OSLO, Norway, April 27, 2021 /PRNewswire/ -- Opera Limited (NASDAQ: OPRA), one of the world's largest internet consumer brands with hundreds of millions of users worldwide, today announced its unaudited consolidated financial results for the quarter ended March 31, 2021:

(PRNewsfoto/Opera Limited)

First quarter 2021 financial highlights



Three Months Ended March 31,



Year-over-


[US$ thousands, except for margins and per ADS amounts]


2020



2021



year %

change


Revenue



40,194




51,583




28.3

%














Net income (loss)



(20,859)




639




n.m.


Margin



-51.9

%



1.2

%


















Adjusted EBITDA (1)



(338)




4,576




n.m.


Margin



-0.8

%



8.9

%


















Adjusted net income (1)



(12,271)




4,607




n.m.


Margin



-30.5

%



8.9

%


















Diluted net income per ADS, US$



(0.17)




0.01




n.m.















Diluted adjusted net income per ADS, US$ (1)



(0.10)




0.04




n.m.



(1) Please see the separate section "About non-IFRS financial measures" for the definitions of adjusted EBITDA and adjusted net income.

"Opera's financial outperformance this quarter is a welcome validation of our strategic approach to growth, and highlights our two complementary strengths," noted co-CEO Song Lin. "First, our core businesses are operating at greater scale across our key markets, with higher user engagement. As a consequence, user-driven search and advertising revenues accelerated to 38% year-over-year growth. Second, the strategic investments we have made in adjacent growth categories, including gaming and fintech, are showing good early traction, and we'll continue to invest heavily in them. This includes the launch of our smart shopping/cashback offering in Spain, Opera News performing well at early-stage western market launches, and expanding the features and reach of Opera's GX gaming browser. While we invested heavily in our new initiatives, our adjusted EBITDA came in well ahead of guidance as revenue overperformance cascaded to profits. Overall, this was a very strong start to our year, directly reflecting how well we're executing on all fronts."

First Quarter and Recent Business Highlights

  • Core search and advertising growth rates accelerated to 38% year-over-year in Q1 driven by strong browser and news performance
  • Opera's monthly active user base increased by 16 million year-over-year in the first quarter; driven by 12% and 14% year-over-year growth in core regions Africa and Europe, respectively
  • The Company reached 79 million average monthly PC users in the first quarter, up 17% year-over-year
  • The Opera GX browser user base now totals nearly 9 million users, up 190% year-over-year in March
  • Opera News revenue grew over 260% year-over-year and 30% sequentially versus the fourth quarter.
  • Investments in our strategic growth initiatives continued; Opera News continues to scale in developed markets, we launched a cashback offering under the Dify brand in Europe, and we continued to build out the Opera gaming platform/community.

"In sum", continued Mr. Song, "we believe we have all the elements in place to enjoy sustained, strong long-term growth, accelerating our trajectory towards significant scale. Our core browsing business shows there is substantial room for growth and innovation: people want features optimized for the way they actually spend time online, whether it's shopping, gaming, looking for news, or simply trying to manage their digital lives with a sense of privacy and security. People have every right to expect more innovation, and more value, from the browsing experience, and the combination of our core businesses and new initiatives offer just that."

Business Outlook

Mr. Frode Jacobsen, Opera's CFO, said, "The continued acceleration of our core browser and Opera News products, both in terms of engagement and monetization, resulted in a first quarter that exceeded our already high expectations. Due to this we are raising our revenue expectations for the full year. Further, we remain extremely optimistic about the long-term prospects of our gaming, European fintech and Opera News in developed markets, but we continue to take a cautious approach as it relates to near-term financial expectations -- fully weighting potential investment, while only including small amounts of revenue contribution from new initiatives."

For the full year 2021, Opera now expects revenue of $230 million to $245 million, representing a 44% year-over-year increase at the midpoint. Adjusted EBITDA expectations remain $10 million to $30 million as we continue to invest our underlying EBITDA growth in our new initiatives to accelerate our long-term growth potential.

For the second quarter 2021, Opera expects revenue of $55 million to $57 million, representing 74% year-over-year growth at the midpoint. This is being driven primarily by further acceleration in our core business and COVID-19 impacts on the year-ago results. Adjusted EBITDA will be around breakeven as Opera invests aggressively in growth.

Nanobank and other investments

Nanobank posted revenue of $50.3 million in the quarter, up about 10% compared to the fourth quarter, and disbursed loans representing $235 million in total value. Adjusted EBITDA was $5.5 million and post tax profits were $4.3 million. The growth was primarily driven by growth in markets launched in the past six months.

In terms of other investments, OPay's total payment volume continues to grow and has increased from December 2020 levels of $2 billion. StarMaker continues to experience strong growth with an annual revenue run rate of almost $180 million in the first quarter, up 3.5 times compared to the year-ago period.

Opera owns 42% of Nanobank, 13.1% of OPay and 19.35% of StarMaker.

First quarter 2021 consolidated financial results

All comparisons in this section are relative to the first quarter of 2020 unless otherwise stated. Our former emerging markets fintech and retail revenues are not included in comparisons as they are classified as discontinued operations.

Revenue increased 28% to $51.6 million

  • Search revenue increased 36% to $26.7 million due to strong PC user growth and as monetization continued to improve.
  • Advertising revenue increased 40% to $24.3 million due to strong Opera News monetization and ad monetization increases.
  • Technology licensing and other revenue was $1.4 million. This declined $2.3 million compared to the previous year as Opera has been phasing out low-margin professional services for an investee.

Operating expenses increased 11% to $53.1 million.

  • Combined technology and platform fees, content cost and cost of inventory sold was $2.2 million, a 30% increase driven by increased costs of third-party ad inventory.
  • Personnel expenses, including share-based remuneration, were $17.1 million, a 4% increase. This expense consists of cash-based compensation expense of $16.0 million, and $1.1 million of share-based remuneration expense.
  • Marketing and distribution expenses were $23.4 million, an increase of 61% driven by increased spend towards new initiatives, primarily Opera News in developed markets.
  • Depreciation and amortization expenses were $5.0 million, up 8%.
  • Other operating expenses were $5.5 million, a 23% decrease driven by general reductions across several smaller cost categories.

Operating loss was $1.5 million compared to operating loss of $7.5 million during the first quarter of 2020. The improvement was primarily due to growth in high margin revenue.

Other items include share of net loss of associates and joint ventures of $145 thousand. Further, net finance income was $1.4 million, primarily related to marketable securities held as part of our treasury function.

Income tax benefit was $0.8 million in the quarter.

Net income was $0.6 million. This compared to a net loss of $20.9 million in the first quarter of 2020, of which $16.0 million loss related to continuing operations.

Net income per ADS was $0.01 in the quarter. Each ADS represents two shares in Opera Limited. In the quarter, the average number of shares outstanding was 230.3 million, corresponding to 115.1 million ADSs.

Adjusted EBITDA was $4.6 million, representing a 9% adjusted EBITDA margin, compared to adjusted EBITDA loss of $0.3 million in the first quarter 2020. Adjusted EBITDA excludes share-based remuneration and non-recurring expenses, as well as other income and discontinued operations.

Adjusted net income was $4.6 million in the quarter, compared to adjusted net loss of $12.3 million in first quarter 2020. Adjusted net income excludes share-based remuneration, non-recurring expenses, discontinued operations and amortization of intangible assets related to acquisitions.

Adjusted net income per ADS was $0.04 in the quarter.

We have posted unaudited supplemental information at https://investor.opera.com, including: 1) Opera's financial historical results by quarter since 2019; and 2) Nanobank financial results by quarter since 2019 (pro forma prior to August 19, 2020). The presentation of Opera's previous results includes certain reclassifications, most notably eliminating the prior "cost of revenue" line item to present all costs by nature, and certain fair value adjustments for year-end 2020. In sum, prior period revenue and adjusted EBITDA is not affected, while 2020 net income increased by $7.0 million.

We are in an advanced stage of completing our annual report on Form 20-F. We anticipate, however, using the extra time afforded by SEC Rule 12b-25. Our investee Nanobank is conducting its first annual closing of IFRS figures across all active markets, and related external audit under PCAOB auditing standards, upon which we intend to rely. In particular, Nanobank's location in India has seen process impacts of the local COVID-19 resurgence affecting both Nanobank staff and its external audit team, resulting in significant delays in completing all required processes.

Conference call

Opera's management will host a conference call to discuss the first quarter 2021 financial results on Tuesday, April 27th at 8:00 am Eastern Time (EDT) (2:00 PM Central European Time, 9:00 PM Beijing/Hong Kong time). Listeners may access the call by dialing the following numbers:

United States: +1 833 570-1161
China: +86 400 682 8609
Hong Kong: +852 5819 4851
Norway: +47 2396 4173
United Kingdom: +44 (0)203 107 0289
International: +1 918 922-6511
Confirmation Code: 3686713

A live webcast of the conference call will be posted at https://investor.opera.com.

About non-IFRS financial measures

To supplement our consolidated financial statements, which are prepared and presented based on IFRS, we use adjusted EBITDA and adjusted net income, both non-IFRS financial measures, to understand and evaluate our core operating performance. These non-IFRS financial measures, which may differ from similarly titled measures used by other companies, are presented to enhance investors' overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with IFRS.

We define adjusted EBITDA as net income (loss) excluding income tax expense (benefit), net finance expense (income), share of net loss (income) of associates and joint ventures, restructuring costs, depreciation and amortization, share-based remuneration, other income, non-recurring expenses and discontinued operations.

We define adjusted net income as net income excluding share-based remuneration, amortization of acquired intangible assets, non-recurring expenses and discontinued operations, net of associated income tax adjustments.

We believe that adjusted EBITDA and adjusted net income provide useful information to investors and others in understanding and evaluating our operating results. These non-IFRS financial measures adjust for the impact of items that we do not consider indicative of the operational performance of our business. While we believe that these non-IFRS financial measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute for the related financial information prepared and presented in accordance with IFRS. Please refer to our financial statements at the end of this announcement for a table reconciling our non-IFRS financial measures to net income (loss), the most directly comparable IFRS financial measure.

Safe harbor statement

This press release contains statements of a forward-looking nature. These statements, including statements relating to the Company and its investees' future financial and operating results, are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as "will," "expects," "believes," "anticipates," "intends," "estimates" and similar statements. Among other things, management's quotations and the Business outlook section contain forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the Company, its investees, and the industry in which they operate. Potential risks and uncertainties include, but are not limited to, those relating to: the duration and development of the COVID-19 pandemic as well as changes in consumer behaviors as a result of such pandemic; the Company and its goals and strategies; expected development and launch, and market acceptance, of products and services; Company and its investees' expectations regarding demand for and market acceptance of their brands, platforms and services; Company's expectations regarding growth in its user base, user retention and level of engagement; Company's ability to attract, retain and monetize users; Company's ability to continue to develop new technologies and/or upgrade its existing technologies; quarterly variations in Company's operating results caused by factors beyond its control; and global macroeconomic conditions and their potential impact in the markets in which Company or its investees have businesses. All information provided in this press release is as of the date hereof, and the Company undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Further information regarding risks and uncertainties faced by Opera is included in the Company's filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 20-F.

About Opera

Opera is a global web innovator. Opera's browsers, news products and fintech solutions are the trusted choice of hundreds of millions of users worldwide. Opera is headquartered in Oslo, Norway and listed on the NASDAQ stock exchange (OPRA). Download the Opera browser from www.opera.com.

 

UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS




Three Months Ended March 31,


[US$ thousands, except per share and ADS amounts]


2020



2021











Revenue



40,194




51,583


Other income



-




58


Operating expenses









Technology and platform fees



(547)




(873)


Content cost



(1,075)




(845)


Cost of inventory sold



(49)




(446)


Personnel expenses including share-based remuneration



(16,453)




(17,096)


Marketing and distribution expenses



(14,526)




(23,357)


Credit loss expense



(1,244)




14


Depreciation and amortization



(4,657)




(5,037)


Non-recurring expenses



(2,072)




-


Other expenses



(7,113)




(5,460)


Total operating expenses



(47,735)




(53,099)











Operating profit (loss)



(7,544)




(1,457)











Share of net income (loss) of associates and joint ventures



(664)




(145)


Change in fair value of preferred shares in associates



-




-











Net finance income (expense)









Finance income



(11)




1,717


Finance expense



(5,920)




(442)


Net foreign exchange gain (loss)



(280)




139


Net finance income (expense)



(6,211)




1,413











Profit before income taxes



(14,420)




(189)


Income tax (expense) benefit



(1,549)




828


Profit from continuing operations



(15,969)




639











Profit (loss) from discontinued operations



(4,892)




-











Net income



(20,859)




639











Net income attributable to:









Equity holders of the parent



(20,859)




639


Non-controlling interests



-




-


Total net income attributed



(20,859)




639











Weighted average number of ordinary shares outstanding









Basic, millions(1)



238.29




230.25


Diluted, millions(2)



241.64




232.69











Profit per ordinary share from continuing operations









Basic, US$



(0.07)




0.00


Diluted, US$



(0.07)




0.00











Profit per ADS from continuing operations









Basic, US$



(0.13)




0.01


Diluted, US$



(0.13)




0.01











Net income per ordinary share









Basic, US$



(0.09)




0.00


Diluted, US$



(0.09)




0.00











Net income per ADS









Basic, US$



(0.18)




0.01


Diluted, US$



(0.17)




0.01



(1) As of March 31, 2021, the total number of shares outstanding for Opera Limited was 230,291,732 , equivalent to 115,145,866 ADSs.


(2) Includes the net dilutive impact of employee equity awards, all of which are dilutive.




UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)




Three Months Ended March 31,


[US$ thousands]


2020



2021











Net income



(20,859)




639











Other comprehensive income (loss) that may be reclassified to the Statement of Operations in subsequent periods (net of tax)









Exchange differences on translation of foreign operations



301




(1,316)


Net other comprehensive income (loss) that may be reclassified to the Statement of Operations in subsequent periods



301




(1,316)


Total comprehensive income



(20,558)




(677)




















Total comprehensive income attributable to:









Equity holders of the parent



(20,558)




(677)


Non-controlling interests



-




-


Total comprehensive income attributed



(20,558)




(677)





UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION




As of December 31,



As of March 31,


[US$ thousands]


2020



2021


ASSETS









Non-current assets









Furniture, fixtures and equipment



18,167




16,650


Intangible assets



111,954




113,786


Goodwill



424,961




431,391


Investments in associates and joint ventures



369,576




370,387


Non-current financial assets



1,490




1,445


Deferred tax assets



4,383




3,933


Total non-current assets



930,531




937,592











Current assets









Trade receivables



29,027




31,288


Loans to customers



68




80


Other receivables



10,750




8,275


Prepayments



9,061




5,899


Inventories



-




21


Other current financial assets



856




-


Marketable securities



-




-


Cash and cash equivalents



134,168




143,297


Total cash, cash equivalents, and marketable securities



134,168




143,297


Total current assets



183,929




188,859


TOTAL ASSETS



1,114,460




1,126,452




















EQUITY AND LIABILITIES









Equity









Share capital



24




24


Other paid in capital



765,129




764,381


Retained earnings



287,246




288,618


Foreign currency translation reserve



1,343




27


Equity attributed to equity holders of the parent



1,053,743




1,053,049


Non-controlling interests



-




-


Total equity



1,053,743




1,053,049











Non-current liabilities









Non-current lease liabilities and other loans



3,584




4,529


Deferred tax liabilities



11,745




11,192


Other non-current liabilities



68




193


Total non-current liabilities



15,397




15,913











Current liabilities









Trade and other payables



25,454




32,269


Current lease liabilities and other loans



5,389




4,531


Income tax payable



1,094




902


Deferred revenue



345




513


Other current liabilities



13,040




19,274


Total current liabilities



45,320




57,489











Total liabilities



60,717




73,402


TOTAL EQUITY AND LIABILITIES



1,114,460




1,126,452








UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY




[US$ thousands]


Share capital



Other paid in capital



Retained earnings



Foreign currency translation reserve



Total equity


As of December 31, 2019



24




814,177




99,513




(1,508)




912,206


Net income



-




-




(20,859)




-




(20,859)


Other comprehensive income (loss)



-




-




-




(2,575)




(2,575)


Total comprehensive income (loss)



-




-




(20,859)




(2,575)




(23,434)


Acquisition of treasury shares



-




(5,490)




-




-




(5,490)


Share-based remuneration expense



-




-




957




-




957


As of March 31, 2020



24




808,687




79,611




(4,083)




884,239



[US$ thousands]


Share capital



Other paid in capital



Retained earnings



Foreign currency translation reserve



Total equity


As of December 31, 2020



24




765,129




287,246




1,343




1,053,743


Net income



-




-




639




-




639


Other comprehensive income



-




-




-




(1,316)




(1,316)


Total comprehensive income



-




-




639




(1,316)




(677)


Acquisition of treasury shares



-




(749)




-




-




(749)


Share-based remuneration expense



-




-




733




-




733


As of March 31, 2021



24




764,381




288,618




27




1,053,049





UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS




Three Months Ended March 31,


[US$ thousands]


2020



2021


Cash flow from operating activities









Net income (loss) before income taxes



(24,816)




(189)


Income taxes paid



(30)




(759)


Depreciation and amortization



4,739




5,037


Share of net loss (income) of associates and joint ventures



664




(145)


Equity component of share-based payment expense



957




733


Net finance income (expense)



8,292




(1,275)


Change in inventories



423




3


Change in trade and other receivables



5,413




214


Change in loans to customers



48,131




(12)


Change in trade and other payables



9,100




6,816


Change in deferred revenue



5,647




168


Change in prepayments



(9,076)




3,162


Change in other liabilities



6,761




(6,725)


Other



(4,783)




248


Net cash flow from (used in) operating activities



51,422




7,275











Cash flow from investment activities









Purchase of intangibles assets



(358)




-


Purchase of equipment



(1,411)




(1,023)


Acquisition of subsidiary, net of cash acquired



(4,882)




(9,008)


Disbursement of short-term loans



(4,497)




-


Repayment of short-term loans



4,497




-


Deposit of collateral for loan facility



(1,000)




-


Net sale (purchase) of listed equity instruments



(6,119)




13,917


Development expenditure



(1,577)




(852)


Interest income received



145




6


Net cash flow from (used in) investing activities



(15,202)




3,039











Cash flow from financing activities









Acquisition of treasury shares



(5,490)




(748)


Proceeds from loans and borrowings



7,795




1,147


Interests on loans and borrowings



(766)




(79)


Repayment of loans and borrowings



(5,571)




-


Payment of lease liabilities



(1,698)




(1,060)


Net cash flow from (used in) financing activities



(5,731)




(740)











Net change in cash and cash equivalents



30,490




9,575











Cash and cash equivalents at beginning of period



139,487




134,168


Net foreign exchange difference



(152)




(446)


Cash and cash equivalents at end of period



169,826




143,297





Financial details by business area


The tables below specify the contribution by each business area:


[US$ thousands]


Three Months Ended March 31, 2020


Business area


Browser and News



Other



Total


Revenue categories













Search



19,664




-




19,664


Advertising



16,752




-




16,752


Technology licensing and other revenue



-




3,779




3,779


Total revenue



36,416




3,779




40,194















Technology and platform fees



(547)








(547)


Content cost



(1,075)








(1,075)


Cost of inventory sold



-




(49)




(49)


Other cost of revenue (1)



(56)




(1,106)




(1,162)


Marketing and distribution expenses



(14,277)




(249)




(14,526)


Credit loss expense



(320)




(924)




(1,244)


Direct expenses



(16,275)




(2,328)




(18,603)















Contribution by business area



20,141




1,451




21,593



(1) Includes expenses presented separately in the Statement of Operations as part of personnel and other expenses, including audit, legal and other advisory services, that were included in the cost invoiced certain customers and previously reported as Cost of revenue.


[US$ thousands]


Three Months Ended March 31, 2021


Business area


Browser and News



Other



Total


Revenue categories













Search



26,725




-




26,725


Advertising



22,763




667




23,430


Technology licensing and other revenue



-




1,428




1,428


Total revenue



49,488




2,095




51,583















Technology and platform fees



(719)




(153)




(873)


Content cost



(834)




(11)




(845)


Cost of inventory sold







(446)




(446)


Marketing and distribution expenses



(23,165)




(192)




(23,357)


Credit loss expense



46




(32)




14


Direct expenses



(24,672)




(834)




(25,506)















Contribution by business area



24,816




1,261




26,077





Personnel expenses including share-based remuneration


The table below specifies the amounts of personnel expenses including share-based remuneration:


[US$ thousands]


Three Months Ended March 31,


Personnel expenses including share-based remuneration


2020



2021


Personnel expenses excluding share-based remuneration



15,978




16,041


Share-based remuneration, including related social security costs



475




1,054


Total



16,453




17,096





Other expenses


The table below specifies the nature of other expenses:


[US$ thousands]


Three Months Ended March 31,


Other expenses


2020



2021


Hosting



2,208




1,843


Audit, legal and other advisory services



1,949




1,496


Software license fees



407




414


Rent and other office expense



602




866


Travel



678




79


Other



1,269




763


Total



7,113




5,461





Non-IFRS financial measures




Three Months Ended March 31,


[US$ thousands, except per share and ADS amounts]


2020



2021


Reconciliation of net income (loss) to adjusted EBITDA









Net income (loss)



(20,859)




639


Add: Income tax expense (benefit)



1,549




(828)


Add: Net finance expense (income)



6,211




(1,413)


Add: Share of net loss (income) of associates and joint ventures



664




145


Add: Change in fair value of preferred shares in associates



-




-


Add: Depreciation and amortization



4,657




5,037


Add: Share-based remuneration



475




1,054


Add: Non-recurring expenses



2,072




-


Less: Other income



-




(58)


Less: Profit (loss) from discontinued operations



4,892




-


Adjusted EBITDA



(338)




4,576











Reconciliation of net income (loss) to adjusted net income









Net Income (loss)



(20,859)




639


Add: Share-based remuneration



475




1,054


Add: Amortization of acquired intangible assets



1,337




1,571


Add: Amortization of Nanobank intangible assets(1)



-




1,759


Add: Non-recurring expenses



2,072




-


Income tax adjustment (2)



(188)




(416)


Less: Profit (loss) from discontinued operations



4,892




-


Adjusted net income



(12,271)




4,607











Weighted average number of ordinary shares outstanding









Basic, millions



238.29




230.25


Diluted, millions



241.64




232.69











Adjusted net income (loss) per ordinary share









Basic, US$



(0.05)




0.02


Diluted, US$



(0.05)




0.02











Adjusted net income (loss) per ADS









Basic, US$



(0.10)




0.04


Diluted, US$



(0.10)




0.04



(1) The amortization of Nanobank intangible assets is included in the line "Share of net income (loss) of associates and joint ventures".


(2) Reversal of tax benefit related to the social security cost component of share-based remuneration and deferred taxes on the amortization of acquired intangible assets.

 

 

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Opera (NASDAQ:OPRA)
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From Aug 2021 to Sep 2021 Click Here for more Opera Charts.
Opera (NASDAQ:OPRA)
Historical Stock Chart
From Sep 2020 to Sep 2021 Click Here for more Opera Charts.