Opera Limited

Welcome to the Opera Limited first quarter 2025 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 the star 1 on your telephone keypad. If you want to remove yourself from the queue, please press star 2. Please be advised that today's call is being recorded. Lastly, if you should need operator assistance, please press star 0. I would now like to turn the call over to your speaker today, Matt Wilson, Head of Investor Relations. Please begin.

Thank you for joining us. This morning, I am joined by our co-CEO, Song Lin, and our CFO, Frodo Jacobson. 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 20F, 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. 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. With that, let me turn the call over to our co-CEO, Song Lin, who will cover our first quarter operational highlights and strategy and And then Frodo Jacobson, who will discuss our financials and expectations going forward. Strong?

Sure. Thanks, Matt. And thank you to everyone for joining us today. I'm excited to share our strong first quarter results with you and to provide an update on our recent business activity. The accelerating business momentum we experienced in the second half of 2024 continued into the first quarter of 2025. In fact, our year-over-year revenue growth increased from 29 percent in the first quarter to 40 percent in the first quarter, well above the 28 to 31 percent growth we had previously guided for the period. This translates to revenue of 143 million, a record, for the first quarter. Once again, our outperformance relative to our previously issued guidance was primarily driven by advertising and, in particular, the e-commerce opportunities we are focusing on. In fact, advertising revenue growth was 3% in the first quarter, reaching $96 million and now representing two-thirds of our total revenue. Within this, eCommerce was the fastest growing vertical and over 100% analyzed growth, which in turn offset the underlying seasonality pattern we expect to see from Q4 to Q1. Search revenue was 47 million in the quarter, growing 8% year over year. The browser served as a crucial access point for search, and we are pleased to see continued growth in search revenue. By leveraging AI, we can effectively identify high user intent, enabling us to optimize the click stream. This optimization allows us to deliver the best possible experience for both end users and partners, fostering the simultaneous growth of search and advertising. Revenue outperformance leads to increased profitability as demonstrated by adjusted EBITDA of 32 million, also well above the high end of our previously issued range. The corresponding margin was 23%, meaning that we were able to accelerate our top line growth without sacrificing the expected profit margin percentage. Our user base continues to be relatively stable, and 293 million MAUs while remaining consistent with our ongoing strategy of focusing on those users with the highest value potential. As a result, our analyst output grew at an outstanding 44% year over year. After significant updates to both Opera 1 and GX during the fourth quarter, the product launches in the fourth quarter were improvements On the recent refresh, such as the addition of blue sky, Discord, and Slack support to the sidebar of Opera 1, even more relevant and mobile world congress, Opera became the fourth major browser to present AI-agentic browsing through the browser operator. The browser operator marks the first step towards broadening the role of the browser to an application that is also agentic and can perform tasks for its users. While working on completing a task, browser operator lets users see what's going on at any point in the process, as well as what steps it took to complete it. During this process, the user remains in full control and can take over or cancel the task at any given moment. The best part is that browser operator works in the same environment as the user, the browser. And another event, just earlier this month, fourth live demo of browser operator, which showcased the browser operator's ability to make travel bookings and even order flowers to a particular hotel room in Lisbon. Given a handful of parameters in English, the browser found a retailer with a website in Portuguese filled the shopping cart with specified flowers, along with all relevant delivery and payment information, with only the final checkout to be clicked by the user. We are just starting to see what is possible with an agentic browsing experience. We also brought our browser AI area to Opera Mini. This makes area available across our full suite of browsers for both mobile and desktop users. Now, close to 300 million people can enjoy the benefits of ARIA, allowing even our most data conscious users to harness the power of AI in a data efficient manner. Turning to Opera GX, the browser made for gamers. Our GX user base was 34 million stable. This is the strong and release-oriented fourth quarter. On an annual basis, we grew the GX user base by 14%, with the current analyzed output of $3.41, slightly down from the seasonal peak of Q4. Engagement on GX remains high, with continued sequential growth in the number of GX games that are published, registered users, and the number of unique modes available to users. We also announced our first game for Rogues, Hell's Obby, which is a competition where up to 25 players have to race up a desolate and obstacle-filled wasteland in a high stakes battle. During the first quarter, we also released the latest member of the Opera browser family, Opera Air. This browser with mindfulness front and center has already received a warm welcome by the tech press with enthusiastic and in-depth coverage. And we are in the process of fine-tuning it ahead of increasing its marketing. Still, in its first two months alone, Opera Air has already been downloaded over half a million times. And we are seeing very encouraging usage. Consistent with our focus on the highest value users, Opera Air is targeting users in Western markets It is still early days, but we like what we see. To summarize, 2025 is off to an impressive start, scaling our business faster than we had thought possible just a few months ago. The fact that we achieved this in the face of a highly volatile macro backdrop says something about the appeal of our broadening browser portfolio and our monetization capabilities. And we'll certainly do our very best to keep it up. Finally, since a lot of our conversation today might center on the volatility affecting the broader market, I sought to also mention that Opera is actually celebrating its 30th anniversary in 2025. And I've personally been part of the journey for nearly 23 of those years. We found ourselves in the midst of some other major disruptions over that time, including the emergency of the web itself, our own pioneering of making the internet available on mobile phones, the fall of the mighty telcos, the emergency of smartphones, and the globalization of internet access. We've dealt with changing environments and competition from companies a thousand times bigger than ourselves. All that to say that we have a strong track record of navigating a rapidly evolving landscape and finding ways to benefit from it and to contribute to innovation. So while today it's natural that we focus our ability to grow even faster than what we told you to expect last time, this will always be made possible by our internal focus of how we develop our products and platforms to set ourselves up for success in the long run. With that, let me hand the call over to Frida for additional details.