Q2 2024 Opera Ltd Earnings Call

Speaker Change: good day and welcome to the oper limited second quarter two thousand and twenty four earnings call at this time all participants or in a listen only mode after the speaker's presentation there will be a question and answer session

Operator: At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this period, you will need to press star 1 on your telephone keypad. If you want to remove yourself from the queue, please press the pound key. Please be advised that today's call is being recorded. Lastly, if you should need operator assistance, please press star 0.

Operator: At this time, all participants are in a listen-only mode.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during this period, you will need to press star 1 on your telephone keypad. If you want to remove yourself from the queue, please press the pound key. Please be advised that today's call is being recorded.

Speaker Change: to ask a question during this period you will need to press star one on your telephone keypad

Speaker Change: if you want to remove yourself from the queue please press the pound key

Operator: Lastly, if you should need operator assistance, please press star 0.

Speaker Change: please be advised that today's call is being recorded lastly if you should need operator assistance please supress star zero i would now like to turn the call over to your speaker today matt wolson head of the investor relations please begin

Operator: I would now like to turn the call over to your speaker today, Matt Wolfson, Head of Investor Relations.

Matthew Wolfson: I would now like to turn the call over to your speaker today, Matt Wolfson, Head of the Investor Relations. Please begin. Thank you for joining us. This morning, I am joined by our co-CEO, Song Lin, and our CFO, Jacobsen.

Operator: Please begin.

Matt Wolfson: Thank you for joining us.

Matt Wolfson: This morning, I am joined by our co-CEO, Song Lin, and our CFO, Frode Jacobsen.

matt wolson: thank you for joining us this morning i am joined by our co ceo song lyn and our cfo forgust jacobson

Matt Wolfson: Before I hand over the call to Song Lin, I would like to remind you that some of the statements that we make today, regarding our business, operations, and financial performance may be considered forward-looking. Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties.

Matthew Wolfson: Before I hand over to the call to Song Lin, I would like to remind you that some of the statements that we make today regarding our business operations and financial performance may be considered forward-looking. Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties. Actual results could differ materially. Please refer to the Safe Harbor statement in our earnings release and our Form 20-F, including the risk factors. We undertake no obligation to update any forward-looking statements. During this call, we will present both ISRS and non-ISRS financial measures.

Speaker Change: before i hand over the call to songwin i would like to remind you that some of the statements that we make tothat regarding our business operations and financial performance may be considered forward-looking such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties

Matt Wolfson: Actual results could differ materially. Please refer to the Safe Harbor Statement in our earnings release and our Form 20-F, including the risk factors.

Speaker Change: actual results could differ materially please refer to the safe harbor statement in our earnings release and our form twentyieth including the risk factors

Matt Wolfson: We undertake no obligation to update any forward-looking statements.

Matt Wolfson: During this call, we will present both IFRS and non-IFRS financial measures. A reconciliation of non-IFRS to IFRS measures is included in today's earnings press release, which is distributed and available to the public through our Investor Relations website, located at investor.opera.com.

Speaker Change: we undertake no obligation to update any forward-looking statement during this call we will present both rs and nonfrs financial measures

Matthew Wolfson: A reconciliation of non-ISRS to ISRS measures is included in today's earnings press release, which is distributed and available to the public through our Investor Relations website located at investor.opro.com. Our comments will be a year-over-year comparison, unless we state otherwise.

Speaker Change: a reciliation of nonif rs to irs measures is included in today's earnings press release which is distributed and available to the public through our investor relations website located at an investor opera dot com

Matt Wolfson: Our comments will be on year-over-year comparisons unless we state otherwise.

Matt Wolfson: With that, let me turn the conference call over to our co-CEO, Song Lin, who will cover our second quarter operational highlights and strategy.

Matthew Wolfson: With that, let me turn the conference call over to our co-CEO, Song Lin, who will cover our second quarter operational highlights and strategy. And then, further Jacobsen will discuss our financials and expectations going forward.

Speaker Change: our comments will be a year-over-year comparisons unless we state otherwise

Speaker Change: with that let me turn the conference call over to our coceo song l who will come our second quarter operational highlights and strategy and then verdta jacobson will discuss our financials and expectations going forward song

Matt Wolfson: And then Ferdinand Jacobson will discuss our financials and expectations going forward.

Song Lin: Song?

Song Lin: Thank you, Matt.

Lin Song: Song? Thank you, Matt, and thanks to everyone joining us today for a business update and more color on our second quarter. Our second color results were ahead of all expectations, coming in above the higher notes, both our revenue and just EBITDA ranges. It is the continued momentum of our products and targeted user adoption that translates to growing and broadened revenue streams and strong financial results. In the second quarter, revenue was 110 million, growing and 17% year over year; adjusted EBITDA was 27 million, translating to a margin of 24%.

Song Lin: And thanks to everyone joining us today for a business update and more color on our second quarter. Our second quarter results were ahead of all expectations, coming in above the high end of expectations. Coming in above the high end of both our revenue and adjusted EBITDA ranges. It is the continued momentum of our products and targeted user adoption, that translates to growing and broadened revenue streams and strong financial results.

Song L: thank you back and thank for everyone joining us today for a business update and more color on our second callumn

verdta jacobson: our second qu results will ahead of all expectations coming in above the higher those are revenue and adjust ebitda ranges

verdta jacobson: it is the continuue the momentum of our products and targeted to use our adoption net translates to growin and broadened revenue streams and strong financial results

Song Lin: In the second quarter, revenue was $110 million, growing 17% year-over-year. Adjusted EBITDA was $27 million, translating to a margin of 24%.

verdta jacobson: in the second callarter revenue was one hundred ten million growing and seventen percent year-over-year adjustto the ebita was twenty-seven minute translating to a margin or twenty four percent and a particular strenth this is our guidance of twenty two to thousand five million

Song Lin: And particular strengths, this is our guidance of $22 to $25 million. In addition to the revenue over performance, our profitability benefited from even tighter focus, on the most monetizable users as the quarter progressed when it comes to our marketing spend.

Lin Song: And particular strengths, this is our guidance of 22 to 25 million. In addition to the revenue over performance, our profitability benefited from even title focus on the most monetizable users.

Speaker Change: the opaddition to the revenue of our performance all profitability benit benefited from even tiitof focus on the most monetizable udoss have the quter progress way comms to our much spendse

Lin Song: As the portal progressed, way comes to our market expense. As a result, we grow up 25% year over year, now an annualized $1.46 average across our products and geographies. Advertising revenue was 65 million in the color, growing 20% year over year, in a similar fashion as prior colors. Our advertising revenue continues to benefit from the same underlying drivers of high-out user growth and expanding monetization opportunities, in particular as our Western and gaming users represent an increasingly attractive audience for monetization partners. Our ability to drive targeted and high-purchase intent traffic from our users directly to an expanding partnership base has proven to be scalable.

Song Lin: As a result, we grew up 25% year-over-year, now an annualized $1.46 average across our products and geographies. Advertising revenue was $65 million in the quarter, growing 20% year-over-year in a similar fashion as prior quarters. Our advertising revenue continues to benefit from the same underlying drivers of high-output, user growth and expanding monetization opportunities. In particular, as our Western end-gaming users represent an increasingly attractive audience for monetization partners, our ability to drive targeted and high-purchase intent traffic from our users directly to an expanding partnership base has proven to be scalable.

Speaker Change: as a result we grow up to twenty-five percent year overyear now and annualyzed one dollar forty- ac cents average across our products and geograpies

Speaker Change: adamidy revenue was sixty-five minute in the columon growing twenty percent year overyear in a similar passashing at prior calls

Speaker Change: our advertising revenue continues to benefit from the same underlying drivers over high per you the th and expanding motization opportunities in particular as our western and gaming you loss represent and increasingly attractive audience form monetization partiners

Speaker Change: all ability to drive targeted and high purchase intense traffic from our euthose directly ren expanding partnerership base has proven to be capable

Song Lin: We are taking advantage of our first-party signals and our well-developed ad tech platform within Opera Ads while creating value to both partners and end-users.

Lin Song: We are taking advantage of our first policymakers and our well-developed AI platform within Opera ads while creating value to both partners and users. We still consider ourselves to be in the audience stages in taking advantage of these opportunities, especially as our AI offerings broaden and we increase the number of direct interactions between the browser itself and the end user. Such revenue was 45 million in the caller, up 15% year-over-year and also in line with our trajectory from prior followers. We are proud to grow our most mature revenue stream, and this pace as it directly demonstrates our ability to attract and retain highly engaged and monetize our users.

Speaker Change: we are taking on the vugage of our first party igals and now well developed acx platform within oper adds while creating value to both partoners and end eles

Song Lin: We still consider ourselves to be in the early stages in taking advantage of these opportunities, especially as our AI offerings broaden and we increase the number of direct interactions between the browser itself and the end-user.

Speaker Change: we still comte ourselves to be in the honest stages in takingout the b age or these opportunities is especially allow air off friends broaden and will increase the number of their raf interactions between the browser itself and the end of you know

Song Lin: Search revenue was $45 million in the quarter, up 15% year-over-year, and also in line with our, trajectory from prior quarters. We are proud to grow our most mature revenue stream at this pace, as it directly demonstrates our ability to attract and retain highly engaged and monetizable users.

Speaker Change: st revenue was forty-five minilling the col up fifventteen percent year over-year and also in line with our trajectory from prior follows

Speaker Change: we are proud to grow our most mature revenue stream and this pace as if directly demonstrates our ability to attract and retain highly engaged and monetize volumeles

Song Lin: We remain enthusiastic about the future of our search-based revenue streams as well.

Lin Song: We remain enthusiastic about the future of our search-based revenue streams as well.

Speaker Change: we remain is fusiastic above the future of though such b the revenue streams as well

Song Lin: There is certainly increased public focus on ensuring competition among search engines.

Lin Song: There is certainly increased public focus on ensuring competition among such engines. Being an independent browser provider, we appreciate the broader recognition of the value and importance of the search position provided by a browser, and we are very excited to work with key players to capture and further expand the potential of the massive amount of traffic that we can drive from our user base.

Speaker Change: there is certainmay increased public focus are ensuring competition among such enges

Song Lin: Being an independent browser provider, we appreciate the broader recognition of the value, and importance of the search position provided by a browser, and we are very excited to work with key players to capture and further expand the potential of the massive amount of traffic that we can drive from our user base.

Speaker Change: being and independent the brrow provider we appreciate the broader recogition of the value and importance over the sour position provided by brrowsel

Speaker Change: and we are very excited to walk with key playerss to capture and further expand the potential of the massive amount of traffic that we can drive from a the base

Song Lin: Last quarter, we also commented a bit on the positive initial impact of the Digital Markets Act, or DMA, which addresses many of the ways that the browser market is not always a level playing field.

Lin Song: Last caller was also commented with our positive initial impact of the Digital Market Act or DMA, which addresses many of the ways that the browser market is not always a level playing field. As separately disclosed, we take an active role in these processes, and this summer we pointed out where we believe that DMA's gatekeeper definition principles have been applied too narrowly. The DMA momentum carried over into the second caller where we saw significant strengths in new user adoption of those or proper Android and Oracle iOS throughout the EU as well as an increase in the number of smartphone users in the region who have made our mobile browsers the default.

Speaker Change: last callal we also committed a bit the positive initial impact of the digital markets act or themay which addresses many of the ways that the braz market is not always a level play field

Song Lin: As separately disclosed, we take an active role in these processes, and this summer, we pointed out where we believe the DMA's gatekeeper designation principles have been applied too narrowly.

Speaker Change: at separately disclosed wetake an active role in these processes and this summer we pointed out well we believe that daz gate people defination principles have been applied to narrowly

Song Lin: The DMA momentum carried over into the second quarter, where we saw significant strengths in new user adoption of both Opera for Android and Opera for iOS throughout the EU, as well as an increase in the number of smartphone users in the region who have made our mobile browsers the default.

Speaker Change: the dma momentum carried over into the second color well we saw significant strenth the new u adoption of those oproper enjoyed and autoper s throughout the eu

Speaker Change: as well as an increase

Speaker Change: in a number of smarttle you go

Speaker Change: in the region who have made our mobile brrosscess the de

Lin Song: Beyond the weather matters, technology and the services evolved as well. Recently, there have been a lot of focus around search and content platforms being redefined. To a great extent, we see how AI underpins the ability of such services to give the end user a better experience, whether it's from answering questions directly or elevating the quality. We are enthusiastic about this trend, as we believe it puts greater emphasis on customer providers to deliver true value and net leakage of our user monetization to no value publishers. The browser is sitting on a perfect spot as being a vehicle of how and the users connect with those AI elevated services, a powerful position to be in.

Song Lin: Beyond regulatory matters, technology and services evolved as well.

Song Lin: Recently, there has been a lot of focus around search and content platforms being redefined. To a great extent, we see how AI underpins the ability of such services to give the end user, a better experience, whether it's from answering questions directly or elevating the quality of promoted content.

Speaker Change: beyond the reg electal matters technology and solives evolved as well recently they'are having been a lot of focus around such and fttain the platforms being redeieded

Speaker Change: to a great extent we see how ai otherpins the ability of such services to give the enddigital a be st whether it's from answering questions directly or elevating the quality or promoted conferen

Song Lin: We are enthusiastic about this trend as we believe it puts a greater emphasis on content, providers to deliver true value and less leakage of our user monetization to low-value publishers.

Speaker Change: we into iastic above this trends as we believe it puts a greater emphasis on counter providers to deliver two value and net leackage over onetization to no value publishers

Song Lin: The browser is sitting a perfect spot as being a vehicle of how end-users connect with those, AI-elevated services, a powerful position to be in.

Speaker Change: the browse are sitting a topics bought as b vehicle over how and do you do connect with those ai enovated services a powerful position to be

Lin Song: We believe these changes are beneficial to our users, as well as our high quality monetization partners, and ultimately to Opera.

Song Lin: We believe these changes are beneficial to our users, as well as our high-quality monetization, partners, and ultimately to Opera.

Speaker Change: we believe these changes are beneficial to our users as well as our high-quality motiization partners and ultimately to operate

Lin Song: Now turning a bit to the always high activity level within Opera. Our success has always been driven by innovation and speed, providing our users with unique products and improved experiences and stay ahead of competition. Lastly, we launched Opera One, our fully redesigned flagship browser and the only Q2 we were proud to announce that Opera One received the prestigious AIF Design Awards to Nip Nip 4. We certainly lead with visuals and functionality, but to win users' hearts, our browsers must also look beautiful and provide elegant flows. The next major upgrade of Opera One, referred to as R2, is now available for public testing and will roll out later this year.

Song Lin: Now tuning a bit to the always-high activity level within Opera.

Speaker Change: now turning a bit to the always high active level within opera

Song Lin: Our success has always been driven by innovation and speed, providing our users with unique, products and improved experiences, and staying ahead of competition. Last year, we launched Opera 1, our fully-redesigned flagship browser.

Speaker Change: our succecess has always been driven by innovation and speed providing our usse weight unit products and the improved experices and stay ahead of competition

Speaker Change: last we launch dopper one are fully redigned flagship brrowsel and the onlyi t twobe we will proud to announce that over one received as the prestigious ihave design awards to live forth

Song Lin: And in early Q2, we were proud to announce that Opera 1 received the prestigious IF Design, Award 2024.

Song Lin: We thought it would lead with visuals and functionality, but to win users' hearts, our browsers must also look beautiful and provide elegant flows.

Speaker Change: we thoughtly lead with bitials and afunctionality but to win you have hut our brrows must also look beautilul and provide anyigagain flows

Song Lin: The next major upgrade of Opera 1, referred to as R2, is now available for public testing, and will roll out later this year.

Speaker Change: the next major upgrade of overper one ref to as rube is now available for public testing and we'will roll out laterate on this field

Lin Song: If you give it a try, you will see how we have improved, how people listen to music from popular services well browsing, as well as continue to advance our browser AI area. With the R2 release, we continue to build out the modular design, introducing Opera One and have a new split screen node that allows users to multitask more easily between two open tabs. Finally, R2 introduces a new type of scene support where users can customize their browser with a set of high-quality dynamic scenes that provide the massive experiences, further differentiating the visual appearance of our browsers.

Song Lin: If you give it a try, you will see how we have improved how people listen to music from, popular services while browsing, as well as continue to advance our browser AI area.

Speaker Change: if you give you the tryal you will see how we have improved how people listen to music from potcular service is well browsing as well as continue to advance our broalso ai area

Song Lin: With the R2 release, we continue to build on the modular design introduced in Opera, 1 and have a new split-screen mode that allows users to multitask more easily between two open tabs.

Speaker Change: where the outer release we continue to build out the what do about design duce the upper one and have a new split f remote that allow you thosess to marittask more easily between two open tabps

Song Lin: Finally, R2 introduces a new type of theme support where users can customize their browser, with a set of high-quality dynamic themes that provide immersive experiences, further differentiating the visual appearance of our browsers.

Speaker Change: finally are to introducces a new title same support well u can calcusmize your brows with the set of high-quality dynamic scenes that provide the mive experiences further differentiating the visual appearance of our brrowsels

Lin Song: Lastly, we also launched Opera One for iOS, prioritized as a direct consequence of the increase of opportunity to compete on the platform. Compared with Safari, Opera's users can engage directly with the area browser AI. They can experience browsing in proper full screen and benefit from all our other integrity services, like building free VPN and app blocking. With that, our product line-up for users with the greatest monetization potential is more complete, and you can see us putting increased marketing dollars behind this line-up in the multiple heads to continue raising awareness of Opera as an alternative to the iOS default browser.

Song Lin: Last week, we also launched Opera 1 for iOS, prioritized as a direct consequence of the, increased opportunity to compete on the platform.

Speaker Change: last week we also launch the auper one ful s prioritized as a diaphical consequence so the increase opportunity to compete on the platform

Song Lin: Compared with Safari, Opera users can engage directly with the ARIA browser AI.

Speaker Change: comppelled with sai or process udooff can engage thatdirectly when the araab o ai

Song Lin: They can experience browsing in proper full-screen and benefit from all our other integrated, services like building free VPN and ad blocking.

Speaker Change: they can experience browy inimproper four screen and the benefit from all our other integrity services like a building free vpm and asblocking

Song Lin: With that, our product lineup for users with the greatest monetization potential is more, complete, and you will see us putting increased marketing dollars behind this lineup in the months ahead to continue raising awareness of Opera as an alternative to the iOS default browser.

Speaker Change: with that our product lineup for you thosess with the greatest ammotization potential is more complete

Speaker Change: and you us see us put increased mly dollars behind this line up in the notoun is ahead to continue really a wellness of opera and that alternative to the s de brrowsels

Song Lin: Now, shifting focus to Opera GX, our highly successful gaming browser. In April, Opera GX debutted the official Cyberpunk 2077 browser mode created in collaboration, with game developer CD Projekt Red. The mode allowed deep customization of the Opera GX browser with branded elements from, the popular games. In total, there are over 7,500 different modes available for Opera GX.

Lin Song: Now, simply focused on Opera GX, our highly successful gaming browser. In April, Opera GX debited the official $7.27 browser node created in collaboration with game developer CD Projekt Red. The node allowed deep customization of the Opera GX browser with branded elements from the popular game. In total, there are over 7,500 different modes available for open GFs. In June, we launched the browser from Valt and official collaboration, browser experience raised the hit TV series, The Boys, alongside the premiere of season 4.

Speaker Change: now shifting c the authter jects are highly successful gaining brrowso

Speaker Change: being a auter gx debed the official sevenver pound twenty seven seven thousandars mode created in collaboration raise game avdeveloilpable cd project reps

Speaker Change: remote allowed a deep customization or the offer gx browser with branded elements from the popular gain

Speaker Change: in total they are over sehundred and five hundred-y different modes available for au gfps

Song Lin: In June, we launched, the browser from Vault.

Speaker Change: in june nounced the brrows from bolt and official collaboration brseser experience raghed the hat td arers in the boys alongside of the premier obxsed four

Song Lin: An official collaboration browser experience with the hit TV series, The Boys, alongside the premiere of Season 4.

Lin Song: Well, seasonality works against our product in the summertime. Open GFs added another 500K users in the call-out to pass salty minor MAUs, achieving a year-over-year youth of growth of 27%, combined with a year-over-year output growth of 14% now and $3.55 on an analyzed basis. As AI capabilities improve, the online journey over consumer can be made both more productive and more informed. Having this pure to build directly into the browser, available website or browser station makes the experience all the more seamless.

Song Lin: While seasonality works against our product, in the summertime, Opera GX added another 500k users in the quarter to pass 30 million user use, achieving a year-over-year user growth of 27%, combined with a year-over-year output growth of 14%, now at $3.55 on an annualized basis.

Speaker Change: well it an analative walks against our product in the summer time or jects added a another of five hundred k you dooff in the colcall to pass sortting min our use

Speaker Change: achieving a year over-year it growth of the finitten percent combined with a year over-year uppu growth of fourteen percent now and three doll ars fifty five cent analyzed the basis

Song Lin: As AI capabilities improve, the online journey of a consumer can be made both more productive and more informed. Having these tools built directly into the browser, instead of a website or a browser extension, makes the experience all the more seamless.

Speaker Change: as the ar capabilities improve the alline jony over consumer can be made both more productive and more infor

Speaker Change: having this to builta directly into the brazsel is fellable website or do extension makes the experience or the mostless

Song Lin: The current landscape reminds me of how search has evolved since the 1990s and before Opera pioneered the integration between search and browser over 20 years ago, from having to use the web page of search engine to search natively in the browser URL bar.

Lin Song: The current landscape reminds me of how such has evolved since the 1990s and before, overpaying me out the integration between search and browser, over to the year-to-build from having to use the webpage of search engine to search natively in the browser URL bar. So now the ability to gather information, make it inform the decisions, and both process and create contents where the help of AI allows users to be even more productive. In the case of our AI assistant area, this is a fully integrated experience that exists nationally alongside the user's existing habits. Our role in this ecosystem is not to remake the individual tools available, but rather integrate both the back and the front end to give our users choice and innovative use cases, whether to area or other services.

Speaker Change: the current landscape reminds the overhouse arch has evolved since the nety united and people overtimeing me out the integration between saw and brought over twenty years ago from having to use the wearepage job such engine too such natively in the brow so you are lbar

Song Lin: So now the ability to gather information, make informed decisions, and both process and create content with the help of AI allows users to be even more productive. In the case of our AI-assisted ARIA, this is a fully integrated experience that exists naturally alongside the user's existing habits.

Speaker Change: so now the ability to gall information makingit inform the divisions and both process and create counountains way through the helpalth of ai allows ethose to the even more productives

Speaker Change: in a case of our ai assistant are this is the fully integrated experience that is this natationurally alongside the usss existing habits

Song Lin: Our role in this ecosystem is not to remake the individual tools available, but rather integrating both the back-end and the front-end to give our users choice and elevated use cases, whether through ARIA or other services. ARIA itself evolves at a rapid pace.

Speaker Change: our role in its equcosystemthat we not reallymake the individual nonot available but rather intintegrity in both a back and the front end to give our you do' choice and enovated the cases will re not to area or otherthose services

Lin Song: Our itself evolves at a rapid pace and this caller along with the multiple AI conditions from better staging our feature drop program and into our flagship browsers, including command line prompts, page context awareness as well as voice and image generation capabilities. We are also offering an integrated and simplified way for users to download and use large language models locally on their computers, currently available in R2. It's a fantastic feeling to have always access to the power of AI assistance, regardless of internet connection and with the certainty that your data does not leave your computer.

Speaker Change: allrightitself inv

Song Lin: And this quarter alone, we moved multiple AI features from beta stage in our feature drop program and into our flagship browsers, including command line prompts, page context awareness, as well as voice and image generation capabilities. We are also offering an integrated and simplified way for users to download and use large language models locally on their computers currently available in R2.

Speaker Change: at a rapid pace and this call along way moveved mulplea shows from better stagingin our figital jorob program and into our flagship brows including commonlying proms page contex wellareness as well as a voice and image generation capabilities

Speaker Change: we are also offering and integrated and simply iedty way or you lo to download and use large langumorage models localcollalect on real computers currently available in our tobe

Song Lin: It's a fantastic thing to have always access to the power of AI assistance, regardless of internet connection, and with the certainty that your data does not leave your computer.

Speaker Change: and so fantasticating to have always unaccess to the pul a assistance with regardless of in connection and ra this certainp that your data does not leave your computer

Song Lin: As you can see, we are keeping busy.

Lin Song: As you can see, we are keeping busy. We might be a small company compared to our competition, but I think we are also the perfect size to innovate and seize opportunities. While we have more than tripled our revenue since our 2018 IPO, we have maintained an ever-present startup mindset, free of the bureaucracy of large organizations. Combined with the scaled business well-sorted financials, this allows us to invest in exciting products and healthy continued growth. With strength building throughout the year, we are excited to embark on the second harbour within the fourth and what comes next.

Speaker Change: as you can see way ackeeping busy we might be a small company comppell to our competition but i think we are also the perfect size to innovate and seive opportunities

Song Lin: We might be a small company compared to our competition, but I think we are also the perfect size to innovate and seize opportunities. While we have more than tripled our revenue since our 2018 IPO, we have maintained an ever-present, startup mindset free of the bureaucracy of large organizations, combined with a scaled business while solid financials allow us to invest in exciting products and healthy continued growth.

Speaker Change: while we have morethan tripl our revenue sense two thousand and eighteen ipo we have maintained ever present start-up mindset three of the bbroocracy of large organizations

Speaker Change: combined the way to scale business well solid financials allow us to invest in exciting products and the healthy continued growth

Song Lin: With strength building throughout the year, we are excited to embark on the second half of 2024 and what comes next.

Speaker Change: ways strength building throughout out the year where i excited to emback on the second halfb of within twenty- four and what comes next

Song Lin: With that, I will turn it over to Frode to dive deeper into the QP numbers and our guidance.

Frode Jacobsen: With that, I will turn over to Frode to dive deeper into the Cuban numbers and our guidance. Thank you, Song. Now, four months further into the year versus our last earnings call, it's fair to say that 2024 is shaping up to be another really nice year for Opera. We are growing ahead of expectations with internal excitement across the board on the topics some have been covered and more to come. Our financial results once again exceeded expectations, even the top of our ranges. In fact, over our six-year history as a public company, we've never missed our revenue guidance and only missed our EBITDA guidance once when the COVID pandemic hit in the first quarter of 2020.

further: with that i will take over to further to dive depeople into the cuban numbers and all guidance

Frode Jacobsen: Thank you, Sung.

Z: thank you z now four months further into the year versus our last earnings call it's fair to say that two thousand and twenty four is shaping up to be another really niceer for opera

Frode Jacobsen: Now, four months further into the year versus our last earnings call, it's fair to say that 2024 is shaping up to be another really nice year for opera.

Frode Jacobsen: We are growing ahead of expectations with internal excitement across the board on the topics Sung Lin covered and more to come.

Speaker Change: we are growing ahead of expectations with internal excititement across the board on the topics sunbeen covered and more to come

Frode Jacobsen: Our financial results once again exceeded expectations, even the top of our ranges.

Speaker Change: our financial results once again exceed expectations even the top of our ranges

Frode Jacobsen: In fact, over our six-year history as a public company, we've never missed our revenue guidance and only missed our EBITDA guidance once when the COVID pandemic hit in the first quarter of 2020.

Speaker Change: in fact over our six -year history as a public company we've never missed our revenue guidance and only mr ebita guidance once when the covid pandemic hit in the first quarter of two thousand and twenty

Frode Jacobsen: That does say something about our healthy and organic growth and its relatively predictable nature, even if we like to bake in some caution for potential headwinds here and there.

Frode Jacobsen: That does say something about our healthy and organic growth and its relatively predictable nature, even if we like to bake in some caution for potential headwinds here and there. We've also been a Rule of 40 company for 13 sequential quarters now, that is, every quarter after the first year of COVID. And as you see from our guidance, we aim to remain in that category going forward as well. Our overall revenue growth was 17%, and our adjusted EBITDA margin was 24%, both in line with recent quarters. As Song commented, I would highlight the e-commerce opportunities already ceased, and there are further potential as a key building block in our continued ARPU building, naturally on top of healthy user based dynamics.

Speaker Change: that does say something about our healthy and organic growth and it's relatively predictable nature even if we like to bak in some caution for potential headwinds here and there

Frode Jacobsen: We've also been a Rule of 40 company for 13 sequential quarters now, that is every quarter, after the first year of COVID. And as you see from our guidance, we aim to remain in that category going forward as well. Our overall revenue growth was 17% and our adjusted EBITDA margin was 24%, both in line with recent quarters.

Speaker Change: we've also been a rule of forty company for thirteen sequential quarters now that is every quarter after the first year of covid

Speaker Change: and as you see from our guidance we aim to remain in that category going forward as well

Speaker Change: our overall revenue growth was seventeen percent and our adjusted ebitda margin was twenty-four percent both in line with recent quarters

Frode Jacobsen: As Sung commented, I would highlight the, e-commerce opportunities already seized and their further potential as a key building block in our continued ARPU building, naturally on top of healthy user-based dynamics.

Song: as song commented i would highlight the e-commerce opportunities already seased and there are further a potential as a key building block in our continued our building naturally on top of healthy user-based dynamics

Frode Jacobsen: As in recent quarters, FX continues to represent a headwind, in particular as it relates to emerging markets. And our year-over-year rose would have been 8 percentage points higher or 25% on a constant currency basis. In terms of cost, we had guided for a sequential increase in marketing costs, yet in the end maintained the spend level from Q1. That led adjusted EBITDA to overall perform even beyond the incremental revenue. Other than that, costs largely came in according to expectations. Compensation costs increased sequentially, as expected, predominantly due to annual salary adjustments, but also with hires and increased bonus provisions.

Frode Jacobsen: As in recent quarters, FX continues to represent a headwind in particular as it relates to emerging, markets. And our year-over-year growth would have been 8 percentage points higher or 25% on a constant currency basis.

Song: as in recent quarters fx continues to represent a headwind in particular as it relates to emerging markets

Speaker Change: and our year-over year growth would have been eight percentage points higher or twenty-five percent on a constant currency basis

Frode Jacobsen: In terms of cost, we had guided for a sequential increase in marketing cost, yet in the end maintained the spend level from Q1.

Frode Jacobsen: That led adjusted EBITDA to overperform even beyond the incremental revenue.

Speaker Change: in terms of cost we had guided for a sequential increase in marketing cost yet in the end maintained the bend level from q one

Frode Jacobsen: Other than that, costs largely came in according to expectations. Compensation costs increased sequentially as expected, predominantly due to annual salary adjustments, but also with hires and increased bonus provisions.

Speaker Change: that led adjusted ebitda to overperform even beyond the incremental revenue

Speaker Change: other than that costs largely camein according to expectations

Speaker Change: compensation costs increased sequenti has expected predominantly due to annual salary adjustments but also with hires and increased bomus provisions

Frode Jacobsen: Cost of revenue items came in at 25.2% of revenue, which was within the expected range. And all other effects pre-adjusted EBITDA came in at 8.6 million, also in line with expectations. Tax cost of 2.8 million was 11% of adjusted EBITDA. In the prior quarter, our tax cost was elevated due to FX impacts on our tax assets. Year to date, tax cost as a percentage of adjusted EBITDA is 14% and in line with a more normalized level. Our operating cash flow was 17.4 million in the quarter, representing 65% of adjusted EBITDA. Free cash flow from operations was 13.5 million, or 51% of adjusted EBITDA.

Frode Jacobsen: Cost of revenue items came in at 25.2% of revenue, which was within the expected range. And all other OPEX pre-adjusted EBITDA came in at 8.6 million, also in line with expectations.

Speaker Change: cost of revenue items came in at twenty-five point two percent of revenue which was within the expected range

Frode Jacobsen: Tax cost of 2.8 million was 11% of adjusted EBITDA.

Speaker Change: and all other opex preadjusted ebitda came in at eight point six million also in line with expectations

Speaker Change: tax cost of two point eight million was eleven percent of adjusted ebitda in the prior corarner our tax cost was elevated due to fx impacts on our tax assets

Frode Jacobsen: In the prior quarter, our tax cost was elevated due to FX impacts on our tax assets. Year-to-date, tax cost as percentage of adjusted EBITDA is 14%, and in line with a more normalized level. Our operating cash flow was $17.4 million in the quarter, representing 65% of adjusted EBITDA. Free cash flow from operations was $13.5 million, or 51% of adjusted EBITDA.

Speaker Change: year-to-date tax cost as percentage of adjusted ebitda is fourteen percent and in line with a more normalized level

Speaker Change: our operating cash flow was seventeen point four million in the quarter werere presenting sixty-five percent of adjusted ebitda

Unknown Attendee: Call.

Operator: Call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this period, you will need to press star one on your telephone keypad. If you want to remove yourself from the queue, please press the pound key. Please be advised that today's call is being recorded. Lastly, if you should need operator assistance, please press star zero.

Unknown Attendee: At this time, all participants are in a listen only mode.

Unknown Attendee: After the speaker's presentation, there will be a question and answer session. To ask a question during this period, you will need to press star one on your telephone keypad. If you want to remove yourself from the queue, please press the pound key. Please be advised that today's call is being recorded.

Speaker Change: free cash flow from operations was thirteen point five million or fifty-one percent of adjusted ebitda

Frode Jacobsen: This year, annual bonuses were paid in Q2 as opposed to in the first quarter of 2023, representing a quarter-specific headwind. Looking at the first half of 2024 as a whole, our conversion from adjusted EBITDA to operating cash flow stands at 94%. The year-to-date conversion from adjusted EBITDA to free cash flow from operations stands at 42%. However, it would be 79% if netting out the special 19 million investment we made in establishing a proprietary AI cluster in Iceland. As commented earlier, we expect these ratios to stabilize as the year progresses.

Frode Jacobsen: This year, annual bonuses were paid in Q2, as opposed to in the first quarter of 2023, representing a quarter-specific headwind.

Speaker Change: this year annual bonuses were paid in q two as opposed to in the first quarter of two thousand and twenty three representing a quarter specific headwind

Frode Jacobsen: Looking at the first half of 2024 as a whole, our conversion from adjusted EBITDA to operating cash flow stands at 94%.

Unknown Attendee: Lastly, if you should need operator assistance, please press star zero.

Speaker Change: looking at the first half of two thousand and twenty four as a whole our conversion from adjusted ebitda to operating cash flow st at ninety-four percent

Matthew Wolfson: I would now like to turn the call over to your speaker today, Matt Wolfson, Head of the Investor Relations.

Matthew Wolfson: I would now like to turn the call over to your speaker today, Matt Wolfson, Head of the Investor Relations. Please begin. Thank you for joining us.

Frode Jacobsen: The year-to-date conversion from adjusted EBITDA to free cash flow from operations stands at 42%. However, it would be 79% if netting out the special $19 million investment we made in establishing a proprietary AI cluster in Iceland.

Matthew Wolfson: Please begin.

Matthew Wolfson: Thank you for joining us.

Speaker Change: the year -to-today commercial from adjusted ebitda to free cash flow from operations stands at forty two percent however it would be seventy nine percent if netting out to special nineteen million investment we made in establishing a proprietary ai cluster in island

Matthew Wolfson: This morning, I am joined by our co-CEO Song Lin and our CFO for us, Jacobsen.

Matthew Wolfson: This morning, I am joined by our co-CEO Song Lin and our CFO for us, Jacobsen. Before I hand over the call to Song Lin, I would like to remind you that some of the statements that we make today regarding our business operations and financial performance may be considered forward-looking. Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties.

Matthew Wolfson: Before I hand over the call to Song Lin, I would like to remind you that some of the statements that we make today regarding our business operations and financial performance may be considered forward-looking. Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties.

Matthew Wolfson: Actual results could differ materially. Please refer to the safe harbor statement in our earnings release and our form 20F, including the risk factors. We undertake no obligation to update any forward-looking statements.

Frode Jacobsen: As commented earlier, we expect these ratios to stabilize as the year progresses. Towards the end of the quarter, we announced our regular semi-annual dividend of $0.40 per ADS, or $35.4 million in total value. Payment was made in early July, consisting of $27.6 million in cash and $7.8 million offset against the remainder of our receivable related to the sale of Starix in 2022, meaning that this receivable is now fully settled.

Speaker Change: as commented earlier we expect these ratios to stabilize as the year progresses

Matthew Wolfson: Actual results could differ materially.

Frode Jacobsen: Towards the end of the quarter, we announced our regular semi-annual dividend of $0.4 million in total value. Payment was made in early July, consisting of 27.6 million in cash and 7.8 million offset against the remainder of our receivable related to the sale of Starex in 2022, meaning that this receivable is now fully settled. Going forward, dividend payments will be entirely cash-based and fully funded by our growing cash generation.

Speaker Change: towards the end of the quarter we announced our regular semiannual dividend of forty-cents radus or thirty-five point four million in total value

Matthew Wolfson: Please refer to the safe harbor statement in our earnings release and our form 20F, including the risk factors.

Matthew Wolfson: We undertake no obligation to update any forward-looking statements.

Speaker Change: payments was made an early july consisting of twenty seven point six million in cash and seven point eight million offset against the remainder of our receivable related to the sale of stars in two thousand and twenty-two meaning that this receivable is now fully settled

Matthew Wolfson: During this call, we will present both IFRS and non-IFRS financial measures. A reconciliation of non-IFRS to IFRS measures is included in today's earnings program.

Song Lin: During this call, we will present both IFRS and non-IFRS financial measures. A reconciliation of non-IFRS to IFRS measures is included in today's earnings program. [inaudible] Our advertising revenue continues to benefit from the same underlying drivers of high-out user growth and expanding monetization opportunities. In particular, as our Western and gaming users represent an increasingly attractive audience for monetization partners. Our ability to drive targeted and high purchase intent traffic from our users directly to an expanding partnership base has proven to be scalable.

Frode Jacobsen: Going forward, dividend payments will be entirely cash-based and fully funded by our growing cash generation.

Speaker Change: going forward dividend payments will be entirely cash based and fully funded by our growing cash generation

Song Lin: [inaudible] Our advertising revenue continues to benefit from the same underlying drivers of high-out user growth and expanding monetization opportunities.

Frode Jacobsen: Then turning to guidance. Following a strong first half of the year that demonstrated the resilience in our growth model, we have added to our comfort on our full-year trajectory and our pleas to raise our guidance today. We now guide full-year revenue of 461-467 million, up from our prior guidance of 454-465 million, and translating to 17% year-over-year growth at the midpoint. Our trajectory allows us to raise guidance beyond the Q2 over performance and also narrow the range to reflect a solidified outlook for the second half. We are seeing particular strengths in the e-commerce vertical, and we are cautiously optimistic that such benefits may be even more pronounced during the holiday season in the final months of the year.

Frode Jacobsen: Then, turning to guidance.

Speaker Change: then and turning to guidance

Frode Jacobsen: Following a strong first half of the year that demonstrated the, resilience in our growth model, we have added to our comfort on our full-year trajectory and are pleased to raise our guidance today. We now guide full-year revenue of $461 to $467 million up from our prior guidance of $454 to $465 million and translating to 17% year-over-year growth at the midpoint. Our trajectory allows us to raise guidance beyond the Q2 overperformance and also narrow the range to reflect a solidified outlook for the second half. We are seeing particular strength in the e-commerce vertical and we are cautiously optimistic that such benefits may be even more pronounced during the holiday season in the final months of the year.

Speaker Change: following a strong first half of the year that demonstrated the resilience in our growth model we have added to our comforts on our full year trajectory and are pleased to raise our guidance today

Speaker Change: we now guide full year revenue of four sixty-one to four sixty seven million up from our prior guidance of four fifty four to four and sixty five million and translating to seventeen percent year -over- year growth at the midpoint

Speaker Change: our trajectory allows us to raise guidance beyond the q two overperformance and also narrow the range to reflect a solidified outlook for the second half

Speaker Change: we are seeing particular strength in the e-commerce vertical and we are cautiously optimistic that such benefits may be even more pronounced during the holiday season in the final months of the year

Frode Jacobsen: We raise adjusted EBITDA guidance to 110-113 million for the year, up from our prior guidance of 106-210 million and representing a 24% margin at the midpoint. While Q2 in isolation could indicate an even stronger range for the year, we guide for a more back-loaded marketing spend profile than earlier assumed to ensure we are in position to seize growth opportunities on the back of our new iOS offering and the upcoming releases of Opera 1 and Opera GX. In some, our updated revenue guidance range now begins above the former midpoint, and our updated adjusted EBITDA guidance range now begins at the former high.

Frode Jacobsen: We raise adjusted EBITDA guidance to $110 to $113 million for the year up from our prior guidance of $106 to $110, million and representing a 24% margin at the midpoint.

Speaker Change: we raateise suggested debbita guidance to one hundred and ten to one hundred and thirteen million for the year up from our prior guidance of one hundred and six two hundred and ten million and representing a twenty-four percent margin at the midpointin

Frode Jacobsen: While Q2 in isolation could indicate an even stronger range for the year, we guide for a more back-loaded marketing spend profile than earlier assumed to ensure we are in position to seize growth opportunities on the back of our new iOS offering and the upcoming releases of Opera 1 and Opera GX.

Speaker Change: while q two in isolation could indicate an even stronger range for the year

Speaker Change: we guide for a more backloaded marketing spend profile than early are assumed to ensure we are inimposition to seize growth opportunities on the back of our new ios offering and the upcoming releases of ourper one and oper gx

Frode Jacobsen: In sum, our updated revenue guidance range now begins above the former midpoint and our updated adjusted EBITDA guidance range now begins at the former high end.

Speaker Change: in some our updated revenue guidance range now begins above the former midpoint and are updated adjusted ebita guidance range now begins at the former high end

Frode Jacobsen: While we do guide for the trend to be modest, we are also very pleased to indicate increases in the year-over-year growth rate from quarter to quarter in the second half of the year.

Frode Jacobsen: While we do guide for the trend to be modest, we are also very pleased to indicate increases in the year-over-year growth rate from quarter to quarter in the second half of the year. For the third quarter, we guide revenue of $119 to $121 million, or 17% year-over-year growth at the midpoint. We guide adjusted EBITDA of $27 to $28.5 million, or 23% margin at the midpoint. That equates to OPEX pre-adjusted EBITDA of $92 million at the midpoint, in which the sequential increase of $9 million is predominantly driven by incremental provisions for marketing spent. We also add just over a percentage point of cost of revenue in items relative to revenue and expect compensation costs to modestly tick upwards in dollar amounts, though decrease as a percentage of revenue.

Speaker Change: while we do guide for the trend to be modest we are also very pleased to indicate increases in the year-over-year growth rate from quarter-to-quarter in the second half of the year

Frode Jacobsen: For the third quarter, we guide revenue of 119 to 121 million, or 17% year-over-year growth at the midpoint. We guide adjusted EBITDA of 27 to 28.5 million, or a 23% margin at the midpoints. That equates to OPEX pre-adjusted EBITDA of 92 million at the midpoints, in which the sequential increase of 9 million is predominantly driven by incremental provisions for marketing spent.

Song Lin: In particular, as our Western and gaming users represent an increasingly attractive audience for monetization partners.

Speaker Change: for the third quarter weguide revenue of aone hundred and nineteen two one hundred and twenty-one million or seventeen percent year-over-year growth at the midpoint

Song Lin: Our ability to drive targeted and high purchase intent traffic from our users directly to an expanding partnership base has proven to be scalable.

Speaker Change: we got adjusted ebitda of twenty-seven to twenty-eight point five million or a twenty- three percent margin at the midpoints

Song Lin: We are taking advantage of our first policymakers and our well-developed AI platform within Opera ads while creating value to both partners and users.

Song Lin: We are taking advantage of our first policymakers and our well-developed AI platform within Opera ads while creating value to both partners and users. We still consider ourselves to be in the audience stages in taking advantage of these opportunities, especially as our AI offerings broaden and we increase the number of direct interactions between the browser itself and the end of the user. Such revenue was 45 million in the color up 15% year over year and also in line with our trajectory from prior colors.

Speaker Change: that equates to opex pre-adjusted ebitda of ninety-two million at the midpoints in which thesequential increase of nine million is predominantly driven by incremental provisions for marketing spent

Frode Jacobsen: We also add just over a percentage point of cost of revenue in items relative to revenue and expect compensation costs to modestly tick upwards in dollar amounts, though decrease as a percentage of revenue.

Song Lin: We still consider ourselves to be in the audience stages in taking advantage of these opportunities, especially as our AI offerings broaden and we increase the number of direct interactions between the browser itself and the end of the user.

Speaker Change: we also add adjust over a percentage point of cost of revenue in items relative to revenue and expect compensation cost to modestly take upwards in dollar amount though decrease as a percentage of revenue

Frode Jacobsen: The total of other OPEX items pre-adjusted EBITDA is expected to trend down versus the second quarter, both in dollars and naturally then relative to revenue.

Frode Jacobsen: The total of other OPEX items pre-adjusted EBITDA is expected to trend down versus the second quarter, both in dollars and, naturally then, relative to revenue. Our cost expectations for the year as a whole remain in line with our prior directional commentary. With marketing cost and cost of revenue, taking up a bit as percentage of revenue relative to 2023, while compensation costs and other OPEX items tick down. Largely offsetting one another but implying 40 basis points of continued margin expansion at the midpoints, combined with stronger-than-expected revenue growth. So all in all, we are entering the second half with great momentum and look forward to keeping you posted.

Song Lin: Such revenue was 45 million in the color up 15% year over year and also in line with our trajectory from prior colors.

Speaker Change: the total of other opeics items preadjusted ebitda is expected to trend down versus the second quarter both in dollars and that's really then relative to revenue

Frode Jacobsen: Our cost expectations for the year as a whole remain in line with our prior directional commentary, with marketing costs and cost of revenue ticking up a bit as percentage of revenue relative to 2023, while compensation costs and other OPEX items tick down, largely offsetting one another, but implying 40 basis points of continued margin expansion at the midpoints, combined with stronger than expected revenue growth.

Song Lin: We are proud to grow our most mature revenue stream and this pace as it directly demonstrates our ability to attract and retain highly engaged and monetize our users.

Song Lin: We are proud to grow our most mature revenue stream and this pace as it directly demonstrates our ability to attract and retain highly engaged and monetize our users. We remain enthusiastic about the future of our search-based revenue streams as well. There is certainly increased public focus on ensuring competition among such engines. Being an independent browser provider, we appreciate the broader recognition of the value and the importance of the search position provided by a browser and we are very excited to work with key players to capture and further expand the potential of the massive amount of traffic that we can drive from our user base.

Speaker Change: our cost expectations for the year as a whole remain in line with our prior directional commentary with marketing costs and cost of revenue taking up a bit as percentage of revenue relative to two thousand and twenty three while compensation costs and other opex items takeick down

Song Lin: We remain enthusiastic about the future of our search-based revenue streams as well.

Speaker Change: largely offsetting one another but implying forty basis points of continued margin expansion at the midpoints combined with stronger than expected revenue growth

Song Lin: There is certainly increased public focus on ensuring competition among such engines.

Frode Jacobsen: So, all in all, we are entering the second half with great momentum and look forward to keeping you posted.

Song Lin: Being an independent browser provider, we appreciate the broader recognition of the value and the importance of the search position provided by a browser and we are very excited to work with key players to capture and further expand the potential of the massive amount of traffic that we can drive from our user base.

Speaker Change: so all in all we are entering the second half with great momentum and look forward to keeping you posted

Operator: 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, press the pound key. When posing your question, we ask that you pick up your handset for optimal sound quality. Again, to ask a question, please press star one at this time.

Frode Jacobsen: With that, I'll turn the call back to the operator for questions.

Operator: Thank you.

Speaker Change: with that i'll turn the call back to the operator for your questions

Speaker Change: thank you as a reminder to ask a question please press star one on your telephone keypad

Speaker Change: to withdraw your question pressed the pound key when posing your question we ask that you pick up your handset for optimal sound quality

Song Lin: Last color we also commented about the positive initial impact of the digital markets act or the MA which addresses many of the ways that the browser market is not always a level playing field.

Song Lin: Last color we also commented about the positive initial impact of the digital markets act or the MA which addresses many of the ways that the browser market is not always a level playing field. As separately disclosed, we take an active role in these processes and this summer we pointed out where we believe the DMA's gatekeeper definition principles have been applied to narrowly. The DMA momentum carried over into the second color where we saw significant strengths in new user adoption of those or proper Android and Oracle iOS throughout the EU as well as an increase in the number of smartphone users in the region who have made our mobile browsers the default.

Operator: As a reminder, to ask a question, please press star 1 on your telephone keypad. To withdraw your question, press the pound key.

Operator: When posing your question, we ask that you pick up your handset for optimal sound quality.

Naved Khan: We'll take our first question from Naveed Khan with the B. Riley Securities. Please go ahead. Great. Thank you. A couple of questions from me.

Speaker Change: again to ask a question please press star one at this time we'll take our first question from nev con with the b riley securities please go ahead

Operator: Again, to ask a question, please press star 1 at this time.

Song Lin: As separately disclosed, we take an active role in these processes and this summer we pointed out where we believe the DMA's gatekeeper definition principles have been applied to narrowly.

Operator: We'll take our first question from Naveed Khan with B Riley Securities.

Nev Con: great thank you a couple of questions from a mayly one for song so song you said that maybe you think that maybe the greatatekepeopleper definition has been applied to narrowly may we can you just use ththoughts on

Lin Song: Maybe one for song. So song is said that maybe, you know, you think that maybe the gatekeeper definition has been applied too narrowly. Maybe can you just give us a thoughts on how you think, you know, you should kind of think about applying it and really, really expect to or where do you want to see it go in terms of implementation.

Naveed Khan: Please go ahead.

Song Lin: The DMA momentum carried over into the second color where we saw significant strengths in new user adoption of those or proper Android and Oracle iOS throughout the EU as well as an increase in the number of smartphone users in the region who have made our mobile browsers the default.

Speaker Change: how you think

chck fa: you know regulator should kind of think about applying it and reallyready where do you expect to oralready you want to see it go in terms of implementation and maybe the second questionution is for chck fa so based on your commentary on this trength you're seeing any e-commerce

Frode Jacobsen: And maybe the second question is for just for a day. So just tell me your commentary on this trend. You're seeing in e-commerce. Maybe just talk about what they are, what are the underlying drivers that are kind of contributing to this trend. Thank you.

Song Lin: Beyond the revolutionary matters, technology and the services evolved as well.

Song Lin: Beyond the revolutionary matters, technology and the services evolved as well. Recently, there have been a lot of focus around search and content platforms being redefined. To a great extent, we see how AI underpins the ability of such services to give the end user a better experience. Whether it's from answering questions directly or elevating the quality or promoted company. We are enthusiastic about this trend as we believe it puts greater emphasis on customer providers to deliver true value and net leakage of our user monetization to no value publishers.

Song Lin: Recently, there have been a lot of focus around search and content platforms being redefined. To a great extent, we see how AI underpins the ability of such services to give the end user a better experience.

Speaker Change: maybeme just talk about what are the what are the underlying driver there are kind of contributing to this strength thank you

Naveed Khan: Great.

Lin Song: Sure. I'll comment a bit about that. So, yeah, I think that, you know, more like, I think that's your invitation to the BMA, right? So more like, I think the M.A. has been helpful on demonstrated to independent player like us, right? Well, we call a lot of expoels on particular iOS platforms. But I think, you know, of course, there are some other platforms, which is also relevant. And, you know, for instance, I think in this particular case, including Windows among others, which, which also then sort of more like it gave the keyboard definitions. And then for now, it applies to Windows, but it doesn't really apply to some other default browser.

Naveed Khan: Thank you.

Naveed Khan: A couple of questions from me.

Song Lin: Whether it's from answering questions directly or elevating the quality or promoted company.

Speaker Change: sure i comment a bit about that so yes i think that you likei think that's immation to be may right so more like i think dm has been helpful demonstrated to independently like us right well we pull all of these foil

Naveed Khan: Maybe one for Song.

Song Lin: We are enthusiastic about this trend as we believe it puts greater emphasis on customer providers to deliver true value and net leakage of our user monetization to no value publishers.

Naveed Khan: So, Song, you said that maybe you think that maybe the gatekeeper definition has been applied too narrowly.

Speaker Change: particular the s platforms but i think of course there are some ount of platforms

Song Lin: The browser is sitting on a perfect spot as being a vehicle of how and the users connect with those AI elevated services, a powerful position to be in.

Song Lin: The browser is sitting on a perfect spot as being a vehicle of how and the users connect with those AI elevated services, a powerful position to be in. We believe these changes are beneficial to our users as well as our high quality monetization partners and ultimately to Opera.

Speaker Change: which is also revant and you know ts i think in this particular case including windows are those which which also that sort of more likelyto get key definitions and for nowitappliesto win knowse but it doesn't really appli some people the growth or they are like like members of that

Lin Song: They are like Microsoft Edge, which we think it's also, you know, by actually, by the definition, it actually should apply among us. So, so yeah, so I think in general, my comment is just more like where we're actually working very closely with the way the EU on this as a European company. And we also have the given opinions and ideas of how, you know, how moving forward this is especially seen that the audio jurisdiction has actually been very helpful to independent player like us to be able to grow. So we feel that there's definitely opportunity for more actions there.

Song Lin: We believe these changes are beneficial to our users as well as our high quality monetization partners and ultimately to Opera.

Speaker Change: which which we think it's also bu by actually definitionation that should apply the models

Speaker Change: so yes i think in general ultimonly just a more like we are actually walking back well the ways the you onvthis yourro company

Song Lin: Now turning a bit to the always high activity level within Opera, our success has always been driven by innovation and speed, providing our users with unique products and improved[inaudible] we were proud to announce that Opera 1 received the prestigious IF design awards for Nip-Nip-Nip-Full.

Song Lin: Now turning a bit to the always high activity level within Opera, our success has always been driven by innovation and speed, providing our users with unique products and improved[inaudible] we were proud to announce that Opera 1 received the prestigious IF design awards for Nip-Nip-Nip-Full. We thought we would lead with features and functionality, but to win users' hearts, our browsers must also look beautiful and provide elegant flows. The next major upgrade of Opera 1, referred to as R2, is now available for public testing and will roll out later this year.

Speaker Change: and we also have tobegin openance

Speaker Change: and ideas of how know how will all this is especially have seen that

Speaker Change: the audiologization as they actually be very helpful to independent play like us be able to grow so we feel that the definite oort to be for more ashions sal so i think that's what we'are trying to reftter you and yes i i think that' separ ressreities of which we have is sued around the metal and we're just continue to wal close ide and with saw the ri id parties to see how we can build addressress and how you can

Lin Song: So, so I think that's what we're trying to report to you.

Lin Song: And yeah, so more like I think that's some separate press release, which we're happy you should share around the matter. And we'll just continue to work close the with EU and with all the related parties to see how we can build on dress and how we can have better opportunity, not only in iOS, which I think it's great. But also a broader platforms. Yeah, so I think the general trend is, in general, quite positive. And we think the similarities which are happening around the world, not only you, which definitely are going to be positive to independent player like us.

Song Lin: We thought we would lead with features and functionality, but to win users' hearts, our browsers must also look beautiful and provide elegant flows.

Speaker Change: have developed oppunity not only s which i think it s it's great but also goup platforms yes so i think the general trend is a generalocr postive and we think into those emergines which are happening around notonlya youu whichage ven are going to be pointedve to independent player like us

Song Lin: The next major upgrade of Opera 1, referred to as R2, is now available for public testing and will roll out later this year.

Song Lin: If you give it a try, you will see how we have improved, how people listen to music from portals services well browsing, as well as continue to advance our browser AI area.

Song Lin: If you give it a try, you will see how we have improved, how people listen to music from portals services well browsing, as well as continue to advance our browser AI area. With the after release, we continue to build out the modular design introduced in Opera 1 and have a new split screen node that allows users to multitask more easily between two open tabs.

Frode Jacobsen: Naved, I'll chime in on the second part of the question on the trend within e-commerce. Besides, I would say we have built a sizable user base in high-value markets, and that allows us to create new partnerships where we can drive meaningful traffic. Using our insights, we don't have the ability to drive traffic with high-purchase intent. So e-commerce has become our biggest vertical and our vertical that is growing the fastest.

Speaker Change: now me i'll try in on the second part of the question on the trend withinan e-commerce i would say we have built a sizeable user base in high value markets

Song Lin: With the after release, we continue to build out the modular design introduced in Opera 1 and have a new split screen node that allows users to multitask more easily between two open tabs.

Speaker Change: and that allows us to create new partnerships where we can drive meaningful traffic and using our insights we ' have the ability to drive traffic with high purchase intent

Song Lin: Finally, R2 introduces a new type of scene support where users can customize their browser with a set of high quality dynamic scenes that provide the mostly experiences further differentiating the visual appearance of our browsers.

Song Lin: Finally, R2 introduces a new type of scene support where users can customize their browser with a set of high quality dynamic scenes that provide the mostly experiences further differentiating the visual appearance of our browsers.

Speaker Change: so e-commerce is has become our biggest vertical and our vertical that is growing the fest

Song Lin: Last week we also launched Opera 1 for iOS, prioritized as a direct consequence of the increase of opportunity to compete on the platform.

Song Lin: Last week we also launched Opera 1 for iOS, prioritized as a direct consequence of the increase of opportunity to compete on the platform. Compared with Safari, Opera's users can engage directly with the area browser AI. They can experience browsing in proper four screen and benefit from all our other integrity services like building free VPN and app blocking. With that, our product line-up for users with the greatest monetization potential is more complete and you will see us putting increased marketing dollars behind this line-up in the multiple heads to continue raising awareness of Opera as an alternative to the iOS before the browser.

Naveed Khan: Maybe can you just give us your thoughts on how you think regulators should kind of think about applying it, and where do you expect to or where do you want to see it go in terms of implementation?

Frode Jacobsen: Okay, that's helpful. Maybe a quick follow-up if I may. If I just look at the Western market, the user base, kind of flatish, sequentially wondering if there is a season I'll be there or if there's more marketing dollars you could have spent or something getting pushed from Q2 into Q2, maybe help us understand that.

Speaker Change: okay that's helpful maybe a quick a quick quick followup if i may if i just look at the western market

Song Lin: Compared with Safari, Opera's users can engage directly with the area browser AI.

Speaker Change: user base kind of flloted sequentially

Song Lin: They can experience browsing in proper four screen and benefit from all our other integrity services like building free VPN and app blocking.

Speaker Change: wondering if there is aseasonety there or if there's more marketing dollars you could have spent

Frode Jacobsen: Thank you. Yeah, I can understand that. Q2 includes the beginning of summer, but I think, more importantly, I would say we have continued our strategy. We've even applied it tighter than before. So when we look at our marketing spend, year over year, we end relative to Q1. We have actually reduced the number of users that have come in through our marketing activities, but at an increased cost. And that is what is driving the year-over-year 8% growth in marketing and sort of the flat trend from Q1. So we are focusing on the very most valuable and output-driving users that we can.

Speaker Change: orsomething 'getreting putush from q two into three preious may help us understand that

Song Lin: With that, our product line-up for users with the greatest monetization potential is more complete and you will see us putting increased marketing dollars behind this line-up in the multiple heads to continue raising awareness of Opera as an alternative to the iOS before the browser.

Speaker Change: thank you i can understand that to includde the beginning of summer but i think more importantly i would say we have continued our strategy we have even applied

Speaker Change: tighter than then before so when we look at our marketing spend year-over-year we and relative to q one we have actually reduced the number of users that are come through our marketing activities but at an increased cost

Song Lin: Now, Shipty focused on Opera GX, our highly successful gaming browser.

Song Lin: Now, Shipty focused on Opera GX, our highly successful gaming browser. In April, Opera GX debited the official $7.27 browser node created in collaboration with the game developer, the CD project Reps. The node allowed deep customization of the Opera GX browser with branded elements from the popular game. In total, there are over 7,500 different modes available for open GFs. In June, we launched the browser from Vault and official collaboration, browser experience raised the hit TV series, The Boys, alongside the premiere of season 4.

Song Lin: In April, Opera GX debited the official $7.27 browser node created in collaboration with the game developer, the CD project Reps. The node allowed deep customization of the Opera GX browser with branded elements from the popular game.

Speaker Change: and that 's what is driving theyearover-year eight percent growth in marketing and so of flat trend from from q one so we are focusing on the very most

Frode Jacobsen: And I think that is also a factor in looking at the total user base. As mentioned, we are building in more marketing cost. In the second half, we have a product lineup that is essentially tailored for Western and high-value users. And that is what we focus on in the second half of the year.

Speaker Change: valuable in arper-driving users that we can and i think that is also a factor in looking at the total user base

Song Lin: In total, there are over 7,500 different modes available for open GFs.

Song Lin: In June, we launched the browser from Vault and official collaboration, browser experience raised the hit TV series, The Boys, alongside the premiere of season 4.

Speaker Change: as mentioned we are building in more marketing cost in the second half we have a product line up that is essentially tailored for western and high value users and that is what we was we focus on in the second half of the year

Song Lin: Well, seasonality works against our product in the summertime.

Song Lin: Well, seasonality works against our product in the summertime. Open GFs added another 500K users in the call-out to pass salty minor MAUs achieving a year-over-year youth of growth of 27 percent combined with a year-over-year output growth of 14 percent, now and $3.55 on an analyzed basis. As AI capabilities improve, the online journey over consumer can be made both more productive and more informed. Having this pure to build directly into the browser, available website or browser station makes the experience all the more seamless.

Song Lin: Open GFs added another 500K users in the call-out to pass salty minor MAUs achieving a year-over-year youth of growth of 27 percent combined with a year-over-year output growth of 14 percent, now and $3.55 on an analyzed basis.

Naved Khan: Superhero, thank you, guys.

Eric Sheridan: Thank you. Our next question will come from Eric Sheridan with Goldman Sachs. Please go ahead. Thanks so much for taking the questions. Maybe first building on Naveem's question on the EU, but widening out a little bit. When you see this level of shift in the competitive and the regulatory landscapes, how should we think about this informing a almost reprioritization of product or marketing over a longer period of time and how your priorities might be shifting or changing, given what you're seeing in the external landscape and some opportunities opening up. And second, in terms of the ARIA system, curious any feedback on behavior adoption, your things you've learned from the way users have embraced AI in the early days.

Naveed Khan: And maybe the second question is for Jeff Flody.

Speaker Change: super helpful thank you guys

Naveed Khan: Okay.

Speaker Change: thank you our next question we'll come from eric sheridan with goldman ses please go ahead

Eric Sheridan: thanks somuch for taking the questions maybe first building on noines's question on the eu but widening out a little bityou know when you see this level of shift in the competitive in the regulatory landscapes

Naveed Khan: So, just on your commentary on this trend you're seeing in e-commerce, maybe just talk about what are the underlying drivers that are kind of contributing to this trend?

Song Lin: As AI capabilities improve, the online journey over consumer can be made both more productive and more informed. Having this pure to build directly into the browser, available website or browser station makes the experience all the more seamless.

Naveed Khan: Thank you.

Speaker Change: how should you thinking about this informing a almost reprioritization of product or marketing over a longer period of time and how your priorities might be shifting or changinggiven what you're seeing in the external landscape and some opportunities opening up and second in terms of the or assistant curious any feedback on behavior or adoption your things you've learned from the way users have embraced a i in in the early base thanks so much

Song Lin: The current landscape reminds me of how such has evolved since the 1990s and before overpaying me out the integration between search and browser over to the year-to-build, from having to use the web page of search engine to search natively in the browser URL box.

Song Lin: The current landscape reminds me of how such has evolved since the 1990s and before overpaying me out the integration between search and browser over to the year-to-build, from having to use the web page of search engine to search natively in the browser URL box. So now the ability to gather information makes it inform the decisions and both process and create contents where the help of AI allows users to be even more productive.

Lin Song: Thanks so much. Sure. I'll comment a bit on it, right? So I think I agree that I think maybe I'll just comment that I think there's perhaps a bigger shifting. So definitely regulatory shifting, which actually in general tends to be forcing a more opening up over the platforms. It may be iOS or Windows or maybe iOS, which is definitely beneficial. So that's, of course, indirect is what we are doing now to invest more heavily in those platforms. Simply because some of the platforms like iOS are too difficult, right? It's also a part of it, but now it's actually opening up.

Song Lin: Sure.

Song Lin: I'll comment a bit about that.

Song Lin: So, yeah, I think that's in relation to the DMA, right?

Song Lin: So now the ability to gather information makes it inform the decisions and both process and create contents where the help of AI allows users to be even more productive.

Speaker Change: sure i'm to with right so i think i agree that i think is' mayly i' just comment that i think ' perhaps the biggotiship so

Song Lin: In the case of our AI assistant area, this is a fully integrated experience that exists naturally alongside the user existing habits.

Song Lin: In the case of our AI assistant area, this is a fully integrated experience that exists naturally alongside the user existing habits. Our role in this ecosystem is not to remake the individual tools available but rather integrating both the back and the front-end to give our users choice and innovative use cases whether to area or other services. Our itself evolves at a rapid pace and this color along with the multiple AI features from better staging our feature drop program and into our flagship browsers including command line prompts, page contacts and wellness as well as voice and image generation capabilities.

Speaker Change: the deitely regul apiciatives which ashley in general tends to be forcing a more opening up over the platforms you maymade the hours or maybe windows or maybe allows

Song Lin: Our role in this ecosystem is not to remake the individual tools available but rather integrating both the back and the front-end to give our users choice and innovative use cases whether to area or other services.

Speaker Change: which is definitely beneficial so that'sof course in the rq is what we are now to invest more heavily those platform it just simply because reved some of those examveples lis

Lin Song: But I think maybe it has a bit more beyond that. Is that also in combination of AI? There's this whole paradigm shifting that previously, because just remember that previously, most of those the high-income user action dollars are concentrated on half of it up and up and up and up and up and up and up. Something else is very isolated. But now, because of AI, I think when more players start to see that those high-income user events can be more broad spread in many other positions, if you design a product in the right way, for instance, it can be pre-sort, it can be post-sort, like through the mentioned e-commerce, like all of the areas where actually utilize AI actively to be able to give you very valid recommendations using AI, it's very natural.

Speaker Change: it's too difficult right for so part about now that's openingup

Speaker Change: but i think maybe passed a bit more beyond that

Song Lin: Our itself evolves at a rapid pace and this color along with the multiple AI features from better staging our feature drop program and into our flagship browsers including command line prompts, page contacts and wellness as well as voice and image generation capabilities.

Speaker Change: is that also have a natial ai there's this whole paradigm shifting

Speaker Change: that like previously because there' real that gogot ate most of those the high intcan you action dollars i' concentrated on you know how of it enough have done so much how something ' be very isolated but now because of ay i i think more playoffers

Song Lin: We are also offering an integrated and simplified way for users to download and use large language models locally on their computers currently available in R2.

Song Lin: We are also offering an integrated and simplified way for users to download and use large language models locally on their computers currently available in R2. It's a fantastic feeling to have always access to the power of AI assistance regardless of internet connection and with the certainty that your data does not leave your computer. As you can see we are keeping busy we might be a small company compared to our competition but I think we are also the perfect size to innovate and see the opportunities.

Speaker Change: it's not to see that you know those the high intity events

Speaker Change: can be life it can be more prorossperread in manalo positions if we position the right way like if you design the ct theright way isice

Song Lin: It's a fantastic feeling to have always access to the power of AI assistance regardless of internet connection and with the certainty that your data does not leave your computer.

Speaker Change: you can it can be to preso and it can be posed soge

Speaker Change: i rethrough the mention e-commomce like all of the areas where actually youutilize actively

Song Lin: As you can see we are keeping busy we might be a small company compared to our competition but I think we are also the perfect size to innovate and see the opportunities.

Speaker Change: to you know be able to give you very valid recommendations as using i it's very natural and then we are happy at the advoate hydthought and the whole industry actually also looking at it and saying at all that's a very valuable we didn to walk with oper on this right so i think to some understand

Lin Song: And then we're very happy that advertisers and the whole industry are also looking at it and saying that, oh, that's actually very valuable. Well, we didn't work with Opera on this in Mahabas, right? So I think to some extent that potentially, you know, even opening up even more than regulatory matters.

Song Lin: While we have more than tripled our revenue since our 2018 IPO, we have maintained an ever-present startup mindset, three of the bureaucracy of large organizations combined with the scaled business well-sorted financials allow us to invest in exciting products and healthy continued growth.

Song Lin: While we have more than tripled our revenue since our 2018 IPO, we have maintained an ever-present startup mindset, three of the bureaucracy of large organizations combined with the scaled business well-sorted financials allow us to invest in exciting products and healthy continued growth.

Lin Song: So to us, I think for Opera, our priority is just being, you know, positioning our product to be able to take those advantages, because in the end of the day, more like where are relatively small players, yet, that the potential is huge. You have like compel with our market show, you know, for instance, we have a few percent of market show with the girls, but then if you look at some big player like Google, whatever, like a $2,000 company, even 1 percent of it is 20 billion, right? Well, only like 1 billion. So we feel that there are at least 10 times, 20 times potentials.

Speaker Change: that potentially even holding uphave even more than regulator metals

Speaker Change: so to us i think for opera out powerorityday just being pollishing our products to be able to take as though the aboutvagesis because in end another day more like we are aalreally more player yet

Song Lin: So, more like I think DMA has been helpful, demonstrated to independent players like us, right, where we call a lot of exploits on particular iOS platforms.

Song Lin: But I think, you know, of course, there are some other platforms which is also relevant.

Song Lin: And, you know, for instance, I think in this particular case, including Windows among others, which also sort of more like gatekeeper definitions.

Frode Jacobsen: With strength building throughout the year, we are excited to embark on the second half of 2024 and what comes next.

Song Lin: With strength building throughout the year, we are excited to embark on the second half of 2024 and what comes next.

Speaker Change: on the tential huge d likecompel is our marketis you know that we have a good personl marckket re with the growrow or then you look at

Speaker Change: some becauseup we are like google out of like it's two billion dollar company even one of the know it is twenty billion right well we like one billion so with you ven there with tentimes to ent potentials we can do if we captl

Lin Song: We can do if we capture these shifting paradigms, which is actually our focus. But we're very happy that that's actually in line with some regulatory matters as well. The things we want to move to the same direction that, you know, perhaps we want this thing to be more diversified into more independent companies like us, and I think that's what we feel we don't appreciate it. Yeah, so around those. And then I think to your second question, which is to be related, right? So I think in general, AI, you know, it seems on the public out there, you know, like it seems to be quite down a little bit because there's no GPT-5 yet, you know, whatever.

Frode Jacobsen: Thank you, Song.

Frode Jacobsen: Thank you, Song. Now, four months further into the year versus our last earnings call. It's fair to say that 2024 is shaping up to be another really nice year for opera. We are growing ahead of expectations with internal excitement across the board on the topics some been covered and more to come. Our financial results once again exceeded expectations, even the top of our ranges. In fact, over our six year history as a public company, we've never missed our revenue guidance and only missed our EBITDA guidance once.

Frode Jacobsen: Now, four months further into the year versus our last earnings call. It's fair to say that 2024 is shaping up to be another really nice year for opera.

Speaker Change: this shippping paraladig which ' the oppospose about very happy that that that's a inline with some organis notde as well this things will we want to move to the same direction that you know perhaps they want this see to be more diversified into more independent companies like us and i think that's what we feel appreciative

Frode Jacobsen: We are growing ahead of expectations with internal excitement across the board on the topics some been covered and more to come.

Song Lin: And then for now it applies to Windows, but it doesn't really apply to some other default browser there like Microsoft Edge, which we think is also, you know, by the definition it actually should apply among others.

Speaker Change: the ab social or those either then i think

Frode Jacobsen: Our financial results once again exceeded expectations, even the top of our ranges. In fact, over our six year history as a public company, we've never missed our revenue guidance and only missed our EBITDA guidance once.

Song Lin: So, yeah, so I think in general our comment is just more like we are actually working very closely with the EU on this as a European company.

Speaker Change: to second question which is bit of related right so i think

Speaker Change: i think in general i it seems on the popertity i bill

Song Lin: And we also have given opinions and ideas of how, you know, how moving forward this is, especially seeing that the audio jurisdiction has actually been very helpful to independent players like us to be able to grow.

Lin Song: But then the way we see it is that actually the application of AI has actually been moving almost into day-to-day stuff. More common is that people perhaps sort, right? Like again, as an example, many organizations, officials, we are actually already using AI to be able to help us is to be able to identify, to give you the right recommendations. And even though some people may not even be aware of that, that's actually based on GNI, right? So I think, like we saw this, I think a bit across the industry that even though like maybe there's some part down to whatever in consumer field, the application of this is actually more penetrating and have more impact on the day-to-day stuff and all the way to the revenue.

Speaker Change: like it seems to be calleded down a little bit because there'snot quty five year you know one of them but then the way herely that actually is the application they i has that been believe we almost to day to days af

Song Lin: So, we feel that there's definitely opportunity for more action still.

Frode Jacobsen: When the COVID pandemic hit in the first quarter of 2020, that does say something about our healthy and organic growth and its relatively predictable nature, even if we like to bake in some caution for potential headwinds here and there.

Frode Jacobsen: When the COVID pandemic hit in the first quarter of 2020, that does say something about our healthy and organic growth and its relatively predictable nature, even if we like to bake in some caution for potential headwinds here and there. We've also been a rule of 40 company for 13 sequential quarters now, that is every quarter after the first year of COVID. And as you see from our guidance, we aim to remain in that category going forward as well.

Song Lin: So, I think that's what we're trying to refer to.

Song Lin: And, yeah, so more like I think there are some separate press releases which we have issued around the matter.

Speaker Change: more common than people i have a sort like right again as an example many of those mization officials we are actually already using i to be able to help us is

Song Lin: And we'll just continue to work closely with the EU and with all the related parties to see how we can better address and how we can have better opportunity not only in iOS, which I think is great, but also in broader platforms.

Song Lin: Yeah, so I think the general trend is in general quite positive.

Song Lin: And we think there are similar things which are happening around the world, not only in EU, which definitely are going to be positive to an independent player like us.

Speaker Change: tobe able i identif to give you the foundations

Speaker Change: and even though some people might not even be awil that' debase on jny right so so i think

Frode Jacobsen: We've also been a rule of 40 company for 13 sequential quarters now, that is every quarter after the first year of COVID. And as you see from our guidance, we aim to remain in that category going forward as well. Our overall revenue growth was 17 percent and our adjusted EBITDA margin was 24 percent both in line with recent quarters.

Speaker Change: like we saw this i think a bit across the industry that even though like maybe ' il down whatever in the consumer appeield the application of this is as been more penetrating and have more impact after this up and order il to therevenue i think that's what we see and that's what ' excited about

Lin Song: So I think that's what we see, and that's what about.

Frode Jacobsen: Our overall revenue growth was 17 percent and our adjusted EBITDA margin was 24 percent both in line with recent quarters. As some commented, I would highlight the e-commerce opportunities already seized and there are further potential as a key building block in our continued RPU building naturally on top of healthy user based dynamics. As in recent quarters, FX continues to represent a headwind in particular as it relates to emerging markets and our year over year rose would have been 8 percentage points higher or 25 percent on a constant currency basis.

Lance Vitanza: Our next question will come from Lance Vitanza with PD Calend. Please go ahead. Hi, thanks, guys, and congratulations on another strong quarter. Just to start to stick with the AI theme, I'm wondering about, and thank you for all of the detail on what you're doing, where you're focused, and how that's creating value for your publishing partners and your advertising customers as well as your user base. But I'm wondering about the impact these initiatives and the work that you're doing, the impact that might have on your cost structure. Are you finding it more expensive to operate, either in absolute dollar terms or as a percent of revenue? And to be clear, I'm really trying to focus here on OPEX, if we can leave the AI cluster in Iceland out of it for now.

Speaker Change: thank you

Frode Jacobsen: Navid, I'll chime in on the second part of the question on the trend within e-commerce. I would say we have built a sizable user base in high-value markets, and that allows us, to create new partnerships where we can drive meaningful traffic.

lance fitenza: thank you our next question will come from lance fitenza with pd callin please go ahead

Frode Jacobsen: And using our insights, we then have the ability to drive traffic with high purchase, intent.

Frode Jacobsen: So e-commerce has become our biggest vertical and our vertical that is growing the fastest.

Frode Jacobsen: As some commented, I would highlight the e-commerce opportunities already seized and there are further potential as a key building block in our continued RPU building naturally on top of healthy user based dynamics.

Frode Jacobsen: Okay.

lance fitenza: i thanks guys and congratulations on another strong quarter just start to stick with the ai theme i'm wondering about and thank you for all of the detail on what you're doing where you're focused and how that's

Frode Jacobsen: As in recent quarters, FX continues to represent a headwind in particular as it relates to emerging markets and our year over year rose would have been 8 percentage points higher or 25 percent on a constant currency basis.

Speaker Change: creating value for your publishing partners and your adtisingcustomers as well as your userbase but i'mwondering about the impact these initiatives and the work that you're doing the impact that might have

Speaker Change: on your cost structure are you finding it more expensive to operate either in absolute dollar terms or as a percent of revenue and to be clear i'm really trying to focus here on opex if we can leave the ai cluster and iceland out of it for now

Frode Jacobsen: In terms of cost, we had guided for a sequential increase in marketing cost yet in the end maintained a spend level from Q1.

Frode Jacobsen: In terms of cost, we had guided for a sequential increase in marketing cost yet in the end maintained a spend level from Q1. That led adjusted EBITDA to overall perform even beyond the incremental revenue. Other than that, costs largely came in according to expectations. Compensation costs increased sequentially as expected predominantly due to annual salary adjustments but also with hires and increased bonus provisions. Cost of revenue items came in at 25.2 percent of revenue, which was within the expected range.

Naveed Khan: That's helpful.

Naveed Khan: Maybe a quick follow-up, if I may.

Frode Jacobsen: That led adjusted EBITDA to overall perform even beyond the incremental revenue.

Lin Song: Hey, Lance, I can add. I go ahead. Okay, sure.

Speaker Change: i

Naveed Khan: If I just look at the Western market user base, it kind of flattens sequentially.

Naveed Khan: I'm wondering if there is a seasonality there, or if there's more marketing dollars you could, have spent or something getting pushed from Q2 into Q3, maybe help us understand that.

Naveed Khan: Thank you.

Lin Song: Yeah, I think I'll jump both in, and Frode can also add a bit, right? So like I think, I have to say that I think there's also a lot of way they have been very careful about, because of course, you saw so many other companies like, you know, the, you know, the Magnificent Seven, whatever they spend, two million dollars, right, to try to deviate things, I can take whatever, so I think for us, we have been quite clear in a spot, right? Like, I think we don't want to make tools. It's not very hard for us to compete in those, you know, basic fundamental model, language model level, you know, because we, like, there's no point for us as a skill, I think there's a small company to try and reinvent the well.

Frode Jacobsen: Yeah, I can understand that.

Frode Jacobsen: Other than that, costs largely came in according to expectations. Compensation costs increased sequentially as expected predominantly due to annual salary adjustments but also with hires and increased bonus provisions.

Frode Jacobsen: Q2 includes the beginning of summer, but I think more importantly, I would say we have, continued our strategy.

Speaker Change: i go ahead some

Frode Jacobsen: We have even applied it tighter than before. So when we look at our marketing spend, year-over-year, and relative to Q1, we have actually reduced, the number of users that have come in through our marketing activities, but at an increased cost.

Frode Jacobsen: So we are focusing on the very most valuable and ARPA-driving users that we can, and I, think that is also a factor in looking at the total user base.

Frode Jacobsen: And that is what is driving the year-over-year 8% growth in marketing and sort of the flat, trend from Q1.

Speaker Change: okay so yeah i think ammy al and for can also had be right so like i think

Speaker Change: i have themto say that i think that's also a lot way we have been very careful about because of course you saw some many other companies like you know know if you said what of all this spend should of dollars right to try the inestin of can sure whateveri also i think for us we have been quite clear in a spo like i think we don't want to make to us

Frode Jacobsen: Cost of revenue items came in at 25.2 percent of revenue, which was within the expected range. And all other effects pre-adjusted EBITDA came in at 8.6 million also in line with expectations.

Frode Jacobsen: And all other effects pre-adjusted EBITDA came in at 8.6 million also in line with expectations. Tax cost of 2.8 million was 11 percent of adjusted EBITDA. In the prior quarter, our tax cost was elevated due to FX impacts on our tax assets. Year to date, tax cost as percentage of adjusted EBITDA is 14 percent and in line with a more normalized level. Our operating cash flow was 17.4 million in the quarter representing 65% of adjusted EBITDA.

Speaker Change: it s very high of compte you know it' a basic famal modeder language model lel because we like a more point plus as a scality more company to trying to remainents the well so i think we have been bursesmart choosing a pass like a measure ofthe course that' now

Frode Jacobsen: Tax cost of 2.8 million was 11 percent of adjusted EBITDA.

Lin Song: So I think we've been very smart in choosing a possible, you know, like a good measure of the course is that turning the basic models, making sure it works, right? So, while the actual deducting part of it is not that costly, if you have the right infrastructural. So I think I'll focus that we don't really do the most heavy lifting in terms of, you know, turning the basic models, which is just the cost of way too much. But then we focus on how to work with partners and even, you know, open-source models, which doesn't cost anything, and hosted in a very cost-effective way.

Frode Jacobsen: In the prior quarter, our tax cost was elevated due to FX impacts on our tax assets. Year to date, tax cost as percentage of adjusted EBITDA is 14 percent and in line with a more normalized level. Our operating cash flow was 17.4 million in the quarter representing 65% of adjusted EBITDA. Free cash flow from operations was 13.5 million or 51% of adjusted EBITDA.

Speaker Change: turnmany the basic models negis walks right so while the actually deductive parliof it is not that quarly

Speaker Change #100: if you have the right infrastructure so i think i' k to that we don't really do the most heive inter of training the basic models which you just been cause the way too much

Speaker Change #101: but then we talk about about how to workk with partners and even open those models it's c in and hosted in a very so effective way and that's our atidentic jge as coming to ay

Frode Jacobsen: Free cash flow from operations was 13.5 million or 51% of adjusted EBITDA. This year annual bonuses were paid in Q2 as opposed to in the first quarter of 2023 representing a quarter specific headwind. Looking at the first half of 2024 as a whole, our conversion from adjusted EBITDA to operating cash flow stands at 94%. The year-to-date conversion from adjusted EBITDA to free cash flow from operations stands at 42%. However, it would be 79% if netting out the special 19 million investment we made in establishing a for-private territory AI cluster in Iceland. As commented earlier, we expect these ratios to stabilize as the year progresses.

Lin Song: And that's our authentic infrastructure that's coming to play on by, you know, just by allowing deducting, which is, of course, a lot less than you, than you want to train it. And then provide that as a very valuable, you know, very valuable service with your notes. And then also, when we're asked to provide you to the you notes, we are optimizing on how we can make, you know, monetizable contributions, right? For instance, recommendation of, hey, this perhaps is a product that you want to try. This perhaps is the context of what you're not interested in. Please, the search links are found well, of course, in the end, where you have to get paid.

Frode Jacobsen: This year annual bonuses were paid in Q2 as opposed to in the first quarter of 2023 representing a quarter specific headwind.

Speaker Change #102: by just by ong dedct which is caused a lot less

Speaker Change #102: then you then if you want the chenit and then provide that as a very valatable to know vvalable service with you know

Frode Jacobsen: Looking at the first half of 2024 as a whole, our conversion from adjusted EBITDA to operating cash flow stands at 94%.

Speaker Change #103: and then also when we are asked toproide intoto the udossse we are optimizing how we can make you one ties contribution so right for instance remoidation or hay this perhaps is the product that you wal try this perhaps ' the context is what that interested politish for such things uponwell of in the way after we goingto ayid so

Frode Jacobsen: The year-to-date conversion from adjusted EBITDA to free cash flow from operations stands at 42%. However, it would be 79% if netting out the special 19 million investment we made in establishing a for-private territory AI cluster in Iceland.

Lin Song: So, so I think so far we have been quite disciplined on those, and the result has been good. That has a very limited impact on the OPEX, and the revenue after it's already demonstrated in our numbers. I think in the, I think we're part of the same trend; there will probably be more usage in the second half. And then, you know, so when the usage picking up even more, especially if you want to be, I like Policy Plus.

Speaker Change #104: so i think so far have been quite discipled ons and the result has been good that very limited the impact on the otex

Frode Jacobsen: As commented earlier, we expect these ratios to stabilize as the year progresses. Towards the end of the quarter, we announced our regular semi-annual dividend of $0.4 million or 35.4 million in total value. Payment was made in early July consisting of 27.6 million in cash and 7.8 million offset against the remainder of our receivable related to the sale of Starex in 2022, meaning that this receivable is now fully settled.

Speaker Change #105: and the revenue after that is readythe demonstrating on our most i think i think we' part of the same ren that will proly be more usage in the second half and then you know so one you pking up even more especially you up come up more whatever but i think that matter if you deitely be highed icty us

Frode Jacobsen: As mentioned, we are building in more marketing costs in the second half.

Frode Jacobsen: Towards the end of the quarter, we announced our regular semi-annual dividend of $0.4 million or 35.4 million in total value. Payment was made in early July consisting of 27.6 million in cash and 7.8 million offset against the remainder of our receivable related to the sale of Starex in 2022, meaning that this receivable is now fully settled. Going forward, dividend payments will be entirely cash-based and fully funded by our growing cash generation.

Frode Jacobsen: We have a product lineup that is essentially tailored for Western and high-value users, and that is what we focus on in the second half of the year.

Naveed Khan: Super helpful.

Naveed Khan: Thank you, guys.

Lance Vitanza: Great, thanks. That's really helpful.

Lance Vitanza: And then, actually, turning to Iceland, and I remembered that it was a $19 million investment, but I kind of lost track of exactly when that went live. And I'm just wondering if you could talk about to the extent that that's up and running and been up and running. Have you seen that specific investment sort of, you know, generating returns for you, so to speak, is that helping facilitate the work that you have called out that you're doing in AI. Yeah, so yes, so yeah, yeah, so as Michelle, they're quite proud of that setup. It's filled on, you know, we're at some more company, but it's still ranked.

Speaker Change #106: thanks that's really helpful and then actually turning to iceland and i remember that it was a one nineteen million dollar investment but i kind of lost track of exactly when that went live and i'm just wondering if you could talk about to the extent that that's up and running and been up and running have you seen that specific investment sort of you know generating you know returns for you er to speak is that helping

Frode Jacobsen: Going forward, dividend payments will be entirely cash-based and fully funded by our growing cash generation.

Frode Jacobsen: Then, turning to guidance.

Frode Jacobsen: Then, turning to guidance. Following a strong first half of the year that demonstrated the resilience in our growth model, we have added to our comfort on our full-year trajectory and our pleas to raise our guidance today. We now guide full-year revenue of 461 to 467 million up from our prior guidance of 454 to 465 million and translating to 17% year-over-year growth at the midpoint. Our trajectory allows us to raise guidance beyond the Q2 over performance and also narrow the range to reflect a solidified outlook for the second half.

Frode Jacobsen: Following a strong first half of the year that demonstrated the resilience in our growth model, we have added to our comfort on our full-year trajectory and our pleas to raise our guidance today. We now guide full-year revenue of 461 to 467 million up from our prior guidance of 454 to 465 million and translating to 17% year-over-year growth at the midpoint. Our trajectory allows us to raise guidance beyond the Q2 over performance and also narrow the range to reflect a solidified outlook for the second half.

Speaker Change #106: facilitate the work that you have called out that you're doing in ai

Speaker Change #108: yeah so yes this so y

Speaker Change #109: as michelall look quite proble of that then it's feel have more company so renked

Lin Song: I think by during this rank as the 88 most powerful superconductors, which, you know, couple hundred in the world, which we're more probably company in the world. So quite proud that we actually have that computing power on build up. So yes, it's been, it's an operational sense to do roughly. And then, yeah, so we're having you near that mentioned. And on various, you know, fine to and task, not to training the basic models, we don't do that, but we use it at the very efficiently in the fine to means and we ask the unit also hosting various open source models, where we ask the court to call the hosting, you know, solutions for those that open source language models and provide it to the end users.

Speaker Change #109: i think by joining usis run as the eight eight most possibleit also which pe in the world which we have our pro bular company so quite oudthat we as have comting paul on doing it up so yes it's be it's more o perational sense to too roughly

Speaker Change #109: and then yes so we're having union that mentioned

Speaker Change #110: whereas you find you intentire you not aining the basic models with all that but we you that as very efficiently in the fan unions and were a unit also hosting therearious open our models well we ask call the called to host sufficions

Frode Jacobsen: We are seeing particular strengths in the e-commerce vertical and we are cautiously optimistic that such benefits may be even more pronounced during the holiday season in the final months of the year. We raise suggested EBITDA guidance to 110 to 113 million for the year up from our prior guidance of 106 to 110 million and representing a 24% margin at the midpoint.

Frode Jacobsen: We are seeing particular strengths in the e-commerce vertical and we are cautiously optimistic that such benefits may be even more pronounced during the holiday season in the final months of the year. We raise suggested EBITDA guidance to 110 to 113 million for the year up from our prior guidance of 106 to 110 million and representing a 24% margin at the midpoint. While Q2 in isolation could indicate an even stronger range for the year, we guide for a more back-loaded marketing spend profile than earlier assumed to ensure we are in position to seize growth opportunities on the back of our new iOS offering and the upcoming releases of Opera 1 and Opera GX.

Lin Song: So we have to work on that.

Speaker Change #111: for for those then overals damage models and provided to end of those so we'have working on that i think it's stage just have o on a few mon

Lin Song: I think it's still a bit on the stage. It's just because they're having operate on a few months. But I think by the second half of this year. So we'll see problem even bigger in Capital. And yes, I think it has already been a good journey to revenues by all calculations on problem, our positive. So, so I think that's that seems the very good investment. But then, yeah, I think we have actually been called on this to generate even for the girls in the second half and also into next year.

Speaker Change #112: but i think by the second half of this year go see probably even being all in capital little bit and yes i think

Frode Jacobsen: While Q2 in isolation could indicate an even stronger range for the year, we guide for a more back-loaded marketing spend profile than earlier assumed to ensure we are in position to seize growth opportunities on the back of our new iOS offering and the upcoming releases of Opera 1 and Opera GX.

Speaker Change #113: it has already been able to generate revenues byioourcalculations probably ile positive so i think 's that seems is the very good investment but then i think we have actually be led on this through two generate even for the growth in the second happ and also into an next year

Lin Song: Great. And then if I could just get one more question in regarding any expected impact on search revenue from the Google antitrust ruling, I mean, I'm guessing the earliest that you could see any impact would be 2026 or maybe even 2027, but should investors be girding for some kind of eventual step function down in search revenue, is that sort of out on the horizon someday? Um, yeah, so it's a very good question.

Speaker Change #114: and then if i could just get one more question in

Speaker Change #114: regarding any expected impact on search revenue

Frode Jacobsen: In some, our updated revenue guidance range now begins above the former midpoint and our updated adjusted EBITDA guidance range now begins at the former high.

Frode Jacobsen: In some, our updated revenue guidance range now begins above the former midpoint and our updated adjusted EBITDA guidance range now begins at the former high. And while we do guide for the trend to be modest, we are also very pleased to indicate increases in the year over year growth rate from quarter to quarter in the second half of the year. For the third quarter, we guide revenue of 119 to 121 million or 17% year over year growth at the midpoint.

Speaker Change #116: from the google antrust ruling i mean i'm guessing the earliest that you could see any impact would be two thousand and twenty six or maybe even two thousand and twenty seven but

Frode Jacobsen: And while we do guide for the trend to be modest, we are also very pleased to indicate increases in the year over year growth rate from quarter to quarter in the second half of the year.

Speaker Change #117: should investors be girding for some kind of eventual stem step function down in search revenue is that sort of out on the horizon someday

Lin Song: So like I think maybe I just say that like again, I think the global population to answer some of those things, but it's a bit like this. So first of all, my thing is just been that I think like in general, all like maybe from a high level sense, right? So in the end of the day, I don't think we care if it's sort of in a whatever revenue, we care that the get paid and high level principle, I think that as far as that everybody seems to be more and more consider that this is a browser traffic, a default position in a browser is very relevant, very important.

Speaker Change #118: yes so it's question rest so like i think it maybe just say that back again i think greu of have been of also some of those things i took like yes so possible might thing we just been that

Frode Jacobsen: For the third quarter, we guide revenue of 119 to 121 million or 17% year over year growth at the midpoint. We got adjusted EBITDA of 27 to 28.5 million or 23% margin at the midpoints. That equates to OPEX pre-adjusted EBITDA of 92 million at the midpoints in which the sequential increase of 9 million is predominantly driven by incremental provisions for marketing spent.

Frode Jacobsen: We got adjusted EBITDA of 27 to 28.5 million or 23% margin at the midpoints. That equates to OPEX pre-adjusted EBITDA of 92 million at the midpoints in which the sequential increase of 9 million is predominantly driven by incremental provisions for marketing spent. We also add just over a percentage point of cost of revenue in items relative to revenue and expect compensation costs to modestly tick upwards in dollar amounts, though decrease as a percentage of revenue.

Speaker Change #119: i think like in general or highly alli from ahigh sense end i don't think social one revenue they care de the gippid and highlight principle i think is that

Speaker Change #120: as far as that everybody it seems to be more anable consider that this is the brad are traffic de position in abrazser is very relevant very important

Frode Jacobsen: We also add just over a percentage point of cost of revenue in items relative to revenue and expect compensation costs to modestly tick upwards in dollar amounts, though decrease as a percentage of revenue.

Lin Song: More important actually than most people saw to them. I believe we should have a chance to be paid more, right? I don't know what that is called. But we should be paid the more. I think that's a general principle.

Speaker Change #120: more important nnational them most we will saw then i believe we should have a chance to paid more right don't go but that court but we should be painable i think that a general principle and ion also been ready about that

Lin Song: And as I mentioned, also a bit earlier that I think actually the bigger pictures I agree with you, the particular case with the public drag song for some time, but I think what the way as the company focus on is actually the bigger power of the shifting, which is, I mean, this is like the whole thing is changing beyond search, right? Because now all that I'm talking about the research post search, I tend to even wait till mediums, everything of those I have to base on, so I think we're actually more motivated to, you know, keep stealing our product, keep innovating, keep designing our product to capture those, you know, not only search, but also even beyond search and post search as for the candidate with the help of AI.

Frode Jacobsen: The total of other OPEX items pre-adjusted EBITDA is expected to trend down versus the second quarter, both in dollars and naturally then relative to revenue.

Frode Jacobsen: The total of other OPEX items pre-adjusted EBITDA is expected to trend down versus the second quarter, both in dollars and naturally then relative to revenue. Our cost expectations for the year as a whole remain in line with our prior directional commentary, with marketing cost and cost of revenue taking up a bit as percentage of revenue relative to 2023, while compensation costs and other OPEX items tick down. Largely offsetting one another, but implying 40 basis points of continued margin expansion at the midpoints combined with stronger than expected revenue growth.

Speaker Change #121: i think actually the big pict s i reven you is the particular case of the do publicbab drags song for some time but i think away the company foccus on s part the shifting which

Frode Jacobsen: Our cost expectations for the year as a whole remain in line with our prior directional commentary, with marketing cost and cost of revenue taking up a bit as percentage of revenue relative to 2023, while compensation costs and other OPEX items tick down. Largely offsetting one another, but implying 40 basis points of continued margin expansion at the midpoints combined with stronger than expected revenue growth. So all in all, we are entering the second half with great momentum and look forward to keeping you posted.

Speaker Change #122: and this is like the whole thingteen changing beyond because now all that adam had are talking about a pretresearch post search high ton event retail medias everything of those i asked the bed on brussel so i think we're actually more motivated to keepeps keeping our productive innovating givevity design product to capture

Speaker Change #122: zones not only selves but also even bey and post search as photo candidate with the help of a i

Lin Song: That's actually what we see a major increase of the equal most revenue and further has to comment it. We have to already see a major increase in Q2, and we'll see more increase in Q3 and even forward in Q4, which is the hardest feeling in the year, right? So that's very fascinating to see. So essentially, you can consider this almost as previously. You know, many of those things go to search by, you know, like natural really do it. But now, you know, such a fine, but actually they even wanted directly go to us. And then, you know, try to.

Speaker Change #123: that's asking what we see a major increase of the ecobus revenue as further has a comment ate

Frode Jacobsen: So all in all, we are entering the second half with great momentum and look forward to keeping you posted.

Speaker Change #124: and we have already see major increasing q two and depy more increas three and even for adding q in the hot sualing the year right so that they re very tantcinating to see

Matthew Wolfson: With that, I'll turn the call back to the operator for questions.

Operator: 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, press the pound key. When posing your question, we ask that you pick up your handset for optimal sound quality. Again, to ask a question, please press star one at this time.

Speaker Change #125: so essentally we can consider this own of as

Unknown Attendee: Thank you, as a reminder, to ask a question, please press star one on your telephone keypad to withdraw your question, press the pound key.

Speaker Change #126: pr us many of those s co to sege by like natural really do it but now you such a find that actually they you want to go to us and then

Lin Song: We engage directly, which well for sport is, so we work with the partners on those things. So I think those are the things really exciting.

Unknown Attendee: When posing your question, we ask that you pick up your handset for optimal sound quality.

Speaker Change #126: tryed to engage the directly which well ppositti so we walk through the ppe this soi think as though that is we reallyre exciting and then

Lin Song: And then. So in the next half a year, why you to come, you're probably seeing more activities around this field on top of search anyway. So, and this actually might have been an impact for the parity. So, so that's that's what the way we think of it and this point.

Unknown Attendee: Again, to ask a question, please press star one at this time.

Speaker Change #126: so in the next half of year line year to tom you pe proly ing more activeities are around this build on top of sge anyway so and this actually might have be impacts autotality so so that's where that's what the way we think of it than this point

Naved Khan: We'll take our first question from Naveed Khan with the B Riley Securities.

Naved Khan: We'll take our first question from Naveed Khan with the B Riley Securities. Please go ahead. Yeah, great. Thank you. A couple of questions from me. Maybe one for song. So, song is said that maybe, you know, you think that maybe the gatekeeper definition has been applied to narrowly.

Naved Khan: Please go ahead.

Naved Khan: Yeah, great.

Naved Khan: Thank you.

Naved Khan: A couple of questions from me.

Lance Vitanza: Great. Thanks, guys.

Naved Khan: Maybe one for song.

Mark Argento: Appreciate the answers. Thank you. Our next question will come from Mark Argento with Lake Street. Please go ahead. Good morning, guys. Just a couple of quick ones. One in terms of the Opera GX browser. I mean, it's just amazing how that continues to grow. I think it was up over. I was a 27% quarter. Talk a little bit about that 30 30 million monthly. I could use here. How many are kind of Western versus not Western markets? And kind of how do you see that?

Song Lin: So, song is said that maybe, you know, you think that maybe the gatekeeper definition has been applied to narrowly.

Speaker Change #127: great thanks guys appreciate the the answers

Operator: Thank you.

Song Lin: Maybe can you just give us a thoughts on how you think a regulatory should kind of think about applying it and really, really expect to or where do you want to see it go in terms of implementation.

Song Lin: Maybe can you just give us a thoughts on how you think a regulatory should kind of think about applying it and really, really expect to or where do you want to see it go in terms of implementation. And maybe the second question is for just for today. So just turn your commentary on this trend. You're seeing an e-commerce. Maybe just talk about what are the underlying drivers kind of contributing to this trend.

mark argentto: thank you our next question wewillll come from mark argentto with lake street please go ahead

Eric Sheridan: Our next question will come from Eric Sheridan with Goldman Sachs.

Mark Argento: morning as just a couple quick ones one in terms of the operate x browser i mean it's just amazing how they continues to grow i think it was up we'

Eric Sheridan: Please go ahead.

Frode Jacobsen: And maybe the second question is for just for today.

mark argentto: was a twenty seven percent in the quarter talk a little bit about that thirty thirty million monthly active users how many airkind of western versus noton whatestern markets

Eric Sheridan: Thanks so much for taking the questions.

Frode Jacobsen: So just turn your commentary on this trend.

Frode Jacobsen: You're seeing an e-commerce.

Frode Jacobsen: Maybe just talk about what are the underlying drivers kind of contributing to this trend.

Lin Song: You know, the long term opportunity there play out because it just continues to grow kind of beyond our expectations. Yeah, I can do that. In terms of the user base mix, GX is actually quite the even list bit between Western and non-Western. But with a substantially better monetization while in both categories and also a narrower gap between non-Western and Western monetization. Still, Western is far more a better monetized than the non-Western, but the non-Western user base are relatively more affluent or at least monetizable than what we see in general in the markets. So that I was in that is an exposure to Western markets that is somewhat ahead of our opera one flagship and and well ahead, naturally offer user base as a whole where 17% of our users are Western.

Speaker Change #130: and kind of how do you see that the long term opportunity there play out because it just continues to grow ok kind and beyond our expectations

Eric Sheridan: Maybe first building on Naveen's question on the EU, but widening out a little bit.

Frode Jacobsen: Thank you.

Eric Sheridan: When you see this level of shift in the competitive and the regulatory landscapes, how should we be thinking about this in forming a almost reprioritization of product or marketing over a longer period of time, and how your priorities might be shifting or changing, given what you are seeing in the external landscape and some opportunities opening up?

Eric Sheridan: And second, in terms of the ARIA assistant, curious any feedback on behavior, adoption, things you have learned from the way users have embraced AI in the early days?

Song Lin: Sure, I'll comment a bit about that.

Song Lin: Thank you. Sure, I'll comment a bit about that. So yeah, I think that, you know, more like, I think that's the implementation to the BMA, right? So more like, I think the BMA has been helpful on demonstrating it to an independent player like us, right? Well, we call a lot of expoels on particular iOS platforms. But I think, you know, of course, there are some other platforms, which is also relevant. And, you know, for instance, I think in this particular case, including Windows, among others, which also then sort of more like a gatekeeper definitions.

Song Lin: So yeah, I think that, you know, more like, I think that's the implementation to the BMA, right?

Eric Sheridan: Thanks so much.

Song Lin: Sure.

Speaker Change #131: know that they want to comment about it

Song Lin: So more like, I think the BMA has been helpful on demonstrating it to an independent player like us, right?

Speaker Change #132: yes again i can do that in terms of the user base mix g x is actually quite even li sitsit between western and on western

Song Lin: I'll comment a bit on it, right?

Song Lin: Well, we call a lot of expoels on particular iOS platforms.

Speaker Change #133: but with a substantially better monetization while in both categories and also narrow er gap between noronwestern and western monetization

Song Lin: But I think, you know, of course, there are some other platforms, which is also relevant.

Song Lin: And, you know, for instance, I think in this particular case, including Windows, among others, which also then sort of more like a gatekeeper definitions.

Song Lin: And then for now, it applies to Windows. But it doesn't really apply to some other default browser. They are like like Microsoft Edge, which which we think is also, you know, by actually, by the definition, it actually should apply among us. So, so yeah, so I think in general, our comment is just more like we're actually working very closely with the EU on this as a European company. And we also have given opinions and ideas of how, you know, how moving forward, this is especially seen that the audio jurisdiction has actually been very helpful to independent player like us to be able to grow.

Speaker Change #133: still westernnis far more a better monetizze than the nonwestern but the numbestern news base are relatively more affluence or at least monetizable than what we see in general in the markets

Song Lin: And then for now, it applies to Windows.

Song Lin: But it doesn't really apply to some other default browser.

Song Lin: They are like like Microsoft Edge, which which we think is also, you know, by actually, by the definition, it actually should apply among us.

Speaker Change #133: so that i would a thatb is an exposure to western market that is some of the head of our operproa one flagship and well ahead naturally offer user bas as a whole where seventeen percent of our users our western

Song Lin: So, so yeah, so I think in general, our comment is just more like we're actually working very closely with the EU on this as a European company.

Lin Song: That's helpful.

Lin Song: And yes, so I can do any work into the China size market. I mean, is it, you know, multiples of size of what it is. Could I please, guys, or how should we be thinking about the longer term opportunity? For now, we remain very enthusiastic about that product. It's still as a lot of headroom. We believe we have a slide in our corporate presentation that tries to indicate a little bit how we see the market, but we don't have any very defined ultimate and state ambition right now. We just want to continue to cultivate growth mode.

Song Lin: So we feel that there's definitely an opportunity for more actions there. So I think that's what we're trying to refer to. And yeah, so more like, I think that's some separate press release, which we're having issued around the matter. And we'll just continue to work closely with the EU and with all the related parties to see how we can better address and how we can have better opportunities, not only in iOS, which I think it's great, but also in grow-up platforms.

Speaker Change #134: that'shelp one and and guess back work into the trying to size that market i mean is you know multiples the size of whatitis today pleyou guys or how should we be thinking about the longer can opportunity

Song Lin: Yeah, so I think the general trend is in general quite positive. And we think the similarities which are happening around the world, not only EU, which definitely are going to be positive to independent player like us.

Speaker Change #135: having for now we remain very enthusiastic about that product it's it's still as a lot of

Speaker Change #136: head room we believe we have a side in our corporate presentation tries to indicate a little bit how we see the market but we don't have any very defined ultimate and end state ambition right now we just want to continue to cultivate the gross mode

Song Lin: And we also have given opinions and ideas of how, you know, how moving forward, this is especially seen that the audio jurisdiction has actually been very helpful to independent player like us to be able to grow.

Lin Song: Yeah, maybe I just had to be there. Right. So like, you know, if you look at the combination of, you know, a bit younger audience and then we came off that overlap, is probably not talking about, you know, the total address for market is probably not been, you know, people. And then, even if we just have a sense of it, you know, size of a sense of it, now we're active. The only browser, they all which addresses market. We feel that the total market address was probably, you know, 200, 300, 300 minutes. I think there's 10 times potential said we can reach for this audience.

Frode Jacobsen: Naved, I'll chime in on the second part of the question on the trend within e-commerce. Besides, I would say we have built a sizable user base in high-value markets and that allows us to create new partnerships where we can drive meaningful traffic and using our insights we then have the ability to drive traffic with high-purchase intent so e-commerce has become our biggest vertical and our vertical that is growing the fastest.

Speaker Change #137: maybe i don't out to be they right so like if you look at the coub machine or

Naved Khan: Okay, that's helpful, maybe a quick follow up if I may.

Speaker Change #138: a bit the youn audience and then when came off

Speaker Change #138: that open apyisprobably like about you know the total addressable marketing we're been people and even if we just have a

Speaker Change #138: the cent of it

Speaker Change #138: size of percent of bit now active the only boughtazvl which addresses market

Speaker Change #139: we feel that the little market just going for a ay

Song Lin: So I think I agree that I think it's—maybe I'll just comment that I think there's perhaps, a bigger shifting.

Speaker Change #140: we have you how do meanion about econom minutes i think this ten times condercial that we can ach

Lin Song: And especially when they are, you know, growing and speaking with us, and then there's a more younger audience just coming. Right. So, so I think, yeah, so, so you show that he's a different than that. The growth potential that we can address. So like, like again, we are very enthusiastic. A lot of actions around it, just to, you know, bigger campaigns and visions. That's another round of those. That's helpful.

Speaker Change #141: but it's audience and especially when they are

Speaker Change #141: growing and the think we last and ended more youngyoun coming right so i think here yes so sure that think the bit than then grow potential that we we can dress like like again we're steadthatastly in a lotof

Song Lin: If I just look at the western market, user base kind of flat is sequentially wondering if there is a seasonality there or if there is more marketing dollars, you could expand something getting pushed from Q2 into Q2, maybe help us understand that. Thank you. Yeah, I can understand that. Q2 includes the beginning of summer, but I think more importantly, I would say we have continued our strategy. We've even applied it tighter than before.

Speaker Change #142: asings around it just to big campaigns ambitions after another rooes

Lin Song: And then just one quick follow-up on the EMA discussion. Can you just walk us through the actual mechanics? Some obviously, you guys continue to benefit from that too, but does the user be prompted once a quarter, once a year, or just on the initial, you know, firing up the device and just try to better understand how long or the benefit, you know, could persist for you guys in terms of seeing semiconductor users come from that new world, let me walk. Yeah, so yeah, so for, you know, I think, okay, so the answer process for iOS, for instance, is an ongoing process.

Speaker Change #143: sthat's helpful and then just one to quick followup on the ma discussion can you ffoc acy that actual mechanics some obviously to youguys benefit from meaggency to

Speaker Change #144: but does user ne profpted once a quarter once a year or just on the initial firing up of the device and just trying to better understand how long or the benefit could persist for you guys

Song Lin: So when we look at our marketing spend year over year, we end relative to Q1. We have actually reduced the number of users that have come in through our marketing activities, but at an increased cost and that is what is driving the year over year 8% growth in marketing and sort of the flat trend from Q1. So we are focusing on the very most valuable and output driving users that we can.

Speaker Change #145: in terms of seen some incremental uses come from from that new revenue laws the new rule

Speaker Change #146: so so you know i think ok so the ab call this simple allow for ance is ongoing process

Lin Song: I don't think that's finished. That's still between EU and Apple, for instance. That's still trying to walk around the room in the EMA, else, right? Like what's the best approach is for Apple to actually allow so by the ground supposed to be, you know, to be actually, you know, functioning well and how should Apple open up? Right, so it's not settled yet. It's still in discussions where they're active; they're in that process. But I think the major contribution is actually on the people, a wellness that, you know, like people feel that, oh, now actually, everybody's saying and even officially people are saying that you should definitely try also alternative browsers; they ask out there is actually possible.

Speaker Change #147: i don't think that's finished that suite between eu and apple places

Speaker Change #147: and that' going towalwork on the remed ad ts like of better pros

Song Lin: And I think that is also a factor in looking at the total user base. As mentioned, we are building in more marketing cost in the second half. We have a product lineup that is essentially tailored for western and high value users, and that is what we focus on in the second half of the year.

Speaker Change #147: for apple to act a law far the growth has to be to be actually functioning

Song Lin: So there's definitely regulatory shifting, which actually, in general, tends to be forcing, a more opening up of the platforms, may it be iOS, or may it be Windows, or may it be iOS, which is definitely beneficial.

Speaker Change #149: well and how how should that will open that right so it's not atle yet it's still discuss we ti process

Song Lin: So that's, of course, indirect is what we are doing now to invest more heavily in those, platforms.

Speaker Change #150: but i think the major contribution is actually out of the people awwellareness that

Speaker Change #151: like people feel that oh now actually everybodyis saying and even official people are saying that you should definitely try also atternive brrow there thatesssly possible and if' i'would like maybe unlike what i was said in

Song Lin: It's just simply because previously, some of those platforms like iOS, it's too difficult, right, for so far, but now it's actually opening up.

Lin Song: And it's been unlike, maybe unlike what Apple said in, you know, as well, that is that completely, you know, solid and even, you know, even the EU advocating, right? So, so I think those impact in general has largely opened up a wellness. And also on top, of course, there will be, we believe that there will be continuous continued actions to actually have also an actual real impact on public choice screen. There will be some other requirement to say that, hey, Apple, you should be able to allow, you know, browser to submit to the old engine, which is still not allowed at this point unless you submit some very strange contract with nobody does.

Song Lin: But I think maybe perhaps a bit more beyond that is that, you know, also you have an issue, of AI, this whole paradigm shifting that, you know, like previously, you know, because just remember that previously, most of those, the high-intent user action dollars are concentrated on, you know, you know, half of it are perhaps on search, half of it is on something else.

Song Lin: It's very isolated.

Naved Khan: Superhouse. Well, thank you guys. Thank you.

Song Lin: But now, because of AI, I think more and more players starting to see that, you know, those high-intent user events, you know, can be, you know, like, can be more broad spread in many other positions, if we position the right way.

Song Lin: Like, if you design a product in the right way, for instance, you know, it can be pre-search, it can be post-search, you know, like I mentioned e-commerce, like all those areas where actually utilize AI actively to, you know, be able to give users very valid recommendations using AI, it's very natural.

Song Lin: And then we are very happy that advertisers and the whole industry actually also looking, at it and saying that, oh, that's actually very valuable.

Speaker Change #151: elsewhere that is that been completely

Song Lin: We are willing to work with Opera on this among others, right?

Song Lin: So, I think to some extent, that potentially, you know, even opening up even more than regulatory, methods.

Eric Sheridan: Our next question will come from Eric Sheridan with Goldman Sachs. Please go ahead. Thanks so much for taking the questions. Maybe first building on Naveem's question on the EU, but widening out a little bit.

Speaker Change #151: solid and even even even u actually advocating right so i think it knowes the impact in general has not opened up a wellareness

Song Lin: So, to us, I think for Opera, our priority has just been, you know, positioning our product, to be able to take those advantages, because in the end of the day, more like we are a relatively small player yet, but the potential is huge, right?

Speaker Change #151: and also on top of course

Song Lin: Like, compared with our market share, you know, for instance, we have a good percent, of market share with the browser, but then if you look at some bigger player like Google, whatever, like it's $2 billion company, even 1% of it is $20 billion, right?

Song Lin: So we feel that there's definitely an opportunity for more actions there.

Song Lin: You know, when you see this level of shift in the competitive and the regulatory landscapes, how should we think about this informing a almost reprioritization of product or marketing over a longer period of time, and how your priorities might be shifting or changing, given what you're seeing in the external landscape, and some opportunities opening up. And second, in terms of the ARIA system, curious any feedback on behavior adoption, your things you've learned from the way users have embraced AI in the early days.

Speaker Change #152: there will be waed that there will be continuous compute actions

Speaker Change #153: to actually have also an actual real impact on publicbab choice creen there will be some other requirement so say y pos itionshould be able to allow you bought the subnit the engine which is good more thanile than this point unless you subme some verystrange contract body does

Lin Song: So, like all of this is going to happen. So Apple poses around it. But, as I mentioned, I think the so, you know, you know, you're the wellness of it. And then also the sponsoring of, you know, of relevant governments are actually helpful to, you know, have people feel that, okay, now I have the choice and I should definitely try it out. And that has to be very helpful to our growth field. All right. Thanks, guys. We're going to go out. Thank you.

Song Lin: So I think that's what we're trying to refer to.

Speaker Change #154: so l all this is going to happen so happy projectit around it but as i mention i think the so you you're the awareness of that and also the sponsoring

Song Lin: And yeah, so more like, I think that's some separate press release, which we're having issued around the matter.

Song Lin: Thanks so much. Sure. I'll comment a bit on it, right? So I think I agree that I think maybe I'll just comment that I think there's perhaps a bigger shifting. So, you know, definitely regulatory shifting, which actually in general tends to be, you know, forcing a more opening up over the platforms, you know, may be iOS or may be Windows or maybe iOS, which is definitely beneficial. So that, of course, indirect is what we are, you know, doing now to invest more heavily in those platforms.

Speaker Change #155: of of relevant governments are actually helpful to you happ to feel that okay now actually have a choice and i should de try out and that has been very helpfulfor you to our growth salk

Song Lin: And we'll just continue to work closely with the EU and with all the related parties to see how we can better address and how we can have better opportunities, not only in iOS, which I think it's great, but also in grow-up platforms.

Speaker Change #156: thanks guys be like certain half

Alicia Yap: Our next question will come from Alicia Yap with City. Please go ahead. Hi. Good evening, Management. Thanks for taking my questions. Congrats on the solid result. Two questions. One is that I saw that our news obviously emerged as the number two app in the Brazilian news ecosystem. And just wonder how management think about the future business opportunity in that time. And then with user metrics and advertising monetization opportunity. So these days, that time could actually attract relatively higher output per user for your app business compared to other emerging markets.

Speaker Change #157: thank you our next question will come from alisa yeap with the city please go a

Song Lin: Yeah, so I think the general trend is in general quite positive.

Song Lin: It just simply because for those that some of those platforms like iOS, it's too difficult, right? For so part of it, but now it's actually opening up. But I think maybe perhaps a bit more beyond that is that, you know, also in combination of AI, there's this whole paradigm shifting that, you know, like previously, you know, because just remember that previously, most of those, the high income user action dollars are concentrated on, you know, you know, half of it are passed on search, half of it is very isolated.

alisa yeap: hiam good evening management and fortyking my questions

alisa yeap: congresss on the solid result two question one is that i saw that or brand news already emerged the number two appps

alisa yeap: in brazilian news ecosystem and just wonder how management think about the future business opportunity in that c and then we've use the metrics and advertising monetization opportunity

Speaker Change #159: so do you think let ha could actually attrap relatively higher ourpool

Song Lin: But now, because of AI, I think when more players starting to see that, you know, those high income user events, you know, can be, you know, like it can be more broad spread in many other positions, if we're position the right way, like if you design the product in the right way, for instance, you know, you can, it can be pre-sort, it can be post-sort, you know, like through the mentioned e-commerce, like all of the ARRs, we actually utilize AI actively to, you know, be able to give you the very valid recommendations using AI. It's very natural.

Speaker Change #160: produuser for your app business compared to other emerging market then second question is that can you elaborate a little bit some of the new features of the g expsure and how do you think that will help and translate to future monetization upside thank you

Lin Song: Then, the second question is that can you elaborate a little bit on some of the new features of the GX brochure? And how do you think that will help and translate to future monetization upside? Thank you. Yeah, I think actually Latin is the fastest growing market for us. I think GX is always very big in Latin, just because it's a Brazilian and you love to play games. They really embrace GX, but also like our regular browser, our news app, or whatever. I also play big in Latin, especially Brazil, but also we also see similar in Mexico and other countries in the region.

Speaker Change #161: sure yes i think actation latan is is well the fast growing markets forus

Speaker Change #162: i think g x always very lotat we can say az you did the last tiplplay gains

Song Lin: And then we're very happy that advertisers and the whole industry actually also looking at it and saying that, oh, that's actually very valuable. Well, we didn't work with opera on this. Right. So I think, to some extent, that potentially, you know, even opening up even more than regulatory matters. So to us, I think for opera, it's just been, you know, publishing our product to be able to take those advantages because in the end of the day, more like we are already a small player yet, but the potential is huge.

Speaker Change #163: of really brace sub ggx but but also like reggular brrows news apple one of are also playing big latin especially brazil but also we also see ly mexicgoing to other countries in the region so

Lin Song: So yes, we actually have high hope on the region. We actually have entity bill established; we are building up teams and it will grow faster. So I'm relatively optimistic. I think it will be as influential as some of the other fast growing emerging markets that we see as well. So quite excited.

Speaker Change #163: so yes we actually have i hope on the regging we actually have entity they established way are building up teams

Speaker Change #163: and it will prove fastteral so relatively optimistic i think it will be as inflal as some of thellow fast inerlogy markets that we see elas well so so quite quite quite excited

Song Lin: I like compel with our market show. You know, for instance, we have a few percent of market show with the girls, but then if you look at some bigger player, like Google, whatever, like it's $2,000 company, even one percent of it is 20 billion, right. Well, only like one billion. So we feel that there's at least 10 times, 20 times potentials. We can do if we capture these shifting paradigms, which that's our purpose.

Lin Song: And then when it comes to GX, I think we have been, we will actually have some major launches in the second half, like we will have the next generation of GX launching. It's already available in the audit board of Washington, so you can try it. We're completely redesigned the whole UI, the whole UI experience of the morning and the customization function, right? So it's actually a major update in the second half, which we remain very excited. And I hope I think we have also been able to move forward on many services within GX, like a GX store, which provided the most downloads, has been super successful.

Speaker Change #163: um and then

Speaker Change #163: when when comes to g x i think we have been we will actually have some majorlaunchesin the second half like we have the next generation objects launchingin it's just already available in the only body washing so you can try it

Song Lin: And we think the similarities which are happening around the world, not only EU, which definitely are going to be positive to independent player like us.

Song Lin: But we're very happy that that's actually in line with some regulatory methods, where there seems to be want to move to the same direction that, you know, perhaps there are things to be more diversified into more independent companies like us. And I think that's what we feel the appreciative. Yeah, so, so around those. And then I think to your second question, which is a bit related, right. So I think, I think in general, AI, you know, it seems on the public out there.

Speaker Change #164: when the public redesigndesign over the whole ui to you'd experience of the morning and the contomoization function right so so it's actually a a maj update

Speaker Change #164: in the second household wid show way we remain very excited

Speaker Change #164: and i'm hope i think we have also been able to move forward our mina services within jx

Frode Jacobsen: Naved, I'll chime in on the second part of the question on the trend within e-commerce.

Lin Song: So we are now actually working with some, you know, how to go and know some others to be able to run the store and provide you all those, you know, gaming gadgets and items, which can be quite relevant and exciting. We have also, you know, have just came in for those, which has also been normal and more popular and helpful, which that actually proves us to work with all those big gaming studios, like CD Projekt Red for the more than potential, but not also have some other potential corporations. So I actually, more like, well, I also had, you know, working with some pulled blood to your titles, games to come.

Speaker Change #165: like you're like a g pore which provide most tnel has has been su successful so we're now to walk with on

Speaker Change #165: you a windows on our goals to be able to run the store and provide you all those

Song Lin: You know, like it seems to be quite down a little bit because there's no GPT-5 yet, you know, whatever. But then the way we see it is that actually the application of AI has actually been moving almost into day-to-day stuff. More common is that people perhaps sort, right? Like as, like again, as an example, many of those monetization officials, we are actually already using AI to be able to help us is to be able to identify, to give you the right recommendations.

Speaker Change #165: getting gadgetet and items which which can be quite r than exciting we have also have just k for those which have also been now lear morepopular and helpful which that actually process as to walk with or is a big

Speaker Change #166: and game is still itlook like as you did project rate

Speaker Change #166: for the more than potential now also have them other potial operations so i ask if more like well also had water we on our popular your titles games to come and i think you to see a lot more announcement you second out of this year which will be very exciting projects

Song Lin: And even though some people may not even be aware, that's actually based on GNI, right. So, so I think, like we saw this, I think a bit across the industry that even though, like maybe there's some part down to whatever in consumer field, the application of this is actually more penetrating and have more impact on active day-to-day stuff and all the way to the revenue.

Lin Song: And I think you asked to see a lot more announcements in the second half of this year, which will be very exciting projects. Thank you.

Speaker Change #167: thank you

Operator: This does conclude our question and answer session.

Song Lin: So I think that's what we see and that's what we're quite excited, about. Thank you.

Lin Song: I would like to turn the call back to Song Lin for any additional or closing remarks. Sure. I think, on behalf of the management team, thank you all for joining us today in the volatile times. We have been looking forward to coming out and conforming offers and continue the tracking and our continued excitement for the way ahead. We'll reconnect in just over two months with our Q3 release, and we'll work hard to bring you more good news. Again, thank you all for your time, and have a good rest of your day.

Speaker Change #167: thank you this does conclude our question and answer session i would like to turn the call back to song ln for any additional or closing remarks

Song Lin: We're only like $1 billion.

Song Lin: So, we feel that there's at least 10 times, 20 times potentials we can do if we capture, these shifting paradigms, which is actually our focus.

Lance Vitanza: Our next question will come from Lance Vitanza with PD Calend, please go ahead. Hi, thanks guys and congratulations on another strong quarter. Just to start to stick with the AI theme, I'm wondering about, and thank you for all of the detail on what you're doing, where you're focused and how that's creating value for your publishing partners and your advertising customers as well as your user base, but I'm wondering about the impact these initiatives and the work that you're doing, the impact that might have on your cost structure.

Song Lin: But we are very happy that that's actually in line with some regulatory methods as well.

Song Lin: There seems to be, want to move to the same direction that, you know, perhaps they want, this thing to be more diversified into more independent companies like us, and I think that's what we feel a bit appreciative.

Speaker Change #167: sht

Song Lin: Yeah, so around those.

song ln: i think the b of or the management team thank you all for join today the bo out times we have been looking forward to come out and come from oper and continue the trcacking and i'll continueed excitement for the way ahead

Song Lin: And then I think to your second question, which is a bit related, right?

Frode Jacobsen: Besides, I would say we have built a sizable user base in high-value markets and that allows us to create new partnerships where we can drive meaningful traffic and using our insights we then have the ability to drive traffic with high-purchase intent so e-commerce has become our biggest vertical and our vertical that is growing the fastest.

Song Lin: So, I think in general, AI, you know, it seems on the public out there, you know, like it seems to be quiet down a little bit because there's no GPT-5 yet or, you know, whatever.

Song Lin: But then the way we see it is that actually the application of AI has actually moving, almost into day-to-day stuff more commonly than people perhaps thought, right?

Song Lin: Like, again, as an example, many of those monetization officials, they are actually, already using AI to be able to help assist, to be able to identify, to give you the right recommendations.

Lance Vitanza: Please go ahead.

Song Lin: And even though some people may not even be aware, that's actually based on gen-AI, right?

Lance Vitanza: Hi.

Song Lin: So, I think, like we saw this, I think, a bit across the industry that even though, like, maybe there's some quiet down or whatever in the consumer field, the application of this is actually more penetrating and have more impact on actually day-to-day stuff and all the way up to the revenue.

Naved Khan: Okay, that's helpful, maybe a quick follow up if I may.

Lance Vitanza: Thanks, guys, and congratulations on another strong quarter.

Song Lin: So, I think that's what we see, and that's why we're quite excited.

Lance Vitanza: Just to start to stick with the AI theme, I'm wondering about, and thank you for all, of the detail on what you're doing, where you're focused, and how that's creating value for your publishing partners and your advertising customers, as well as your user base.

Eric Sheridan: Thank you.

Lance Vitanza: But I'm wondering about the impact these initiatives and the work that you're doing, the impact, that might have on your cost structure.

Lance Vitanza: Our next question will come from Lance Vitanza with TD Callen.

Song Lin: We'll reconnect in just over two months with our Q3 release, and we'll work hard to bring, you more good news there.

Lance Vitanza: Are you finding it more expensive to operate either in absolute dollar terms or as a percent, of revenue?

Song Lin: Again, thank you all for your time, and have a good rest of your day.

Lance Vitanza: And to be clear, I'm really trying to focus here on OPEX, if we can leave the AI cluster, in Iceland out of it for now.

Lance Vitanza: Hey, Lance.

Frode Jacobsen: I can add.

Frode Jacobsen: Go ahead, Song.

Speaker Change #169: well we connected in just overabout two months our q three release and we work hard to bring you more good news al again thank you all your time and to have a good rest of the day

Song Lin: Okay.

Song Lin: Sure.

Song Lin: Yeah.

Song Lin: I think I'll chime in both, and then Frida can also add a bit, right?

Song Lin: So I think I have to say that I think that's also what we have been very careful about, because, of course, you saw so many other companies like, you know, the Magnificent Seven or whatever, they spend trillions of dollars, right, to try to invest in architecture, or whatever.

Song Lin: So I think for us, we have been quite clear in the start, right, like, I think we don't, want to remake tools.

Song Lin: It's also very hard for us to compete in those, you know, basic fundamental model, language, model level, you know, because we, like, there's no point for us as a still relatively small company to try and reinvent the wheel.

Song Lin: So I think we have been very smart in choosing a path where, you know, like, because majority, of the cost is actually trimming the basic models, making sure it works, right? So while the actual deducting part of it is not that costly.

Operator: This does conclude today's call. We thank you for your participation. You may disconnect at any time.

Operator: This does conclude today's call.

Song Lin: If you have the right infrastructure.

Operator: We thank you for your participation.

Song Lin: So I think our focus is that we don't really do the most heavy lifting in terms of, you, know, training the basic models, which is just cost way too much. But then we focus on how to work with partners, and even, you know, open source models, which, doesn't cost anything, and host it in a very costly, effective way.

Song Lin: And that's our authentic infrastructure has to come into play by, you know, just by allowing, deducting, which is cost a lot less than if you want to train it, and then provide that as a very valuable, you know, very valuable service to the users.

Song Lin: And then also, when we are asked to provide it to the users, we are optimizing on how, we can make, you know, monetizable contributions, right?

You may disconnect at any time.

Song Lin: For instance, recommendation of, hey, this perhaps is a product that you want to try.

Speaker Change #170: this does conclude today's call we thank you for your participation you may disconnect at any time

Song Lin: This perhaps is the context of what you might be interested on, please put such things upon.

Song Lin: Well, of course, in the end, we have to get paid.

Naved Khan: If I just look at the western market, user base kind of flat is sequentially wondering if there is a seasonality there or if there is more marketing dollars, you could expand something getting pushed from Q2 into Q2, maybe help us understand that.

Song Lin: Are you finding it more expensive to operate either in absolute dollar terms or as a percent of revenue and to be clear, I'm really trying to focus here on OPEX, if we can leave the AI cluster in Iceland out of it for now. I go ahead. Okay, sure. Yeah, I think I'll jump both in and Frode can also add to be right. So like I think I have to say that I think that's also a lot of way they have been very careful about because of course you saw so many other companies like, you know, the, you know, the 907 or whatever they spend $200 right to try to invest in such architecture or whatever.

Song Lin: So I think so far, we have been quite disciplined on those, and the result has been good.

Song Lin: That is very limited impact on the OPEX, and the revenue offset is already demonstrated, in our models.

Song Lin: I think we're part of the same trend. There will probably be more usage in the second half, and then, you know, when the usage is, picking up even more, especially when eCommerce come up more or whatever, but I think net net, it will definitely be all positive for us.

Lance Vitanza: Great.

Lance Vitanza: Thanks.

Lance Vitanza: That's really helpful.

Lance Vitanza: And then, actually, turning to Iceland, and I remembered that it was a $19 million investment, but I kind of lost track of exactly when that went live, and I'm just wondering if you could talk about, to the extent that that's up and running and been up and running, have you seen that specific investment sort of, you know, generating, you know, returns for you, so to speak?

Lance Vitanza: Or helping facilitate the work that you have called out that you're doing in AI?

Song Lin: Yeah, so as mentioned earlier, we're quite proud of that setup.

Song Lin: It's still a small company, but it's ranked, I think by June, it's ranked as the 88th most powerful supercomputers, which there are more than 400 companies in the world. So quite proud that we actually have that computing power built up.

Song Lin: So yes, it's been operational since Q2, roughly.

Song Lin: And then, yeah, we have been using it, as mentioned, on various, you know, fine-tuned tasks, not training the basic models.

Song Lin: We don't do that.

Song Lin: But we use it very efficiently in fine-tunings.

Song Lin: And we're actually using it also hosting various open-source models, where we actually call it the cloud hosting, you know, solutions for those open-source language models and provide it to the end users.

Song Lin: So we're actually working on that.

Song Lin: I think it's still a bit out of stage, just because we have been operating only for a few months.

Song Lin: But I think by second half of this year, we will see probably even bigger impact of it.

Song Lin: And yes, I think it has already been able to generate revenues by all calculations, probably ROI positive.

Song Lin: So I think that seems a very good investment.

Naved Khan: Thank you.

Song Lin: But then, yeah, I think we have actually big hope on this to generate even further growth in the second half and also into next year.

Lance Vitanza: Great.

Lance Vitanza: And then if I could just get one more question in regarding any expected impact on, search revenue from the Google antitrust ruling.

Naved Khan: Yeah, I can understand that.

Lance Vitanza: I mean, I'm guessing the earliest that you could see any impact would be 2026 or maybe even 2027.

Naved Khan: Q2 includes the beginning of summer, but I think more importantly, I would say we have continued our strategy.

Lance Vitanza: But should investors be girding for some kind of eventual step function down in search revenue?

Lance Vitanza: Is that sort of out on the horizon someday?

Song Lin: Yeah.

Naved Khan: We've even applied it tighter than before.

Song Lin: So it's a very good question.

Song Lin: So I think maybe I'll just say that, like again, I think Google probably in a better position to answer some of those things.

Song Lin: But it's a bit like this.

Song Lin: So first of all, my feeling has been that I think in general, high level or maybe from a high level sense.

Song Lin: So at the end of the day, I don't think we care if it's search revenue or whatever revenue.

Song Lin: We care that we get paid.

Song Lin: And high level principle, I think that as far as that, everybody seems to be more and more consider that this is a browser, traffic.

Song Lin: A default position in a browser is very relevant, very important, more important, actually, than most people thought.

Song Lin: Then I believe we should have a chance to be paid more.

Song Lin: Right.

Song Lin: I don't care what they're called, but we should be paid more.

Song Lin: I think that's the general principle.

Song Lin: And as I mentioned also earlier that I think actually the bigger picture, I agree with you, the particular case with Google probably drags on for some time.

Song Lin: But I think what we as a company focus on is actually the bigger paradigm shifting, which is, I mean, this is like the whole thing is changing beyond search, right?

Song Lin: Because now all the advertisers are talking about pre-search, post-search, high-intensity events, retail media.

Naved Khan: So when we look at our marketing spend year over year, we end relative to Q1. We have actually reduced the number of users that have come in through our marketing activities, but at an increased cost and that is what is driving the year over year 8% growth in marketing and sort of the flat trend from Q1.

Song Lin: So I think for us, we have been quite clear in a spot, right? Like I think we don't want to remake tools. It's not very hard for us to compete in those, you know, basic fundamental model language model level, you know, you know, because we like the no point for us as a theoretical small company to try and reinvent the well. So I think we've been very smart in choosing a possible, you know, like the major of the course is that they're turning the basic models, making sure it works, right?

Song Lin: Everything of those are actually based on browser.

Song Lin: So I think we're actually more motivated to keep skewing our product, keep innovating, keep designing our product to capture those, not only search, but also even beyond search and post-search as for productivity with the help of AI.

Song Lin: That's actually what we see a major increase of e-commerce revenue, as Frida has commented.

Naved Khan: So we are focusing on the very most valuable and output driving users that we can.

Song Lin: We actually already see a major increase in Q2, and we'll definitely see more increase in Q3, and even forward in Q4, which is the hottest thing in the year, right?

Song Lin: So that's very fascinating to see.

Song Lin: So essentially, you can consider this almost as previously, you know, many of those things go to search by, you know, like, naturally, everybody do it.

Naved Khan: And I think that is also a factor in looking at the total user base.

Song Lin: But now, you know, search is fine, but actually, they even want to directly go to us and then, you know, try to engage directly, which, well, of course, is positive.

Song Lin: So we work with other partners on those things.

Song Lin: So I think all those things are really exciting.

Speaker Change #170: oh

Song Lin: And then, so in the next half of the year, one year to come, you'll probably see more activities around this field on top of search anyway.

Song Lin: And this actually might have a bigger impact for totality.

Song Lin: So that's what we think of it at this point.

Lance Vitanza: Great.

Lance Vitanza: Thanks, guys.

Lance Vitanza: Appreciate the answers.

Operator: Thank you.

Mark Argento: Our next question will come from Mark Argento with Lake Street.

Mark Argento: Please go ahead.

Mark Argento: Good morning, guys.

Mark Argento: Just a couple of quick ones.

Mark Argento: One, in terms of the Opera GX browser, I mean, it's just amazing how that continues to grow.

Mark Argento: I think it was up over – it was at 27 percent in a quarter.

Mark Argento: Can you talk a little bit about that 30 million monthly active users?

Mark Argento: How many are kind of Western versus non-Western markets?

Mark Argento: And kind of how do you see that – the long-term opportunity there play out?

Song Lin: So while the actual deducting part of it is not that costly if you have the right infrastructure. So I think I'll focus that we don't really do the most heavy lifting in terms of, you know, training the basic models, which is just the cost of way too much. But then we focus on how to work with partners and even, you know, open tools models, which doesn't cost anything and hosted in a very costly effective way.

Mark Argento: Because it just continues to grow kind of beyond our expectations.

Frode Jacobsen: Flo, do you want to comment about it?

Frode Jacobsen: Yeah, I can do that.

Frode Jacobsen: In terms of the user base mix, GX is actually quite evenly split between Western and non-Western, but with a substantially better monetization while in both categories and also a narrower gap between non-Western and Western monetization.

Frode Jacobsen: Still, Western is far better monetized than non-Western, but the non-Western user base are relatively more affluent or at least monetizable than what we see in general in the markets.

Frode Jacobsen: So, I would say that is an exposure to Western markets that is somewhat ahead of our Opera 1 flagship and well ahead, naturally, of our user base as a whole, where 17 percent of our users are Western.

Frode Jacobsen: That's helpful.

Mark Argento: And have you guys sat back and done any work in terms of trying to size that market?

Operator: Vicky Wei, Lance Vitanza, Naved Khan, Vicky Wei, Lance Vitanza,

Mark Argento: I mean, is it multiples the size of what it is today for you guys, or how should we be thinking about the longer-term opportunity there?

Frode Jacobsen: I mean, for now, we remain very enthusiastic about that product.

Frode Jacobsen: It still has a lot of headroom, we believe.

Frode Jacobsen: We have a slide in our corporate presentation that tries to indicate a little bit how we see the market, but we don't have any very defined ultimate end-state ambition. Right now, we just want to continue to cultivate the growth model. We feel that the total market addressable is probably 200 million, 300 million.

Frode Jacobsen: I think there's at least 10 times potential that we can reach for this audience, and especially when they are growing and they speak with us, and then there's more younger audiences coming in.

Frode Jacobsen: So, I think, yeah.

Frode Jacobsen: So, in short, I think there's definitely 10 times the growth potential that we can address.

Frode Jacobsen: So, like, again, we are very enthusiastic in a lot of actions around it, just to bigger campaigns, ambitions around those.

Frode Jacobsen: That's helpful.

Mark Argento: And then just one quick follow-up on the EMA discussion.

Mark Argento: Can you just walk us

Mark Argento: through the actual mechanics?

Mark Argento: Some, obviously, you guys continue to benefit from that, too.

Mark Argento: But does the user get prompted once a quarter, once a year, or just on the initial, you know, firing up of the device?

Mark Argento: I'm just trying to better understand how long or the benefit, you know, could persist for you guys in terms of seeing some incremental users come from that new law or that new rule?

Song Lin: Yeah.

Song Lin: And that's our authentic infrastructure. I think I'm going to play on by, you know, just by allowing feedback, which is cost a lot less than you then you want to train it. And then provide that as a very valuable, you know, very valuable service with you notes. And then also when we ask to provide you to the you notes, we are optimizing on how we can make, you know, monetizable contributions, right?

Song Lin: So, you know, I think, okay, so the actual process on iOS, for instance, it's an ongoing process.

Song Lin: I don't think that's finished.

Song Lin: That's still between you and Apple, for instance.

Song Lin: They're still trying to work around the remedial models, right?

Song Lin: Like what's the best approaches for Apple to actually allow somebody else to be, you know, to be actually, you know, functioning well and how should Apple open up, right?

Song Lin: So, it's not settled yet.

Song Lin: It's still in discussion.

Song Lin: It's very active in that process.

Song Lin: But I think the major contribution is actually out of the people's awareness that, you know, like people feel that, oh, now, actually, everybody's saying, and even officially, people are saying that you should definitely try also alternative browsers.

Song Lin: That's out there.

Song Lin: It's actually possible.

Song Lin: And it's a bit unlike maybe, unlike what Apple said in, you know, elsewhere that it's actually completely, you know, solid.

Song Lin: And even, you know, even the EU are actually advocating, right?

Song Lin: So, I think those impacts in general have largely opened up awareness.

Song Lin: And also on top, of course, there will be, we believe that there will be continuous actions to actually have also actual real impact on top of choice screen.

Song Lin: There will be some other requirement to say that, hey, Apple, you should be able to allow, you know, browser to submit their own engine, which is still not allowed at this point, unless you submit some very strange contract, which nobody does.

Song Lin: So, like, all of this is going to happen.

Song Lin: So, happy process around it.

Song Lin: But as I mentioned, I think the sole, you know, user awareness of it, and then also the sponsoring of, you know, of relevant governments are actually helpful to, you know, have people feel that, okay, now I actually have a choice, and I should definitely try it out.

Song Lin: And that has been very helpful to our growth field.

Mark Argento: Great.

Mark Argento: Thanks, guys.

Mark Argento: Good luck, second half.

Song Lin: For instance, recommendation of hey, this perhaps is a product that you want to try. This perhaps the context is what you might interested in. So such links are found well, of course, in the end, where you have to get paid. So I think so far we have been quite disciplinary levels and the result has been good. That has a very limited impact on the OPEX and the revenue after it's already demonstrated in our numbers.

Mark Argento: Thank you.

Operator: Our next question will come from Alicia Yap with Citi.

Alicia Yap: Please go ahead.

Alicia Yap: Hi.

Alicia Yap: Good evening, management.

Alicia Yap: Thanks for taking my questions.

Alicia Yap: Congrats on the solid result.

Alicia Yap: Two questions.

Alicia Yap: One is that I saw that Opera News obviously emerged as the number two app in Brazilian news ecosystem, and just wonder how management think about the future business opportunity in LATAM, and then with user metrics and advertising monetization opportunity.

Alicia Yap: So, do you think LATAM could actually attract relatively higher output per user for your app business compared to other emerging markets?

Alicia Yap: Then second question is that can you elaborate a little bit some of the new features of the GX browser, and how do you think that will help and translate to future monetization upside?

Alicia Yap: Thank you.

Song Lin: Sure.

Song Lin: Yeah, I think, actually, LATAM is one of the fastest-growing markets for us.

Song Lin: I think, GX is always very big in LATAM, just because, say, Brazilians, you know, they love to play games.

Song Lin: So they really embrace GX.

Song Lin: But also, like, our regular browsers, our news app or whatever, are also playing big in LATAM, especially Brazil.

Song Lin: But also, we also see similar in Mexico and a few other countries in the region.

Song Lin: So yes, we actually have high hope on the region.

Song Lin: We actually have entity there established.

Song Lin: We are building up teams.

Song Lin: And it will grow faster, right?

Song Lin: So I'm relatively optimistic.

Song Lin: I think it will be as influential as some of the other fast-growing emerging markets that we see elsewhere.

Song Lin: So quite excited.

Naved Khan: As mentioned, we are building in more marketing cost in the second half.

Song Lin: I think in the, I think we're part of the same trend, there will probably be more usage in the second half. And then, you know, so when the usage is picking up even more, especially when you come up more or whatever, but I think net net is definitely a lot of policy for us. Great. Thanks.

Song Lin: And when it comes to GX, I think we will actually have some major launches in the second half, like we will have the next generation of GX launching.

Song Lin: It's actually already available in the Audit Board version, so you can try it.

Song Lin: We've completely redesigned the whole UI, of the whole user experience, of the modding and the customization function, right?

Song Lin: So it's actually a major update in the second half, which we remain very excited.

Song Lin: And on top, I think we have also been able to move forward on many services within GX, like a GX store, which provides remote download, has been super successful.

Naved Khan: We have a product lineup that is essentially tailored for western and high value users, and that is what we focus on in the second half of the year.

Lance Vitanza: That's really helpful.

Song Lin: So we are now actually working with some hardware windows, some of those to be able to run the store and provide you all those gaming gadgets and items, which can be quite creative and exciting.

Song Lin: We also have GX gaming portals, which have also been now more and more popular and helpful, which that actually prompts us to work with all those big gaming studios, like CD Projekt Red, for the more than, potentially, we are now also have some other potential corporations.

Song Lin: So I actually, more like, we also have, you know, working with some portability titles, games to come, and I think you actually see a lot more announcement in the second half of this year, which will be very exciting for GX.

Alicia Yap: Thank you.

Operator: Thank you.

Operator: This does conclude our question and answer session.

Operator: I would like to turn the

Song Lin: call back to Song Lin for any additional or closing remarks.

Song Lin: Sure.

Song Lin: I think, you know, on behalf of all the management team, thank you all for joining us, today.

Song Lin: You know, the volatile times, we have been looking forward to coming out and confirming all process and continue the tracking and our continued excitement for the way ahead.

Naved Khan: Superhouse.

Naved Khan: Well, thank you guys.

Naved Khan: Thank you.

Eric Sheridan: Our next question will come from Eric Sheridan with Goldman Sachs.

Song Lin: And then actually turning to Iceland. And I remembered that it was a $19 million investment, but I kind of lost track of exactly when that went live. And I'm just wondering if you could talk about to the extent that that's up and running and been up and running. Have you seen that specific investment sort of, you know, generating returns for you, so to speak, is that helping facilitate the work that you have called out that you're doing in AI.

Eric Sheridan: Please go ahead.

Eric Sheridan: Thanks so much for taking the questions.

Eric Sheridan: Maybe first building on Naveem's question on the EU, but widening out a little bit.

Song Lin: Yeah, so, yes, so yeah, yeah, so it's, it's filled on, you know, it's more company, but it's ranked, I think by doing this rank as the, the 88 most powerful superconduct, also, which, you know, couple hundred in the world, which we have more co-founder company in the world. So, quite proud that we actually have that computing power on build up. So yes, it's been, it's an operational sense to do roughly. And then, yeah, so we have been using that mentioned on various, you know, fine-tuned tasks, not just training the basic models, we don't do that, but we use it as a very efficiently in fine-tuned means, and we actually use it also hosting various open source models, where we ask the core to call the hosting, you know, solutions for those that then open source language models and provide it to the end users.

Song Lin: So, we're still working on that. I think it's still a bit out of the stage, it's just because we haven't opened on it for a few months. But I think by second half of this year, we'll see problem even bigger in capital bit. And, and yes, I think it has already been a good journey to revenues by all calculations, problem hour I posted. So, so I think that's, that seems the very good investment, but then, yeah, I think we have actually be called on this to, to generate even for the growth in a think I have, and also into a next year.

Eric Sheridan: You know, when you see this level of shift in the competitive and the regulatory landscapes, how should we think about this informing a almost reprioritization of product or marketing over a longer period of time, and how your priorities might be shifting or changing, given what you're seeing in the external landscape, and some opportunities opening up.

Song Lin: Great, and then if I could just get one more question in regarding any expected impact on search revenue from the Google antitrust ruling, I mean, I'm guessing the earliest that you could see any impact would be 2026, or maybe even 2027, but should investors be gurding for some kind of eventual step, step function down in search revenue? Is that sort of out on the horizon someday? Yeah, so it's a very good question, right?

Eric Sheridan: And second, in terms of the ARIA system, curious any feedback on behavior adoption, your things you've learned from the way users have embraced AI in the early days.

Eric Sheridan: Thanks so much.

Song Lin: So, like, I think maybe I just say that, like again, I think the Google public implementation to answer some of those things, but it's a bit like this, right? So, first of all, my thing has just been that I think like in general, high level, maybe from a high level sense, right? So, in the end of the day, I don't think we care if it's sort of in a one-of-a-revenue, we care that we get paid.

Song Lin: Sure.

Song Lin: I'll comment a bit on it, right?

Song Lin: And high level principle, I think that as far as that everybody seems to be more and more consider that this is the browser traffic, could be for position. English browser is very relevant, very important. More important actually than most people saw, to then I believe we should have a chance to be paid more, right? I don't know what that quote, but we should be paid more. I think that's a general principle.

Song Lin: So I think I agree that I think maybe I'll just comment that I think there's perhaps a bigger shifting.

Song Lin: And as I mentioned also a bit earlier, that I think actually the bigger picture, I agree with you, the particular case with Google public drag song for some time, but I think what the way as the company focuses on is actually the bigger power of the shifting, which is, I mean, this is like the whole thing is changing beyond search, right? Because now all the other people are talking about the pretty search, post search, high-intensity events, retail media, everything of those I asked to base on browser.

Song Lin: So, you know, definitely regulatory shifting, which actually in general tends to be, you know, forcing a more opening up over the platforms, you know, may be iOS or may be Windows or maybe iOS, which is definitely beneficial.

Song Lin: So that, of course, indirect is what we are, you know, doing now to invest more heavily in those platforms.

Song Lin: So I think we're actually more motivated to, you know, keep tuning out product, keep innovating, keep designing our products, to capture those, you know, not only search, but also even beyond search and post search as photo-category, with the help of AI. That's what we see, a major increase of the equal most revenue, as further has commented. And we have to already see a major increase in Q2, and we'll then see more increase in Q3, and even forward in Q4, which is the hardest thing in the year, right?

Song Lin: It just simply because for those that some of those platforms like iOS, it's too difficult, right?

Song Lin: For so part of it, but now it's actually opening up.

Song Lin: So that's a very fascinating to see. So essentially, you can consider this almost as previously, you know, many of those things go to search by, you know, like natural everybody do it. But now, you know, such a fine, but actually they even want to directly go to us, and then, you know, try to engage them directly, which were our first policies. So we work with other partners on those things. So I think those are things really exciting, and then, and so in the next half of the year, why to come, you're probably seeing more activities around this field on top of search anyway. So, and this actually might have a bigger impact photo-tarity. So that's that's what we think of it, and this point.

Song Lin: But I think maybe perhaps a bit more beyond that is that, you know, also in combination of AI, there's this whole paradigm shifting that, you know, like previously, you know, because just remember that previously, most of those, the high income user action dollars are concentrated on, you know, you know, half of it are passed on search, half of it is very isolated.

Lance Vitanza: Great. Thanks, guys. Appreciate the answers.

Song Lin: But now, because of AI, I think when more players starting to see that, you know, those high income user events, you know, can be, you know, like it can be more broad spread in many other positions, if we're position the right way, like if you design the product in the right way, for instance, you know, you can, it can be pre-sort, it can be post-sort, you know, like through the mentioned e-commerce, like all of the ARRs, we actually utilize AI actively to, you know, be able to give you the very valid recommendations using AI.

Unknown Attendee: Thank you.

Song Lin: It's very natural.

Song Lin: And then we're very happy that advertisers and the whole industry actually also looking at it and saying that, oh, that's actually very valuable.

Mark Argento: Our next question will come from Mark Argento with Lake Street. Please go ahead. Good morning, guys. Just a couple of quick ones. One in terms of the opera GX browser, I mean, it's just amazing how that continues to grow. I think it was up where there was a 27% in the quarter. Talk a little bit about that 30, 30 million monthly active users. How many are kind of, you know, Western versus non-Western markets?

Song Lin: Well, we didn't work with opera on this.

Mark Argento: And kind of how do you see that, you know, the long-term opportunity there play out because it just continues to grow kind of beyond our expectations. Do they want to comment about it? Yeah, I can do that. In terms of the user-based mix, GX is actually quite the even list bit between Western and non-Western, but with a substantially better monetization while in both categories, and also narrower gap between non-Western and Western monetization.

Song Lin: Right.

Song Lin: So I think, to some extent, that potentially, you know, even opening up even more than regulatory matters.

Song Lin: So to us, I think for opera, it's just been, you know, publishing our product to be able to take those advantages because in the end of the day, more like we are already a small player yet, but the potential is huge.

Song Lin: I like compel with our market show.

Mark Argento: Still Western is far more a better monetized than the non-Western, but the non-Western user-based are relatively more affluent or at least monetizable than what we see in general in the markets. So that I would say that is an exposure to Western markets that is somewhat ahead of our upper one flagship, and well ahead, naturally, offer user-based as a whole, where 17% of our users are Western.

Song Lin: That's helpful. And yes, so I can do any work into the China size market. I mean, is it, you know, multiple size of what it is today for you guys, or how should we be thinking about the longer-term opportunity? For now, we remain very enthusiastic about that product. It's still as a lot of headroom. We believe we have a slide in our corporate presentation that tries to indicate a little bit how we see the market, but we don't have any very defined, ultimate and state ambition.

Song Lin: Right now, we just want to continue to cultivate growth mode. Yeah, maybe I just have to be there, right? So like, you know, if you look at the combination of, you know, a bit younger audience, and then with gayness, that overlap is probably not talking about, you know, the total address of a market is probably like bit in, you know, people. And then even if we just have a percent of it, you know, size of a percent of it, now we act as the only browser there, which addresses market.

Song Lin: You know, for instance, we have a few percent of market show with the girls, but then if you look at some bigger player, like Google, whatever, like it's $2,000 company, even one percent of it is 20 billion, right.

Song Lin: Well, only like one billion.

Song Lin: We feel that the total market address is probably, you know, two or three hundred million. I think there's 10 times potential that we can reach for this audience, and especially when they are, you know, growing. And they speak with us, and then there's more younger audience just coming in, right? So I think, yeah, so I'm sure that there's definitely potential that we can address. Like again, we're very enthusiastic, a lot of actions around it, just to, you know, bigger campaigns and visions are another round of those.

Song Lin: So we feel that there's at least 10 times, 20 times potentials.

Song Lin: We can do if we capture these shifting paradigms, which that's our purpose.

Song Lin: But we're very happy that that's actually in line with some regulatory methods, where there seems to be want to move to the same direction that, you know, perhaps there are things to be more diversified into more independent companies like us.

Song Lin: And I think that's what we feel the appreciative.

Song Lin: Yeah, so, so around those.

Song Lin: And then I think to your second question, which is a bit related, right.

Song Lin: That's helpful. And then just one quick follow up on the EMA discussion. Can you just walk us through the actual mechanics? Some obviously, you guys continue to benefit from that too. But does the user be prompted once a quarter, once a year, or just on the initial, you know, firing up the device and just try to better understand how long or the benefit, you know, in terms of seeing to make them all users come from that new, uh, that new wall.

Song Lin: So I think, I think in general, AI, you know, it seems on the public out there.

Song Lin: You know, like it seems to be quite down a little bit because there's no GPT-5 yet, you know, whatever.

Song Lin: But then the way we see it is that actually the application of AI has actually been moving almost into day-to-day stuff.

Song Lin: More common is that people perhaps sort, right?

Song Lin: Yeah, sure, yeah, sure. For, you know, I think, okay, so the answer for this, um, say, I always, for instance, it's an ongoing process. You know, I don't think that's finished, that's still between EU and Apple, for instance, that's still trying to walk around the room with the EMA adults, right? Like what the best approaches for Apple to actually allow somebody, but also to be, you know, to be actually, you know, functioning well and how should Apple open up, right?

Song Lin: Like as, like again, as an example, many of those monetization officials, we are actually already using AI to be able to help us is to be able to identify, to give you the right recommendations.

Song Lin: And even though some people may not even be aware, that's actually based on GNI, right.

Song Lin: So, so I think, like we saw this, I think a bit across the industry that even though, like maybe there's some part down to whatever in consumer field, the application of this is actually more penetrating and have more impact on active day-to-day stuff and all the way to the revenue.

Song Lin: So I think that's what we see and that's what we're quite excited, about.

Song Lin: So it's not settled yet. It's still in discussions where they're active, they're in that process. But I think the major contribution is actually on the people, a wellness that, you know, like people feel that, oh, now actually, everybody's saying, and even officially people are saying that you should definitely try also alternative browsers. That's out there is actually possible. And it's been unlike, maybe unlike what Apple said in, you know, as well, that is that completely, you know, solid and even, you know, even the EU are actually advocating, right?

Song Lin: Thank you.

Lance Vitanza: Our next question will come from Lance Vitanza with PD Calend, please go ahead.

Song Lin: So I think those impact in general has largely opened up a wellness. And also on top, of course, there will be, we believe that there will be continuous content actions to actually have also an actual real impact on public choice screen. There will be some other requirement to say that, hey, Apple, you should be able to allow, you know, browser to stop into the old engine, which is still not allowed at this point.

Song Lin: And unless you stop into some very stringent contract, which nobody does. So like all of this is going to happen. So Apple poses around it. But as I mentioned, I think the so, you know, you know, you're the wellness of it. And then also the sponsoring of, you know, of relevant governments are actually helpful to, you know, have people feel that, okay, now actually have a choice and I should demonstrate that. And that has to be very helpful to our growth field.

Unknown Attendee: So basically, I was about to go out. Thank you.

Lance Vitanza: Hi, thanks guys and congratulations on another strong quarter.

Alicia Yap: Our next question will come from Alicia Yap with City. Please go ahead. Hi.

Lance Vitanza: Just to start to stick with the AI theme, I'm wondering about, and thank you for all of the detail on what you're doing, where you're focused and how that's creating value for your publishing partners and your advertising customers as well as your user base, but I'm wondering about the impact these initiatives and the work that you're doing, the impact that might have on your cost structure.

Song Lin: Good evening, management. Thanks for taking my questions. Congrats on the solid result. Two questions. One is that I saw that our news always emerged as the number two app in Brazilian news ecosystem. And just wonder how management think about the future business opportunity in that time. And then with user metrics and advertising monetization opportunity. So do you think that time could actually attract relatively higher output per user for your app business compared to other emerging market?

Lance Vitanza: Are you finding it more expensive to operate either in absolute dollar terms or as a percent of revenue and to be clear, I'm really trying to focus here on OPEX, if we can leave the AI cluster in Iceland out of it for now.

Lance Vitanza: I go ahead.

Lance Vitanza: Okay, sure.

Lance Vitanza: Yeah, I think I'll jump both in and Frode can also add to be right.

Lance Vitanza: So like I think I have to say that I think that's also a lot of way they have been very careful about because of course you saw so many other companies like, you know, the, you know, the 907 or whatever they spend $200 right to try to invest in such architecture or whatever.

Lance Vitanza: So I think for us, we have been quite clear in a spot, right?

Lance Vitanza: Like I think we don't want to remake tools.

Lance Vitanza: It's not very hard for us to compete in those, you know, basic fundamental model language model level, you know, you know, because we like the no point for us as a theoretical small company to try and reinvent the well.

Song Lin: Then second question is that can you elaborate a little bit some of the new features of the GX brochure? And how do you think that will help and translate to future monetization upside? Thank you.

Lance Vitanza: So I think we've been very smart in choosing a possible, you know, like the major of the course is that they're turning the basic models, making sure it works, right?

Lance Vitanza: So while the actual deducting part of it is not that costly if you have the right infrastructure.

Song Lin: Sure. Yeah, I think actually Latin is well the fast growing market fast. You know, I think GX is always very big in Latin. Just we can say Brazil and you know, they love to play games. So they really embrace the GX but but also like our regular browser news app or whatever. I also playing big in Latin, especially Brazil, but also we also see similar in Mexico and other countries in the region.

Lance Vitanza: So I think I'll focus that we don't really do the most heavy lifting in terms of, you know, training the basic models, which is just the cost of way too much.

Lance Vitanza: But then we focus on how to work with partners and even, you know, open tools models, which doesn't cost anything and hosted in a very costly effective way.

Lance Vitanza: And that's our authentic infrastructure.

Lance Vitanza: I think I'm going to play on by, you know, just by allowing feedback, which is cost a lot less than you then you want to train it.

Lance Vitanza: And then provide that as a very valuable, you know, very valuable service with you notes.

Song Lin: So so yes. We actually have high high hope on the region. We actually have entity bill established. We are building up teams and it will grow faster. Right. So I'm relatively optimistic. I think it will be as influential as some of the other fast growing emerging markets that we see as well. So quite quite excited.

Lance Vitanza: And then also when we ask to provide you to the you notes, we are optimizing on how we can make, you know, monetizable contributions, right?

Song Lin: And then when comes to GX, I think we have been we will actually have some major launches in the second half, like we will have the next generation of GX launching. It's that already available in the audit board of Washington. So you can try it. With completely redesigned the whole UI of the whole user experience of the morning and customization function. Right. So so it's actually a major update in the second half, which we remain very excited.

Lance Vitanza: For instance, recommendation of hey, this perhaps is a product that you want to try.

Lance Vitanza: This perhaps the context is what you might interested in.

Lance Vitanza: So such links are found well, of course, in the end, where you have to get paid.

Lance Vitanza: So I think so far we have been quite disciplinary levels and the result has been good.

Lance Vitanza: That has a very limited impact on the OPEX and the revenue after it's already demonstrated in our numbers.

Song Lin: And I hope I think we have also been able to move forward on many services within GX, like like a GX store, which provided the most download has been super successful. So we are not actually working with some. And you know, you know, how to go and know some others to be able to run the store and provide you all those, you know, gaming gadgets and items, which can be quite relevant and exciting.

Song Lin: We have also, you know, have just came in for those which has also been normal and more popular and helpful, which that actually prompt us to work with all those big gaming studios like CD project rate for the more than potential, but not also have some other potential corporations. So I actually feel more like well, I also had, you know, working with some pulled blood to your titles games to come on. And I think you asked to see a lot more. I'm going to take a half of this year, which will be very exciting projects.

Unknown Attendee: Thank you.

Lance Vitanza: I think in the, I think we're part of the same trend, there will probably be more usage in the second half.

Song Lin: This does conclude our question and answer session.

Song Lin: I would like to turn the call back to song Lynn for any additional or closing remarks. Sure. I think I'm on behalf of the management team.

Lance Vitanza: And then, you know, so when the usage is picking up even more, especially when you come up more or whatever, but I think net net is definitely a lot of policy for us.

Song Lin: Thank you all for joining us today in the volatile times. We have been looking forward to coming out and conforming offers and continue the tracking and continue the excitement for the way ahead. We'll reconnect in just over two months with our Q3 release and we'll work hard to bring you more good news. Again, thank you all for your time and have a good rest of your day.

Lance Vitanza: Great.

Lance Vitanza: Thanks.

Lance Vitanza: That's really helpful.

Lance Vitanza: And then actually turning to Iceland.

Operator: This does conclude today's call. We thank you for your participation. You may disconnect at any time.

Lance Vitanza: And I remembered that it was a $19 million investment, but I kind of lost track of exactly when that went live.

Lance Vitanza: And I'm just wondering if you could talk about to the extent that that's up and running and been up and running.

Lance Vitanza: Have you seen that specific investment sort of, you know, generating returns for you, so to speak, is that helping facilitate the work that you have called out that you're doing in AI.

Music: Music

Lance Vitanza: Yeah, so, yes, so yeah, yeah, so it's, it's filled on, you know, it's more company, but it's ranked, I think by doing this rank as the, the 88 most powerful superconduct, also, which, you know, couple hundred in the world, which we have more co-founder company in the world.

Lance Vitanza: So, quite proud that we actually have that computing power on build up.

Lance Vitanza: So yes, it's been, it's an operational sense to do roughly.

Lance Vitanza: And then, yeah, so we have been using that mentioned on various, you know, fine-tuned tasks, not just training the basic models, we don't do that, but we use it as a very efficiently in fine-tuned means, and we actually use it also hosting various open source models, where we ask the core to call the hosting, you know, solutions for those that then open source language models and provide it to the end users.

Lance Vitanza: So, we're still working on that.

Lance Vitanza: I think it's still a bit out of the stage, it's just because we haven't opened on it for a few months.

Lance Vitanza: But I think by second half of this year, we'll see problem even bigger in capital bit.

Lance Vitanza: And, and yes, I think it has already been a good journey to revenues by all calculations, problem hour I posted.

Lance Vitanza: So, so I think that's, that seems the very good investment, but then, yeah, I think we have actually be called on this to, to generate even for the growth in a think I have, and also into a next year.

Lance Vitanza: Great, and then if I could just get one more question in regarding any expected impact on search revenue from the Google antitrust ruling, I mean, I'm guessing the earliest that you could see any impact would be 2026, or maybe even 2027, but should investors be gurding for some kind of eventual step, step function down in search revenue?

Lance Vitanza: Is that sort of out on the horizon someday?

Lance Vitanza: Yeah, so it's a very good question, right?

Lance Vitanza: So, like, I think maybe I just say that, like again, I think the Google public implementation to answer some of those things, but it's a bit like this, right?

Lance Vitanza: So, first of all, my thing has just been that I think like in general, high level, maybe from a high level sense, right?

Lance Vitanza: So, in the end of the day, I don't think we care if it's sort of in a one-of-a-revenue, we care that we get paid.

Lance Vitanza: And high level principle, I think that as far as that everybody seems to be more and more consider that this is the browser traffic, could be for position.

Lance Vitanza: English browser is very relevant, very important.

Lance Vitanza: More important actually than most people saw, to then I believe we should have a chance to be paid more, right?

Lance Vitanza: I don't know what that quote, but we should be paid more.

Lance Vitanza: I think that's a general principle.

Lance Vitanza: And as I mentioned also a bit earlier, that I think actually the bigger picture, I agree with you, the particular case with Google public drag song for some time, but I think what the way as the company focuses on is actually the bigger power of the shifting, which is, I mean, this is like the whole thing is changing beyond search, right?

Lance Vitanza: Because now all the other people are talking about the pretty search, post search, high-intensity events, retail media, everything of those I asked to base on browser.

Lance Vitanza: So I think we're actually more motivated to, you know, keep tuning out product, keep innovating, keep designing our products, to capture those, you know, not only search, but also even beyond search and post search as photo-category, with the help of AI.

Lance Vitanza: That's what we see, a major increase of the equal most revenue, as further has commented.

Lance Vitanza: And we have to already see a major increase in Q2, and we'll then see more increase in Q3, and even forward in Q4, which is the hardest thing in the year, right?

Lance Vitanza: So that's a very fascinating to see.

Lance Vitanza: So essentially, you can consider this almost as previously, you know, many of those things go to search by, you know, like natural everybody do it.

Lance Vitanza: But now, you know, such a fine, but actually they even want to directly go to us, and then, you know, try to engage them directly, which were our first policies.

Lance Vitanza: So we work with other partners on those things.

Lance Vitanza: So I think those are things really exciting, and then, and so in the next half of the year, why to come, you're probably seeing more activities around this field on top of search anyway.

Lance Vitanza: So, and this actually might have a bigger impact photo-tarity.

Lance Vitanza: So that's that's what we think of it, and this point.

Lance Vitanza: Great.

Lance Vitanza: Thanks, guys.

Lance Vitanza: Appreciate the answers.

Lance Vitanza: Thank you.

Mark Argento: Our next question will come from Mark Argento with Lake Street.

Mark Argento: Please go ahead.

Mark Argento: Good morning, guys.

Mark Argento: Just a couple of quick ones.

Mark Argento: One in terms of the opera GX browser, I mean, it's just amazing how that continues to grow.

Mark Argento: I think it was up where there was a 27% in the quarter.

Mark Argento: Talk a little bit about that 30, 30 million monthly active users.

Mark Argento: How many are kind of, you know, Western versus non-Western markets?

Mark Argento: And kind of how do you see that, you know, the long-term opportunity there play out because it just continues to grow kind of beyond our expectations.

Mark Argento: Do they want to comment about it?

Mark Argento: Yeah, I can do that.

Mark Argento: In terms of the user-based mix, GX is actually quite the even list bit between Western and non-Western, but with a substantially better monetization while in both categories, and also narrower gap between non-Western and Western monetization.

Mark Argento: Still Western is far more a better monetized than the non-Western, but the non-Western user-based are relatively more affluent or at least monetizable than what we see in general in the markets.

Mark Argento: So that I would say that is an exposure to Western markets that is somewhat ahead of our upper one flagship, and well ahead, naturally, offer user-based as a whole, where 17% of our users are Western.

Mark Argento: That's helpful.

Mark Argento: And yes, so I can do any work into the China size market.

Mark Argento: I mean, is it, you know, multiple size of what it is today for you guys, or how should we be thinking about the longer-term opportunity?

Mark Argento: For now, we remain very enthusiastic about that product.

Mark Argento: It's still as a lot of headroom.

Mark Argento: We believe we have a slide in our corporate presentation that tries to indicate a little bit how we see the market, but we don't have any very defined, ultimate and state ambition. Right now, we just want to continue to cultivate growth mode.

Mark Argento: Yeah, maybe I just have to be there, right?

Mark Argento: So like, you know, if you look at the combination of, you know, a bit younger audience, and then with gayness, that overlap is probably not talking about, you know, the total address of a market is probably like bit in, you know, people.

Mark Argento: And then even if we just have a percent of it, you know, size of a percent of it, now we act as the only browser there, which addresses market.

Mark Argento: We feel that the total market address is probably, you know, two or three hundred million.

Mark Argento: I think there's 10 times potential that we can reach for this audience, and especially when they are, you know, growing.

Mark Argento: And they speak with us, and then there's more younger audience just coming in, right?

Mark Argento: So I think, yeah, so I'm sure that there's definitely potential that we can address.

Mark Argento: Like again, we're very enthusiastic, a lot of actions around it, just to, you know, bigger campaigns and visions are another round of those.

Mark Argento: That's helpful.

Mark Argento: And then just one quick follow up on the EMA discussion.

Mark Argento: Can you just walk us through the actual mechanics?

Mark Argento: Some obviously, you guys continue to benefit from that too.

Mark Argento: But does the user be prompted once a quarter, once a year, or just on the initial, you know, firing up the device and just try to better understand how long or the benefit, you know, in terms of seeing to make them all users come from that new, uh, that new wall.

Mark Argento: Yeah, sure, yeah, sure.

Mark Argento: For, you know, I think, okay, so the answer for this, um, say, I always, for instance, it's an ongoing process.

Mark Argento: You know, I don't think that's finished, that's still between EU and Apple, for instance, that's still trying to walk around the room with the EMA adults, right?

Mark Argento: Like what the best approaches for Apple to actually allow somebody, but also to be, you know, to be actually, you know, functioning well and how should Apple open up, right?

Mark Argento: So it's not settled yet.

Mark Argento: It's still in discussions where they're active, they're in that process.

Mark Argento: But I think the major contribution is actually on the people, a wellness that, you know, like people feel that, oh, now actually, everybody's saying, and even officially people are saying that you should definitely try also alternative browsers.

Mark Argento: That's out there is actually possible.

Mark Argento: And it's been unlike, maybe unlike what Apple said in, you know, as well, that is that completely, you know, solid and even, you know, even the EU are actually advocating, right?

Mark Argento: So I think those impact in general has largely opened up a wellness.

Mark Argento: And also on top, of course, there will be, we believe that there will be continuous content actions to actually have also an actual real impact on public choice screen.

Mark Argento: There will be some other requirement to say that, hey, Apple, you should be able to allow, you know, browser to stop into the old engine, which is still not allowed at this point.

Mark Argento: And unless you stop into some very stringent contract, which nobody does.

Mark Argento: So like all of this is going to happen.

Mark Argento: So Apple poses around it.

Mark Argento: But as I mentioned, I think the so, you know, you know, you're the wellness of it.

Mark Argento: And then also the sponsoring of, you know, of relevant governments are actually helpful to, you know, have people feel that, okay, now actually have a choice and I should demonstrate that.

Mark Argento: And that has to be very helpful to our growth field.

Mark Argento: So basically, I was about to go out.

Mark Argento: Thank you.

Alicia Yap: Our next question will come from Alicia Yap with City.

Alicia Yap: Please go ahead.

Alicia Yap: Hi.

Alicia Yap: Good evening, management.

Alicia Yap: Thanks for taking my questions.

Alicia Yap: Congrats on the solid result.

Alicia Yap: Two questions.

Alicia Yap: One is that I saw that our news always emerged as the number two app in Brazilian news ecosystem.

Alicia Yap: And just wonder how management think about the future business opportunity in that time.

Alicia Yap: And then with user metrics and advertising monetization opportunity.

Alicia Yap: So do you think that time could actually attract relatively higher output per user for your app business compared to other emerging market?

Alicia Yap: Then second question is that can you elaborate a little bit some of the new features of the GX brochure?

Alicia Yap: And how do you think that will help and translate to future monetization upside?

Alicia Yap: Thank you.

Song Lin: Sure.

Song Lin: Yeah, I think actually Latin is well the fast growing market fast.

Song Lin: You know, I think GX is always very big in Latin.

Song Lin: Just we can say Brazil and you know, they love to play games.

Song Lin: So they really embrace the GX but but also like our regular browser news app or whatever.

Song Lin: I also playing big in Latin, especially Brazil, but also we also see similar in Mexico and other countries in the region.

Song Lin: So so yes.

Song Lin: We actually have high high hope on the region.

Song Lin: We actually have entity bill established.

Song Lin: We are building up teams and it will grow faster.

Song Lin: Right.

Song Lin: So I'm relatively optimistic.

Song Lin: I think it will be as influential as some of the other fast growing emerging markets that we see as well.

Song Lin: So quite quite excited.

Song Lin: And then when comes to GX, I think we have been we will actually have some major launches in the second half, like we will have the next generation of GX launching.

Song Lin: It's that already available in the audit board of Washington.

Song Lin: So you can try it.

Song Lin: With completely redesigned the whole UI of the whole user experience of the morning and customization function.

Song Lin: Right.

Song Lin: So so it's actually a major update in the second half, which we remain very excited.

Song Lin: And I hope I think we have also been able to move forward on many services within GX, like like a GX store, which provided the most download has been super successful.

Song Lin: So we are not actually working with some.

Song Lin: And you know, you know, how to go and know some others to be able to run the store and provide you all those, you know, gaming gadgets and items, which can be quite relevant and exciting.

Song Lin: We have also, you know, have just came in for those which has also been normal and more popular and helpful, which that actually prompt us to work with all those big gaming studios like CD project rate for the more than potential, but not also have some other potential corporations.

Song Lin: So I actually feel more like well, I also had, you know, working with some pulled blood to your titles games to come on.

Song Lin: And I think you asked to see a lot more.

Song Lin: I'm going to take a half of this year, which will be very exciting projects.

Song Lin: Thank you.

Unknown Attendee: This does conclude our question and answer session.

Song Lin: I would like to turn the call back to song Lynn for any additional or closing remarks.

Song Lin: Sure.

Song Lin: I think I'm on behalf of the management team.

Song Lin: Thank you all for joining us today in the volatile times.

Song Lin: We have been looking forward to coming out and conforming offers and continue the tracking and continue the excitement for the way ahead.

Song Lin: We'll reconnect in just over two months with our Q3 release and we'll work hard to bring you more good news.

Song Lin: Again, thank you all for your time and have a good rest of your day.

Unknown Attendee: This does conclude today's call.

Unknown Attendee: We thank you for your participation.

Unknown Attendee: You may disconnect at any time.

Unknown Attendee: Music