Q2 2025 Opera Ltd Earnings Call

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Welcome to the Opera Limited second quarter 2025 earnings call.

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I would now like to turn the call over to your speaker today, Matt Walton, head of Investor Relations. Please begin.

Matthew Wolfson: Thank you for joining us. This morning, I am joined by our Co-CEO, Song Lin, and our CFO, Frode 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. Actual results could differ materially. Please refer to the Safe Harbor statement in our earnings press release, as well as our annual report, Form 20-F, including the risk factors. We undertake no obligation to update any forward-looking statements. During this call, we will present both IFRS and non-IFRS financial measures.

Matthew Wolfson: 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. Our comments will be on year-over-year comparisons unless we state otherwise. I will now turn the call over to our Co-CEO, Song Lin, who will cover our second quarter operational highlights and strategy, and then Frode Jacobsen, who will discuss our financials and expectations going forward. Song?

Thank you for joining us this morning. I'm joined by our co-CEO, Lin Song, and our CFO, Frode Jacobsen. Before I hand over the call to Lin Song, 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 our 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 press release, as well as our annual report Form 20-F, including the risk factors. We undertake no obligation to update any forward-looking statements. During this call, we will present both IFRS and non-IFRS financial measures, as well as a reconciliation of non-IFRS.

To IRR measures included in today's earnings press release, which is distributed and available to the public. So our Investor Relations website is located at investor.opera.com.

our comments will be on year-over-year comparisons, unless we State otherwise turn the call over to our co-ceo sin, who will cover our second quarter operational, highlights and strategy and then throw to Jacobson who will discuss our financials and expectations going forward song.

Song Lin: Thank you, Matt, and everyone else for joining us today. We have been looking forward to sharing our second quarter results with you and also updating you on our latest thinking and priorities in this very exciting business landscape. I am going to start with the financials. The second quarter experienced year-over-year revenue growth of 40% compared to guidance of 22% to 26%, and well ahead of 17% growth in the second quarter of last year. This marks our 17th straight quarter as a row-of-forty company entirely fueled by organic revenue growth and healthy margins, leading to cash flows that fund both innovation and our recurring dividends. Advertising revenue grew 40% year-over-year to $93 million. E-commerce remains the fastest-growing vertical within advertising, continuing to grow over 100% year-over-year despite the ongoing volatility due to tariff uncertainty.

Oh, thank you, Matt, and everyone else for joining us today. We have been looking forward to sharing our second quarter results with you and also updating you on our latest thinking. This is an exciting business landscape.

I am going to start with the financials.

The second caller experienced year-over-year revenue growth of 30%.

Growth in the second quarter of last year.

This marks our 17th straight quarter as a low of 4-day company entirely filled by organic revenue growth and healthy margins, leading to cash flows that fund both innovation and our recurring dividends.

Song Lin: While the growth support from e-commerce in our revenue mix has resulted in the vertical now representing nearly half of total advertising revenue, we still believe we are under-indexing with ample headroom for continued expansion as we move into the retail-heavy back half of the year. We are also very pleased to see search revenue returning to double-digit growth, up 11% year-over-year to $50 million in the quarter. The sequential growth of 60% was also twice as high as it was in Q2 last year, benefiting from the continued mixed shift of our user base towards higher averages. We also see a broader trend with a new focus on high-user intended traffic powered by AI, leading to monetization opportunities arising not only during actual search but also around pre and post-search, providing ample opportunities for those in a position to detect and create value.

After the revenue grew 44%, to $93 million, e-commerce remains the fastest-growing vertical within advertising, continuing to grow over 100% year-over-year. Despite the ongoing volatility due to terrorists on Saturday,

While the growth support from e-commerce in our revenue mix has resulted in the vertical now representing nearly half of total advertising revenue, we still believe we are under-indexing. There is ample headroom for continued expansion as we move into the retail-heavy back-up of the year.

We are also very pleased to see such revenue returning to double-digit growth, up 11% year-over-year to $50 million in the columns. The sequential growth of 6% was also twice as high as it was in Q2 last year, benefiting from the continued mix of our user base towards higher-up regions. We also see a broader trend with a new focus on high user intent traffic.

How would my AI lead to monetization opportunities? Arriving, not only during actual search but also around pre and post-search?

Song Lin: This allows us to deepen cooperation in a space with a wider range of partners, from traditional search providers to e-commerce, travel, and gaming verticals, foremost in the U.S., though increasingly also a global trend with exciting new opportunities ahead. This strong revenue performance leads to an adjusted EBITDA of $32 million, just above the high end of our previously issued guidance, and once again demonstrating that we can outperform our revenue expectations while hitting our profit targets. With that, I'll move to our product and our strategic opportunities. We are at the dawn of a new era in compute and surrounded by AI companies competing for users to their models. Beyond being a huge source of traffic, we believe that the browser will emerge as the operating system for these AI services. Today, the majority of AI agents run as cloud-hosted web pages.

Providing ample opportunities for those in opposition to detect and create value.

This allows us to deepen cooperation in a space where the wider range of partners, from traditional source providers to e-commerce, travel, and gaming modules. For most in the U.S., this will also increase a global trend, presenting exciting new opportunities ahead.

This strong revenue performance led to adjusted EVA of $32 million.

Above the high end of our previously issued guidance, and once again demonstrating that we can also perform our revenue expectations while meeting our profit targets.

With that, I'll move to, uh, product and our strategic opportunities. We are at the dawn of a new era in compute and surrounded by AI companies competing for users to their models.

Song Lin: That is clearly inferior to the potential of a browser-native architecture, which elevates an agent's capabilities by allowing local native operations to run side-by-side and sometimes indistinguishable from regular human operations. This is key for an AI agent to be truly and consistently helpful, enabling faster execution, richer contextual understanding, and broader functional extensibility, and also better solutions for information privilege. The browser AI agents can have access to all the information accessible by the user, whether it is local files, communication platforms, or premium subscription content, with greater control of privacy and security and more efficient use of computing resources.

Beyond being a huge source of traffic, we believe that the browser will emerge as the operating system. For these AI services today, the majority of AI agents run as cloud-hosted web pages.

Song Lin: In this context, we are so excited about what we are building for public release during the fall, the AI browser Opera Neon. Opera Neon will combine major AI use cases into a single user interface with the native functionality of the Opera Browser that is already appreciated for productivity. Opera Neon is built to be the gateway to AI, web applications, and automation converge. The value creation opportunity is huge. For example, there are over 1 billion knowledge workers worldwide who rely on the browser as their primary workspace. These same workers on average juggle nine productivity apps a day and a far greater number of web tabs, all in all losing 40 minutes to context switching every day. This creates an opportunity for an agentic AI collaborator as a natural evolution of how people work based on existing user habits and muscle memory.

That is clearly inferior to the potential of a browser native architecture which elevates an agent's capabilities by allowing local, native operations to run side by side with and sometimes indistinguishable from regular human operations. This is the key for a agent to be truly and the consistently helpful enabling faster execution, reach our contextual understanding and the broader function functional extensibility and also better solution for information privilege. The browser AI agents can have access to all the information accessible by the user, whether it's local files communication platforms, or premium subscription content weighs greater control of privacy and security and more efficient use of computing resources.

In this context, we are so excited about what we are building for public release during the fall. The AI browser is open.

Neon will combine major AI use cases into a single user interface, where the native functionality or the upper browser that is already appreciated for productivity.

Open Near is built to be the gateway to AI, where web applications and automation converge.

The value creation opportunity is huge. For example, there are over 1 billion knowledge workers worldwide who rely on the browser as their primary workspace. These same workers, on average, juggle multiple productivity apps throughout the day and a greater number of web apps, losing 40 minutes to context switching every day. This creates an opportunity for an agentic AI collaborator as a natural evolution of how people work.

Song Lin: Opera Limited is uniquely positioned for this, both in terms of competence and scale. We have been pioneering browser innovation for the past 30 years, and we operate at a scale far greater than most web-based AI platforms, with our nearly 300 million users. We will make AI widely accessible, naturally integrated, and with immediate productivity benefits for our users. Automation and task intelligence will be built right into the routines that already exist. We can't wait to show you. Moving on from AI, I wanted to give you an update on Opera GX, the browser made for gamers. The Opera GX user base was 43 million MAUs in the second quarter, up 11% year-over-year, and with an annualized output of $3.47. Opera GX released an update during the quarter, providing users with a pack of in-house tab management capabilities and improved multitasking features.

With our new 300 million users, we will make AI widely accessible, naturally integrated, and with immediate productivity benefits for users.

Automation and task intelligence will be built right into the routines that already exist.

We can't wait to show you.

Moving on from AI, I wanted to give you an update on Opera GX, the browser made for gamers. The GX user base was 43 million monthly users in the second quarter, up 11% year-over-year. And with the analyst's estimate at 347.

Song Lin: The update allows for side-by-side tab viewing, easy tracing of recently visited pages, and the function to organize related tabs into collapsible groups. We are also in the process of soft launching Opera GX in South Korea, with Japan to follow shortly, leveraging our partnership with League of Legends as the pre-bought browser. We are going on with our flagship browsers as well, both for computers and for phones. In the interest of time, I'll dive deeper into those on our Q3 call later in the year, since that will coincide with the up-and-coming rollout of the third edition of Opera One, with even more new exciting features.

Offer GX release and update during the call, providing users with a pack of In Your House, tap management capabilities, and improved multitasking features. The updates allow for both side-by-side table viewing, easy tracing operations, recently visited pages, and the function to organize related tabs into collapsible groups.

Where also in the process.

Of soft launching, Opera GX will operate in South Korea, with Japan to follow shortly.

Leveraging our partnership with League of Legends as the preferred browser.

They are not going on with our Flagship browsers as well both for computers. And for phones though in the interest of time, I'll dive deeper into those Q3 call later in the year since that will coincide with upcoming roll out of the sorted, machine of Opera 1, with, even more new exciting features.

Song Lin: In terms of our overall user base and economics, our strategy of focusing our products and marketing on the highest value segments is unchanged, resulting in a solid 5% upgrade to an annualized level of $1.97, with 289 million MAUs in the quarter. I will wrap up with the final topic, stablecoins. We view the stablecoin market as one of the most exciting aspects within the fintech space. Through the use of non-trustworthy wallets, Opera created a stablecoin-based wallet called MiniPay. MiniPay allows people to hold, send, and receive funds instantly using just a phone number. MiniPay already works with over 40 different currencies in 53 countries and allows its users to seamlessly convert local cash into a stablecoin-backed wallet using their preferred method: card, Apple Pay, Mobile Money, or bank transfer, and to switch back just as easily. A person located in Europe or the U.S.

In part of our overall user base and economics.

Also, the strategy of focusing our products and marketing on the highest value segments is unchanged, resulting in solid 5% growth. To analyze the level of 1.97 cents with 289 million... Mm, used in Google.

I will wrap up with a final topic: stable coins. We view the stable coin market as one of the most exciting aspects within the fintech space.

Through the use of non-custodial wallets.

Opera created a stable Coinbase wallet called Mini Pay.

Mini Pay allows people to hold, send, and receive funds instantly using just a phone number.

Mini Pay already works with over 40 different currencies in 53 countries.

And allow its users to seamlessly convert local cash into a stablecoin-backed wallet using their preferred method: card, Apple Pay, mobile money, or bank transfer, and to switch back just as easily.

Song Lin: can then easily send funds or even make an instant payment of groceries at a checkout thousands of miles away. MiniPay also introduced the notion of pockets, which allows for switching between stablecoins with just one click. With several real-world applications already, MiniPay has the potential to improve the lives of millions of people globally. By simplifying the experience, we removed some major barriers for people to take advantage of this technology. As a result, MiniPay has reached 9 million activated wallets and exceeded 250 million transactions and is now among the fastest-growing non-trustworthy wallets globally. In addition, we are seeing the development of third-party apps within MiniPay further differentiating the app and creating a positive feedback loop to fuel additional growth. While our near-term priority is skill-building, we already generated MiniPay revenue from integrations that ensure native support for ecosystem partners.

A person located in Europe or the U.S. can easily send funds or even make an instant payment for groceries at a checkout thousands of miles away.

MiniPay also introduced the notion of pockets, which allows for switching between stablecoin weights with just one click.

Wait several real-world applications already.

Mini has the potential to improve the lives of millions of people globally.

By simplifying, we removed some major barriers for people to take advantage of this technology.

As a result, Minifie has reached 9 million activated wallets and exceeded 250 million transactions. It is now among the fastest-growing non-custodial wallets globally.

In addition, we're asking for the development of Salt Party apps within Mini Pay for the differentiating the app, and creating a positive feedback loop to fuel additional growth.

While our neotone priority is still building, we already generate the mini pay revenue from integrations that ensure native support for ecosystem partners.

Song Lin: MiniPay was originally launched within our lightweight Opera Mini browser on Android phones and is now also available as a standalone app on both Android and iOS, providing an even richer feature set and sets the stage for transacting across continents without expensive remittance fees. We have observed qualitative regulatory developments in the stablecoin space, most recently the Genius Act in the United States, and believe we can capture additional growth as this space continues to mature. All in all, we find ourselves in the privileged position of both being able to rapidly scale revenue opportunities while also being well-situated to capitalize on two transformative and highly strategic technologies: AI and the adoption of stablecoins as a way to drive financial inclusion. We will stay very close to capture these opportunities, and we look forward to keeping you posted on these developments.

Minify was already launched within our lightweight Opera Mini browser on Android phones and is now also available as a standalone app on both Android and iOS.

Providing an even richer feature set and setting the stage for transacting across continents without expensive remittances.

We have observed positive regulatory developments in the cable and coin space. Most recently, the GENIUS Act in the United States, and we believe we can capture additional growth as this space continues to materialize.

Song Lin: Frode, we will now dive into the details behind our financial results before providing our updated guidance for the remainder of 2025. Frode?

To capitalize on two transformative and highly strategic technologies, AI and the adoption of stablecoins, as a way to drive financial inclusion, we will stay very close to capture these opportunities and we look forward to keeping you posted on these developments.

Further, well, now dive into the details behind our financial results before providing our updated guidance for the remainder of Q2 2025.

Further.

Matthew Wolfson: Thanks, Song. First of all, we are very pleased to yet again deliver on high expectations and exceed both our own guidance as well as Frode's expectations. Revenue growth was 30% year-over-year, well ahead of our already strong guidance of 22% to 26% growth. Looking at the first half as a whole, we grew revenue 35% year-over-year, which is more than double the year-over-year growth in the first half of 2024. Over the past year, our advertising revenue has scaled to new levels. Preparing for and then seizing e-commerce opportunities, we saw major growth acceleration in the second half of last year, followed by an unprecedented sequential growth from the seasonal peak of Q4 into Q1 2025. With Q2, we saw the expansion of global opportunities, largely upselling the impact of tariff-related headwinds in U.S. e-commerce.

Thank You song.

First of all, we are very pleased to yet again deliver on high expectations and exceed both our own guidance as well as Street expectations.

Revenue growth was 30% year-over-year, well ahead of our already strong guidance of 22% to 26% growth.

Looking at the first half as a whole, we grew Revenue 35% year-over-year, which is more than double the year-over-year growth in the first half of 2024.

Over the past year, our advertising revenue has scaled to new levels.

Preparing for and then seizing e-commerce opportunities. We saw major growth acceleration in the second half of last year, followed by an unprecedented sequential growth from the seasonal peak of Q4 into Q1 2025.

And with Q2, we saw the expansion of global opportunities largely offsetting the impact of tariff-related headwinds in the U.S. being Commerce.

Matthew Wolfson: We have been positively assured by the resilience of our newly scaled advertising revenue streams in an otherwise volatile macro picture. We also saw search revenue return to double-digit growth as expected, which adds to our ability today to significantly raise our growth expectations for the year. On the cost side, Q2 OpEx came in according to our prior directional commentary across marketing, compensation, and the other smaller items combined, while cost of revenue scaled with revenue over performance and came in at the same percentage of revenue as in Q1. This means that we were able to grow faster than expected and strengthen our overall business trajectory going into the second half of the year, while still exceeding the high end of our adjusted EBITDA guidance.

We have been positively assured by the Brazilians of our newly scaled advertising revenue streams.

In an otherwise volatile macro picture, we also saw search revenue return to double-digit growth as expected, which adds to our ability today to significantly raise our growth expectations for the year.

On the cost side, Q2 Opex came in according to our prior directional commentary across marketing compensation. The other smaller items combined while custom revenue scales with the revenue overperformance and came in at the same percentage of revenue, I think you want.

This means that we were able to grow faster than expected and strengthen our overall business trajectory going into the second half of the year while still exceeding the high end of our adjusted EBITDA guidance.

Matthew Wolfson: Our operating cash flow was $33 million in the quarter, representing 103% of adjusted EBITDA, with the cash flow headwinds of Q1 representing tailwinds in Q2. Free cash flow from operations came in at $29 million, or 91% of adjusted EBITDA. As always, we continue to expect fluctuations in cash conversion on a quarterly basis, with the year-to-date conversion stabilizing as the year progresses. Adjusted diluted EPS was $0.26 in the quarter. We present adjusted net income and adjusted diluted EPS to provide a consistent view on the underlying business performance, excluding accounting impacts from investments such as Opera Ads and share-based compensation expenses, which is quite volatile in the P&L due to timing of grants, while the number of actual equity instruments vested each year has been fairly stable.

Our operating cash flow was $33 million in the quarter, representing 103% of adjusted EBITDA, with the cash flow headwinds of Q1 representing a tailwind in Q2.

Free cash flow from operations came in at $29 million, or 91% of adjusted EBITDA.

As always, we continue to expect fluctuations in cash conversion on a quarterly basis, with the year-to-date conversion stabilizing as the year progresses.

Adjusted diluted EPS was $0.26 in the quarter.

We presented just a net income and adjusted the diluted EPS to provide a consistent view on the underlying business performance, excluding accounting impacts from investments such as share-based compensation expenses, which are quite volatile in the P&L due to the timing of grants.

Matthew Wolfson: This cost adjustment also eliminates the accounting impact of equity grants made by our majority shareholder, consisting of options in that shareholder itself and not causing dilution for Opera's other shareholders. The resulting adjusted diluted EPS thereby becomes a less volatile metric tied to the underlying profitability of our operations. As Song Lin mentioned, the second quarter was our 17th consecutive quarter as a rule-of-40 company, with revenue and adjusted EBITDA once again meeting or exceeding our previously issued guidance. We are incredibly happy to continue to execute at these levels of revenue growth, matched by healthy profits, allowing us to continue to return cash to shareholders through our recurring dividend program. Since January 2023, we have distributed $2.80 of dividends per share, and during the three years prior to that, we bought back 30% of our outstanding stock as another way of driving value for our shareholders.

While the number of actual equity instruments vested each year has been fairly stable.

This cost adjustment also eliminates the accounting impact of equity grants made by our majority shareholder, consisting of options in that shareholder itself and not causing dilution for other shareholders.

The resulting adjusted diluted EPS thereby becomes a less volatile metric, tied to the underlying profitability of our operations.

As long mentioned, the second quarter was our 17th consecutive quarter as a Rule of 40 company, with revenue and adjusted EBITDA once again meeting or exceeding our previously issued guidance.

We are incredibly happy to continue to execute at these levels of revenue growth, matched by healthy profits, allowing us to continue to return cash to shareholders through our recurring dividend program.

We have distributed $2.80 of dividends per share. During the three years prior to that, we bought back 30% of our outstanding stock as another way of driving value for our shareholders.

Matthew Wolfson: Turning to guidance. For 2025 as a whole, we now guide revenue of $585 million to $597 million, or 22% to 24% growth over 2024. This is the second time we refresh 2025 guidance and the second time we add three percentage points to the annual growth rate. Our guidance implies a continued acceleration of our full-year revenue growth from 20% in 2023, 21% in 2024, and now 23% at the midpoint for 2025, while continuing to reflect appropriate caution for potential headwinds. Similar to before, given the hockey stick growth of the second half of 2024, we have very stark guidance on sequential modeling. The raised estimates capture the Q2 overall performance and the increased confidence in our path for the second half.

Now turning to guidance.

For 2025 as a whole, we now guide revenue of $585 to $597 million, or 20% to 24% growth over 2024.

This is the second time we refresh our 2025 guidance, and the second time we add 3 percentage points to the annual growth rate.

Our guidance implies a continued acceleration of our full year revenue growth.

From 20% in 2023, 21% in 2024, and now 23% at the midpoint for 2025.

While continuing to reflect appropriate caution for potential headwinds.

Similar to before, given the hockey stick growth of the second half of 2024, we have very strong guidance on sequential modeling.

Matthew Wolfson: As before, this results in a relatively stable trend of quarterly revenue growth measured on a two-year CAGR, which captures the scale we have built in recent quarters while also evening out our forward-looking growth profile. In terms of adjusted EBITDA, we lift the bottom end of the range for now, guiding $136 million to $140 million for the year as a whole, or a margin of 23.4% at the midpoints. This reflects a continued expectation for margin expansion in the second half of the year, but also that a weakened U.S. dollar relative to other currencies eats up about a third of the benefits by affecting our cost base. The conversion of international currencies to USD results in a percentage cost increase, most notably for compensation costs, which increases by about $1 million per quarter in US dollars compared to the rates from when we last gave guidance.

The raised estimates capture the queue to overperform performance and the increased confidence in our path for the second half.

As before, this results in a relatively stable trend of quarterly revenue growth measured on a 2-year CAGR, which captures the scale we have built in recent quarters while also evening out our forward-looking growth profile.

In terms of adjusted EBITDA, we lift the bottom end of the range for now, guiding $136 million to $140 million for the year as a whole, or a margin of 23.4% as the midpoints this reflects. A continued expectation for margin expansion in the second half of the year, but also that a weakened U.S. dollar relative to other currencies eats up about a third of the benefit by affecting our cost base.

Matthew Wolfson: Apart from such fluctuations, economies of scale continue to benefit us as an underlying trend. Cost-wise, we then implicitly guide to a full-year OpEx space pre-adjusted EBITDA of $453 million at the midpoints. For the year as a whole, we expect the cost of revenue items combined to come in at 34% to 35% of revenue following the continued growth of Opera Ads. Other cost items grow at a lower pace than our revenue and thereby reduce as a percentage of revenue relative to 2024. This includes marketing costs, which we expect to grow at mid to high single digits, compensation costs, which will increase about 10%, and the sum of all other OpEx items pre-adjusted EBITDA will likely increase at a low single-digit percentage.

The conversion of international currencies to USD results in a percentage of cost increase, most notably for compensation costs, which increases by about $1 million per quarter in US dollars compared to the rates from when we last gave guidance.

Apart from such fluctuations, economies of scale continued to benefit us as an underlying trend.

Cost-wise, we then implicitly guide to a full year. Opic space pre-adjustment at the midpoints.

For the year as a whole, we expect the cost of revenue items combined to come in at 34% to 35% of revenue, following the continued growth of upper ads.

Other cost items grow at a lower pace than our revenue and thereby reduce as a percentage of revenue relative to 2024.

This includes marketing costs, which we expect to grow at mid to high single digits; compensation costs, which will increase about 10%; and the sum of all other items per adjusted EBITDA will likely increase at a low single-digit percentage.

Matthew Wolfson: In line with this, we guide Q3 revenue of $146 million to $149 million, representing 20% growth at the midpoints, and Q2 adjusted EBITDA of $34 million to $36 million, or a 24% margin at the midpoints. Within the implied quarterly OpEx space of $112.5 million at the midpoints, we expect that cost of revenue items as percentage of revenue will be 34% to 35% in the quarter. We expect marketing costs in the mid $30 million range, and thereby relatively stable versus the prior quarters this year. We expect cash compensation costs to increase about $1 million to $2 million versus the Q2 level, including the effects of a weaker US dollar relative to the main currencies of our salary expense. The sum of all other OpEx items pre-adjusted EBITDA are expected to tick up slightly.

In line with this, we guide Q3 revenue of $146 million to $149 million, representing 20% growth at the midpoint, and adjusted EBITDA of $34 million to $36 million, or a 24% margin at the midpoints.

Within the implied, quarterly optic, space of 112.5 million at the midpoints we expect that cost of Revenue items. As percentage of Revenue will be 34 to 35% in the quarter. We expect marketing cost in the mid 30 million dollar range and thereby relatively stable versus the prior quarters this year,

And we expect cash compensation costs to increase by about $1 to $2 million compared to Q2 levels, including the effects of a weaker U.S. dollar relative to the main currencies of our salary expense.

The sum of all other topics' items, pre-adjusted Ibitta, are expected to take up slightly.

Matthew Wolfson: Giving guidance in these periods that combine such rapid revenue growth in an environment with great changes, both on the macroeconomic stage as well as the technological one, has proven to be difficult. Though we believe caution has served us well. After all, the guidances that later turn out to be conservative were well beyond expectations at the time they were given. Yet again, I believe we have guided something that we should all feel proud and pleased to achieve, while recognizing that volatility goes both ways, and we, of course, hope to continue giving those positive surprises. With that, I'll turn the call back to the operator for questions.

Has proven to be difficult.

Though we believe caution has served us well.

After all, the guidance is that later turned out to be conservative, while well beyond expectations at the time they were given.

And yet again, I believe we have guided something that we should all feel proud and pleased to achieve, while recognizing that volatility goes both ways. And we, of course, hope to continue giving those positive surprises.

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

Operator: Thank you. As a reminder, to ask a question, please press star one on your telephone keypad. To withdraw your question, press star two. When posing your question, we ask that you please pick up your handset for optimal sound quality. We will take our first question from Navid Khan with B-Reilly Securities. Please go ahead.

Thank you. As a reminder, to ask a question, please press star 1 on your telephone keypad.

To withdraw your question, press *2.

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

We'll take our first question from Novit Con with B. Raleigh Securities. Please go ahead.

Frode Jacobsen: Thank you very much. Two questions from me, please. One on the Western market user base. The sequential growth was quite strong, I think the strongest we've seen in some time. On the flip side, Opera GX uses really growth. Is this a reflection of how you spend your marketing spend, the dynamics there in terms of what drove the strength in Western market users versus Opera GX? The second question I have is just around Opera Neon. Can you just maybe share some thoughts on how should we think about the pricing of the product and also the cost side of things as you would probably have to pay for the compute for it? Thank you.

Great. Um,

thank you very much. Uh,

Two questions from me, please. Uh, one on the, uh, uh, on the Western Market user base. Uh, the sequential growth, uh,

It was, it was quite strong. I think, uh, the strongest we've seen, uh, in some time. Uh, and on the flip side, GX uses generally grow. So, uh, is this a reflection of how you spend your marketing? Spend is trying to understand the dynamics there in terms of wardrobe. The strength in Western market users, uh, versus, uh, versus GX. And the second question I have is just around Neon. Uh, uh, can you just maybe share some thoughts on how should we think about the pricing of the product? And also the cost side of things, as you would probably have to pay for the compute for it. Thank you.

Song Lin: Yeah, so it is only, I think I will just quickly comment, right? Maybe super high level, I would just say that I think there is a bit of an analogy around this, just to point out, right? Because, of course, naturally Opera GX users are mostly, you know, younger audiences and also gamers, young gamers and Gen Zs or whatever. So they are, of course, affected more always, like we saw this all the time, that they are affected more by the summer holidays. So there is a bit of seasonality factor involved. Hopefully, you know, states will be more changed during Q3 and Q4. I think that will be more visible.

Yeah, so it's only how I think I'll just quickly implement, right? So maybe super high level, I would just say that.

Song Lin: Just to also say that, of course, internally we do not really operate on a basis of more like, I would almost say that the growth of Western database, of course, is more like a summary of indicative trends, right? But internally, of course, we are always organized by our eyes and where we see the biggest potential and where we see the product has been received the most. Maybe I will just call out that, yeah, so like we see that, you know, we have very good growths on Europe, for instance, for Q2, which is very exciting, which is actually also good proof that, you know, by having more of those AIs actually also be helpful to us. It is just because then, especially in the Western market, are more exposed to be aware that there is actually a choice of a browser.

I think, uh, there is a bit of a narrative, uh, around it just to go out right because, of course, naturally the GX you love the mostly, you know, young girl audiences and also game off young games and Gen Z or whatever. So they are, of course, affected more. Always like we saw this all the time that they are affected more by the summer holidays. Um, so there is a bit of seasonality path that has evolved. Um, and, uh, yeah, hopefully, you know, States will be more, uh, more changed, uh, during Q3 and Q4. So I think that will be more visible. And then just also say that, of course, internally, we don't really operate on the basis of, um, more like I would almost say that we're also working. The best, of course, is more like.

Song Lin: So like not only default, but there will be micro choices. That in turn actually helps driven adoptions. We actually see that where AI is hottest, is actually where it is almost becoming easier for us to acquire users. Yeah, as a simple way to put it.

Uh, summary of indicative Trends, right. But internally, of course, we're always organized by our lives. And well, we see the big potential of them. Well, we see, the product has been received a lot and maybe I'll just call out that. Uh, yeah. So like we we see that, uh, you know, we have very growths on Europe for instance, um, for for Q2, which is very excited, which is actually also good proof that, you know, by having more of those AI actually also be helpful to, to us. It's just because, then it's better, you know, invest in Market more exposed to be aware that there is actually a choice of browser, right? So, like not only the default choices and that the international have open help, help driven adoptions. So, so we actually see that where are is hotest is actually where it's almost becoming easier for us to acquire you those. Um, yeah, as the as the simple way to, uh, to put it

Operator: will take our next question from Eric Sheridan with Goldman Sachs. Please go ahead.

We'll take our next question from Eric Sheridan. With Goldman Sachs, please go ahead.

Analyst: Thanks for taking the question. Maybe a two-parter on Opera Neon with the announcement and the release and getting closer to a public launch there. I wanted to go a little deeper first, big picture, on how you think the browser environment is going to change more broadly. You know, this clearly is a first step towards a direction of AI generation and browsers and how you think about the multi-year pathway for the browser landscape generally changing and how you align the platform for those changes. The second piece would just be, in terms of launching something like this in the public, how should we think about the investments needed either on the marketing side or on the infrastructure side?

Thanks for taking the question. Maybe a two-part one on Neon, with the announcement and the release, and getting closer to a public launch there. I wanted to go a little bit deeper. First, big picture on how you think the browser environment is going to change more broadly. You know, this clearly is the first step towards a direction of sort of AI generation in browsers. And how you think about the multi-year pathway for the browser?

Analyst: I know Navid asked about the cost of compute tied to it, but just trying to understand a little bit of fixed versus variable investments behind this over a longer duration period of time. Thanks so much.

Landscape generally changing, and how you align the platform for those changes. Uh, and then the second piece would just be in terms of launching something like this in the public. How should we think about the investments needed, either on the marketing side or on the infrastructure side? I know Devid asked about sort of the cost of compute tied to it, but just trying to understand a little bit of sort of the fixed versus variable investments behind this over a longer duration period of time. Thanks so much.

Song Lin: Sure. I guess I also take the chance to cover the question which I have not answered in the first one, about Opera Neon and also in general landscape. I guess first of all, just to call out that it is all still early stage. I would say at this point, our focus primarily is actually on product marketing side of things. Maybe I will just first talk about how we think of a product and also the growth of Browser Operator. In a few points, high level, I think that with AI, it has already been proven that web interface via traditional apps, I guess, have now also been recognized as almost the preferred platform where people want to access information.

Song Lin: This is especially obvious with AI, because I guess, it shows that the web, traditional web, instead of locking apps, are still the best way for AI to be able to operate and to access information freely. That is very good news for Browser Operator in general. That is, of course, very strong affirmatives, if we compare to some earlier narratives a few years back where somebody is still talking about always-only apps or whatever. I think with AI, that is actually a big help that everybody now sees very clearly that web and Browser Operator is probably the future. I guess I will also comment that, as you probably also see the trend lately, both also by those AI players, all of them are also talking about how important a browser could be.

And I would say and this point our Focus primarily is actually on, you know, like product marketing side of things, right? Because more like, but maybe I'll just first talk about how we think of product and also the growth of browser, whatever, right? So so, you know, a few points high level. I think that with AI, it's already been proven that, you know, web interface via traditional apps, I guess have now been also been recognized as almost a preferred platform where people want to active information, and this is especially obvious with AI, right? Because I guess, you know, at least, you know, it shows that, you know, the web traditional web. Instead of locking apps are still the best way for AI to be able to operate and to access information freely. Um, so so that is that, you know, very good news for browser in general. So so that is what goes very strong affirmatives. If we compared to some other narratives a few years back or something still talking about, oh it's only app or whatever. So so I think you know with AI that's actually a big help that

Song Lin: I think our view is about the same, that when web becomes so important, there will always be, I would say, two ways of accessing information. One way is where traditionally users access information, which is by, you run a webpage service provided by those AI providers, like you run ChatGPT or whatever, on a webpage. However, I think it is also been very clear that when we see things go deeper, it is more and more likely that you need a native solution rather than just because there will be so many informations. As also AI goes on, I think, number one, it will be an unseparable part of your everyday operation. I think once you try it, there will never be no back. You will always, every day, use AI.

Everybody is not in very clearly. That's that's you know, web and browser information in the future and then and then I guess I'll also call them that as well. So you probably also see the trend lately and you know both also by those AI players, right. All of them are also talking about how important browser could be. Um so so I think our view is about the same right? That, you know, like when we have become so important they will always be. I would say 2 ways of accessing information, right? So 1 way is well, traditional the user access

Song Lin: The second question comes that when you are using AI, it is unlikely that you will have to rely on a purely cloud-based solution just because AI has to access everything, right? On your computers, they have to access all your premium content, all your subscriptions, all your email. All those, I think, will be very hard to capture if only it can be accessible from cloud as it is now, right? I think the trend seems to be very clear. All the AI companies also recognize that there will be a significant portion of it that AI has to be located natively on your applications, like on your PC, on your whatever. Everybody now sees that browser is probably one of the best mediums. It is just by design. Because by design, a webpage cannot access so many informations. It has to be locally while the browser is local.

Machine, which is the, you know, by you know, you run a web page so this provided by the AI provider like in your own chatbot level on web page. However, you know, I think it's also been very clear that when we see since we go deeper, it's more and more likely that, you know, you need a native solution raising just because, you know, there will be so many informations and adds. Also, AI goes on, I think number one, it will be a separate part of your everyday operation, right? So like I think, once you try it, you will then will never go back. You will always every day use AI. But then the second question comes that when you are using AI, it's unlikely that you will have to rely on a pure cloud-based solution just because AI has to access everything, right, uh, on your, on your, um, on your computer. They have the access on your premium content, your subscriptions, your email, and all those, I think will be very hard to capture.

Song Lin: It is a natural linking between a web environment and also a local environment. That is the trend we see. I think that is exactly why we are spending, why, you know, we are doing a lot of research on Opera Neon. It is just because we feel that we are actually in a better position to do this. I also saw some comments that many other companies commenting about, you know, they also think it is relevant. Of course, maybe people do not realize that, you know, we are probably one of the few ones which have the scale and the capacity to do it, right? Even if you look at some other player, you know, hot ones claiming to want to take over Chrome, and they have only like 20, 30 million MAUs in total, right?

If only they can be accessible from the cloud as it is now, right? So, I think the trend seems to be very clear, and also all the air companies recognize that there will be a significant portion of it that has to be located natively on your applications, like on your PC, or whatever. And everybody now sees that the browser is probably one of the best mediums. It's just by design because, by design, a web page cannot access so much information; you don't have to be local while browsing is local. So, it's a natural linking between, um, yeah, between the web environment and also the.

Song Lin: We already have existing almost 300 million MAUs, which have been running for many, many years. I think we are in a very good spot to actually make that happen. That is what we are focusing on. I think that is also part of what we believe will be the future. That is just a few lines, right? I think in the future, the economics and business models, I would almost say that I think there will always be, you know, some will be free because we can, we believe that we can power them by advertisements, as what we are doing now, whether it is through, you know, partners or whether it is through some other, more like search engine or other different partners. I think we are in a very good spot to actually monetize.

So, so that's a trend that we see, and I think that's exactly why we are spending. We, you know, we're doing a lot of research on Neo. It's just because we feel that we are actually in a better position to do this. I also saw some comments that they made out of companies called something about, you know, they also think it's relevant. But of course, maybe people don't realize that, you know, we are probably 1 of the few ones which has a scale and a capacity to do it, right. Even you look at a lot of player, you know, hot ones. And then you want to take over chrome and they have only like 20 different million and they're using total. Right? Well we already have existing uh, almost 300 million Mau, which have been around for many, many years. So, I think we are a very good sport to estimate that happening. And that's what we'll uh, what we are focusing on. Um, and I think that's also part of what we believe will be the future and then just a few lines, right? So I I think in the future, the, you know, economics and business models. I would almost say that I think they'll always be, you know, some will be free because we can we believe that we can pause my advertisements as what.

Song Lin: Again, I think we do a better job than most, some of the startups. I think if you want to have some deeper, you know, experience, I also think it is already proven that people are willing to pay subscription money for it for some extensive usages. I think it is also fair that we follow the same model. So I believe it will always be a combination that it will be, you know, use case sponsored by advertisement. Then it will also be a subscription model for whoever enjoys a deeper experience, purely because that is already been proven and people are ready to spend money on it. I hope this helps.

We are doing now, whether it's through, you know, partners or whether it's through some other, uh, more like a search engine or other different partners. I think, you know, we're in a very good spot to actually monetize again. I think we'll do a better job than most people of some of the startups. But then, I think if you want to have some deeper, you know, experience, I also think it's already proven that people are willing to pay subscription money for it, um, for some extensive usages. And I think it's also a fair model. So, yeah.

WLW, always good.

That it will be, uh, you know, sponsored by advertisement. Um, and then it will also be a subscription model for the web to enjoy, um, a deeper experience, probably because that's already been proven and people are ready to spend money on it.

Analyst: Great, thank you.

I hope this helps as well. Great. Thank you.

Operator: will go next to Lance Vitanza with TD Cowan. Please go ahead.

Analyst: Hi, thanks guys, and congrats on the quarter. I have two questions if I could. The first is on the stablecoin, the MiniPay, the 9 million activated wallets. That's great. How do you monetize the engagement? Is this just about encouraging user growth and retention, or is there another angle here? Is there any way to connect the dots between MiniPay user growth and, I don't know, sustained ad revenue growth, for example?

We'll go next to Lance Vitaza with TD. Colin, please go ahead.

Hi, thanks, guys, and congrats on the quarter. I have two questions. If I could, the first is on the stablecoin, the Mini Pay. The 9 million activated wallets—that's great. How do you monetize the engagement? Is this just about encouraging user growth and retention, or is there another angle here? Is there any way to connect the dots between Mini Pay user growth and, I don't know, sustained ad revenue growth, for example?

Song Lin: Yeah, it's only how I think I also try to cover this. Frode Jacobsen can also supplement with other information. Again, we are trying to be conservative in calling out those new initiatives. We have learned for the record, we have been actually integrating MiniPay for a few years. We are very happy that we are now seeing that expanding and now it's the right moment. Internally, we are very excited, quietly excited I would say, to see the growth of it, to see the very good product market fit in many places. We also see that the wider adoption of stablecoin across the industry, which of course is very necessary for anything to succeed in the fintech world. Now I think we are starting to see that many of the stars are starting to align, and that's why we are also getting very excited.

Um, yeah, so it's only Hill. I think that was.

tried to pop.

Song Lin: Maybe just super quickly on monetization. I actually feel that again, MiniPay is one of the few products that is a good combination of both very good product marketing fit, but actually it also comes with monetization. I think the nature is just that it's very close to, it is a product which is very close to money, I would say, for the nature of fintech. For now, it's already actually generating sensible money from us, even though of course for now that's not the short-term purpose. Our purpose, of course, but standalone it's actually already proven, I would say, for monetization. For now, I would say the pure monetization model would be for us to work with ecosystem partners to integrate all those functionalities like we are including all those stablecoins into MiniPay, and we get a cut for whatever they earn based on some strategic investment agreement.

Also supplements with, with also other information, right? So, so like again, like, we are trying to be consultative in quoting out, you know, those the new initiatives, uh, we have last for the records. You know, we have been actually integrating many people for, for a few years and very happy that we are now. Um, you know, seeing that expanding and also, now is the right moment, right? So, so like, again, internally, we are very excited and proud of the next idea that I would say to see the growth of it, uh, to see the, you know, very good for the many places. And we also see that the wide adoption of stable coin across industry, which of course, is is, uh, is very necessary for, for anything to, uh, to succeed in your fintech world. Right. So now, I think the way we're starting to see that many of the stars are studies online and that's why we are also getting very excited and then maybe just, you know, super quick about monetization, right? So, I actually feel that again, mini pay is 1 of the

Song Lin: Again, maybe just echo back to say that I think this is a MiniPay is a very good example where the nature of the product, it comes almost with monetization potentials without having to go through advertisements or without having to go through search or other means. It's just because stablecoin itself, this industry is rather profitable. I guess it's also proven by some of the recent listings by Circle, and also there are some established players like Paydol and a few others. I think it is also why we are very excited because as far as you have enough user base, as far as you have enough to use it, there are actually very natural opportunities for you to get revenue out of it. I would almost compare this with search, right?

View product that, you know, it's a good combination of both very good product marketing feed. But actually, it also comes with monetization. I, I think nature just says it's, you know, it's very close to, um, it's it is a product uh, which are very close to, to Mommy, I would say for the nature of intake. Um, so so for now, like it's already actually generating, you know, sensible money from from us even though of course, for now that's not the short-term purpose. Our purpose, of course. Uh, but but like, yeah. But stand alone is actually already, uh, proven how we say for monetization. So, for now I I would say the Pure Imagination model will be to for us to work with ecosystem Partners um to integrate with that, you know, all those kind of activities like we are including all those stable points into mini pay and we get a cut right for whatever they own, uh, you know, based on some Strategic investment agreements. So like again, maybe just Echo back to say that I think this is the mini page is very good example, where, you know, the nature of

The product, uh, it comes almost the way it's monetized potentials, uh, without having to go through, say, advertisements or without having to go to, you know, search or other means. It's just because stablecoin itself, this industry, ah, around the profitable. I guess it also proves them by some of the recent listings by Circle. And also, there are some missteps, you know, like PASO and a few others. Um, so I think it's, it's also why we are very excited because, uh, as far as you have enough user base and as far as you have, you know, to use it.

Song Lin: Why search is very good for the Browser Operator in the early days, in the early 10 years, is because when people are using search, they do not really see that as advertisement, right? They see that as an important functionality, but we, of course, along the way also make money. I would almost say that MiniPay is of a bit similar nature. You do not have to see some ugly ads popping up or whatever. You can just use it, and by the nature of it, there is a chance for us to monetize.

Analyst: That is great. Actually, that sort of ties into my next question, which was on search revenue and the rebound there. Frode Jacobsen, I think you mentioned that it was expected, and maybe I lost track of why you were expecting it to rebound, but I am just wondering what drove that. I tend to think of search revenue as a function of number of searches. Did search volume rise on a per-user basis, or is this simply a change in revenue per search that is perhaps driven by the shift in users to higher value markets?

And they are actually a very natural opportunity for you to, uh, get, um, you know, get revenue out of it. So I would almost maybe compare this with, um, with such, right? So, like why such is very good for the browser. In the early days, you know, all the pain yields is because when people are using, so they don't really see that as advertisement, right? They see that the important functionality, but the way, of course, along the way, also making money. So I would almost say that the mini pay is also of a bit similar nature that, you know, you don't have to see some ugly ads popping up or whatever, uh, you can just use it, and by the nature of it, uh, there's a chance for us to monetize.

Uh, that that's great. Um and actually that sort of ties into my next question, which was on search revenue and the rebound there. And um and further I think you mentioned that it was expected and and maybe I lost track of of why you were expecting it to rebound. But I'm just wondering if you know what, what drove that I'm when I tend to think of search Revenue as a function of number of searches. So did did search volume rise on a per user basis or is this simply a change in Revenue per search that's perhaps driven by the shift in users to higher value markets?

Frode Jacobsen: Yes, when we last reported, we already saw the trends picking up. We were in the single digits year-over-year growth last quarter, then we saw we were getting back towards the double digits. I think we expect search to continue to do well for the remainder of the year, and that is reflected in our guidance. But I do not think I should go into the detailed breakdown of how we modeled or predicted.

Yeah, when we when we last reported we already saw the trends of picking up for we. We were in the single digits year over year growth last quarter and then we saw we were getting back towards the double digits. Um

and I think uh we we expect search to continue to do well for the remainder of the year and and that's reflected in our guidance. But I don't think I should go into sort of the the detail breakdown of of how we model or or or predict it.

Analyst: How about at least, can you discuss whether you think it is a new trend line, or was it more of sort of a, you know, how durable do you see this resurgence potentially being?

Frode Jacobsen: I think that the broader search landscape is changing rapidly, right, with the theme of a lot of this call as well, with various kinds of new information processing and gathering services. I think that is very, very interesting as a browser, right, being able to send traffic to partners, but also being able to natively integrate those types of solutions in the products that we talked about with Opera Neon. As a broader concept, I think we are very enthusiastic about this. It might be a bit narrow almost to call it search, right, because it is almost like information discovery and how the browser becomes increasingly relevant in that space.

I think that the broader search landscape is changing rapidly, right? With the theme of a lot of this call as well, with various kinds of new information processing and gathering services. I think that is very, very interesting as a browser, right? Being able to send traffic to partners, but also being able to natively integrate those types of solutions in the product that we talked about with Neon.

Um, so as as a broader concept by uh, I think we are very enthusiastic about this. It it might be a bit narrow almost to call it search, right? Because it's almost like information Discovery, uh, and how the Bro browser becomes increasingly relevant in that space,

Analyst: Fair enough. Thank you very much.

Fair enough. Thank you very much.

Operator: will go next to Jim Callahan with Piper Sandler. Please go ahead.

Analyst: Hi, thanks for taking the question, everyone. Can you talk more about the tariff-related headwinds you called out in the quarter? Are these temporary, or is this something we can see persisting through the rest of this year?

We'll go next to Jim Callahan with Piper Sandler. Please go ahead.

Hi. Thanks for taking the question, everyone. Can you talk more about the tariff-related headwinds? You kind of called out in the quarter. Are these, you know, temporary or is this something we can see kind of like persisting through the rest of this year?

Frode Jacobsen: Yeah, I can comment on that. I think it played out a bit as expected. When we last reported, it was late April, and then we were, you know, we were past the initial launch of tariffs. I think, of course, since then, maybe there's been somewhat more stabilization in the broader picture. But it did translate into a real headwind, and we are very proud to have been able to offset that with global growth, essentially. I think as we look ahead, I think we are starting to see some recovery now, but it definitely represents an upside potential for us to see a return to even higher activity levels as in pre-tariff terrain.

Um, yeah, you can comment on that. I I think it played out a bit as expected. So when we, when we last reported, it was late April, and then we were, you know, we were past, uh, initial launch of terrorists. And I, I think, of course, since then maybe there's been somewhat more stabilization in the, in the broader picture. Um, but it, it did translate into a real headwind and we are very proud to have been able to offset that with uh, with global growth essentially. So I think as as we look ahead, I I think we're starting to see some, um, some recovery now. But, but it's definitely represent a upside potential for us to to see a return to, uh, to even higher activity levels, um, as as in free tariff Terrain.

Analyst: Got it. That is helpful. Opera GX launching in South Korea and Japan, I guess, how should we think about the size of that opportunity? That would be helpful.

Got it. That's helpful. And then, um, Upper GX launching in South Korea and Japan. I guess, how should we think about sort of like the size of that opportunity?

Would be helpful.

Song Lin: Yeah, it's only how I can briefly comment, right? I would almost say that it's the early stage, but I guess, you know, we have announced that we are League of Legends' preferred browser. Of course, as you know, East Asia is actually one of the bigger, almost important places for those games. As a result, we actually see that there are some very interesting attractions that Opera GX are becoming to be liked by the users in those countries. I think it's very natural for us to deepen down. I think the only thing is that, of course, those regions also require more localization because they are all peculiar in their own ways, and we have not really prioritized this in the past, but now we see opportunities. We will dive in.

Yeah, it's Sony Hills. I can briefly comment, right? So I I would almost say that it's the honest stage but I guess you know we have enough that we are able to agent to the preferred browser and and of course as you know, that naturally um East Asia is actually 1 of these are almost important. The places for those uh for those games and as a result we ask you to see that there are some

Song Lin: I think it's a bit too early to estimate the scale in monetary terms, but it's a very exciting market. Interestingly, just to comment that partly the result of that, we do already see quite strong growth on, say, e-commerce potential in those regions based on our still, you know, regular user base or limited user coverage on, say, generic browsers. Essentially, I think another important factor that we are very excited about is monetization potentials. I think that's also why we feel that it's the right move to further spread the coverage of those key, I would say, developed countries.

I'm very interesting attractions, uh, that the Gs are becoming to be alike, but but you guys know those countries, so I think it's very natural for us, uh, to deepen that life is the only thing that, of course, those bridges also require more localization because they are, uh, they are all particular in all ways, and we have not really prioritize this in the past. But now with the opportunity, so we'll dive in, I think it's a bit too early to estimate the scale, you need monetary terms but it's very exciting markets. And

And interestingly just to comment that partly the, the result that we we do already see quite strong growth and say, equal loss potential, you know regions, uh, based on our still, you know, regular database or limited, uh, user coverage on the generic browsers. So, so essentially, I think the other important factor that we are very excited about monetization potentials. And I think that's also why we we feel that it's the right move to to further uh spreading uh the coverage of those key. I would say developed countries.

Analyst: That's great. Thank you.

That's great. Thank you.

Operator: As a reminder, if you would like to ask a question, you may do so by pressing star one. We will go next to Mark Argento with Lake Street. Please go ahead.

Hello. As a reminder, if you'd like to ask a question, you may do so by pressing *1.

We'll go next to Mark, our gentle friend with Lake Street. Please go ahead.

Analyst: Good morning, guys. Just a few quick ones here. On the e-commerce business, is that business, you know, we start to comp, the comps get a little bit more difficult. But how should we think about the seasonality in terms of the revenue there? Obviously, probably a little bit more, weighted over time to the higher spend quarters, but just wanted to get your thoughts on how you see that playing out in the different verticals.

Good morning, guys. It's a few quick ones here on the e-commerce business. Is that business? You know, we start to comp.

You know, uh, the comps get a little bit more difficult, but how should we think about the seasonality in terms of, uh, kind of the revenue there? Obviously, probably a little bit more, you know, weighted over time to the higher spend quarters. But just wanted to, you know, get your thoughts on how you see that playing out in the different verticals.

Frode Jacobsen: Yeah, sure. Mark, I can comment a bit. As a recap, I think what we saw last year was that we went from a 17% year-over-year growth rate in the first half of the year into 20% and then 29% growth in the second half. So the comparables are definitely quite challenging in the second half of the year. Of course, the underlying, it is the shopping season. So that is a tailwind for the second half of the year. At the same time, we try to not bake in the same kind of home run in our second half expectations at this point in time, but rather take a more cautious view. That is why we look at the two-year growth rate by quarter to guide something that is a bit more of an even growth profile all in all.

Um, of course, the underlying, uh, it is the shopping season. Uh, so that is a tailwind for the second half of the year. At the same time, we tried to.

To not.

Bake in the same kind of home run in our second half expectations at this point in time. Um, but rather take a more cautious View and that's why we look at the 2 year uh growth rate by quarter to to uh to guide something that's a bit more of an even growth profile, uh, all in all.

Analyst: Okay, that's helpful. Then in terms of the various verticals, obviously still mostly focused on more kind of product or goods versus services at this point. Is there opportunity to expand into, you know, travel in some other areas, you know, above and beyond just more of the kind of the traditional goods area?

Okay, that's so cool. And in terms of the various verticals, obviously, it's still mostly focused on.

And work out a, you know, product or, uh, you know, goods versus services. At this point, is there an opportunity to expand and, uh,

You know, travel and some other areas, um, you know, above and beyond just more of the kind of the traditional goods area.

Song Lin: I can try to cover this. So, more like super high level, just to comment that, for now, of course, we have received the fastest growth in retail. So that is great. It has also proven that the, let us say, the intent-based advertisement with help of that actually works. Because I think I also mentioned earlier that almost all our advertisement is performance-based. It is a very solid proof that it actually works. We see very close to the follow-up. Traveling is definitely a key sector. We are traditionally already fairly big. A browser is historically always a fairly big distribution partner for travelers, like Booking.com, for instance. So, yes, 100% that we see that it is a good combination of both browsers, but also AI. So that is definitely very interesting.

Um, I I I, I can try to cover this. So, yeah, more or less 2, super, super high level, just to call the net, you know, for now, of course, we we, we see the fastest growing is is retail. Um, so that's, that's great. And is also proven that uh, you know, like the uh, let's say the intent based uh advertisement with a, with help of action walks. And, you know, because I, I think it's also mentioned earlier that all our president, almost all our proposed.

Song Lin: I guess, we also commented maybe a bit earlier that there are also some other verticals like fintech, for instance, that could also be quite relevant because, again, it is also a good combination of you see lots of those existing browser environments, very natural. Also, they are also the one probably affected most by AI that there could also be maybe a better combination of things. So, I would say all those areas are good potentials for us to develop further, and we are looking into those.

A very solid proof that it actually works. Um, so and then I would almost say that uh, we see very close the follow up, traveling is definitely a key, uh, you know, key key sectors, where are traditionally already fairly big. Like a browser is historically. Always, a fairly big distribution partners for, for tra boss like, you know, booking.com for instance, so so yes. 100% that we see that. It's a good combination of both browser, but also AI. So so that is definitely very interesting. And then, I guess, you know, we we also call that maybe a bit early on that. They are also some other verticals like fintech for instance uh that could also be quite relevant because again it's also good combination of you see a lot of those uh existed on the browser environments, very natural. Uh and also they also the 1 probably affected the most by AI that that they could also be maybe a better combination of things. So, so I would say although the areas are good potentials for us to direct, uh, develop for a lot and we are looking into those

Analyst: Thank you. That is helpful. Just pivoting quickly, it was not overly clear to me at least on the Opera Neon product launch. Is that going to, is that built on your guys' tech stack, or are you guys using other large language models? Maybe just refresh me and better understand what is powering that new browser.

Thank you, that's helpful. And then, uh, just pivoting quickly, yeah, it wasn't overly clear to me, at least, um, on the, uh, the Neon product launch. Is that going to, is that built on your guys' tech stack, or are you guys using other LLMs? But maybe just refresh my memory to better understand kind of what is powering that new browser.

Song Lin: Sure. So, yeah, Song Lin will also quickly cover that. Yes, I think essentially we are using similar approaches as most others that we do rely on the big base models from those bigger AI companies. I do not think we have planned to spend billions of dollars to train the large language model because I think that is repetitive. I guess the ability of that is that because the market on big language models are so competitive, that it is almost a bit commoditized in some ways that actually allow us to be able to have a good relationship with almost all of them to actually be able to use the best language model at any given time and any given scenario. I would almost say that is an advantage of that.

Song Lin: Also because of all the investment and the competitions, we actually see that the costs have actually been lowered down quite dramatically. As far as there is still competition, we believe that will still be the case. I think that is such a good time for players like us. On top of it, I think our contribution would mostly be on, number one, how to give the relevant context and how to allow AI to operate in a browser-native environment. I think that will be the best advantage that we would have. I think that will be a huge, huge win for us to nail it. That is what we are focusing on.

Hey, Sean. So yeah, it's, it's on the hell. I also quickly called that, right? So so, yes, I think essentially, where are you doing similar approaches? As most of us that we do rely on the big, you know, base models from those big companies. I don't think we have planned to spend billions of dollars to train the last time we model because I, I, I think that's repetitive and, and I guess they built it of that, is that, because the market of big language models are so competitive. That is almost, it's almost a big commodity in some ways that actually allow us to be able to, you know, have a good relationship with almost all of them and to actually be able to use the best, um, you know, the best language more than any given time and any given scenario. So, I would almost say that's an advantage of that. And also because of all the investment and the competitions, we actually see that the, the costs have actually been lowered down quite dramatically. As far as the competition. We believe that we will still be the case. Um, and and I think that's such a good time for like us. Uh, and then on top of it, I think our contribution would mostly be on, uh,

Example on how to give the relevant context and how to allow uh AI to operate in a browser native environment. I think that will be the best advantage that we would have. And and I think that will be a huge, huge win for us, uh, to to nail it and that's what we are focusing on.

Analyst: Last one for me. We touched on it a little bit earlier, but Perplexity was out with their, yeah, kind of unsolicited offer to buy Chrome Browser. A little surprised you guys did not get any play on that in terms of just kind of being in the mix. It sounds like Perplexity went and talked to a handful of the other browser players out there. Is there a strategic opportunity for you guys to work with other large branded guys above and beyond what you are doing right now? How do you think about, and if you could size it for us as well, how big is actually your browser install base right now? I do not think the market is valuing the strategic value of that install base.

Lasting for me. Um,

I'm touched on a little bit earlier, but, uh, Perplexity was out with their, um, you know, unsolicited offer to buy the Chrome browser. I was a little surprised you guys didn't get any, you know, get any play on that in terms of just kind of being in the mix. It sounds like Perplexity went and talked to you and all the other browser players out there. Um, you know, is there a strategic opportunity for you guys to work with other, you know, large branded guys, um, above and beyond what you're doing right now? And, uh, how do you think about, um, and if you could size it for us as a tool as well, you know, how big is actually your browser installed base right now? Because I don't think...

The strategic value of that install base.

Song Lin: Yeah. Yeah, okay. I guess I will comment a bit first, and then I think it will be the moment we will put it on the map. I can also comment a bit, right? Okay, so I guess it is very interesting. I mean, we will, of course, follow this closely. As you know, we are also, you know, we are more or less involved in all those discussions, right? We are very familiar with the players now. Okay, so first of all, I would just say that, yes, that is quite interesting to see, right? Because, of course, we saw, you know, some of the players claiming that they are in a better position. They are, you know, one of the few positions to be able to accommodate, you know, Chrome should there be some jurisdictions.

Song Lin: I guess, you know, we, of course, are always a very good partner with Google for more than 20 years. Then I would just say that, of course, I guess, we are probably, we are one of the biggest independent browsers out there. We have been independent for the past, you know, 30 years, which we have said everything this year for 30 years. We are the innovator of browsers, and we have a deep understanding of technology. More importantly, we have, of course, 300 million MAUs and still growing. I think everything is very strong pointing that, you know, we are in a very good position for all those discussions. It is more like just an interesting point out, right? If we are actually talking about, you know, whoever is the biggest independent browsers, I think our name should actually pop up very high there.

Yeah, um, yeah. Okay. So I I guess I'll comment a bit first and then I think that's all good. The moment well for them, the math can also come in a bit, right? So, okay. So I guess it's a very interesting. I mean, way, of course, follow this closely as you know, that well, so, you know, we are more or less involved all those discussion, right? So we are very familiar with the player there, so, okay. So first of all I would just say that yes is actually quite interesting to see, right? Because of course we saw you know some of the playoffs claiming that they are better on position. They are you know, 1 of the 2 positions to to be able to accommodate, you know, from should they not be some jurisdictions? And I guess, you know, of course, I always a very good person. I always, but then, I would just say that, of course,

I guess.

Song Lin: I guess the only thing is just, you know, because being a European company has some, has some pros and cons, I guess, that we are probably less frequently being discussed in those contexts. Again, I think it is just our job to be able to be reasonable, and we should also get, and of course, U.S. has been our biggest market for the past many years, and it is becoming more and more relevant, and we should just, you know, work more on it. I would almost say that is, that is our feelings for now. Otherwise, I think it is hard for us to comment anything particular, you know, related in this case, because we have a good cooperation with, with all the partners involved there.

Like where? I probably, where I want the biggest independent browser out there, we have been independent for the past you know, 30 years which we have and everything this year for 30 years and we are the innovator of browsers. And we have a deep understanding of technology and more importantly we have, of course, 300 million, mm, use, and still growing. So so I think everything is very strong point in that, you know, we are in a very good position, uh, for all those discussions. Uh, so it's more like just an interesting point out, right? So, so like, if we're actually talking about, you know, whoever is the biggest independent browser, I think our name should have to pop up very high there. I I I guess the only thing is

You know, because being a European company has some has some problems. I guess that. That's the way I probably less frequently been discussed in those context, but, but again, I think it's just our job to be visiting us more and we should also. And of course, you have been our biggest Market, uh, for the past many years, and it's becoming more and more relevant and we should just, you know, work more on it.

Um, so I would almost say that's.

That's our feelings for now. And, uh, otherwise I think it's hard to say. And anything in particular, uh, you know, related to this case investment, good operation with all the partners involved there.

Analyst: Great. Thank you.

Great. Thank you.

Operator: It appears we have no further questions at this time. I will now turn the program back over to Song Lin for any additional or closing remarks.

It appears we have no further questions at this time.

I will now turn the program back over to Songlin for any additional or closing remarks.

Song Lin: Thank you to everyone for joining us today. We look forward to sharing those results and our look with you. Now, we will turn to an extremely exciting second half of the year. We have many launches to come. We will work hard to seize the opportunities that come with it, and I look forward to keeping you posted. Have a good day, all of you.

Sure. So um, like again.

Thank you to everyone for joining us today. We look forward to sharing those results and all that we have with you. Now, we will open to an extremely exciting second half of the year. We have many launches to come, and we will work hard to seize the opportunities that arise with it. We look forward to keeping you posted. Have a good day, all of you.

Operator: This does conclude today's program. Thank you for your participation. You may disconnect at any.

This does conclude today's program. Thank you for your participation.

You may disconnect at any time.