Q3 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.
Thanks for joining us and.
Morning, or this evening, depending on where you are with me today I have our co CEO soundly and.
And our CFO for Jack ups, and before I hand over the call. The phone line I would like to remind everyone that in the conference calls per day, the company will be making statements about its future results and expectations, which constitute forward looking statements within the meaning of the private Securities Litigation Reform Act such.
Such statements are based on current expectations and how we perceive the current economic environment and are currently subject to economic competitive and other uncertainties and contingencies beyond the control and management.
You should be cautioned that these statements are not guarantees of future performance you may refer to the safe Harbor statement and the company's earnings release for further details our.
Our commentary today will also include non high apparatus financial measures, including adjusted EBITDA, which are different from our consolidated financial statements that are prepared and presented based on IRS. We believe that the use of our non IRS financial measures provides an additional tool for investors to use and.
Evaluating ongoing operating results and trends these measures should not be considered in isolation, whereas a substitute for financial information prepared in accordance with the IRS.
We have also posted on our net supplemental information on our Investor Relations website that includes historical financial results of opera, reflecting microlending and retail as discontinued operations and pro forma for National Bank.
With that let me turn over the call to our co Ceos phone line, who will cover our operational highlights and strategy and then spread out who will finish up with financial and update on our investments and our expectations going forward the song.
Yes, sure. So yeah center, there and this is choline and again I would just like to say that you know sensible and full for joining OSL actually how in this reported label. So so and highlighted that you know this call weighted really showed that the strength all does the opera called business line.
And many of those we are still fielding zone and on it.
The way were able to achieve another nice gross and yourself and also engagement and all those all Brussels and ultra and deals [laughter] you know this alone.
Good day, she recovery and have led to all soft revenue already been bad and population the center and the last deal and.
Advertising revenue showing yield and young girls show and and of course. It is unique and you will be able to see that you know those revenue categories and to grow about two and a person because that is such and also does give us and that is ABS, respectively, and compelled that raise and the Arctic and Colo. So so in general and well ahead well ball.
Calibrate expectations and whether you feel great about all the trajectory.
And the same time, we have shown and discipline on the cost side and other results. We have achieved a 25% adjusted EBITDA margin.
Even while investing meaningfully and all European Fintech and other growth initiatives. That's all the other generating meaningful revenue and well also be flow that you know well still prioritize and growing the business you said all day and it Neal told EBITDA margins overall is still a growth company with.
Attractive opportunities that we are pursuing that all largest mud and will fluctuate you know before you crazy anybody on this level. So you don't have all this quarter's results really speak to all adjusted and also the lean cost base football structural.
And since we have been speaking about the gross and it's across all Brazil. We also feel that this is probably a good time to share some thoughts on how we do all shelves. So you know after the call. The Oprah is all from Brussels and.
Although two decades, we have demonstrated that you know this is a very good business that does a room full independence, well and niche oriented and play also this is the system people girls and.
Well, there's no. They did a weighted examples you know standing from multiple jobs done a lot expense management to the integration of mass and Jones Lang Lasalle and Wearables originally did with it and it was extremely was Spotify and get your music and have been out of those Oh girls and panel doubled and PC game, all we called Ultra Gx is.
Another Great example.
We have no grow and to well over 300 million, but also use those and.
You know this business also brands and very predictable and nice and growing you know driven revenue streams and the very high incremental margins.
So were very pleased about and the core business, though so as a male on pulled from.
He's also walked away from a fault you as all Brasil plus strategy, so well and proven all several times that zebra also with its user base Brown and Paul and to give them more how it is used as an entry to the web is an excellent platform to launch new products and services. So this is well it.
Really moving from that nice and steady growth hormone cool to see accelerated value drive off that way other products, having achieved all those apotheosis.
Some of them have been called me Palo <unk> core business like all AI based content and accommodation pencil and ultra nails and have now exceeding 300 million Bucks and yourself and having been called me and for instance, Africa, the biggest comp and to publish all telephone.
Other it's also you know, including selling investments like okay, and dangerous because the mobile payment solutions and also none of them.
Okay and may jump into it and they all for emerging markets. So when we look ahead well very excited about the significant additional growth potential debt do Brasil plus strategy temperatures and for the next deal and beyond.
So what does that seem to mind that the background.
You know we also quickly talk about some recent trends and and development.
You know what continued all trend up and your growth you saw portal and.
Well I'd be averaging over 318 million and yourself.
This was driven by the growth across all key regions Africa, Europe, So I'll say show and also old telephones and.
Beginning with all coal production all Brussels, you know they continue to show very solid gross increasing almost 200 million and they use compel was the second total if you look at all PC relative your sales were helping grow overall tempus and you all the yield to simplify and been in Salt Cool and then you put the income.
Oh, we have offered yet Oh, Danny Brasil has rich five minutes most active guy most instead Campbell that these three times up yield today, and you know the trend or something else.
And mobile and well see not very soon and have started to Alaska <unk> well, we have seen strong results and Africa, well exceed long and 15 minute yourself, you reported <unk> deal to product and relevance and also all Ukrainian pedicle relationships.
Also seen very strong growth from higher and the mobile girls, all people and George which has grown Tulsa and you do a compound that was the second total.
And you know you know looks like and if we're moving to all you know Russell plus product all from deals.
It's a strong seasonal momentum have continued.
While total well you know and they use has growing from approximately around 40% you all but you will you know the growth is fueled by ultra deals has again become a critical hot fill those hobbies and I cant nettlesome <unk> local deals.
And you know as mentioned before opening sales he's already debt the biggest called and the publisher platform and after a couple ways roster and sell them off and you know how far is every day.
And finally and.
Oh from news is also making meaningful progress races eat monetization well revenue growing roughly 70% you feel compelled that was the same for the last deal you know deal two more years also increase the other even three and also battlefield through debt tied to the cold and not having pets.
You know, we're also getting a bit from the broader monetization that we are seeing a very slow recovery trends, which have continued into the fourth call and also beyond the Neal income tactical our non core monetization potential well continue to benefit from Zee offline to online transition accelerating and also all day.
It you monetized and all you do you have other developing markets such as Africa. All the time you know for example, ultra has already reached the top 10, and Google and to programmatic humans right. What line right. So this really speaks to all momentum opportunity and.
Again, while police and also to see that offer and it was becoming more and more about your real 12 revenue, even though and you know touching on wallboard next the big initiatives and wells are very excited about it and we are making significant progress ways European debt.
And again this initiative fits well within all Brazil plus strategy.
And you know they have more than 50 million addressable your those either bridge and.
Oh, you love to make our line equal most transactions through all Brussels.
When she becomes a difficult point of sale for many of those consciousness.
This place US you know very strong position to kickstart innovative and national and and it's all this is which has the potential to drive major GMB around ecommerce and to read it accelerating all gross income into the won and beyond. So you know we have been testing all force product you spin as weighted.
And they should all day.
By helping to the offering and were very pleased with the audio result.
Our next day, well be to form and and onshore pro left on L. brand and you know this will be followed by Atlanta launches and several other European markets and put it.
And the one lots.
I forget and were very excited about it and we'll keep you updated on the problem is sales.
You know just to wrap up and.
The way I look forward to the end of this year and into 2000 and the one I'm truly excited about <unk> prospects. All brought all friends called tends to do well off and they will dissolve the hospitals and be called me a material country, but all other revenue and well very exciting.
Obama and new initiatives that we believe could drive significant growth so with that let me hand, it almost a fruit, which we'll talk about all cues from result, and also future expectations.
Thanks, and then.
Before I get into the numbers I'll say, a few words about the changes we have made that affect how we present, our financial results and the third quarter two such strategic changes are irrelevant.
The first was the previously announced creation of Meadowbank, where we contributed our micro lending business and exchange rate, 42% ownership stake and the joint business. That's.
That's a consequence revenue previously reported under Fintech, along with all the Rep and attributable cost.
And now were excluded from our historical operating results and.
And you will see the post tax profit off our former Microlending business reported as discontinued operation.
As promised well continue to disclose and a bank operating results given our large ownership stake.
To provide historical comparable we are today also publishing and I don't think per forma financials like water and so you want and stuff and Mike.
Our other relevant decision and the quarter was to discontinue our retail business.
You May remember that we launched this initiative and late 2018 with the intention of boring opportunities and the E comm systems around prepaid mobile credit and mobile phone sales.
We now concluded this to Terry Ltd, strategic potential and do not see a path for that business to contribute meaningfully to our profit.
That's a consequence, the revenue and cost previously reported on the retail are also presented as discontinued operation.
Now moving onto the third quarter results.
Revenue for the third quarter was 42.4 million, excluding both Microlending and read this.
This compares to 32.2 million GAAP revenue and the prior quarter or a sequential growth of 32% and we've recovered from cold and in fact the monetization.
Specifically and the quarter surge was 21.2 million down 1% year over year and up 20% sequentially.
And improved each month of the quarter with August and September returning to year over year growth.
Advertising was 19 million up 4% year over year and up 50% sequentially.
The sequential strength was driven by a return and sports vertical and growing and monetization from offerings.
Finally tech and other revenue.
Point and milling this.
This was relatively flat sequentially year over year. This revenue category has been reduced by 5.8 million, although with almost no impact and profit as the decline relates primarily to low margin professional services and opaque.
Our operating expenses were 39 million, a sequential increase of 4%, but down 15% year over year.
And Clinton around marketing and other variable.
As a result, adjusted EBITDA was positive and 10.7 million and before this represents a 25% margin, which compares to five percentage and the second quarter as we benefited from strong increases and high marks and certain advertising revenue.
Post tax profit from.
The news operations was 6.3 million, while net income was 154.4 million.
The Delta is largely driven by the gain recorded from the National Bank transaction, namely that recorded their volume of Barton and all banks here. That's the book values of our former micro lending business.
Our operating cash flow was positive and $17.4 million for the quarter were the biggest drivers where underlying profitability and from collection.
Our major cash outflows in the quarter, whereas in my 39.3 million of cash that's followed our micro lending business and I don't know, Brian and repurchase is for our own share of 22.4 million totaling 1.6 million.
Everything else and at all and cost and the 4.1 line. So.
So net total cash and marketable securities and <unk> by 40.2 million and during the quarter at 100 and line.
And.
In terms of our share buyback program at the end of Q3, we had repurchase core porn 97 million adss year.
Year to date.
Right total spend of 40.9 million, averaging 822 per idea and.
And leaving 9.1 million up additional share repurchases under our announced.
And buyback program.
Now moving to our investments, which will devote more time to do going forward given the importance of the upside they represent to our shareholders.
And now bank continues to recover from called at 19, and packed with metrics, improving and all geographies during the third quarter.
Indonesia is now close to greet called and level with India and and the out also recovering but at a slower pace and Mexico, while still early daily life.
For the quarter and on a pro forma basis, none have been posted revenue of 34.9 million Oh 87 per cent compared to the second quarter and disbursed, two and a half no and loans, representing 155 million and total value.
Adjusted EBITDA was 8.8 million and gross profit were moving.
As a reminder, non non bank has prioritized profitable and b versus the past and scaling with more credit risk.
But that said, we expect revenue to continue to scale rapidly and the fourth quarter and with and we expect to see a brief strengthening profit margin.
Ladies and gentle bank, it's on a trajectory to reach greet called mid level within 20.1.
As a reminder, and the fourth quarter of 2019 nano bank generated nine.
<unk> million in revenue and 37.8 million adjusted EBITDA.
We're also seeing strong momentum from our other investments, Okay and star maker and believe both have tremendous upside potential.
Oh pay continues to grow and.
Payment offering and.
And October Okay process, and gross transaction value of 1.4 billion on this platform more than three times and level and generate.
Further we expect that okay, and we'll be expanding beyond Nigeria soon and believe and continue to grow its payments platform and elevated growth rate.
Star maker and continues to scale and well growing users roughly 80% year to date and more than doubling revenue year to date and.
And your old run rate of over 100 million.
Opera hold 13.1 per cent, okay, and 19.35 per cent all star maker.
Now moving to our forward looking commentary.
We continue to see improvements and our business trends, we had returned to year over year user driven and revenue growth and are positioned for further improvements and the fourth quarter and for double digit growth and 2021 before taking into account potential upsides from your initiatives.
Or browser and is continuing to outperform our expectations.
And that we're getting into some of the specifics thus.
Thus far and the fourth quarter and search and advertising growth rates have continued to get better and we expect that to be a five percentage point improvement year over year, and all right versus the third quarter.
Used her game and monetization bouncing back are the key drivers.
Thank you and other revenue well flat to down on a sequential basis, though as previously discussed profit contribution should not be affected by it and resulting in year over year reduction.
Combined this leads and they expect fourth quarter revenue of 45 million to 47 million up 9% at the midpoint compared to the third quarter.
Additionally, we expect much of the increase and search and advertising revenue falls to the bottom line and who basically offset the increased investment we are putting towards our growth initiatives.
And such we expect adjusted EBITDA to be 10 to 12 million, representing a 24% margin.
And.
Beyond Q4 were excited about entering Twentytwenty one from a top line perspective, we expect to benefit from multiple factors. The strong news for gains we've made throughout from lumpy you acceleration from offline to online and more normalized monetization why.
While we'll provide full guidance.
And the warm on our fourth quarter call. We thought it would be helpful to already now indicate a revenue they find and expectation.
200 million for next year, representing approximately 25 per cent grow over 20%.
This expectation is based on continued acceleration and year over year growth rates pork search and advertising.
Bill we consider our assumptions around our core businesses to be relatively conservative and hopefully, we'll see similar results and some that pad and the pets with additional upside.
There was also a wide range of potential revenue contributions from new initiatives for the time being we have been conservative and only included small amounts of revenue contribution and we would rather add to our expectations and initiatives progress.
In terms of adjusted EBITDA, it's premature to provide specific expectation now as many of our new initiatives are at the very early stages.
Data points over the months ahead will determine how fast these product scale, the tightening up and and how much we will and.
However, we do know that search and advertising revenue growth will be margin accreted similar to what you've seen and this quarter.
To wrap up our business trends are positive growing users and your revenue growth coming in ahead of our expectations.
Our focus on our strategic opportunities with great potential to build something much bigger and we hold investments that we believe will drive value creation for of course shareholders.
We're very excited about the future and look forward to share and hard story along the way.
I think we can now take questions.
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Our first question comes from the line of Lance the Tanya.
Hi, Collyn.
Hi, guys, thanks, and congratulations on the quarter EPS.
It's good to see revenue per and they you rebounding.
And we're still way off pretty total big Pete and I think you reported Q 19, and when I look and thank you for providing the store sales by the way, but I believe that you know 14 nights and revenue per employee was over $48.
So you still have some room to go there do you think and secondly, co that concern.
Actually caused revenue per and they you dipped lower again before we eventually we take that and when the new Pete.
Yeah, probably here I can maybe begin so first were very piece with the with the trajectory that we have seen in Q3, and and what we're seeing going into and through Q4.
Monetization on a per user basis, it and as you.
Say still lower than what we've had and the past, but then what we've what we've also seen this increased engagement and and more activity more inventory, but for our EPS.
So.
And so and should be looked ahead I think we will continue to benefit from the assets that we have built up and the strength and user base over over this quarter. We also have the most.
More diversified revenue mix now than we had pretty cold and and but it's a bit too.
Two two and to say when we think the per day per user.
Net economics will be the same.
That's it was pretty cold.
And last this debt Derek I mean, one thing to keep in mind and the year ago quarter, We did almost 6 million of technology revenue.
Which doesn't really relate to our user base.
So when you look at our search and advertising revenue.
It's going to be up year over year in Q4, So we're actually going to do.
From opera news or from the browser higher Merck monetization and what we did a year ago. So I think we.
Yes on the top line it doesn't hit there because we have that headwind from.
Some professional services work, we debt, but the user driven stuff is actually above its pete or should be above its peak in Q4.
Well, that's great and then I think the numbers I'm looking and I'm, taking that technology licensing out of the equation dark and and so look my point is I think that you know you've got this opportunity where you're expanding your your user base and now we've got recovery and.
And your per user economics, so there should be quite a bit of incremental revenue and that continues to improve I'm wondering if you could comment a little bit on what the incremental sort of margin profile is right, presumably as monetization picks up I would think incremental margin on that and the additional revenue would be quite high.
Great and maybe the cuts against bad or worse and most of that just you kind of flow into the bottom line.
I think you're correct. If you look at ER, and search and advertising revenue and and ER isolation for our existing browser and use products and very very high flow through from incremental revenue to profit.
So okay. Thanks, so on the guidance Q.
Q4, he strength there 45 to 47 million from the news that that's already a little bit better than we had modeled coming into the quarter, but what surprised me. Most is the EBITDA the margin, which when we look back its EBITDA margin has been a little bit all over the map and so.
Yes, you did 25% margin this quarter, you're guiding and 24 per se, that's more consistent and I think we've seen over the past couple of years. So can we sort of think about that as as maybe some sort of new plane or new trajectory or what do you think about 2021.
And dies and you guys and a lot going on these new businesses should we expect the quarterly EBITDA margin will it continue to be as volatile as it's been in the past.
So.
And.
I'll begin by saying, if we did nothing between now and sort of the end of Q4 and we we we are tracking towards the revenue guide line that we gave and and that would have increased our EBITDA margin in Q4. The recent Miss don't guide for it to be.
And he might be.
Also from expects to invest more and our newer initiatives are in Q4 compared.
Compared to Q3.
Okay, sorry, and had a little bit of phone problems and line in but let me just get my last question and then I'll get back and Q and that is on the revenue guide for two and full year and I apologize. If you could just address this because my phone was cutting out but just to be clear the 200 million and.
And that you're talking about that and that compares with the hundred and 60 million or so that you'll reported this year from continuing ops and other words retail is excluded from that 200 million.
Correct.
And that's a 25% quickly that obviously was less this year is cold pressed and but it's still up about 13% year on year or not it's up about 30% from 2018. So I guess my question is is that 13% growth rate over the sort of unexpected 2000 and making.
Is that perhaps and more reliable indicator of the longer term growth rate and I'm just trying to think about what do I do in my model for 2022 here.
Now and with that.
I think when when we began 2020 we talked about.
Let's say more baseline levels of advertising gross or above, 20% and and search revenue and gross and and sort of the mid single digits and a normal and steady state scenario.
And then of course, we have accelerated our user growth more than we expected our and the fact that we are back to year over year gross now really speaks to that.
Even though on a per user basis as you pointed out.
We still there is still more cobot impact.
Left and to normalize.
And.
When.
Let me just think what was the beginning of your question.
So so.
When we yeah. The final comment I want to make is that.
We we are providing the $200 million indication as a base line as we realize we've made changes with national bank and and retail.
Of course, as we also talked about we our ambitions are greater than net.
Okay. Thanks, guys I appreciate the time.
Our next question comes from the line and the leasing out of Citigroup.
Hi, Good evening and good morning management, Thanks for taking my questions I wanted to.
And.
Oh overall advertising monetization first when we look at 35% and then you grow flow your authorized news.
Could you share with us somewhat these new user right. They use a profile from these new use and coming on board.
What type of you know.
From South Dakota, each school right and Dan.
How long day spending.
On the news per day.
And the reason is that I wanted to understand the monetization.
You know along the way right because you should be monetization asset we'll follow the usual growth might be maybe three to six months and back.
But I'm just trying to get some expectations.
Coming from you know the combination and so on these new user profile, what type of new industry, Bloody cold appetizer and debt.
And the truck down total, especially into next year and.
And if you could remind us and net that they want other current app note.
And also opera meals as a percentage of contribution between the appetite and revenue. Thank you.
Yes, so its only and all I think I'll just try to try and give some crazy. She said it on the U.S also said that and and through the and and kills and so so how did well I would say that you know from all the major proposals and you'll see those are still primarily in all key and use market that is Africa and to some extent also you saw.
Good day shop, I think is the primary relative is actually is feeling the current reduced which is after John.
You know I would say, that's probably still the most fundamental characteristics of it. That's it you know they have to because there's still you know tradition, and very strong and Nigeria, Kenny and South Africa, especially as well. We also you know collaborative ways Ultra and tell us for you know the flow of initiative. So that remain all standpoint, and major dry most for the other user base.
You know when it comes to monetization I would just flexible and all that and you probably also see the correlation that's and revenue ads revenue wise and Neos Liberty, we reported about 70% quality flow growth sorry.
Sorry, 70% of gross income probably the same quarter last year. So it is a very strong gross already much higher and then you know absolute amount or would you look where sales you know sort of us and.
Like two times altogether wells or so so with that in mind I would almost call months that I think will now you Africa. The steel will be meeting from call us steel around you know monetization capability and that the rage and Rotce as we all know that the average CPM African skill national maybe one tenths or you know one thats all volume and the other regions. So.
I think were still waiting for that time, and well you know what that's Reggie and general continue to grow and we'll hopefully see even though exit rate and gross of it so.
So sorry, and maybe that's a very simple high level, just switching off what we see on the heels and you know how perhaps you could do a model around the for the other increase on EPS.
That's revenue, especially on the news or other deals.
Six nobody would dip and I hope that we will still maintain perhaps the higher gross.
Most of this income families appeal and use of wells.
Yeah, So like maybe that's the called and said what other than that I would have.
And colors on some of the industry body clock that we could potentially you tried to penetrate into next year.
Yes, sure I guess, it's more you know like I think he you Africa. Adjusted this this year and also be special rights. So I think what we'll see you know high level maybe per se that.
Most part of the law that you eat out to say, if we used at the gaming and mobile game, he's actually loved and major part of the ads revenue and so it's not to the casing Africa you know because for non maturity Africa is that you know and love the AD spend by skill and people on the traditional and say all creates all day. So you know loyalty calls you know because over the last feel by fog and most the reaching.
So based not everybody can use online and.
And they know for instance, you know it doesn't really have mobile gaming, but he doesnt have you know a concept that's both gaming well you know how to give it and not you Pee all like English Premier League and I'll go through it. So I would almost say that you know this feel at least the deal to close. This we'll see a you have a much stronger will focus on a line because the old line is on.
Must and will not possible regimen and place not closed and we'll see you in places like Africa, you know, it's actually he did affected more than some other place right. So so where you know I would almost feel that way I ask the benefiting a bit more than usual because of the transition.
From a much more aggressive transition from offline to online because in places like Africa, and steal too much on line condos and other places, but now we see the transition actually move possible right. So that's probably why I think lastly, well below then you know like I guess and I'll do the gross in terms of monetization and my prediction and that's called we'd welcome seems to be with us.
Probably especially Africa for the next day I was shocked me also and we probably will see the seasonal trends continue and.
And next deal that's the majority will still be on online and also exit or do you have and transition from offline to online.
Thank you so.
Our next question comes from one other John Goodman of Lake Street capital.
Hey, guys congrats on the quarter and thanks for taking my questions.
First I was wondering if you could peel, the onion and a bit on the utilization trend and.
C and what is kind of given you profit that you think that's and continued going forward and just thinking about you know how sticky the cohorts and kind of new users and both on the grounds are and the news platform as planned or.
Okay.
Okay, and so like I said.
Yes so.
And I'll just start there so it's not like I'm not sure about London bus and he'll you'll clearly show. So apologize you fund and not to the point you know I think in general once we see during the course of time and that the the order you will see those how's gross Hello.
I understand I guess, because you know you don't actually spent more time on line and then on line because he also more more you know relative to source will then right. So yeah. So like I think what we would see is as you know both some debt still.
Which is actually many from Europe, and we see a lot of your those actually using.
Neil Neil you those are using this will not you all from them before and just because you know they find out that says and hold becomes really go into all that just from a natural for them to use it more frequently and I'd be saying that as you know a little bit relative aspect. It's the same story that you know people get use they'd be more because they can't.
They rely only and will heavily of course, he's also possibly benefiting from the pro and which way.
Walkaways Altria told to also launching and it'll kill them to you know helps have enabled EPS and I'd be same as well from Nielsen out. So you know all the tree relative you don't actually have beaten crazy and.
Based on it so you know and I can.
We've got to be very specific and because there is always to be hard to predict it but I would almost say that well I think the trend will definitely continue.
Other way probably until you know sometime next deal and you know I actually feel that it's it's not 10 price. It just because it's not and you'd like habits and dresses and moment, you, though getting used to have and it didnt Dom and it's been done online I think it will be very difficult for them to go back off line and getting you know what used to keep lots and lots of gaming people you pretty much the you and you know doing.
From a you know sports gave me some intellectual but at the moment you actually getting used to do it on line I think on line will actually eventually become used the majority Pablo this is anyway. So yeah. So you know saying around deals that if you get used to a you know see the news on the athletes from and that's likely to buy and you'll see line and so yes, there will be fluctuations there will be some.
You know normalization, but the high level, we see that trend different it sticks and so you know the trends moving from most lunch on accelerating and especially in places like Africa, well people and not so used to before that's not that used to now.
That's helpful. And then second thinking about kind of your priorities for investment and the coming corner and into 2021, how do you think about kind of weighing investments and current initiatives and potentially expanding into new markets versus some of the other new initiatives such as always.
Just and anything else you guys have been working on.
Sure. So I'll cover this also called it a bit. So so you know further can probably also cold winter, but I would almost say that.
You know there was a feeling so definitely see right. So you know first of all let's see that's a deal to the probably the enhanced which I feel deal on that we're still comfortable to focus more on on line for instance, which means that you know since you mentioned all these threats. So I think and you know just to do really well and all of your those but I think and you know line comes Q.
And your best money, especially <unk> and prevent the vessel doubled the combination will play online right. So that will be less and we say because you know I think it's really fair to say that even now is from and not just I mean to your best too heavily on both lines those and those responsible for that.
For those kind of sales right. So how do I would say that's all focus will now will be little even more on line, maybe less frequent and those combination will be fueled by online because now it's not the best time, you for that and.
Other income and I would say that.
Will unfold and maintain already a very strong position. After account, we do see very good opening to see Europe.
Just had to build it and that's because you know be called possibly radial field force that we see those very strong growth. Some desktop and everybody was also seemed a little bit and put it is right. You foremost has that you know for a particular desktops. All these other illustrate touch them before so way. That's also why we are saying that you know offers us well probably be also around all your p. fintech.
I don't know if index. So that he may not know plays as you know, but you know we feel that the real and equal most slashed and they go because you did new York on opening up the call though.
You know Pompey related.
And with the pandemic and it's just too good opportunity to to northwest sales, so that will be nickel and.
All right. Thank you guys.
And again, ladies and gentlemen to ask a question. Please press star one. Our next question comes from the line of Lee Chrome of B. Riley Securities.
Great. Thanks for taking my questions a few just kind of and some minor details first one on the Q4 guidance does the current guide and have any assumption for.
Kind of second wave impacts and and we've seen Lockdowns and Europe.
Or any elements of your guidance reflect.
Perhaps you know this locked and dynamic that we're starting to see and real time.
And it's Uh huh.
Hey, Andy.
It's a forecast based on the very basis data that we have so so it's just a couple of days back in time.
And so it's based on a reality as it is now.
Okay.
And then.
On the on the.
Incremental investment front, both from Q4, and and perhaps and the 2021.
Could you may be kinda itemize or break down where specifically are you spending and I guess the reason I'm asking is.
It is it is are these investments are.
Focused on building brand awareness through you know marketing investments or is there more operational and product specific investments.
Building headcount and and capacity to fulfill skill and growth.
Sure so.
When you look acute current implicitly and our guidance, there's a two to 3 million and additional investments and the the bulk of that money is between the personnel and staffing up and marketing so that the those are the two primary areas.
Where you will see it.
Got it Okay and then when we think about the guidance for next year.
Could you maybe talk about the assumptions around a return of spend from a critically impacted verticals such as travel and.
And then secondly, with regards to that guidance you guys kind of highlighted that there is a.
A fairly wide range of potential scenarios for new growth initiatives contributing to revenue growth.
Could you, maybe just specify or rank, where you would expect the most growth to come from from new growth initiatives would it be the fintech solution or.
Is it a combination of from Tech solution and no list or are there perhaps products you haven't announced yet I'm just trying to figure out what sort of mix and and where the orders of magnitude that there's potential growth from from new initiatives and and what specifically they are.
Sure and so beginning with the first question on on verticals and it's of course hard for us to to say now how that specific day would look good going ahead. If we if we just look at the trends we have seen.
And this quarter, how we compare and now versus pre cobot same quarter last year.
Overall, I would say, we see pretty stable activity on a per user basis for easy and ports hurt from mobile.
But we're getting much more activity per user related to advertising on mobile and.
As engagement this is increasing time spend and and that's up from news monetization is.
And it's growing.
And of course, our user numbers have grown but the per unit pricing is still lower than last year, and and we see that searches recovering faster than an advertising, let's is predominantly related to the geographic footprint.
But from a revenue sources.
And when we talked about and wide range of.
And.
Total revenue impact from these initiatives. The reason, we say that we're all day [laughter] thing and then once we see something work and we are happy with the unit economics, we scale and we want to be a bit cautious at this point and time to to be too specific around VX.
Fixation sales as I mentioned, we'd rather.
Starting with a base line that we are comfortable with and then update you with our expectations as we see the initiatives perform.
Got it and then last question from me you guys to kind of highlight in the press release.
You know your your select investments and and kind of outside operations, Okay start Medicare et cetera, I'm, just given that the solid inflection points in those businesses would.
Would you expect to make any incremental investment and in any of these kind of outside investments or Conversely would you anticipate to monetize any of these assets.
Call It and the next 12 months.
And as a general answer I would say, we try to always look rational on our investments and do the best thing for our shareholders. We are extremely pleased with both the company's you and you mentioned I referenced some of their operating a matrix.
And metrics and the past quarter and and I think we'll.
We we will evaluate this and if I can go by and and and announce it we make and changes but for now we knew we definitely see the value potential and both of these companies.
Significant and are very pleased when and how they are performing.
Got it thanks for taking my questions guys.
Sure.
And ladies and gentlemen that was our final question I'd like to turn the floor back over to phone and then for any additional or closing remarks.
No I think I think maybe the last column and it just be that's a you know I think we have 'em, we have a very due to house equal and and you know hopefully this trend will continue in Q4, and and we have high expectations to this and one.
Both for our core business, but also for some of the new initiatives. So like again I think it would just like to say that central other people for supporting us and will continue to choose to perform and hopefully above and beyond expectations, So and I think people joining us.
[noise] and thank you ladies and gentlemen, this does conclude today's conference call you may now disconnect.
And.
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