Opera Ltd. Aktie

Welcome to the Opera Limited First Quarter 2026 Earnings Call. [Operator Instructions] Please be advised that today's call is being recorded. [Operator Instructions]

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

Thank you for joining us. This morning, I am joined by our 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 as a result of various factors, including those set forth in today's earnings press release and in our most recent annual report on Form 20-F filed with the SEC. We undertake no obligations to update any forward-looking statement.

During this call, we will present both IFRS and non-IFRS financial measures. A reconciliation of IFRS to non-IFRS measures is included in today's earnings press release. The earnings press release and an accompanying investor presentation are available on our Investor Relations website at investor.opera.com. Our comments will be on a year-over-year comparison unless we state otherwise.

With that, let me turn the call over to our CEO, Song Lin, who will cover our first quarter operational highlights and strategy, and then Frode Jacobsen, who will discuss the details of our financials and expectations for the second quarter and full year. Song?

Sure. Thank you, Matt, and good day, everyone. It's been less than 2 months since we reported our fourth quarter 2025 results with the trajectory for 2026 well ahead of internal expectations. And today, we announced that we surpassed even those recent forecasts.

Q1 revenue exceeded the high end of our guidance range by $4 million and adjusted EBITDA exceeded the high end of our guidance range by $2 million. That translated to year-over-year revenue growth of 23% to $176 million with $42 million adjusted EBITDA or a 24% margin.

It is also worth noting that revenue growth was comparable across advertising and query revenue and 24% and 23%, respectively, both contributing to an excellent starting position for the remainder of the year. On the advertising side, fourth quarter revenue was a new all-time high of $117 million. Our momentum and underlying growth was strong enough to more than offset seasonality.

Our advertising partners run performance-based campaigns, so we would not see this level of growth if our partners were not also experiencing success. As a result, we are able to continue increasing our share of wallet with a continued focus on scaling our e-commerce partnerships.

As an example, just 2 weeks ago, we were awarded Affiliate of the Year from AliExpress. And in late 2025, we received a similar recognition from Shopee, another key partner. We are humbled by the appreciation shown and operate Opera Ads with their continued success as our North Star.

Our partners appreciate the 3 core pillars of Opera Ads. First is a unified media technology ecosystem that combines our own ad inventory augmented with the wider programmatic landscape and advanced targeting algorithms to deliver hyper relevant placements and the precise moment of user intent.

Second is consistent execution that delivers daily volume without sacrificing quality. And finally, a deep collaborative alignment that fosters a transparent, closely aligned working relationship with our partners.

Working with such global partners will translate demonstrated performance in active markets to continued regional expansion. And while e-commerce opportunities will only increase as the year progresses, I'm also excited about taking our learnings from that vertical and applying it more broadly.

For example, as we enter the travel heavy second and third quarters, we see a clear potential to establish Opera Ads as a source of well-targeted audiences for the travel industry. All in all, there is no shortage of opportunity and it's all about execution to deliver the best results for our partners.

Within the 23% growth of query revenue, search revenue growth continued expanding and reached 14% in the quarter, a level we have not seen since 2024. The remainder of query growth was driven by non-search query revenue, which continues to be multiple times larger than the year ago quarter with underlying growth also offsetting seasonality. In total, query revenue was $58 million in the fourth quarter and representing 33% of our revenue.

As we've discussed before, the AI age comes with completely new monetization potentials for our browsers, both from conversation with the native Opera AI assistant and as it relates to the back-end understanding of a user's intentions, presenting relevant products and services natively in the user interface.

The browser is unlike any other app. It's a gateway to almost every service available online. And as the browser gets smarter, the user can more efficiently act on their intentions.

For example, if the user starts formulating a query in the URL bar, the browser can understand the intention and expand the interface to present relevant destinations or if a user was interrupted during a session, the browser can organize that history and enable a seamless continuation later on.

In fact, AI unlocks both advertising and query revenue opportunities for us. On the advertising side, deep learning and agentic AI are leading to greater optimization and better targeting of user intent, resulting in greater conversion rates for our advertising partners.

On the query side, we are witnessing an evolution in search. Historically, search has been limited to the keywords users are searching for. But over the past few years, we have seen it transform from simple keywords to more complex and longer question-based queries and more recently to chat conversations.

As a browser with control of the URL bar and omnibox, we are well positioned as an entry node to search and AI chats. As these more complex searches and conversations begin to be monetized, we are in an excellent position to benefit.

Now turning to our products and recent innovations, [indiscernible] on the key topic of AI potentials for the browser. We recently introduced Browser Connector available both in our subscription-based agentic browser, Opera Neon and in our mainstream browsers, Opera One and GX.

Browser Connector allows users to plug their favorite AI tools directly into their live browser sessions via a protocol known as MCP, providing the AI platform of their choice with full real-time context of open tabs and active content. Think of this as bring your own AI.

The MCP protocol is the open standard that enables a secure connection between the browser host and AI models, giving users the freedom to choose their preferred combination of browser and AI back end.

With Browser Connector, the user no longer needs to act as the personal secretary of their own online AI tools, copy and pasting links and context. Instead, the browser enables the AI of choice to access and re-page content, understand open tabs and even take screen shots to analyze images of graphs. Beyond the technical upgrade, Browser Connector reinforces Opera's long-standing advocacy for user choice over ecosystem lock-in.

Product innovation translates to user appreciation and increased usage of our browsers, which again translates to revenue tailwinds. Looking at key Western markets, we see users who engage with AI within our browsers, spend over an hour more per day in the browser and even perform 50% more traditional searches than comparable users who are not yet engaging AI, all of which directly contributes to ARPU growth.

Our broad approach to monetization puts us in a differentiated position as most companies that are monetizing AI today are either chip and compute providers or those relying exclusively on subscriptions and usage-based models.

In terms of our user base, we added 4 million users during the fourth quarter, bringing our total monthly average users to 288 million. We added 400,000 Western users on top of the seasonally strong fourth quarter and we benefited from both continued Android adoption and PC platform growth and 1 million new Opera GX users globally. In total, our annualized ARPU was $2.43, a 25% increase year-over-year.

The final topic I would like to discuss is MiniPay, our noncustodial stablecoin wallet with deep ecosystem roots. MiniPay is the leading stablecoin wallet in Africa, appreciated for its technical ease and seamless integrations.

We see great opportunities and real life benefits with access to stablecoins, both within emerging markets and as a global payment framework. Just last week, we announced a USD 1 million incentive for local developers of mini apps that take advantage of the transaction opportunities of MiniPay and we are using our on the ground presence in Africa and Latin America to provide in-person support.

This supports the continued expansion of mini apps available in MiniPay, covering a broad range of services from finance, shopping, entertainment and utility tools. MiniPay has now activated over 15 million wallets and processed over 430 million total transactions.

With that, I would like to turn the call over to Frode Jacobsen, our CFO, to discuss our financial results, guidance and capital allocation in greater detail. Frode?

Thanks, Song. As Song Lin mentioned, we are very pleased with the start of 2026 and the trajectory we are on now well into the second quarter.

Yet again, we overperformed our estimates and delivered an incremental $4 million of revenue on top of the guidance range with over 50% conversion to incremental adjusted EBITDA. This level of outperformance is particularly impressive in the face of seasonal headwinds following the holiday heavy fourth quarter. Instead of a seasonal dip, our underlying commercial momentum overpowered those trends and drove sequential advertising revenue higher in the first quarter.

Q1 also marks our 20th consecutive quarter as a Rule of 40 company and we are well on track for 2026 to be the sixth consecutive year where we meet that high bar. In fact, our average annual revenue growth or CAGR stands at 21% over the past 10-year period, a feat few public companies achieve, even more so for companies that have been around for over 30 years like Opera.

In these times, filled with innovation and opportunity, we continue to benefit from the resilience and agility of our business model, disciplined execution and our consistency in pairing rapid and organic growth with healthy profitability.

Our outperformance continues to be broad-based with total revenue growth of 23% as opposed to the midpoint guidance of 19% growth. Within our total quarterly revenue of $176 million, advertising was $117 million or 67% of the total and query revenue was $58 million.

Advertising revenue grew at 24% and the evolution of our search business into a broader query approach resulted in query revenue growth of 23%, a level we haven't seen since the post-COVID rebound in 2021 as we better monetize high-intent user actions across the browser interface.

In terms of costs, I want to highlight the fact that we scaled the business beyond expectations while also improving gross margin by about 60 basis points versus the prior quarter. Cost of revenue items combined represented 36.8% of revenue, down from the 37.4% we saw in Q4 and according to margin expectations from our prior cost commentary.

Also as expected, cash-based compensation ticked slightly down from the Q4 level to $21.5 million. Marketing spend came in just below what we had built into guidance at $38.5 million, while the [Technical Difficulty] of all other OpEx items, pre-adjusted EBITDA came in at $9 million or just above expectations, but still resulting in a slight net benefit.

All in all, our continued cost discipline underpinned our adjusted EBITDA overperformance coming in at $42 million for the quarter [Technical Difficulty] or a 24% margin.

Operating cash flow was also $42 million in the quarter, representing a 100% conversion of adjusted EBITDA as strong net collection more than offset the limited tax payments we incurred.

Free cash flow from operations was $35.5 million or 85% of adjusted EBITDA. We continue to expect fluctuations quarter-to-quarter due to the size and timing of tax and bonus payments as well as other working capital movements, though I will reiterate my statement from last quarter that the full year conversion ratio of EBITDA to these cash flow metrics as achieved in 2025 continue to be reasonable expectations also for 2026.

Turning to capital allocation and return of cash to our shareholders, where we combine a recurring dividend program of $0.80 per year with our recently launched $300 million buyback program. The dividend is paid out semiannually with $0.40 or $36 million paid out in January.

In terms of the buyback, we repurchased 1.14 million shares in March for a total spend of $17 million pro rata distributed between public buybacks and repurchases from our majority shareholder at the same price per share, $14.88. This reduced the total number of shares outstanding as of 31st March to 89.55 million. You'll see $12.8 million of the spend in our Q1 cash flow with the settlement of the remaining $4.1 million taking place in Q2.

Now turning to our guidance. In terms of our full year outlook, our solid start to the year allows us to raise revenue guidance to $727 million to $740 million or 18% to 20% growth for the year as a whole. With that, we are raising the low end of guidance by $7 million and the high end by $5 million from the range we provided just 2 months ago, adding about 1 percentage point of growth to our expectations. Still, in line with our guidance logic, this range continues to allow for later upside potential in the second half of the year.

We let just over 40% of the incremental revenue flow through to our adjusted EBITDA guidance and update our annual range to become $170 million to $174 million or a 23.4% margin at the midpoint. That means that our prior high end of the range has now become the midpoint.

For the second quarter, we guide revenue of $176 million to $178 million or 23% to 25% growth. The quarter is already well underway and both our operational and commercial performance supports the nice step-up versus prior implicit expectations.

We guide adjusted EBITDA of $40 million to $42 million, representing a 23.2% margin and 28% adjusted EBITDA growth at the midpoint.

In terms of costs, we then implicitly guide to a full year OpEx base pre-adjusted EBITDA of $562 million at the midpoint, of which $136 million in Q2. We continue to expect cost of revenue items combined to represent about 38% of revenue for the year, with midyear coming in around the annual average before we go slightly higher in Q4 with its seasonal advertising peak.

As discussed before, Opera Ads has a different gross margin profile compared to our O&O revenue streams, resulting in a greater cost of revenue component in our overall results even as our Opera Ads gross margin is ticking up. Apart from the business mix effect, we continue to see the Opera Ads gross margin expanding as the platform scales and our optimization algorithms evolve in addition to benefiting from low marketing costs and limited OpEx base.

Cash-based compensation expense is expected to grow just above 10% for the year as a whole, which is slightly lower than our earlier expectation of growth in the low teens. We expect costs to increase modestly in Q2 with annual salary adjustments effective as of April.

Post Q2, compensation cost is expected to show smaller movements quarter-to-quarter. Full year marketing costs remains expected to grow by about 10% from the 2025 level with Q2 costs quite similar to Q1, followed by a slightly higher spend level in the later quarters.

In sum, cash-based compensation and marketing will then decline from representing 36% of revenue in 2025 to representing about 33% of revenue in 2026.

For all other OpEx items, pre-adjusted EBITDA, we increased our full year estimate to represent just over 20% growth year-over-year, up from our earlier expectation at about 15% growth. This is explained by hosting costs and the effects of our rapid business scaling, increased AI usage and pricing impact of constrained supply, while other items included in the total remained stable overall. We expect the cost category to increase quite linearly as the year progresses.

In sum, while we continue to focus on building scale over accelerating margin expansion, as we refresh our estimates, we see a slight further widening of the gap between revenue and cost growth, allowing us to lift our adjusted EBITDA margin by about 15 basis points at the midpoint of full year guidance 2 months after providing the first color on 2026.

In light of our performance and outlook, we remain very pleased with having expanded shareholder returns beyond our recurring dividend program to also include our new buyback program. We repurchased 1.3% of shares outstanding in the program's first month at an attractive $14.88 per share, accelerating ROI upside for our shareholders.

While it's only been a couple of months since our last release, we've been excited to share today's updates with you and look forward to keeping you posted on our progress.

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

[Operator Instructions] And we'll take our first question from Eric Sheridan with Goldman Sachs.

Wanted to know if we go a little bit deeper into the learnings you have to date with respect to the adoption of AI tools across your user base and when you look longer term, what do you see as the opportunity set either at the browser level or maybe even for the rise of agentic commerce behavior by users that could bode well for both user growth as well as monetization opportunities?

Sure. So -- it's Song Lin here. I'll try to answer. So yes, so high level, I guess, number one, I would say that I think the -- more like we are always advocate for AI and that's also why we almost try to embed it in many of the aspects within the browser anyway.

And as we also talked about in the script that we also have it, for instance, from the URL bar, Omnibar to, of course, also the offer AI assistant that you can engage from sidebar and then further on to allow you to use AI with their own subscription, bring your own AI. So that's consistent with our offerings.

And I would almost say that, number one, in general, we see that once we provide it in the right context in the right moment, users are very happy about it. So that's why we -- I think we also talked about it briefly in the script that whoever use AI, we saw that they almost spend 1 hour more in, say, desktop browsers, which is already a very long hour spend compared with any other thing.

And then they also typically search almost long time more, right, than the others or engage with AI in different ways. So I think in general, we are very positive about it because those basically transfer to better opportunity to capture user intent and also the monetization opportunities as follow-on.

So I think that's, in general, where we see that why it's beneficial. And on the other end, though, I think maybe the only thing I will just say that we should, of course, never forget that in the end of the day, user is a first, right?

So as Opera, for instance, we never try to push user to something without may not be what they want. So I think #1 priority should always be that you give what user want. And also, it's also equally important to be aware that, of course, it's not all about efficiency, for instance, because for many of the times, if users just want to kill time, they just want to enjoy what they do and we should also respect that.

So I think that's what also we see that people in the longer term, whoever win will be, who respect user behavior, give them the AI and the right context and right time, helping them use their own stuff instead of giving something with the lock-in ecosystem, whatever that is.

And I think that's what we see at least major growth of us, both for the use of all those AI features, but also for how we actually see quite a good growth of user base. And you can see that even though Q1 is actually traditionally almost a bit lower season, it's actually we have been done very well on the user base-wise.

And we actually also see one of the highest growth of MAUs on desktop, for instance, likely as a result. So that's -- yes, more like that's some high-level figures.

We'll move next to Naved Khan with B. Riley Securities.

So 2 questions from me. One is this metric you shared about users who engage with AI spend an hour more per day and you see 50% increase in searches. I'm curious what percentage of your base is engaging with the AI chat features that you currently have?

And what are the levers that you control to drive this higher? And the second question I have is just on the Google renewal that's coming up at the end of the year. How are those conversations going? Are you confident about renewing it? Or just give us your thoughts there.

So yes, it's only I think I also try to answer it. I captured the last question first, I think I'll just revert on that. So yes, I think for Google, I think we also talked about, I believe, 2 months ago in our Q4 release that we are very happy to be one of the first to sign with Google, the renewed, let's say, agreement for the year due to the DOJ requirement, right, with them in the U.S.

So very happy. We are very happy. I think they're also very happy that we are one of the first partners to do that. And moving forward, we don't expect any surprises. We have very good dialogue with them. Hopefully, there will be also some interesting openings of new potentials that we can cooperate with Google, both on the search, but potentially on the AI side and a few other side.

And yes, for the renewal, I think we typically have stand on the process of renewing with them by -- yes, more towards the second half of the year. I think we'll continue the right path on that trend and we'll provide an update when such is available. But for now, I think the cooperation is fantastic.

And as you also see that we even have one of the highest growth of traditional search parties ever. So I think both sides are very happy. And hopefully, we can expand that partnership moving forward.

Yes. And then I guess also super quickly comment a bit on your questions on AI, right? So yes, I guess in short, for now, we have not disclosed the exact AI usage percent. I think the reason is just because now there are so many touch points and entry points of AI that is almost a bit hard for us to define a particular entry well, what comes as the user use AI or not because that can happen both from Omnibar whenever there is a suggestion, which is, of course, we are always updating.

So that's also why you see a good growth of query revenues. Most of them are actually resulted of the many of the AI features that we are trying to resonate. But of course, it's also possible for user to both access AI from the sidebar with Open AI.

But with the latest introduced of browser with own AI, you can actually compute the browser by Browser Connector from your ChatGPT subscription inside the browser directly or from your cloud and other chatbots directly from a webpage.

So I guess it will become harder for us to define particularly what content AI usage because I think that will be almost prolific that almost the majority -- I think we do expect majority of the interactions within the browser will encounter AI in one form or another.

And I think our goal basically just to make sure that we are a browser choice. We are a standalone player, we give them all the options available. And hopefully, for instance, if you have a cloud-based subscription, our goal is just to make sure that Opera is the best place going to use and saying that if you have ChatGPT subscription, but you also want to use [indiscernible] sometimes, we should also be the go-to choice. So I think that's our aim and I think we are actually moving forward to that goal.

We'll move next to Ron Josey with Citi.

I wanted to ask a little bit more on search, specifically with query growth accelerating in the quarter. And Frode, I think you talked about the search evolves and your broader query approach overall.

So talk to us about the evolution as search is -- we see accelerating query growth and specifically the tie between, call it, the new browser AI tools and engagement as search revenues growth and query grow, in fact, accelerate.

So any insights on the evolution here would be super helpful. And then bigger picture, understood with guidance here, but any insights on the broader advertising environment would be very helpful. Are there any verticals to call out one way or the other?

Ron, Frode here. I'll start. So I think in the first quarter, we saw the year-over-year search, like pure search revenue was growing at about 14% year-over-year, which was very strong and up from the growth that we saw in all the quarters in 2025.

And then on top of that, we have the broadening of the category, including also the non-search query revenues that drove it up to 23% total overall. So I think we look at that category in an enthusiastic way because as these new tools evolve and as people can engage with the browser in new ways, we have more opportunities to direct people to the things they are looking for in native ways in the browser.

And further to that, as engagement ramps, you talked about more opportunity direct. And then we heard in the call earlier, I think, Song, you talked about broader engagement for those who have adopted AI tools. I know we've talked about that on the Q&A section. But any insights on adoption of AI tools to the browser and the user base overall?

Yes. So yes, it's Song Lin here. So I guess I'll just complement a bit on what Frode is saying that on -- I mean, as I said, I think now the way we see it, it's becoming really proliferating that like, for instance, if you just use Opera browser, you can go to ChatGPT by just using the Browser Connector, or you can benefit from there to control the Opera browser.

And the same way that, let's say, if you type a regular URL, we will actually use AI to say that, oh, maybe this is Amazon tools -- product that you would like, right, it will pop up, either you click on, they will go through it. And same as the Booking.com is also a perfect example that now it actually works that way.

So I would almost say that I think now we are basically coming to a stage where you could arguably say that majority of the user searches probably have AI involved in one form or the other.

And I think we will see that will be the future moving forward. And I think the key is just -- as we also maybe mentioned a bit earlier that I think the key is just maybe find the right design and the combination that it should really facilitate users' browsing behaviors.

I think maybe that's also something that people go to that. At the end of the day, it's always consumer first, is always end user first. It's very important that it's something facilitating.

For instance, that's also why we provide this Browser Connector instead of pushing them to force them to use some particular Opera Ad tool, but actually they can use whatever existing tool they like. And I think that's a very important philosophy that we believe in.

And we have to feel strongly that, that should be the direction of what a browser should do, right? As an independent player, user can choose whatever AI they like. It can be from existing big players. It can be even from open source if they choose.

And then we just have to make sure that we provide this Browser Connector in MCP protocol that people can access and said great and then they can use whatever to control it. And I think we are basically in the best position to provide it.

So maybe perhaps that's also why I would almost say that so far for the browser come up by the particular AI providers, I don't think there's too much acceptance of it. But rather, we actually see very nice growth -- actually we have the higher growth of our users, say, for desktop that we have not seen for years. So I think we are very encouraged by that.

We'll take our next question from Jim Callahan with Piper Sandler.

Interested on the comments on travel, rolling out the sort of performance-based product there. Would just be curious if -- how much of the pieces are in place to kind of roll that out? Or is that something that's kind of already in the model today?

So I'll go in terms of the model. So our guidance is always quite bottom up estimates where we look at what we have today. And then we rather leave upside for things to scale better than what we built into guidance in the later parts of the year.

And of course, travel is a big opportunity. It's very -- we can use our lessons from the e-commerce opportunity to scale into this vertical. It's also interesting seasonality-wise, but it has a different annual profile with sort of midyear travels, et cetera, whereas e-commerce and shopping tends to be or is definitely strongest around year-end and the holiday season.

Okay. Got it. That is helpful. And then anything in terms of guidance for, I don't know, either 2Q or full year, just relative growth between query and advertising?

We will be a bit careful to break it down into detail because it evolves as we evolve the opportunity, especially the non-search parts of query is relatively new. And then search as a whole is also quite market-based on top of how we move our user base.

And then on the advertising side, of course, we have a baseline and we have a guidance and we also have opportunities that you just touched on. So we -- for now, I would say Q1 was very strong on the query overall.

I think we don't need to continue a year-over-year growth of over 20% on a query basis to meet our guidance, but it's a bit too soon to discuss specifics for the better parts of the year.

[Operator Instructions] We'll move next to Jacob Stephan with Lake Street Capital Markets.

Congrats on a nice quarter. Maybe just to start off for me, I'll ask on the MCP. This kind of positions you as kind of the central call point for several AI tools.

But do you think that this kind of risks cannibalizing any of the Opera Neon subscriptions or economics? Or is this kind of a complementary funnel? Curious your thoughts here.

Yes. So yes, that's a very good question. So as like -- yes, it's a very relevant question, right? So I guess, yes, we do have a choice, right? Like any given AI feature, which are quite interesting, we do have a choice of do we only give it to Opera Neon and hopefully, we will push more for subscription revenue?

Or do we think that it's more relevant for the broader audience? And as a result, hopefully also attract more users in the generic Opera One or GX product, right? So -- but I think basically, as also demonstrated by our numbers, I think we are in a bit slightly luxury situation that we are not burning money like all those base model companies.

We are quite profitable and we have good revenue. And also because our revenue model is because of advertisement, right, that we do not really have to rely on fixed subscription revenue. And then be aware that typically that subscription revenue is also -- if you are a traditional AI company, that subscription revenue also coupled heavily with burning token cost, which is almost many times not sustainable.

So I would also say that in this particular case you asked, it's a bit easy simple decision because we see it, we saw that there's a great user feedback, people liked it and we calculated that it's economically much better to put it outside really just because remember, this is bring your own AI, right?

So we don't even need to use our own tokens, this is tokens from ChatGPT or whatever based on what you already have. And so we don't really have any cost really whatsoever. But that if that causes a higher retention, how user search, how user use our browser because at the end of the day, if user have to use it inside the browser anyway that we would be able to capture all the intent and monetize if needed anyway.

So this particular case is actually a very easy decision that it makes more sense to have it available on the general product and make money by regular browsers, which are already demonstrated to be very profitable anyway. I'm sure that there will be certain features may be tailored to particular vertical audiences that would only be available in Neon like many of the current Neon features is and those that will be more subscription-based.

But yes, for the Browser Connector, it's an obvious choice that it's better to make it widely available.

Okay. Very helpful. Maybe just last one for me on MiniPay. Obviously, nice momentum there. At what point does this kind of become more of a P&L contributor versus just a strategic investment? Do you kind of -- I guess, looking longer term, what are your plans for MiniPay, OPay?

Yes, I can comment a bit on MiniPay. So MiniPay is already meaningfully contributing. We generate about $20 million of revenue from the broader ecosystem around it.

It is a very successful product, as you say, and it does allow people -- we've tailored it initially for emerging markets to have an easy way to access stablecoins and other blockchain types of assets. And we continue to think it has a huge potential ahead and can really scale.

Still, this is one of those items that is quite early, still a bit early in terms of how big it can get and what the trajectory looks until that point.

On OPay, which is a separate topic, that's a company that Opera founded back in 2017 and we have a 9.5% stake in that, that we carry on our balance sheet at about $300 million of book value.

That company is by now operating completely independently from Opera and is advancing on its own. So while we're not operationally working together, we, of course, share a history and we're very proud to see how that company has scaled and is sort of working towards what we expect will ultimately be an IPO, which we think is also very positive for Opera because it would sort of immediately make visible the market value of that company and Opera's stake in it.

We'll take our next question from Jonnathan Navarrete with TD Cowen.

How are buybacks going 2Q so far? And how should we think about the phasing through the year?

So I don't think we'll get into sort of talking ahead beyond sort of the historical period. But overall, we're, of course, very pleased to have that program in place.

I guess it's the third or fourth time that we launched a buyback program and by far the biggest one that we have launched. I think we already are -- we reported our March trades essentially since the program became -- was launched in late Feb and we could start trading in March.

And already, I think it can contribute to accelerating ROI for our shareholders as we take shares out of the denominator. And then sort of going ahead, I think we continue to be, as we've always been with buybacks, opportunistic and adjust the program to maximize the value that we can create.

I think just the fact that we are in that position, we talked about it a bit on the last quarter as well, we are growing fast and we are self-funded in the sense that the business is generating very healthy cash flows. And our CapEx model that Song touched on, on the AI side is very limited compared to other companies that you would think about in that space.

So we don't have like a massive investment need to drive our business. It's a software layer, it's a service and we -- that is what we are good at. So we don't want to compete in a hardware race. And that also means that the cash we generate, we can actually return it to shareholders. We like the recurring dividend and the buyback just helps us drive incremental upside.

Great. And just one more question. There were some reports this morning that OpenAI missed some internal sales targets. And just wondering what could be the read-through, if any, for you guys?

Hard...

OpenAI? It's not open...

I think -- okay, it's actually convenient that you asked the question immediately after my prior response because I think we do -- we are quite distinguished. If you think about companies that have an, let's say, AI opportunity, then of course, we have the major platforms like OpenAI, et cetera, but you also have Opera, right?

And -- but we do it as a service in a browser. We don't try to compete against the big LLMs out there, whether it's ChatGPT or Gemini or Claude or any of the other ones. But we are very good at providing an interface for LLMs to exist very close to the user to control the browser, to take into account context of the user and to enable it to be as productive as possible, right?

So for example, as we talked about with the Browser Connector, our own Open Opera AI in the browser, like as a human, you don't have to sit and be like the personal secretary of an AI model and copy paste links and text, right? You can just -- you can operate these tools in the browser with the context included.

So I think comparing us to OpenAI in some ways, flattering that you ask. But at the same time, I think our cost and capital need structure is completely different.

Yes. Maybe I'll just add, right, that I just -- I think in general, I think, hopefully, as we also demonstrated that like both Opera and the potential our users are already demonstrated to be very AI-savvy, I would say.

Otherwise, it probably like -- unlike some other maybe old-fashioned browser companies, people who use AI tend -- whoever use Opera tends to be AI-savvy, they tend to be very interested. So I would almost say that I think, of course, 300 million MAU, that is a very attractive partners that we will want to grow AI is I think we must be a very attractive partners that they can work with.

For instance, if you compare with many other, we call it similar big player like even Claude or X or whatever, I think I believe their MAU are in the range of almost 1/10 of our MAUs, right? I'm sure OpenAI has a bit more, but at least 300 million, there must be a very interested partnership opportunities.

So I guess that will also be our -- hopefully, with the year moving on, we can see what can be done there.

And it does appear that there are no further questions at this time. I would now like to hand the call back to Song Lin for any additional or closing remarks.

Sure. So yes, I guess thank you to everyone for joining us today. 2026 is off, again, to a great start. Our continued momentum and truly exciting landscape has already resulted in a solid foundation for continued strength through the remainder of the year and well beyond. Have a good day, everyone.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Welcome to the Opera Limited Fourth Quarter and Full Year 2025 Earnings Call. [Operator Instructions] Please be advised that today's call is being recorded.

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

Thank you for joining us. This morning, I am joined by our 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 as a result of various factors, including those set forth in today's earnings press release and our most recent annual report on Form 20-F, filed with the SEC. We undertake no obligations to update any forward-looking statements. During this call, we will present both IFRS and non-IFRS financial measures. A reconciliation of IFRS to non-IFRS measures is included in today's earnings press release. The earnings press release and an accompanying investor presentation are available on our Investor Relations website 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 CEO, Song Lin, who will cover our fourth quarter operational highlights and strategy, and then Frode Jacobsen, who will discuss the details of our financials and expectations for the first quarter and full year. Song?

Sure. Thank you, Matt, and good day, everyone. While we preannounced Q4 outperformance, we have been very much looking forward to today, and to tell you how great our actual results was, and even more importantly, how exciting our 2026 guidance is.

Advertising revenue led by continued scaling of e-commerce came in with an unprecedented sequential increase of $19 million versus the third quarter, resulting in 25% year-over-year growth. Clearly, we are performing well for an increased number of advertiser partners, all running performance-based campaigns with us, and we have yet again shown our ability to leverage the seasonally strongest fourth quarter to cross a year of fast growth.

In addition, our rapidly expanding monetization of user intent query revenue continued with 16% growth year-over-year. This was fueled by both healthy search revenue growth and a continuation of 200% plus year-over-year growth in non-search query revenue. The monetization of intent-based traffic beyond search is an exciting opportunity, contributing over $5 million of revenue in the quarter and will continue to be our fastest-growing revenue component in 2026.

All in all, Q4 revenue growth was 22% against the toughest quarterly comparison of 2024, and 8% higher than the midpoint of guidance. Our resulting annual revenue growth was 28% in 2025, an acceleration from 21% growth in 2024.

EBITDA also came in well above the high end of our guidance range and 7% higher than the midpoint. We continue to invest in both product marketing and the growth of advertiser relationships, while maintaining a healthy EBITDA margin and solid cash flow, which Frode will cover in more detail later.

We have talked a lot about our positioning in the AI era over the past years, and the topic continues to deserve attention. Our job is to make the best browsers for demanding users. We are amazed at the quality of emerging AI services, as I'm sure many of you are too, and we do not consider these companies as our competitors, but rather current and potential future partners. Our focus is to create the best orchestration layer possible for end users to benefit from this rapidly expanding ecosystem.

The best example is Google, which has delivered the world's best search experience for decades and is showcasing its technical abilities through the advancing Gemini models. Google has its own browser but has been our partner for 25 years as we deliver an integrated experience for the end user to benefit from these services in a feature-rich and advanced browser. And with the broadening ecosystem of services, the appeal of an independent browser only increases. And at the same time, the attention to the browser space results in more people contemplating which browser represents a better alternative.

That sentiment should be shared by the new AI companies, which would prefer to reach their users via an independent Opera browser as opposed to a direct competitor's browser. That is a healthy basis for constructive relationships.

Our strength is browser sophistication and a dedication to augment the web experience in ways the users will find familiar and useful. Most people don't want to change their browsing habits. Rather, they are looking to enhance it with a richer experience, enabled by AI and agentic capabilities of their choosing, but it all starts with browsing at its core.

The browser itself is a gateway to your online journey, and it is a mistake to build a browser that is a little more than an AI terminal with browsing the web as an afterthought. This positioning is also what enables our financial profile. We do not need to put out massive capital into hardware nor enter a fierce competitive large language model arms race.

Financially, this is a continuation of the profile we have consistently shown a healthy combination of growth, profitability and cash generation, and a relatively unique resulting ability to be both a growth company with no financial constraints to seize our potential, while also returning significant cash to our shareholders.

While our performance and outlook are not fully reflected by the public market today, there is always a silver lining. And in this case, it is our ability to take advantage of this opportunity to create significant value for our shareholders by launching a major share buyback program. Frode will go into the specifics shortly.

Moving on to operational highlights. 2025 was certainly another year of rapid innovation and built upon our modular technology and preference to tailor browsers to distinct audiences. We launched 2 new browsers, Opera Air; and the subscription-based Opera Neon, which became widely available in early December.

While user demand for agentic browsers is not yet mainstream, Neon is a terrific product that solves multiple goals. It provides one of the most advanced browsers for AI demanding power users, potentially unlocking a new subscription-based revenue stream. And more importantly, it is a testing ground for new AI features that we can then introduce across our full suite of browsers.

Our revamped flagship browser, Opera One entered 2025 in its second-generation R2, and most recently was refreshed to R3. In addition to greatly enhanced tab management and split screen views, R3 came with native integration of e-mail and calendar and our most advanced integrated AI assistant yet, Opera AI.

Compared to earlier versions, Opera AI benefits from a 20% faster agentic-based engine and contextual responses that allow AI to understand the web page or an entire group of tabs. This enables it to give answers based on the browsing context while maintaining privacy and control in the hands of the user. As a result, the user benefits from more relevant, efficient persistency and direct task completion within the browsing experience, unlike a stand-alone chat. And on the back of expanding monetization opportunities, we are bringing Opera AI to all of our browsers.

With business models evolving beyond subscription, Opera is exceptionally well positioned to benefit from these trends and take advantage of our successful history of query monetization.

Opera GX, the browser for gamers, reached over 34 million MAUs in the fourth quarter, a 5% sequential increase and remains our highest ARPU product. As the official browser sponsor of the League of Legends World Championships, we saw our best weekend of user activations in the history of GX during the tournament.

Our mobile browsers also contributed to healthy user base dynamics, with Europe continuing to stand out after iOS became a more level playing field, following the EU Digital Markets Act.

All in all, we ended the year with 284 million MAUs, inclusive of 60 million users in Western markets that contribute the most to our strong ARPU trajectory.

ARPU grew by 26% to $2.49 in the fourth quarter. This growth demonstrates our ability to gain users in key target markets despite new entrants from well-capitalized competitors. We continue to take advantage of our browser position to scale opportunities that are natural extensions.

Opera Ads, the platform that initially optimized the relevance of ads to each individual Opera user has become a global player also on non-browser inventory as part of our audience extension. Learning from primary data signals, we more than doubled its pace of growth in 2025 versus 2024, with well-performing campaigns for our advertiser partners. Every second, we process 12 million ad queries, more than double the year ago period. We worked with over 300 advertisers in 2025, including 4 of the 5 largest e-commerce platforms.

Within the top 50 advertisers, the average spend per advertiser grew by 56% in 2025. In terms of our total advertising reach, when taking into account the millions of users that access our content platform through OEM white-label solutions, and the reach of Opera Ads, it is over 0.5 billion MAUs and growing. This scale and growth positions Opera uniquely among the largest online platforms.

Another native extension of our footprint is MiniPay, a stablecoin wallet that emerged as a feature inside our mini browser tailored to emerging market users and is now available as a dedicated app. Mini Pay continues to drive adoption in a stable core market with over 13 million activated wallets, an increase from 10 million in the third quarter. The accumulated number of transactions increased from 290 million last quarter to 390 million.

MiniPay is the fastest-growing stablecoin wallet in Africa, appreciated for its technical ease and seamless integrations with a broad partner ecosystem, enabling simple and low to no-fee transactions. Most recently, we expanded support for USDT and Tether Gold, and are rolling out the MiniPay card to increase functionality and serve as an important offering, offering best-in-class FX rates. Building upon our success in Africa, our 2026 focus will be to invest in making MiniPay a more global platform.

With that, I would like to turn the call over to our CFO, Frode Jacobsen, to discuss our financial results, guidance and capital allocation in greater detail. Frode?

Thanks, Song. As Song Lin also opened, we have been looking forward to sharing our complete fourth quarter and full year results with growth well ahead of even recent expectations and above the guidance ranges on both revenue and adjusted EBITDA.

While we always apply caution to guidance, exceeding the high end of our revenue range by over $12 million is a recent record. Relative to midpoint, revenue was 8% above guidance and adjusted EBITDA was 7% above guidance. We are also very pleased with the composition of our overperformance with healthy trajectories across both advertising and query revenue.

Our e-commerce success translated into a record contribution from the holiday shopping season, and as importantly, demonstrated our ability to scale our partnerships further ahead of embarking on a new year.

Our most mature revenue stream, search, is evolving and broadening with our ability to monetize users' intent as part of query revenue, whether it relates to reactive suggestions or advancing our intent-based traffic partnerships. In addition, AI unlocks query volume that was previously too complex for the search bar and represents a major improvement in the user experience, including well-tailored advertiser recommendations.

Quarterly revenue totaled $177 million, 22% up year-over-year and well ahead of guidance.

Looking at our quarterly cost components, we incurred about $1 million more cash compensation expense than expected, predominantly a result of increased bonus provisions and a weaker U.S. dollar. Cost of revenue items also scaled with the revenue overperformance, representing 37.4% of total revenue. Marketing costs and the sum of all other OpEx items pre-adjusted EBITDA came in according to expectations.

In total, and largely as a function of revenue overperformance, costs were $11 million higher than implied in our midpoint guidance, though this was more than offset by the comparable $14 million increase in revenue, resulting in $3 million incremental adjusted EBITDA. Quarterly adjusted EBITDA came in at $42 million, a 23.6% margin and also outside the guidance range, as earlier stated.

All in all, full year revenue came in at $615 million, growing 28%. Our initial guidance for 2025 was for growth of 17%, after which our steady cadence of overperformance added $52 million of revenue as the year progressed or 11 percentage points of growth.

2025 adjusted EBITDA came in at $143 million, a 23.2% margin. This too represented a solid increase of $7.5 million versus initial guidance, adding 7 percentage points to the expected growth rate for the year. With that, 2025 was our fifth consecutive year as a Rule of 40 company.

A few words about gross margin. As we scale Opera Ads, which has a different gross margin profile compared to our all in all revenue streams, we see a greater cost of revenue component in our results. But the platform comes with no marketing cost and a limited OpEx base. As a result, our EBITDA margin was relatively stable even as we delivered 28% overall revenue growth.

It's worth noting that the Opera Ads gross margin actually expanded in parallel with its scaling from 2024 to 2025, thanks to enhancements in our optimization algorithms, showing how both we and our advertisers benefit from our strong targeting capabilities.

Operating cash flow was $40 million in the quarter or 96% of adjusted EBITDA, resulting in a full-year operating cash flow of $118 million or a relatively normalized 83% as expected.

Free cash flow from operations, which also deducts capitalized equipment and development as well as payment of lease liabilities, was $35 million in the quarter and $98 million for the year, corresponding to 84% and 69% of adjusted EBITDA, respectively. As percentages of adjusted EBITDA, we believe these annual levels represent fair expectations for 2026 cash conversion as well, while we will continue to see quarterly fluctuations with seasonality, tax and bonus payments and other cyclical effects.

Then turning to guidance. While we are very pleased with our performance last year, we are still early in our trajectory. As we embark on a new year, we are excited by both the quality and potential of our products, and our opportunities to continue growing our financial results.

Starting with the current quarter, we guide Q1 revenue of $169 million to $172 million, representing 18% to 21% growth year-over-year. The guidance reflects the growth momentum experienced year-to-date, reducing the sequential effect following the seasonally strongest quarter.

We are generating healthy margins and are guiding for adjusted EBITDA of $38 million to $40 million, a 22.9% margin at the midpoint, setting a solid foundation for the remainder of the year.

For 2026 as a whole, we guide revenue of $720 million to $735 million, translating into growth of 17% to 20%. While we prefer to be prudent at such an early point in the year, we are humbled by how far we have come in these past few years and our opportunities ahead.

We guide adjusted EBITDA of $167 million to $172 million, a 23.3% margin at the midpoint. We take pride in driving organic revenue growth at a healthy level of profitability. And while our guidance reflects an inclination to focus on building scale over expanding margins, it implies a slight tick up in profitability, with the 2025 margin level now representing the starting point of the range.

In terms of costs, we then implicitly guide to a full year OpEx base pre-adjusted EBITDA of $558 million at the midpoint, of which $131.5 million in Q1. We expect cost of revenue items combined to represent about 38% of revenue for the year, starting somewhat below and ticking up as the year progresses. That represents a 2 percentage point gross margin headwind for the year, while Opera Ads in isolation is expected to continue its margin expansion.

Economies of scale across the other OpEx items supports the combination of rapid growth combined with a cautious adjusted EBITDA margin expansion.

Cash-based compensation expense is expected to grow with a percentage in the low teens with quarterly costs starting just below our Q4 2025 level and ticking up with annual salary adjustments as of April.

Full year marketing cost is expected to grow by about 10% from the 2025 level with a relatively even distribution of the annual spend between the quarters. And all other OpEx items pre-adjusted EBITDA are expected to grow by about 15% for the year as a whole, starting just below the Q4 level and increasing quite linearly through the year.

Finally, we are excited to launch our new buyback program today, which is of an unprecedented scale. In fact, the $300 million authorization exceeds all prior buybacks combined and represents over 25% of our market cap as of this morning. Our ability to do this on top of an already meaningful recurring dividend only highlights the attractiveness of our operating model and commitment to shareholder returns.

Given our belief that our stock is trading at levels that do not reflect our continued success, we are taking advantage of our strong balance sheet and expanding cash generation to capture a compelling ROI opportunity for our shareholders.

We will pace and structure the buyback program based on market conditions, and we will buy back shares from our majority shareholder at the same pace as we buy back shares in the public market, ensuring that our free float percentage remains unchanged while massively stepping up our return of cash to shareholders.

All in all, we are very pleased and also proud of the results we have achieved, thanks to our highly driven team and our ability to expand monetization while enhancing the user experience. We look forward to keeping you posted as yet another year with much promise progresses.

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

[Operator Instructions] We'll take our first question from Ron Josey with Citi.

I wanted to ask a little bit more about Western users, which grew about $2 million sequentially. And I think we had some positive commentary around greater competition in Europe. So just talk to us about the ability to continue to gain these users despite, call it, greater competition and everything else. So talk about Western users and the growth there as one.

Then the next question is just on ads overall. With e-commerce growing 25% year-over-year, a lot of that from e-commerce specifically, you noted the top 50 advertisers grew 56%. Talk to us about the traction that you're seeing within e-commerce and how you position that going forward.

Yes, I can answer this. No, I just saw that he mentioned you, Frode. But this is only -- I can try to answer, give a first step, and then Frode can also comment a bit afterwards.

So yes, I mean, I think overall, we are quite happy with the user performance in Q4. I mean, actually, both for the total MAUs, I think it's a good number because, as we always mentioned in the past that where we are always like losing some feature phone users, but then we are always growing in where it counts: smartphone users and desktop users. And of course, a fair percentage of that is also Western users, which also showed up nicely in the Q4 stats. So very happy about it.

I think -- essentially, I think it's an illustration of our focus, of our dedication, both for very attractive desktop offerings, but also -- maybe also to mention that we also see very nice growth on, say, mobile browsers, especially iOS browsers after the European Market Act.

Then we also saw a lot of attraction, of course, a result of AI -- that as a result of AI, everybody actually see that it's actually possible to have a very good AI-powered browser experience also in iOS, and then that's why we also have a lot of interest with Opera for iOS, for instance. So overall, I think we saw a very good trend, and cautiously positive that the trend will continue, and then hopefully we will grow faster in the new year to come. So I think it's on that.

Then, yes, like again, also maybe super quickly commenting on the ads, especially e-commerce. So yes, in general, e-commerce is our biggest category. It grows very nicely. That grows -- if you only look at e-commerce alone, it actually grow a lot faster than 25% apparently. And it's one of the strong powerhouse, I guess, to power the whole year-over-year growth.

It's also very easy to calculate that despite of like nice growth on search and also others, the e-commerce, of course, overall grows faster. And that actually enabled us to have an overall yearly growth of 28%. So like again, very positive. But also maybe I like to mention that the whole e-commerce is a very big market. It's a very big TAM, right? Like the whole -- I would say it's -- in the world, it's probably likely to be $100 billion, depends on which number you use. And then even if just by a market share of where we should be, we still have at least $5 billion to $10 billion actually potential to grow. So we are very positive about it.

I think it is also indicating the opportunity that brings us that in the past, most of those money probably go into, let's say, search engine because that's the only user intent, which people cares. But with the advancement of AI, people are now starting to see that there are actually many places that is possible to place user intent and browser is naturally also one of it.

That's also why we have the chance to actually gain those, I would say, user intent revenues, both in what we call acquired revenue, but also in advertisements or performance based. And we feel that this have a very good opportunity to continue to power our growth in the next months or years to come. So very excited.

Let me chime in briefly that the e-commerce, very successful part of the business. It continues growth rates and a 100% year-over-year rate, including in the key fourth quarter and scaled massively over the past couple of years.

Then the Opera Ads platform, which is -- which also allows third-party publishers to take advantage of our targeting, saw an increase in the growth rate in 2025.

The metric you mentioned about the biggest customers growing, I think that's a very good picture of the deepening of the relationship we have with them, as all our campaigns are performance-based. And when we do well, we get a bigger share of their marketing budgets.

Our next question will come from Jim Callahan with Piper Sandler.

Just a question on Neon. It's been a few months since being rolled out. Anything you can talk to on engagement or monetization there, so far?

Yes. So again, it's Song Lin here. So I'll also try to comment a bit, right? So like again, as also mentioned in the scripts, very exciting about the launch of Neon. We just have it widely available in mid-December, so it's still quite early. But as also mentioned that I think what's been relevant is both the opening up of Neon as a potential community hub for AI power users. But also, I think the technology behind it, which actually allows us to use the most advanced orchestrations in ways and forms, which is not possible in the past. And then all of those features have also been able to allow us to move those into Opera AI, which are also launched across all the Opera products, which are very well received, which we believe is actually also part of the reason why we see the strong growth in Western market, because this is where this is mostly appealed to. But we also think that there's a good potential to have it to further grow in 2026.

Then in terms of monetization, as I also mentioned a bit that it's, of course, partly already revealed by the nice growth in both query revenue, but also related advertisement revenue based on it. But even though it's not really showing up in Q4, because we only launched it in mid-December, there are potential, of course, of potential subscription revenue streams, which can help us move up further.

Just follow-up on gross margin. So you're obviously, scaling the off-platform part of the business, but your incremental gross margin stepped up the past 2 quarters. Can you just talk about the sustainability of that trend, and like what steady-state gross margins look like if we keep scaling off-platform?

I think the nice thing as we look into 2026, it's a good growth potential across the business. We are still guiding to Opera Ads platform, growing slightly faster than the totality and building in a bit of a couple of extra points on cost of revenue. But at the same time, given the P&L profile of running a platform, it's generating very healthy EBITDA contribution, which allows us to slightly tick up the EBITDA margin expectation for 2026.

Our next question comes from Eric Sheridan with Goldman Sachs.

Maybe the first one, just following up on Jim's question about Neon. I want to understand how you view the landscape to potentially grow wider adoption? And what might be some of the key investments you need to make from either a branding perspective or a download perspective to sort of get more usage around Neon broadly as you look out over the next sort of 6 to 12 months? That would be the first one.

Then in the slide deck or the investor presentation, you talked a little bit about the payments opportunity that sits in front of you. What do you see as some of the strategic investments that have to be made to capitalize on that payment opportunity? And how does it fit more broadly into your strategic imperatives?

Yes, it's Song Lin. So I think I'll just try to make a stab, and then Frode can also comment a bit on growth, right? So again, very good question on Neon. So to us, I think it's about -- yes, it's actually a very interesting consideration. So I guess to us, at the end of the day, we are very unique in a position that because many other AI companies, they either have to rely on purely subscription. They don't really have a choice. And I think we are almost in a bit luxury situation that we are rather profitable on our free product, right, powered by advertisement and a few others.

So for us, I think it's almost a bit of consideration and also balancing act that what features do we want to prioritize on get into Neon, which is a paid product, subscription base? Or do we think that makes more sense to have it in -- to make it generally available to everybody, right? Because that, in the end, of course, will also be able to allow or grow users faster and also help generating a very healthy advertisement revenues, which is, I guess, a bit challenge for some of the newer AI start-ups.

So I would almost say that's almost a bit luxury situation, and that's also essentially why, for instance, at least in Q4, we have prioritized on also making sure that many of the functionalities moved into Opera AI because we can afford it, and it's also making more sense in that context.

While I think our focus is more for those which are really for powerful users. For instance, Neon will allow very powerful orchestration of different AI models, you can choose Grok, you can choose OpenAI, you can choose many other models or even many Open Source ones. And then also will allow rather comprehensive task management to group all the tabs into different -- more like to group multiple tabs into a task, to be able to generate the context. And also, we actually also have very powerful Neon make tools, which are able to make many interesting utilities, mini apps or potentially even presentations. But naturally, those were always tailored to a very, I would say, a niche group of users to start with, among others, right?

So we have a lot of thoughts. We have a lot of ideas. We have many functionalities. Some of them will go into Opera AI, which is more suitable perhaps for wider audience. But then some of it, I would almost say, at this point, we have some very exciting tools for utility or, let's say, efficiency tools, which we are aiming at Neon. And I think those will be very interesting for potential Neon users in the future, and those will be our target subscription base, while there's also many other browser-related utilities and functionalities that will focus more in Opera AI, which will more be freely available to general market.

So it's a very big topic, very exciting times. And I think we only appreciate that we at least have many different choices to make, which is a very nice position to be in.

Then super quickly on payments. So you might also recall that we actually have an investment of some other investments based on fiat currency, which is proven to be a very good success in the past. So I would almost say we have some experience of how to have very interesting payment infrastructure buildups on emerging markets, which we see opportunities.

So I think MiniPay hereby is also a very good case that we believe by focusing on technology, in this case, Web3 and Stablecoin. And because of infrastructure, again, in this case, decentralized approach that noncustodial approach and decentralized that we are able to build up a technical infrastructure while utilizing our, I would say, orchestration both for partners across different countries and also end consumers, which as a consumer company, we are very good at to be able to link all those 3 different parts to have a very compelling value proposition and storage.

So for now, I would say it has -- we have already proven in Africa. But this year, the focus is actually to move it to be a more platform play around the world, and also be able to link in those developed countries to developing countries as well. So I think those will be the area which we work. But again, we're actually working with closely with partners.

For instance, we announced the cooperation with Tether earlier this year, which I think we in particularly called out that, that will also be focus not only in Africa, but also allow us to reach other parts of the world. And hopefully, we also have some other interesting announcements to come shortly, which continue to allow us to do more globally as a platform and technical infrastructure. So very exciting times.

Our next question will come from Naved Khan with B. Riley Securities.

Two questions from me. One on the Opera GX user growth. What regions are you seeing this growth come from? And then also, I recall you launched Japan and Korea sometime early last year. How are those markets performing in terms of contributing to the user growth? So that's question one.

Then secondly, can you just talk about maybe OPay and maybe potential IPO timing, if there is going to be one this year, what are your expectations there or your thoughts there?

Yes. So like again, I think I'll try to talk about a bit on Opera GX, and then Frode can also talk a bit more on some other investments we have.

Yes, so high level, I think Opera GX, so overall, I would almost say that at this stage, what we have already been proven is that gaming users itself are quite high up valuable users across the regions, right? So I think the nature of the fact that they are gaming users, typically on PC actually, and this is very nicely reflected in the different revenue and ARPU profiles as fairly high ARPU users regardless of the regions they are. So yes, consequentially, for us, its priority is actually to making sure that we serve all those users, both in one of the biggest market, for instance, U.S. is still the biggest market, but also in other markets like LatAm and a few other places, which we also see some very good interest.

Then maybe also super quick comment that, yes, indeed, that we have also actually quite interesting developments in, I would say, East Asian market, which we previously have not spending time on. Like, for instance, League of Legends World Championship last year is actually in China, but also is also very influential in Korea and Japan.

So the fact that our close relationships with Riot allow us actually to be able to do more in those markets. So we have actually some very exciting happenings, and also continuations in those markets in 2026 to come.

I can comment on the OPay question. I think we're very excited about the performance of our -- OPay. In terms of an IPO, we see that they have hired very experienced public executives with the new CFO and CEO that the company recently announced.

I think all signs point to the company -- a natural next step for the company being a public company, but nothing yet been confirmed on timing and specific expectations around it.

[Operator Instructions] Our next question will come from Jonnathan Navarrete with TD Cowen.

My questions are really on MiniPay. The first one is, could you walk us through the monetization path for MiniPay? And lastly, are there any read-throughs in terms of Stripe's potential acquisition of PayPal as it relates to MiniPay? Or are they just really two different platform assets?

I can comment on the monetization first. So our priority with MiniPay is to build a scale and build a user base and create a product that has such low barriers to entry that stablecoins become sort of a viable accessible tool for people with the starting focus on emerging markets.

Then as we've talked about, we're expanding sort of the functionality of it to include more payment opportunities, both domestically and internationally. And the way we monetize it for now is, broadly speaking, from the partner ecosystem, integrating partners into the product and promoting that, and sort of growing together with partners.

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

Congrats on the strong finish to the year. Just one quick one for me. Could you just remind us non-search query revenue was up almost 200%, small dollars, but what is that exactly? And how can you leverage that going forward?

Yes, sure. I'll do that. It's starting to -- it's a very new revenue stream. So -- but it's becoming material. It exceeded $5 million in the quarter, up from $3 million in Q3 and growing very quickly.

What it consists of is essentially when a user has an intent and we can address that intent by sending a search query to a search partner, but we can also provide direct references to partners, either as a part of the URL experience or in an AI test with Opera AI, for example, and promote partners directly that way, tailored to what the user is looking for.

The reason we're excited about the revenue stream is that, sort of, as these types of potential dialogues expand so quickly, people use it more, we see a big step-up in our users taking advantage of Opera AI in the browsers. Being a native part of the browser and existing one level above websites has many advantages, including monetization potential, which we will then capture in, in query revenue.

At this time, there are no further questions in the queue. So I'd like to turn the call back over to Song, for any additional or closing remarks.

Sure. So yes, like again, thank you to everyone for joining us today. 2025 was an amazing year. We were able to ship new browsers and bring exciting features to our existing suite of browsers, and at the same time, deliver impressive financial results that exceeded our rising expectations throughout the year. So while we, of course, still have a lot of work ahead of us, I'm confident we can make 2026 even more successful.

Have a good day, everyone.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Good day, everyone, and welcome to the Opera Limited Third Quarter 2025 Earnings Call. [Operator Instructions] Please be advised that today's call is being recorded. [Operator Instructions]

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

Thank you for joining us. This morning, I am joined by our 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 statement.

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 a year-over-year comparison unless otherwise stated.

With that, let me turn the call over to our CEO, Song Lin, who will cover our third quarter operational highlights and strategy, and then Frode Jacobsen, who will discuss our financials and expectations for the remainder of the year. Song?

Sure. Thank you, Matt, and everyone else for joining us today. These are certainly exciting times for Opera and for our industry. And while it's only been 2 months since our last release, it already feels like ages ago. The product opportunities around AI that we have been advocating and preparing for over the past years are coming to fruition, and I could not be more pleased about our strategic position in this rapidly evolving landscape. And while this is playing out, we combine our strategic positioning for the future with a healthy business that continues to scale faster than we have expected.

I will start with some of the big industry things that have happened since we last spoke. First, the remedies phase between the U.S. DOJ and Google came to a conclusion in which it became clear that Google can continue to compete for U.S. traffic in the same way as other players in the broader and rapidly evolving content discovery landscape. While anything else would have been quite surprising, it was good to get clarity on that.

Second, the broader recognition of the web browser strategic importance continues to increase, even if the opportunities for Opera might not be fully appreciated yet. Household AI names are investing heavily to expand their reach and knowledge about the fuller context of end users with the browser being the focal point of attention. Opera's advantage in this situation is our agnostic approach to the underlying large language models that powers our browsers. We believe in an increasingly broad landscape of AI services that assist users across a multitude of areas from information gathering to making purchasing decisions to producing content and performing tasks.

We believe that these services all come together in the browsing experience, in particular, on computers where most of us are spending an increasing amount of time as more products and tools are becoming web-based. And crucially, we don't believe people will install one browser for each use case or each AI services. The browser needs to work across all platforms and its approach to assist the user has to be powered by the right tool for each job. That is where Opera Neon comes in as an early stage window into how we see the future of browsers.

Office browsers are not AI professional windows nor are the tools to lock users into a specific large language model. Rather, we offer the most sophisticated alternatives targeted to a growing segment of users that care about the functionality of their browser. This includes how we integrate services, manage tabs and workspaces, optimize memory and battery utilization, not to mention the design and visual customizations. We differ from others in that our specialization is the browser itself, and we use that skill set to create the best possible AI experiences.

We know that people are different and the one-size-fit-all system does not work for everyone. Our flagship browser, Opera One is carefully tailored for people who want to have the richest possible browsing experience, while Opera GX and Opera AL both rethink what browsers should be for their core audiences.

All the Opera browsers ship with a free and advanced LLM agnostic AI solution. Opera One was the first of our free browsers to receive the new chat functionality. Opera Neon complements this with being tailored for the most advanced and demanding users out there, those who want to participate in shaping the future of web browsing and believe AI agents will be a core part of their experience when doing so.

Those of you who have experienced the early release of the Opera Neon browser have seen how we believe AI can integrate into the existing workflow in a way that people are already used to working as opposed to existing within a terminal like process remotely operated in a server form. As we evaluate our strategic position, we take pride in the exceptional quality of our products and the rapid expansion of partnership opportunities. Such partnerships, along with the efforts of multiple niche players in term of promoting browser choice, significantly increased public awareness that alternatives exist.

In an environment where more users are actively considering switching browsers, we are well positioned and eager to compete for the most discerning and demanding users, offering them innovation, reliability and a truly differentiated browsing experience. And while running at full speed to seize these opportunities, we are proud to have a already healthy financial profile of growth, profitability and ability to turn capital to our shareholders.

The third quarter experienced year-over-year revenue growth of 23%, as always, all organic and compared to guidance of 18% to 21% growth. Our $152 million of revenue in the third quarter was a new record. And for the first time, our annualized ARPU crossed $2 per user, growing 28% year-over-year to an annualized level of $2.13. Our revenue outperformance leads to adjusted EBITDA of $36.3 million, also above the high end of our previously issued guidance and also setting a new quarterly record. This translates to an adjusted EBITDA margin of 24%, expanding versus the first half of the year as expected and marking our 18th straight quarter as a Rule of 40 company.

As Frode will detail shortly, the Q3 results and trajectory with which we enter Q4 allow us to raise our revenue guidance well beyond the Q3 overperformance. Our updated midpoint estimate now exceeds $600 million and represents 25% growth for the year as a whole. Taking a step back, our 2025 guidance has reached nearly 4x the revenue we had in 2018, the year we went public, and our CAGR over these 7 years is 21%, another feat to be proud of. Our company was recognized by Fortune Magazine this month, which named Opera in its 2025 list of the 100 fastest-growing companies based on growth in revenue, profits and scope returns.

I wanted to spend the next few minutes on the launch of Opera Neon and what it tells you about how we see the future of AI-powered browsing. Currently, Neon is a premium subscription-based browser that showcases our ambition to transform web browsing. Opera Neon implements native AI assistant functionality that can step in at any point in time as we browse. As you are logged into your services in the browser, Neon acts locally on your behalf and supports you with everything from deep research to new task such as filling out forms, comparing products across sites and acting as your personal assistant with the efficiency befitting a browser veteran.

The key innovation is architectural. Instead of adding chatbots to existing browsers like some of our competitors, Opera built a task-based system where AI agents operate directly in your authenticated browser session. This overcomes the limitation of cloud-based AI tools and stand-alone apps. They cannot access your logged-in account or interact with real website. Neon can because it runs locally in your browser where you have already been authenticated.

Benefiting from our task architecture, Neon is also able to define the right context for a given task without the need to access or upload the entire set of OpenTabs or your browsing history to a platform in the cloud. This is putting privacy first and represents another competitive benefit of Opera's architecture.

We are also tackling the complexity that hinders broader AI adoption. With so many AI services and models, users struggle to choose the right tools. As a independent player, we are introducing a new interface where Opera Neon guides users to the right group of agents for any task. And while we are on the topic of agents, one of our own agent, Opera Deep Research is already scoring better than the deep research capabilities of those AI-first platforms as we showed in our press release last week. It shows the benefit of combining the strengths of different large language models as we do not invest in the already crowded LLM landscape.

Opera Neon is a product tailored for the most advanced and AI-forward users, but our mission is to expand these innovations in our mainstream products such as Opera One and Opera GX. As we evolve our monetization of AI opportunities and our industry partnerships, we will be able to facilitate an increasingly advanced experience for our total user base, that's the future that we are really excited about, and you'll see us acting rapidly on those fronts as well.

While I wanted to mostly focus today on how we see the AI opportunity, there are also other highlights worth mentioning. Last time we updated you on how far along we've come with MiniPay. Since we last spoke 2 months ago, MiniPay has grown the number of noncustodial wallets to over 10.5 million, up from 9 million during our last report, while the number of transactions has increased to almost 310 million from 250 million as of this morning.

We are building MiniPay with multiple use cases in mind. Building upon the power of stablecoins, it can allow immigrants working abroad to quickly and cheaply send money home. It allows the traveler who does not have access to local payment rails pay like local and can even facilitate payments to global freelancers in USD. We are a deep believer in how new technology can be used to facilitate transformation and have an exciting pipeline of partnerships and product features that we plan to launch in this space.

Finally, I'm going to briefly touch on Opera GX, the browser for gamers. We ended the quarter with 33 million users, up 3% year-over-year and with a new ARPU record of $3.69 on an annualized basis. Opera GX has recently expanded its offering with exclusive in-browser gaming deals and introduced advanced features like smart home integration designed for tech enthusiasts seeking seamlessly device control. The browser also continues to enhance its AI capabilities by deploying faster, more powerful models, further improving performance and user experience for the gaming community.

Lastly, GX modes allow users to personalize their browser even further, including animated courses for a highly customized and immersive experience. We are also excited about our continued sponsorship of the League of Legends World Championships currently underway.

To conclude, I'm incredibly excited about our ability to innovate and take our browser offering to the next level. And at the same time, while it always feels like the future can't come fast enough, we also take pride in running a healthy business with solid revenue growth and profitability that directly benefits our shareholders through our recurring dividend program. Opera shows that it's possible to combine growth and strategic potential with healthy financials and meaningful return of capital to shareholders along the way.

With that, I will now turn the call over to Frode to go into the financials in more detail.

Thank you, Song. We are very pleased to report that the momentum in our business continues to outperform even our most recent expectations. Our third quarter hit a new milestone by exceeding $150 million of quarterly revenue coming in at $151.9 million, and we also reached our highest ever adjusted EBITDA at $36.3 million. Both came in above the high end of our guidance ranges and both come as a result of scaling new revenue partnerships, while also expanding browser classic revenue such as search.

This quarter, we introduced a slight change in our revenue categories by reporting on total query-based revenue, which largely consists of the old revenue category search, but also includes revenue generated by other user prompts where we see increasing opportunities to monetize as we scale our business. For example, if the user has a dialogue with our AI assistant Aria and follows a paid recommended link or starts typing a search query in the URL bar and elects to follow an offer recommended partner listing from the drop-down menu.

As a result, the new query revenue category includes the total of our potential ways to monetize a user's intent for online discovery. Advertising revenue in comparison is more lean back on the part of the user where we serve ads and promote partners that we think the user will be interested in, but without the user explicitly querying it.

Our quarterly revenue, query revenue was $55.6 million, which represented a year-over-year increase of 17%. The old search category was the predominant component at $52.4 million, which represented 13% year-over-year growth and accelerated further versus the prior quarters, as well as the other query monetization that amounted to $3.2 million and tripled versus the year ago period, which has now been carved out of the advertising revenue category.

Advertising revenue, net of the query monetization, as previously described, grew 27% year-over-year to $95.9 million. By the former definition, advertising revenue would have grown 29% year-over-year to $99.1 million. Once again, e-commerce was the primary driver of our advertising revenue growth, now representing about half of our advertising revenue and setting us up well for new records in the holiday season.

Q3 costs came in according to our previous directional commentary. Cost of revenue items combined reduced slightly as a percentage of revenue versus the first half of the year and amounted to 34.6% of revenue, which was within the indicated 34% to 35% range. With the strong underlying performance, we allowed marketing to expand from $34 million in Q2 to $36 million in Q3, with a continued focus on the highest ARPU potential users, though remaining in the mid-$30 million range as indicated.

Similarly, we recorded cash compensation cost at the higher end of the indication, predominantly as a result of increased provisions for annual bonuses in light of our trajectory, but also reflecting the weakening of the U.S. dollar versus our main salary currencies. Taken together with the sum of all other OpEx items pre-adjusted EBITDA showing a slight sequential decline and the revenue overperformance, we were still able to exceed our range for adjusted EBITDA.

Our operating cash flow was $28 million in the quarter, representing 78% of adjusted EBITDA. Free cash flow from operations came in at $21 million or 59% of adjusted EBITDA. As always, we expect continued fluctuations in cash conversion on a quarterly basis due to impacts of seasonality and operational variations. Overall, we maintain a solid financial position with cash at $119 million, no financial debt and underlying cash generation well in excess of our dividend payments. Adjusted diluted EPS was $0.30 in the quarter, representing a relatively stable margin at increased scale.

Now turning to guidance. For 2025 as a whole, our trajectory and the resilience that it has shown allows us to significantly raise our expectations for the year, continuing the trend from prior quarters. We now guide revenue of $600 million to $603 million or 25% growth over 2024. This updated range starts above the prior high end of guidance as we add an additional 2 percentage points of expected full year growth. Our guidance implied a further acceleration of annual revenue growth from 20% in 2023, 21% in 2024 and now 25% at the midpoint for 2025.

Similar to before, given the hockey stick growth of the second half of 2024 and Q4 in particular, we have based our guidance on sequential modeling. The raised estimates capture the Q3 overperformance and adds a further incremental expectation to our Q4 guidance, resulting in a continued increase in our sequential growth rate.

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 the growth profile. In terms of adjusted EBITDA, we lift the range to become $138 million to $141 million for the year as a whole or a margin of 23% at the midpoint. This reflects a continued expectation that the percentage margin in the second half of the year will stay about 1.5 percentage points above the margin in the first half, even as the weakened U.S. dollar relative to other currencies continues to represent a headwind.

Apart from such fluctuations, we see cost of revenue items stabilizing as a percentage of revenue and economies of scale continue to benefit us as an underlying trend. Cost-wise, we then implicitly guide to a full year OpEx base pre-adjusted EBITDA of $461 million at the midpoint. For the year, we expect the cost of revenue items combined to come in at about 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 high single digits from 2024 to 2025, compensation costs, which will increase just over 10% and the sum of all other OpEx items pre-adjusted EBITDA will likely remain quite stable at the 2024 level.

In line with this, we guide Q4 revenue of $162 million to $165 million, representing 11% to 13% growth or a 2-year CAGR of 20% at the midpoint and Q4 adjusted EBITDA of $37.5 million to $40.5 million or a 24% margin at the midpoint. Within the implied quarterly OpEx base of $125 million at the midpoint, we expect that cost of revenue items as percentage of revenue will be similar to the third quarter at about 35%.

We expect marketing costs to increase by $2 million to $3 million relative to the third quarter, and we expect cash compensation costs to remain quite stable. The sum of all other OpEx items pre-adjusted EBITDA are expected to tick up such that the second half of the year as a whole becomes comparable to the first half as a whole.

All in all, we find ourselves in a great position as we enter the seasonally strongest fourth quarter, and we are excited both about our commercial opportunities, as well as the broader strategic picture.

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

[Operator Instructions] We'll take our first question from Naved Khan with B. Riley Securities.

Great. A couple of questions from me. Maybe just on -- starting with Neon, been around a month since you took it out of the closed beta and opened it. Just curious about the traction you might have seen with it in terms of people who have signed on and how is the wait list for the product and how quickly you're moving through it? And also, maybe just talk also about the go-to-market strategy for Neon, both in terms of paid media and unpaid media and how do you plan to sort of drive the awareness for the product? The other question I had is around e-commerce. Curious about how do you see the growth in this line of business kind of sort of evolve going forward, not just necessarily in Q4, but actually more in 2026. How should we think about that?

Yes. So, yes, it's Song here. I think I'll just first answer the Neon question and then Frode can also comment a bit on the e-commerce one. So yes, so, Naved, as also mentioned a bit on the script, very excited about the launch. Yes, more like at this point, of course, it's still invitation based because I think our philosophy that in the beginning, it is very important to have a group of founders that we want them to be closely working with us on potential features and also the direction of the products what they need among others. So, we are very excited to form this very close group that we can work with for the next months to come. And I think there will be also a key base for the future Neon programs. So, I think that's also why our intention that we make this premium invitation-based product at this point.

But you're also right that I think within the next 1 or 2 months, we will also open up to the broader public and also receive even more interesting advises and also product developments. So I think that's, in general, how we see Neon. And then maybe also super quickly that I saw you also asking questions about go-to-market and then a few others.

So, I guess for us, it's a bit slightly different, I guess, from some of the competitions that, of course, we are -- I think more like anything in the browser field offer is a household brand name. We have a relatively big already audience, and then we have a very mature way of marketing. So, I think for us, probably we think slightly less about a particular way of go-to-marketing, but instead of thinking of how we can engage all our existing user base and then how we can find out some of the audience, which will fit them more with Neon and how we can also position Neon together with other free offerings.

So, I think that's for now how we think about it. But overall, I think Neon has been extremely well received. We saw many media coverage. We saw more than 1,000 articles and it keeps coming. And even on the surprise that even though we are still on the invitation, we saw a very good coverage. I think just today, I also saw some other medias publishing very favorable announcement of when they try Neon. The operator is by far the most efficient and the type architecture they also appreciate.

So overall, quite excited about the launch, but I think this is still very early stage. We will excited even more how can we take it further.

And now I can chime in on the e-commerce part of the question. I think we, of course, find ourselves in a very good, nice situation where the e-commerce revenue streams have scaled extremely rapidly now over the past 18 months, still approximately doubling at a year-over-year basis this far into growth spur.

The nice thing I would say is that I believe we are still under-indexing in terms of e-commerce as part of the advertising -- online advertising markets overall and perhaps for the browser in particular, which is so well suited to promote e-commerce partners.

We'll take our next question from Ron Josey with Citi.

Maybe a quick follow-up to Naved as it relates to Neon browser and adoption trends. I think Song, you mentioned on the call, it's tailored for the most advanced users. Just in this first wave, just talk to us a little bit more about the behaviors that you've seen from these users. Anything stood out, what you've learned here as you go to general market or call it, open it up to beyond just the invite list. And then on commerce specifically and not as much on the e-commerce side, but just I wanted to get your thoughts on Agentic commerce just as checkout mechanisms change as MiniPay becomes a bigger part of the business. But help us understand how you're thinking about Agentic commerce going forward.

Yes, it's actually -- it's something else I think I'll cover a bit. It's also some of very interesting discussions in the market there. So, first of all, just talk about Neon. I think for now, actually, it's really well to get all those user feedbacks. So I think as also mentioned about earlier that I think for now, our strategy is really -- we are not really super eager to get so many users because we do have massive amount of users using us anyway, but more important to us to form a close community and hear their feedback on Neon and in particular, Agentic browsing.

So yes, we have received a very good feedback. For instance, one thing I would say stood out is that it's also in relation to what we also call out later about Agentic e-commerce, right, that I think for now, everybody feels that it is definitely the future that imagine the future that you don't really have to spend too much time on browsing, but simply ask agent to browse for you to buy books on Amazon to buy shoes among others. So, it is definitely working as of now. That's actually one of the major use cases that we saw happening on Neon that people actually use it to buy a lot of interesting content e-commerce wise.

And for us, I would say what I think we stand out and what we also be proud of is the efficiency because there are some other Agentic solutions out there, you can try yourself, right, which is rather slow and sluggish. And -- but even more important on the back end is that I think many of them using -- have to rely on visual models, which are very costly that they almost cost 10x more tokens or whatever and also being slower, right?

So I think what we have been extremely happy about and also what our focus is, is that how can we use capability of a browser because at the end of the day, browser have access to all the layout doom trips in a technical sense and how we can even use text to be extremely efficient to analyze all those elements and to move forward. So, I think that's so far what we have been probably received the most praised that we are able to execute those task very efficient, faster than others. And also people may not realize also that because of the past architecture, we are able to do this like we are able to execute multiple tasks as well, right, which is a better architecture than many others.

So, this is what I'm really feeling proud of and user are appreciative, even though sometimes maybe some users feel that sometimes we can, of course, by design, be slightly more aggressive, partly just because we want those advanced users to influence what the agent can be doing, right? But this is actually in connection with your other question that -- I think our view is just that for now, agentic is definitely the future, everybody see it, but it's still not as efficient as a real human being, right, because it takes too long to do any transactions. However, we believe that within a shorter time frame, maybe a few months' time, hopefully less than 1 year that the ways the work like us and others, there is possibility to make sure that in certain task that agent will perform better in the browser other than the human be more efficient, and that will be the point where we will see more and more of those, I would say, agentic e-commerce coming along.

And like I think also touched base on the cost part of it that -- at least for the architecture that we are using, it's actually very cost efficient without need to quote the exact numbers. I think -- for now, what we see that the cost of the agentic browsing due to e-commerce is actually very reasonable compared to the amount of the money that people will spend. And even if you compare to the commissions compared to whatever we can earn as an advertiser, it still leaves a big margin for us to be able to use agentic e-commerce to help move this forward.

So, this is actually something which we also spend a lot of time on and it's very important for us. And I think in some cases, we may be 10x more efficient than our competitions, which we are quite proud. And I think this is also a major base of potential agentic e-commerce in the future.

That being said, there are some other considerations that we're also closely following up. I think reason just because we are not only an agentic browser company, we are also advertisement company, as you see, that will grow very nicely of e-commerce. So, there are certain concerns, I would say, from e-commerce players that maybe some of them do not want to just be a pipe, right, that they do want to also have a better exposure of the goods and e-commerce, even in the agentic browsing scenario. So I think that's also something maybe we are a bit differentiating from others that we also take this into consideration that we also make sure that our partners do not end up as a pipe, but rather that they also end up as an interesting destination that not only agent but the audience can also have a chance to see and browse through all the different groups and perhaps have more selections.

So, yes, so I think this can be too long discussions along the way, but it's definitely very interesting to see how this evolves.

We'll hear next from Eric Sheridan with Goldman Sachs.

Maybe if I could squeeze in two, we continue to hear a fair bit around the overall macro environment and how it might be impacting digital advertising. Would love to get your sense across your array of advertisers, how you would characterize the current demand environment and how you're thinking about that environment sort of evolving in the forward forecast. That would be one. And then two, coming back to MiniPay, can you talk a little bit about how you see that building in terms of scale as we look out to 2026 and beyond? And how you think that will tie into the broader services layer of your offering in terms of driving overall ecosystem strength?

Sure. So yes, it's something else. So, I think I will also try to answer that, and then Frode will also chime in for many insights on the advertisement and as well, right? So okay. So, I would almost say that I think in a broader advertisement scape, there are different changes and shapes and forms, right? But I would almost say that at least in the angle where we see e-commerce, especially performance-based e-commerce, the fact that it is actually tightly related to whatever -- more like the actual purchasing.

For now, we definitely see from our end that it's still on a growing path. Simple fact has been that -- at least from what we can see users are more and more buying with partners like us, and they get very good recommendations since it's also performance-based. There's less concern, I guess, from advertisers of is there enough brand richness or whatever. So I guess that's why for us, at least we are growing more than 100% year-over-year, and we see that trend definitely not slowing down, but rather continuous and very excited about it. That also fit into well with the agentic browsing scenario just because, again, it's performance-based, right? At the moment, it doesn't matter if you are a people or if you are an agent to bought something, I guess, some people are equally happy. So I think that is definitely positive.

But more like -- on the other end, though, I do see that this is more like just a general feeling, right, that there are, of course, also discussions around, okay, now if the agents are doing a lot of stuff, well, let's say, traditional display advertisement or well brand or whatever still make sense and how is the best way to nail that because potentially, it's not real people, but actually agents who are doing that. I think that also posed some of the threat to some of the e-commerce players as we commented earlier that for them, of course, it's very scary if they end up at the end of the pipe, right, if they end up as only as a good delivery storage house or whatever, while all the others are taken by the other AI players if someone just directly use AI to direct a purchase or whatever, right?

So, we see those things. So -- but that being said, I would say that actually put browser into a very good position because unlike at least some particular AI chat clients, we – our browser at least make sure that all the web pages and all the goods are showed up in front of people and even in front of agents for that sake so that there are enough exposures of those things, which can be immersive as well.

So, I would almost say that at least we saw potentially at least benefit impact of for the browser players, while I would imagine that for some of the pure chat-based e-commerce solutions that might actually cause a issue for some of the ad players. So that's how we see it. But again, we can have longer discussions along the way.

And then super quick for MiniPay. Yes, like I think, indeed, our feeling in that, of course, stablecoin is definitely going, it's definitely staying and it's growing strong. And also, it actually helps facilitate large part of payments even fit into agentic scenarios it's just because it's very naturally fit into agentic scenarios where all -- like everything can be combined. So we do have that as part of consideration.

For us, I think maybe the only comment would just say that I think we will hopefully land some bigger partnership discussions and bigger cooperation with industrial players in stablecoin field in certain areas and markets to drive both adoption, but also hopefully to have even wider use cases like we commented about the local payments -- better integration with local payments, but also potentially integration with e-commerce and a few others.

So, yes, so that is definitely coming. And we will -- yes, hopefully, there will be quite a lot of announcement in the next few weeks and months to come.

We'll hear next from Mark Argento with Lake Street.

Just a couple of quick ones. Just turning back to advertising and the e-commerce opportunity. Could you just -- it's not still 100% clear to me what's kind of the gating factors are there in terms of the growth. Obviously, it looks like the business is growing extremely rapidly. But is it working with more e-commerce partners? Like what -- I guess, what are the mechanics there to better or to see additional growth or ultimately better understand that long-term opportunity?

Yes. Frode here, I can start. I think we try to focus on the leading players by region and develop deep partnerships with them, and that allows us to really do a good job on targeting. All our revenue is performance-based. So there, we certainly share the interest on doing well. And then I think just to tie it a little bit to Eric's question before, of course, the year started out quite volatile in the macro-wise picture and also around the e-commerce. And then I think that we reflected by being quite cautious in our guidance as we progressed. And then I think the nice thing that we are reporting on today as well is that we are seeing the resilience in what we are building. We are sort of seeing a stabilization around this, and we're able to grow well in our key regions, Western markets driving our growth.

That's helpful. So, when you say working with partners, are those in particular, e-commerce, the bigger e-commerce players? Or is it brand specifically or both?

It's the big players by region, so within the U.S., within Europe and Asia.

When you say players, I'm assuming you're talking about e-commerce vendors, the Amazons of the world or the Walmarts or those types of guys?

Exactly.

Got it. That's helpful. And then in terms of more just kind of a couple of housekeeping things. Any update on OPay? I was digging around OPay, it's been a little while, I hadn't realized that the company hasn't really done any capital raising or really not a whole lot of activity, at least in the capital markets, the private capital markets since 2021. Still plans there in terms of an IPO? Is 2026 going to be the year? Any thoughts on that?

Yes. I think updates on OPay, the company is doing really well. It's scaling rapidly. And as you say, it's been multiple years since their last real financing round, and they are essentially then operating also a profitable business. So I think that's a very good basis. We're very pleased with the company's performance. But for details, I think I'll have to leave it to them to control what they share about their business and when. Our strategy as a founding investor and no longer being operationally involved is that over time, we will monetize our stake in OPay, and it's very natural for us to consider that in the context of the company becoming public.

In terms of timeline for that, again, it's not our decision, but we always think that or we think that the company is doing well, and it's definitely moving in the right direction.

Yes. Maybe also I'll just comment -- maybe I'll just comment a bit that at least based on public information, right, you probably see that OPay is doing extremely well in Nigeria. It's by far the dominant players. By public information, you can also see that it is the -- very exciting to see that it is now the second most used DAUs. This is very unusual for a fintech app. So of course, very proud that we are able to incubate and support the company in early stage. But like, yes, as Frode is saying, the company is doing extremely well. It's very dominating in the area. So of course, as a shareholder, very happy to see if it's -- and will be supportive, if it's plans to also go on into further capital market-related activities, very excited.

Hopefully, hear more on OPay here soon.

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

And I appreciate you breaking out the sort of other query revenue. Can you just talk about contractually how this revenue works and maybe just explain a little bit more about it at a high level?

It shares the characteristics of search and that it's a revenue share models where we drive traffic to partners, whether it's a search engine or another partner and collect revenue share based on what the partner is then generating off that traffic. So, I think the reason we wanted to group this and create the one category is it's a much better view of our revenue mix in terms of what we monetize as a direct result of the user looking for something as opposed to the more classic lean back, as I said, advertising monetization.

That's helpful. I mean it seems the growth has been pretty impressive. I guess where -- like how early would you say you are in kind of monetizing that opportunity?

I think a lot of our strategy evolves around creating opportunities for user to essentially have a dialogue with the browser, whether it's the agent or integrating with Aria, as well as broader opportunities. So, we certainly think that both our key revenue streams, query and advertising have a great potential in terms of ability to scale as we keep executing on this.

We'll hear next from Lance Vitanza with TD Cowen.

I have 3, if I can get them in. The first is back on Neon. And specifically, how should we think about competitive positioning there? I mean ChatGPT has Atlas, Perplexity has Comet. How does Neon stack up? And how do you expect the market to evolve in terms of how many AI browsers can the market ultimately support in your opinion?

Yes. Okay. So, I will take this one. So yes, so like again, very interesting discussion. So okay. So I think our belief is like this, right, that I think we also commented a bit on the script that I think our strength fundamentally is that we are not a manage model company. We are not really -- we don't really see us -- I don't think actually all the see us also as competition. I think for us, the biggest strength will be that we are horizontal instead of vertical, right? So to us, it's about how we can work with all of those guys, both on the free browsers, but also Neon to provide the end user the best experience.

For instance, yes, so like use different models to -- for different scenarios. So I think that is always our best approach. And we believe that there will be so many cases that users simply would not want to be locked into one single large language model when they are doing browsing. So I think that's definitely our competitive advantage on this that we are rather neutral. In the same way that even in days when we are integrating the search, right, we are not really buying into one player. And I think agentic are even much, much more actually afraid of locked in, I would say. So I think we are in a pretty good spot on that.

And then -- but then in particular, right, I think there's also many different -- for instance -- for us, it's -- we talk about -- for me, for instance, if we talk about agentic browsing part, we focus about one efficiency because we feel that it's very important that the user can get results fast. It's very important that agent can achieve whatever needed to be done more efficient than human being, right, and cost with affordable cost and the ability that we are able to utilize different large language model in different cases to facilitate that is a big help.

And then I guess the other thing, maybe I'll quickly comment is also again about privacy, right? That fact that we have a past architecture and the fact that we are not locked into any single large language model helps because there will be users which don't want to everything on their browsing to be logged by a particular large language model because this is very -- like it's very different when you chat something on it and everything go browsing with on it. And so that's why we actually designed in a very careful way that it's only a particular task particular context. We will use the context to give you best advice. And even that, we don't really upload all of those to a particular large language model or to your personal account, right?

So I think there are plenty of use cases, we believe that we are better solution in those scenarios. And those are a few simple examples, right? And then just also to say that not only Neon, but also what we have on Opera One and Opera GX, the free watching are actually will be comparable to also those guys, maybe accepting agentic browsers, everything else, I think we will be comparable, even more efficient. And so all of those are actually important value propositions, I think, for Opera as a whole to facilitate the AI browsing.

Super helpful. So, then the next one is on MiniPay. Obviously, tremendous growth there in the past couple of months. Remind me, is there a plan to monetize that activity? Or is this just about capturing engagement and driving sort of user growth in the browser?

Yes. So just to say that MiniPay, of course, are already revenue generating. It is actually due to some of our partnerships. It is actually have sizable revenue being generated. I think the only thing just to add at this stage, we probably would like to invest all the revenue back into marketing, both for promoting itself, but also for work with our partners, which we really think is -- some of them are very industrial important to further facilitate penetration, I would say, of stablecoin and Wave 3 technology into many regions that we would like to penetrate. So like when we talk about, okay, we had that experience in the past, which is super successful. And we think maybe there's something we can replicate or even bigger opportunities.

So yes, so I think that's how we see it.

And then last one for me on GX. The user base has kind of plateaued there at 33 million. Is that a pause? Or has the product kind of matured? And we think out a year from now, should we think that the GX user base could it be notably higher at the end of next year? Or is this just 33 million is kind of where we stay? And then in that case, can we expect revenue will continue to grow in the face of a potentially flat user base?

Yes. So okay, I think I'll also to this one and then Frode can also follow up, right? So okay. So, first of all, I think for us, of course, as a company, we focus a bit more on revenues and a bit more potential because I think fact has been add as a browser company, you have such a big user base compared to many others that sometimes we have been more disciplined, we focus a bit more on the regions and the areas where we can earn more money. So that's one. And then also just to say that, of course, we're actually also seeing very nice growth on Opera One because of AI. So that I guess some of the users, they might actually choose Opera One instead just because AI is so successful. And of course, to us, it doesn't really make a huge -- we just want users to choose whatever they fit into, whether they choose Opera One or GX, we have no strong fit in, right? And also some choose even Opera or Neon.

So like GX is actually, I would say, one of the audience which are very AI saturated. So it's natural that some of them might also go to Neon, which I think we're all extremely happy about, we have no issue on that, right? So -- so that being said, I think there's definitely still growth potential for GX. There's many interesting regions that we are wanting to go into. There are many activities that we are also planning around Neon and product launches. Also with the AI upgrade, I think it will bring GX to be also as sophisticated and maybe as Neon and others will be. So there's many things -- many interesting aspects ahead that we are very excited. So I think we still remain very positive about the GX.

Oh and congrats on the becoming CEO. I mean, a long overdue, but it's great to see that recognition.

And with no further questions in queue at this time, I'd like to turn the floor back over to Song Lin for any additional or closing comments.

Yes. So okay. So like guys, thank you, everyone, for joining us today. I think as you guys see that we're very excited. We have been looking forward to sharing those updates with you on the product launches we have been seeing, but it's also good to share all those financials. And as mentioned, we will keep you posted with both even more product updates and also hopefully, even better financial releases as we continue our journey. Have a good day to you all.

Ladies and gentlemen, that will conclude today's event. Thank you for your participation. You may disconnect at this time, and have a wonderful rest of your day.

All right. I think in the interest of time, we're going to get started with our next one. It's my pleasure to have the team from Opera here today at the conference, Frode Jacobsen, CFO. Frode, thank you so much for being part of the conference.

Thanks for having us.

So for those who are less familiar with Opera, why don't you start with taking a step back and giving a little bit of an overview of the platform that's being built, the evolution you guys have been on from the product side and sort of the vision going forward.

Sure. I mean Opera has been around for 30 years. We still act like we are a start-up, and it still feels like we are a start-up. But it's a Norwegian company from the 1990s, started out as a Netscape competitor or Netscape became our, I don't know. And we make web browsers for computers, for phones, an independent player in that space. We built up a user base of close to 300 million monthly users, both in emerging markets, but also where we grow the most is in the Western markets.

So we have browsers that are tailored for -- they are made to be different than what comes with a computer or what comes with a phone, more feature-rich, tailored to specific segments. Like we have a browser for gamers and yes. And then company-wise, close to $600 million revenue, 23% midpoint guidance for growth this year. I think EBITDA margin, the same percentage. And we've had a nice track record of good growth for many years. So I mean it's in a very exciting space.

Yes. All true. Yes, agree. I want to break that down a little bit, though. If you think about the user base you have, is there a way to break down by either product or geography or demographic? How do you think about who your user base is across the array of products you try to bring to market?

I mean if we begin with geographies, we have about 20% of the user base in what we call western markets. So from North America, the European, the developed, those countries, that's up from 6%, 7% of the base when we started really focusing on building that and much higher monetization. So that's been fueling our revenue growth and ARPU growth that is like 3x over the past 4 years.

In terms of types of users, probably the typical Opera -- user of Opera One, for example, the flagship product, is probably a bit more tech savvy than the average person. They care more. They know that they can install a browser that's not the one that came with the device, and they appreciate the richer feature set, so -- because we don't have to make a product that works for both grandparents and grandchildren, and we can make something that's appreciated a lot by some. Then we have a gamer browser, the only one in the world, I think, that exists. That is...

My son's an avid user. My gaming 18-year-old son is an avid user, yes.

Yes, very good. And that's the perfect target audience set. We have over 30 million users. It's the highest -- it's a very highly rated product, the highest ARPU product we have. It's obviously a very lucrative segment of people that are happy to make online purchases, and that drives revenue to us.

Yes, understood. How could that mix evolve over time? When you think about the landscape evolving or your product set evolving, what might that mix look like in 3 to 5 years' time?

We're still investing in the trends of -- we focus on high-value potential users more than the absolute user number. So if you, for example, take the regional split, I think we still spend 80%, 90% of our marketing dollars on that type of user growth, and it still represents less than that in terms of our revenue mix. So we are still cultivating the continuation of that trend, which I think, especially now with sort of the inflow of AI opportunities, including in the browser itself with sort of more computing on the back end, et cetera, but also much more opportunities on revenue generation, is a very good place to be. So that's what we'll keep doing.

Okay. Over the last sort of 6 to 12 months, there's been 2 sort of interesting developments. The first one I want to talk about is the EU competitive landscape. So obviously, there were changes made with the Digital Markets Act. I wanted to understand better how that impacted your business, what kind of market opportunity it opened up. And what have you seen in the European Union since some of those regulatory actions?

Yes. Both in the EU and in the U.S., I think we've seen government bodies focus on promoting competition. And as an independent player among giants, like we tend to be very happy with that and appreciate those types of things to level the playing field. But we're also not kind of -- we're not naive in the sense that it's -- we are still a challenger and we still have to win our users, and we still have to innovate faster than sort of the big system OS players to get users download us.

But in the EU one outcome was that also on iPhones, people were given a choice of which browser they want to use. So every time you buy a new iPhone in the EU, you're asked that. That already exists on Android. And we saw from a low starting point, we've been focusing on Android as the platform that we had the greatest chance to compete, but still kind of more or less overnight, we saw a doubling in the inflow of new iOS users to Opera in the EU. So it's a step in a positive direction for us.

Right. Do you think that will be an area where you continue to invest time and effort over time that if you see these regulatory sort of pro-competition rulings come that you'll sort of lean in from the investment side?

From -- I think it's -- there isn't -- we still have to work for it, [ Kyle ]. So we don't get anything for free. But in the case of Apple, for example, for the longest time, iOS was locked. You had to use Safari as your default browser. That has opened up. People are informed about the alternatives.

And the next one will be that we can use our own rendering technology that gets very technical. That is possible on Android, and that is why we focused on Android as the platform with the biggest opportunity. And now we see it's moving in the right direction on iOS. So like sort of best case scenario is our TAM is twice as big, but -- so yes, we are investing in growing iOS in Europe as a consequence.

Got it. Okay. You've also talked about the U.S. You have a current working relationship with Google on the search revenue side. For those who are a little bit less familiar, why don't you talk a little bit about that relationship between Google and yourself? And then obviously, there's been a number of regulatory rulings with respect to search recently in the U.S. as well.

Yes. The relationship dates back 25 years. So for 25 years, we've sort of consistently been in a partnership set up with Google as our preferred search partner. The way it works is, well, the same as Apple generates Google revenues that we have users want -- typing in a search in the address bar or in the search box and we send that to Google, and we get a revenue share in exchange for the traffic.

So yes, there's been a case between the DOJ and Google about search distribution. And I guess the only part of it that was directly relevant to us was if somehow Google would be prohibited for -- to pay for traffic. And it came out that they wouldn't be in the ruling. It would have been very strange now that all these AI players are heating up. Bing is growing, if somehow one player Google would not be allowed to compete for traffic and all the other ones would be. So it was maybe not so surprising. But as said, it was relevant for the U.S. part of our user base, so not -- it's a smaller part, but still good to get clarity on that, I think.

And just to make -- put a fine point on this, so as a result of that ruling is your interpretation that very little, if nothing, will change with the relationship you have with Google today, the way it's structured.

Correct. I still -- we operate -- we've been extending our contract yearly. That was one of the things that came in the ruling, that there should be annual contracts. So that's -- we don't operate with exclusivity. So that was another part of it. So I think in practical terms, this doesn't really alter our relationship with Google.

Okay. Understood. I want to pivot to artificial intelligence. Why don't you talk us through what you built around Aria and AI integration into the browser? I think there's a lot of technology investors that believe the next big secular theme is going to be AI infused into browser experience and sort of how that changes consumer habits over time.

Yes. It's an example of we tend to be very quick at adopting new opportunities and coming up with innovation ourselves. In the -- in line with this, we have to give people a reason to use Opera. They have to appreciate the technology of Opera. So very early on, we built in AI functionality in the browser, meaning that you could essentially chat with an agent. We worked with both Google and OpenAI on the back end. You can have a native chat in the browser. You can make it aware of what website you're on, ask questions about that. You can also command certain browser features, et cetera. So that's been an early implementation of AI that we rolled out in Opera One, the flagship browser, and it's now available in all our browsers. So that was step one.

And then -- but you probably have questions about Opera Neon, which is this AI-native browser we're coming out with. So maybe I'll pause there.

Yes. Well, obviously, that was the big announcement on this last earnings call. I thought that was sort of the splashy new change in terms of the narrative overall. Why don't you talk a little bit about that shift? What was the genesis of going down this road? And obviously, we're going to get more information about that as the year progresses and into 2026 but set the table for us on where that might take the company.

We think -- we are so excited about it, and we're coming out with a new browser now this fall. We're just wrapping it up and get it ready for a release called Opera Neon. And maybe to introduce it, I'll say that, I mean, I'm using all of these AI services. I'm paying $20 to all of them, everyone, and I use them for different things. I have ideas in my head about what they're all best for, et cetera. But they're all websites, right? They are a website, and I have excellent dialogues with them and I get information and it makes me effective, but it's constrained to that dialogue. And if I close that tab, it's gone. And either of them -- none of them are aware of what else I'm doing, right?

So what we find so exciting as a browser maker is to elevate the AI functionality, let's say, above the tabs to be native in the browser itself at a level where it can actually control your tabs and interact with your websites and perform actions for you on the Internet. So it will be a combination of local and cloud powered, but it exists at the same level as the person using a browser, meaning that when you are logged into your e-mail, your calendar, your Wall Street Journal and Economist subscription and all of that, your agent in Opera Neon has access to those things.

So that enables you to essentially create summaries and information from websites that are not crawlable from a big LLM that is central. You can research information. You can have the agent then summarize that, share it with your team through your e-mail, set up a meeting through your calendar and get stuff done, like the tedious stuff handled. And I think our benefit -- we're not the only ones that are thinking about this. But I think our benefit relative to some of the owners of the LLMs themselves is that we don't try to compete at the level of the LLM. We'll use partners' models on that. But we have decades' worth of experience in making a really unique high-quality browser, and we know how people use browsers, how they work with tabs, how they structure their tasks. And we want to create something that fits with the existing flow of how people actually work online but assists it and speeds it up.

Understood. Okay. You referenced there sort of what you build versus what you partner. You've talked about making targeted investments in the AI infrastructure on the CapEx side of the equation. But talk a little bit about what that landscape looks like. So where would there be avenues of exploring AI where you would partner? It sounds like on the foundational model side. And what do you feel the need to sort of invest in and own and operate yourself?

We'll play to our strengths, which is to make a really good browser. And then the slight differences between models in terms of how you can structure a task in the browser and execute a command is not so critical in what we believe is our success formula. In terms of investment, we -- and the computing behind that, what can be done locally on the device will actually run it locally, not in the cloud.

Then we have our own hosting infrastructure that we can -- where we can run our own models, and then we partner with Google for Gemini, OpenAI and others on the back end where that is useful. And we want to give the user also control over where their queries are being processed. But yes, so that's our setup. I don't know if that answers...

No, it does. That's helpful. In terms of incremental investments going forward, is there anything to flag in terms of like changing the mix of like incremental margins or incremental free cash flow generation of the business? Or are we on a pretty steady path at this point?

I would say we are on a quite steady path. We did one very early hardware investment in these NVIDIA H100 cards just to build up enough internal capacity to run initial stage, internal testing and those kinds of things. We chose to just cash pay. It was $19 million, which is a relatively sizable amount for us. But we have plenty of opportunities to finance that in other ways, right? And I think as this scales, we just -- we optimize for like maximum profitability.

If we come into a case where we see that, okay, we can keep scaling this up, right, and now we have the business case, we're also driving the revenue, the product is in the market, et cetera, then we will consider that OpEx just like any other and optimize for that. But I would expect it to be a more monthly cost type of cash flow nature than onetime major purchases.

Understood. Okay. You talked earlier about the gaming opportunity and the gaming browser. When you look about where the gaming landscape could go over the next 3 to 5 years, what are some of the more interesting opportunities to drive growth either on the monetization side or on scaling the user side of the equation when you tie your browser products back into the end market of gaming overall?

I think both are exciting opportunities for us. If we do the -- on the growth of users first, we have 33 million GX users. It's a mix of western and emerging. Average ARPU is $3.50, so it's nearly like twice of all the other products. And so it already represents like close to or about 20% of our revenue with that product.

When we look -- that 33 million is part of the total gaming -- addressable gaming market out there, even in like the younger age demographics that we do best in, et cetera. And the product scores so well, and it has great user feedback. It's the best retention we have in addition to the highest ARPU. So we -- our journey on that is to keep raising awareness. And in terms of geographic focus, we are expanding now also into some key Asian gaming opportunities like Japan, South Korea that we think are -- I mean, they're obviously potential -- huge potentials.

On the monetization side, we -- you have seen us launch various partnerships, and what we are cautious about is that the product has a genuine gaming feel throughout. So for example, we'd like to -- of course, we'd like to promote new game releases, hardware, games, even content that's relevant for the segment but in a way that's very native in the product and is also useful and interesting for the user base.

Understood. Okay. I want to pivot now to sort of growth investments. You've talked a lot about deploying money behind different growth initiatives inside the company. Is there a way to sort of rank order what the highest priorities are for incremental growth investments when you look out over the next 6 to 18 months?

I think the strategy in terms of the type of users we focus on, the way we reach them, how we work with content and influencers and various marketing channels and all of that, we -- it's performing very well, and I think we'll continue doing that. On the product side, it's what we talk about. So it's sort of the next versions of both Opera One and Opera GX but Opera Neon as the big news this fall. But these are not investments like we're going to -- here's CapEx of the quarter. This is just what does our team spend time on and how do we allocate our marketing budget. So it's within like the normal P&L of the company on a recurring basis, I would say.

So -- but sticking with the marketing budget, for instance, like how does the ROI of marketing continue to evolve? How is the thought process as a company about where you can optimize for return or how you can optimize different channels to generate outcomes on the marketing side continue to evolve as well?

I think we see really good effects of promoting the brand, making sure that people are just raising awareness essentially that we exist, that we have products that are interesting to various segments. It's very data-driven because, I mean, a browser business is a business of millions and hundreds of millions of people, billions of clicks at the cents level, right? So law of big numbers and all that.

When we run a campaign, we immediately see -- of course, we see the direct downloads that come as a consequence. We see the uplift in organic traffic, and then we can follow the -- all the cohorts by product, country campaign. Over -- within a few days, we sort of see the profile of that user base that come in, their activity level, their retention curve and the revenue generation.

So we have an ROI assessment of every single campaign and very quick feedback loop to sort of teach us to double down on something, scale back on something and optimize for -- I mean, in theory, as an analytical answer, we should just -- we should balance our budget so that the ROI is equal on absolutely everything, like the marginal dollar generates the same amount. Of course, in practice, it's not that theoretical, but that's the guiding principle.

It might be premature to ask this, but when you think about launching something potentially as scaled as a change product like a Neon, would that alter maybe the way you think about spending marketing dollars to not only raise the awareness of the company's brand but continue to alert customers to a new product? How do you think about striking the right balance there?

I mean ROI is ROI. So we quickly see how do we -- I mean, it comes with -- and it won't all be at perfect operations on day 1. But the potential of where the browser itself is natively giving advice to the user, presenting choice, making recommendations, of course, it comes with a great revenue potential, right, to direct traffic to our advertising partners. We've talked a lot about e-commerce opportunities over the past 3, 4 quarters and how we have scaled that. And I think this is just a continuation of that type of opportunity and with ARPU growth, the sort of the ability to step on marketing.

But we manage this -- we manage the profitability we think we should have, and then we balance investment in growth with that. And then I would just say that just in terms of awareness, like the tech media is very aware of Opera. And we cultivate those relationships, right? We make sure that the journalists have early insights and access to our products that they get to learn about them, that we gather them and give demonstrations, et cetera. And so if we have done it right, it will be very visible in the tech media when Opera Neon goes live.

Understood. Yes. Look forward to those reviews. Got it. Okay. You guys have been very regular returners of capital to shareholders in a couple of different formats. When you take the whole discussion we've had today, where you think product is going over the long run, the growth investments you want to make, how do you think about balancing investments back into the business in the name of growth versus the potential that exists to continue to return capital to shareholders?

First is context because we just added it up. I mean we have returned nearly $0.5 billion now since 2020 to our shareholders. So relative to our market cap, that's something to be proud of. Like we run the company like classic stewardship of shareholders' money in a sense, half of it in buybacks and half of it in dividends. And we have a dividend as like the preferred method of return now just because it doesn't touch our free floats. We like the liquidity in the stock, et cetera. And so you asked how we think about it going forward or...

Yes, yes. What might change that mix? What might change the focus of it?

Right. We -- I mean we run a -- it's 100% essentially organic growth. Our investments is our team that we pay salaries and marketing, which we do on a daily basis, and we generate the profit. And we have a good conversion of that to cash. And then we -- I mean, we're already running at good profitability. We don't want to -- we want to keep doing that. Like it's not -- we are launching Opera Neon and we have created that within our daily operations.

So we can always -- and every year, we discuss okay, how would we like to see -- how do we do the trade-off between do we want to staff up in certain teams or do we want to spend more active marketing in certain regions, et cetera, versus near-term profitability. And so I think you've seen over the last 3 years that we've essentially managed that to a quite stable to slightly ticking up EBITDA margin but then 20-plus percent revenue growth. And so we've landed at that as like a compromise almost, right? We could have spent more money and maybe grown a bit faster and vice versa, and then that's where we landed.

Okay. One follow-up to that, that I do get from some investors is you highlighted that you've traditionally preferred dividend, but you have bought back stock. How do you think about the buyback relative to the float dynamic with it? Is that why you're landing on the dividend, is it doesn't impact as much the liquidity around the stock?

Right. We've done buybacks at -- like many times, it has maybe seen that way. But sometimes it's just been too extreme to ignore that we've launched buyback programs. And then -- but the single biggest one we did was we bought up the pre-IPO shareholder at $5.50 per share before we paid like $2.50 in dividends so far, right? So -- or $2.60, I don't remember about that since then. So the net price of that, I mean, it was already attractive.

So of course, that's one we're proud of having achieved. And then we have had some rounds in the market. But yes, look, that's why we lean to the dividend. That's like the recurring underlying method of returning value to shareholders. But then I mean, we're, I guess, getting versed in both, and we can take the opportunities.

Okay. Last one just to bring it all together, when you look out over the next 3 to 5 years and you guys sit as a management team, what would be the biggest priorities you're the most focused on executing against? And how do -- should we be thinking about you aligning sort of investments to deliver on those strategic priorities on a multiyear view?

3 to 5 years is a long time in our space.

We'll still be having this conversation if you want to.

Okay. So when we're a 35-year-old company. So at least in our history, it's -- No, I think it's an extremely exciting moment in time, right? Because I remember back in the day, people asking like, will the browser have a future? Will there be an Internet browser. Now I'm seeing -- people are spending more time in a browser, right? You have your e-mail, your calendar, maybe you're not in the Excel and Word, but you're in like online tools that does the same for collaboration. So in addition to new ways of finding information and taking advantage of the full web to do research, et cetera. So I think that is an extremely exciting context that we enter that 3- to 5-year period as we look ahead.

And so I guess, aspirations for that time is that we can show with Opera Neon, its first and subsequent versions, that actually creating a browser is not so easy and having the company knowledge that we do actually puts us in a very good position to make something that people will appreciate. And I think that's the type of product in this period where the browser and these AI tools has so much attention that can make more people just even aware that we exist and that there are alternatives, so yes, taking advantage of this and then continue what we're doing. We're quite happy with what we've been doing also.

Yes. Understood. Okay. Well, why don't we leave it there. Thanks so much for being part of the conference. Please join me in thanking the team from Opera for being part of the conference this year.

Thank you.

Great. So we're on the clock. So we'll get started here. My name is Ron Josey. I cover the Internet sector here at Citi, and I'm very happy today to be with us, Frode Jacobsen, who's the CFO of Opera.

I think we all know what Opera does. Opera has a portfolio of browsers and a ton of other products, from a payments perspective and just everything under the sun, and multiple secular tailwinds from a global basis as well, whether in every region, but in particular, in North America.

I think the one thing for me on Opera is the 289 million global monthly active users. You say that number, there aren't that many companies with that much scale. So there's a lot to go through here. And of course, it was a very busy week from a news flow. So Frode, thank you for joining us today. Glad to have you.

Thanks for having us, yes.

Before we get into news flow, I want to lay the foundation here. Just talk us a little bit more about Opera, the product portfolio across. So we talked earlier browsers, payments, other products and -- yes, talk about the product portfolio and the go-to-market.

I mean you already introduced it pretty well. But we've been around -- it's a Norwegian company originally, quite global today. Been around for 30 years. Started out competing with Netscape, essentially. And I think, as you said, we've built up to become a quite sizable challenger, with competition being mainly browsers that belong to operating systems like Google, Microsoft, Apple. So I think we've shown that there definitely is a segment of people who like to have something nondefault, and we've created a portfolio of browsers to cater to different needs. I think -- I'm sure we'll get back to sort of the more news flow. So I can go back on that.

Well, we can talk about it now. That's very topical. So happy to jump in.

But -- so that's the business. And size-wise, in case you're new to the story, we're guiding close to $600 million of revenue this year, $130 million, $140 million adjusted EBITDA, a good cash flow. We're guiding to growth at about 23%, so multiple years of growth. We've been a Rule of 40 company, I think, for the past 16, 17 quarters. So we try to balance growth and profitability, and then we use our cash flow to actually pay a dividend, which I think is maybe a little bit unusual for sort of tech growth companies.

That's great. Yes. Good overview. Okay. So 289 million monthly active users, browsers are a big part. Did we -- so we talked about -- started competing with Netscape for us, old folks up on stage, i.e., me. I remember Netscape very well.

So all right, big news earlier this week. Google is a partner of yours. You've been a partner for 25 years. That's right. So the big news is -- and then I think Google is around 1/3 of total revenue in terms of partnership from a [ tech ]. So would love -- I'll just keep it open ended. I would love your thoughts on the news that came out this week on the remedies.

I mean what was most relevant to us as a browser company, was this question, would Google be allowed to essentially pay for traffic, which is a little -- funny anecdote, but I think it was -- Opera was the first browser to actually natively integrate search, kind of proposing to Google like, hey, what if we just make it so the people -- if they type the a search query and hit enter, we send them to you. And I think they thought it was a good idea, and that's how that all started. So still waiting for the thank you card from Apple.

But I think it would have been very surprising if somehow, Google would not be allowed to pay for traffic when the competition is just heating up, like that being would be allowed to perplexity and ChatGPT and Claude will be allowed to pay for traffic, but somehow not Google. So that almost -- I the remedies that came out on Tuesday was sort of not limiting, that was kind of not so surprising to us in a sense.

Though exclusivity is no longer part of it?

Yes. Well, I think our agreements with Google is very compatible with sort of what came out in that ruling. So it's not so much about exclusivity for us. It's just -- I mean, we appreciate the ruling because it allows us the freedom to choose the partners that we want. And I think right now, it's just the fact that Google is the best at monetizing traffic.

If I -- I am a user of all the other platforms, right? I pay them the $20 a month, all of them. And the funny thing is they make the most money off me if I pay that $20 and not use them, where, of course, Google is much better at actually being a bit commercial in that sense. And so I think there are some other aspects of the ruling, like around the potential to do data sharing. And I mean the [indiscernible] about promoting competition in the sort of information and product gathering space.

And if anything, like if that fuels competition, as a browser, that is a positive news for us, right, because our ability to make money depends on both the value of the traffic and the competition for that traffic. So if more players out there are able to essentially generate revenue from search queries, you could call it that, right, even though it's like an AI chat, then the better it is for the browser.

That's very helpful. And we can get into more Q&A. But I think that's a great place to sort of jump off into.

We're all asked about the TAM for the browser market, the size, the scale, the strategic benefit simply because it's hard to see maybe how browsers touch revenue. Obviously, browsers are the portal to the -- everything Internet. So walk us through, just on the browser market overall, as you think about the TAM and then how you see it evolves over time. And the next follow-up question, which we'll get, is just the competitive side, which you touched on.

I mean I think browser, it's getting it a little bit more front of mind. I feel to be the application that most people spend most of their working day, it has a surprisingly little attention. Maybe some of that is because most people use a browser that come with operating systems, so people focus more on like Windows versus iOS versus -- or Android on mobile versus [ macro ], iOS.

Now I think it's almost -- the economics are much more relevant in terms of within the browser than within the operating system. Like it's -- you don't shift so much between -- the operating system isn't really doing that much in terms of touching commercial points or touching product points, but the browser is.

So I think there's been more attention in the space lately also because these AI companies are talking about the importance of browser, which is sort of -- it's helpful to us because they just direct more eyeballs and sort of the -- in our direction, right, because there aren't so many browser companies out there. I guess there's only one listed browser company out there, and that is Opera. So it's a good benchmark, I guess, to -- for people to look at. So I think that's been positive to us.

And I think we -- we've been trying to say this since we went public in 2018, right, that this is actually a quite valuable piece of software because this is where hundreds and millions or in the market, billions of people are going through to find information by products, to make decisions, et cetera. And so I think our ability to generate revenue of sending traffic to partners is -- it's more visible now. Yes, perhaps. Yes.

So let's -- we'll get the competition in a second, but I want to focus on Opera here and the portfolio of products, but let's focus on browsers for now. There's multiple browsers within Opera. You have one, which is the key, I believe, but then we have Air, GX, Neon is coming out. Talk to us about the portfolio of products that are offered. And we don't have to get through each one of those. But maybe -- so the portfolio of products is one, and then just trend-wise, where the technology is going as agentic browsers become the norm, et cetera.

So I think our strategy has always been -- if we're going to be -- we are an independent player in that space, and we know that the landscape, like it's a bit stacked against us in the sense that when you buy a computer, it comes with a browser. If you buy a phone, it comes with a browser. So we've always taken a very explicit strategy that our browser needs to be meaningfully different than whatever comes as default. Because if you are a Chrome or Safari or Edge, you have to sort of cater to the grandparents and the kids and everyone tech-savvy versus completely not, right? So it has to be -- it's very minimalistic and it's very basic.

And then so I think the opportunity we have had is to make products that not for everyone, but targets particular groups of people that we can identify, reach, communicate with, build a brand against that can appreciate. So if it's like very tech-savvy people that I appreciate sort of the very like richer functionalities with, for example, Opera One, gamers with Opera GX, the newer product, Air, which is sort of like mindfulness [ declutter ] simplify kind of thing, and then Opera Neon, which will be the very AI-oriented products.

And that's been a successful strategy. And I think it's very different from the most well-known challenger in the U.S., which is Mozilla [ Hub ] Firefox, which is -- they've taken the almost opposite strategy of looking a whole lot like Google Chrome, like feel -- it's almost like -- I mean, it's also viable, like we want to make Chrome for people who don't want to use Google. I'm sure that's not what they do. But we've tried to be -- stand out much more, future-wise and sort of the experience.

Sure. And so with the advent of agentic browsing, so to speak. Neon is coming out here soon. It's out now, but maybe taking a more GA later this year. Just talk to us about some of the key, call it, functionalities or capabilities as browsing evolves with AI.

Yes. This is where we try to have AI play to our strength. So we're extremely excited about it. So Opera Neon -- so what -- we don't have our own large language model. We don't try to compete with Gemini, ChatGPT, Anthropic, those companies. There, we just -- we benefit from the fact that we are an independent company. And then our strength is we've built browsers for 30 years. We have like a team of people who are like the smartest engineers in Opera work on browsers. That's what we have.

So I think we're quite good at that, that we're quite -- if you use Opera One, it's probably quite tailored to everyone here in the audience, sort of information workers needing to process a lot of information. You can sort of see that that's -- hopefully, you'll find it a different and more -- and better experience. It's -- and then so I think our strength is to use the power of LLMs as a natively integrated function in the browser.

So if you -- if you think about the -- if you use ChatGPT or Claude or et cetera, today, they are a tab in your browser. They -- within that window, that window doesn't know whatever else is going on in your browser. It can answer your request, give you facts, but it's not really an assistant across everything you do. So I think the benefit of natively integrating AI in the browser is that you lift it up one level to sort of exist across everything that you do and also being able to run essentially the tabs and the tasks for you in a different way than when it's just a website.

Can you give us a real time like a use case of that? So...

Yes. I mean -- anything from -- because what do you use -- in the browser, you have your e-mail, maybe you have your Teams and like Slack, instant messaging, you have your calendar. And then obviously, you have all the various websites, for example. So you could set up a team meeting with my direct report tomorrow to talk about this topic and include a summary in the meeting notes. And then AI can find an available time for everyone, can summarize whatever you put it in.

Always in the browser? You have your e-mail tab up. You've got your Teams. Teams is a separate app, but you could also do it within the browser.

Yes. For example, we in Opera, we use Slack. So then like you could -- that the AI will then create a Slack room with your direct reports. Let's say, you had the DOJ versus Google, 200-page ruling up, to summarize how this is relevant to us and send it to the team that's been studying that process and set up a meeting tomorrow to discuss with any implications for us.

They can be very massive timesaver, right? Because -- so one of the things when the product team goes through our plans for Opera Neon, and they've looked at quite a lot of -- so we do a lot of work with our user base and we -- and the broader market. So you have -- it's more than 1 billion information workers worldwide, right? And then the fact that people go from this task to that task to that task, creates like these inefficiencies in your day. So I think if this product is done right, it can be a massive timesaver for people. You get a lot of the simple stuff out of the way in terms of like task management, but also, let's you just keep the flow much more.

So no, we're coming out with Opera Neon this fall. We're very excited to release it. And I hope when it comes out, that if you contrast it to like, I don't know, Perplexity Comet, which is the alternative that's out, right, that you'll see that it bears the mark of a company that has much more experience in making a browser, and therefore maybe have some interesting thoughts on how AI can be helpful in -- within the routines and the muscle memory of how people actually work.

And as we think about the multi-browser strategy within Opera, talk to us, Frode, about how we can use the best use cases of Neon into One, into GX, into Air. So how we bring the product portfolio together.

Yes, because Neon is made to -- it's most likely going to be a paid product. It's most -- that's where we're going to put the richest features, which is the most compute-intensive. But then I think -- so we already have, you would say, AI in all our products. We have a built-in assistant that we call Aria. It sort of exists in the browser interface, but doing many of the same things as a normal AI service would do. Maybe it links a bit more to products, and so we try to -- we set it up in a way that we can monetize it.

I think as computing cost comes down, as we learn how we can monetize best that type of traffic, because it is interesting also from a revenue point of view that we are moving in this direction of an agent in the browser, helping the user out. But as that relates to -- I mean, there's not so much money in summarizing the ruling and calling up the team, but when you talk about your vacation plans or things you need to buy, et cetera, right, of course, you can generate revenue share from that, from making the purchases with your partner base, et cetera. So I think as we see how the user monetization evolves and there's sort of a line of debt versus cost, it can get broader and broader.

Yes, that's great. We all look forward to Neon launching and just seeing how the broader market evolves here. And we can get more on the competition side, but I want to also dive a little more deeper into the operations of the business here. And so that's -- we've already talked about Google, but we haven't really talked about the partnership with Google. And just the visibility that comes with a 25-year relationship, I think. And just talk to us about the term as much as you can, the terms or the duration of the relationships every 3 years, but you have a year-plus renewal cycle. Any insights around those would be very helpful.

Yes. As you mentioned, it's entering the 25th year now that we have been consistently in partnership with Google, where we send traffic and get a revenue share in exchange. We've typically had 3-year agreements, and then Google has had an option to extend the fourth year on the same terms without renegotiation. And that's the year we're in now. And then earlier this year, they extended -- they asked if we should just keep extending like that, which is now, finally, very compatible with the ruling. So I think the only change is that the default would be a 1-year contract as opposed to our history being to do this every third year. So -- but I mean, the option was for Google to extend at the same term because we always try to do well in those negotiations.

So for us, this doesn't really change very much. It's not like we see them every 3 years. We see them on a very frequent basis because it's a partnership across traffic, technology, sort of how the browser evolves, how their services are integrated. We work with -- Gemini is one of the language models that we use in Aria. And it's interesting for us to use that in Neon as well, right? And I think it's probably interesting to Google too because everything they put in Chrome is not scary to them, but it's huge, right, it's like billions of people. So of course, I'm assuming it's interesting to these LLM players to see how things work also with partners like Opera, yes.

You talked about Gemini as one of the language models. How are you using LLMs overall? And which ones are...

I think -- we are independent. We don't have any -- we're a very pragmatic company. So depending on like the use case, which model works best on some, you can maybe use some like open source models. We can run it in our own data center on something that's more language quality, it's maybe in like more OpenAI direction and then you have like the product search, et cetera. I'm not into the detail of how we do the mix, but the point is that we do a mix on the back end. The user doesn't really have to know or have to give input on it. We'll try to select the best one, but we will let the user be in control. If you want to use a specific model, we will allow for that.

Makes sense. Let's talk about the user base to a certain extent. Western MAU has been a focus here for the past couple of years. I think overall, the MAUs use are doing what they're doing, but higher monetizable Western MAUs are still seeing growth here. So just talk just on the products and features and really the go-to market to build that Western presence overall. And Western is defined as U.S., Europe, but then also several other countries.

Yes. I mean it's -- we try to find good ways to explain our strategy in simple terms because we are still a relatively small company. And so -- but what we have been focusing on is the highest potential ARPU user base. What we have defocused on, in particular, been feature phone users in emerging markets, which has -- we -- at some point, I think we had 70 million feature phone users in Africa and Asia. There wasn't really much revenue associated with it.

So we focused marketing in higher ARPU regions, and that's where we have been growing. The overall base has been quite stable. It's gone a bit down in totality, but the net there is feature phone user. And then while -- when we have had fewer users in Africa and Asia, we have had equally many new users in the U.S. and Europe essentially, which is very good revenue-wise and what we are focused on.

So what we are doing is we're making products that we think will do well with the most demanding, highest ARPU potential users, whether it's because people live in rich countries, like this one or Norway or like Europe or because they are in, let's say, segments like gamers -- for GX browser for gamers. What we see is that -- of course, there is a big difference between the average ARPU of an American and a Kenyan, let's say. But if you're a gamer, like if you have the setup with the whole like gaming PC and the neon lights and the gaming chair and all of that, the difference is less. It's still a difference, but it's less because then you're -- obviously, you're more affluent if you're in an emerging market and you're in -- are in that group.

So we've been focusing on that. I think we've quadrupled the ARPU or tripled at least the ARPU over the past 4 years. And we've grown the Western user base by close to 30% over the past 4 years. So I think we've been quite successful at it. And it's fortunate that we did it because the AI changes that are happening now and all the opportunities that come with that is very -- it comes at a certain cost, it certainly monthly price point, et cetera, where I think that user base is much more susceptible to that than the average global mix, let's say.

And from an advertising -- how is awareness of the browser? Like we often try to do our studies about awareness and Opera is an emerging brand here. So talk to us how we build up awareness in these Western U.S. and Europe, we'll call it.

Yes. No, we spent close to 30% of our revenue on marketing and brand building. So it's a quite wide list of initiatives, but it goes from like working with people that like YouTubers, influencers, people in the space. If it's for a gamer for example or now with the well being. So just to introduce it in people's awareness that we exist. That's like number one. If you take the gaming browser, it has like great reviews, very high retention. And then we have like 33 million users, I mean, which is like the -- by far, our highest ARPU products we have. But there are hundreds of millions of gamers, right? So if they all love it so much and the retention is so good, so then our job is to make more people sort of aware and sort of consider it and give it a try.

So the foundation is to build an awareness and a brand identity. And then on top of it, we can be more tactical ad click, download kind of things. But the ROI on that is much better if the audience that you go after have some sort of association with the product to begin with.

Are there any newer channels that the team is focused on, whether it's social search course or you talked about influencers, maybe Twitch is it for the GX browser. Any insights there?

No, I think we are quite present in all these, maybe not social media -- or social media, too, like our [ X ] account is very active, for example.

New -- what was I -- I mean, another aspect is we -- tech media because, for example, for One, it goes after people who are a little bit interested in technology, et cetera. And so I think you will see -- if you ever read the press release that we say something like we launched something and if you try to Google it, you'll see like 100 tech sites already talking about it. So we're quite good at working with journalists in the space. We gather them twice per year to show them the latest things, they can get some early access so we can sort of prep it a little bit so that they are aware that's...

Analysts enjoy early access too.

Yes, noted. Yes, noted. So we try to do that because, I mean, the outlets of where people find information.

So one good thing about -- I mean, not going after like the grandparents and 12-year olds, but going after very specific groups is that for a large part, you know where to find them. Like you don't have to go TV, 7:00 p.m., everyone, it's very expensive. You can go to gaming sites and you can work with PewDiePie and Mr. Beast and the people that are actually watched by that segment and promote it that way.

Very helpful. So let's -- so that's a very good deeper dive in browsers, on Google, on MAUs and focus.

Let's talk about the other side of the business. It's now about 2/3 of revenue, and that's the advertising -- like the actual advertising side outside of Google. Would love to hear more thoughts on just the approach. And then as a CFO, the greater the visibility that you have in this business, and I'll tack on to that. So approach visibility, e-commerce has been a home run here more recently, so drivers there.

I mean, since -- I think when we went public, we had something like 70%, 80% of our revenue was search, and that has grown since then, but the advertising has just grown so much faster because -- I mean search was the original monetization. And I think we, as I mentioned before, kind of came up with it. And then advertising, we began by -- we promote some partners. They can click an icon, the user and we collect the rev share or we had a monthly fixed fee to be there kind of thing. And then -- so that's evolved a lot.

We have many more partnerships. We've gotten -- we have content in the browser, which is personalized, and we can show normal ads. We started targeting. So not presenting everyone with the same, but essentially looking at -- we have an advantage on that, right, because we see what people are doing. So we have a chance to show them relevant things. And then we even use that to target people outside the Opera browser through our Opera Ads network, which is getting quite big. So that's been an evolution and that's why the advertising revenue stream has grown so much faster and become now 2/3 of revenue instead of minority.

I mean, of course, it's all, in a sense, the same. It's about driving traffic to partners. We've split it up in that way. You could also consider it as we look ahead, right? We talk about what's the future of search and AI. But the search for revenue stream, I mean, it's an expression of the revenue we generate when the user is actually looking for something, right? They are typing in something they are looking for in the future saying it or whatever, right? And then we work with partners to answer their queries and direct them to certain products, and that's the user initiated, whereas an advertising can be more like yes, I was looking at memory from a game yesterday. Yes, you reminded me. So I click that, right? But it's more -- it's a bit different, right?

So I think both revenue streams will be important going forward. I actually think the search revenue stream are sort of the user initiated, like we can -- where it's almost like we're coming to a point where advertising was 6, 7 years ago, like the search opportunity could kind of come back into that because now we're going to take a much more active role in the user sort of initiate the product discovery, for example.

Because of agentic and because of seeing the entire browser experience across the tabs. And so as we think about e-commerce close to 50% of overall advertising revenues, I believe, makes it very large, growing around 100%-ish? Any specific callouts to make there or...

We can tie it back to the product strategy or the geographic strategy before like the focusing on Western markets, higher ARPU. So what we found was that suddenly, we were at a size big enough in the U.S. and in key European markets that we became a more interesting partner to e-commerce players. And we were able to drive meaningful amounts of traffic, and they are also thinking diversification. So if they can have more partners driving traffic to their site or not rely too much on a very few big ones, it's interesting to them.

So that became -- I mean, e-commerce was always part of our revenue mix, but it just kind of took off, and it's been growing at more than 100% year-over-year now for the past 4 quarters, I guess, or 3 at least, accelerated about a year ago, mid-last year was when we really started to scale it. So that was a strategy that we've been working on for some time before that, and it's been very nice to see it play out.

And then you asked about visibility, et cetera. So I mean in our history as a public company, I think we've never missed revenue guidance, and we missed EBITDA guidance one time when COVID hit, Q1 2020, we took some provisions. But other than that, it's always been meet or exceed. So at least that's a good proof of what I'm about to say, which is that since our revenue is generated by like billions of queries, billions of clicks, views, et cetera, like it's such large numbers, that there is a good degree of predictability into that.

So as we run, for example, marketing campaigns, as I mentioned, it's our biggest OpEx category. And we know within a few days, like what's the ROI on a certain campaign because we see the profile of the users that are coming in by country, we see the engagement, the daily, the clicks, et cetera. And we can very quickly sort of calculate that curve for the next 2 years on that segment and look at it compared to the money that we spent to drive that, and we look at the organic uplift of okay, so we got these people click and then we rose in the rankings and so we got some extra and what's the incremental value. So I mean, it's like the BI team at Opera and sort of the [indiscernible] is a great place to be because you have such vast amounts of data that you can actually be quite good at predicting.

Having said that, I think we've had a positive problem of having, in particular, e-commerce scale so quickly that we didn't dare to guide what would it look like just because when something is that new and growing that fast, then it's big numbers or not, it becomes more difficult.

Makes sense. Makes perfect sense. We have about a minute or 2 left. Any questions in the audience? Yes?

Just curious on the earlier you mentioned...

There's a mic right behind you. Hopefully it's on.

Yes. Earlier, you mentioned 1 billion knowledge users doing work in the browser all the time. I think that's not lost in enterprise software, too. Atlassian just announced the acquisition of The Browser Company, has 2 different browsers. And I guess the angle there is it's more secure, more enterprise-oriented. Can you talk about sort of differentiated offerings for enterprise specifically? And how do you tap into that? And if you're familiar with The Browser Company, how is that different than sort of what you can offer in the enterprise?

Yes. We have operated for the past more than a decade as a very B2C-oriented business. We monetize the user base we have, and that's what we -- how we generate revenue. Our history is actually B2B with operators and sort of payments, et cetera, if you go way, way back.

I think the products we are making, they are made to appeal -- like Neon is made to appeal to the knowledge worker. That might open up some opportunities, but we're not really running those calculations. But of course if every analyst at Citi is like, "I love this product, like we should have that in our..." that can be interesting. But for now, it's -- we want to get the product out. We want to see how it works. Of course, I realize it's the first iteration, but I certainly hope people will recognize the difference between that and the product of a company that's just launching their first browser.

In terms of that acquisition, I mean, I guess they started out as a very -- for very tech-savvy people and got a good following on that. But as they said themselves, it was very hard to scale. So we don't really see them pop up in like step count or anything in terms of -- so maybe they have less than 0.1% market share then, if that's as low as it goes. So it's still a small company, so it was clearly acquired because of interest in the technology in that space. But yes, we could be valued on the same multiples, then we will happily do that. So...

Do you have the compliance and security features...

We're -- and we're in over time. So I sort of have to -- let's make it quick, and we can follow up in the hall or...

I'm not familiar with how they distinguish themselves from us. But I mean we're a Norwegian European company operating under the European rules for privacy and all of that. So I think on that front, we're probably quite good.

So that, Frode, we didn't get to talk about payments or about profitability or not a lot, but there's a lot going on. So thank you for joining us today and looking forward to testing up Neon.

Yes. Thanks.

Thank you.

Welcome to the Opera Limited Second Quarter 2025 Earnings Call. [Operator Instructions] Please be advised that today's call is being recorded. [Operator Instructions] I would now like to turn the call over to your speaker today, Matt Wolfson, 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, 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 on 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. 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. And with that, let me 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, Matt, and everyone else for joining us today. We have been looking forward to sharing our second quarter results with you and also update 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 30% 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 Rule of 40 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 44% 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. 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 6% was also twice as high as it was in Q2 last year, benefiting from the continued mix shift of our user base towards higher ARPU regions. We also see a broader trend with a new focus on high user intent 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.

This allows us to deepen cooperation in the 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 led to 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 will move to 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. 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 key for an AI agent to be truly and consistently helpful, enabling faster execution, richer contextual understanding and broader functional extensibility and also better solution for information privilege.

The browser AI agent can have access to all the information accessible by the user, whether it's local files, communication platforms or premium subscription content with 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, Opera neon. 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 [ 9 ] 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.

Opera 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 GX user base was 33 million MAUs in the second quarter, up 11% year-over-year and with an annualized ARPU of $3.47. Opera GX released an update during the quarter, providing users with a pack of enhanced tab management capabilities and improved multitasking features. The update allows for side-by-side tab viewing, easy tracing of recently visited pages and the function to organize related tabs into collectible 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 preferred browser.

There's a lot going on with our flagship browsers as well, both for computers and for phones. Though in the interest of time, I will dive deeper into those on our Q3 call later in the year since that will coincide with the upcoming rollout of the third edition of Opera One with even more new exciting features.

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 solid 5% ARPU growth 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-custodial 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 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. A person located in Europe or the U.S. can then easily send funds or even make an instant payment of groceries and 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-custodial 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 scale building, we already generated MiniPay revenue from integrations that ensure native support for ecosystem partners. MiniPay was already launched within our lightweight Opera Mini browser on Android phones and is now also available as a stand-alone 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 positive 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 2 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.

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

Thanks, Tom. 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 U.S. e-commerce.

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 the revenue overperformance 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.

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 OPay 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. 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 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 3 years prior to that, we bought back 30% of our outstanding stock as another way of driving value for our shareholders.

Now 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 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 based our guidance on sequential modeling. The raised estimates capture the Q2 overperformance 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 lifted 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 midpoint. This reflects a continued expectation for margin expansion in the second half of the year, but also the weakened U.S. dollar relative to other currencies eats up about 1/3 of the benefit 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 U.S. dollars compared to the rates from when we last gave guidance. 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 base pre-adjusted EBITDA of $453 million at the midpoint. 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. In line with this, we guide Q3 revenue of $146 million to $149 million, representing 20% growth at the midpoint and Q2 adjusted EBITDA of $34 million to $36 million or a 24% margin at the midpoint.

Within the implied quarterly OpEx base of $112.5 million at the midpoint, we expect that cost of revenue items as a 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. And we expect cash compensation costs to increase about $1 million to $2 million versus the Q2 level, including the effects of the weaker U.S. 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.

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. 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 Instructions]

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

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. And on the flip side, GX users didn't really grow. So is this a reflection of how you spend your marketing spend? Just trying to understand the dynamics there in terms of what drove the strength in Western market users versus GX?

And the second question I have is just around 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?

Yes. So it's Song Lin. I think I'll just quickly cover that, right? So maybe super high level, I would just say that I think there is a bit seasonality around it, just to call out, right, because, of course, naturally, GX users are mostly 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 factors involved. And yes, hopefully, it will be more changed during the Q3 and Q4. So I think that will be more visible.

And then just to also say that, of course, internally, we don't really operate on a basis of more like -- I would almost say that the growth of the [indiscernible], of course, is more like a summary of indicative trends, right? But internally, of course, we're always organized by ROIs and where we see the biggest potential and where we see the product has been received a lot. And maybe I'll just call out that, yes, so like we see that we have very good growth in Europe, for instance, for Q2, which is very excited, which is actually also good proof that by having more of those AIs, actually it would also be helpful to us just because then -- especially the Western markets are more exposed to be aware that there is actually a choice of browser, right?

So not only default, but there will be multiple choices. And that in turn can actually help driven adoptions. So we actually see that where AI is hottest is actually where it's almost become easier for us to acquire users. Yes, as a simple way to put it.

We'll take our next question from Eric Sheridan with Goldman Sachs.

Maybe a 2-parter on Neon. With the announcement in 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. This clearly is a first step towards a direction of sort of AI generation in browsers and how you think about the multiyear pathway for the browser landscape generally changing and how you align the platform for those changes?

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 Naved asked about sort of the cost of compute tied to it, but just trying to understand a little bit of sort of fixed versus variable investments behind this over a longer duration period of time.

Sure. So like I guess I also take the chance to also come on the question which I have not answered in the first one, so about Neon and also in general landscape, right? So I guess, first of all, just to call out that it's, of course, the early stage. And I would say, at this point, our focus primarily is actually on like product market fit 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 or whatever, right?

So a few points, high level, I think that with AI, it's already been proven that web interface via traditional apps, I guess, has now been also been recognized as almost the preferred platform where people want to access information. And this is especially obvious with AI, right? Because I guess at least 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. So that is very good news for browser in general. So that is of course very strong alternatives.

If we compare with some earlier narratives a few years back where somebody is still talking about, it's only app or whatever. So I think with AI, that's actually a big help that everybody now see very clearly that web and browser is probably the future. And then I guess I'll also comment that as also you probably also see the trend lately, both -- also by those AI players, right? All of them are also talking about how important browser could be. So I think our view is about the same, right, that like when web becomes so important, there will always be, I would say, 2 ways of access information, right?

So one way is where traditionally user access information, which is by -- you run a web page service provided by the AI provider, like you run ChatGPT or whatever, on a web page. However, I think it's also been very clear that when we see things go deeper, it's more and more likely that you need a native solution really just because there will be so many information. And as also AI goes on, I think number one, it will be an unseparable part of your everyday operation, right? So like I think once you try it, you will -- there will never be go back. You 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 purely cloud-based solution just because AI has to access everything, right, on your computers, they have access on your premium content on your subscription, on your e-mail. And all those, I think, will be very hard to capture if only can access from cloud as it is now, right? So I think the trend seems to be very clear. And also 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 and everybody now see that browser is probably one of the best mediums, just by design. Because by design, a web page cannot access so many information. You have to be locally while browser is local. So it's a natural linking between -- yes, between a web environment and also local environment. So that's the trend we see.

And I think that's exactly why we are spending -- we're doing a lot of research on Neon 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 they also think it's relevant. But of course, maybe people don't realize that we are probably one of the few ones which has the scale and the capacity to do it, right? Even if you look at some other players, hot ones claiming to want to take over Chrome and they have only like 20 million, 30 million MAUs in total, right? Where we already have the existing almost 300 million MAUs, which have been running for many, many years.

So I think we are in a very good spot to actually make that happening, and that's what we are focusing on. And I think that's also part of what we believe will be the future. And then just a few lines, right? So I think in the future, the economics and business models, I would almost say that I think there will always be -- some will be free because we can -- we believe that we can power the advertisement as what we're doing now, whether it's through partners or whether it's through some other more like [indiscernible] or other different partners, I think we are in a very good spot to actually monetize. Again, I think we do a better job than most some of the start-ups.

But then I think if you want to have some deeper experience, I also think it's already proven that people are willing to pay subscription money for it for some extensive usages, and I think it's also fair that we follow the same model. So yes, so I believe it will always be a combination that it will be use case sponsored by advertisement. And then it will also be a subscription model for whoever want to enjoy a deeper experience purely because that's already been proven and people are ready to spend money on it.

I hope this helps.

We'll go next to Lance Vitanza with TD Cowen.

Congrats on the quarter. I have 2 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?

Yes. So it's Song Lin. I think I also try to cover this, and then Frode can also supplement with also other information, right? So like again, like we are trying to be conservative in calling out those new initiatives. We have launched for the record, we have been actually incubating MiniPay for few years and very happy that we are now seeing that expanding and also now it's the right moment, right?

So like, again, internally, we are very excited, quietly excited, I would say, to see the growth of it, to see the very good for the market in many places. And we also see that the wide adoption of stablecoin across the industry, which, of course, is very necessary for anything to succeed in the fintech world, right? So now I think we're starting to see that many of the stars are starting to align, and that's why we are also getting very excited.

And then maybe just super quickly on monetization, right? So I actually feel that, again, MiniPay is one of the few products that -- it's a good combination of both very good product market, but actually, it also comes with monetization. I think the nature is just that it's very close to -- it is a product which are very close to money, I would say, for the nature of fintech. So for now, like it's already actually generating sales for money from us, even though, of course, for now, that's not the short-term purpose. Our purpose, of course -- but like -- yes -- but the stand-alone is actually already approval, I would say, for monetization.

So for now, I would say the pure monetization model will be to -- for us to work with ecosystem partners to integrate that, all those functionalities like we are including all those stablecoins into MiniPay and we get a card, right, for whatever they earn based on some strategic investment agreement. So like again, maybe just echo back to say that I think this is -- MiniPay is a very good example where the nature of the product, it comes almost with monetization potentials without having to go through, say, advertisements or without having to go to Search or other means.

It's just because stablecoin itself, this industry are rather profitable, I guess, is also proven by some of the recent listings by Sogou and also there are some [indiscernible] and a few others. So I think it's also why we are very excited because as far as you have enough user base and as far as you have to use it, there are actually a very natural opportunity for you to get revenue out of it.

So I would almost maybe compare this with Search, right? So like why Search is very good for the browser in the [indiscernible] is because when people are using Search, they don't really see that as advertisement, right? They see that as an important functionality, but we, of course, along the way, also making money.

So I would almost say that MiniPay is of a bit similar nature that you don't have to see some apps popping up or whatever, you can just use it. And by the nature of it, there is a chance for us to monetize.

That's great. And actually, that sort of ties into my next question, which was on Search revenue and the rebound there. And Frode, I think you mentioned that it was expected and maybe I lost track of why you were expecting it to rebound. But I'm just wondering what drove that? What I tend to think of Search revenue as a function of number of searches. So 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?

Yes. When we last reported, we already saw the trends were picking up. We were in the single digits year-over-year growth last quarter, and then we saw we are getting back towards the double digits. And I think we expect Search to continue to do well for the remainder of the year, and that's reflected in our guidance. But I don't think I should go into sort of the detailed breakdown of how we model or predict it.

Okay. Well, how about -- at least, can you discuss whether you think it's a new trend line? Or was it more of sort of -- how durable do you see this resurgence potentially being?

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.

So 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's almost like information discovery and how the browser becomes increasingly relevant in that space.

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

Can you talk more about the tariff-related headwinds you kind of called out in the quarter? Are these temporary? Or is this something we can see kind of like persisting through the rest of this year?

Yes, I can comment on that. I think it played out a bit as expected. So when we last reported, it was late April, and we were past the initial launch of tariffs. And 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.

So 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.

Got it. That's helpful. And then Opera 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?

Yes, it's Song Lin. I can briefly comment, right? So I would almost say that it's still early stage, but I guess we have announced that we are [indiscernible] the preferred browser. And of course, as you know, that naturally, East Asia is actually one of the bigger, almost important places for those games. And as a result, we actually see that there are some very interesting attractions that the GX are becoming to be liked by the users in those countries. So I think it's very natural for us to deepen that.

And I think the only thing is that, of course, those regions also require more localization because they are all [indiscernible], and we have not really prioritized this in the past, but now we see opportunities. So we are diving in. I think it's a bit too early to estimate the scale in market returns, but it's a very exciting market.

And interestingly, just to comment that partly though is also that we do already see quite strong growth on the e-commerce potential in those regions based on our still regular base or limited user coverage on the generic browsers. So essentially, I think the other important factor is that we are very excited about monetization potentials. And 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.

[Operator Instructions]

We'll go next to Mark Argento with Lake Street.

Just a few quick ones here. On the e-commerce business, as that business will start to comp, the comps get a little bit more difficult. But how should we think about the seasonality in terms of kind 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?

Yes, sure, Mark, I can comment a bit. So 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, and that's why we look at the 2-year growth rate by quarter to guide something that's a bit more of an even growth profile all in all.

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

I can try to comment on this. So yes, more like super high level just to comment that -- for now, of course, we see the fastest growing is retail. So that's great. And it's also proven that like the -- let's say, the intent-based advertisement actually works because -- I think I also mentioned earlier that all our advertisers, almost all are performance based is a very solid proof that it actually works.

So -- and then I would also say that we see very close follow-up. Traveling is definitely key sectors. We are traditionally already fairly big, like browser is historically always a fairly big distribution partners for travelers like Booking.com, for instance. So yes, 100% that we see that it's a good combination of both browser, but also AI. So that is definitely very interesting. And then 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's also a good combination of you see a lot of those executives on a browser environment, very natural. And also they are also the ones 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.

Okay, that's helpful. And then just pivoting quickly, it wasn't overly clear to me at least on the Neon product launch, is that going to -- is that built on your guys' tech stack? Are you guys using other LLMs? Maybe just refresh me and better understand kind of what is powering that new browser?

Sure. So yes, it's Song Lin. I'll quickly cover that, right? So 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 don't think we have plan to spend billions of dollars to train the large language model because I think that's repetitive. And I guess the beauty of that is that because the market of big language models are so competitive, that it's 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 in 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 costs have actually been lowered down quite dramatically. As there is still competition, we believe that will still be the case. And I think that's actually a good time for a player like us. And then 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 like environment. I think that will be the best advantage that we would have. And I think that will be a huge win for us to nail it, and that's what we are focusing on.

Great. And last one for me. You touched on it a little bit earlier, but Perplexity was out with their unsolicited offer to buy Chrome browser. A little surprised you guys didn't get any play on that in terms of just kind of being in the mix. It sounds like for Perplexity went and talked to all 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're doing right now? And how do you think about -- and if you could size it for us as well, how big is actually your browser installed base right now? Because I don't think the market is valuing the strategic value of that installed base?

Yes. Okay. So I guess I will comment a bit first, and then I think it's the moment to go through that and Matt can also comment a bit, right? So -- okay, so I guess it's very interesting. I mean we, of course, follow this closely as you know that well. So we are more or less involved in all those discussions, right? So we are very familiar with the player there. Okay -- so first of all, I would just say that, yes, it's actually quite interesting to see, right, because, of course, we saw some of the players claiming that they are in a better position. They are one of the few positions to be able to accommodate Chrome, should there be some jurisdictions?

And I guess we, of course, are always a very good partner with Google for more than 20 years. But then I would just say that, of course, I guess like we are probably -- we are one of the biggest independent browser out there. We have been independent for the past 30 years, which we are celebrating 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 MAUs and still growing.

So I think everything is very strong, pointing that we are in a very good position for all those discussions. So it's more like just interesting point out, right? So like if we're actually talking about whoever is the biggest independent browsers, I think our name should actually pop up very high there. I guess the only thing is just because being a European company has some pros and cons, I guess, that we are probably less frequently being discussed in those context. But again, I think it's just our job to be visiting U.S. more, and we should also -- and of course, U.S. has been our biggest market for the past many years, and it's becoming more and more relevant, and we should just work more on it.

So I would almost say that's -- that's our feelings for now. And otherwise, I think it's hard for us to comment anything in particular related to this case, [Technical Difficulty] we have good cooperation with all the partners involved there.

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.

Sure. So like again, thank you to everyone for joining us today. We look forward to sharing the results and outlook with you. And now we come 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 look forward to keeping you posted. Have a good day, all of you.

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