Q4 2023 Opera Ltd Earnings Call
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Welcome to the Altra Limited's fourth quarter and full year 2023 earnings call. At this time, all participants are in a listen only mode.
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Operator: Please be advised that today's call is being recorded. Lastly, if you should need operator assistance, please press star 0. I would now like to turn the call over to your speaker today, Matt Wolfson, Head of Investor Relations. Please begin.
Please be advised that today's call is being recorded.
Lastly, if you should need operator assistance. Please press star Zero I would now like to turn the call over to your speaker today, Matt Wilson head of Investor Relations. Please begin.
Thank you for joining us as usual I have with me today are co CEO song Lin and our CFO <unk> Jacobsen.
Matthew Wolfson: Thank you for joining us. As usual, I have with me today our co-CEO, Song Lin, and our CFO, Frode Jacobsen. Before I hand over the call to Song Lin, I would like to remind everyone that in the conference call today, 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 statements are based on current expectations and how we perceive the current economic environment, and they're hardly subject to economic, competitive, and other uncertainties and contingencies beyond the control of management. You should be cautioned that these statements are not guaranteed for future performance, and we may refer to the Safe Harbor Statement in the company's earnings release for detail.
I hand over the call to song Lin I would like to remind everyone that the conference call today, 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 statements are based on current expectations and how we perceive the corner.
And they're hardly subject to economic competitive and other uncertainties and contingencies beyond the control back you are cautioned that these statements are not guarantees of future performance.
Are you starting to the Safe Harbor statement in the company's earnings release for details of our commentary today will also include non I R. S financial measures, including adjusted EBITDA, which are different from our consolidated financial statements are prepared and presented based on how far out we.
Matthew Wolfson: Our commentary today will also include non-IFRS financial measures, including adjusted EBITDA, which are different from our consolidated financial statements that are prepared and presented based on IFRS. We believe that the use of our non-IFRS financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends. However, these measures should not be considered in isolation or as a substitute for financial information prepared in accordance with IFRS.
Believe that each of our non Ifr S. Financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends. These measures should not be considered in isolation or as a substitute for financial information prepared in accordance with the Ifr S. We've also posted an unaudited quarterly historical financial results of opera.
Matthew Wolfson: We've also posted unaudited quarterly historical financial results of Opera on our investor relations website. With that, let me turn the conference call over to our co-CEO, Song Lin, who will cover our fourth quarter operational highlights and strategy, and then Frode Jacobsen will discuss our financials and expectations going forward.
On our Investor Relations website with that let me turn the conference call over to our co CEO song Lin, who will cover our fourth quarter operational highlights and strategy and then sort of Jacobs and will discuss our financials and expectations going forward. So.
Lin Song: Sure. Thanks, Matt. And thank you to everyone joining us this morning to review our full scholar results. We are excited to announce yet another great scholar. Revenue of $130 million, driven by strong organic growth payout, with costs basically resulting in $28 million of adjusted EBITDA, well above our expectations. For the full year, revenue was $397 million, and adjusted EBITDA was $94 million. The fourth quarter of 2023 builds upon the strengths we saw throughout the year. At this time last year, we guided revenue growth of 17% for 2023 as a whole, with a 20% EBITDA margin as the midpoint. Even after raising the midpoint of revenue and EBITDA guidance every quarter, we were able to consistently beat those expectations, ending the year with revenue up 20% and an adjusted EBITDA margin of 24%. We are very pleased that we have been able to consistently deliver revenue out of performance while spending less than anticipated on marketing and accelerating our margin expansion. This also highlights our ability to consistently attract new users, primarily through organic channels. We did not waiver from our strategy to focus on high after-results.
Sure.
And thank you to everyone joining us this morning to review our fourth quarter results.
We are excited to report yet another great quarter.
Revenue all hunger shopping demand driven by strong organic gross payout rates Costco basically with all the 28 million of adjusted EBITDA, well above our expectations for.
For the full year revenue was 397 million and adjusted EBITDA was 94 million.
The fourth quarter, all but put it in their three build upon the strength we saw throughout the year.
This time last year, we guided revenue growth of 15% for chemical industry as a whole.
Is it 70% EBITDA margin at the midpoint.
Even after raising the midpoint of revenue and EBITDA guidance every call.
We were able to consistently beat expectations and be the Yale wage revenue up 20%.
And then adjusted EBITDA margin of 24%.
Yeah.
We're very pleased that we haven't been able to accomplish is made illegal revenue outperformance.
While spending less than anticipated all marketing.
And that's generating all of margin expansion.
This also highlights our ability to attract.
Attract meal, yugo and marrying that through organic channels.
Wei Didnt north wave off drama off strategy to focus on high often gives us.
Lin Song: As expected, we are starting to see signs that high-up user growth is upsetting; low-up user churn raised a slight increase in our total user base during Q4. Annualized output grew to a record high 1.44% in the fourth quarter, up 72% year-over-year and 10% sequentially. This was primarily driven by high-value users, as well as Opera GA. 2024 will be more of the same, with the goal of continuing to grow this user base, both in Western markets as well as high-value results in general. This focus on high-value users coupled with the stronger product portfolio and ongoing efforts to continually improve monetization puts us in a very exciting position. We are still a relatively small company with lots of potential remaining in the core browser business. During the quarter, out-of-county revenue was 68 million, growing 20% year-over-year.
As expected we are starting to see signs that the high opt to use all else equal tricky Milwaukee Hugo churn rates are slightly increase you know all told me he was a base during Q4.
Yeah.
Annualized op, who grow to a record high one point to 44 cents in the fourth call up 72% yellow, but yeah and 10% sequentially.
This was primarily driven by high value as well as opera Gx.
'twenty 'twenty four will be more of the same way the goal of continuing to grow lead because those.
Both your western markets as well as high value vehicles in general.
Combined these phone calls out hot topic.
Coupled with the strong product portfolio and ongoing efforts to continuing to improve monetization puts us in a very exciting position.
We are still a ridiculous small company with lots of potential remaining in the call, but also business.
During the quarter all advertising revenue was.
68 million growing 20% year over year.
Lin Song: Advertising was strong for both our owned and operated inventory, as well as Opera ads, with a particular strength in the retail vertical during the holiday period. Advertising now represents 60% of Redmond. Such revenue was $45 million in the quarter, up 15%, which we are also very proud of given the maturity of this revenue category. As we shift the mix of our user base towards higher monetization regions and user groups, we can generate such revenue growth well beyond the underlying market growth of such monetization. Last quarter, I outlined three core growth drivers: the genealogy of AI and the work we are doing with ARIA.
Advertising was strong for both our owned and operated inventory as well as opera ads.
We saw particular strength in the retail bulky called during the holiday period.
Advertising and marketing events six defense all the revenue.
Such revenue was 45 minutes is a cohort of 15%, which we are also very proud of given the maturity of this revenue category.
I wish it meets all of our user base.
Hi, monetization through agents and user groups, we can generate such revenue growth well beyond the other lai market gross absorption base monetization.
Last quarter I outlined three core growth drivers.
Okay, Nokia they die and the work we're doing with Iberia.
Lin Song: Advertising Opportunities, And finally, our gaming focus, Ray Volker, GX. I want to give you a brief update on each and how they shape our focus for 2024. For several years, we have used AI to help power our new content products to deliver relevant and customized content for our users. In 2023, we'll step up those efforts, Specifically, rolling out ARIA, our browser AI.
Advertising opportunities.
And finally, our gaming Pogos right Volcker G X.
I want to give you a brief update on.
On each.
And how they shape also calls for 'twenty 'twenty four.
For several years, where have you pay us to help power our music content products to deliver relevant and compromised content for argue those.
In Q3, we stepped up no that helps.
Specifically roni al IL al umbrella.
I really have received great feedback and provided another appointment of a country that supported our user growth in western markets.
Lin Song: ARIA has received great user feedback and provided another point of attention that supported our user growth in the Western Market. However, we need to be mindful that the whole industry is still in the early stage of its potential. Users can benefit more from AI assistance than they might consider themselves. The muscle memory of routine is strong, and many integration points within the industry need to be reviewed. As we embark on a new year, we continue to iterate and are very excited for this next chapter in the ARIA story. We want to integrate ARIA Fuzzle into the BrowseExperience, assisting you guys to be a lot more efficient again.
Yes, we need to be mindful that the whole industry is still is the early stage of each potential users.
He was off can benefit more from the AI assistance.
The Microsoft they don't themselves.
Lots of memory all the routine is strong and then the integration points within the industry needs to be rebuilt.
As we embark on the New York.
How do you look at rates and I think excited for this next chapter.
Oh, sorry.
We want to integrate them into the browsing experience.
Assisting you goes to a lot more efficiency gains, whereas all of it relates to the policy of the web itself. Okay.
Lin Song: Whether it relates to the browsing of the web itself, obtaining or processing information, or content creation. As a browser and as an independent ecosystem player, we also have a unique opportunity to help users navigate the broader AI space and simplify their experience. On top of that, we see potential to help less tech-savvy users take advantage of these technologies while enjoying heightened levels of privacy and data protection. In short, the opportunities are huge. Our reward for helping our users benefit from ARIA is observable not only as part of user growth but also within engagement and in indirect and direct monetization opportunities, from our monetizable links in chat environments to intelligent recommendations based on the browsing code. As you may have seen, we have announced that we are pairing our product development with a significant investment in our AI infrastructure with the launch of a new data center in Iceland. This data center will be powered by green energy and take advantage of the Atlantic climate to reduce cooling costs.
Okay.
All culture take information or content creation.
As a browser and independent ecosystem player, but also have a unique opportunity to help us navigate the broad the AI space and simplify their experience.
I'm, Paul we see potential to help less tech savvy yourself to take advantage of these technologies.
While enjoying heightened levels of privacy and data protection.
You show the opposite all the candidates are huge.
All of these wallets for healthy hard you got the benefit from Iraq emailed to go up about not only as part of the growth, but also the engagement and the indirect and direct monetization opportunities.
My Mom is high school age and chatting environment children, Penn, Virginia recommendations based on their browsing complex.
You may have seen rate have a bounce back well Perry our product development rates that significantly investments in.
Oh, Yeah. He first shop shop lays the launch of a new data center in Iceland.
This data center, well be Green energy policy and take advantage of the Atlantic flying it to reduce cooling cost.
Lin Song: And in general, we pride ourselves on our efficient hosting setup. Titles by the Amara.org community, and we're excited to expand our in-house hosting to the AI space. AI is privacy intensive, with energy and quality being key operational factors, but less sensitive to latency variations in minutes.
And in general, we pride ourselves on how efficient the whole SKU setup.
He'd be can I add one pence.
The cost of third party providers.
We're excited to expand our in house housekeeper took the AI space.
Yeah, it's how old is he in country right.
Waste energy and calling being key OPEC backups.
But less than people, who license the variations you mean existence and.
Lin Song: And such Iceland is a great location for our first AI footprint, whereas our other data centers are typically located closer to our end, shift into advertising, which remains a top priority, given the potential we see to continue strengthening our monetization. As a browser company, we can leverage the closed loop environment of the browser to capture interest and count users. While remaining mindful of user privacy, we are able to create value and utility for the user throughout their online journey. Unlike many advertising platforms, which rely on third-party signals and cookies.
As such I spend each a great location for all phosphate footprint.
As all other data centers are typically located close all to all and yourself.
Shifting to advertising, which remains a top priority given the potential we see to continue strengthening our monetization.
The bulk of the company, we can leverage the close the loop environment of the browser to catch up interest and topics.
Wow remind me mindful of user privacy.
We are able to create value and utility coal to udall throw off their online journey.
I like them any advertising platforms, which rely on third parties and cookies.
Lin Song: For example, when shopping online, we do not need to rely on third-party cookies to tell us which offers to display to the user but can do so organically and at the right moment in the user's shopping experience, such as discount codes when viewing the card, when intent is at its highest. With the growth of high-value users, we are becoming an increasingly relevant party to even more potential advertisers. Typically, in the context of integrated functionality that both benefits our users and has the potential to drive sizable revenue for Opera, representing a significant opportunity as we're looking to turn into the full. Beyond our own inventory, Opera Ads has proven itself as a competitive player in the broader landscape. Shrinking Advertisers Based on Our Technical Abilities to Augment Their Targets
For example, when shopping online we did not need to rely on third party cookies to tell us which offers to the slate will use all but rather cant do so organically and as a writer Mogens you either give us shopping excursions.
This kind of approach when dealing that caught.
My intent is at its highest.
Rates of growth of high value use all right I'll be calling me and in crazy relevant puppy.
Even though potential advertisers, particularly in the context of integrated functionality that both benefit all yours and they have the potential to drive sizeable revenue.
Representing a significant opportunity as we're looking to put into the fleet.
Beyond all the inventory opera ads has proven itself as a competitive player is the broader landscape.
Shockey advertise also based on our technical abilities to augment their own packaging.
Lin Song: We will continue investing in that platform in 2024, and we will see good opportunities from e-commerce, gaming, and other high-intent user interactions in a programmatic way, coupled with advantages in AI and algorithms, which we persist in pursuing. And then, in terms of our focus on change, Opera GX continues its healthy growth trajectory. Our GX user base was 27.8 million in the poll, adding 7% high-value users versus Q3 alone. On top of the user growth, annualized APU increased to 3.31 cents during the quarter, up 6%.
We will continue investing in that battle, I mean, truthfully before which we will see good though because it is from ecommerce gaming and other high end then you go into actions you have programmatic way.
With advances to.
The AI and algorithms, which would persist intercity.
And then telling you all about focus on Danish opera Gx continues its healthy growth trajectory.
Apologetics user base was 27.8, Paul Abbott.
The 7% high value yourself visits Q3 alone.
On top of it you look worse.
Annualized absolute increased two three points since day, one since there was a colo.
6% this is Q3.
Lin Song: This is Q3. The compounding of user and app growth has brought Opera GX to become a product with almost a $100 million annualized revenue round rate, demonstrating our ability to be relevant to a young and highly engaged Yugoslavia. In terms of footprint, Brazil now follows the U.S. as the second-largest market for gear.
The compounding overages on and off gross Hasbrook opera Gx.
From a product like almost hungry man annualized revenue run rates.
Demonstrating our ability to be relevant to a young and highly engaged you'd love taking them.
In terms of footprint, Brazil, now if all of the U S. As the second largest market of Gx, we're continuing to observe that the GNC is also emerging markets monetize significantly below that.
Lin Song: We continue to observe that GX users in emerging markets monetize significantly below their users. Meanwhile, our other browsers show the gap between Western and other U.S. being narrow, among PC gamers in particular. We feel great about the prospects of OperaGX in 2024 with continued user growth and further monetization opportunities within its attractive user base. Our ability to invest in the footprint of GX is also ever-expanding alongside the growth of the product. Beyond these three highlighted areas of opportunity, we also observed some exciting trends in the broader ecosystem. One is the opening up of ILS, for now, in Europe, as a result of the continued evolution of the regulatory environment in the EU and other parts of the world.
Other Brussels waived the gap between western and although you'd also be narrow in on PC game in particular.
We feel great about the prospects all bulk of G. S incidents in the fall when.
With continued issue somewhere else and further monetization opportunities.
They've attracted user base.
Our ability to invest in the foods printer objects. He's also everybody spending alongside the growth of the <unk>.
Product topic.
Beyond these three highlighted area of opportunity, but also all the Gulf some exciting trends in the broader ecosystem.
One is the opening up of ILS 40.
I was in Europe.
All of our continued evolution.
All of the regulatory environment, the EU and other parts of the wall.
Lin Song: Such regulatory measures to promote healthy competition are naturally a positive impulse to opera and their independent playoffs. Also, we are well positioned for the rebounding interest in FinTech applications on Web3, where we continue to invest in technology and build use cases. Both of these carry strategic importance for opera in the months and years to come. So now, let me turn the call over to Frode to discuss the financials and Jonathan's guidance in more detail. Thank you. Thank you, Song.
Such regulation and that goes to promote healthy competition is naturally a positive impulse to oprah and the independent the playoffs.
Also we are well positioned for the rebound the interest in Fintech applications on lead free.
We continue to invest in technology and build use cases.
Both of his carrier strategic importance to opera in the mouse and he has a good call.
So now let me pause a cobalt who forgot to discuss the financials and then his nipple guidance in more detail.
For that.
Thank you. So Q4 was a great quarter for us with a continuation of the strength, we've observed all year and it comes formation upper confidence as discussed when we raised Q4 guidance last quarter.
Frode Fleten Jacobsen: Q4 was a great quarter for us with a continuation of the strengths we've observed all year and a confirmation of our confidence, as discussed when we raised our Q4 guidance last quarter. Revenue in the quarter came in at the top of our guidance at 17% year-over-year growth. On a constant currency basis, our growth would have been about 4 percentage points higher, or 21%.
Revenue in the quarter came in at the top of our guidance at 17% year over year growth.
On a constant currency basis, our growth would have been about four percentage points higher or 21%.
Frode Fleten Jacobsen: Our user base is growing in Western markets, and PC browsers also have high R2 users in emerging markets due to the success of Opera VX. The decline of low monetized mobile users in emerging markets is offset by strong underlying ARPA growth, leading to revenue growth in both Western and non-Western regions for all products. Adjusted EBITDA came in well above our guidance, adding $3.8 million to the top of our prior range. The overperformance was driven in particular by lower marketing spend than anticipated in our guidance and cost of revenue coming in about one percentage point lower than anticipated relative to revenue. On the other hand, we saw an increase in costs related to advisory services supporting our internal teams in SOX readiness, as well as the Bad Debts Provision.
Our user base is growing in western markets and PC browsers also grow high ARPA users in emerging markets due to the success of opera Gx.
The decline of low monetize mobile users in emerging markets, it's offset by strong underlying ARPA growth leading to revenue growth in both western and southwestern regions for all products.
Adjusted EBITDA came in well above our guidance, adding $3 million to $8 million to the top of our prior range.
The over performance was driven in particular by lower marketing spend than anticipated in our guidance and cost of revenue coming in about one percentage points lower than anticipated relative to revenue.
On the other hand, we saw an increase in cost related to advisory services supporting our internal teams on Sox readiness.
As well as the bad debt provision.
Cash flows came in at the high end of expectations relative to adjusted EBITDA with an 88% conversion to operating cash flow for the year as a whole and 77% conversion to free cash flow from operations for the year as a whole.
Frode Fleten Jacobsen: Cash flows came in at the high end of expectations relative to adjusted EBITDA with an 88% conversion to operating cash flow for the year as a whole and 77% conversion to free cash flow from operations for the year as a whole and both slightly stronger in the fourth quarter. Tax costs for the year were relatively modest at 7% of adjusted EBITDA. In 2023, we benefited from both the recognition of tax assets in relation to our share-based compensation in prior years, as well as FX movements between USD and local currencies in which our taxes are calculated and paid. Our year-end balance sheet includes an updated fair value assessment of our investments in OPEN. We value our stake at an estimated $269 million, up from $163 million before. This results in a significant non-cash accounting gain of $106 million in the fourth quarter.
Both slightly stronger in the fourth quarter in isolation.
<unk> costs for the year was relatively modest at 7%. The suggested EBITA in 2023 B benefited from both the recognition of tax assets in relation to our share based compensation in prior years.
What is the FX movements between USD and local currencies in which our Texas are calculated and paid.
Our year end balance sheet includes an updated fair value assessment of our investments in open.
We value our stake at an estimated $269 million up from $163 million before.
This result in a significant noncash accounting gain of 106 million in the fourth quarter.
Frode Fleten Jacobsen: As noted in our press release, we've observed that the company more than quadrupled its user base during 2023 and saw an even higher uplift in daily usage, in turn driving strong revenue growth. The updated valuation also ties with the limited investment by a new OPEI investor in late 2023, which was subscribed at a $3 billion OPEI valuation. We remain interested in selling our stake in OPEI at the right price. We are also open to a later stage exit in connection with OPE eventually going public according to its longer-term plan, so that's 9.44% at the year end. We completed our most recent buyback program in the quarter, repurchasing 1.15 million ADSs at an average price of $11.27, totaling $13 million.
As noted in our press release, we've observed that the company more than quadrupled its user base during 2023, and so on even higher up list and data usage in turn driving strong revenue growth.
The updated valuation also ties to the limited investment by a new old paint investor in late 2023, which subscribed at a 3 billion dollar opaque valuation.
We remain interested in selling our stake in okay at the right time.
We are also open to a later stage exit in connection with obey eventually going public. According to its longer term plans are old Bay state stood at nine points to 44% as of yearend.
We completed our most recent buyback program in the quarter repurchasing $1 15 million Eddie Esses at an average price of $11 27 pence totaling $13 million.
Frode Fleten Jacobsen: We thereby fulfilled the 50 million buyback that was launched in early 2022, with a total of 6.1 million ADSs repurchased at an average cost of $8.17. We will continue to consider buybacks in a tactical manner to maximize value for our shareholders in the long run. Since 2020, we have repurchased 35.5 million ADSs, equal to 30% of the shares outstanding at that time, at a cost of $228 million, or $6.44 on average per ADS. When adjusting for dividends avoided, the average cost is even more attractive.
Thereby fulfilled the 50 million buyback that was launched in early 2022 with a total of $6 1 million, Eddie Esses repurchased at an average cost of $8.17.
We will continue to consider buybacks and technical manner to maximize value for our shareholders in the long run.
Since 2020, we have repurchased $35 5 million ABS is equal to 30% of the shares outstanding at that time at a cost of $228 million or $6.44 on average per avs.
When adjusting for dividends avoided the average cost is even more attractive.
Frode Fleten Jacobsen: However, as we look ahead, it is our recurring dividend program launched in 2023 and currently at 80 cents per ADF per year that is expected to be our main avenue of returning funds to our shareholders. Now, turning to our first guidance for the full year 2024 and the first quarter. For 2024 as a whole, we are guiding revenue between $450 million and $465 million, representing 15% growth at the midpoint. The guidance assumes continued convergence between the growth rates of advertising and search, though further upside would more likely be fueled by advertising. We expect to continue our browser's growth trajectory with high ARPA users, and we expect continued expansion of Opera Ads. We guide adjusted EBITDA to between $106 and $110 million, representing a 24% margin at the mid-price. The EBITDA guidance is highly exposed to what marketing costs we assume, and this cost is also highly discretionary.
However, as we look ahead. It is our recurring dividend program launched in 2023 and currently at 80 cents per area for a year, but it's expected to be our main avenues of returning funds to our shareholders.
Now turning to our first guidance for the full year 'twenty 'twenty four and the first quarter.
For 2020 for at home, we are guiding revenue to $4 $50 million to $465 million, representing 16% growth at the midpoint.
The guidance assumes continued convergence between the growth rates of advertising and search so further upside would more likely be fueled by advertising.
We expect to continue our browser its growth trajectory with high ARPA users and we expect the continued expansion of our progress.
We guide to adjusted EBITDA to 106 to 110 million, representing a 24% margin at the midpoint.
The EBITDA guidance is highly exposed to whats marketing coffee as soon and this cost its also highly discretionary.
Frode Fleten Jacobsen: In 2023, marketing costs came in at 28% of revenue versus about 32% in our original guidance for the year. As a reminder, marketing costs were 35% of revenue in 2022 and even 48% of revenue in 2021. From a relatively low spend level at the start of 2023, we scaled our marketing activities quarter to quarter. We are encouraged by our ability to scale as an attractive ROI, and as we look to 2024, we expect to continue the sequential trend as an investment in our growth trajectory, also beyond the current year, though starting the year with a Q1 spend more similar to Q4. In sum, this translates to a marketing spend expectation of just above $130 million, or about 29% relative to revenue.
In 2023 marketing costs came in at 28% of revenue versus about 32% in our original guidance for the year.
As a reminder, marketing costs was 35% of revenue in 2022, and even 48% of revenue in 2021.
From a relatively low spend level at the start of 2023, we scaled our marketing activity quarter to quarter.
We are encouraged by our ability to scale at attractive Rois and as we look to 'twenty 'twenty four we expect to continue the sequential trend that's an investment in our growth trajectory also beyond the current year, though starting the year with a Q1 spend more similar to Q4.
In sum this translates to a marketing spend expectation of just about just about $130 million or about 29% relative to revenue.
Frode Fleten Jacobsen: Cost of revenue items combined represented 23% of revenue in 2023, scaling with the successful expansion of Opera and. Our guidance implies a modest continuation of the trend, adding about one percentage point relative to revenue for 2024 as a whole. Similar to 2023, the percentage will start below the annual average and increase in subsequent quarters. For remaining cost expectations, both cash-based compensation costs and the sum of our other cost items prior to adjusted EBITDA are expected to grow year over year in the mid-single digits. As a result, they are expected to drop about two percentage points relative to revenue combined.
Cost of revenue items combined represented 23% of revenue in 2023 scaling with the successful expansion of opera ads.
Our guidance implies a modest continuation of the trend, adding about one percentage points relative to revenue for 'twenty 'twenty four as a whole.
Similar to 2023, the percentage will start below the annual average an increase in subsequent quarters.
Four remaining cost expectations, both cash based compensation costs and some of our other cost items prior to adjusted EBITDA are expected to grow year over year in the mid single digits and that's a result are expected to drop about two percentage points relative to revenue.
Combined.
For the first quarter, we guide revenues to 99 $201 million or up 15% year over year at the midpoint and adjusted EBITDA of $22 five to $24 5 million or a 24% margin at the midpoint.
Frode Fleten Jacobsen: For the first quarter, we guide revenue to $99 to $101 million, or up 15% year-over-year at the midpoint, and adjusted EBITDA of $22.5 to $24.5 million, or a 24% margin at the midpoint. In conclusion, we put behind us a year that progressed ahead of our expectations, both in terms of revenue and profitability, and we are excited to embark on 2024. We're only two months out from releasing Q1 by now, and we look forward to giving you more color on how 2024 is shaping up to then. With that, I'll turn the call back to the operator for questions. Thank you. As a reminder, to ask a question, please press star one on your telephone keypad. To withdraw your question, please press the pound key. When asking your question, we ask that you please pick up your handset for optimal sound quality. We'll take our first question from Lance Vitanza with T.D. Cohen.
In conclusion, we've put behind this a year. That's progressed ahead of our expectations. Both in terms of revenue and profitability and we are excited to embark on 2024.
We're only two months out from released in Q1 by now and we look forward to giving you more color on how 'twenty 'twenty four is shaping up.
With that I'll turn the call back to the operator for questions.
Thank you and as a reminder to ask a question. Please press star one on your telephone keypad.
Draw. Your question. Please press the pound key one kind of thing a question. We ask that you. Please pick up your handset for optimal sound quality.
Our first question from Lance Vitanza with TD Cowen Your line is open.
Operator: Your line is open. Hi, thanks for taking the questions and congratulations on the quarter. A couple for me if I could.
Hi, Thanks for taking the questions and congratulations on the quarter a couple for me if I could the first is with respect to the headroom that you think you have to further expand the user base and the high value markets like the U S and Western Europe, and I know you touched on this a little bit during the call, but could you provide any more color.
Lance William Vitanza: The first is with respect to the headroom that you think you have to further expand the user base in high-value markets like the US and Western Europe. And I know you touched on this a little bit during the call, but could you provide any more color on how penetrated you believe you are in those markets today versus where you think you can ultimately take that? And then I was not quite sure I understood the commentary around Brazil and how that came into play.
On how penetrated you believe you are in those markets today versus where do you think you can ultimately take that and then I I was not quite sure I followed the commentary around Brazil, and how that comes into play I mean, that's that's not necessarily a high value market, but it sounds like you're seeing some.
Operator: I mean, that's not necessarily a high-value market, but it sounds like you're seeing some progress there. So if perhaps you could revisit that and elaborate on that, that would be helpful. Unknown Speaker: Hello. Songlin, are you muted?
Yes, there so if perhaps you could revisit.
Revisit that and elaborate on that that would be helpful.
Hello.
Some of it are you muted.
But now I'm getting out.
Lin Song: Uh, no, no; I'm good to go. Did you guys get the question, or should I repeat that? No, I think it's good.
Okay.
Did you guys get the question or should I repeat that.
No I think it's getting okay. So okay.
If you can get.
That's also in the beginning but I think in narcolepsy.
Lin Song: Okay. So, okay. No, no. I think it's good for the GX penetration and also a bit of Brazil, and then Frode can always add Carlos for the user numbers. So, so yeah, so more like, maybe starting with Brazil, because it's actually quite interesting.
Maybe I'll comment okay. So maybe I'll comment a bit for the you know gx penetration can also pita.
But in Brazil, and in food I can always ask polo sport.
So so yeah, so more like.
Yeah, maybe starting with Brazil, because it's actually quite interesting. It gets bigger I think we just publicly is bad.
Lin Song: I think we just commented that for GX, the U.S., of course, is always our number one market, but it's a good example that we also show very strong growth for Brazil, more like as an emerging market, but it's a function that it's also one of the places where we see... Traditionally, it's counted as an emerging market, and you see ARPA not so high on ARGOS. But for GX, what's been very interesting is that if it's a gaming user, if it's from a PC game, it's very active, then they actually see that it's actually relatively high output compared with other... So I think it's, so we'll highlight this to call out that in some instances, especially, I would say, in PC and in GX, we actually see maybe less difference between, you know, users from different regions, but rather as far as they are high-end users, for instance, they are gamers, they play with 3A games, then you actually see quite high up, you know, across the regions.
For G ex U S. O 40 is always our number one market, but it's a good example that will also show very strong growth for Brazil.
As well.
Well like as a multi market, but also it's a function that it's also one where the pace of what we see you know traditionally it's counted as an emerging market and D. C are not so high on the Atlas carpet gx, what's been very interesting is that with you that you know it is a game gaming use off it would be from PC game off right now asking them now.
We see that it's actually really do you have a high alcohol company always the other side.
So I think it's somewhat hard to call out that in some instance, especially I would say in P. C. E. G. S case, we actually see might be less difference all by you know you're not going to keep on wages.
Not at all as far as their high op ease off points in that game off they play with three games than you actually see quite a high alcohol.
You know a classic ridges.
Lin Song: So I think we're excited to see that we have very good growth of GX users in Brazil. And also, it's a proof, I would say rather that, in the long run, perhaps more relevant is high-end users with high intent, which we also see as a trend in the industry, and can even be less limited to particular regions. So I think maybe that's the commentary; that's the way you have it.
People are excited to see that we have very good RASK are all by Jackie dog in Brazil, and also it's a proof I would say right now that you know too in the long run perhaps more relevant is how often do those with high intensive restaurant sees as a trend in the industry.
And that's how you can be less so maybe that's too long.
Richards.
I think maybe that's the commentary that the.
The way you'll have your own and then and then maybe also to comment that you feel like all your all in general bounce I E. That's the high yield market or.
Lin Song: And then maybe also to comment on that, but still like all in general, both, I would say, let's say, the high-end user market, or let's say with the market, where I feel, you know, things are digital market share, right, where we still have plenty of room to grow, and overall, we're just very excited about the potential. It's more like, I would say, you know, for certain products, which are already very high end to start with. We also announced the GX app, right? I would say we probably have less focus on particular regions, and where I welcome all the user growth, you know, both organically and also by market expense. So the potential is huge. While we're, of course, in certain other verticals, we're, of course, focused more on high value, more like the high user value market, like with. That's super helpful.
The market Raphael no single digit market share right now we have plenty of room to grow and although that just very excited about the potentials.
Like I was saying you.
You know for certain products, which are already very high often stopping rates. We also announced the gx off right I would say, we'd probably have less focus on particular region and the way I will tell them what are you there Ross.
You know both organically and also by that marketing spend so peninsula was a huge Huawei of course can you talk at all about it goes where of course forgot more a high a high value even when I'm talking about battery market like the rest of the market.
Okay. That's super helpful and if I could just squeeze in one more question about capital allocation before I before I pass the baton here and I heard the commentary about the you know the dividend being the primary mechanism for returning cash to shareholders and I think I know the answer to this but you know there's a yield on that.
Lance William Vitanza: And I could just squeeze in one more question about capital allocation before I pass the baton here. And I heard the commentary about the dividend being the primary mechanism for returning cash to shareholders. And I think I know the answer to this, but there's a yield on the stock, a 7% dividend yield, that would seem to suggest that maybe the market sees potentially some downside risk to the dividend.
On the stock a 7% dividend yield that that would seem to suggest that maybe the market sees potentially some downside risk to the dividend and just to be clear is there any reason to think that the dividend could actually be cut or lowered I mean, it seems to me like the risk around the dividend is to the upside given you have no.
Frode Fleten Jacobsen: And just to be clear, is there any reason to think that the dividend could actually be cut or lowered? I mean, it seems to me like the risk around the dividend is to the upside, given you have no debt, and you have strong margins. And even if growth were to begin to plateau, which it hasn't, it seems as though you're generating, I mean, I think I have you at around $150 million in cash at the end of this year, even after you pay the public portion of that 80 cent dividend, right, because you still have some of the Starmaker receivable that you're working off, I believe. Yeah, it's correct. Yeah, I can try to broadly comment. I mean, yeah, we seem to trade at a good yield, so it's good for our investors.
So that you have strong margins and even if growth were to begin to plateau.
Which it hasn't it seems as though you're generating I mean, I I think I have you at around $150 million of cash at the end of this year. Even after you pay you know the public portion of that 80 cent dividend right. Because you still have some of the star maker receivable that you're working off I believe.
Yeah, that's correct.
Yeah, I can try to broadly comments I mean, yeah.
We seem to trade at a good a good deal so good for our investors.
Frode Fleten Jacobsen: The business is scaling. We are converting cash, sorry, profitability to cash, I think, in a healthy manner. I would also end up with the calculation of increasing cash, also taking into account our new Iceland data center for the year, though.
We.
The business is scaling we are converting cash Ah sorry profitability into cash I think in a healthy manner.
I would also.
And up with the calculation of increasing cash also taking into account our Iceland data center for for the year, though.
Frode Fleten Jacobsen: So, obviously, we'd like to be more textbook, and I hope, you know, we just launched this recurring dividend, but, you know, over time, we would like to be in a position where we can increase it and certainly not decrease it. Thank you very much, guys. I'll get back in line.
So we obviously have a wheel.
We'd like to be more textbook and I Hope you know, we just launched this recurring dividend, but you know overtime and.
Of course, we would like to be in a position, where we can increase its an uncertain enough to decrease it.
Thank you very much guys I'll get back in queue.
Operator: Thank you, and we'll take our next question from Eric Sheridan with Goldman Sachs. Your line is open. Thanks so much for taking the questions. Two, if I could.
Okay.
Eric Sheridan: First, coming back to the comments about Apple and opening up broader competition, how should we think about what that means for growth in the business, not only in 2024 but over a longer-term time horizon, and how are you thinking about incorporating that into forward forecasts? That would be number one. And then number two, you know, obviously, nice leverage displayed both in the quarter and the way you're framing margins for 24. Can you talk a little bit about balancing what your key investments are for 24 against delivering against that type of operating leverage? Thanks so much.
Lin Song: Yes, sure. So I guess I thought this was only, I thought I'd just take the Apple one because I like it. So now I think, so in general, I think it's still rather on the stage, right? Because it's more like it's a function of regulatory changes. I guess everybody sees the, yeah, see the motions.
<unk> <unk> <unk> <unk> changes I guess everybody's do the yeah. The the motion as well you know appeal to some of the first one was from you you do you May Act that we see Apple now starting to open the offer I was trying to say that they're not at all and you know, but they sent us all <unk> browser and Juicy all case to be available Apple, even though they will.
Lin Song: Well, you know, due to some of the pressures from the EU, the EMA Act, that we see Apple now starting to open up, right? Trying to say that they now allow potential third-party browser engines, in our case, to be available on Apple, even though there are still lots of conditions that we need to iron out, right? So I would almost say, you know, as we all know that in the Western market or the higher market, Apple has a significant market share, and that has been rather vintage in third-party browsers because they simply do not allow a browser engine at all, right? So I don't know if many people realize that from the beginning. They never allow it, which is rather strange.
Lots of conditions could I do need to iron out right. So so I I would almost say you know you know as we all know that you went to the market all high off the bucket Apple as a significant Matthew shot and that have been.
<unk> yourself out all sorts because they simply do not allow my browser and you have a right. So I don't know if people realize that from the beginning they never allow it.
Smell the strange so I would almost say that I think is not the way <unk> move without the Emmys, that's opening up.
Lin Song: So I would almost say that now we have this false to right move, that at least that's opening up. That's potential that can allow us to compete at the same level as, say, Android, which is now by far the majority of the mobile smartphone base, simply because we can now have our own engine. So I think that's definitely the right direction. There's still work to do, though, because I think even, yeah, we also have a good talk with Apple and many others. They are still ironing out the whole process, because now it's also limited to the EU, which is a bit strange. Why would you have something which is only okay in Europe and not other places?
Potential that can allow us to compete in the same level as onsite Android, which is the amount by following the truth of the mobile smartphone base simply because we can now have all N. G. So so I think that's definitely right direction and they'll still work to do because I think <unk>, yeah, what what else have we could talk with Apple and they may not loss. They ask your iron levels the whole process.
And with all you know cause nowadays, it's also be needed somebody to you, which is a bit strange <unk> why why would you have something that you'd only okay. In Europe about other place. So you know when you do you know I'm not one of details also very good spirit in partnership with that plan he likes but good likes the movement and the directions and way right. After the <unk> I I do think that the way we.
Lin Song: So we need to iron out a lot of details also in a very good spirit and partnership with Apple and the likes. But we like the movement and the directions, and we are very actively working on it. I do think that we will have higher growth in iOS in any case.
We all have <unk> any case and a bottle of course again it depends on what the <unk> that will actually work actually been working on so yeah. So I think that's that's my shoulder, but maybe it <unk> <unk>.
Lin Song: But, of course, again, it depends on a few other stuff that we're actively working on. So, yeah, so I think that's my short answer. But then maybe Prudence can comment a bit on capital allocation models.
Kevin That'll get you a <unk>.
Yeah.
Sure area. So I mean, we are.
Our underlying trend.
Is Martin Expansionists squeeze scale.
And and then when we look at the 2024, we sent our garden space, though so if the normalized trend of scale. So I think we <unk>.
Frode Fleten Jacobsen: Yeah, sure, Eric. So, I mean, our underlying trend is a margin expansion as we scale. And then when we look at 2024, we set our guidance based on that normalized trend of that scale. So, I think we guide about a point or so, percentage points ahead of consensus, given that we scaled very strongly in the fourth quarter.
Guide about a toy store so percentage points.
Consensus given that there'll be upscaled very strongly in the fourth quarter for the fourth quarter alone lifted the EBITDA margin of 2023 by an entire percentage points relative to must be guided for the quarter ahead of time. So so we certainly came in ahead of expectations throughout the year, including independent final months.
Of the year, because if you look back remember our original margin expectation for 2023 was was 20 per cent tip. It though so we continued to scale it but we also invest in growth in in our marketing, let me see a healthy or a lion and may.
Have been stepping that up and in dollar terms quarter by quarter and and we we do want to continue that trend.
Thank you.
Thank you and we'll take our next question from all the time with the virus.
Frode Fleten Jacobsen: The fourth quarter alone lifted the margin for 2023 by an entire percentage point relative to what we guided for the quarter ahead of time. So, we certainly came in ahead of expectations throughout the year, including in the final month of the year. Because if you look back, remember our original margin expectation for 2023 was 20%. Believe it.
[noise] is open.
Mm Thanks, a lot.
The I O S topic.
I'm curious as to if you plan to do any advertising to drive up over there and escort Oprah is this change goes into effect on much on March 7th.
So then you can get going down there's any any kind of on that and then and then I have a follow up on the an extension are you seeing any.
Any increase interest because the upcoming reputation in chrome browser and how you kind of off with a closed loop.
Frode Fleten Jacobsen: So we continue to scale it, but we also invest in growth in our marketing when we see a healthy ROI, and we have been stepping that up in dollar terms, quarter by quarter, and we do want to continue that trend. Thank you. Thank you, and our next question from the lead conference would be from Riley. Your line is open. Yeah, great. Thanks a lot.
System further appetizers.
Yeah. So okay, yeah, <unk> I think I'll hold on <unk>.
And then for the college Tammy for more details. So so yeah. So I think if you prefer to talk to the police or the download screen <unk>, you'll have to choose a list of from yeah. When when they follow up on the phone waiting on you. So so I would say, yes, I think it was about different would probably I was going to move back in about.
Who gives me a good timing.
Maybe just to point out that will close blast Rainbow. Other people also bought into the <unk> I'll be able to have the independent browser and James because I'd actually well, we'll make a note of your friends your issues and that will take more time somebody because Apple L. Yeah. That's obviously a lot of indications that complaint that the Apple [laughter].
Operator: On the iOS topic, I'm curious if you plan to do any advertising to drive up awareness for Opera as this change goes into effect on March 7th so that you can get more downloads; any color on that? And then I have a follow-up on the ad extension. Are you seeing any increased interest because of the upcoming cookie deprecation and Chrome browser and how you can offer a closed loop system for the advertisers? Yeah, so it's fine. Yeah, it's only hell.
Still not very familiar.
<unk>, so we need to work on that but yes high level I think doesn't make sense to have I don't have to spend and wait wait wait do people out with two actually they called it resolved Oh this might be shown so sorry for that.
And then also maybe hold on to get onto the ads that yes, yes way, we see that web traffic is one word of the glass.
As the App that for me just because way out of a browser like natural into this will have all the <unk> and we're not reading about this.
It's you know I'll know traffic so yes <unk>.
<unk> <unk> picking up of web traffic, perhaps more than anything else you need <unk> tried to walk continuing to London. It will smoke on on that as well so it's probably gonna be a bitch.
Lin Song: I think I'll comment on that. Sponsored ADR Sponsored ADR Sponsored ADR Sponsored ADR, next slide. Thank you. Thank you. And we'll take our next question from Alicia Yap with Citigroup. Your line is open. Hi, thank you. Good evening.
<unk>.
<unk> Oh, good advantage for us will be for.
Excellent. Thank you.
Thank you and we'll take our next question from Alicia Yeah, What Citigroup. Your line is open.
Hi, Thank you good evening, good morning, and.
Alicia Yap: Good morning, management. Thanks for taking my questions. Also, congratulations on the solid quarter. I have a few questions. First, following up on, you know, the Brazil GX browser and the lesson learned from Brazil. Would that lead you to think about, you know, also launching in other markets? If so, where could that be?
Thanks for taking my questions out also congrats on the Sonic quota.
I have actually have questions slash is uhm following up on you know the <unk> <unk> <unk> from the shell would that lead you to think about you know also launching in other markets. It's so <unk> could that be and then second question.
Lin Song: And then my second question is just wondering if there's any initial target for revenue contribution or incremental revenue contribution that can be, you know, coming out of the ARIA integration later this year. And then a last question is, given you will continue to grow the high value, high-end users on your platform, what kind of potential new advertiser industry vertical or category do you believe you could attract that have not been already on your platform? Thank you. Yeah, yeah.
<unk>, He's just wondering in Spanish and English contact with that on their robbing a consultation or incremental revenue consultation that can be you know coming out from the army integration.
Sure and then my last question is.
Do you think you will continue to grow the high value high options on that platform, what kind of potential new advertisement.
Industry.
Or category.
Attract at.
Alrighty on the telephone.
<unk>.
Yeah, yeah, Okay. So yeah okay.
Lin Song: Okay. So yeah, OK. Like again, so we know I'll shut down the post and then further please chime in, and I'll try to be brief. So, so, yeah, I think GX, I mean, GX essentially is available worldwide. We don't really have too many limitations in regions, but then you are right that the content of the courses of GX can be different across regions because of languages, news, user interest, among others.
<unk> I'll go down to the policy. Please tell me and I'll try to be very self. So yeah. I think I think <unk> is available worldwide. We don't really have too much impatience outrageous, but there you are right that the <unk> can be different crossword days because of language.
Jeez meals, you've got interest on my I'll also so yes.
Lin Song: So, yes, there is a bit of localization needed and a bit of localized focus, which, as you are rightly saying, we have both focused on the U.S. and other European countries. But now we're also expanding into Latin America, in particular Brazil, which works really well. So I think naturally we will want to expand more into Latin America, yeah, into relevant regions. And then there are also other similar regions which we can look at. So I think the focus is naturally that we want to target regions and countries where there is a big penetration of gamers, especially PC gamers, because that's a very relevant product for GX.
Localization needed and a bit localized photos, which <unk> that we have.
A U S.
European countries, but now we also expanded into lockdown in particular, Brazil, which works really well. So I think a natural labour will want to expand more into about them. Yeah. It's <unk> and then you'll also I'd also need outrageous, which we can we can do cats. So I think the phone calls is naturally that we want to talk to you about the regions and countries well.
That is a big penetrating all gangloff, especially for P. C game also because that's very relevant prozac for four G. S. So so I think that available what how would look at it and I I think it will come to you know through the ninth expansion <unk>, which again is a very nice revenue drive all and it's talk to the forefront they want so I'm very excited about it.
Lin Song: So, so I think that's how we look at it. And I think it will continue to be a nice expansion of the GX user base, which again is a very nice revenue driver and it's profitable from day one. So very excited about it because that actually will mean more profit margins, hopefully. And then I think you also commented about ARIA and its contribution to revenue, I guess. So, like, again, it's still, you know, for the time being, it's still a bit out of stage. But I would say that, you know, first of all, of course, it does bring awareness and, you know, say we have grown very much, people offer one of our flagship products because of AI, because, you know, people put a lot of focus on it. They see that it can be differentiated.
Because that actually means more appropriate Matthews hopefully and then I think you also commented about <unk> and it's you know contribution.
Two two it's revenue I guess, so knock again it field.
You know <unk>, it's there'll be the other stage, but I would say that you know a couple of calls about doing a wellness and you know as I would have gone to drive my escape over one our flagship product called of I I, because you know people put the local ninth that you'd have to can be differentiated uhm, but damn on top looking on purely revenue point of view.
Lin Song: But then on top, if you're looking at purely revenue from a point of view, in many regions, you probably can already see that now the AI, the ARIA chat team, has now already included monetizable links. If you click on one, it will take you to a webpage where you can, you know, get, you know, make monetizable sales. So, I think that's a very good example of how that can be monetized, even though we're actually working, of course, with our partners, because it's very important that they are also on the board, about how we should design the model for work. So, that. And then, you know, again, not limiting to links, recommendations for hotels, and many others, which we are very excited about with our partners experimenting. So, like all in all, a very nice way to monetize, very easily conceivable. And the only thing is, you know, we have to see almost a bigger change in the industry, and we want to work very closely with our partners to do that in the right way. So, that's it. And now I think, uh, what's the last question again?
<unk> <unk> you probably can't see that now that <unk> has not already included sorry, Monetizable links if you <unk> if you.
Take him to a web page and work with you you know get you know get the monetize bookshelves. So I think that's a very good example of how that can be monetized, even though I feel walking almost with all parts of us.
Because it's very important that they always on the boat.
<unk>, how would you design the modem for work so so it's that.
Then.
Again, not limited to make sure. It doesn't mean at all you know recommendations on the hotel and have been diagnosed with Rob that's cited about with all partners experiment. So so like what do you all have a very nice way of <unk> very easily conceivable and the only and just you know way apathy almost the change in in Detroit and we want.
To work very closely with our partners to do that to the right way <unk>.
And now I think.
Eh Eh.
Did you do.
What what's the last the question again.
Oh, Thank you could you need to go into high value high options is there any.
Alicia Yap: Oh, thank you. Continue to grow the high value, high output user; any new advertiser industry vertical that you haven't been on board can be attracted. Yes, yes. Sorry, I don't have a note.
Advertiser in that you've already called that you haven't been.
<unk>, we can attract yeah, yes, yes, sorry, I don't have a note. So yeah I'll go to the song Okay sure sure. So yeah I think eh.
Lin Song: So yeah, I forgot. Okay, sure. Sure. So yeah, I mean, I think it's actually quite interesting, right?
It's hard to find the truth, you might be getting too long when I wanted to see that the you know equal I'm also gonna send them out, but I would almost say that you know, it's really it's a bit different democracy in the past that now we see that you know equal most voskuil plays a very specific a high user intent is very relevant like like you said a generic.
Lin Song: Because in Q4 alone, we already see that, you know, eCommerce is really standing out. But I would almost say that, you know, it's really, it's a bit different than what we've seen in the past, and now we see that, you know, an eCommerce vertical with a very specific, high user intent is very relevant. Like, like, instead of generic banners showing, you know, hey, you can buy this or that, we see that, you know, now we can do more, I would say, focus on high-intent user events, like at the point where you don't want to check out, we say, hey, do you have a coupon code? Hey, maybe you want to check this cashback. And those actually work really well.
Australia, you know Harry.
You can buy this guzzo that will see that you know not only can do more I would say focus on <unk> like <unk> <unk> check out and say Hey, you do have.
Coupon called Hey, maybe you want to have to check with cashback and those actually <unk>. So very excited about it I think that's definitely a new <unk> receive that with both of the high <unk> and it will make it and then I'll try to come up with an idea, but also give them very good. These are valueless. Because these are very appreciated you know because.
Lin Song: We're experimenting with some of our US partners and are very excited about it. I think that's definitely a new trend that we see that we focus on high-intent user events, and then we'll make them, and then we'll try to commercialize them, but also give very good user values, because these are very appreciated, you know, because that gives them value right down the line. So, so I think similar styles that, you know, maybe potentially lower frequency, but very high-value events with a good user intent, So that is what we are very excited about as a potentially new version. Okay, great. Maybe I should just comment on your second question in terms of guidance.
Right on the spot. So so I think a female styles that you know, maybe particularly millwall frequency.
A high value events.
The good deals on intent.
Equaled off can also financial there'd be no Fintech finance credit card application audible can't be copyrighted. So so those of us decided about to have the potential to <unk>.
Okay.
Maybe I should just come in on your second question in terms of guidance. So it was I would say it'd be do reflects effects that are helps us raise awareness and so it helps us attract high value users and we see that it is also very engaged users would that'd be monetize well in our existing legislation correctly, so that that'll be considerate <unk>.
Lin Song: So I would say we do reflect the fact that ARIA helps us raise awareness, and so it helps us attract high-value users, and we see that they are also very engaged users that we monetize well with our existing monetization record. So that's how we consider it for now. But at an incrementality, we are more cautious to build in once it's built on.
Now in the name from and Pelosi.
We are more cautious too to building one since it's still telling me.
Frode Fleten Jacobsen: Mm-hmm. I see. Okay. I've got you.
Mhm I see okay gotcha. Thank you.
Alicia Yap: Thank you. And once again, to ask a question, please press star and one on your telephone keypad. We'll take our next question from Mark Argento on Lake Street. Your line is open. Good morning, guys.
And once again to ask a question. Please press star and one on your telephone keypad.
We'll take our next question from Mark Argenta with Lake Street. Your line is open.
Alright. Good morning does just a couple of critical items here, So <unk> and her prepared remarks, you can talk a little bit about search kicking me he.
Operator: Just a couple quick ones here. So Song Lin, I know in your prepared remarks, you talked a little bit about the search, continue to see, Any kind of thoughts on the use of proceeds? Thanks, guys. Okay, so yeah, I'll briefly comment and then Frode can also comment a bit on the other questions.
Recent strikes I already did roofing king per se, but you did mentioned he thought he could grow it et cetera.
Sure, it's Martha and just wanted to drill down a little bit.
They they call a contributor of there and then just one for throat, Oh paid big rebel mistake with a recent and glassman and you guys get a look at the opportunity to sell secondary shirt and that transaction. What is the probability that came out of accumulation there.
Lin Song: So yeah, I guess when we refer to search, I think it's really a function of, number one, we do have, you know, like, say for instance, we work closely with our search partners, like Google and the like, and then in fact, of course, just being that we do have a bit higher search growth, because we're benefiting from not only the revenue growth, you know, in this case, similar to Google, but we do also have more user growth, perhaps, because we are starting from a much smaller point, right, like way, especially higher up the market. So I think that's really just explain why we do have, you know, higher user, higher search revenue growth than, say, the bigger markets, right? So if you compare us with Google device.
And then if if you do monetize any kind of thoughts on use a person's credit you guys.
Okay, So yeah, I'll I'll call them and.
Yeah, perfect can also <unk>, yeah come in to be that'd be that'd be all my questions. So yeah, I guess, a little bit of referred to such I think it is really a function of number.
We do have you know like <unk>.
<unk> and in fact will just be announced we do have a bit of high all such rose because we're benefiting from not only the revenue rose.
<unk> seemed to add Google <unk>.
<unk>, perhaps if it's because we're all starting from a much smaller pulling drive like way, especially when you're high off the market. So I figured that's what it doesn't explain why but we do have you know you know highly <unk> say the <unk> market <unk>.
Lin Song: So that's one. And then, of course, we're also quite excited about the future, because I think mainly because we are very positive about our potential user growth. And then I also agree with you that the incorporation of AI can actually make users more efficient, more search discoverable, and then they can lead perhaps the search page, the search results page, more likely, which we really hope can also bring more revenue streams from that.
So that's why I'm.
And the and then of course, well so quite excited about the future because I I think mainly because we're all available at T. Mobile could you give me the gross and then I also agree with you that way the incorporation of AI, you can actually make it more efficient and more <unk> comfortable and then they can lead to perhaps a little salt page the search results page more like me.
We're actually going to hope that Skinner also brain more revenue stream from that and if we can also be innovative on that.
Frode Fleten Jacobsen: And if we can also be innovative in that. But again, we're working very closely with our partners on that. Because I think it's very important that this is a cooperative. Mark, I can comment on the open part of the question. So, based on the result of 2023, we can say we are happy we haven't sold out yet. We didn't monetize the stake a couple of years ago, but it's still a significant position. At the same time, it's not part of our business. We don't really have any operational synergies as an investor.
[noise] again, while I'm walking very close there was I'll pass on the map.
It's very important <unk>.
Mark comes.
<unk> on the open part of the question, so, but I think based on the result of 23, we were going to say we are we.
We are happy we haven't sold I hope yet we didn't monetize does take a couple of years ago, but still a significant position.
At the same time, it's it's not a part of our businesses. We don't have any operational synergies Israeli as an investor So as a long term view, we do want to accept the position, but there's no real.
Frode Fleten Jacobsen: So it's a long-term view. We do want to exit the position, but there's no real necessity for a set timeline. So I think we'll consider it and treat it in an opportunistic manner. And as I mentioned on the call, whether that ultimately becomes a sale or an exit via an IPO, that's how we see it long-term. But we don't have a set timeline that we, for some reason, must adhere to.
<unk> said timeline, so I think we'll.
Consider as intrigued as an opportunistic manner.
And then as I mentioned on the call whether that ultimately becomes hussein or exit via an I P O and that's how we saved longterm, but we don't have a timeline.
Timeline between for for some reason it must adhere to.
Lin Song: Great, thank you. And it appears that we have no further questions at this time. I will now turn the program back over to Song Lin for any additional or closing remarks. Okay. So, like again, I really appreciate you joining the call. In conclusion, we think that 2023 was a terrific year for Opera. The top-line growth and adjusted EBITDA margin expansion we experienced, combined with the best product for the field in our history, set us up for continued success in 2024. So, I am really looking forward to it. And I would also like to thank all of you, our employees, for your hard work, and our investors for your confidence in us. Thank you. And this does conclude today's program. Thank you for your participation. You may disconnect at any time and have a wonderful day. Sponsored ADR, BF-WATCH TV 2021
Alright, thank you.
And it appears that we have no further questions at this time.
Now turn the program back over to <unk> for any additional are closing remarks.
Sure. Okay. So there's no like snuck again really appreciate that you could join the call the conclusion.
We think that three was terrific.
This hotline gross and adjusted EBITDA margin expansion <unk> combines the best.
Best product with a female you know history.
For continued success and you can put it on before so <unk> I'm looking forward to it and then I would also like to thank all of you employees for their hard work and I'll <unk>.
Yes, thank you for it.
And this does conclude today's program. Thank you for your participation.
Connect at any time and have a wonderful day.
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