Opera Limited

We appreciate your patience and please continue to stand by. Thank you. Thank you. Please stand by. Your program is about to begin. If you need audio assistance during your conference today, please press star zero. Welcome to the Opera Limited fourth quarter and full year 2021 earnings 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. If you want to remove yourself from the queue, please press the pound key. Please be advised that today's conference is being recorded. Lastly, if you should need operator assistance, please press star zero. I would now like to turn the call over to your speaker today, Matt Wolfson, Head of Investor Relations. Please begin.

Thanks for joining us. With me today, I have our co-CEO, Song Lin, and our CFO, Broda Jacobson. Before I hand the call over to Song Lin, I would like to remind everyone that in the conference call today, the company will be making statements about its future results and expectations, which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Such statements are based on current expectations and how we perceive the current economic environment and are inherently subject to economic, competitive, and other uncertainties and contingencies beyond the control of management. You should be cautioned that these statements are not guarantees of future performance, you may refer to the Safe Harbor Statement in the company's earnings release for details. Our commentary today will also include non-IFRS financial measures, including adjusted EBITDA, which are different from our consolidated financial statements that are prepared and presented based on IFRS. We believe that the use of our non-IFRS financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends. These measures should not be considered in isolation or as a substitute for financial information prepared in accordance with IFRS. We have also posted unaudited supplemental information on our investor relations website that includes historical financial results of Opera and our investee, NanoBank. We'll be live-tweeting highlights from the call at Investor Opera, so please follow along there during the call and in the future. With that, let me turn the conference call over to our co-CEO, Song Lin, who will cover our operational highlights and strategy. And then Frodo will finish up with financials and our expectations going forward.

Sure. Thanks, Matt. And thank you, everyone, for joining us today. This is Olin. So we are excited to report that the fourth quarter of 2021 coming ahead of expectations, closing out a record 2021 for OPERA. The investments we have made to develop new products and expanding to new geographies rewarded us with accelerating revenue growth and strengthened our position in higher upper markets. Even more encouragingly, as we look ahead to 2022 and beyond, we have every expectation that we will continue to grow driven by continued innovations in our core offering and the tailwind provided by the long-term circular trend as we move towards an increasingly fiscal future. So before digging deeper, I would like to offer a few key financial highlights from our fourth quarter. First, revenue was $72.6 million, exceeding the top end of our revenue guidance for the quarter. This was up 45% year over year and was fueled by both search and advertising revenue categories. Second, adjusted EBITDA also exceeded the high end of our guidance and $16.1 million, or a 22% margin. our margins expanded even more than expected following the accumulated top line impact of our investments to scale during 2021. And so ARPU has increased 62% year over year to 83 cents on an annualized basis, reflecting our growth in higher value markets and focus on high value segments. Frida will offer more detail on our financial results shortly. But as our financial performance makes clear that being the world's best independent browser company is a good business. And the strategic value of Opera's position has never been greater. When we look at the direction the internet is heading, the step changes in scale and complexity as more people need greater portions of their lives online, the requirement for a browser that integrates the tools and features people need with the personalization, security, and privacy people want creates a huge opportunity for Opera. Many players in our space, including ourselves and Opera, share a great excitement for the potential of next-generation internet services, sometimes referred to as Web 3.0, and the impact it can have on people's daily lives. While Web 3.0 is still in its inception phase, we can observe multiple trends that suggest that whatever form it takes, it will certainly be defined by individuality. The ability to operate as a distinct, permanent, and unique individual online, along with improved ways to communicate, create, share, and transact with other individuals. So you may have seen that during the first quarter, we have launched a new browser, both on desktop and mobile, with the idea that it will continuously be tailored to the Web3 audiences. Opera believes that in Web 3.0, the browser is not just a doorway or an unrent. The browser is both the launchpad and foundation for the entire online experiences, from start to finish. So we believe it goes beyond functionality and becomes a lifestyle that we want to help empower. In addition to providing a unique and compelling browser to a potentially high-value Web3 user segment, the Web3 browser and how its audience takes advantage of the product will also allow us to refine and integrate many Web3 aspects from blockchain to smart contract computing, community governance, and inventables for our browsers more broadly. So the logic behind our Web3 browser is similar to the logic that also drove the launch of our fully integrated gaming browser, Opera GX, which is already our highest engagement and highest up product. And we believe monetization there is still early. For instance, Opera GX had over 14 million users and year end across both mobile and desktop versions more than double from a year ago. And on top, annualized ARPU grow from $2.7 in the short quarter to $3 in Q4. Bing and OS independent browser providers allow us to tailor-made browsers that solve for specific use case people have. While those use cases initially appeal to groups that represent segments of the market this segment can be both very large and also highly attractive. So when the fundamentals of growth and value potential are in place, we go after it full speed. So the logic goes back to Opera Mini, the best browser for emerging markets, which secured our strategic foothold and brand awareness in Africa, enabling a mobile digital life in the Web 2.0 of the error bill. And we will play even bigger role moving forward in the Web3 space. Since inception, Opera has found success in developing browsers that meet the needs of the individual users. And following success with specific user segments, we have been able to expand into new errors and services. This is the path our news, content, communications, and shopping functionality have all followed. And looking ahead, we see even more reasons our investment in those initiatives will pay off. Ultimately, we believe that each person will need these capabilities, integrated and personalized, to be able to fully participate in Web3 So this browser-plus strategy has been accelerating user adoption across a number of our strategic initiatives. I should be clear that these initiatives, for example, our Web 3.0 and gaming features, as well as moving our content and news offering to new markets, are all still young. However, each is showing promise, and we believe that, taken together, they put Opera in a very strong competitive position. So with increased user engagement, alongside the ongoing development of our ad tech business, we have also rapidly grown our advertising revenues. Our tech specs allow us to aggregate additional high-quality inventory to sell to our existing advertising partners and continues to scale as a natural audience extension for any advertiser in the Opera network. During the quarter, total advertising revenues grew 59% compared to last year. And we have also begun forging early partnerships to bring further shopping functionality into our browser products, which will complement the geographic expansion of our cashback platform and also broaden our e-commerce footprint. And our content and open news service continues to resonate with users, and we are very pleased with how it has scaled beyond Africa and also into Western markets. Such, the other key revenue component for Opera grew 35% compared to last year, and during the quarter, we renewed our partnership agreement with Google on materially similar terms to our previous agreement. The continuity of this deal and the visibility it provides is one of the factors in our confidence for continued revenue growth. Our overall average monthly active users was 344 million in the quarter, compared to 352 million in the prior quarter. Our ARPU increased by 11% from Q3 to Q4, demonstrating the value of our strategy to shift our user base towards higher ARPU, higher profit users. We talked about it last quarter. as we continue to focus our investments and resources on markets and initiatives that offer a combination of high growth potential with high profit potential, and the strategy is working, as evidenced during the quarter by the record revenue combined with expanding margins. In terms of our outlook, given the strengths we are seeing in our advertising and search revenues, and the continued improvement in ARPU from all our initiatives to attract and retain high-value users, we feel confident in our continued growth trajectory in the years to come, both for the revenue as well as for the margin expansion. So there's a lot to look forward to at Opera, and we are very excited about the future. So with this, I'll hand over to Frida for more financial details.