but will not impact profitability as both businesses are low margin.
So were three.
Our new initiatives oldest and European Fintech, we'll start to generate revenue in second half this year, though we expect the contribution to be small.
And our focus here is to prepare for significant contribution to our growth as we look into 2021 and beyond.
Finally, we are expecting a meaningful improvement in EBITDA margin in the third quarter, primarily topline driven given the high margin of search and advertising revenue.
To wrap up our core search and advertising business is recovering from covert 19, and we believe is positioned to return to its historical growth rates in 2021.
Our new initiatives are progressing well and we expect them to support further acceleration off our growth rates next year.
Finally, we believe our investments in OPAY Star maker, and now nano Bank will drive value creation for our shareholders as these businesses continue to execute.
We're very excited about the future and returning to our strong growth trajectory.
With that I think we can now moved two questions.
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Okay.
Our first question comes from the line only call Us B. Riley FBR.
Great. Thanks for taking my questions and congrats song on the promotion to co CEO.
I wanted to start out on the search and advertising business.
You kind of consolidated the trends of those business into down 8% year over year could you maybe breakout the trends specifically by search and advertising quarter to date, and then I guess the other breakout I was curious on is just by the sub sectors.
Which have returned to kind of normalized levels in which are lagging. Thanks.
Ah yes.
Actually take that.
Yes, sure and thanks for your question. So yes mentioned in Q2 search was down 18% year over year and advertising 21.
And in July we saw that search AD regained half and was down 9% year over year.
Typing, even more so was down 6% year over year and as I mentioned.
Excluding travel as follows a it was back to growth year over year in July.
And this is Derek here. The other comment that we made is that you know month to date in August we're seeing.
Better trends in July.
Got it okay.
And then on on the Nano Bank transaction.
You guys provided a lot of detail that was helpful. I just kind of wanted to dig in on on the question of why now.
The business has reached some decent scale.
A lot of velocity, but obviously a brief pause with the pandemic why does it make sense to do this trip transaction today versus waiting for it to build further scale within opera. Thanks.
Sure.
I mean this this is something that we have considered for some time.
We've seen fantastic operational performance in both our prime Inmobi magic.
We think this is good timing to consolidate now and prepare.
For for the re acceleration of the business and do everything we can so that that business is set up to be a true leader as a global scale for emerging markets.
We see operational benefits as mentioned, we also see structural flexibility overtime.
Got it thank you for taking my question.
Sure.
Our next question comes from a lot of Lance Vitanza of Cowen.
Hi, guys. Thanks for taking the questions and glad to hear things are improving.
Let me actually ask you a couple of questions on on that or bank I guess first years, how easy or difficult do you expect the integration.
With Moby Magic the formation of JV to be in.
These risks there that you're putting the two companies together causes you to to Miss some of the opportunities in the marketplace over the next phase three to six months.
[noise] I'm sure.
Total here again I'll answer that question.
I would say at the starting point operationally the businesses have different core market.
Where it overlaps we already works together.
So that would actually simplify things being par having it as part of one joins group I think we've also seen that in Mexico, which we're really excited about that market. We have prepared together and we are about to really start scaling scaling that's now I think.
And in terms of Bill.
Building a corporate function that is an area, where our will remain quite involved very similar to how we supported old pay in its early days until we have sort of the corporate consolidating function.
Well in place.
Okay and then.
Sticking with with this the so.
Obviously, you talked about the disparate profitability rate show operate generating more than half with revenue, but at a relatively low margin versus Moby magic generating less than half of the revenue, but at a pretty impressive margin how do you explain that margin differential.
Is that sustainable what are the structural elements that go into that and I guess you know I know you mentioned all of the factors, but at the end of the days is that margin differential really why.
Opera winds up with only 42% of the equity in the JV. Despite contributing the majority of the revenue.
Yes, so I would say on profitability.
First of all there there will always be country by country conferences, I'm sort of how profitable each market will be and Moby magic has set up a very attractive business in Indonesia, both in terms of growth and profitability.
Second reason why their profitability is good is that they've been able to leverage their technology.
Developed for Indonesia, as they have supported opera and then yes.
Which has made the.
Made it the made the company profitable I too as you referred to.
So as I.
You did to cover the second part of the question. So so when we when we have looked at the relative valuations we have looked at cash flows.
Over a long time periods.
And we have looked as multiples both on revenue [noise].
You sort of determine their rights split.
On that one as I mentioned, we engaged an independent professional party.
And to to help us.
Confirm the appropriateness often inland.
Lance this is Derek we're not expecting any structural changes in terms of you know maybe magics business, meaning.
Their tech platform will be the same in Indonesia.
We'll continue to do what it's doing so there's nothing that's.
No one time this year.
Thank you that we just really that was a big part of the question.
And then I guess, just you know I think you went through this on the prepared remarks, but just to make sure I haven't right. So there is roughly 31 million if I take your June 30, cash and marketable securities of about 160, and then I back out was 31 million or showed that you are shifting into the joint venture essentially so on.
Pro forma basis, you've got about 130 million of cash and marketable securities is that is that accurate.
Correct.
Okay.
And then just any will there be any debt at the JV I would imagine nothing on balance sheet, but could you.
Anything about the debt structure, there and then also.
I apologize I'm not familiar with that Moby back its shareholder base I know that there's your relationship there and between Youre a erie.
Their co CEO and chairman, but could you remind me his percentage ownership in there will be magic.
And how that whether that's direct or indirect through that through one of these other investment vehicles.
Sure.
So to answer the first question no there won't be any external debt.
And the international bank or in the National Bank balance sheets, so that will be clear on ownership that is correct or that our CEO.
He is the majority shareholder in Inmobi magic.
Okay. Thank you very much guys appreciate that I appreciate that help.
Sure. Thank you.
Our next question comes from a lot of John Godyn like Street.
You guys. Thank you for taking my question.
Congrats on.
First on the National Bank can you talk a little bit more detail.
I think this expands the Tam both from a geographic ability standpoint, as well its new product standpoint.
And then number two.
Can you walk me through.
The strategy for customer acquisition, especially for some of these markets where offer has had a significant presence through any other products previously thank you.
Sure I'll I'll I can go first so we believe that a consolidated company.
Working across different geography.
Makes it makes the operation solid makes it easier to expand into new geographies. It also supports a broader product diversification.
To essentially have a company that has centralized tech that it it's can apply in different geographies. So we believe that the combination of I'll try and Moby Magic International Bank.
It's very supportive for its continued growth.
Yes. This is Derek I would add.
Yet.
Distant markets are I guess any markets in Indonesia in Mexico.
Sure.
On bank market.
You say, they're smaller than India.
But bigger inside and yet so that a bigger opportunities I think.
Mexico had the opportunity to be very similar to Indonesia in terms of scale you know there's some other markets that nano bank is looking at.
And which again would fall into.
Large unbanked population.
And they want to and make sure everything with the steel goes right Beacon, Mexico continues to scale in India scale back out.
In the next fixed at 12 months would not be shocked to see a couple of big more markets. The other thing that I think we spoke a little about.
Last quarter to quarter or was the expanded products so they're working on that.
There is multiple different products.
I remember when you look at nothing there was 50 million registered users and when you look at the loans the company's provided they're not giving a lot of every user so it really focused on.
How did they get the most out of that registered user base.
And go from there I think you're what was your final question was around how do they acquire users in different countries.
Yes, just.
The customer acquisition strategy in countries, where you don't offer has previously you had a big.
Presence.
Yeah, Yeah, right like you guys, it's only hill.
Oh, yeah like several jumping I guess I'm a bit yellow step further get all the questions. So I just on the tried to chime in.
Yeah. So like maybe also called out there right. So so like it to be relates it maybe a bit repetitive it that way actually feel that knowledge. The great time to do this you know like a first of all my part of that business is doing great.
But ill call. It does impact the you know what is called it now of course the original have been recovering. So we ask you feel that knowledge. The great time, you know, partly because the demand isn't all that at all also because as you talk about possible acquisitions, because now you know, although slate full well Oprah is a big like India, Indonesia eligible in Mexico.
Well I reasonably big about that now he's also a fantastic time to actually acquired you've lost because of course is a very cheap because people are still recovering from called it. So like spent that your time, but did you get a use all programs that should this level.
You know possible. So we really feel that not always all channels asked it to scale.
You know without being too exciting with build out in those emerging markets that we read it on the Golden John scratched it be I would say, maybe I'll be to both sustainable isolating reasonably short timeframe, but then we need to concentrates we need to know have one team to focus on that streamline when the risk control the fuel I see an older processes. So so I think.
So you know knowledge Golden timing you know maybe probably to also your question that now he's also complete the politics time to acquire use also because you know you all those markets. We talk about so I'll say shell southeast Asia or you have a lot of America. You know, it's about time feel quite like you, though as it is very cost effective NOL.
So in combination with all our traffic.
[noise] Super helpful. Thank you and then everyone again.
Yes. Thank you saw and second one also for you could you just talk a little bit in more detail about the trends you're seeing with the opportunities.
If you kind of progress you're making their expansion into I believe your six markets now.
Well as.
How Oh list is trending and whether that's kind of go ahead.
Alright.
Speculations maybe at the beginning of year. Thank you.
Yeah, so it's a bit sporadic and so I'm not sure how is the only about I'll try to also like you. All so you know high level as well as also called it a bit all the err on the on the press release and often used up going really well on cotulla, it's a milestone that you're not deposits longer.
And then and you know knowledge. The average is also posturing of 5 million second called also good indication that did that so you know we believe all strategy really walks and yes. You are right that you know by ask you use the often use hop way are able to east of after you have very strong presence by you know a walk with all the local content for dual sourcing all those key countries.
You know, Nigeria, Kenya called <unk>, and if you all those and data of course really policy. Yeah. These wells had laughing.
And I just have to say that of course, when I'm quite pleased at all but the role will have been playing.
In doing Colby time is because they're probably that actually becoming a no. Good go to place what people drafted check although it's relevant Nielsen. So so you know all feel cold month. That's you know you probably see that you hope and that's a report what we actually have the you know reduced I'll have to spend just because the organic growth of use on that so big that we're almost all need to spend that much.
Well that we still have I know Tunis axiall, although you up wells that's allowed that pleased about it.
And also I'm not showing about how you fill it but if you talk about monetization.
Also pullmantur bid that you know just idled the Corbett Neal's monetization you showed you has almost no gross five six cents compared with last deal.
So you know, although it's still at low point loss the Olympic steel chicken Parmesan getting calls. It's I think is a very strong seeking all that would that love doing well and I've also Coleman to that you know if you look at home and adding pressure is left solving a global their annual does actually almost a you know top top five once you.
Okay problematic life from Google.
So we're very proud.
Again, I guess, the only issue that you see PM in January I forgot, although it's still very low compel with well you'll see in Jay a U.S. So Europe.
But we just have confidence that you know when the coffee Rick Hubbell and one that's how originate become to grow we're going to be very good position to let you will fall, though so so well quite pleased with regret we thought was meal seem like Africa.
Thank you yes.
Our next question comes from a lot of Alicia Yap of Citigroup.
Hi.
For the management. This is like you weigh on the Oh Alicia.
So I've got two questions. The first one is about advertising so.
The coping lighting.
Duration becomes better and we expect check fit at touch it great journey to not just the second quarter. So can you naturally a bit more on the trends seen in July and August I mean overall advertiser Justin.
Oh, that's okay.
Have you seen any cautiousness on budget spending in lively geographic.
Elliptical attention and also bike category, let's say.
On my treble equal nice would you please explain more about how advertisers.
Thank you.
[noise] [noise], yeah for the do like I guess I can take it on its own painful a high level I know further and further comment it did all the.
Actually almost like again, just because we'll then take a minute now then Chris is that on unhealthy all deal.
So yeah, so I would say like it like what's what are those if you're saying that I would say in you know in July August weight would have or the same upgrade recovery, which will.
Optimistic about you know you franchise, you seem to get a bit I would say on the mobile I think the ads revenue, while you are growing nicely almost back to well it is.
So so like Labelle pulled out this trend will continue of course will have to be cautious because I'm also isn't this but.
Level, they see that lifting well without big its recovery in and it's very nice positive.
On the desktop side I would say no sought she's already ads for the said as you know as almost a you know recovery into the a you know only single digit Joel although it's a you know last deal and then hopefully that trend will continue so shell, so which is great in terms of you know advertising.
I would say you know if you look on categories a ways out traveling which primarily remains is is that you know equal north and if you. All goes I would say those already it back to the Lafayette level, maybe slasher high all showing tomo traveling or cost, it's still a bit impact.
Bob So we also see stronger Congress a few times your top very safe from June to July and then that trend also continues in August. So you know argument would be saying what revenue level cost. It feels it will still be dong, coupled with not feel.
You know the growth trend is very encouraging.
So I think thats more I could be a high level and but no further kelso comment a bit all the details on that most.
Yeah, I think we'll be will be quite careful in sort of laying out the trajectory of sort of the normalization and back to growth.
The only thing I can add its a reminder is at the beginning of the year, we we guided advertising to grow faster in 2020 than in 2019 last year. It grew 18 and and the start of the year. We were also well over 20% in year over year growth.
Since then.
Of course, we have Kobin, which has a impacted monetization. These days, but we also have more users than what we expected to have at this point in time.
So so I believe that outlook is actually quite positive when it comes through advertising in search monetization.
[noise] I'm thinking I have one follow up questions about the European seen pet.
So we note that the company is taking multiple initiatives one to management's opinion in the longer term.
Let's say in total so yes, how do you see our market position and would you.
He said, we sensed any lunchtime and shut them Ken Thank you.
Yeah. This is Derek I mean.
In terms of our market position I think the ideas continue doing what we've been doing which is growing our users.
You know committed side growing or monetization.
And then using our platform to launch new products.
Obviously has been successful over the last couple of years, but offer news.
As well as.
Microlending.
And I think when you look at O. list. When you look at the European Fintech and some other initiatives that are to really to talk about.
Our hope is that.
You know, we grow our search and advertising it historical or better right.
And then we find new businesses, the turbocharge growth so that.
That's sort of how we look at it.
Thank you.
Yes.
Your next question comes from one of leasing shall see I see.
Hi measurement. Thanks for taking my question I'm wondering whether you could provide updates on only business.
Okay, and then you and our monetization message on the business and also awake.
Yeah, well strategy. Thank you.
Yeah. So yeah. This is Tony Hill I I can just give a quick remark. So yes itself. So all this is lovely lost steam material. It's a very good example, overhaul we try and enable the local merchants to you know shred. It from the offline is is to be online business.
You know utilized we have in Q2, which averaged about six to me then most of that give you. Those compel is for me during the start of the deal which is not quite proud because that's because the base you know that's a big as a base.
Contract Nigeria.
You know monetization wise I think it's also a very good example, that's the way we have just announced the initiative overall you know also for business together with Google I think it that's a that's a very that's you know should actually all strategy that way well tried to pop you know, it's all the beagle guys like Google antibodies or the other playoffs, either regime to help those margins and.
Additionally, and use those you know battle monetize and also do Isabella transitions.
So like you like I I get you a little comps actually goes all this cycle multiple business and do a bit more interesting updates and and we feel that in general we are optimistic about how that can Paul the a you know the transition into a digital AD space, which you asked it is they have almost red bumps you haven't called basis.
She is because it's top on top of physical assets is good.
A line so I think what it's their products well well bill.
We'll be bought I think all strategy would be the same that we will try to you know built similar proposition seeing Africa, and even potentially in other parts of the wall, which is encouraging because I think we think all did I read a bunch to helping our transition from offline to online.
Okay. Thank you.
And that was our final question I'd like to turn the floor back over to supplement for any additional closing remarks.
She also Ah Yes also if there was no no further questions I think I'll, just say that they know guys I'm very proud overhaul Oprah has continued to exhibit ammonia uncertain times. The good meals is that all you know the opt monetization is bouncing back.
I have very exciting new initiatives that could really total Josh all girls and well positioned to take advantage of the structural change from transition Oh, no offline to online on so like it looked at all to take the good opportunity I'm you know together with all of you and thanks, everyone for joining us today.
And I have a good day.
Thank you ladies and gentlemen, this does conclude today's conference call you may now disconnect.
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